EXECUTIVE VERSION
EXHIBIT 4.4
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of June 28, 2002
among
Extendicare Health Services, Inc.,
The Subsidiary Guarantors from time to time party hereto, and
Lehman Brothers Inc., on behalf of the Initial Purchasers
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This Exchange and Registration Rights Agreement (this
"Agreement") is made and entered into as of June 28, 2002 by and among
Extendicare Health Services, Inc., a Delaware corporation (the "Company"), the
Subsidiary Guarantors (as defined herein) and Lehman Brothers Inc. on behalf of
U.S. Bancorp Piper Jaffray Inc. and ABN AMRO Incorporated (collectively, the
"Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement,
dated June 20, 2002 (the "Purchase Agreement"), by and among the Company, the
Existing Subsidiary Guarantors (as defined herein) and the Initial Purchasers,
which provides for the sale by the Company to the Initial Purchasers of
$150,000,000 aggregate principal amount of the Company's 9 1/2% Senior Notes due
2010 (the "Notes"). The Notes are, and the Exchange Notes (as defined herein)
will be, guaranteed on a senior basis by the Subsidiary Guarantors (as defined
herein). In order to induce the Initial Purchasers to purchase the Notes, the
Company and the Existing Subsidiary Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 7 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Additional Subsidiary Guarantor: Any subsidiary of the Company
that executes a Guarantee under the Indenture after the date of this Agreement.
Advice: As defined in Section 6(e) hereof.
Blackout Period: As defined in Section 5(a) hereof.
Blue Sky Application: As defined in Section 8(a) hereof.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Closing Date: The date of this Agreement.
Commission: The U.S. Securities and Exchange Commission.
Company: As defined in the preamble hereto.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement
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relating to the Exchange Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of Exchange Notes in the same aggregate
principal amount as the aggregate principal amount of Notes that were tendered
by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Notes, each Interest
Payment Date.
Exchange Act: The U.S. Securities Exchange Act of 1934, as
amended.
Exchange Notes: The Company's 9 1/2% Senior Notes due 2010 to
be issued pursuant to the Indenture in the Exchange Offer, together with the
related Guarantees.
Exchange Offer: The registration by the Company under the
Securities Act of the Exchange Notes pursuant to a Registration Statement
pursuant to which the Company offers the Holders of all outstanding Transfer
Restricted Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Exchange Notes in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities validly tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Existing Subsidiary Guarantors: The various Subsidiary
Guarantors signatory to the Indenture as of the date hereof.
Guarantees: Guarantees by the Subsidiary Guarantors of the
Company's obligations under the Notes, the Exchange Notes and the Indenture.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of the date hereof, among
the Company, the Existing Subsidiary Guarantors and U.S. Bank, N.A., as trustee
(the "Trustee"), pursuant to which the Notes and the Exchange Notes are to be
issued, as such Indenture may be amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the
Notes.
NASD: National Association of Securities Dealers, Inc.
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Notes: As defined in the preamble hereto.
Person: An individual, partnership, corporation, limited
liability company, unincorporated organization, association, joint-stock
company, trust, joint venture, government or any agency or political subdivision
thereof or any other entity.
Prospectus: The prospectus included in a Registration
Statement as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Purchase Agreement: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the record date with
respect to the Interest Payment Date on which such Damages Payment Date shall
occur.
Registration Default: As defined in Section 5(a) hereof.
Registration Statement: Any Registration Statement of the
Company relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Securities Act: The U.S. Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4(a) hereof.
Shelf Registration Period: As defined in Section 4(a) hereof.
Shelf Registration Statement: As defined in Section 4(a)
hereof.
Subsidiary Guarantors: The Additional Subsidiary Guarantors
and the Existing Subsidiary Guarantors.
TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note or Exchange Note
(including the related Guarantees), as applicable, until the earliest to occur
of (a) the date on which such Note is exchanged by a person other than a
Broker-Dealer in the Exchange Offer in exchange for an Exchange Note, so long as
such person is not prohibited from reselling such Exchange Notes to the public
without delivering a prospectus and the Prospectus in the Exchange Offer
Registration Statement is not sufficient for such purpose, (b)
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following the exchange by a Broker-Dealer in the Exchange Offer of a Note for an
Exchange Note, the date on which that Exchange Note is sold to a purchaser who
receives from that Broker-Dealer on or prior to the date of such sale a copy of
the Prospectus contained in the Exchange Offer Registration Statement, (c) the
date on which such Note or Exchange Note has been effectively registered under
the Securities Act and disposed of in accordance with a Shelf Registration
Statement and (d) the date on which such Note is sold by the Holder pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Subsidiary Guarantors
shall use (i) their reasonable best efforts to cause to be filed with the
Commission as soon as practicable after the Closing Date, but in no event later
than 90 days after the Closing Date, a Registration Statement under the
Securities Act relating to the Exchange Notes and the Exchange Offer, (ii) their
reasonable best efforts to cause such Registration Statement to be declared
effective on or prior to 150 days after the Closing Date, (iii) in connection
with the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Securities Act and (C)
cause all necessary filings in connection with the registration and
qualification of the Exchange Notes to be made under the blue sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of such Registration Statement, commence the
Exchange Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Exchange Notes to be offered in exchange for the Transfer
Restricted Securities and to permit resales of Exchange Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and the Subsidiary Guarantors shall use their
reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the
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minimum period required under applicable U.S. Federal and state securities laws
to Consummate the Exchange Offer; provided, however, that in no event shall such
period be less than 20 business days. The Company and the Subsidiary Guarantors
shall cause the Exchange Offer to comply with all applicable U.S. federal and
state securities laws. No securities other than the Exchange Notes and the
Guarantees shall be included in the Exchange Offer Registration Statement. The
Company and the Subsidiary Guarantors shall use their reasonable best efforts to
cause the Exchange Offer to be Consummated within 30 business days after the
Exchange Offer Registration Statement has become effective.
(c) The Company and the Subsidiary Guarantors shall indicate
in a "Plan of Distribution" section of the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Notes that are
Transfer Restricted Securities and that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a Prospectus meeting the requirements of the Securities Act
in connection with any resales of the Exchange Notes received by such
Broker-Dealer in the Exchange Offer, which Prospectus delivery requirement may
be satisfied by the delivery by such Broker-Dealer of the Prospectus contained
in the Exchange Offer Registration Statement. Such "Plan of Distribution"
section shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission.
The Company and the Subsidiary Guarantors shall use their
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
resales of Exchange Notes acquired by Broker-Dealers for their own accounts as a
result of market-making activities or other trading activities, and to ensure
that it conforms with the requirements of this Agreement, the Securities Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least 90 days after the Consummation of the Exchange
Offer.
The Company and the Subsidiary Guarantors shall provide
sufficient copies of the latest version of such Prospectus to Broker-Dealers
promptly upon request at any time during such 90-day period in order to
facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Subsidiary
Guarantors are not required to file an Exchange Offer Registration Statement or
cannot
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Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable U.S. law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with) or (ii) if any Holder of Transfer
Restricted Securities shall notify the Company prior to the 20th day following
the Consummation of the Exchange Offer that such Holder (A) is prohibited by
applicable U.S. law or Commission policy from participating in the Exchange
Offer, (B) may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) is a Broker-Dealer and holds
Notes acquired directly from the Company or one of its affiliates, then the
Company and the Subsidiary Guarantors shall:
(x) use their reasonable best efforts to cause to be filed a
Registration Statement pursuant to Rule 415 under the Securities Act,
which may be an amendment to the Exchange Offer Registration Statement
if permitted by the rules and regulations of the Commission (in either
event, the "Shelf Registration Statement") on or prior to the earliest
to occur of (1) the 30th day after the date on which the Company
determine that they are not required to file the Exchange Offer
Registration Statement, or permitted to Consummate the Exchange Offer
and (2) the 30th day after the date on which the Company receive notice
from a Holder of Transfer Restricted Securities as contemplated by
clause (ii) of paragraph (a) above (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities by the Holders which
shall have provided the information required pursuant to Section 4(b)
hereof; and
(y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
before the 90th day after the Shelf Filing Deadline.
Subject to Section 5(b), the Company and the Subsidiary Guarantors shall use
their reasonable best efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for resales of Notes or Exchange Notes by the Holders of Transfer
Restricted Securities entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period of at least two years following the Closing Date or
such shorter period that will terminate when all Notes or Exchange Notes covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (such period being the "Shelf Registration Period").
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in
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writing, within 20 days after receipt of a request therefor, such information as
the Company may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein.
No Holder of Transfer Restricted Securities shall be entitled to Additional
Interest pursuant to Section 5 hereof unless and until such Holder shall have
used its reasonable best efforts to provide all such reasonably requested
information. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
SECTION 5. ADDITIONAL INTEREST
(a) If (i) any of the Registration Statements required by this
Agreement are not filed with the Commission on or prior to the date specified
for such filing in Sections 3(a) and 4(a), as applicable, (ii) any of such
required Registration Statements have not been declared effective by the
Commission on or prior to the date specified for such effectiveness in Sections
3(a) and 4(a), as applicable, (iii) the Exchange Offer has not been Consummated
within 30 business days, or longer, if required by federal securities laws,
after the Exchange Offer Registration Statement has been declared effective or
(iv) any Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable in
connection with resales of Transfer Restricted Securities without being
succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (except as permitted in paragraph (b); such period of time during
which any such Registration Statement is not effective or any such Registration
Statement or the related Prospectus is not usable being referred to as a
"Blackout Period") (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company and the Subsidiary Guarantors jointly and
severally agree to pay additional interest ("Additional Interest") to each
Holder of Transfer Restricted Securities adversely affected by such Registration
Default, in an amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder with respect to the first
90-day period immediately following the occurrence of such Registration Default.
The amount of Additional Interest shall increase by an additional $.05 per week
per $1,000 principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period (or portion thereof) until all Registration
Defaults have been cured, up to a maximum amount of Additional Interest of $.50
per week per $1,000 principal amount of Transfer Restricted Securities. All
accrued Additional Interest shall be paid to Record Holders by the Company and
the Subsidiary Guarantors in the same manner as interest is paid under the
Notes. Following the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, the accrual of Additional Interest
with respect to such Transfer Restricted Securities will cease.
(b) A Registration Default referred to in Section 5(a)(iv)
shall be deemed not to have occurred and be continuing in relation to a
Registration Statement or the related Prospectus if (i) the Blackout Period has
occurred solely as a result of (x) the
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filing of a post-effective amendment to such Shelf Registration Statement to
incorporate annual audited financial information with respect to the Company
where such post-effective amendment is not yet effective and needs to be
declared effective to permit Holders to use the related Prospectus or (y) the
occurrence of other material events with respect to the Company that would need
to be described in such Registration Statement or the related Prospectus and
(ii) in the case of clause (y), the Company is proceeding promptly and in good
faith to amend or supplement (including by way of filing documents under the
Exchange Act which are incorporated by reference into the Registration
Statement) such Registration Statement and the related Prospectus to describe
such events; provided, however, that in any case if such Blackout Period occurs
for a continuous period in excess of 30 days, a Registration Default shall be
deemed to have occurred on the 31st day of such Blackout Period and Additional
Interest shall be payable in accordance with the above paragraph from the day
such Registration Default occurs until such Registration Default is cured or
until the Company is no longer required pursuant to this Agreement to keep such
Registration Statement effective or such Registration Statement or the related
Prospectus usable; provided, further, that in no event shall the total of all
Blackout Periods exceed 45 days in the aggregate of any 12-month period.
All payment obligations of the Company and the Subsidiary
Guarantors set forth in this section that are outstanding with respect to any
Transfer Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such payment
obligations with respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Subsidiary Guarantors shall comply with
all of the provisions of Section 6(c) below, shall use their reasonable best
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company and the Subsidiary Guarantors (which may be contained in the
letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A) it is not an affiliate of the
Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any Person to participate
in, a distribution of the Exchange Notes to be issued in the Exchange
Offer and (C) it is acquiring the Exchange Notes in its ordinary course
of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's and the
Subsidiary Guarantors'
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preparations for the Exchange Offer. Each Holder hereby acknowledges
and agrees that any Broker-Dealer and any such Holder using the
Exchange Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under Commission policy as
in effect on the date of this Agreement rely on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5,
1991), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters, and (2) must comply
with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and
that such a secondary resale transaction should be covered by an
effective Registration Statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Exchange Notes obtained by such Holder in
exchange for Notes acquired by such Holder directly from the Company.
(ii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Subsidiary Guarantors shall
state to the Commission that the Company and the Subsidiary Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991)
and shall represent to the Commission that neither the Company nor any
Subsidiary Guarantor has entered into any arrangement or understanding
with any Person to distribute the Exchange Notes to be received in the
Exchange Offer and that, to the best of the Company's and each
Subsidiary Guarantor's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in
its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Exchange
Notes received in the Exchange Offer; and
(iii) shall issue, upon the request of any Holder of
Notes covered by the Exchange Offer, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Notes surrendered to the Company by such Holder in exchange therefor;
such Exchange Notes to be registered in the name of such Holder or in
the name of the purchaser(s) of such Exchange Notes, as the case may
be; in return, the Notes held by such Holder shall be surrendered to
the Company for cancellation.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their reasonable
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company and the
Subsidiary Guarantors will as expeditiously as possible prepare and file with
the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
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sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes and Exchange Notes by Broker-Dealers), the Company and the Subsidiary
Guarantors shall:
(i) use their reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Securities Act or
any regulation thereunder, financial statements of any Subsidiary
Guarantors) for the period specified in Sections 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company and the
Subsidiary Guarantors shall file promptly an appropriate amendment to
such Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A) or
(B), use their reasonable best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, the Company and
the Subsidiary Guarantors may allow the Shelf Registration Statement to
cease to become effective and usable if (x) the board of directors of
the Company determines in good faith that it is in the best interests
of the Company not to disclose the existence of or facts surrounding
any proposed or pending material corporate transaction involving the
Company or the Subsidiary Guarantors, and the Company notifies the
Holders within two business days after such boards of directors make
such determination or (y) the Prospectus contained in the Shelf
Registration Statement contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading; provided that the two-year period
referred to in Section 4(a) hereof during which the Shelf Registration
Statement is required to be effective and usable shall be extended by
the number of days during which such Registration Statement was not
effective or usable pursuant to the foregoing provisions; and provided
further that Additional Interest shall accrue on the Notes as provided
in Section 5 hereof;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement
as may be necessary to keep the Registration Statement effective for
the applicable period set forth in Sections 3 or 4 hereof, as
applicable; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act, and to comply fully with the
applicable
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provisions of Rules 424 and 430A under the Securities Act in a timely
manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) cooperate with the selling Holders of Transfer
Restricted Securities and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(iv) use their reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities;
(v) if any fact or event contemplated by clause
(d)(i)(D) below shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading;
(vi) provide a CUSIP, CINS or ISIN number, as
applicable, for all Transfer Restricted Securities not later than the
effective date of the Registration Statement and provide the Trustee
under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
depositary;
(vii) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD;
(viii) otherwise use their best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer
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Restricted Securities are sold to underwriters in a firm or best
efforts Underwritten Offering or (B) if not sold to underwriters in
such an offering, beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement;
(ix) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith,
cooperate with the Trustee and the Holders of Notes and Exchange Notes
to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA;
and execute, and use their best efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and
all other forms and documents required to be filed with the Commission
to enable such Indenture to be so qualified in a timely manner; and
(x) provide promptly to any Holder upon such Holder's
written request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act.
(d) Additional Provisions Applicable to Shelf
Registration Statements. In connection with each Shelf Registration Statement,
during the Shelf Registration Period, the Company and the Subsidiary
Guarantors shall:
(i) advise the underwriter(s), if any, and selling
Holders of Transfer Restricted Securities promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to the Shelf Registration Statement or
any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Shelf Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Securities Act,
of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction or of the initiation of any proceeding for any
of the preceding purposes and (D) of the existence of any fact or the
happening of any event that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order
that the Shelf Registration Statement and the Prospectus do not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any U.S. state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under U.S. state securities or blue
sky laws, the Company and the Subsidiary Guarantors
13
shall use their reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(ii) if requested in writing, furnish to each of the
selling Holders of Transfer Restricted Securities and each of the
underwriter(s), if any, before filing with the Commission, copies of
any Shelf Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Shelf Registration Statement
or Prospectus (including all documents incorporated by reference after
the initial filing of such Shelf Registration Statement), which
documents will be subject to the review of such Holders and
underwriter(s), if any, for a period of at least five business days,
and the Company and the Subsidiary Guarantors will not file any such
Shelf Registration Statement or Prospectus or any amendment or
supplement to any such Shelf Registration Statement or Prospectus
(including all such documents incorporated by reference) if a selling
Holder of Transfer Restricted Securities covered by such Shelf
Registration Statement or the underwriter(s), if any, shall not have
had an opportunity to review the Shelf Registration Statement as set
forth above; such Holders and underwriter(s) shall be deemed to have
reasonably objected to such filing if such Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains an untrue statement of a material fact
or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or fails to comply with the applicable requirements of
the Securities Act;
(iii) upon request, provide copies of any document
that is to be incorporated by reference into a Shelf Registration
Statement or Prospectus to the selling Holders and to the
underwriter(s), make the Company's and the Subsidiary Guarantors'
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(iv) make available for inspection at reasonable
times at each of the Company's principal place of business by the
Holders of Transfer Restricted Securities, any underwriter
participating in any disposition pursuant to such Shelf Registration
Statement, and any attorney or accountant retained by such selling
Holders or any of the underwriter(s) who shall certify to the Company
and the Subsidiary Guarantors that they have a current intention to
sell Transfer Restricted Securities pursuant to a Shelf Registration
Statement, and, such relevant financial and other records, pertinent
corporate documents and properties of the Company and the Subsidiary
Guarantors as reasonably requested and cause the Company's and the
Subsidiary Guarantors' officers, directors and employees to respond to
such inquiries as shall be reasonably necessary, in the reasonable
judgment of counsel to such Holders, to conduct a reasonable
investigation; provided, however, that the foregoing inspection and
information gathering shall
14
be coordinated on behalf of the selling Holders by one counsel
designated by and on behalf of such Holders and, provided, further,
that each such party shall be required to maintain in confidence and
not disclose to any other Person any information or records reasonably
designated by the Company in writing as being confidential, until such
time as (A) such information becomes a matter of public record (whether
by virtue of its inclusion in such Shelf Registration Statement or
otherwise), (B) such Person shall be required so to disclose such
information pursuant to a subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter
(subject to the requirements of such order, and only after such Person
shall have given the Company prompt prior written notice of such
requirement) or (C) such information is required to be set forth in
such Shelf Registration Statement or the Prospectus included therein or
in an amendment to such Shelf Registration Statement or an amendment or
supplement to such Prospectus in order that such Shelf Registration
Statement, Prospectus, amendment or supplement, as the case may be,
does not contain an untrue statement of a material fact or omit to
state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading;
(v) if requested by any selling Holders of Transfer
Restricted Securities or the underwriter(s), if any, promptly
incorporate in any Shelf Registration Statement or Prospectus pursuant
to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other
terms of the offering of the Transfer Restricted Securities to be sold
in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company are notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, however,
that the Company shall not be required to take any action pursuant to
this Section 6(d)(v) that would, in the opinion of counsel for the
Company reasonably satisfactory to the Initial Purchasers, violate
applicable law;
(vi) deliver to each selling Holder of Transfer
Restricted Securities and each of the underwriter(s), if any, without
charge, as many copies of the Prospectus (including each preliminary
Prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company and the Subsidiary Guarantors
hereby consent to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
15
(vii) furnish to each Holder whose Transfer
Restricted Securities have been included in a Shelf Registration
Statement in connection with such exchange or sale, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(viii) enter into an underwriting agreement on not
more than one occasion in the case of an offering pursuant to a Shelf
Registration, and make such representations and warranties, and take
all such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement,
all to such extent as may be reasonably requested by any Holder or
Holders of Transfer Restricted Securities who hold at least 25% in
aggregate principal amount of such class of Transfer Restricted
Securities; provided that the Company and the Subsidiary Guarantors
shall not be required to enter into any such agreement more than once
with respect to all of the Transfer Restricted Securities and may delay
entering into such agreement if the board of directors of each of the
Company and the Subsidiary Guarantors determines in good faith that it
is in the best interests of the Company and the Subsidiary Guarantors
not to disclose the existence of or facts surrounding any proposed or
pending material corporate transaction involving the Company and the
Subsidiary Guarantors; and whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, the Company and the Subsidiary Guarantors shall:
(A) furnish to the Initial Purchasers, the
Holders of Transfer Restricted Securities who hold at least 25% in
aggregate principal amount of such class of Transfer Restricted
Securities and each underwriter, if any, in such substance and scope as
they may reasonably request and as are customarily made in connection
with an offering of debt securities pursuant to a Shelf Registration
Statement (i) upon the effective date of the Shelf Registration
Statement (and if such Shelf Registration Statement contemplates an
Underwritten Offering of Transfer Restricted Securities upon the date
of the closing under the underwriting agreement related thereto) and
(ii) upon the filing of any amendment or supplement to the Shelf
Registration Statement or any other document that is incorporated in
the Shelf Registration Statement by reference and includes financial
data with respect to a fiscal quarter or year:
(1) a certificate, dated the date of
effectiveness of the Shelf Registration Statement signed by
(y) the respective chief executive officer, the respective
President or any Vice President and (z) the respective chief
financial officer of each of the Company and each of the
Subsidiary Guarantors confirming, as of the date thereof, the
matters set forth in Section 7(m) of the Purchase Agreement
and such other matters as such parties may reasonably request;
16
(2) an opinion, dated the date of
effectiveness of such Shelf Registration Statement, of
securities counsel for the Company covering matters similar to
those set forth in Section 7(d) of the Purchase Agreement and
such other matters as such parties may reasonably request, and
in any event including a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, the Initial
Purchasers' representatives and the Initial Purchasers'
counsel in connection with the preparation of such Shelf
Registration Statement and the related Prospectus although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements in such Shelf
Registration Statement; and that such counsel advises that, on
the basis of the foregoing, such counsel's work in connection
with this work did not disclose information that gave such
counsel reason to believe that the Shelf Registration
Statement, at the time such Shelf Registration Statement or
any post-effective amendment thereto became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus contained in such Shelf Registration
Statement as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Such
counsel may state further that such counsel expresses no view
with respect to, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules, the financial projections and
other financial, statistical and accounting data included or
incorporated by reference in the Shelf Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of
the date of effectiveness of the Shelf Registration Statement
from the Company's independent accountants, in the customary
form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with primary
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Sections 7(i) and
7(j) of the Purchase Agreement;
(B) set forth in full or incorporated by
reference in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to all
parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and
certificates as may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary conditions
contained in the underwriting
17
agreement or other agreement entered into by the Company and the
Subsidiary Guarantors pursuant to this clause (viii), if any.
If at any time during the Shelf Registration Period the representations and
warranties of the Company or the Subsidiary Guarantors contemplated in clause
(A)(1) above cease to be true and correct, the Company or the Subsidiary
Guarantors shall so advise the Initial Purchasers and the underwriters, if any,
and each selling Holder promptly and, if requested by such Persons, shall
confirm such advice in writing; and
(ix) prior to any public offering of Transfer
Restricted Securities cooperate with the selling Holders of Transfer
Restricted Securities the underwriter(s), if any, and their respective
counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or blue sky laws of
such jurisdictions as the selling Holders of Transfer Restricted
Securities or underwriter(s) may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the Shelf Registration Statement filed pursuant to Section 4 hereof;
provided, however, that the Company and the Subsidiary Guarantors shall
not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process, other
than as to matters and transactions relating to the Shelf Registration
Statement, in any jurisdiction where it is not now so subject.
(e) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 6(d)(i) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the Shelf Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Shelf Registration Statement set forth in Section 4
hereof, as applicable, shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to Section
6(d)(i) hereof to and including the date when each selling Holder covered by
such Shelf Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof or
shall have received the Advice.
(f) The Company and the Subsidiary Guarantors may require each
Holder of Transfer Restricted Securities as to which any registration is being
effected to
18
furnish to the Company such information regarding such Holder and such Holder's
intended method of distribution of the applicable Transfer Restricted Securities
as the Company may from time to time reasonably request in writing, but only to
the extent that such information is required in order to comply with the
Securities Act. Each such Holder agrees to notify the Company as promptly as
practicable of (i) any inaccuracy or change in information previously furnished
by such Holder to the Company or (ii) the occurrence of any event, in either
case, as a result of which any Prospectus relating to such registration contains
or would contain an untrue statement of a material fact regarding such Holder or
such Holder's intended method of distribution of the applicable Transfer
Restricted Securities or omits to state any material fact regarding such Holder
or such Holder's intended method of distribution of the applicable Transfer
Restricted Securities required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of the applicable Transfer Restricted Securities an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Company regardless of whether a Registration Statement becomes effective,
including without limitation and as applicable: (i) all Commission, securities
exchange or NASD registration and filing fees and expenses (including filings
made by any Initial Purchasers or Holder with the NASD (and, if applicable, the
fees and expenses of any "qualified independent underwriter" and its counsel
that may be required by the rules and regulations of the NASD)); (ii) all fees
and expenses of compliance with U.S. federal securities and state blue sky or
securities laws and compliance with the rules of the NASD (including reasonable
fees and disbursements of one counsel for Holders in connection with blue sky
and/or NASD qualification of the Exchange Notes); (iii) all expenses of printing
(including printing certificates for the Exchange Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services;
(iv) all fees and disbursements of counsel for the Company and the Subsidiary
Guarantors; (v) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance) and (vi) the
reasonable fees and disbursements of one firm of counsel designated by the
Holders of a majority in principal amount of Transfer Restricted Securities
covered by the Shelf Registration Statement to act as counsel for the Holders of
those Transfer Restricted Securities in connection therewith.
The Company will, in any event, bear their and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit
19
and the fees and expenses of any Person, including special experts, retained by
the Company or the Subsidiary Guarantors.
(b) Each Holder of Transfer Restricted Securities will pay all
underwriting discounts, if any, and commissions and transfer taxes, if any,
relating to the disposition of such Holder's Transfer Restricted Securities.
SECTION 8. INDEMNIFICATION
(a) The Company and each Subsidiary Guarantor shall, jointly
and severally, indemnify and hold harmless each Holder of Transfer Restricted
Securities, its officers and employees and each Person, if any, who controls any
such Holders, within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases, sales and registration of the Notes, the
Guarantees and the Exchange Notes), to which that Holder, officer, employee or
controlling Person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Registration Statement or preliminary Prospectus or
Prospectus or in any amendment or supplement thereto, (B) in any Blue Sky
Application (as defined below) or other document prepared or executed by any
Company or any Subsidiary Guarantor (or based upon any written information
furnished by any Company or any Subsidiary Guarantor) specifically for the
purpose of qualifying any or all of the Notes under the securities laws of any
state or other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application") or (C) in any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Exchange Notes ("Marketing
Materials"), including any roadshow or investor presentations made to investors
by the Company (whether in person or electronically); (ii) the omission or
alleged omission to state in any Registration Statement, preliminary Prospectus
or Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application or Marketing Materials any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, or (iii) any act or failure to act or
any alleged act or failure to act by any Holder of Transfer Restricted
Securities in connection with, or relating in any manner to, the Notes, the
Guarantees or the Exchange Notes or the offering contemplated by any
Registration Statement, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the
Subsidiary Guarantors shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such Holder
through its gross negligence or willful misconduct); and shall reimburse each
Holder and each such officer, employee or controlling Person promptly upon
demand for any legal or other expenses reasonably incurred by that Holder,
officer, employee or controlling Person in connection with investigating or
defending or
20
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and the
Subsidiary Guarantors shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement, preliminary Prospectus or
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application or Marketing Materials, in reliance upon and in conformity with
written information concerning such Holder furnished to the Company by or on
behalf of any Holder specifically for inclusion therein; provided, further, that
with respect to any such untrue statement or omission made in any preliminary
Prospectus or Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of the Holder from whom the Person asserting any
such losses, claims, damages or liabilities purchased the Notes, Guarantees or
Exchange Notes concerned if, to the extent that such sale was a sale by the
Holder and any such loss, claim, damage or liability of such Holder is a result
of the fact that both (A) a copy of the Prospectus (or the Prospectus as then
amended or supplemented) was not sent or given to such Person at or prior to
written confirmation of the sale of such Notes or Exchange Notes to such Person
and (B) the untrue statement or omission in the preliminary Prospectus or
Prospectus was corrected in the Prospectus (or the Prospectus as then amended or
supplemented) unless such failure to deliver the Prospectus was a result of
noncompliance by the Company with Section 6(d)(vi) hereof. The foregoing
indemnity agreement is in addition to any liability which the Company and the
Subsidiary Guarantors may otherwise have to any Holder or to any officer,
employee or controlling Person of that Holder.
(b) Each Holder, severally and not jointly, shall indemnify
and hold harmless each of the Company, each of the Subsidiary Guarantors, their
respective directors, officers and employees, and each Person, if any, who
controls either of the Company or any of the Subsidiary Guarantors within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company, the Subsidiary Guarantors or any such director, officer or controlling
Person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Registration Statement, preliminary Prospectus or
Prospectus, or in any amendment or supplement thereto or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Registration Statement, preliminary Prospectus or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Holders
furnished to the Company by or on behalf of that Holder specifically for
inclusion therein, which information consists of the information specified in
Section 8(e) of the Purchase Agreement, and shall reimburse the Company, each of
the Subsidiary Guarantors and each such director, officer, employee and
controlling Person for any legal or other expenses reasonably incurred by the
21
Company, each such Subsidiary Guarantor or each such director, officer, employee
or controlling Person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Holder may otherwise have to the Company, any of the
Subsidiary Guarantors or any such director, officer, employee or controlling
Person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and; provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel has been specifically authorized by the indemnifying
party in writing, or (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and in
the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by (x) Lehman Brothers Inc.
if the indemnified parties under this Section 8 consist of the Initial
Purchasers or any of their respective officers, employees or controlling Persons
or (y) by the Company, if the indemnified parties under this Section 8 consist
of any of the Company, any of the Subsidiary Guarantors or any of their
respective directors, officers, employees or
22
controlling Persons. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors, on the one hand, and the
Holders on the other, from the sale of the Transfer Restricted Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Subsidiary Guarantors, on the one hand and the Holders on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or any of the Subsidiary Guarantors, on the
one hand, or the Holders, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Subsidiary Guarantors and the
Holders agree that it would not be just and equitable if contributions pursuant
to this Section 8(d) were to be determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Holder shall
be required to contribute any amount in excess of the amount by which the net
proceeds received by it in connection with its sale of Notes exceeds the amount
of
23
any damages which such Holder has otherwise paid or become liable to pay by
reason of the untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute as provided in this Section 8(d) are several and not
joint.
SECTION 9. RULE 144A
The Company and each Subsidiary Guarantor hereby agrees with
each Holder of Transfer Restricted Securities, during any period in which the
Company or such Subsidiary Guarantor is not subject to Section 13 or 15(d) of
the Exchange Act within the two-year period following the Closing Date, to make
available to any Holder or beneficial owner of Transfer Restricted Securities,
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
Subject to Section 6(d)(i), the Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering at such
Holders' expense. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities included in such offering; provided that such
investment bankers and managers must be reasonably satisfactory to the Company.
24
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and the Subsidiary Guarantors agree
that monetary damages (including Additional Interest) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Except as disclosed in the Offering Memorandum (as such term
is defined in the Purchase Agreement), neither the Company nor any Subsidiary
Guarantor has previously entered into any agreement granting any registration
rights with respect to its securities to any Person. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's or any Subsidiary Guarantor's
securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the
Subsidiary Guarantors will not take any action, or permit any change to occur,
with respect to the Notes that would materially and adversely affect the ability
of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company have
obtained the written consent of Holders of a majority of the outstanding
principal amount of the Transfer Restricted Securities affected by such
amendment, modification, supplement, waiver or consent. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, facsimile or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on
the records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
25
(ii) if to the Company or the Subsidiary
Guarantors to:
Extendicare Health Services, Inc.
111 West Michigan Street
Milwaukee, Wisconsin 53203-2903
Attention: Chief Executive Officer
Fax: (414) 908-8059
with a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Attention: Russell E. Ryba, Esq.
Fax: (414) 297-4900
Any such notices and communications shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
notice or communication given or made by the Initial Purchasers.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or
26
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company and the
Subsidiary Guarantors with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
(Signature pages follow.)
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Very truly yours,
EXTENDICARE HEALTH SERVICES, INC.
By: /s/ Mark W. Durishan
--------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
EXTENDICARE HEALTH FACILITY HOLDINGS, INC.
EXTENDICARE HEALTH FACILITIES, INC.
COVENTRY CARE, INC.
NORTHERN HEALTH FACILITIES, INC.
EXTENDICARE HOMES, INC.
EXTENDICARE HEALTH NETWORK, INC.
THE PROGRESSIVE STEP CORPORATION
EXTENDICARE OF INDIANA, INC.
EDGEWOOD NURSING CENTER, INC.
ELDER CREST, INC.
HAVEN CREST, INC.
MEADOW CREST, INC.
OAK HILL HOME OF REST AND CARE, INC.
EXTENDICARE GREAT TRAIL, INC.
FIR LANE TERRACE CONVALESCENT CENTER, INC.
ADULT SERVICES UNLIMITED, INC.
ARBORS EAST, INC.
ARBORS AT TOLEDO, INC.
HEALTH POCONOS, INC.
MARSHALL PROPERTIES, INC.
COVENTRY CARE HOLDINGS, INC.
UNITED PROFESSIONAL SERVICES, INC.
By: /s/ Mark W. Durishan
--------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
INDIANA HEALTH AND REHABILITATION PARTNERSHIP
BY: EXTENDICARE HOMES, INC., AS GENERAL PARTNER
By: /s/ Mark W. Durishan
--------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
BY: EXTENDICARE OF INDIANA, INC., AS GENERAL
PARTNER
By: /s/ Mark W. Durishan
--------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
CONCORDIA MANOR, LLC
FIRST COAST HEALTH AND REHABILITATION CENTER, LLC
JACKSON HEIGHTS REHABILITATION CENTER, LLC
TREASURE ISLE CARE CENTER, LLC
BY: EXTENDICARE HOMES, INC., AS SOLE MEMBER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
KAUFMAN STREET, WV, LLC
NEW CASTLE CARE, LLC
BY: FIR LANE TERRACE CONVALESCENT CENTER, INC.,
AS SOLE MEMBER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
ALPINE HEALTH AND
REHABILITATION CENTER, LLC
COLONIAL CARE, LLC
GREENBRIAR CARE, LLC
GREENBROOK CARE, LLC
HERITAGE CARE, LLC
LADY LAKE CARE, LLC
NEW HORIZON CARE, LLC
NORTH REHABILITATION CARE, LLC
PALM COURT CARE, LLC
RICHEY MANOR, LLC
ROCKLEDGE CARE, LLC
SOUTH HERITAGE HEALTH AND REHABILITATION
CENTER, LLC
THE OAKS RESIDENTIAL AND REHABILITATION
CENTER, LLC
WINTER HAVEN HEALTH AND REHABILITATION
CENTER, LLC
BY: EXTENDICARE HEALTH FACILITIES, INC.,
AS SOLE MEMBER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
EDGEWOOD CARE, LP
ELDER CREST CARE, LP
HAVEN CARE, LP
MEADOW CARE, LP
OAK HILL CARE, LP
BY: EXTENDICARE HEALTH FACILITIES, INC.,
AS GENERAL PARTNER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
ARBORS AT TAMPA, LLC
ARBORS AT BAYONET POINT, LLC
ARBORS AT FAIRLAWN CARE, LLC
ARBORS AT FAIRLAWN REALTY OH, LLC
ARBORS AT SYLVANIA CARE, LLC
ARBORS AT SYLVANIA REALTY OH, LLC
ARBORS WEST CARE, LLC
ARBORS WEST REALTY OH, LLC
COLUMBUS REHABILITATION
REALTY OH, LLC
JACKSONVILLE CARE, LLC
SAFETY HARBOR CARE, LLC
KISSIMMEE CARE, LLC
ORANGE PARK CARE, LLC
OREGON CARE, LLC
PORT CHARLOTTE CARE, LLC
SARASOTA CARE, LLC
SEMINOLE CARE, LLC
WINTER HAVEN CARE, LLC
BLANCHESTER CARE, LLC
CANTON CARE, LLC
COLUMBUS HEALTH CARE, LLC
DAYTON CARE, LLC
DELAWARE CARE, LLC
GALLIPOLIS CARE, LLC
HILLIARD CARE, LLC
LONDON CARE, LLC
MARIETTA CARE, LLC
ROCKMILL CARE, LLC
ROCKSPRINGS CARE, LLC
WATERVILLE CARE, LLC
WOODSFIELD CARE, LLC
BY: NORTHERN HEALTH FACILITIES, INC., AS
SOLE MEMBER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
STONEBRIDGE CARE, LP
BY: EXTENDICARE HOMES, INC., AS GENERAL PARTNER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
BY: COVENTRY CARE HOLDINGS, INC., AS
GENERAL PARTNER
By: /s/ Mark W. Durishan
----------------------------------------------
Name: Mark W. Durishan
Title: Vice President -- Finance
GREAT TRAIL CARE, LLC
BY: EXTENDICARE GREAT TRAIL, INC., AS
SOLE MEMBER
By: /s/ Richard Bertrand
----------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President -- Development
FISCAL SERVICES GROUP, LLC
PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS
SOLE MEMBER
By: /s/ Richard Bertrand
---------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President - Development
MILFORD CARE, LLC
BY: MARSHALL PROPERTIES, INC., AS SOLE MEMBER
By: /s/ Richard Bertrand
---------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President
PARTNERS HEALTH GROUP -- FLORIDA, LLC
PARTNERS HEALTH GROUP -- LOUISIANA, LLC
PARTNERS HEALTH GROUP -- TEXAS, LLC
BY: PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS
SOLE MEMBER
By: /s/ Richard Bertrand
---------------------------------------------
Name: Richard Bertrand
Title: Senior Vice President
Accepted on behalf of the Initial Purchasers:
LEHMAN BROTHERS, INC.
By: /s/ Mike Konigsberg
------------------------------------
Name: Mike Konigsberg
Title: Authorized Representative