Exhibit 10.118
THIRD AMENDMENT TO RIGHTS AGREEMENT
THIS THIRD AMENDMENT TO RIGHTS AGREEMENT (this "Amendment"), dated as
of October 1, 2002, is made by and between ARV ASSISTED LIVING, INC., a Delaware
corporation (the "Company"), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY (the
"Rights Agent").
RECITALS
A. WHEREAS, the Company and the Chasemellon Shareholders Services,
L.L.C. ("Chasemellon") entered into that certain Rights Agreement dated as of
May 14, 1998, as amended as of October 21, 1998 and April 24, 2000 (the "Rights
Agreement");
B. WHEREAS, Chasemellon, as assignor, and Rights Agent, as assignee,
entered into that Certain Assignment and Assumption of Rights Agreement dated
September 25, 2002 pursuant to which Chasemellon assigned and transferred all of
its right, title and interest under the Rights Agreement to Rights Agent, and
Rights Agent assumed and agreed to perform and to be bound by all of the terms
and conditions imposed upon Chasemellon under the Rights Agreement
C. WHEREAS, pursuant to Section 26 of the Rights Agreement, the
Company and the Rights Agent desire to amend the Rights Agreement as set forth
below;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. Amendment of Section 9. The following paragraph shall be added to
Section 9 beneath the last sentence of the first paragraph of Section 9.
"The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance of
shares in connection with the exercise of the Rights, including any required
registration under (i) the Securities Act of 1933, as amended from time to time
(the "Securities Act"), and (ii) the securities or "blue sky" laws of the
various states, in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement or statements for the purpose of effecting any such registration and
permit such statement(s) to become effective. At the commencement and
termination of any such suspension, the Company shall issue a public
announcement and shall provide written notice to the Rights Agent, stating that
the exercisability of the Rights has been temporarily suspended, or that such
suspension has terminated, as the case may be. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement has been declared effective."
2. Amendment of Section 23.1. The first sentence of Section 23.1 of
the Rights Agreement is hereby amended and restated to read in its entirety as
follows:
"23.1 Right to Redeem. The Board of Directors of the Company may,
at its option, at any time prior to the Distribution Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such
redemption price
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being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, pay the Redemption Price in Common Shares (based on the "current
per share market price," determined pursuant to Section 11.4, of the Common
Shares at the time of redemption), cash or any other form of consideration
deemed appropriate by the Board of Directors."
3. Amendment of Section 27.1. Section 27.1 of the Rights Agreement is
hereby amended and restated to read in its entirety as follows:
"27.1 Exchange of Common Shares for Rights. The Board of
Directors of the Company may, at its option, at any time after the occurrence of
a Trigger Event, exchange Common Shares for all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11.1.2) by exchanging that number of
Common Shares having an aggregate value equal to the Spread (with such value
being based on the current per share market price (as determined pursuant to
Section 11.4) on the date of the occurrence of a Trigger Event) per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such amount per Right being
hereinafter referred to as the "Exchange Consideration"). Notwithstanding the
foregoing, the Board shall not be empowered to effect an exchange for more than
that number of Rights for which there are sufficient Common Shares authorized
but unissued, or held by the Company as treasury shares, to permit the exchange
for Rights. From and after the occurrence of an event specified in Section 13.1,
any Rights that theretofore have not been exchanged pursuant to this Section
27.1 shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 27.1. The exchange of the Rights by
the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish."
4. Effectiveness. This Amendment shall be deemed effective as of
August 20, 2002 as if executed by both parties on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
5. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state, without giving
effect to the choice of law provisions thereof. This Amendment may be executed
in any number of counterparts, each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument. If any term, provision, covenant or restriction
of this Amendment is held by a court of competent jurisdiction or other
authority to be invalid, illegal, or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Amendment shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Rights Agreement to be duly executed as of the date first above
written.
ARV ASSISTED LIVING, INC.
By:
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Name: Douglas M. Pasquale
Its: Chairman, Chief Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By:
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Name:
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Its:
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