REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of May 17, 1996, by and between Sterling House Corporation, a Kansas
corporation (the "Company"), and the purchaser whose name and address is set
forth on the signature page hereof (the "Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated as of May
17, 1996, between the Company and the Purchaser (the "Purchase Agreement"). In
order to induce the Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide for the benefit of the holders (initially consisting of
the Purchaser and the Other Purchasers as defined below) of the Company's
Transfer Restricted Securities (as defined below) the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the
Closing under the Purchase Agreement.
The Company proposes to enter into substantially this same form of
registration rights agreement with certain other investors (the "Other
Purchasers") and expects to complete sales of the Debentures to them. The
Purchaser and the Other Purchasers are hereinafter sometimes collectively
referred to as the "Purchasers," and this Agreement and the registration rights
agreements executed by the Other Purchasers are hereinafter sometimes
collectively referred to as the "Agreements." The term "Placement Agent" shall
mean National Westminster Bank PLC, New York Branch.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
CLOSING: Has the meaning such term is given in the Purchase
Agreement.
CLOSING DATE: Has the meaning such term is given in the Purchase
Agreement.
COMMON STOCK: The shares of common stock of the Company, no par
value.
DEBENTURES: The Company's 6.75% Convertible Subordinated Debentures
due 2006 being sold and issued pursuant to the Purchase Agreement and the
Indenture in an aggregate principal amount of $35,000,000.
EFFECTIVE DATE: The date the Shelf Registration is declared effective
by the SEC.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended from
time to time.
INDEMNIFIED HOLDER: See Section 6(a).
INDENTURE: The Indenture, dated as of May 23, 1996, between the
Company and Fleet National Bank, as Trustee.
NASD: National Association of Securities Dealers, Inc.
PERSON: Any individual, partnership, corporation, trust or
unincorporated organization, or government (or any agency, instrumentality or
political subdivision thereof).
PROSPECTUS: The prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Transfer Restricted Securities, pursuant
to any registration covered by the Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.
REGISTRABLE SECURITIES: The Debentures and the shares of Common Stock
issuable upon conversion of the Debentures; PROVIDED THAT a Debenture or a share
of Common Stock, as the case may be, ceases to be a Registrable Security when it
is no longer a Transfer Restricted Security.
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REGISTRATION EXPENSES. See Section 5.
REGISTRATION STATEMENT: Any registration statement of the Company
which covers any of the Transfer Restricted Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such Registration
Statement.
SECURITIES ACT: The Securities Act of 1933, as amended from time to
time.
SEC: The Securities and Exchange Commission.
SHELF REGISTRATION: See Section 3.
TRANSFER RESTRICTED DEBENTURES: The Debentures upon original issuance
thereof and at all times subsequent thereto until the earlier of the following:
(i) such Debentures have been effectively registered under Section 5 of the
Securities Act and disposed of in accordance with the Registration Statement
covering them or (ii) such Debentures have been distributed to the public
pursuant to Rule 144 (or any similar provisions then in force).
TRANSFER RESTRICTED SECURITIES: The Transfer Restricted Debentures
and the Transfer Restricted Shares.
TRANSFER RESTRICTED SHARES: The shares of Common Stock issuable upon
conversion of the Debentures until the earlier of the following: (i) such
shares of Common Stock have been effectively registered under Section 5 of the
Securities Act and disposed of in accordance with the Registration Statement
covering them or (ii) such shares of Common Stock have been distributed to the
public pursuant to Rule 144 (or any similar provisions then in force).
TRUSTEE: The Trustee under the Indenture.
2. SECURITIES SUBJECT TO THIS AGREEMENT
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(a) REGISTRABLE SECURITIES. The securities entitled to the benefits of
this Agreement are the Registrable Securities.
(b) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a holder
of Registrable Securities whenever such Person is the beneficial owner of
Registrable Securities. The Company is entitled to treat the record holder of
Registrable Securities as beneficial owner of Registrable Securities unless
otherwise notified by such holder.
3. SHELF REGISTRATION: TIMING OF FILING, EFFECTIVENESS AND PERIOD OF USABILITY
Subject to the provisions of Section 4 hereof, the Company shall use its
best efforts to cause to be declared effective not later than November 19, 1996
a "shelf" Registration Statement (a "Shelf Registration") on Form S-3 or any
other appropriate form pursuant to Rule 415 (or similar rule that may be adopted
by the SEC) under the Securities Act for all the Registrable Securities, which
form shall be available for the sale of the Registrable Securities in accordance
with the intended method or methods of distribution thereof.
The Company agrees to use its best efforts to keep the Registration
Statement continuously effective and usable for resale of Registrable Securities
until 1095 days (the "Effectiveness Period") from the Effective Date or such
shorter period which will terminate when all the Registrable Securities covered
by such Registration Statement have been sold pursuant to such Registration
Statement or when all Registrable Securities otherwise have been sold pursuant
to Rule 144 or are freely tradeable in essentially the same manner as
contemplated in Section 4 below.
4. REGISTRATION PROCEDURES
In connection with the Company's obligation to file a Registration
Statement as provided in Section 3 hereof, the Company will as expeditiously as
possible:
(a) before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to Purchaser and the holders of
the Registrable
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Securities covered by such Registration Statement a copy of all such
documents proposed to be filed, which documents will be subject to
the review of Purchaser and such holders and the Company will not file any
Registration Statement or amendment thereto or any Prospectus or any
supplement thereto to which the holders of a majority in aggregate
principal amount of the Registrable Securities covered by such Registration
Statement shall reasonably object (provided that the Company may assume,
for the purposes of the foregoing that any holder of Registrable Securities
has no objection if the Company has not received notice from such holder
within five business days after delivery of such documents to such holder);
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be required by the rules, regulations or instructions
applicable to the registration form utilized by the Company or by the
Securities Act or rules and regulations thereunder for shelf registration
or otherwise necessary to keep the Registration Statement effective for the
applicable period and cause the Prospectus as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; 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 methods of disposition by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(c) notify Purchaser and the holders of Registrable Securities
promptly, and confirm such advice in writing:
(1) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective,
(2) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration
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Statement or the initiation of any proceedings for that purpose, and
(3) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(e) furnish, without charge, to Purchaser and each selling holder of
Registrable Securities, at least one conformed copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, all documents incorporated therein by reference
and all exhibits (including those incorporated by reference);
(f) deliver to Purchaser and each selling holder of Registrable
Securities without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of Purchaser and
the selling holders of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by the Prospectus
or any amendment or supplement thereto;
(g) at least 14 days prior to filing of the Registration Statement,
use its best efforts to furnish by certified mail to the beneficial holders
of the Registrable Securities, at the addresses of record specified on the
transfer books held by the Trustee, notice of the Company's intention to
file a Registration Statement and request that all holders of Registrable
Securities desiring to sell their Registrable Securities pursuant to the
Registration Statement notify the Company promptly in writing;
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(h) cooperate with Purchaser and the selling holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing
any restrictive legends;
(i) use its best efforts to cause the Registrable Securities covered
by the Registration Statement to be registered with or approved by such
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Securities in such jurisdictions as the sellers may specify in response to
inquiries to be made by the Company, provided that the Company will not be
required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action which would subject it to
general service of process in any such jurisdiction where it is not then so
subject;
(j) as provided in Section 3, if any event shall occur as a result of
which it is necessary, in the opinion of counsel for the Company or for the
holders of a majority of the Registrable Securities, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser,
prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable 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 therein not misleading;
(k) obtain a CUSIP number for all Registrable Securities (unless
already obtained), not later than the Effective Date;
(l) make available for inspection during normal business hours by a
representative of the holders of a majority of Registrable Securities and
any attorney or accountant retained by such representative, all financial
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and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to
supply all information reasonably requested by Purchaser or any such
attorney or accountant in connection with the Registration Statement;
provided that all such records, information or documents shall be kept
confidential by such Persons unless disclosure of such records, information
or documents is required by court or administrative order or is generally
available to the public other than as a result of disclosure in violation
of this paragraph (l);
(m) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make generally available to their security
holders an earning statement satisfying the provisions of Section 11(a) of
the Securities Act (in accordance with Rule 158 thereunder or otherwise),
no later than 45 days after the end of the 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the Effective Date, which
statements shall cover said 12-month period;
(n) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended from time to time (the "TIA"), and, in connection
therewith, cooperate with the Trustee under the Indenture and the holders
of the Debentures to effect such changes to the Indenture as may be
required for the 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 as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner; and
(o) if at any time an event of the kind described in Section 4(j)
shall occur, promptly notify Purchaser and the holders of Registrable
Securities that the use of the Prospectus must be discontinued.
Each selling holder of Registrable Securities as to which any registration
is being effected agrees, as a condition to the
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registration obligations with respect to such holder provided herein, to
furnish to the Company such information regarding the distribution of such
securities as the Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company
described in paragraph 4(o), such holder will forthwith discontinue disposition
of Registrable Securities until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 4(j) hereof, or until
it is advised in writing by the Company (which notice the Company shall give as
promptly as possible), that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus, and, if so directed by the Company, such 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 Registrable Securities current at the time of receipt of such
notice.
5. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation:
(1) all registration, filing and listing fees;
(2) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities and determination of
their eligibility for investment under the laws of such jurisdictions as
the holders of a majority in principal amount of the Registrable Securities
being sold may reasonably designate);
(3) printing, messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company;
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(5) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit
necessary to satisfy the requirements of the Securities Act and any "cold
comfort" letters required by or incident to such performance);
(6) securities acts liability insurance if the Company so desires;
(7) fees and expenses of other Persons retained by the Company; and
(8) fees and expenses associated with any NASD filing required to be
made in connection with the Registration Statement
(all such expenses being herein called "Registration Expenses") will be borne by
the Company, regardless of whether the Registration Statement becomes effective.
The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the securities to
be registered on a securities exchange, rating agency fees and the fees and
expenses of any Person, including special experts, retained by the Company.
6. INDEMNIFICATION AND CONTRIBUTION
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees, to indemnify and
hold harmless each holder of Registrable Securities, its officers, directors,
employees and agents and each Person who controls such holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person being sometimes hereinafter referred to as an "Indemnified
Holder") from and against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and legal expenses) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus or in any amendment
or supplement thereto or in any preliminary
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prospectus, or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by such holder expressly for
use therein; PROVIDED, HOWEVER, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus
if (i) such holder failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale of Registrable
Securities and (ii) the Prospectus would have completely corrected such
untrue statement or omission; and PROVIDED FURTHER, that the Company shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus as so amended or supplemented, such
holder thereafter fails to deliver such Prospectus as so amended or
supplemented, prior to or concurrently with the sale of a Registrable
Security to the person asserting such loss, claim, damage, liability or
expense who purchased such Registrable Security which is the subject thereof
from such holder. This indemnity will be in addition to any liability which
the Company may otherwise have. The Company will also indemnify
underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
holders of Registrable Securities.
If any action or proceeding (including any governmental investigation or
inquiry) shall be brought or asserted against any Indemnified Holder in respect
of which indemnity may be
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sought from the Company, such Indemnified Holder shall promptly notify the
Company in writing (but the omission to so notify the Company shall not
relieve it of any liability that it may have against any Indemnified Holder
otherwise than under this subsection), and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Holder and the payment of all expenses. Indemnified
Holders shall have the right, collectively, to employ their own counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of the Indemnified Holders
unless (a) the Company has agreed to pay such fees and expenses or (b) the
Company shall have failed to assume the defense of such action or proceeding
and have failed to employ counsel reasonably satisfactory to the Indemnified
Holders in any such action or proceeding or (c) the named parties to any such
action or proceeding (including any impleaded parties) include the
Indemnified Holders and the Company, and the Indemnified Holders shall have
been advised by counsel that there may be one or more legal defenses
available to the Indemnified Holders which are different from or additional
to those available to the Company (in which case, if the Indemnified Holders
notify the Company in writing that they elect to employ their own counsel at
the expense of the Company, the Company shall not have the right to assume
the defense of such action or proceeding on behalf of the Indemnified
Holders, it being understood, however, that the Company shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction 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 (together with appropriate local counsel) at any time for the
Indemnified Holders which firm shall be designated in writing by the
Indemnified Holders representing at least a majority of the aggregate
principal amount of the outstanding Debentures). Any such fees and expenses
payable by the Company shall be paid to the Indemnified Holders entitled
thereto as incurred by the Indemnified Holders. The Company shall not be
liable for any settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent, or if there be
a final judgment for the plaintiff in any such action or proceeding, the
Company agrees to indemnify and hold harmless the Indemnified Holders from
and
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against any loss or liability by reason of such settlement or judgment.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each holder of
Registrable Securities agrees to indemnify and hold harmless the Company, its
respective directors and officers and each Person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such holder, but only with respect to information relating to such
holder furnished in writing by such holder expressly for use in any Registration
Statement or Prospectus, or any amendment or supplement thereto, or any
preliminary prospectus. In case any action or proceeding shall be brought
against the Company or its respective directors or officers or any such
controlling person, in respect of which indemnity may be sought against a holder
of Registrable Securities, such holder shall have the rights and duties given
the Company, and the Company or its respective directors or officers or such
controlling person shall have the rights and duties given to each holder by the
preceding paragraph. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. Each holder of Registrable
Securities will also indemnify underwriters, selling brokers, dealer managers
and similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Company. The Company and each holder of Registrable Securities shall be
entitled to receive indemnities from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus or Registration Statement.
(c) CONTRIBUTION. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under
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Section 6(a) or Section 6(b) hereof (other than by reason of exceptions
provided in those Sections) in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company from the sale of the Debentures to Purchaser pursuant to the Purchase
Agreement on the one hand and each holder of Registrable Securities from the
offering of the Registrable Securities by such holder, on the other hand, 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 on the one hand and each holder of Registrable Securities on
the other in connection with the statements or omissions that resulted in
such losses, claims, damages, or liabilities, as well as the other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and each holder of Registrable Securities on the other shall be
deemed to be in the same proportion as the aggregate amount paid by Purchaser
to the Company pursuant to the Purchase Agreement for the Registrable
Securities purchased by such holder that were sold pursuant to the
Registration Statement bears to the difference (the "Difference") between the
amount such holder paid for the Registrable Securities that were sold
pursuant to the Registration Statement and the amount received by such holder
from such sale. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the particular holder and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company and the holders of Registrable Securities agree that it would not be
just and equitable if contributions pursuant to this subsection (c) were to
be determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable consideration referred to in the
first sentence of this subsection (c). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to
in the first sentence of this subsection
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(c) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigation or
defending against any action or claim that is the subject of this subsection
(c). Notwithstanding the provision of this subsection (c), each holder of
Registrable Securities shall not be required to contribute any amount in
excess of the amount by which the Difference exceeds the amount of any
damages that such holder has otherwise been required to pay by reason of such
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.
7. RULE 144 AND RULE 144A
For so long as the Company is subject to the reporting requirements of
Section 13 or 15 of the Exchange Act, the Company covenants that it will file
the reports required to be filed by it under the Securities Act and Section
13(a) or 15(d) of the Exchange Act and the rules and regulations adopted by the
SEC thereunder. If the Company is not subject to the reporting requirements of
Section 13 or 15 of the Exchange Act, the Company also covenants that it will
provide the information required pursuant to Rule 144A(d)(4) under the
Securities Act upon the request of any holder of Registrable Securities which
continues to be "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act and it will take such further action as any holder of
such Registrable Securities may reasonably request, all to the extent required
from time to time to enable such holder to sell its Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, so long as such provision does not require the
public filing of information relating to the Company which the Company is not
otherwise required to file, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or (c) any similar rule or regulation
hereafter adopted by the SEC that does not require the public filing of
information relating to the Company. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
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8. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Agreement enter into any agreement with respect to their
securities which is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
such agreements.
(b) ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will not
take any action, or permit any change to occur, with respect to the
Registrable Securities which would adversely affect the ability of the
holders of Registrable Securities to include such Registrable Securities in a
registration undertaken pursuant to this Agreement.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company has obtained the written consent
of holders of a majority of the Transfer Restricted Debentures and a majority
of the Transfer Restricted Shares. Notwithstanding the foregoing, a waiver
of consent to departure from the provision hereof that relates exclusively to
the rights of holders of Registrable Securities whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other holders of Registrable Securities may
be given by the holders of a majority of the Transfer Restricted Securities
being sold.
(d) NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, telecopier, or nationally recognized overnight express
courier postage prepaid, and shall be deemed given when so mailed or if
telecopied, when receipt is acknowledged, and shall be delivered as addressed
as follows:
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(1) if to the Purchaser, at the most current address given by the
Purchaser to the Company in accordance with the provisions of this Section
8(d), which address initially is as set forth on the signature page hereto;
(2) if to a holder of Registrable Securities, at its address of
record as indicated on the books of the transfer agent and registrar for
the Registrable Securities; and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 8(d).
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the addresses specified in the Indenture.
(e) 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 of Registrable Securities.
(f) 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.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
RULES AS TO CONFLICTS OF LAW.
(i) 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 unenforceable, the validity, legality and enforceability
of any such provision in
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every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(j) ENTIRE AGREEMENT. This 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 with respect to the securities sold pursuant to the Purchase
Agreement. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STERLING HOUSE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and CEO
Print or Type:
Name of Purchaser
(Individual or Institution):
/s/
---------------------------------
Name of Individual representing
Purchaser (if an Institution):
/s/
---------------------------------
Title of Individual representing
Purchaser (if an Institution):
/s/
---------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
---------------------------------
Address:
-------------------------
Telephone:
----------------------
Telecopier:
---------------------
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