EXECUTION COPY
Registration Rights Agreement
BY AND BETWEEN
BROOKDALE LIVING COMMUNITIES, INC.,
AND
HEALTH PARTNERS
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Dated as of May 14, 1999
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TABLE OF CONTENTS
Page
Article 1 DEFINITIONS ............................................1
Section 1.1 Definitions ............................................1
Article 2 PIGGYBACK REGISTRATION; SHELF REGISTRATION .............4
Section 2.1 Piggyback Registration Rights ..........................4
2.1.1 Right to Piggyback ................................4
2.1.2 Priority on Registrations .........................5
2.1.3 Suspension of Piggyback Dispositions ..............6
Section 2.2 Shelf Registration .....................................6
2.2.1 Obligation to File ................................6
2.2.2 Maintenance of Effectiveness ......................6
2.2.3 Certain Limitations on Sales ......................7
2.2.4 Certain Limitations on Sale of Notes Pursuant
to Shelf Registration ..........................7
Section 2.3 Registration Procedures ................................7
Section 2.4 Registration Expenses .................................11
Section 2.5 Indemnification .......................................12
Article 3 TRANSFEREES ...........................................15
Section 3.1 Transferrees ..........................................15
Article 4 TERMINATION ...........................................15
Section 4.1 Termination ...........................................15
Article 5 MISCELLANEOUS .........................................15
Section 5.1 Notices ...............................................15
Section 5.2 Governing Law .........................................16
Section 5.3 Successors and Assigns ................................16
Section 5.4 Duplicate Originals ...................................16
Section 5.5 Severability ..........................................16
Section 5.6 No Waivers; Amendments ................................17
Section 5.7 Entire Agreement ......................................17
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REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement") dated as of May 14, 1999, is entered into by and between Brookdale
Living Communities, Inc., a Delaware corporation (including its successors, the
"Company"), Health Partners ("Health Partners") and any direct or indirect
transferee of Health Partners that becomes a party to this Registration Rights
Agreement in accordance with Section 3.1 hereto.
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
Article 1
DEFINITIONS
-----------
Section 1.1 Definitions.
"Advice" shall have the meaning provided in Section
2.1.3 hereof.
"Affiliate" means, with respect to any Person, any
Person who, directly or indirectly, controls, is controlled by or
is under common control with that Person. For purposes of this
definition, "control" when used with respect to any Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Common Stock" means shares of the Common Stock, $.01
par value per share, of the Company, and any capital stock into
which such Common Stock thereafter may be changed.
"Common Stock Equivalents" means, without duplication
with any other Common Stock or Common Stock Equivalents, any
security of the Company which is convertible into, exercisable for
or exchangeable for, directly or indirectly, Common Stock of the
Company, whether at the time of issuance or upon the passage of
time or the occurrence of some future event.
"Company" shall have the meaning provided in the
introductory paragraph hereof.
"Conversion Common Stock" means (i) all shares of Common
Stock issued or issuable upon conversion of the Notes, provided
that such Shares are owned by a Holder (or are issuable upon
conversion of Notes that are owned by a Holder) and (ii) any
shares of Common Stock issued as a dividend or other distribution
with respect to or in exchange or in replacement of any shares of
the Common Stock referred to in clause (i) above.
"Effectiveness Period" shall have the meaning provided
in Section 2.2.1 hereof.
"Effectiveness Target Date" means the 180th day
following the date of this Registration Rights Agreement.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated by the
SEC thereunder.
"Excluded Registration" shall have the meaning provided
in Section 2.1.1 hereof.
"Filing Date" means the 90th day following the date of
this Registration Rights Agreement.
"Fully-Diluted Common Stock" means, at any time, the
then outstanding Common Stock of the Company plus (without
duplication) all shares of Common Stock issuable, whether at such
time or upon the passage of time or the occurrence of future
events, upon the conversion or exchange of all then outstanding
Common Stock Equivalents.
"Health Partners" shall have the meaning provided in the
introductory paragraph hereof.
"Health Partners Holders" means, collectively, Health
Partners and any Affiliates or direct or indirect partners of
Health Partners who own any Common Stock or Common Stock
Equivalents or any interest therein.
"Holder" means (i) Health Partners and (ii) any direct
or indirect transferee of Health Partners who shall become a party
to this Registration Rights Agreement in accordance with Section
3.1 hereof.
"Inspectors" shall have the meaning provided in Section
2.3(x) hereof.
"Losses" shall have the meaning provided in Section
2.5.1 hereof.
"Majority Health Partners Holders" means Health Partners
Holders owning Common Stock and/or Common Stock Equivalents
representing a majority of the Fully-Diluted Common Stock then
owned by all Health Partners Holders.
"Material Adverse Effect shall have the meaning provided
in Section 2.1.2 hereof.
"NASD" shall have the meaning provided in Section 2.4
hereof.
"Notes" means the 5 1/2% Convertible Subordinated Notes
due 2009 of the Company in the aggregate principal amount of
$100,000.00.
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"Person" or "person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or other agency or political
subdivision thereof.
"Prime Registration Rights Agreement" means the
Registration Rights Agreement, dated as of May 7, 1997, by and
among Company, The Prime Group, Inc., Prime Group Limited
Partnership and Prime Group, VI, L.P.
"Prospectus" means the prospectus included in any
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the
shares of Common Stock covered by such Registration Statement, and
all other amendments and supplements to any such prospectus,
including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in
such prospectus.
"Records" shall have the meaning provided in Section
2.3(x) hereof.
"Registration Expenses" shall have the meaning provided
in Section 2.4 hereof.
"Registration Rights Agreement" means this Registration
Rights Agreement, as such from time to time may be amended.
"Registration Statement" means any registration
statement of the Company under the Securities Act that covers any
shares of Common Stock pursuant to the provisions of Article 2
hereof (or with respect to which any shares of Common Stock are
eligible for inclusion in accordance with Section 2.1 hereof),
including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement.
"SEC" means the U. S. Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
"Seller Affiliates" shall have the meaning provided in
Section 2.5.1 hereof.
"Shelf Registration" shall have the meaning provided in
Section 2.2.1 hereof.
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"Shelf Securities" means (i) all of the Notes, provided
that such Notes are held by Holders and (ii) the Conversion Common
Stock.
"Suspension Notice" shall have the meaning provided in
Section 2.1.3 hereof.
Section 1.2 Rules of Construction. Unless the context otherwise
requires
(1) a term has the meaning assigned to it;
(2) words in the singular include the plural, and words
in the plural include the singular;
(3) provisions apply to successive events and
transactions; and
(4) "herein," "hereof" and other words of similar import
refer to this Registration Rights Agreement as a whole and not
to any particular Article, Section or other subdivision.
Article 2
PIGGYBACK REGISTRATION; SHELF REGISTRATION
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Section 2.1 Piggyback Registration Rights.
------------------------------
2.1.1 Right to Piggyback. Each time the Company proposes to
register any of its Common Stock (other than pursuant to an Excluded
Registration) under the Securities Act for sale to the public (whether for the
account of the Company or the account of any securityholder of the Company), the
Company shall give prompt written notice to each Holder (which notice shall be
given not less than thirty (30) days prior to the effective date of the
Company's Registration Statement), which notice shall offer each such Holder the
opportunity to include any or all of its or his Conversion Common Stock in such
Registration Statement, subject to the limitations contained in Section 2.1.2
hereof. Each Holder who desires to have its or his Conversion Common Stock
included in such Registration Statement shall so advise the Company in writing
(stating the number of shares desired to be registered) within twenty (20) days
after the date of such notice from the Company. Any Holder shall have the right
to withdraw (provided that, after such Holder has entered into an underwriting
agreement, such right to withdraw will exist only to the extent provided in such
underwriting agreement) such Holder's request for inclusion of such Holder's
Conversion Common Stock in any Registration Statement pursuant to this Section
2.1.1 by giving written notice to the Company of such withdrawal. Subject to
Section 2.1.2 hereof, the Company shall include in such Registration Statement
all such Conversion Common Stock so requested to be included therein; provided,
however, that the Company may at any time withdraw or cease proceeding with any
such registration if it shall at the same time withdraw or cease proceeding with
the registration of all other equity securities originally proposed to be
registered. As used herein, "Excluded Registration" means a registration under
the Securities Act of (i) securities registered pursuant to the Shelf
Registration, (ii) securities
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registered on Form S-4 or S-8 or any similar successor form, (iii) securities
registered to effect the acquisition by the Company of, or combination by the
Company with, another Person or registered to effect an offering solely to the
Company's existing stockholders and (iv) securities registered pursuant to any
primary shelf registration statement on the part of the Company or any resale
shelf registration statement on behalf of any other Person.
2.1.2 Priority on Registrations. If the managing underwriter
or underwriters advise the Company that the inclusion of the Conversion Common
Stock proposed to be included in a proposed registration in accordance with
Section 2.1.1 hereof would materially and adversely affect the price or success
of the offering (a "Material Adverse Effect"), then (i) the number of such
Holder's shares of Conversion Common Stock to be included in the Registration
Statement shall be reduced to an amount which, in the judgment of the managing
underwriter or underwriters, would eliminate such Material Adverse Effect, or
(ii) if no such reduction would, in the judgment of the managing underwriter or
underwriters eliminate such Material Adverse Effect, then the Company shall have
the right to exclude all such Conversion Common Stock from such Registration
Statement. Any partial reduction in the number of shares of Conversion Common
Stock to be included in the Registration Statement pursuant to clause (i) of the
immediately preceding sentence shall be effected pro rata based on the ratio
which such Holder's requested shares bears to the total number of shares of
Conversion Common Stock requested to be included in such Registration Statement
by all Holders, and any reduction in the number of shares of Common Stock to be
included in the Registration Statement pursuant to the immediately preceding
sentence shall be effected pro rata among all Persons (including Holders) who
have requested (pursuant to contractual registration rights) the inclusion of
shares of Common Stock in such Registration Statement (based on the respective
number of such shares such Person has requested to be included); provided,
however, that such inclusion shall be subject to the priorities set forth in the
Prime Registration Rights Agreement. If as a result of the provisions of this
Section 2.1.2 any Holder shall not be entitled to include all shares of
Conversion Common Stock in a registration that such Holder has requested to be
so included, such Holder may withdraw (provided that, after such Holder has
entered into an underwriting agreement, such right to withdraw will exist only
to the extent provided in such underwriting agreement) such Holder's request to
include shares of Conversion Common Stock in such Registration Statement. No
Person may participate in any Registration Statement pursuant to this Section
2.1 unless such Person (x) agrees to sell such Person's shares of Common Stock
on the basis provided in any underwriting arrangements approved by the Company
or by the holder of demand registration rights who has initiated such
registration and (y) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents, each in
customary form, reasonably required under the terms of such underwriting
arrangements; provided, however, that no such Person shall be required to make
any representations or warranties in connection with any such registration other
than representations and warranties as to (i) such Person's ownership of his or
its shares of Common Stock to be sold or transferred free and clear of all
liens, claims, and encumbrances, (ii) such Person's power and authority to
effect such transfer, and (iii) such matters pertaining to compliance with
securities laws, including representations and warranties concerning the
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accuracy of any information provided in writing by such Person for inclusion in
the Registration Statement, as may be reasonably requested; provided further,
however, that the obligation of such Person to indemnify pursuant to any such
underwriting arrangements shall be several, not joint and several, among such
Persons selling shares of Common Stock, and the liability of each such Person
will be in proportion to, and provided further that such liability will be
limited to, the net amount received (after excluding underwriting discounts and
commissions, but not other expenses) by such Person from the sale of his or its
shares of Common Stock pursuant to such registration.
2.1.3 Suspension of Piggyback Dispositions. Each Holder agrees
by acquisition of any shares of Common Stock that, upon receipt of any notice (a
"Suspension Notice") from the Company of the happening of any event of the kind
described in Section 2.3(v)(C), such Holder will forthwith discontinue
disposition of shares of Common Stock registered pursuant to this Section 2.1
until such Holder's receipt of the copies of the supplemented or amended
Prospectus, 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 which are incorporated by reference in the
Prospectus.
Section 2.2 Shelf Registration.
-------------------
2.2.1 Obligation to File. The Company agrees to file with the
SEC, as soon as practicable, but in no event later than the Filing Date, a
Registration Statement for a resale offering to be made on a continuous basis
pursuant to Rule 415 promulgated under the Securities Act covering all of the
Shelf Securities (the "Shelf Registration"). The Shelf Registration shall be on
Form S-3 under the Securities Act or another appropriate form permitting
registration of such Shelf Securities for resale by the Holders of Conversion
Common Stock in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Company shall use its best
efforts to cause the Shelf Registration to be declared effective pursuant to the
Securities Act as promptly as practicable following the filing thereof, but in
no event later than the Effectiveness Target Date, and to keep the Shelf
Registration continuously effective under the Securities Act during the term of
this Registration Rights Agreement, or such shorter period ending when either
(1) all Shelf Securities covered by the Shelf Registration have been sold in the
manner set forth and as contemplated in the Shelf Registration or pursuant to
Rule 144 promulgated under the Securities Act or (2) there cease to be
outstanding any Shelf Securities (the "Effectiveness Period").
2.2.2 Maintenance of Effectiveness. The Company shall use its
best efforts to keep the Shelf Registration continuously effective for the
Effectiveness Period, by supplementing and amending the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, if required by the
Securities Act or if reasonably requested by Holders of Shelf Securities covered
by such Registration Statement or by any underwriter of such Shelf Securities.
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2.2.3 Certain Limitations on Sales. Notwithstanding anything
to the contrary in Section 2.2.1 or Section 2.2.2 hereof, the Company may, by
delivering written notice to the Holders of Conversion Common Stock, prohibit
offers and sales of Conversion Common Stock pursuant to the Shelf Registration
until a date not later than 90 days after the date of such notice if (i) the
Company is engaged in confidential negotiations or other confidential business
activities, disclosure of which would be required in such Registration Statement
(but which public disclosure would not be required if offers and sales were not
made pursuant to such Registration Statement), and the Company determines in
good faith that such disclosure would be materially adverse to the Company and
its stockholders (provided, however, that upon the public disclosure by the
Company of the negotiations or business activities described above, the
suspension of the use of the Shelf Registration pursuant to this Section 2.2.3
shall cease and the Company shall promptly notify Holders of Conversion Common
Stock that dispositions of Conversion Common Stock may be resumed) or (ii) the
Company is required to file a post effective amendment to such Shelf
Registration. In no event may the Company prohibit offers and sales of
Conversion Common Stock pursuant to the Shelf Registration (i) for a period of
more than 90 days following the delivery by the Company of the notice provided
for in the first sentence of this Section 2.2.3 or (ii) more than twice in any
12-month period.
2.2.4 Certain Limitations on Sale of Notes Pursuant to Shelf
Registration. Notwithstanding anything in this Article 2 to the contrary, (i) no
Holder will sell any Notes pursuant to the Shelf Registration except pursuant to
an underwritten offering, (ii) the Holders will effect no more than three such
underwritten offerings of Notes in the aggregate pursuant to the Shelf
Registration and (iii) the Holders will not effect more than one such
underwritten offering of Notes pursuant to the Shelf Registration in any nine
month period.
Section 2.3 Registration Procedures. In connection with the
Company's registration obligations hereunder, the Company shall effect such
registrations on the appropriate form available for the sale of the Common Stock
(in the case of any registration pursuant to Section 2.1 hereof) or Shelf
Securities (in the case of any registration pursuant to Section 2.2 hereof) to
permit the sale of such Common Stock or Shelf Securities, as applicable, in
accordance with the intended method or methods of disposition thereof and
subject to the provisions hereof, and pursuant thereto the Company shall as
expeditiously as possible:
(i) prepare and file with the SEC a Registration
Statement on any appropriate form under the Securities Act with
respect to such shares of Common Stock or Shelf Securities, as
applicable, and use its best efforts to cause such Registration
Statement to become effective as quickly as practicable
(ii) prepare and file with the SEC such amendments,
post-effective amendments, and supplements to such Registration
Statement and the Prospectus used in connection therewith as may
be necessary to keep such Registration Statement continuously
effective for the applicable time period (which, (i) in the case
of a Registration Statement in which shares of Common
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Stock are included pursuant to Section 2.1 hereof, shall be not
less than 180 days or such lesser period in the case of an
underwritten offering as is necessary for the underwriters to sell
unsold allotments, and (ii) in the case of a Registration
Statement pursuant to Section 2.2 hereof, shall be the
Effectiveness Period) and comply on the Company's part with the
provisions of the Securities Act applicable to the Company with
respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth
in such Registration Statement;
(iii) furnish to each seller of Common Stock or Shelf
Securities, as applicable, pursuant to such Registration Statement
and the underwriters of the securities being registered such
number of copies of such Registration Statement, each amendment
and supplement thereto, the Prospectus included in such
Registration Statement (including each preliminary Prospectus),
any documents incorporated by reference therein and such other
documents as such seller or underwriters may reasonably request in
order to facilitate the disposition of such Common Stock or Shelf
Securities, as applicable, or the sale of such securities by such
underwriters (it being understood that, subject to the
requirements of the Securities Act and applicable state securities
laws and to the provisions of Section 2.2.3 hereof, the Company
consents to the use of the Prospectus and any amendment or
supplement thereto by each seller and the underwriters in
connection with the offering and sale of the Common Stock or Shelf
Securities, as applicable, covered by the Registration Statement
of which such Prospectus, amendment or supplement is a part);
(iv) use its commercially reasonable efforts to
register or qualify such Common Stock or Shelf Securities, as
applicable, under such other securities or blue sky laws of such
U.S. states as the managing underwriter or underwriters reasonably
request (or, in the event the Registration Statement does not
relate to an underwritten offering, as the holders of a majority
of such shares of Common Stock or Shelf Securities, as applicable,
may reasonably request); use its commercially reasonable efforts
to keep each such registration or qualification (or exemption
therefrom) effective during the period in which such Registration
Statement is required to be kept effective; and do any and all
other acts and things which may be reasonably necessary or
advisable to enable each seller to consummate the disposition of
the shares of Common Stock or Shelf Securities, as applicable,
owned by such seller in such jurisdictions (provided, however,
that the Company will not be required to (A) qualify generally to
do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (B) consent to
general service of process in any such jurisdiction or (C) subject
itself to taxation in any such jurisdiction);
(v) promptly notify each seller and each underwriter
and (if requested by any such Person) confirm such notice in
writing (A) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed and, with respect to a
Registration Statement or any post-effective
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amendment, when the same has become effective, (B) of the issuance
by any state securities or other regulatory authority of any order
suspending the qualification or exemption from qualification of
any of the shares of Common Stock or Shelf Securities, as
applicable, under state securities or "blue sky" laws or the
initiation of any proceedings for that purpose, and (C) of the
happening of any event which makes any statement made in a
Registration Statement or related Prospectus untrue or which
requires the making of any changes in such Registration Statement,
Prospectus or documents so that they will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and, as promptly as practicable
thereafter, prepare and file with the SEC and furnish a supplement
or amendment to such Prospectus so that, as thereafter deliverable
to the purchasers of such shares of Common Stock or Shelf
Securities, as applicable, such Prospectus will not contain any
untrue statement of a material fact or omit a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) make generally available to the Company's
securityholders an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act no later than thirty (30) days
after the end of the twelve (12) month period beginning with the
first day of the Company's first fiscal quarter commencing after
the effective date of a Registration Statement, which earnings
statement shall cover said twelve (12) month period, and which
requirement will be deemed to be satisfied if the Company timely
files complete and accurate information on Forms 10-Q, 10-K and
8-K under the Exchange Act and otherwise complies with Rule 158
promulgated under the Securities Act;
(vii) if reasonably requested by the managing
underwriter or underwriters or any seller, promptly incorporate in
a Prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or any
seller reasonably requests to be included therein, including,
without limitation, with respect to the shares of Common Stock or
Shelf Securities, as applicable, being sold by such seller, the
purchase price being paid therefor by the underwriters and with
respect to any other terms of the underwritten offering of the
shares of Common Stock or Shelf Securities, as applicable, to be
sold in such offering, and promptly make all required filings of
such Prospectus supplement or post-effective amendment;
(viii)as promptly as practicable after filing with the
SEC of any document which is incorporated by reference into a
Registration Statement (in the form in which it was incorporated),
deliver a copy of each such document to each seller;
(ix) cooperate with the sellers and the managing
underwriter or underwriters to facilitate the timely preparation
and delivery of certificates (which shall not bear any restrictive
legends unless required under applicable law) representing
securities sold under any Registration Statement, and enable such
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securities to be in such denominations and registered in such
names as the managing underwriter or underwriters or such sellers
may request and keep available and make available to the Company's
transfer agent prior to the effectiveness of such Registration
Statement a supply of such certificates;
(x) promptly make available for inspection by any
seller, any underwriter participating in any disposition pursuant
to any Registration Statement, and any attorney, accountant or
other agent or representative retained by any such seller or
underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably
necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement;
(xi) furnish to each seller in an underwritten offering
and underwriter a signed counterpart of (A) an opinion or opinions
of counsel to the Company, and (B) a comfort letter or comfort
letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as
such sellers or managing underwriter reasonably requests;
(xii) cause the shares of Common Stock or Shelf
Securities, as applicable, included in any Registration Statement
to be (A) listed on each securities exchange, if any, on which
similar securities issued by the Company are then listed, or (B)
authorized to be quoted and/or listed (to the extent applicable)
on the National Association of Securities Dealers, Inc. Automated
Quotation System or the Nasdaq National Market if the shares of
Common Stock or Shelf Securities, as applicable, so qualify;
(xiii)reasonably cooperate with each seller and each
underwriter participating in the disposition of such shares of
Common Stock or Shelf Securities, as applicable, and their
respective counsel in connection with any filings required to be
made with the National Association of Securities Dealers, Inc.;
(xiv) during the period when the Prospectus is required
to be delivered under the Securities Act, promptly file all
documents required to be filed with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act;
(xv) notify each seller of shares of Common Stock or
Shelf Securities, as applicable, promptly of any request by the
SEC for the amending or supplementing of such Registration
Statement or Prospectus or for additional information;
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(xvi) prepare and file with the SEC promptly any
amendments or supplements to such Registration Statement or
Prospectus which, in the opinion of counsel for the Company or in
the reasonable opinion of counsel for the managing underwriter, is
required in connection with the distribution of the shares of
Common Stock or Shelf Securities, as applicable;
(xvii)enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) as are
customary in connection with an underwritten registration; and
(xviii)advise each seller of such shares of Common Stock
or Shelf Securities, as applicable, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any
stop order by the SEC suspending the effectiveness of such
Registration Statement or the initiation or threatening of any
proceeding for such purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal
at the earliest possible moment if such stop order should be
issued.
Section 2.4 Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Article 2 including, without
limitation, all registration and filing fees, all fees and expenses associated
with filings required to be made with the National Association of Securities
Dealers, Inc. ("NASD") (including, if applicable, the fees and expenses of any
"qualified independent underwriter" as such term is defined in Schedule E of the
By-Laws of the NASD, and of its counsel), as may be required by the rules and
regulations of the NASD, 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 shares of Common Stock or Shelf
Securities, as applicable), rating agency fees, printing expenses (including
reasonable expenses of printing certificates for the shares of Common Stock or
Shelf Securities, as applicable, in a form eligible for deposit with Depository
Trust Company and of printing Prospectuses if the printing of Prospectuses is
reasonably requested by a holder of shares of Common Stock or Shelf Securities,
as applicable), messenger and delivery expenses, the Company's internal expenses
(including without limitation all salaries and expenses of its officers and
employees performing legal or accounting duties), the fees and expenses incurred
in connection with any listing of the shares of Common Stock or Shelf
Securities, as applicable, fees and expenses of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit or "cold comfort" letters required by or incident to such performance),
securities acts liability insurance (if the Company elects to obtain such
insurance), the fees and expenses of any special experts retained by the Company
in connection with such registration, and the fees and expenses of other Persons
retained by the Company and reasonable fees and expenses of one firm of counsel
for the sellers (which shall be selected by the holders of a majority of the
shares of Common Stock or Shelf Securities, as applicable, being included in any
particular Registration Statement) (all such expenses being herein called
"Registration Expenses") will be borne by the Company whether or not any
Registration Statement becomes effective; provided that in no event shall
Registration Expenses include any underwriting discounts, commissions, or fees
11
attributable to the sale of the shares of Common Stock or Shelf Securities, as
applicable, or any counsel (except as provided above), accountants, or other
Persons retained or employed by the sellers.
Section 2.5 Indemnification.
----------------
2.5.1 The Company agrees to indemnify and reimburse, to the
fullest extent permitted by law, each Holder who offers or sells shares of
Common Stock pursuant to a Registration Statement, and each of its employees,
agents, representatives, partners, officers, and directors and each Person who
controls such Holder (within the meaning of the Securities Act or the Exchange
Act) and any investment advisor thereof (collectively, the "Seller Affiliates")
(i) against any and all losses, expenses, claims, damages or liabilities
(including, without limitation, reasonable attorneys' fees and disbursements,
subject to the limitations set forth in Section 2.5.3 hereof) (collectively,
"Losses" and each individually, a "Loss") based upon, arising out of, related to
or resulting from any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus, or preliminary Prospectus
or any amendment thereof or supplement thereto, or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which made, not
misleading, (ii) against any and all Loss, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon, arising out of, related to or resulting from
any such untrue statement or omission or alleged untrue statement or omission,
and (iii) against any and all costs and expenses (including, subject to the
provisions of Section 2.5.3 hereof, reasonable fees and disbursements of
counsel) as may be reasonably incurred in investigating, preparing, or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon,
arising out of, related to or resulting from any such untrue statement or
omission or alleged untrue statement or omission, to the extent that any such
expense or cost is not paid under clause (i) or (ii) above; except insofar as
the same are made in reliance upon and in strict conformity with information
furnished in writing to the Company by such seller or any Seller Affiliate for
use therein or arise from such seller's or any Seller Affiliate's failure to
deliver a copy of the Registration Statement or Prospectus or any amendments or
supplements thereto after the Company has furnished such seller or Seller
Affiliate with a sufficient number of copies of the same. The reimbursements
required by this Section 2.5.1 will be made by periodic payments during the
course of the investigation or defense, as and when bills are received or
expenses incurred.
2.5.2 In connection with any Registration Statement in which a
seller of shares of Common Stock or Shelf Securities, as applicable, is
participating, each such seller will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such Registration Statement or Prospectus and, to the
fullest extent permitted by law, each such seller will indemnify the Company and
its directors and officers, employees, agents, representatives and each Person
who controls the Company (within the meaning of the Securities Act or the
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Exchange Act) (i) against any and all Losses resulting from any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus, or any preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) against any and all Loss, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon, arising out of, related to or resulting from
any such untrue statement or omission or alleged untrue statement or omission,
and (iii) against any and all costs and expenses (including, subject to the
provisions of Section 2.5.3 hereof, reasonable fees and disbursements of
counsel) as may be reasonably incurred in investigating, preparing, or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon,
arising out of, related to or resulting from any such untrue statement or
omission or alleged untrue statement or omission, but, in the case of each of
the foregoing clauses (i), (ii) and (iii), only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is made in
reliance upon and in strict conformity with information furnished in writing to
the Company by such seller or any Seller Affiliate for use therein or arise from
such seller's or any Seller Affiliate's failure to deliver a copy of the
Registration Statement or Prospectus or any amendments or supplements thereto
after the Company has furnished such seller or Seller Affiliate with a
sufficient number of copies of the same; provided that the obligation to
indemnify will be several, not joint and several, among such sellers of shares
of Common Stock or Shelf Securities, as applicable, and the liability of each
such seller of shares of Common Stock or Shelf Securities, as applicable, will
be in proportion to, and provided further that such liability will be limited
to, the net amount received by such seller from the sale of shares of Common
Stock or Shelf Securities, as applicable, pursuant to such Registration
Statement; provided, further, that such seller of shares of Common Stock or
Shelf Securities, as applicable, shall not be liable in any such case to the
extent that prior to the filing of any such Registration Statement or Prospectus
(or amendment thereof or supplement thereto from which such Loss has arisen),
such seller has furnished in writing to the Company information expressly for
use in such Registration Statement or Prospectus or any amendment thereof or
supplement thereto which corrected or made not misleading information previously
furnished to the Company.
2.5.3 Any Person entitled to indemnification hereunder will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
such notice shall not limit the rights of such Person unless the indemnifying
party is materially prejudiced thereby) and (ii) permit such indemnifying party
to assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such Person unless (A) the indemnifying party
has agreed to pay such fees or expenses, (B) the indemnifying party shall have
failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such Person or (C) in such party's reasonable judgment, a
conflict of interest between such indemnified party and
13
indemnifying party exists with respect to such claim. If such defense is not
assumed by the indemnifying party as permitted hereunder, the indemnifying party
will not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent will not be unreasonably withheld).
If such defense is assumed by the indemnifying party pursuant to the provisions
hereof, such indemnifying party shall not settle or otherwise compromise the
applicable claim unless (1) such settlement or compromise contains a full and
unconditional release of the indemnified party or (2) the indemnified party
otherwise consents in writing. In the event an indemnifying party elects not to
assume the defense of a claim or an indemnified party, in its reasonable
judgment, concludes that a conflict of interest exists as described in clause
(C) above, the indemnifying party will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim.
2.5.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 2.5.1 or Section 2.5.2 are
unavailable to hold harmless an indemnified party in respect of any Losses
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and the indemnified party in connection with the actions which resulted in
the Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, 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 such indemnifying party or indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 2.5.4 were determined by pro rata allocation (even if the Holders or any
underwriters or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 2.5.4. The amount paid or payable by
an indemnified party as a result of the Losses referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or, except as provided in
Section 2.5.3, defending any such action or claim. Notwithstanding the
provisions of this Section 2.5.4, no Holder shall be required to contribute an
amount greater than the dollar amount by which the net proceeds received by such
Holder with respect to the sale of any shares of Common Stock or Shelf
Securities, as applicable, pursuant to this Article 2 exceeds the amount of
damages which such Holder has otherwise been required to pay by reason of any
and all untrue or alleged untrue statements of material fact or omissions or
alleged omissions of material fact made in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto related to such sale of shares of Common Stock or Shelf Securities, as
applicable. 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 in this Section 2.5.4 to contribute shall be several in proportion
to the amount of shares of Common Stock or Shelf Securities, as applicable, sold
by them, and not joint.
14
If indemnification is available under this Section 2.5, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 2.5.1 and Section 2.5.2 without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 2.5.4 subject, in the case of the Holders, to the
limited dollar amounts set forth in Section 2.5.2.
Article 3
TRANSFEREES
-----------
Section 3.1 Transferees. Other than in the case of transfers to the
public pursuant to an effective Registration Statement or sales to the public
pursuant to Rule 144 promulgated under the Securities Act, each Holder may (but
shall not be required to) cause any proposed transferee of any Common Stock or
Common Stock Equivalent or any interest therein held by him or it to agree, by
execution of a counterpart signature page hereto, to take and hold such Common
Stock or Common Stock Equivalent subject to the provisions and upon the
conditions specified in this Registration Rights Agreement and to become a party
to this Registration Rights Agreement.
Article 4
TERMINATION
-----------
Section 4.1 Termination. Subject to earlier termination of certain
provisions hereof as provided herein, the provisions of this Registration Rights
Agreement shall terminate on the date that is 10 years following the date of
this Registration Rights Agreement.
Article 5
MISCELLANEOUS
-------------
Section 5.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier, by registered or certified mail,
postage prepaid, return receipt requested, or by overnight courier, addressed as
follows (or at such other address as may be substituted by notice given as
herein provided):
If to the Company:
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
with copies to (which shall not constitute notice):
15
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
and
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to any Holder, at its address listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to have been
given or made as of the date so delivered if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five (5)
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee); and one (1) business day after delivery to
a reputable overnight courier service guaranteeing next business day delivery.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section 5.2 Governing Law. THIS REGISTRATION RIGHTS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 5.3 Successors and Assigns. This Registration Rights
Agreement shall be binding upon the Company, each Holder, and their respective
successors and permitted assigns.
Section 5.4 Duplicate Originals. All parties may sign any number of
copies of this Registration Rights Agreement. Each signed copy shall be an
original, but all of them together shall represent the same agreement.
Section 5.5 Severability. In case any provision in this Registration
Rights Agreement shall be held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and the remaining provisions shall not in any way be
affected or impaired thereby.
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Section 5.6 No Waivers; Amendments.
-----------------------
5.6.1 No failure or delay on the part of the Company or any
Holder in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or any Holder at law or in equity or otherwise.
5.6.2 Any provision of this Registration Rights Agreement may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Company, the Holders holding at least a majority of the
Fully-Diluted Common Stock held by all Holders, and the Majority Health Partners
Holders.
Section 5.7 Entire Agreement. This Registration Rights Agreement
contains the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings with
respect to such subject matter.
[Signature Pages Follow]
17
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Executive Vice President
HEALTH PARTNERS
By: Capital Z Financial Services Fund II, L.P.,
its general partner
By: Capital Z Partners, L.P.,
its general partner
By: Capital Z Partners, Ltd.,
its general partner
By: /s/ Xxxx X. Xxxxxx
-------------------
Xxxx X. Xxxxxx
Senior Vice President
Address:
One Chase Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
With a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000