ex4-2



 



EXHIBIT 4.2


Execution Copy


SUNRISE ASSISTED LIVING, INC.


5 1/4% Convertible Subordinated Notes due February 1, 2009


REGISTRATION RIGHTS AGREEMENT


January 24, 2002


Credit Suisse First Boston Corporation

Robertson Stephens, Inc.

First Union Securities, Inc.

c/o Credit Suisse First Boston Corporation

      Eleven Madison Avenue

      New York, New York 10010-3629


Ladies and Gentlemen:


        Sunrise Assisted Living, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to Credit Suisse First Boston Corporation, Robertson
Stephens, Inc. and First Union Securities, Inc. (the “Initial Purchasers”),
upon the terms set forth in a purchase agreement dated January 24. 2002 (the
“Purchase Agreement”), up to $125,000,000 aggregate principal amount of its
51/4% Convertible Subordinated Notes due February 1, 2009 (the “Notes”). The
Notes will be issued pursuant to an Indenture, to be dated as of January 30,
2001 (the “Indenture”), between the Company and First Union National Bank, as
trustee (the “Trustee”). As an inducement to the Initial Purchasers to enter
into the Purchase Agreement, the Company agrees with the Initial Purchasers,
for the benefit of (i) the Initial Purchasers as Initial Purchasers and (ii)
the beneficial owners (including the Initial Purchasers) from time to time of
the Notes and of the Underlying Common Stock (as defined herein) issued upon
conversion of the Notes (each of the foregoing, a “Holder” and, collectively,
the “Holders”), as follows:


        1.     Shelf Registration.


        (a)  The Company shall prepare and file with the Securities and Exchange
Commission (the “Commission”) in no event later than 90 days (such 90th day
being a “Filing Deadline”) after the latest date on which the Initial
Purchasers purchase the Notes pursuant to the Purchase Agreement (the “Closing
Date”), a Shelf Registration Statement for an offering to be made on a delayed
or continuous basis pursuant to Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”) (a “Shelf Registration Statement”), registering
the resale from time to time by Holders thereof (who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement) of all of the Registrable Securities (defined herein)
(the “Initial Shelf Registration Statement”); provided, however, that no Holder
(other than an Initial Purchaser) shall be entitled to have the Registrable
Securities (as defined herein) held by it covered by such Shelf Registration
Statement unless such Holder agrees in writing to be bound by all provisions of
this Agreement applicable to such Holder, it being agreed that a Notice and
Questionnaire (as defined herein) signed by a Holder shall suffice for this
purpose. The Initial Shelf Registration Statement shall be on an appropriate
form under the Securities Act permitting registration of such Registrable
Securities for resale by such Holders from time to time in accordance with Rule
415 under the Securities Act and the methods of distribution set forth in the
Initial Shelf Registration Statement (which shall be substantially as set forth
in the Notice and Questionnaire). The Company shall use its commercially
reasonable efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but
in any event within one hundred and eighty (180) days after the Closing Date
(the “Effectiveness Deadline Date”),


 






 



and to keep the Initial Shelf Registration Statement (or any Subsequent
Shelf Registration Statement) continuously effective under the Securities Act
to permit the prospectus included therein to be lawfully delivered by the
Holders of the Registrable Securities, for a period of two years (or for such
longer period if extended pursuant to Section 2(h) below) from the date of the
filing of the Shelf Registration Statement or such shorter period that will
terminate when all the Registrable Securities covered by the Shelf Registration
Statement (i) have been sold pursuant thereto or (ii) are, with respect to such
securities held by non-affiliates, eligible to be sold to the public pursuant
to Rule 144(k) under the Securities Act, or any successor rule thereof (such
period, the “Effectiveness Period”). Subject to Section 2(b)(vi) hereof, the
Company shall be deemed not to have used its commercially reasonable efforts to
keep the Shelf Registration Statement effective during the requisite period if
it voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell such Registrable
Securities during that period, unless such action is (i) required by applicable
law or (ii) upon the occurrence of any event contemplated by Section 2(b)(v) or
(vi) below, such action is taken by the Company in good faith and the Company
thereafter complies with the requirements of Section 2(h) hereof. At the time
the Initial Shelf Registration Statement is declared effective, each Holder who
has provided the Company with an appropriately completed Notice and
Questionnaire (as defined herein) on or prior to the date five (5) Business
Days prior to such time of effectiveness and who holds Registrable Securities,
shall be named as a selling securityholder in the Initial Shelf Registration
Statement and the related prospectus in such a manner as to permit such Holder
to deliver such prospectus to purchasers of Registrable Securities in
accordance with applicable law. None of the Company’s securityholders (other
than the Holders of Registrable Securities) shall have the right to include any
of the Company’s securities in the Shelf Registration Statement.


        (b)  If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement (defined below) ceases to be effective for any reason at
any time during the Effectiveness Period (other than because all Registrable
Securities registered thereunder have been resold pursuant thereto or have
otherwise ceased to be Registrable Securities), the Company shall use its
commercially reasonable efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within thirty (30)
days of such cessation of effectiveness amend the Shelf Registration Statement
in a manner reasonably expected to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional Shelf Registration
Statement covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent Shelf Registration Statement”). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
commercially reasonable efforts to cause the Subsequent Shelf Registration
Statement to become effective as promptly as is practicable after such filing
and to keep such Subsequent Shelf Registration Statement continuously effective
until the end of the Effectiveness Period.


        (c)  The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration
Statement, if required by the Securities Act or as reasonably requested by (i)
any Initial Purchaser in the event that such Initial Purchaser is participating
in the Shelf Registration Statement or (ii) the Trustee on behalf of a majority
in interest of the registered Holders.


        (d)  From and after the date the Initial Shelf Registration Statement is
declared effective, the Company shall, as promptly as practicable after the
date a Notice and Questionnaire is delivered to the Company by a Holder of
Registrable Securities (i) if required by applicable law, file with the
Commission a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the related
prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other document required under the Securities Act so that
the Holder delivering such Notice and Questionnaire is named as a selling
securityholder in the Shelf Registration Statement and the related prospectus
in such a manner as to permit such Holder to deliver such prospectus to
purchasers of the Registrable Securities in accordance with applicable law and,
if the Company shall file a post-effective amendment to the Shelf Registration
Statement, use its commercially reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable; (ii) provide such Holder copies of any documents filed pursuant to
clause (i) of this Section 1(d); and (iii) notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to clause (i) of this Section 1(d);
provided that if such Notice and Questionnaire is delivered during a Deferral
Period (as defined in Section 2(h)), the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth
in clauses (i), (ii) and (iii) above


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promptly upon expiration of the Deferral Period in accordance with Section
2(h). Any Holder who, subsequent to the date the Initial Shelf Registration
Statement is declared effective, provides a Notice and Questionnaire pursuant
to the provisions of this Section (whether or not such Holder has supplied the
Notice and Questionnaire at the time the Initial Shelf Registration Statement
was declared effective) shall be named as a selling securityholder in the Shelf
Registration Statement and related prospectus in accordance with the
requirements of this Section 1(d).


        (e)  Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement and as of the date of filing any
amendment or supplement, as applicable, (i) to comply in all material respects
with the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.


        (f)  As used in this Agreement, the following terms shall have the
following meanings:



		
	 	           “Applicable Conversion Price” as of any date of determination means
the Conversion Price in effect as of such date of determination or, if no
Notes are then outstanding, the Conversion Price that would be in effect
were Notes then outstanding.
	 
	 	           “Business Day” means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.
	 
	 	           “Common Stock” means the shares of common stock, $0.01 par value per
share, of the Company and any other shares of common stock as may
constitute “Common Stock” for purposes of the Indenture, including the
Underlying Common Stock.
	 
	 	           “Conversion Price” has the meaning assigned to such term in the
Indenture.
	 
	 	           “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
	 
	 	           “Notice and Questionnaire” means a written notice (in substantially
the form attached as Annex A to the Company’s offering circular dated
January 24, 2002) delivered to the Company by a Holder containing any
information with respect to the Holder necessary to be included in the
Initial Shelf Registration Statement or to amend the Shelf Registration
Statement or supplement the related prospectus with respect to the
intended distribution of Registrable Securities by such Holder.
	 
	 	           “Registrable Securities” means the Notes, until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all
times subsequent to any such conversion or exchange, the Underlying
Common Stock and any securities into or for which such Underlying Common
Stock have been converted or exchanged, and any security issued with
respect thereto upon any stock dividend, split or similar event until, in
the case of any such security, (A) the earliest of (i) its effective
registration under the Securities Act and resale in accordance with the
Shelf Registration Statement covering it, (ii) expiration of the holding
period that would be applicable thereto under Rule 144(k) under the
Securities Act were it not held by an Affiliate of the Company or (iii)
its sale to the public pursuant to Rule 144, and (B) as a result of the
event or circumstance described in any of the foregoing clauses (i)
through (iii), the legends with respect to transfer restrictions required
under the Indenture are removed or removable in accordance with the terms
of the Indenture or such legend, as the case may be.
	 
	 	           “Underlying Common Stock” means the Common Stock into which the
Notes are convertible or issued upon any such conversion.



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        2.     Registration Procedures. In connection with the Shelf Registration
Statement contemplated by Section 1 hereof, the following provisions shall
apply:


        (a)  The Company shall include the names of the Holders who propose to
sell Registrable Securities pursuant to the Shelf Registration Statement as
selling securityholders.


        (b)  The Company shall give written notice to the Holders (which notice
pursuant to clauses (ii) through (vi) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite changes
have been made):



		
	 	           (i) when the Shelf Registration Statement or any amendment thereto
has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
	 
	 	           (ii) of any request by the Commission for amendments or supplements
to the Shelf Registration Statement or the prospectus included therein or
for additional information;
	 
	 	           (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation
of any proceedings for that purpose;
	 
	 	           (iv) of the receipt by the Company or its legal counsel 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;
	 
	 	           (v) of the happening of any event that requires the Company to make
changes in the Shelf Registration Statement or the prospectus in order
that the Shelf Registration Statement or the prospectus neither contain
an untrue statement of a material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements therein
(in the case of the prospectus, in light of the circumstances under which
they were made) not misleading; and
	 
	 	           (vi) the occurrence or existence of any pending corporate
development with respect to the Company that the Company believes in good
faith may be material and that, in the good faith determination of the
Company, makes it inadvisable and not in the best interest of the Company
to allow continued availability of the Shelf Registration Statement and
the related prospectus.



        (c)  The Company shall make every commercially reasonable effort to obtain
the withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement or, subject to the proviso in
Section 2(f) below, the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale.


        (d)  The Company shall furnish to each Holder of Registrable Securities
included within the coverage of the Shelf Registration Statement, without
charge, at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).


        (e)  The Company shall, during the Effectiveness Period, deliver to each
Holder of Registrable Securities included within the coverage of the Shelf
Registration Statement, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such person may reasonably
request. The Company consents, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by each of the
selling Holders of the Registrable Securities in connection with the offering
and sale of the Registrable Securities covered by the prospectus, or any
amendment or supplement thereto, included in the Shelf Registration Statement.


        (f)  Prior to any public offering of the Registrable Securities pursuant
to any Shelf Registration Statement the Company shall register or qualify or
cooperate with the Holders of the Registrable Securities included therein


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and their respective counsel in connection with the registration or
qualification of the Registrable Securities for offer and sale under the
securities or “blue sky” laws of such states of the United States as any Holder
of Registrable Securities reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Registrable Securities covered by such Shelf
Registration Statement; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction where it
is not then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is not
then so subject.


        (g)  The Company shall cooperate with the Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities sold pursuant to any Shelf Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as the Holders may request a reasonable period of time
after sales of the Registrable Securities pursuant to such Shelf Registration
Statement.


        (h)  Upon the occurrence of any event contemplated by paragraphs (ii)
through (vi) of Section 2(b) above during the period for which the Company is
required to maintain an effective Shelf Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the Shelf
Registration Statement or a supplement to the related prospectus and any other
required document so that, as thereafter delivered to Holders or purchasers of
Registrable Securities, the prospectus will not contain an 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, in light of the
circumstances under which they were made, not misleading. If the Company
notifies the Initial Purchasers and the Holders of Registrable Securities in
accordance with paragraphs (ii) through (v) of Section 2(b) above to suspend
the use of the prospectus until the requisite changes to the prospectus have
been made or the Company otherwise notifies the Initial Purchasers and the
Holders of Registrable Securities of its election to suspend the availability
of the Shelf Registration Statement and related prospectus pursuant to Section
2(b)(vi) above, then the Initial Purchasers and the Holders of Registrable
Securities shall suspend use of such prospectus (such period during which the
availability of the Shelf Registration Statement and any related prospectus is
suspended being a “Deferral Period”), and the period of effectiveness of the
Shelf Registration Statement provided for in Section 1(a) above shall be
extended by the number of days from and including the date of the giving of
such notice to and including the date when the Initial Purchasers and the
Holders of Registrable Securities shall have been advised in writing by the
Company that the prospectus may be used or has received such amended or
supplemented prospectus pursuant to this Section 2(h). The Company will use
its commercially reasonable efforts to ensure that the use of the prospectus
may be resumed as promptly as is practicable, except that in the case of
suspension of the availability of the Shelf Registration Statement and related
prospectus pursuant to Section 2(b)(vi) above, the Company shall not be
required to take such action until such time as it shall no longer determine in
good faith that continued availability of the Shelf Registration Statement and
the related prospectus is inadvisable and not in the best interests of the
Company. The Company shall only be entitled to utilize its right under this
Section 2(h) to suspend the availability of the Shelf Registration Statement or
any prospectus, without incurring or accruing any obligation to pay Additional
Interest pursuant to Section 5(a), for one or more periods not to exceed an
aggregate of 45 days in any 90-day period and not to exceed, in the aggregate,
90 days in any 12-month period.


        (i)  Not later than the effective date of the Initial Shelf Registration
Statement, the Company will provide a CUSIP number for the Registrable
Securities and provide the applicable trustee with one or more global notes as
required by the Indenture.


        (j)  The Company shall prepare and file with the Commission such
amendments and post-effective amendments to each Shelf Registration Statement
as may be necessary to keep such Shelf Registration Statement continuously
effective for the applicable period specified in Section 1(a) and shall cause
the related prospectus to be supplemented by any required prospectus supplement
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act. The Company will comply with all rules and
regulations of the Commission to the extent and so long as they are applicable
to the Shelf Registration Statement and will make generally available to its
securityholders (or otherwise provide in accordance with Section 11(a) of the
Securities Act) an earnings statement satisfying the provisions of Section
11(a) of the Securities Act, no later than 45 days after the end of a 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


5






 



commencing after the effective date of the Shelf Registration Statement,
which statement shall cover such 12-month period.


        (k)  The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, in a timely manner and containing such
changes, if any, as shall be necessary for such qualification. In the event
that such qualification would require the appointment of a new trustee under
the Indenture, the Company shall appoint a new trustee thereunder pursuant to
the applicable provisions of the Indenture.


        (l)  The Company may require each Holder of Registrable Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of the Registrable
Securities as the Company may from time to time reasonably require for
inclusion in the Shelf Registration Statement, and the Company may exclude from
such registration the Registrable Securities of any Holder that unreasonably
fails to furnish such information within a reasonable time after receiving such
request.


        (m)  The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
action, if any, as any Holder shall reasonably request in order to facilitate
the disposition of the Registrable Securities pursuant to any Shelf
Registration Statement; provided, however, that the Company shall not be
required to facilitate an underwritten offering pursuant to a Shelf
Registration Statement by any Holders unless the offering relates to at least
$25,000,000 principal amount of Notes or an equivalent number of the Underlying
Common Shares..


        (n)  In the event of an underwritten offering, the Company shall (i) make
available, at reasonable times and in a reasonable manner, for inspection by a
representative of the Holders of Registrable Securities, the underwriter(s)
participating in any disposition pursuant to the Shelf Registration Statement
and any attorney, accountant or other agent retained by the Holders of
Registrable Securities or any such underwriter, all relevant financial and
other records, pertinent corporate documents and properties of the Company as
may be reasonably requested and (ii) cause the Company’s officers, directors,
employees, accountants and auditors to supply all relevant information
reasonably requested by the Holders of Registrable Securities or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as shall be necessary to enable such
persons, to conduct a reasonable investigation within the meaning of Section 11
of the Securities Act; provided, however, that the foregoing inspection and
information gathering shall be coordinated on behalf of the Holders and the
other parties by one counsel designated by and on behalf of the Holders and
such other parties; provided, further, however, that the Holders shall maintain
and shall cause each such person to maintain the confidentiality of any
information that is reasonably and in good faith designated by the Company in
writing as confidential at the time of delivery of such information, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law, (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person, (iv) such information was already in
the possession of such person at or before the time it was delivered to such
person by the Company, or (v) such information is developed independently by
such person without violating any obligation of confidentiality owed to the
Company.


        (o)  In the event of an underwritten offering,the Company shall cause (i)
its counsel to deliver an opinion at the closing thereof relating to the
Registrable Securities in customary form addressed to such Holders and the
managing underwriters thereof (it being agreed that the matters to be covered
by such opinion shall include, without limitation, the due incorporation and
good standing of the Company and its significant subsidiaries; the
qualification of the Company and its significant subsidiaries to transact
business as foreign corporations; the due authorization, execution and delivery
of the relevant agreement of the type referred to in Section 2(m) hereof; the
due authorization, execution, authentication and issuance, and the validity and
enforceability, of the applicable Registrable Securities; the absence of
governmental approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable Registrable
Securities, or any agreement of the type referred to in Section 2(m) hereof;
the compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with the
requirements of the Securities Act and the Trust Indenture Act, respectively;
and, as of the date of the opinion and as of the effective date of the Shelf
Registration Statement or most recent post-effective amendment thereto, as the
case may be, the absence from such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented, together with


6






 



any documents incorporated by reference therein, of an untrue statement of
a material fact or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii)
its officers to execute and deliver all customary documents and certificates
and updates thereof requested by any underwriters of the applicable Registrable
Securities and (iii) its independent public accountants (and the independent
accountants with respect to any other entity for which financial information is
provided in the Shelf Registration Statement) to provide to the selling Holders
of the applicable Registrable Securities and any underwriter therefor a comfort
letter in customary form and covering matters of the type customarily covered
in comfort letters in connection with primary underwritten offerings, subject
to receipt of appropriate documentation as contemplated, and only if permitted,
by Statement of Auditing Standards No. 72.


        (p)  The Company will use its commercially reasonable efforts to (a) if
the Notes have been rated prior to the initial sale of such Notes, confirm such
ratings will apply to the Registrable Securities covered by a Shelf
Registration Statement, or (b) if the Notes were not previously rated, cause
the Registrable Securities covered by a Shelf Registration Statement to be
rated with the appropriate rating agencies, if so requested by Holders of a
majority in aggregate principal amount of Registrable Securities covered by
such Shelf Registration Statement, or by the managing underwriters, if any.


        (q)  In the event that any broker-dealer registered under the Exchange Act
shall underwrite any Registrable Securities or participate as a member of an
underwriting syndicate or selling group or “assist in the distribution” (within
the meaning of the Conduct Rules (the “Rules”) of the National Association of
Securities Dealers, Inc. (“NASD”)) thereof, whether as a Holder of such
Registrable Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company will assist such
broker-dealer in complying with the requirements of such Rules, including,
without limitation, by (i) if such Rules, including Rule 2720, shall so
require, engaging a “qualified independent underwriter” (as defined in Rule
2720) to participate in the preparation of the Shelf Registration Statement
relating to such Registrable Securities, to exercise usual standards of due
diligence in respect thereto and, if any portion of the offering contemplated
by such Shelf Registration Statement is an underwritten offering or is made
through a placement or sales agent, to recommend the yield of such Registrable
Securities, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Rules.


        (r)  The Company shall use its commercially reasonable efforts to take all
other steps necessary to effect the registration of the Registrable Securities
covered by a Shelf Registration Statement contemplated hereby.


        (s)  The Company shall use its commercially reasonable efforts to cause
the Underlying Common Stock to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the Company
are then listed, to the extent the Underlying Common Stock satisfies applicable
listing requirements.


        3.     Registration Expenses.


        (a)  All expenses incident to the Company’s performance of and compliance
with this Agreement will be borne by the Company, regardless of whether a Shelf
Registration Statement is ever filed or becomes effective, including without
limitation:



		
	 	           (i) all registration and filing fees and expenses;
	 
	 	           (ii) all fees and expenses of compliance with federal securities and
state “blue sky” or securities laws;
	 
	 	           (iii) all expenses of printing, messenger and delivery services and
telephone;
	 
	 	           (iv) all fees and disbursements of counsel for the Company;
	 
	 	           (v) all application and filing fees in connection with listing the
Underlying Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements thereof; and



7






 





		
	 	           (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit
and comfort letters required by or incident to such performance).



The Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any person, including special experts, retained by the Company.


        (b)  In connection with any Shelf Registration Statement required by this
Agreement, the Company will bear or reimburse the Holders of Registrable
Securities for the reasonable fees and disbursements of not more than one firm
of legal counsel, which may be selected by the Holders of a majority in
principal amount of the Registrable Securities covered by the Shelf
Registration Statement (provided that Holders of Registrable Securities in the
form of Underlying Common Stock shall be deemed to be Holders of the aggregate
principal amount of Notes from which such Underlying Common Stock was
converted), to act as counsel for such Holders in connection therewith.


        4.     Indemnification.


        (a)  The Company agrees to indemnify and hold harmless each Holder of
Registrable Securities and each person, if any, who controls such Holder within
the meaning of the Securities Act or the Exchange Act (each Holder and such
controlling persons are referred to collectively as the “Indemnified Parties”)
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof (including, but not limited to, any losses,
claims, damages, liabilities or actions relating to purchases and sales of the
Registrable Securities) to which each Indemnified Party may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of, or are based
upon, any untrue statement or alleged untrue statement of a material fact
contained in a Shelf Registration Statement or prospectus or in any amendment
or supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse,
as incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in a
Shelf Registration Statement or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a Shelf Registration in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein and (ii) with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary prospectus
relating to a Shelf Registration Statement, the indemnity agreement contained
in this subsection (a) shall not inure to the benefit of any Holder from whom
the person asserting any such losses, claims, damages or liabilities purchased
the Registrable Securities concerned, to the extent that a prospectus relating
to such Registrable Securities was required to be delivered by such Holder
under the Securities Act in connection with such purchase and any such loss,
claim, damage or liability of such Holder results from the fact that there was
not sent or given to such person, at or prior to the written confirmation of
the sale of such Registrable Securities to such person, a copy of the final
prospectus if the Company had previously furnished copies thereof to such
Holder; provided further, however, that this indemnity agreement will be in
addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify any underwriters, their
officers and directors and each person who controls such underwriters within
the meaning of the Securities Act or the Exchange Act to the same extent as
provided above with respect to the indemnification of the Holders if requested
by such Holders.


        (b)  Each Holder of Registrable Securities, severally and not jointly,
will indemnify and hold harmless the Company, its officers and directors and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act from and against any losses, claims, damages
or liabilities or any actions in respect thereof, to which the Company, its
officers and directors or any such controlling person may become subject under
the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in


8






 



a Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any legal
or other expenses reasonably incurred by the Company or any such controlling
person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have to the Company,
its officers and directors or any of its controlling persons.


        (c)  Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. Notwithstanding the indemnifying party’s election to
assume the defense of the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel) and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action, and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.


        (d)  If the indemnification provided for in this Section 4 is unavailable
or insufficient to hold harmless an indemnified party under subsections (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or
(b) above in such proportion as is appropriate to reflect the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well
as any other relevant equitable considerations. The relative fault of the
parties 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 indemnified party, on the one hand, or by the indemnifying party, on the
other, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. 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 (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding any other
provision of


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this Section 4(d), the Holders of Registrable Securities shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Registrable Securities
pursuant to a Shelf Registration Statement exceeds the amount of damages which
such Holders have 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. For purposes of this subsection
(d), each person, if any, who controls such indemnified party within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Company.


        (e)  The agreements contained in this Section 4 shall survive the sale of
the Registrable Securities pursuant to a Shelf Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified
party.


        5.     Additional Interest Under Certain Circumstances.


        (a)  Additional interest (the “Additional Interest”) with respect to the
Registrable Securities shall be assessed as follows if any of the following
events occur (each such event in clauses (i) through (iii) below being herein
called a “Registration Default”):



	 	 	 	 	 
		 	
(i)
	 	the Initial Shelf Registration Statement required by this
Agreement is not filed with the Commission on or prior to the Filing
Deadline;
	 
	 	 	
(ii)
	 	the Initial Shelf Registration Statement required by this
Agreement is not declared effective by the Commission on or prior to
the Effectiveness Deadline Date;
	 
	 	 	
(iii)
	 	any Shelf Registration Statement required by this Agreement
has been declared effective by the Commission but such Shelf
Registration Statement or related prospectus thereafter ceases to be
effective or useable (subject to the Company’s right to suspend the
use of the Shelf Registration Statement and the prospectus as set
forth in Section 2(h)) in accordance with the provisions of this
Agreement and during the periods specified herein and (A) the
Company does not cure the Shelf Registration Statement within five
(5) Business Days (which shall not be deemed to extend the period
when the Company may suspend the availability of the Shelf
Registration and related prospectus without incurrence and accrual
of any obligation to pay Additional Interest beyond the time
provided for in the last sentence of Section 2(h)) after it ceases
to be effective or useable by a post-effective amendment or
additional Shelf Registration Statement being filed and declared
effective or a report filed pursuant to the Exchange Act or (B) if
applicable, the Company does not terminate any Deferral Period
within the time provided for in the last sentence of Section 2(h)



Each of the foregoing will constitute a Registration Default whatever the
reason for any such event and whether it is voluntary or involuntary or is
beyond the control of the Company or pursuant to operation of law or as a
result of any action or inaction by the Commission.


        Additional Interest shall accrue on the Registrable Securities over and
above the interest set forth in the title of the Registrable Securities from
and including the date on which any such Registration Default shall occur to
but excluding the date on which all such Registration Defaults have been cured,
at a rate of 0.50% per annum (the “Additional Interest Rate”) of the aggregate
principal amount of the Notes that are Registrable Securities. In the case of
Notes that have been converted into or exchanged for Underlying Common Stock,
Additional Interest shall accrue at a per annum rate equal to 0.50% of the
Applicable Conversion Price of such shares of Underlying Common Stock that are
Registrable Securities. Any Additional Interest accrued with respect to any
Note or portion thereof called for redemption on a redemption date or converted
into Underlying Common Stock on a conversion date prior to the interest payment
date with respect to the Notes under the Indenture, shall, in any such event,
be paid instead to the Holder who submitted such Note or portion thereof for
redemption or conversion on the applicable redemption date or conversion date,
as the case may be, on such date (or promptly following the conversion date, in
the case of


10






 



conversion). Notwithstanding the foregoing, no Additional Interest shall
accrue as to any Registrable Security from and after the earlier of (x) the
date such security is no longer a Registrable Security and (y) the expiration
of the Effectiveness Period. The rate of accrual of the Additional Interest
with respect to any period shall not exceed the rate provided for in this
paragraph notwithstanding the occurrence of multiple concurrent Registration
Defaults. Following the cure of all Registration Defaults requiring the
payment by the Company of Additional Interest to the Holders of Registrable
Securities pursuant to this Section, the accrual of Additional Interest will
cease (without in any way limiting the effect of any subsequent Registration
Default requiring the payment of Additional Interest by the Company). No other
monetary damages shall be available to the Holders of Registrable Securities
for a Registration Default.


        Subject to the last sentence of the immediately preceding paragraph, the
Trustee shall be entitled, on behalf of Holders of Notes or Underlying Common
Stock, to seek any available remedy for the enforcement of this Agreement,
including for the payment of any Additional Interest.


        All of the Company’s obligations set forth in this Section 5 that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full.


        (b)  Any amounts of Additional Interest due pursuant to Section 5(a) will
be payable in cash on the regular interest payment dates with respect to the
Registrable Securities. The amount of Additional Interest will be determined
by multiplying the applicable Additional Interest Rate by the principal amount
of the Registrable Securities or the Applicable Conversion Price of the
Registrable Securities converted into shares of Underlying Common Stock, as
applicable, and further multiplied by a fraction, the numerator of which is the
number of days such Additional Interest Rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360. The Registrable Securities entitled to
payment of Additional Interest shall be determined as of the Business Day
immediately preceding the next regular interest payment date with respect to
the Registrable Securities.


        6.     Rules 144 and 144A. The Company shall use its best efforts to file
the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of any Holder, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)). The Company will provide a copy of this Agreement to
prospective purchasers of Notes identified to the Company by the Initial
Purchasers upon request. Upon the request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 6 shall be deemed to require the Company to register
any of its securities pursuant to the Exchange Act.


        7.     Underwritten Registrations. If any of the Registrable Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering (“Managing Underwriters”) will be selected by the
Holders of a majority in aggregate principal amount of such Registrable
Securities to be included in such offering (provided that Holders of Common
Stock issued upon conversion of the Notes shall not be deemed holders of Common
Stock, but shall be deemed to be holders of the aggregate principal amount of
Notes from which such Common Stock was converted) and such selection shall be
subject to the Company’s consent, which shall not be unreasonably withheld.


        No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person’s Registrable Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.


11






 


        8.     Miscellaneous.


     (a)  Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations hereunder may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company’s obligations hereunder. The Company further
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.


        (b)  No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company’s securities under any
agreement in effect on the date hereof.


        (c)  Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Registrable
Securities affected by such amendment, modification, supplement, waiver or
consents (provided that Holders of Common Stock issued upon conversion of Notes
shall not be deemed holders of Common Stock, but shall be deemed to be holders
of the aggregate principal amount of Notes from which such Common Stock was
converted). Without the consent of each affected Holder of Registrable
Securities, however, no modification may change the provisions relating to the
payment of Additional Interest.


        (d)  Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class
mail, facsimile transmission, or air courier that guarantees overnight
delivery:


                      
    (1)  if to a Holder of the Registrable Securities, at the most current
address given by such Holder to the Company.


                      
    (2)  if to the Initial Purchasers:



	 	Credit Suisse First Boston Corporation

Eleven Madison Avenue

New York, NY 10010-3629

Fax No.: (212) 325-8278

Attention: Transactions Advisory Group




	 	with a copy to (which shall not constitute notice):




	 	Alston & Bird LLP

One Atlantic Center

1201 West Peachtree Street

Atlanta, Georgia 30309

Fax No.: (404) 881-7777

Attention: Nils H. Okeson, Esq.



                      
    (3)    if to the Company, at its address as follows:



	 	Sunrise Assisted Living, Inc.

7902 Westpark Drive

McLean, Virginia 22102

Fax No.: (703) 744-1990

Attention: Julian Myers Benton, Esq.



12






 



	 	with a copy to (which shall not constitute notice):




	 	Hogan & Hartson L.L.P.

555 Thirteenth Street, N.W.

Washington, D.C. 20004

Fax No.: (202) 637-5910

Attention: George P. Barsness, Esq.



        All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when
receipt is acknowledged by recipient’s facsimile machine operator, if sent by
facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.


        (e)  Third-Party Beneficiaries. The Holders shall be third-party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.


        (f)  Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.


        (g)  Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


        (h)  Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.


        (i)  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.


        By the execution and delivery of this Agreement, the Company submits to
the nonexclusive jurisdiction of any federal or state court in the State of New
York.


        (j)  Severability. If 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 every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.


        (k) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Registrable Securities
is required hereunder, Registrable Securities held by the Company or its
affiliates (other than subsequent Holders of Registrable Securities if such
subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.


13






 


        If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Initial Purchasers a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Initial Purchasers and the Company in accordance
with its terms.



	 	Very truly yours,




	 	SUNRISE ASSISTED LIVING, INC.




	 	 	 	 	 
		 	
By:	 /s/ 

	Larry E. Hulse

	 	 	
Name:
	 	Larry E. Hulse
	 	 	
Title:
	 	Senior Vice President and Chief Financial Officer



The foregoing Registration

Rights Agreement is hereby confirmed

and accepted as of the date first

above written.


CREDIT SUISSE FIRST BOSTON CORPORATION

ROBERTSON STEPHENS, INC.

FIRST UNION SECURITIES, INC.


By: CREDIT SUISSE FIRST BOSTON CORPORATION



	 	 	 
	By:	 	
/s/ Joseph D. Fashano



	Name:

Title:	 	
Joseph D. Fashano

Director




14