Exhibit 4.4
$75,000,000
PEDIATRIC SERVICES OF AMERICA, INC.
10% Senior Subordinated Notes due 2008
REGISTRATION RIGHTS AGREEMENT
-----------------------------
April 16, 1998
SALOMON BROTHERS INC
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Pediatric Services of America, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Salomon Brothers Inc, NationsBanc
Xxxxxxxxxx Securities LLC and First Union Capital Markets, a division of Wheat
First Securities, Inc. (the "Initial Purchasers"), upon the terms set forth in a
purchase agreement dated April 13, 1998 (the "Purchase Agreement"), an aggregate
of $75,000,000 principal amount of its 10% Senior Subordinated Notes due 2008
(the "Notes"). The Notes will be issued pursuant to an indenture (the
"Indenture") dated as of April 16, 1998, between the Company, the Guaranteeing
Subsidiaries and SunTrust Bank, Atlanta, a Georgia banking corporation, as
trustee (the "Trustee"). As an inducement to the Initial Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchasers thereunder, the Company agrees with the
Initial Purchasers, for the benefit of the holders of the Notes (including,
without limitation, the Initial Purchasers), as follows:
Section 1. Definitions.
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As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Broker-Dealer Transfer Restricted Securities: New Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Notes that
such Broker-Dealer acquired for its own account as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its affiliates).
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Notes to be issued in the Exchange Offer, (b) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of New Notes in the same aggregate principal
amount as the aggregate principal amount of Notes tendered by Holders thereof
pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Transfer Restricted
Securities, each Interest Payment Date.
Definitive Note: Any Notes other than a Global Note.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
New Notes pursuant to the Exchange Offer Registration Statement under which the
Company shall offer the Holders of all outstanding Notes the opportunity to
exchange all such outstanding Notes for New Notes in an aggregate principal
amount equal to the aggregate principal amount of the Notes tendered in such
exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Global Note: As defined in the Indenture.
Guaranteeing Subsidiaries: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8 hereof.
Indenture: The Indenture, dated the Closing Date, among the Company,
the Guaranteeing Subsidiaries and SunTrust Bank, Atlanta, a Georgia banking
corporation, as trustee (the "Trustee"), pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
New Notes: The Company's 10% Senior Subordinated Notes due 2008 to be
issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the
request of
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any Holder of Notes covered by a Shelf Registration Statement, in exchange for
such Notes.
Non-Company Indemnitee: As defined in Section 8 hereof.
Person: An individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company and
the Guaranteeing Subsidiaries relating to (a) an offering of New Notes pursuant
to an Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) which
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Restricted Broker-Dealer: As defined in Section 3(c) hereof.
Shelf Registration: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
"Transfer Restricted Securities" shall be deemed to include the guarantees of
the Company's obligations under the Indenture and the Notes by the Guaranteeing
Subsidiaries.
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Section 2. Securities Subject To This Agreement.
-------------------------------------
(a) The securities entitled to the benefits of this Agreement are the
Transfer Restricted Securities.
(b) A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "Holder") whenever such Person owns Transfer Restricted
Securities.
Section 3. Exchange Offer.
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(a) Unless the Exchange Offer shall not be permitted by applicable
federal law or Commission policy, the Company and the Guaranteeing Subsidiaries
shall (i) cause to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 60 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use its best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
possible time, but in no event later than 135 days after the Closing Date, (iii)
in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause such
Exchange Offer Registration Statement to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
New Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting registration of the New Notes to be offered in exchange for the
Notes that are Transfer Restricted Securities and to permit sales of Broker-
Dealer Transfer Restricted Securities by Restricted Broker-Dealers as
contemplated by Section 3(c) below.
(b) The Company and the Guaranteeing Subsidiaries shall use their
respective reasonable best efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 days. The Company
and the Guaranteeing Subsidiaries shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. The
Company and the Guaranteeing Subsidiaries shall use their respective best
efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 45 days thereafter.
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Notes that are Transfer Restricted
Securities and that were acquired for the account of such Broker-Dealer as a
result of market-making activities or other trading activities (a "Restricted
Broker-Dealer"), may exchange such
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Notes (other than Transfer Restricted Securities acquired directly
from the Company or any Affiliate of the Company) pursuant to the Exchange
Offer; however, such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of each New Note
received by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan
of Distribution" section shall also contain all other information with respect
to such sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers that the Commission may require in order to permit such sales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer,
except to the extent required by the Commission as a result of a change in
policy after the date of this Agreement.
The Company and the Guaranteeing Subsidiaries shall use their
respective best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6 below to the extent necessary to ensure that it is available for
sales of Broker-Dealer Transfer Restricted Securities by Restricted Broker-
Dealers, and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of 180 days from
the date on which the Exchange Offer is Consummated.
The Company and the Guaranteeing Subsidiaries shall promptly provide
sufficient copies of the latest version of such Prospectus to such Restricted
Broker-Dealers promptly upon request, and in no event later than one day after
such request, at any time during such 180-day period in order to facilitate such
sales.
Section 4. Shelf Registration.
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(a) If (i) the Company is not required to file an Exchange Offer
Registration Statement with respect to the New Notes because the Exchange Offer
is not permitted by applicable law or Commission policy or (ii) if any Holder of
Transfer Restricted Securities shall notify the Company within 20 days following
the Consummation of the Exchange Offer that (A) such Holder was prohibited by
law or Commission policy from participating in the Exchange Offer or (B) such
Holder may not resell the New Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (C) such Holder is a Broker-Dealer and holds Notes
acquired directly from the Company or one of its affiliates, then the Company
and the Guaranteeing Subsidiaries shall (x) cause to be filed on or prior to 60
days after the date on which the Company determines that it is not required to
file the Exchange Offer Registration Statement pursuant to clause (i) above or
60 days after the date on which the Company receives the notice specified in
clause (ii) above a shelf registration statement pursuant to Rule 415 under the
Act (the "Shelf Registration") (which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration Statement")),
relating to all Transfer Restricted Securities
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the Holders of which shall have provided the information required pursuant to
Section 4(b) hereof, and shall (y) use their respective reasonable best efforts
to cause such Shelf Registration Statement to become effective on or prior to
135 days after the date on which the Company becomes obligated to file such
Shelf Registration Statement. If, after the Company has filed an Exchange Offer
Registration Statement which satisfies the requirements of Section 3(a) above,
the Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer shall not be permitted under
applicable federal law or Commission policy, then the filing of the Exchange
Offer Registration Statement shall be deemed to satisfy the requirements of
clause (x) above. Such an event shall have no effect on the requirements of
clause (y) above. The Company and the Guaranteeing Subsidiaries shall use their
respective reasonable best efforts to keep the Shelf Registration Statement
discussed in this Section 4(a) continuously effective, supplemented and amended
as required by and subject to the provisions of Section 6 hereof to the extent
necessary to ensure that it is available for sales of Transfer Restricted
Securities by the Holders thereof entitled to the benefit of this Section 4(a),
and to ensure that it conforms with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of at least two years following the date on which such
Shelf Registration Statement first becomes effective under the Act or such
shorter period ending when all of the Transfer Restricted Securities available
for sale thereunder have been sold.
(b) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in any Shelf Registration Statement pursuant to
this Agreement unless and until such Holder furnishes to the Company in writing,
within 20 days after receipt of a request therefor, such information specified
in Item 507 of Regulation S-K under the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein.
No Holder of Transfer Restricted Securities shall be entitled to Liquidated
Damages pursuant to Section 5 hereof unless and until such Holder shall have
provided all such information. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
Section 5. Liquidated Damages.
------------------
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 45 days after the Exchange Offer Registration Statement is
first declared effective by the Commission or (iv) any Registration Statement
required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded immediately by a post-effective amendment to such
Registration Statement that cures such failure and that is itself declared
effective immediately (each such event referred to in clauses (i) through (iv),
a "Registration Default"), then the Company and the Guaranteeing Subsidiaries
hereby jointly and severally agree to pay liquidated damages to each Holder
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of Transfer Restricted Securities with respect to the first 90-day period
immediately following the occurrence of such Registration Default, in an amount
equal to $.05 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues. The amount of the liquidated damages shall
increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
liquidated damages of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. Notwithstanding anything to the contrary set forth
herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (i) above, (2)
upon the effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall no longer accrue.
All accrued liquidated damages shall be paid to the Holders by wire
transfer of immediately available funds or by federal funds check and to Holders
of Definitive Securities by mailing checks to their registered addresses on each
Damages Payment Date. All obligations of the Company and the Guaranteeing
Subsidiaries set forth in the preceding paragraph that are outstanding with
respect to any Transfer Restricted Security at the time such security ceases to
be a Transfer Restricted Security shall survive until such time as all such
obligations with respect to such security shall have been satisfied in full.
Section 6. Registration Procedures. In connection with any Shelf
-----------------------
Registration contemplated by Section 4 hereof and, to the extent applicable, the
Registered Exchange Offer contemplated by Section 3 hereof, the following
provisions shall apply:
(a) The Company shall furnish to the Initial Purchasers, prior to the
filing thereof with the Commission, a copy of the registration statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and shall obtain the consent (which shall not be unreasonably withheld
or delayed) of the Initial Purchasers to any such filing.
(b) The Company shall advise the Initial Purchasers in writing:
(i) when the registration statement and any amendment thereto has
been filed with the Commission and when the registration statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
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supplements to the registration statement or the prospectus included
therein or for additional information;
(c) The Company shall advise the Initial Purchasers and the holders of
the Notes and the New Notes (to the extent applicable) in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes and New Notes
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iii) of the happening of any event that requires the Company to
make changes in the registration statement or the prospectus in order to
make the statements therein not misleading (which advice shall be
accompanied by an instruction that such notice constitutes material
nonpublic information, and to suspend the use of the identified prospectus
("Non-Conforming Prospectus") until the requisite changes have been made,
and which instruction shall require that such holders shall not communicate
such material nonpublic information to any third party and shall not sell
or purchase, or offer to sell or purchase, any securities of the Company
after receipt of such advice and prior to the effectiveness of any action
required to be taken by the Company pursuant to Section 6(i) hereof).
(d) The Company shall use all reasonable efforts to prevent the
issuance or obtain the withdrawal of any order suspending the effectiveness of
the registration statement at the earliest possible time.
(e) The Company shall furnish to each holder of Notes included within
the coverage of the Shelf Registration, without charge, at least one copy of the
registration statement and any post-effective amendment thereto, including
financial statements and schedules, if any, included therein and, if the holder
so requests in writing, all exhibits (including those incorporated by
reference).
(f) The Company shall deliver to each holder of Notes included within
the coverage of the Shelf Registration, if any, without charge, as many copies
of the prospectus (including each preliminary prospectus) included in the
registration statement with respect to the Shelf Registration and any amendment
or supplement thereto as such Persons may reasonably request. The Company
consents, subject to the provisions of the Agreement, to the use of the
prospectus or any amendment or supplement thereto by each of the selling holders
of Notes in connection with the offering and sale of the Notes covered by the
prospectus, or any amendment or supplement thereto, included in such
registration statement.
(g) Prior to any public offering of Notes pursuant to the Shelf
Registration,
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the Company shall register or qualify or cooperate with the holders of
securities included therein and their respective counsel in connection with the
registration or qualification of such Notes for offer and sale under the
securities or blue sky laws of such jurisdictions in the United States as any
holder of Notes 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 securities covered by the Shelf Registration; provided that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified, (ii) take any action that would
subject it to the service of process in suits, other than as to matters and
transactions relating to the Shelf Registration, in any jurisdiction where it is
not now subject or (iii) 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.
(h) The Company shall cooperate with the holders of the Notes to
facilitate the timely preparation and delivery of certificates representing
Notes to be sold in the Shelf Registration free of any restrictive legends and
in such denominations and registered in such names as the holders may request a
reasonable period of time prior to sales of Notes pursuant to the Shelf
Registration.
(i) Upon the occurrence of any event contemplated by Section 6(c)(iii)
above, the Company shall, as promptly as reasonably practicable, prepare a post-
effective amendment to the registration statement or a supplement to the related
prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Notes, the prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading.
(j) Not later than the effective date of the applicable registration
statement, the Company will provide a CUSIP number for the New Notes and provide
the applicable trustee with printed certificates for the Notes or New Notes, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(k) The Company will use all reasonable efforts to comply with all
rules and regulations of the Commission to the extent and so long as they are
applicable to the Exchange Offer or the Shelf Registration and will make
generally available to its security holders (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 commencing
after the effective date of the Shelf Registration, which statement shall cover
such 12-month period.
(l) The Company shall cause the Indenture (or an indenture
substantially identical to the Indenture in the case of an Exchange Offer) to be
qualified under the Trust Indenture Act of 1939, as amended.
(m) The Company may require each Holder of Notes to be sold pursuant
to the Shelf Registration to furnish to the Company such information regarding
the Holder and the distribution of such Notes as the Company may from time to
time reasonably require for inclusion in the registration statement. The
Company may also require each
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holder of Notes participating in the Exchange Offer to represent to the Company
that at the time of the consummation of the Exchange Offer (i) such holder is
not an affiliate of the Company, (ii) any New Notes received by such holder will
be acquired in the ordinary course of its business and (iii) such holder will
have no arrangement or understanding with any Person to participate in the
distribution of the Notes or the New Notes within the meaning of the Act. Each
holder agrees by acquisition of Notes that, upon receipt of any notice from the
Company of the existence of any fact of the kind described in Section 6(c)(iii)
hereof, such holder will forthwith discontinue disposition of Notes until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 6(i) hereof, or until it is advised in writing by the
Company that the use of the prospectus may be resumed, and has received copies
of any additional or supplemental filings with respect to the prospectus. If so
directed by the Company, each holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the prospectus covering such Notes current at the time
of receipt of such notice.
Section 7. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 3
through 6 hereof and, in the event of a Shelf Registration, shall bear or
reimburse the holders of the Notes for the reasonable fees and disbursements of
one firm of counsel designated by the holders of a majority in principal amount
of the Notes to act as counsel for the holders of the Notes in connection
therewith.
Section 8. Indemnification.
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(a) The Company and the Guaranteeing Subsidiaries, jointly and
severally, agree to indemnify and hold harmless (i) the Initial Purchasers, (ii)
each holder of Notes and/or New Notes (including Broker-Dealers receiving New
Notes in the Exchange Offer) (each an "Indemnity Holder"), (iii) each Person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Initial Purchasers or any Indemnity Holder (any of the
Persons referred to in this clause (iii) being hereinafter referred to as a
"controlling person") and (iv) the respective officers, directors, partners,
employees, representatives and agents of the Initial Purchasers or any Indemnity
Holder or any controlling person (any Person referred to in clause (i), (ii),
(iii) or (iv) may hereinafter be referred to as a "Non-Company Indemnitee"), to
the fullest extent lawful, from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus (or any amendments or supplements thereto) prepared in accordance
with this Agreement, including any document incorporated by reference therein,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except, with respect to any Non-Company Indemnitee, insofar as such
losses, claims, damages, liabilities or judgments (1) are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company or the Guaranteeing Subsidiaries
by such Non-Company Indemnitee expressly for use therein; (2) with respect to
any preliminary prospectus, result from the fact that such Non-Company
Indemnitee sold Notes or New Notes to a Person to whom there was
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not sent or given, at or prior to the written confirmation of such sale, a copy
of the final prospectus, as amended or supplemented, if required under the Act
and if the Company or the Guaranteeing Subsidiaries shall have previously
furnished copies thereof to such Non-Company Indemnitee in accordance with this
Agreement and the final prospectus, as amended or supplemented, would have
corrected such untrue statement or omission; (3) arising from the use of any
final prospectus after receipt of notification from the Company of the issuance
of any stop order or of any proceeding contemplating a stop order of the type
described in Section 6(c)(i) hereof or a suspension of, or initiated or
threatened proceeding contemplating a suspension of, the type described in
Section 6(c)(ii) hereof, until such time as notice shall have been received from
the Company that any such stop order or suspension has been lifted or such
proceeding has been terminated; or (4) arising from the use of any Non-
Conforming Prospectus after receipt of notice from the Company pursuant to
Section 6(c)(iii).
(b) In case any action shall be brought against any Non-Company
Indemnitee based upon any registration statement or prospectus, or any amendment
or supplement thereto, and with respect to which indemnity may be sought against
the Company and/or the Guaranteeing Subsidiaries, such Non-Company Indemnitee
shall promptly notify the Company and the Guaranteeing Subsidiaries in writing
and the Company and the Guaranteeing Subsidiaries shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Non-Company Indemnitee and payment of all fees and expenses. Such Non-Company
Indemnitee shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of counsel
shall be paid by such Non-Company Indemnitee, unless (i) the employment of such
counsel shall have been specifically authorized in writing by the Company and
the Guaranteeing Subsidiaries, (ii) the Company or the Guaranteeing Subsidiaries
shall have failed to assume the defense and employ counsel or (iii) the named
parties to any such action (including any impleaded parties) include both such
Non-Company Indemnitee and the Company and/or the Guaranteeing Subsidiaries and
such Non-Company Indemnitee shall have been advised by counsel that it would be
inappropriate for the same counsel to represent such Non-Company Indemnitee and
the Company and/or the Guaranteeing Subsidiaries (in which case the Company
and/or the Guaranteeing Subsidiaries shall not have the right to assume the
defense of such action on behalf of such Non-Company Indemnitee, it being
understood, however, that neither the Company nor any Guaranteeing Subsidiary
shall, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
the Non-Company Indemnitees, which firm shall be designated in writing by the
Non-Company Indemnitees and whose fees and expenses reasonably incurred shall be
reimbursed as they are incurred). The Company and the Guaranteeing Subsidiaries
shall not be liable for any settlement of any such action effected without the
written consent of the Company and the Guaranteeing Subsidiary, but if settled
with the written consent of the Company and the Guaranteeing Subsidiary, the
Company and the Guaranteeing Subsidiaries agree to indemnify and hold harmless
any Non-Company Indemnitee from and against any amounts payable pursuant to such
written consent in connection with such settlement.
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Notwithstanding the immediately preceding sentence, if in any case where the
fees and expenses of counsel are at the expense of the Company and/or the
Guaranteeing Subsidiaries and a Non-Company Indemnitee shall have requested the
Company and/or the Guaranteeing Subsidiaries to reimburse such Non-Company
Indemnitee for such fees and expenses of counsel as incurred, the Company and
the Guaranteeing Subsidiaries agree that they shall be liable for any settlement
of any action effected without their written consent if (i) such settlement is
entered into more than 30 business days after the receipt by the Company and the
Guaranteeing Subsidiaries of the aforesaid request and (ii) the Company and/or
the Guaranteeing Subsidiaries shall have failed to reimburse such Non-Company
Indemnitee in accordance with such request for reimbursement prior to the date
of such settlement. The Company and the Guaranteeing Subsidiaries shall not,
without the prior written consent of such Non-Company Indemnitee, effect any
settlement of any pending or threatened proceeding in respect of which such Non-
Company Indemnitee is or could have been a party and indemnity could have been
sought hereunder by such Non-Company Indemnitee, unless such settlement includes
an unconditional release of such Non-Company Indemnitee from all liability on
claims that are the subject matter of such proceeding.
(c) Each Indemnity Holder agrees to indemnify and hold harmless (i)
the Company and the Guaranteeing Subsidiaries, (ii) the Initial Purchasers,
(iii) each other Indemnity Holder, (iv) any Person controlling (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
the Initial Purchasers and each other Indemnity Holder and (v) the respective
officers, directors, partners, employees, representatives and agents of each of
the parties referred to in clauses (i), (ii), (iii) and (iv), to the same extent
as the foregoing indemnity from the Company and the Guaranteeing Subsidiaries to
each of the Non-Company Indemnitees, but only with respect to information
relating to such Indemnity Holder that was furnished in writing by such
Indemnity Holder expressly for use in any registration statement (or any
amendment or supplement thereto) prepared in accordance with this Agreement. In
no event shall the liability of any Indemnity Holder hereunder be greater in
amount by which the dollar amount of the proceeds received by such Indemnity
Holder upon the sales of the Notes or New Notes giving rise to such
indemnification obligation exceeds the amount of any damages which such
Indemnity Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party, on the one hand, and the indemnified party, on
the other hand, 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
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information supplied by the indemnifying party, on the one hand, or the
indemnified party, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Guaranteeing Subsidiaries, the Initial Purchasers
and each Indemnity Holder agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The losses, claims, damages, liabilities or judgments of an indemnified party
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim prior to the indemnifying party's
assumption of the defense thereof or subsequent thereto to the extent permitted
by the second sentence of Section 8(b) hereof. Notwithstanding the provisions
of this Xxxxxxx 0, xxxx of the Indemnity Holders shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total amount received by such Indemnity Holder with respect to the sale of Notes
or New Notes exceeds the amount of any damages which such Indemnity Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The obligations of Indemnity Holders to
contribute pursuant to this Section 8(d) are several in proportion to the
respective principal amount of Notes and/or New Notes held by each of the
Indemnity Holders hereunder and not joint.
Section 9. Miscellaneous.
--------------
(a) 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, unless the Company has obtained the
written consent of holders of a majority in aggregate principal amount of the
Notes.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier which guarantees overnight delivery:
(1) If to a holder of Notes or New Notes, at the most current
address given by such holder to the Company in accordance with the
provisions of this Section 9(b), which address initially is, with
respect to each holder, the address of such holder to which
confirmation of the sale of Notes or New Notes to such holder was
first sent, with a copy in like manner to the Initial Purchasers
c/o Salomon Brothers Inc at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
(2) If to the Company, at the following address:
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Pediatric Services of America, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
with a copy to:
Long Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, 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
answered back, if telexed; when receipt acknowledged by recipient's telecopy
operator, if telecopied; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent holders of the Notes and the New Notes.
(d) 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.
(e) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York, without regard to its
conflicts of laws rules.
(g) 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.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Initial Purchasers.
Very truly yours,
PEDIATRIC SERVICES OF AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
Accepted in New York, New York
April 16, 1998
SALOMON BROTHERS INC
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
FIRST UNION CAPITAL MARKETS
A DIVISION OF WHEAT FIRST
SECURITIES, INC.
By: SALOMON BROTHERS INC
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Managing Director
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