EXHIBIT 4.13
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of June 30, 2003
among
Psychiatric Solutions, Inc.,
The Subsidiary Guarantors from time to time party hereto, and
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Jefferies & Company, Inc.
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This Exchange and Registration Rights Agreement (this
"AGREEMENT") is made and entered into as of June 30, 2003 by and among
Psychiatric Solutions, Inc., a Delaware corporation (the "COMPANY"), the
Subsidiary Guarantors (as defined herein) and Lehman Brothers Inc. on behalf of
Merrill Lynch & Co. and Jefferies & Company Inc. (collectively, the "INITIAL
PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement,
dated June 19, 2003 (the "PURCHASE AGREEMENT"), by and among the Company, the
Existing Subsidiary Guarantors (as defined herein) and the Initial Purchasers,
which provides for the sale by the Company to the Initial Purchasers of
$150,000,000 aggregate principal amount of the Company's 10-5/8% Senior
Subordinated Notes due 2013 (the "NOTES"). The Notes are, and the Exchange Notes
(as defined herein) will be, guaranteed on a senior subordinated basis by the
Subsidiary Guarantors (as defined herein). In order to induce the Initial
Purchasers to purchase the Notes, the Company and the Existing Subsidiary
Guarantors have agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 7 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
ADDITIONAL INTEREST: As defined in Section 5(a) hereof.
ADDITIONAL SUBSIDIARY GUARANTOR: Any subsidiary of the Company
that executes a Guarantee under the Indenture after the date of this Agreement.
ADVICE: As defined in Section 6(e) hereof.
AGREEMENT: As defined in the preamble hereto.
BLACKOUT PERIOD: As defined in Section 5(a) hereof.
BLUE SKY APPLICATION: As defined in Section 8(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.
CLOSING DATE: The date of this Agreement.
COMMISSION: The U.S. Securities and Exchange Commission.
COMPANY: As defined in the preamble hereto.
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CONSUMMATE: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement relating to the Exchange Notes to be issued in the
Exchange Offer, (ii) 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 (iii) the
delivery by the Company to the Registrar under the Indenture of Exchange Notes
in the same aggregate principal amount as the aggregate principal amount of
Notes that were tendered by Holders thereof pursuant to the Exchange Offer.
DAMAGES PAYMENT DATE: With respect to the Notes, each Interest
Payment Date.
EFFECTIVENESS TARGET DATE: As defined in Section 5(a) hereof.
EXCHANGE ACT: The U.S. Securities Exchange Act of 1934, as
amended.
EXCHANGE NOTES: The Company's 10-5/8% Senior Subordinated
Notes due 2013 to be issued pursuant to the Indenture in the Exchange Offer,
together with the related Guarantees.
EXCHANGE OFFER: The registration by the Company under the
Securities Act of the Exchange Notes on a Registration Statement pursuant to
which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for Exchange Notes in an aggregate principal
amount equal to the aggregate principal amount of the Transfer Restricted
Securities validly tendered in such exchange offer by such Holders.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
EXISTING SUBSIDIARY GUARANTORS: The various Subsidiary
Guarantors signatory to the Indenture as of the date hereof.
GUARANTEES: Guarantees by the Subsidiary Guarantors of the
Company's obligations under the Notes, the Exchange Notes and the Indenture.
HOLDER: As defined in Section 2(b) hereof.
INDENTURE: The Indenture, dated as of the date hereof, among
the Company, the Existing Subsidiary Guarantors and Wachovia Bank, National
Association, as trustee (the "Trustee"), pursuant to which the Notes and the
Exchange Notes are to be issued, as such Indenture may be amended or
supplemented from time to time in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
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INTEREST PAYMENT DATE: As defined in the Indenture and the
Notes.
NASD: National Association of Securities Dealers, Inc.
NOTES: As defined in the preamble hereto.
PERSON: An individual, partnership, corporation, limited
liability company, unincorporated organization, association, joint-stock
company, trust, joint venture, government or any agency or political subdivision
thereof or any other entity.
PROSPECTUS: The prospectus included in a Registration
Statement 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.
PURCHASE AGREEMENT: As defined in the preamble hereto.
RECORD HOLDER: With respect to any Damages Payment Date
relating to Notes, 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(a) hereof.
REGISTRATION STATEMENT: Any Registration Statement of the
Company relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of this Agreement, in each case including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
SECURITIES ACT: The U.S. Securities Act of 1933, as amended.
SHELF FILING DEADLINE: As defined in Section 4(a) hereof.
SHELF REGISTRATION PERIOD: As defined in Section 4(a) hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4(a)
hereof.
SUBSIDIARY GUARANTORS: The Additional Subsidiary Guarantors
and the Existing Subsidiary Guarantors.
TIA: The U.S. 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 or Exchange Note
(including the related Guarantees), as applicable, until the earliest to occur
of (a) the date on which
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such Note is exchanged by a person other than a Broker-Dealer in the Exchange
Offer in exchange for an Exchange Note, so long as such person is not prohibited
from reselling such Exchange Notes to the public without delivering a prospectus
and the Prospectus contained in the Exchange Offer Registration Statement is not
sufficient for such purpose, (b) following the exchange by a Broker-Dealer in
the Exchange Offer of a Note for an Exchange Note, the date on which that
Exchange Note is sold to a purchaser who receives from that Broker-Dealer on or
prior to the date of such sale a copy of the Prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such Note has been
effectively registered under the Securities Act and disposed of in accordance
with a Shelf Registration Statement and (d) the date on which such Note is
eligible to be distributed to the public pursuant to Rule 144 under the
Securities Act.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "HOLDER")
whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or one of the events set forth in Section
4(a)(ii) has occurred, the Company and the Subsidiary Guarantors shall (i) cause
to be filed with the Commission as soon as practicable after the Closing Date,
but in no event later than 90 days after the Closing Date, a Registration
Statement under the Securities Act relating to the Exchange Notes and the
Exchange Offer, (ii) use their reasonable best efforts to cause such
Registration Statement to be declared effective on or prior to 180 days after
the Closing Date, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary in
order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Securities Act and (C) cause all necessary filings in
connection with the registration and qualification of the Exchange 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
Registration Statement, commence the Exchange Offer. The Exchange Offer shall be
on the appropriate form permitting registration of the Exchange Notes to be
offered in exchange for the Transfer Restricted Securities and to permit resales
of Exchange Notes held by Broker-Dealers as contemplated by Section 3(c) below.
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(b) The Company and the Subsidiary Guarantors shall use their
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 U.S. federal and
state securities laws to Consummate the Exchange Offer; provided, however, that
in no event shall such period be less than 20 business days. The Company and the
Subsidiary Guarantors shall cause the Exchange Offer to comply with all
applicable U.S. federal and state securities laws. No securities other than the
Exchange Notes and the Guarantees shall be included in the Exchange Offer
Registration Statement. The Company and the Subsidiary Guarantors shall use
their reasonable best efforts to cause the Exchange Offer to be Consummated 30
business days after the date on which the Exchange Offer Registration Statement
was declared effective by the Commission.
(c) The Company and the Subsidiary Guarantors shall indicate
in a "Plan of Distribution" section of the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Notes that are
Transfer Restricted Securities and that were acquired for its own account as a
result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be
deemed to be an "underwriter" within the meaning of the Securities Act and must,
therefore, deliver a Prospectus meeting the requirements of the Securities Act
in connection with any resales of the Exchange Notes 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 resales by
Broker-Dealers that the Commission may require in order to permit such resales
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.
The Company and the Subsidiary Guarantors shall use their
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
resales of Exchange Notes acquired by Broker-Dealers for their own accounts as a
result of market-making activities or other trading activities, and to ensure
that it conforms with the requirements of this Agreement, the Securities Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least 90 days after the Consummation of the Exchange
Offer.
The Company and the Subsidiary Guarantors shall provide
sufficient copies of the latest version of such Prospectus to Broker-Dealers
promptly upon request at any time during such 90-day period in order to
facilitate such resales.
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SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Subsidiary
Guarantors are not required to file an Exchange Offer Registration Statement or
cannot Consummate the Exchange Offer because the Exchange Offer is not permitted
by applicable U.S. law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with) or (ii) any Holder of Transfer
Restricted Securities shall notify the Company prior to the 20th day following
the Consummation of the Exchange Offer that such Holder (A) is prohibited by
applicable U.S. law or Commission policy from participating in the Exchange
Offer, (B) may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) is a Broker-Dealer and holds
Notes acquired directly from the Company or one of its affiliates, then the
Company and the Subsidiary Guarantors shall:
(x) use their reasonable best efforts to cause to be filed a
Registration Statement pursuant to Rule 415 under the Securities Act,
which may be an amendment to the Exchange Offer Registration Statement
if permitted by the rules and regulations of the Commission (in either
event, the "SHELF REGISTRATION STATEMENT") on or prior to the earliest
to occur of (1) the 30th day after the date on which the Company
determines that they are not required to file the Exchange Offer
Registration Statement, or permitted to Consummate the Exchange Offer
and (2) the 30th day after the date on which the Company receives notice
from a Holder of Transfer Restricted Securities as contemplated by
clause (ii) of paragraph (a) above (such earliest date being the "SHELF
FILING DEADLINE"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities by the Holders which shall
have provided the information required pursuant to Section 4(b) hereof;
and
(y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on
or before the 90th day after the Shelf Filing Deadline.
Subject to Section 5(b), the Company and the Subsidiary Guarantors shall use
their reasonable best efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for resales of Notes or Exchange Notes by the Holders of Transfer
Restricted Securities entitled to the benefit of this Section 4(a), and to
ensure that it conforms with the requirements of this Agreement, the Securities
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 Closing Date or
such shorter period that will terminate when all Notes or Exchange Notes covered
by the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (such period being the "SHELF REGISTRATION PERIOD").
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(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. 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 as the Company may reasonably request 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 Additional Interest pursuant to Section 5 hereof unless and until
such Holder shall have used its reasonable best efforts to provide all such
reasonably requested 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. ADDITIONAL INTEREST
(a) If (i) any of the Registration Statements required by this
Agreement are not filed with the Commission on or prior to the date specified
for such filing in Sections 3(a) and 4(a), as applicable, (ii) any of such
required Registration Statements have not been declared effective by the
Commission on or prior to the date specified for such effectiveness in Sections
3(a) and 4(a), as applicable, (each, an "EFFECTIVENESS TARGET DATE"), (iii) the
Exchange Offer has not been Consummated within 30 business days, or longer, if
required by federal securities laws, after the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement has been declared effective
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 in connection with resales of Transfer Restricted Securities without
being succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (except as permitted in paragraph (b); such period of time during
which any such Registration Statement is not effective or any such Registration
Statement or the related Prospectus is not usable being referred to as a
"BLACKOUT PERIOD") (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), the Company and the Subsidiary Guarantors, jointly and
severally, agree to pay additional interest ("ADDITIONAL INTEREST") to each
Holder of Transfer Restricted Securities adversely affected by such Registration
Default, in an amount equal to $.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder with respect to the first
90-day period immediately following the occurrence of such Registration Default.
The amount of Additional Interest shall increase by an additional $.05 per week
per $1,000 principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period (or portion thereof) until all Registration
Defaults have been cured, up to a maximum amount of Additional Interest of $.50
per week per $1,000 principal amount of Transfer Restricted Securities. All
accrued Additional Interest shall be paid to Record Holders by the Company and
the Subsidiary Guarantors in the same manner as interest is paid under the
Notes. Following the cure of all Registration Defaults relating to any
particular Transfer Restricted
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Securities, the accrual of Additional Interest with respect to such Transfer
Restricted Securities will cease.
(b) A Registration Default referred to in Section 5(a)(iv)
shall be deemed not to have occurred and be continuing in relation to a
Registration Statement or the related Prospectus if (i) the Blackout Period has
occurred solely as a result of (x) the filing of a post-effective amendment to
such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Company where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events with
respect to the Company that would need to be described in such Registration
Statement or the related Prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into the Registration Statement) such Registration
Statement and the related Prospectus to describe such events; provided, however,
that in any case if such Blackout Period occurs for a continuous period in
excess of 30 days, a Registration Default shall be deemed to have occurred on
the 31st day of such Blackout Period and Additional Interest shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured or until the Company is no
longer required pursuant to this Agreement to keep such Registration Statement
effective or such Registration Statement or the related Prospectus usable;
provided, further, that in no event shall the total of all Blackout Periods
exceed 45 days in the aggregate of any 12-month period.
All payment obligations of the Company and the Subsidiary
Guarantors set forth in this section 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 payment
obligations with respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Subsidiary Guarantors shall comply with
all of the provisions of Section 6(c) below, shall use their reasonable best
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company and the Subsidiary Guarantors (which may be contained in the
letter of transmittal contemplated by the Exchange Offer Registration
Statement) to the effect that (A)
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it is not an affiliate of the Company, (B) it is not engaged in, and
does not intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the Exchange Notes
to be issued in the Exchange Offer and (C) it is acquiring the Exchange
Notes in its ordinary course of business. In addition, all such Holders
of Transfer Restricted Securities shall otherwise cooperate in the
Company's and the Subsidiary Guarantors' preparations for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13,
1988) and Morgan Stanley and Co., Inc. (available June 5, 1991), as
interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, and similar no-action letters, and (2) must comply with
the registration and prospectus delivery requirements of the Securities
Act in connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
Registration Statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Exchange Notes obtained by such Holder in
exchange for Notes acquired by such Holder directly from the Company.
(ii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Subsidiary Guarantors shall state to the
Commission that the Company and the Subsidiary Guarantors are
registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991)
and shall represent to the Commission that neither the Company nor any
Subsidiary Guarantor has entered into any arrangement or understanding
with any Person to distribute the Exchange Notes to be received in the
Exchange Offer and that, to the best of the Company's and each
Subsidiary Guarantor's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in
its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Exchange
Notes received in the Exchange Offer; and
(iii) The Company and the Subsidiary Guarantors shall issue,
upon the request of any Holder of Notes covered by the Exchange Offer,
Exchange Notes (including the related guarantees), having an aggregate
principal amount equal to the aggregate principal amount of Notes
surrendered to the Company by such Holder in exchange therefor; such
Exchange Notes (including the related guarantees) to be registered in
the name of such Holder or in the name of the purchaser(s) of such
Exchange Notes (including the related guarantees), as the case may be;
in return, the Notes held by such Holder shall be surrendered to the
Company for cancellation.
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(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their reasonable
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto the Company and the
Subsidiary Guarantors will as expeditiously as possible prepare and file with
the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes and Exchange Notes by Broker-Dealers), the Company and the Subsidiary
Guarantors shall:
(i) use their reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Securities Act or
any regulation thereunder, financial statements of any Subsidiary
Guarantors), unless such financial statements are publicly available,
for the period specified in Sections 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company and the Subsidiary
Guarantors shall file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B),
use their reasonable best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, the Company and
the Subsidiary Guarantors may allow the Shelf Registration Statement to
cease to become effective and usable if (x) the board of directors of
the Company determines in good faith that it is in the best interests
of the Company not to disclose the existence of or facts surrounding
any proposed or pending material corporate transaction involving the
Company or the Subsidiary Guarantors, and the Company notifies the
Holders within two business days after such boards of directors make
such determination or (y) the Prospectus contained in the Shelf
Registration Statement contains an untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading; provided that the two-year period
referred to in Section 4(a) hereof during which the Shelf Registration
Statement is required to be effective and usable shall be extended by
the number of days during which such Registration
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Statement was not effective or usable pursuant to the foregoing
provisions; and provided further that Additional Interest shall accrue
on the Notes as provided in Section 5 hereof;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Sections 3 or 4 hereof, as applicable;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable
provisions of Rules 424 and 430A under the Securities Act in a timely
manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) cooperate with the selling Holders of Transfer
Restricted Securities and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(iv) use their reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities;
(v) if any fact or event contemplated by clause (d)(i)(D)
below shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading;
(vi) provide a CUSIP, CINS or ISIN number, as applicable, for
all Transfer Restricted Securities not later than the effective date of
the Registration Statement and provide the Trustee under the Indenture
with printed certificates for the Transfer Restricted Securities which
are in a form eligible for deposit with the depositary;
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(vii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any underwriter (including any "qualified independent underwriter")
that is required to be retained in accordance with the rules and
regulations of the NASD;
(viii) otherwise use their reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to their security holders, as soon as practicable,
a consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(ix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders of Notes and Exchange Notes to effect
such changes to the Indenture as may be required for such Indenture to
be so qualified in accordance with the terms of the TIA; and execute,
and use their reasonable best efforts to cause the Trustee to execute,
all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; and
(x) provide promptly to any Holder upon such Holder's written
request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act to the
extent such documents are not otherwise filed with the Commission and
available to the public free of cost.
(d) Additional Provisions Applicable to Shelf Registration
Statements. In connection with each Shelf Registration Statement, during the
Shelf Registration Period, the Company and the Subsidiary Guarantors shall:
(i) advise the underwriter(s), if any, and selling Holders of
Transfer Restricted Securities promptly and, if requested by such
Persons, to confirm such advice in writing, (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed,
and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act, of the suspension by
any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction or of
the initiation of any proceeding for any of
13
the preceding purposes and (D) of the existence of any fact or the
happening of any event that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order
that the Shelf Registration Statement and the Prospectus do not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any U.S. state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under U.S. state securities or blue
sky laws, the Company and the Subsidiary Guarantors shall use their
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(ii) if requested in writing, furnish to each of the selling
Holders of Transfer Restricted Securities and each of the
underwriter(s), if any, before filing with the Commission, copies of
any Shelf Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Shelf Registration Statement
or Prospectus (including all documents incorporated by reference after
the initial filing of such Shelf Registration Statement), which
documents will be subject to the review of such Holders and
underwriter(s), if any, for a period of at least five business days,
and the Company and the Subsidiary Guarantors will not file any such
Shelf Registration Statement or Prospectus or any amendment or
supplement to any such Shelf Registration Statement or Prospectus
(including all such documents incorporated by reference) if a selling
Holder of Transfer Restricted Securities covered by such Shelf
Registration Statement or the underwriter(s), if any, shall not have
had an opportunity to review the Shelf Registration Statement as set
forth above; such Holders and underwriter(s) shall be deemed to have
reasonably objected to such filing if such Shelf Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains an untrue statement of a material fact
or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or fails to comply with the applicable requirements of
the Securities Act;
(iii) promptly prior to the filing of any document that is to
be incorporated by reference into a Shelf Registration Statement or
Prospectus, provide copies of such document to the selling Holders and
to the underwriter(s), if any, make the Company's and the Subsidiary
Guarantors' representatives available for discussion of such document
and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request in writing;
14
(iv) make available for inspection at reasonable times at each
of the Company's principal places of business by the selling Holders of
Transfer Restricted Securities, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any
attorney or accountant retained by such selling Holders or any of the
underwriter(s) who shall certify to the Company and the Subsidiary
Guarantors that they have a current intention to sell Transfer
Restricted Securities pursuant to a Shelf Registration Statement, such
relevant financial and other records, pertinent corporate documents and
properties of the Company and the Subsidiary Guarantors as reasonably
requested and cause the Company's and the Subsidiary Guarantors'
officers, directors and employees to respond to such inquiries as shall
be reasonably necessary, in the reasonable judgment of counsel to such
Holders, to conduct a reasonable investigation; provided, however, that
the foregoing inspection and information gathering shall be coordinated
on behalf of the selling Holders by one counsel designated by and on
behalf of such Holders and, provided, further, that each such party
shall be required to maintain in confidence and not disclose to any
other Person any information or records reasonably designated by the
Company in writing as being confidential, until such time as (A) such
information becomes a matter of public record (whether by virtue of its
inclusion in such Shelf Registration Statement or otherwise), (B) such
Person shall be required so to disclose such information pursuant to a
subpoena or order of any court or other governmental agency or body
having jurisdiction over the matter (subject to the requirements of
such order, and only after such Person shall have given the Company
prompt prior written notice of such requirement) or (C) such
information is required to be set forth in such Shelf Registration
Statement or the Prospectus included therein or in an amendment to such
Shelf Registration Statement or an amendment or supplement to such
Prospectus in order that such Shelf Registration Statement, Prospectus,
amendment or supplement, as the case may be, does not contain an untrue
statement of a material fact or omit to state therein a material fact
required to be stated therein or necessary to make the statements made
therein not misleading;
(v) if requested by any selling Holders of Transfer Restricted
Securities or the underwriter(s), if any, promptly incorporate in any
Shelf Registration Statement or Prospectus pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating
to the "Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Company
15
shall not be required to take any action pursuant to this Section
6(d)(v) that would, in the opinion of counsel for the Company
reasonably satisfactory to the Initial Purchasers, violate applicable
law;
(vi) deliver to each selling Holder of Transfer Restricted
Securities and each of the underwriter(s), if any, without charge, as
many copies of the Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto as such Persons reasonably may
request; the Company and the Subsidiary Guarantors hereby consent to
the use of the Prospectus and any amendment or supplement thereto by
each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(vii) furnish to each Holder whose Transfer Restricted
Securities have been included in a Shelf Registration Statement in
connection with such exchange or sale, without charge, at least one
copy of the Registration Statement, as first filed with the Commission,
and of each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including exhibits incorporated
therein by reference) to the extent such documents are not otherwise
filed with the Commission and available to the public free of cost;
(viii) enter into an underwriting agreement on not more than
one occasion in the case of an offering pursuant to a Shelf
Registration, and make such representations and warranties, and take
all such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement,
all to such extent as may be reasonably requested by any Holder or
Holders of Transfer Restricted Securities who hold at least 25% in
aggregate principal amount of such class of Transfer Restricted
Securities; provided that the Company and the Subsidiary Guarantors
shall not be required to enter into any such agreement more than once
with respect to all of the Transfer Restricted Securities and may delay
entering into such agreement if the board of directors of each of the
Company and the Subsidiary Guarantors determines in good faith that it
is in the best interests of the Company and the Subsidiary Guarantors
not to disclose the existence of or facts surrounding any proposed or
pending material corporate transaction involving the Company and the
Subsidiary Guarantors; and in connection with an Underwritten
Registration, the Company and the Subsidiary Guarantors shall:
(A) furnish to the Initial Purchasers, the Holders of
Transfer Restricted Securities who hold at least 25% in aggregate
principal amount of such class of Transfer Restricted Securities and
each underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made in connection with an
offering of debt securities pursuant to a Shelf Registration Statement
upon the effective date of the Shelf Registration
16
Statement (and if such Shelf Registration Statement contemplates an
Underwritten Offering of Transfer Restricted Securities upon the date
of the closing under the underwriting agreement related thereto):
(1) a certificate, dated the date of effectiveness of
the Shelf Registration Statement signed by (y) the respective
chief executive officer, the respective President or any Vice
President and (z) the respective chief financial officer of
each of the Company and each of the Subsidiary Guarantors
confirming, as of the date thereof, the matters set forth in
Section 7(l) of the Purchase Agreement and such other matters
as such parties may reasonably request;
(2) an opinion, dated the date of effectiveness of
such Shelf Registration Statement, of securities counsel for
the Company covering matters similar to those set forth in
Section 7(c) of the Purchase Agreement and such other matters
as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, the Initial
Purchasers' representatives and the Initial Purchasers'
counsel in connection with the preparation of such Shelf
Registration Statement and the related Prospectus although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements in such Shelf
Registration Statement; and that such counsel advises that, on
the basis of the foregoing, such counsel's work in connection
with this work did not disclose information that gave such
counsel reason to believe that the Shelf Registration
Statement, at the time such Shelf Registration Statement or
any post-effective amendment thereto became effective
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus contained in such Shelf Registration
Statement as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Such
counsel may state further that such counsel expresses no view
with respect to, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules, the financial projections and
other financial, statistical and accounting data included or
incorporated by reference in the Shelf Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date
of effectiveness of the Shelf Registration Statement from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in
17
connection with primary underwritten offerings, and
affirming the matters set forth in the comfort letters
delivered pursuant to Sections 7(e) and 7(f) of the
Purchase Agreement;
(B) set forth in full or incorporated by
reference in the underwriting agreement, if any, the
indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and
certificates as may be reasonably requested by such parties to
evidence compliance with clause (A) above and with any
customary conditions contained in the underwriting agreement
or other agreement entered into by the Company and the
Subsidiary Guarantors pursuant to this clause (viii), if any.
If at any time during the Shelf Registration Period the representations
and warranties of the Company or the Subsidiary Guarantors contemplated
in clause (A)(1) above cease to be true and correct, the Company or the
Subsidiary Guarantors shall so advise the Initial Purchasers and the
underwriters, if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing; and
(ix) prior to any public offering of Transfer
Restricted Securities cooperate with the selling Holders of
Transfer Restricted Securities the underwriter(s), if any, and
their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under
the securities or blue sky laws of such jurisdictions as the
selling Holders of Transfer Restricted Securities or
underwriter(s) may reasonably request and do any and all other
acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement filed
pursuant to Section 4 hereof; provided, however, that the
Company and the Subsidiary Guarantors shall not be obligated
to qualify as a foreign corporation in any jurisdiction in
which they are not now so qualified or to take any action that
would subject them to general consent to service of process,
other than as to matters and transactions relating to the
Shelf Registration Statement, in any jurisdiction where they
are not now so subject.
(e) Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of any notice from the
Company of the existence of any fact of the kind described in
Section 6(d)(i) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the
Shelf Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus
contemplated by Section 6(d)(vi) hereof, or until it is
advised in writing (the "Advice") by the Company that the use
of the Prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated
by reference in 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
18
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Shelf Registration Statement set forth in Section 4
hereof, as applicable, shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to Section
6(d)(i) hereof to and including the date when each selling Holder covered by
such Shelf Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof or
shall have received the Advice.
(f) The Company and the Subsidiary Guarantors may require each
Holder of Transfer Restricted Securities as to which any registration is being
effected to furnish to the Company such information regarding such Holder and
such Holder's intended method of distribution of the applicable Transfer
Restricted Securities as the Company may from time to time reasonably request in
writing, but only to the extent that such information is required in order to
comply with the Securities Act. Each such Holder agrees to notify the Company as
promptly as practicable of (i) any inaccuracy or change in information
previously furnished by such Holder to the Company or (ii) the occurrence of any
event, in either case, as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities or omits to state any material fact
regarding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading and promptly to furnish to the
Company any additional information required to correct and update any previously
furnished information or required so that such Prospectus shall not contain,
with respect to such Holder or the distribution of the applicable Transfer
Restricted Securities an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Company regardless of whether a Registration Statement becomes effective,
including without limitation and as applicable: (i) all Commission, securities
exchange or NASD registration and filing fees and expenses (including filings
made by any Initial Purchasers or Holder with the NASD (and, if applicable, the
fees and expenses of any "qualified independent underwriter" and its counsel
that may be required by the rules and regulations of the NASD)); (ii) all fees
and expenses of compliance with U.S. federal securities and state blue sky or
securities laws and compliance with the rules of the NASD (including reasonable
fees and disbursements of one counsel for Holders in connection with blue sky
and/or NASD qualification of the Exchange Notes); (iii) all expenses of printing
(including printing certificates for the Exchange Notes to be issued in the
Exchange Offer and printing of Prospectuses), messenger and delivery services;
19
(iv) all fees and disbursements of counsel for the Company and the Subsidiary
Guarantors; (v) 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) and (vi) the
reasonable fees and disbursements of one counsel designated by the Holders of a
majority in principal amount of Transfer Restricted Securities covered by the
Shelf Registration Statement to act as counsel for the Holders of those Transfer
Restricted Securities in connection therewith.
The Company will, in any event, bear its and the Subsidiary
Guarantors' 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 or the Subsidiary Guarantors.
(b) Each Holder of Transfer Restricted Securities will pay all
underwriting discounts and commissions, if any, and agency fees, commissions and
transfer taxes, if any, relating to the disposition of such Holder's Transfer
Restricted Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such Holder, other than the counsel and experts
specifically referred to in clause (a) above.
SECTION 8. INDEMNIFICATION
(a) The Company and each Subsidiary Guarantor shall, jointly
and severally, indemnify and hold harmless each Holder of Transfer Restricted
Securities, its officers and employees and each Person, if any, who controls any
such Holders, within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases, sales and registration of the Notes, the
Guarantees and the Exchange Notes), to which that Holder, officer, employee or
controlling Person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Registration Statement or preliminary Prospectus or
Prospectus or in any amendment or supplement thereto, (B) in any Blue Sky
Application (as defined below) or other document prepared or executed by any
Company or any Subsidiary Guarantor (or based upon any written information
furnished by any Company or any Subsidiary Guarantor) specifically for the
purpose of qualifying any or all of the Notes under the securities laws of any
state or other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application") or (C) in any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Exchange Notes ("Marketing
Materials"), including any roadshow or investor presentations made to investors
by the Company (whether in person or electronically); (ii) the omission or
alleged omission to state in any Registration Statement, preliminary Prospectus
or Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application or Marketing Materials any material fact required
20
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or (iii) any act
or failure to act or any alleged act or failure to act by any Holder of Transfer
Restricted Securities in connection with, or relating in any manner to, the
Notes, the Guarantees or the Exchange Notes or the offering contemplated by any
Registration Statement, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company and the
Subsidiary Guarantors shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such Holder
through its gross negligence or willful misconduct); and shall reimburse each
Holder and each such officer, employee or controlling Person promptly upon
demand for any legal or other expenses reasonably incurred by that Holder,
officer, employee or controlling Person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Subsidiary Guarantors shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Registration Statement, preliminary Prospectus or
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application or Marketing Materials, in reliance upon and in conformity with
written information concerning such Holder furnished to the Company by or on
behalf of any Holder specifically for inclusion therein; provided, further, that
with respect to any such untrue statement or omission made in any preliminary
Prospectus or Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of the Holder from whom the Person asserting any
such losses, claims, damages or liabilities purchased the Notes, Guarantees or
Exchange Notes concerned if, to the extent that such sale was a sale by the
Holder and any such loss, claim, damage or liability of such Holder is a result
of the fact that both (A) a copy of the Prospectus (or the Prospectus as then
amended or supplemented) was not sent or given to such Person at or prior to
written confirmation of the sale of such Notes or Exchange Notes to such Person
and (B) the untrue statement or omission in the preliminary Prospectus or
Prospectus was corrected in the Prospectus (or the Prospectus as then amended or
supplemented) unless such failure to deliver the Prospectus was a result of
noncompliance by the Company with Section 6(d)(vi) hereof. The foregoing
indemnity agreement is in addition to any liability which the Company and the
Subsidiary Guarantors may otherwise have to any Holder or to any officer,
employee or controlling Person of that Holder.
(b) Each Holder, severally and not jointly, shall indemnify
and hold harmless each of the Company, each of the Subsidiary Guarantors, their
respective directors, officers and employees, and each Person, if any, who
controls either of the Company or any of the Subsidiary Guarantors within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company, the Subsidiary Guarantors or any such director,
21
officer or controlling Person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Registration Statement, preliminary
Prospectus or Prospectus, or in any amendment or supplement thereto or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in
any Registration Statement, preliminary Prospectus or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Holders
furnished to the Company by or on behalf of that Holder specifically for
inclusion therein, and shall reimburse the Company, each of the Subsidiary
Guarantors and each such director, officer, employee and controlling Person for
any legal or other expenses reasonably incurred by the Company, each such
Subsidiary Guarantor or each such director, officer, employee or controlling
Person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Holder may otherwise have to the Company, any of the Subsidiary
Guarantors or any such director, officer, employee or controlling Person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and; provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel has been specifically authorized by the indemnifying
party in writing, or (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and in
22
the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by (x) Lehman Brothers Inc.
if the indemnified parties under this Section 8 consist of the Initial
Purchasers or any of their respective officers, employees or controlling Persons
or (y) by the Company, if the indemnified parties under this Section 8 consist
of any of the Company, any of the Subsidiary Guarantors or any of their
respective directors, officers, employees or controlling Persons. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Subsidiary Guarantors, on the one hand, and the
Holders on the other, from the sale of the Transfer Restricted Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Subsidiary Guarantors, on the one hand and the Holders on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the
23
Company or any of the Subsidiary Guarantors, on the one hand, or the Holders, on
the other hand, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Subsidiary Guarantors and the Holders agree that it would not
be just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the net proceeds received by it in
connection with its sale of Notes exceeds the amount of any damages which such
Holder has otherwise paid or become liable to pay by reason of the 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 Holders' obligations to
contribute as provided in this Section 8(d) are several and not joint.
SECTION 9. RULE 144A
The Company and each Subsidiary Guarantor hereby agrees with
each Holder of Transfer Restricted Securities, during any period in which the
Company or such Subsidiary Guarantor is not subject to Section 13 or 15(d) of
the Exchange Act within the two-year period following the Closing Date, to make
available to any Holder or beneficial owner of Transfer Restricted Securities,
in connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
Subject to Section 6(d)(i), the Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering at such
Holders' expense. In any such
24
Underwritten Offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of the Transfer Restricted Securities
included in such offering; provided that such investment bankers and managers
must be reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and the Subsidiary Guarantors agree
that monetary damages (including Additional Interest) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Subsidiary Guarantor will, 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. Except as disclosed in the Offering Memorandum (as such term
is defined in the Purchase Agreement), neither the Company nor any Subsidiary
Guarantor has previously entered into any agreement granting any registration
rights with respect to its securities to any Person. 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 or any Subsidiary Guarantor's
securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the
Subsidiary Guarantors will not take any action, or permit any change to occur,
with respect to the Notes that would materially and adversely affect the ability
of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of the Transfer Restricted Securities affected by such
amendment, modification, supplement, waiver or consent. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, facsimile or
air courier guaranteeing overnight delivery:
25
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
if to the Company or the Subsidiary Guarantors to:
Psychiatric Solutions, Inc.
113 Seaboard Lane,
Suite C-100
Franklin, Tennessee 37067
Attention: Joey A. Jacobs
Fax: (615) 312-5700
with a copy to:
Waller Lansden Dortch & Davis, PLLC
511 Union Street, Suite 2100
Nashville, Tennessee 37219
Attention: Christopher L. Howard, Esq.
Fax: (615) 244-6804
Any such notices and communications shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
notice or communication given or made by the Initial Purchasers.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) 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; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder.
(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.
26
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other
Transaction Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company and the
Subsidiary Guarantors with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
[Signature pages follow.]
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Very truly yours,
PSYCHIATRIC SOLUTIONS, INC.
By: /s/ Joey A. Jacobs
-----------------------------------------------
Name: Joey A. Jacobs
Title: President and Chief Executive Officer
PSYCHIATRIC SOLUTIONS HOSPITALS, INC.
INFOSCRIBER CORPORATION
COLLABORATIVE CARE CORPORATION
PSYCHIATRIC SOLUTIONS OF ALABAMA, INC.
PSYCHIATRIC SOLUTIONS OF FLORIDA, INC.
PSYCHIATRIC SOLUTIONS OF TENNESSEE,
INC.
SOLUTIONS CENTER OF LITTLE ROCK, INC.
PSYCHIATRIC SOLUTIONS OF NORTH
CAROLINA, INC.
PSI COMMUNITY MENTAL HEALTH AGENCY
MANAGEMENT, INC.
PSYCHIATRIC MANAGEMENT RESOURCES,
INC.
PSI-EAP, INC.
SUNSTONE BEHAVIORAL HEALTH, INC.
THE COUNSELING CENTER OF MIDDLE
TENNESSEE, INC.
PSI CEDAR SPRINGS HOSPITAL, INC.
PSYCHIATRIC SOLUTIONS OF OKLAHOMA,
INC.
AERIES HEALTHCARE CORPORATION
AERIES HEALTHCARE OF ILLINOIS, INC.
PSI HOSPITALS, INC.
PSYCHIATRIC PRACTICE MANAGEMENT OF
ARKANSAS, INC.
BOUNTIFUL PSYCHIATRIC HOSPITAL, INC.
EAST CAROLINA PSYCHIATRIC SERVICES
CORPORATION
GREAT PLAINS HOSPITALS, INC.
GULF COAST TREATMENT CENTER, INC.
HAVENWYCK HOSPITAL INC.
H.C. CORPORATION
HSA HILL CREST CORPORATION
HSA OF OKLAHOMA, INC.
MICHIGAN PSYCHIATRIC SERVICES, INC.
RAMSAY MANAGED CARE, INC.
RAMSAY TREATMENT SERVICES, INC.
PSYCHIATRIC SOLUTIONS OF CORAL GABLES, INC.
RAMSAY YOUTH SERVICES OF ALABAMA, INC.
RAMSAY YOUTH SERVICES OF FLORIDA, INC.
RAMSAY YOUTH SERVICES OF GEORGIA, INC.
RAMSAY YOUTH SERVICES PUERTO RICO, INC.
RAMSAY YOUTH SERVICES OF SOUTH CAROLINA,
INC.
RHCI SAN ANTONIO, INC.
TRANSITIONAL CARE VENTURES, INC.
TRANSITIONAL CARE VENTURES (TEXAS), INC.
By: /s/ Joey A. Jacobs
-----------------------------------------------
Name: Joey A. Jacobs
Title: President
THERAPEUTIC SCHOOL SERVICES, LLC
BY: PSYCHIATRIC SOLUTIONS OF
OKLAHOMA, INC., AS SOLE MEMBER
By: /s/ Joey A. Jacobs
-----------------------------------------------
Name: Joey A. Jacobs
Title: President
PSI TEXAS HOSPITALS, LLC
BY: PSYCHIATRIC SOLUTIONS HOSPITALS,
INC., AS SOLE MEMBER
By: /s/ Joey A. Jacobs
-----------------------------------------------
Name: Joey A. Jacobs
Title: President
TEXAS CYPRESS CREEK HOSPITAL, LP
TEXAS WEST OAKS HOSPITAL, LP
NEURO INSTITUTE OF AUSTIN, LP
TEXAS LAUREL RIDGE HOSPITAL, LP
TEXAS OAKS PSYCHIATRIC HOSPITAL, LP
TEXAS SAN MARCOS TREATMENT CENTER,
LP
BY: PSI TEXAS HOSPITALS, LLC, AS
GENERAL PARTNER
BY: PSYCHIATRIC SOLUTIONS HOSPITAL,
INC., AS SOLE MEMBER
By: /s/ Joey A. Jacobs
-----------------------------------------------
Name: Joey A. Jacobs
Title: President
Accepted:
LEHMAN BROTHERS INC.
By: /s/ Michael Konigsberg
--------------------------------------------------
Authorized Representative
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Sarang R. Gadkari
--------------------------------------------------
Authorized Representative
JEFFERIES & COMPANY, INC.
By: /s/ Catherine Gemmato-Smith
--------------------------------------------------
Authorized Representative