EXHIBIT 4.2
EXECUTION VERSION
EXTENDICARE HEALTH SERVICES, INC.
$150,000,000
9 1/2% SENIOR NOTES DUE 2010
PURCHASE AGREEMENT
June 20, 2002
Xxxxxx Brothers Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
ABN AMRO Incorporated
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Extendicare Health Services, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Initial Purchasers named
in Schedule 1 hereto (the "INITIAL PURCHASERS") $150,000,000 aggregate principal
amount of its 9 1/2% Senior Notes due 2010 (the "NOTES") guaranteed (the
"GUARANTEES") by the Company's domestic subsidiaries signatory hereto
(collectively, the "SUBSIDIARY GUARANTORS") pursuant to the terms of an
indenture (the "INDENTURE"), to be dated June 28, 2002, between the Company, the
Subsidiary Guarantors and U.S. Bank, N.A., as trustee (the "TRUSTEE").
The Notes will be offered and sold to you pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "SECURITIES ACT"). The Company has prepared a preliminary
offering memorandum, dated June 7, 2002 (as amended or supplemented, the
"PRELIMINARY OFFERING MEMORANDUM"), and will prepare a final offering memorandum
(as amended or supplemented, the "OFFERING MEMORANDUM"), to be dated June 20,
2002, relating to the Company, the Notes and the Guarantees.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act, the Notes (and all securities issued in exchange therefor or in
substitution therefor) shall bear substantially the following legend:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN THE ABSENCE OF
SUCH REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED
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INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
"OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (A) THE DATE WHICH
IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WERE THE OWNERS OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE) AND (B) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION DATE"),
OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (I) TO THE COMPANY,
(II) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (III) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (IV) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR
(V) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE, AND
THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (IV) OR (V) TO REQUIRE THAT AN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED BY
THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
You have advised the Company that you will make offers and
sales (the "EXEMPT RESALES") of the Notes purchased hereunder on the terms set
forth in the Offering Memorandum solely to (i) persons whom you reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Securities Act ("QIBs") and (ii) outside the United States to
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persons other than U.S. persons in offshore transactions meeting the
requirements of Regulation S under the Securities Act ("REGULATION S") (such
persons specified in clauses (i) and (ii) being referred to herein as the
"ELIGIBLE PURCHASERS"). As used herein, the terms "offshore transaction,"
"United States" and "U.S. person" have the respective meanings given to them in
Regulation S. You will offer the Notes to Eligible Purchasers initially at a
price equal to 99.75% of the principal amount thereof. Thereafter, the offering
price may be changed at any time without notice.
In connection with the offering of the Notes, the Company and
the Subsidiary Guarantors will enter into a new revolving credit facility in the
amount of up to $105.0 million pursuant to a credit agreement among Extendicare
Holdings, Inc., the Company, the Subsidiary Guarantors, Xxxxxx Commercial Paper
Inc., as the administrative agent and the other lenders thereto (the "NEW CREDIT
FACILITY"). The net proceeds from the sale of the Notes will be used (i) to
refinance all of the Company's and the Subsidiary Guarantors' outstanding
obligations under their existing credit facility (the "EXISTING CREDIT
FACILITY"), (ii) to refinance an existing industrial development revenue bond,
(iii) to refinance a promissory note and (iv) for general corporate purposes,
all as described in the "Use of Proceeds" section of the Offering Memorandum. In
addition, the Company and the Subsidiary Guarantors intend to enter into a
five-year interest rate swap agreement with respect to the Company's outstanding
9.35% Senior Subordinated Notes due 2007 (the "SWAP AGREEMENT"). The entering
into of the New Credit Facility and the Swap Agreement, the offering of the
Notes and the use of the net proceeds from the sale of the Notes as provided in
the "Use of Proceeds" section of the Offering Memorandum are collectively
referred to herein as the "TRANSACTIONS."
Holders (including subsequent transferees) of the Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT") among the Company, the Subsidiary Guarantors
and the Initial Purchasers, to be dated as of the Closing Date (as defined
below), in the form of Exhibit A hereto, for so long as such Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Subsidiary Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein, (i) a
registration statement under the Securities Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") relating to a separate series of the Company's 9 1/2%
Senior Notes due 2010 (the "EXCHANGE NOTES") to be offered in exchange for the
Notes (such offer to exchange being referred to collectively as the "REGISTERED
EXCHANGE OFFER") and (ii) if required by the terms of the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "SHELF REGISTRATION STATEMENT") relating to the resale by
certain holders of the Notes, and to use their best efforts to cause such
Registration Statements to be declared effective. This Agreement, the Notes, the
Exchange Notes, the Guarantees, the Exchange Note Guarantees (as defined below),
the Indenture and Registration Rights Agreement are hereinafter referred to
collectively as the "OPERATIVE DOCUMENTS." This is to confirm the agreements
concerning the purchase of the Notes from the Company by the Initial Purchasers.
SECTION 1. Representations, Warranties and Agreements of the
Company and the Subsidiary Guarantors. The Company and the Subsidiary
Guarantors, jointly and severally, represent, warrant and agree that:
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(a) The Preliminary Offering Memorandum and the Offering
Memorandum have been or will be prepared by the Company and Subsidiary
Guarantors for use by the Initial Purchasers in connection with the
Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
order asserting that the transactions contemplated by this Agreement
are subject to the registration requirements of the Securities Act has
been issued and no proceeding for that purpose has commenced or is
pending or, to the knowledge of the Company and Subsidiary Guarantors,
is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates did not, and the Offering
Memorandum as of the Closing Date will not, contain an untrue statement
of a material fact or omit 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, except that this
representation and warranty does not apply to statements in or
omissions from the Preliminary Offering Memorandum and the Offering
Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing
by or on behalf of the Initial Purchasers expressly for use therein, as
specifically identified in Section 8(e) hereof.
(c) The Company and each of the Subsidiary Guarantors (i) have
been duly organized or formed, are validly existing and are in good
standing under the laws of their respective jurisdictions of
organization, and (ii) are duly qualified to do business and are in
good standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, except where the failure to so qualify or
to be in good standing would not have a material adverse effect on the
general affairs, management, consolidated financial position,
shareholders' equity, results of operations, business or prospects of
the Company and its subsidiaries taken as a whole (a "MATERIAL ADVERSE
EFFECT"). The Company and each of the Subsidiary Guarantors have all
power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, and
none of the subsidiaries of the Company, other than Extendicare Homes,
Inc., Northern Health Facilities, Inc. and Extendicare Health
Facilities, Inc., is a "significant subsidiary," as such term is
defined in Rule 405 under the Securities Act.
(d) The Subsidiary Guarantors constitute all of the active
subsidiaries of the Company and each of the Company's other
subsidiaries are individually and in the aggregate inactive and
immaterial.
(e) The Company has an authorized capitalization as set forth
in the Offering Memorandum. All of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock and limited partner or limited liability company interests of
each of the Subsidiary Guarantors have been duly and validly authorized
and issued and are fully paid and non-assessable (except, in the case
of such Subsidiary Guarantors that are Wisconsin corporations, for
certain statutory liabilities that may be imposed by Section
180.0622(2)(b) of the Wisconsin Business Corporation Law for unpaid
employee
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wages) and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, other than liens,
encumbrances, equities or claims under the Existing Credit Facility
(which will be assigned to the lenders under the New Credit Facility on
the Closing Date) and contemplated under the New Credit Facility or
otherwise described in the Offering Memorandum, and none of such shares
of capital stock, or limited partner or limited liability company
interests were issued in violation of preemptive or other similar
rights arising by operation of law, under the charter and bylaws of the
Company or under any agreement to which the Company or any Subsidiary
Guarantor is a party or otherwise.
(f) Each of the Company and the Subsidiary Guarantors has all
requisite power and authority to execute, deliver and perform its
respective obligations under this Agreement and each of the other
Operative Documents to which it is a party.
(g) This Agreement has been duly and validly authorized,
executed and delivered by the Company and the Subsidiary Guarantors.
(h) The Registration Rights Agreement has been duly and
validly authorized by the Company and each of the Subsidiary
Guarantors, and when duly executed by the proper officers of the
Company and each of the Subsidiary Guarantors (assuming due
authorization, execution and delivery by the Initial Purchasers) and
delivered by the Company and each of the Subsidiary Guarantors, will
constitute a legal, valid and binding agreement of the Company and each
of the Subsidiary Guarantors, enforceable against the Company and each
of the Subsidiary Guarantors in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity),
and except that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy
relating thereto.
(i) The Indenture has been duly and validly authorized by the
Company and each of the Subsidiary Guarantors, and when duly executed
by the proper officers of the Company and each of the Subsidiary
Guarantors (assuming due authorization, execution and delivery by the
Trustee) and delivered by the Company and each of the Subsidiary
Guarantors, will constitute a legal, valid and binding agreement of the
Company and each of the Subsidiary Guarantors enforceable against the
Company and each of the Subsidiary Guarantors in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or
in equity). No qualification of the Indenture under the Trust Indenture
Act of 1939, as amended (the "TRUST INDENTURE ACT"), is required in
connection with the offer and sale of the Notes contemplated hereby or
in connection with the Exempt Resales. The Indenture
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conforms to the requirements of the Trust Indenture Act and the rules
and regulations thereunder applicable to an indenture that is qualified
thereunder.
(j) The Notes have been duly and validly authorized by the
Company and when duly issued by the Company in accordance with the
terms of the Indenture and, assuming due authentication of the Notes by
the Trustee, when delivered to the Initial Purchasers against payment
therefor in accordance with the terms hereof, will have been validly
issued and delivered, and will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(k) The Guarantees have been duly and validly authorized by
each of the Subsidiary Guarantors and when duly endorsed on the Notes
in accordance with the terms of the Indenture and, assuming due
authentication of the Notes by the Trustee, upon delivery to the
Initial Purchasers against payment therefor in accordance with the
terms hereof will constitute legal, valid and binding obligations of
each of the Subsidiary Guarantors entitled to the benefits of the
Indenture and enforceable against each of the Subsidiary Guarantors in
accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(l) The Exchange Notes have been duly and validly authorized
by the Company and if and when duly issued by the Company in accordance
with the terms of the Indenture and, assuming due authentication of the
Exchange Notes by the Trustee, if and when delivered in accordance with
the Registered Exchange Offer contemplated by the Registration Rights
Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
(m) The guarantees of the Exchange Notes (the "EXCHANGE NOTE
GUARANTEES") have been duly and validly authorized by each of the
Subsidiary Guarantors and if and when duly endorsed on the Exchange
Notes in accordance with the terms of the Indenture and, assuming due
authentication of the Exchange Notes by the Trustee, if and when the
Exchange Notes are delivered in accordance with the Registered
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Exchange Offer contemplated by the Registration Rights Agreement, will
constitute legal, valid and binding obligations of each of the
Subsidiary Guarantors entitled to the benefits of the Indenture and
enforceable against each of the Subsidiary Guarantors in accordance
with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at
law or in equity).
(n) The Company and the Subsidiary Guarantors have all
requisite corporate power and authority to enter into (A) the New
Credit Facility, (B) any and all other agreements and instruments
ancillary to or entered into in connection with the transaction
contemplated by the New Credit Facility (items (A) and (B) are referred
to collectively as the "CREDIT DOCUMENTS") and (C) the Swap Agreement.
(o) Each of the New Credit Facility, the other Credit
Documents and the Swap Agreement have been duly and validly authorized
by the Company and the Subsidiary Guarantors, to the extent they are a
party thereto, and when duly executed by the proper officers of the
Company and each of the Subsidiary Guarantors (assuming due
authorization, execution and delivery by the other parties thereto) and
delivered by the Company and each of the Subsidiary Guarantors, to the
extent they are a party thereto, will constitute a legal, valid and
binding agreement of each of the Company and the Subsidiary Guarantors,
enforceable against the Company and each of the Subsidiary Guarantors
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity). Prior to the issuance of letters of
credit to replace existing letters of credit, the Company will have up
to $105.0 million of borrowings available to it under the New Credit
Facility after the Closing of the sale of the Notes, the receipt by the
Company of the proceeds therefrom and the application of such proceeds
as described under the caption "Use of Proceeds" in the Offering
Memorandum. All representations and warranties made by the Company in
the New Credit Facility and the other Credit Documents will be true and
correct in all material respects as of the date thereof.
(p) The Indenture, the Notes, the Guarantees, the Registration
Rights Agreement and the Credit Documents conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(q) The execution, delivery and performance of this Agreement,
the other Operative Documents, the New Credit Facility and the other
Credit Documents and the Swap Agreement by the Company and the
Subsidiary Guarantors and the consummation of the Transactions will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement, license or
instrument to which the Company or
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any of the Subsidiary Guarantors is a party or by which the Company or
any of the Subsidiary Guarantors is bound or to which any of the
property or assets of the Company or any of the Subsidiary Guarantors
is subject, (ii) the provisions of the charter or bylaws of the Company
or the charter, bylaws or other organizational documents of any of the
Subsidiary Guarantors or (iii) any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiary Guarantors or
any of their properties or assets, except, in the case of clauses (i)
and (iii) for such conflicts, breaches, violations or defaults that
would not have a Material Adverse Effect. Except as may be required in
connection with (1) the registration of the Notes, the Exchange Notes,
the Guarantees and/or the Exchange Note Guarantees under the Securities
Act in accordance with the Registration Rights Agreement, (2)
qualification of the Indenture under the Trust Indenture Act, (3)
compliance with the securities or Blue Sky laws of various
jurisdictions and (4) filings required by the terms of the Credit
Documents, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement,
any of the other Operative Documents, the New Credit Facility and the
other Credit Documents or the Swap Agreement by the Company and the
Subsidiary Guarantors and the consummation of the Transactions.
(r) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum comply as to
form in all material respects with the requirements of Regulation S-X
under the Securities Act and present fairly the financial condition and
results of operations and cash flows of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The other financial data, selected pro forma ratios,
operating data and statistical information and data, including Adjusted
EBITDA and Adjusted EBITDAR (each as defined in the Offering
Memorandum), included in the Offering Memorandum is presented fairly
and has been prepared on a basis consistent with such financial
statements and the books and records of the Company.
(s) Except as set forth in the Offering Memorandum, there are
no legal or governmental proceedings pending to which the Company or
any of the Subsidiary Guarantors is a party or of which any property or
assets of the Company or any of the Subsidiary Guarantors is the
subject which, if determined adversely to the Company or any of the
Subsidiary Guarantors, would have a Material Adverse Effect, and to the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or others.
(t) Except as set forth in the Offering Memorandum, there are
no contracts, agreements or understandings between the Company and/or
the Subsidiary Guarantors and any person granting such person the right
to require the Company or the Subsidiary Guarantors to file a
registration statement under the Securities Act with respect to any
securities of the Company or the Subsidiary Guarantors owned or to be
owned by such person or to require the Company or the Subsidiary
Guarantors to include such securities
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in the securities to be registered pursuant to the Exchange Offer
Registration Statement or the Shelf Registration Statement or in any
securities registered or to be registered pursuant to any other
registration statement filed by or required to be filed by the Company
or the Subsidiary Guarantors under the Securities Act.
(u) Except as disclosed in the Offering Memorandum, since the
date of the latest audited consolidated financial statements of the
Company included in the Offering Memorandum, none of the Company or the
Subsidiary Guarantors has incurred any liability or obligation, direct
or contingent, or entered into any transaction, in each case not in the
ordinary course of business, that is material to the Company or the
Subsidiary Guarantors, taken as a whole, and there has not occurred, to
the knowledge of the Company and the Subsidiary Guarantors, any
development or event involving a Material Adverse Effect and, except as
disclosed in or contemplated by the Offering Memorandum, there has been
no (i) dividend or distribution of any kind declared, paid or made by
the Company or its affiliates on any class of its respective capital
stock, (ii) issuance of securities by the Company or its affiliates
(other than the Notes and the Guarantees offered thereby or pursuant to
an issuance by the Company or its affiliates of options to purchase the
capital stock of the Company or its affiliates) or (iii) material
increase in short-term or long-term debt of the Company or the
Subsidiary Guarantors.
(v) The Company is in full compliance with the reporting
requirements of Section 13 or 15(d) of the Exchange Act. All reports
filed by the Company with the Commission pursuant to Section 13 or
15(d) of the Exchange Act comply as to form with the Exchange Act and
the rules and regulations of the Commission thereunder and when filed
did not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading.
(w) The Company and each Subsidiary Guarantor (i) makes and
keeps accurate books and records and (ii) maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements in conformity with generally
accepted accounting principles and to maintain accountability for its
assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the recorded accountability for its
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) KPMG LLP, who have certified certain financial statements
of the Company, whose report appears in the Offering Memorandum and who
have delivered the initial letter referred to in Section 7(j) hereof,
are independent public accountants as required by the Securities Act
and the rules and regulations promulgated thereunder.
(y) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the
Company and the subsidiaries believe to be reliable and accurate.
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(z) Except as disclosed in or specifically contemplated by the
Offering Memorandum, each of the Company and the Subsidiary Guarantors
has such permits, licenses, patents, franchises, certificates of need
and other approvals or authorizations of governmental or regulatory
authorities ("PERMITS") as are necessary under applicable law to own
its properties and to conduct its businesses in the manner described in
the Offering Memorandum, except where the failure to have any such
Permit would not, individually or in the aggregate, have a Material
Adverse Effect; each of the Company and the Subsidiary Guarantors has
fulfilled and performed all of its obligations with respect to the
Permits, except where the failure to so fulfill and/or perform such
obligations would not have a Material Adverse Effect; and, except as
disclosed in or specifically contemplated by the Offering Memorandum,
no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
impairment of the rights of the holder of any such Permit, except where
any such revocations, terminations or impairments would not,
individually or in the aggregate, have a Material Adverse Effect.
Except as disclosed in or specifically contemplated by the Offering
Memorandum, none of the Permits contains any restriction that is
materially burdensome (other than such burdens as are common or
customary to such Permits) to any of the Company or the Subsidiary
Guarantors.
(aa) The Company and each of the Subsidiary Guarantors carry,
or are covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(bb) The Company and each of the Subsidiary Guarantors own or
possess adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses necessary for the
conduct of their respective businesses and have no reason to believe
that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such
rights of others, and the Company and the Subsidiary Guarantors are not
aware of any pending or threatened claim to the contrary or any pending
or threatened challenge by any other person to the rights of the
Company and the Subsidiary Guarantors with respect to the foregoing
which, if determined adversely to any of the Company or the Subsidiary
Guarantors, would have a Material Adverse Effect.
(cc) There are no contracts or other documents which would be
required to be described in a prospectus included in or filed as an
exhibit to a registration statement on Form S-1 under the Securities
Act that have not been described in the Offering Memorandum or filed
with the Commission.
(dd) No relationship, direct or indirect, exists between or
among the Company and the Subsidiary Guarantors, on the one hand, and
the directors, officers, shareholders, customers or suppliers of the
Company or the Subsidiary Guarantors, on the other hand, which would be
required to be described in a prospectus included in a registration
statement on Form S-1 under the Securities Act that is not described in
the Offering Memorandum.
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(ee) No labor disturbance by the employees of the Company or
any of the Subsidiary Guarantors exists or, to the knowledge of the
Company, is imminent which would have a Material Adverse Effect.
(ff) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect to incur
any material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "CODE");
and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(gg) The Company and the Subsidiary Guarantors have filed all
federal, state and local income and franchise tax returns required to
be filed through the date hereof, other than those being contested in
good faith, and paid all taxes due thereon, other than those being
contested in good faith, and no tax deficiency has been determined
adversely to the Company or any of the Subsidiary Guarantors, nor does
the Company have any knowledge of any tax deficiency which, if
determined adversely to the Company or any of the Subsidiary
Guarantors, would have a Material Adverse Effect.
(hh) Neither the Company nor any of the Subsidiary Guarantors
(i) is in violation of its charter, bylaws or other organizational
documents, (ii) is in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is
subject, except for such defaults that would not have a Material
Adverse Effect, or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject, except for such violations that
would not have a Material Adverse Effect.
(ii) Neither the Company nor any of the Subsidiary Guarantors,
nor any current director or officer, or to the Company's knowledge, any
current agent, employee or other person associated with or acting on
behalf of the Company or any of the Subsidiary Guarantors, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1977; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
11
(jj) Neither the Company nor the Subsidiary Guarantors has
stored, disposed of, generated, manufactured, refined, transported,
handled or treated toxic wastes, medical wastes, solid wastes,
hazardous wastes or hazardous substances or other similar materials
("Hazardous Materials") and, to the knowledge of the Company, there has
been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of Hazardous Materials by any
other person at, upon or from any of the properties now owned or leased
by the Company or the Subsidiary Guarantors in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit which could reasonably be expected to have, individually or in
the aggregate with all such violations, a Material Adverse Effect;
there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of the Subsidiary Guarantors or with
respect to which the Company or any of the Subsidiary Guarantors have
knowledge, which could reasonably be expected to have, individually or
in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes," "toxic wastes," "hazardous
substances," "solid wastes" and "medical wastes" shall have the
meanings specified in any applicable local, state, federal and foreign
laws or regulations with respect to environmental protection.
(kk) The Company and each of the Subsidiary Guarantors have
good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them, in each
case, free and clear of all liens, encumbrances and defects except such
as are existing under the Existing Credit Facility (which will be
assigned to the lenders under the New Credit Facility as of the Closing
Date) and the other indebtedness of the Company described in the
Offering Memorandum under "Description of Other Indebtedness" or such
as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiary Guarantors; and all assets
held under lease by the Company and the Subsidiary Guarantors are held
by them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such assets by the Company and the
Subsidiary Guarantors.
(ll) Immediately after the consummation of the Transactions,
the fair value and present fair saleable value of the assets of the
Company and each of the Subsidiary Guarantors (each on a consolidated
basis) will exceed the sum of its stated liabilities and identified
contingent liabilities; none of the Company nor any of the Subsidiary
Guarantors (each on a consolidated basis) is, nor will any of the
Company or any of the Subsidiary Guarantors (each on a consolidated
basis) be, after giving effect to the execution, delivery and
performance of this Agreement and the other Operative Documents and the
New Credit Facility and the other Credit Documents and the consummation
of the Transactions, (A) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted, (B)
unable to pay its debts (contingent or otherwise) as they mature or (C)
otherwise insolvent.
12
(mm) Neither the Company nor any Subsidiary Guarantor is, or,
as of the Closing Date after giving effect to the Transactions and the
application of the proceeds as described in the Offering Memorandum
under the section entitled "Use of Proceeds," will be, an "investment
company" within the meaning of such term under the Investment Company
Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(nn) Except as set forth in the Offering Memorandum, neither
the Company nor any of the Subsidiary Guarantors nor, to the knowledge
of the Company, any other person who has a direct or indirect ownership
or control interest in the Company or any of the Subsidiary Guarantors
or who is an officer, director, agent or managing employee of the
Company or any Subsidiary Guarantor: (1) has engaged in any activities
which are prohibited, or are cause for criminal or civil penalties
and/or mandatory or permissive exclusion from Medicare or Medicaid,
under Section 1320a-7, 1320a-7a, 1320a-7b, or 1395nn of Title 42 of the
United States Code, the federal TRICARE statute, the Federal False
Claims Act 31 U.S.C.ss.3729-3733, or the regulations promulgated
pursuant to such statutes or regulations or related state or local
statutes or by generally recognized professional standards of care or
conduct; (2) has had a civil monetary penalty assessed against it under
Section 1128A of the Social Security Act ("SSA"); (3) is currently
excluded from participation under the Medicare program or a Federal
Health Care Program (as that term is defined in SSA Section
1128(B)(f)); or (4) has been convicted (as that term is defined in 42
C.F.R. ss.1001.2) of any of the categories of offenses described in SSA
Section 1128(a) and (b)(1), (2) and (3).
(oo) Neither the Company nor any other affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act ("REGULATION
D")) of the Company has directly, or through any agent (provided that
no representation is made as to the Initial Purchasers or any person
acting on their behalf), (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined
in the Securities Act) which is or could be integrated with the
offering and sale of the Notes and the Guarantees in a manner that
would require the registration of the Notes and the Guarantees under
the Securities Act or (ii) engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D, including,
but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising) in connection with the offering of the Notes and the
Guarantees. Neither the Company nor any Subsidiary Guarantor has
offered, sold or issued any securities, or securities that are
convertible into other securities, with terms that are substantially
similar to the Notes and the Guarantees during the six-month period
preceding the date of the Offering Memorandum, including any sales
pursuant to Section 4(2) of the Securities Act or Regulation D or
Regulation S under the Securities Act.
(pp) Each of the Preliminary Offering Memorandum and the
Offering Memorandum and each amendment or supplement thereto, as of its
date, contains the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
13
(qq) Neither the Company nor any Subsidiary Guarantor has
distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Notes and the Guarantees, will
not distribute any offering material in connection with the offering
and sale of the Notes other than the Preliminary Offering Memorandum
and the Offering Memorandum.
(rr) When issued and delivered pursuant to this Agreement, the
Notes will not be of the same class (within the meaning of Rule 144A
under the Securities Act) as securities of the Company that are listed
on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a U.S. automated inter-dealer
quotation system.
(ss) Assuming (i) that your representations and warranties in
Section 2 of this Agreement are true, (ii) compliance by you with the
covenants set forth herein and (iii) that each of the Eligible
Purchasers is a QIB or a person who acquires the Notes and the
Guarantees outside the United States in an "offshore transaction" and
is not a "U.S. person" (within the meaning of Rule 904 of Regulation
S), it is not necessary in connection with the purchase of the Notes
and the Guarantees and the offer and initial resale of the Notes and
the Guarantees by you in the manner contemplated by this Agreement and
the Offering Memorandum, to register the Notes and the Guarantees under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act.
(tt) None of the Company, any Subsidiary Guarantor or any of
their affiliates or any person acting on their behalf (provided that no
representation is made as to the Initial Purchasers or any person
acting on their behalf) has engaged or will engage in any directed
selling efforts within the meaning of Rule 902(c) of Regulation S with
respect to the Notes, and the Company, the Subsidiary Guarantors and
their other affiliates and all persons acting on their behalf (provided
that no representation is made as to the Initial Purchasers or any
person acting on their behalf) have complied with and will comply with
the offering restrictions requirements of Regulation S in connection
with the offering of the Notes outside of the United States and, in
connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(g). The sales of the Notes pursuant to
Regulation S are not part of a plan or scheme to evade the registration
provision of the Securities Act.
(uu) The Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not
be exchanged for definitive securities until the expiration of the
40-day restricted period referred to in Rule 903(b)(2) of the
Securities Act and only upon certification of beneficial ownership of
such Notes by non-U.S. persons or U.S. persons who purchased such Notes
in transactions that were exempt from the registration requirements of
the Securities Act.
(vv) In connection with the distribution of the Notes and the
Guarantees, neither the Company nor any of its subsidiaries has taken
or will take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
14
of the Notes and the Guarantees to facilitate the sale or resale of the
Notes and the Guarantees.
(ww) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act (i) has imposed (or has informed the Company
that it is considering imposing) any condition (financial or otherwise)
on the Company's retaining any rating assigned as of the date hereof to
the Company or any of their respective securities or (ii) has indicated
to the Company that it is considering (A) the downgrading, suspension
or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so
assigned or (B) any negative change in the outlook for any rating of
the Company.
(xx) The Company has not taken, and will not take, any action
that might cause this Agreement or the issuance or sale of the Notes
and the Guarantees to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve System.
(yy) The Company and each Subsidiary Guarantor understands
that the Initial Purchaser and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Section 7 hereof,
counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby
consents to such reliance.
SECTION 2. Representations, Warranties and Agreements of the
Initial Purchasers. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to, and agrees with, the Company and the Subsidiary
Guarantors, that:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as are necessary in order
to evaluate the merits and risks of an investment in the Notes and the
Guarantees.
(b) Such Initial Purchaser (i) is not acquiring the Notes and
the Guarantees with a view to any distribution thereof or with any
present intention of offering or selling any of the Notes and the
Guarantees in a transaction that would violate the Securities Act or
any state securities laws or any other applicable jurisdiction; (ii) in
connection with the Exempt Resales, will solicit offers to buy the
Notes and the Guarantees only from, and will offer to sell the Notes
and the Guarantees only to, the Eligible Purchasers in accordance with
this Agreement and on the terms contemplated by the Offering
Memorandum; and (iii) will not offer or sell the Notes and the
Guarantees, nor has it offered or sold the Notes and the Guarantees by,
or otherwise engaged in, any form of general solicitation in connection
with the offering of the Notes and the Guarantees.
(c) The Notes and the Guarantees have not been and will not be
registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act
or pursuant to an exemption from the registration requirements of the
Securities Act. Such Initial Purchaser represents that it has not
offered, sold or delivered
15
the Notes and the Guarantees, and will not offer, sell or deliver the
Notes and the Guarantees (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering of the Notes and the Guarantees and the Closing Date (such
period, the "DISTRIBUTION COMPLIANCE PERIOD"), within the United States
or to, or for the account or benefit of U.S. persons, except in
accordance with Rule 144A under the Securities Act. Accordingly, such
Initial Purchaser represents and agrees that neither it, its affiliates
nor any persons acting on its behalf have engaged or will engage in any
directed selling efforts within the meaning of Rule 902(c) of
Regulation S with respect to the Notes and the Guarantees, and its
affiliates and all persons acting on its behalf have complied and will
comply with the offering restrictions requirements of Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Notes and Guarantees (other than a sale
pursuant to Rule 144A), it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration
that purchases Notes and Guarantees from them during the Distribution
Compliance Period a confirmation or notice substantially to the
following effect:
"The Notes covered hereby have not been registered under the
Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering or the closing
date, except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities Act, and in
connection with any subsequent sale by you of the Notes
covered hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you
must deliver a notice substantially to the foregoing effect.
Terms used above have the meanings assigned to them in
Regulation S."
(e) All offers and sales of the Notes and the Guarantees by
such Initial Purchaser pursuant to Regulation S are and will be
"offshore transactions" within the meaning of Regulation S and are not
and will not be part of a plan or scheme to evade the registration
provisions of the Securities Act.
(f) Such Initial Purchaser (i) has not offered or sold, and
prior to the six months after the date of the issue of the Notes will
not offer or sell, any Notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) has complied with and will comply with all
applicable provisions of the Financial Services and Markets Xxx 0000,
or the FSMA, with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom and (iii) has
only communicated or caused to be communicated and will only
communicate and cause to be communicated any invitation
16
or inducement to engage in investment activity (within the meaning of
Section 21 of the FSMA) received by it in connection with the issue or
sale of any Notes in circumstances in which Section 21(1) of the FSMA
would not apply to the Company.
(g) Such Initial Purchaser understands that the Company and,
for purposes of the opinions to be delivered to you pursuant to Section
7 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations
and hereby consents to such reliance.
The terms used in this Section 2 that have meanings assigned
to them in Regulation S are used herein as so defined.
SECTION 3. Purchase of the Notes and the Guarantees by the
Initial Purchasers. On the basis of the representations and warranties contained
in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell the Notes (and cause the Subsidiary Guarantors to issue the
Guarantees) to the several Initial Purchasers and each of the Initial
Purchasers, severally and not jointly, agrees to purchase the amount of Notes
set opposite that Initial Purchaser's name in Schedule 1 hereto. Each Initial
Purchaser will purchase such aggregate principal amount of Notes at an aggregate
purchase price equal to 96.75% of the principal amount thereof (the "PURCHASE
PRICE").
The Company shall not be obligated to deliver any of the Notes
to be delivered on the Closing Date, except upon payment for all the Notes and
the Guarantees to be purchased on the Closing Date as provided herein.
SECTION 4. Delivery of and Payment for the Notes and the
Guarantees.
(a) Delivery of and payment for the Notes and the Guarantees
shall be made at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M., New York City time, on
the sixth full business day following the date of this Agreement or at
such other date or place as shall be determined by agreement between
Xxxxxx Brothers and the Company. This date and time are sometimes
referred to as the "CLOSING DATE."
(b) On the Closing Date, one or more Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository
Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Notes
(collectively, the "GLOBAL NOTES"), shall be delivered by the Company
to the Initial Purchasers against payment by the Initial Purchasers of
the purchase price thereof by wire transfer of immediately available
funds as the Company may direct by written notice delivered to you no
later than two business days prior to the Closing Date. The Global
Notes in definitive form shall be made available to the Initial
Purchasers for inspection not later than 2:00 p.m. on the business day
prior to the Closing Date.
SECTION 5. Further Agreements of the Company. The Company
agrees:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of the issuance by the Commission
or any state securities commission of
17
any stop order suspending the qualification or exemption from
qualification of the Notes and the Guarantees for offering or sale in
any jurisdiction, or the initiation or threatening of any proceeding
for such purpose by the Commission or any state securities commission
or other regulatory authority, and (ii) the happening of any event that
makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or which requires the
making of any additions to or changes in the Preliminary Offering
Memorandum or Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The Company shall use all reasonable efforts to prevent
the issuance of any stop order or order suspending the qualification or
exemption of the Notes and the Guarantees under any state securities or
Blue Sky laws and, if at any time any state securities commission shall
issue any stop order suspending the qualification or exemption of the
Notes and the Guarantees under any state securities or Blue Sky laws,
the Company shall use all reasonable efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
(b) To furnish to you without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as you may reasonably request. The
Company consents to the use of the Preliminary Offering Memorandum and
the Offering Memorandum, and any amendments and supplements thereto
required pursuant to this Agreement, by you in connection with the
Exempt Resales that are in compliance with this Agreement.
(c) Not to amend or supplement the Offering Memorandum prior
to the Closing Date or during the period referred to in (d) below
unless you shall previously have been advised of, and shall not have
reasonably objected to, such amendment or supplement within a
reasonable time, but in any event not longer than three days after
being furnished a copy of such amendment or supplement. The Company
shall promptly prepare, upon any reasonable request by you, any
amendment or supplement to the Offering Memorandum that may be
necessary or advisable in connection with Exempt Resales.
(d) If, in connection with any Exempt Resales or market making
transactions after the date of this Agreement and prior to the
consummation of the Registered Exchange Offer, any event shall occur
that, in the judgment of the Company or in your judgment or the
judgment of counsel to you, makes any statement of a material fact in
the Offering Memorandum untrue or that requires the making of any
additions to or changes in the Offering Memorandum in order to make the
statements in the Offering Memorandum, in the light of the
circumstances at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not misleading, or if it is necessary
to amend or supplement the Offering Memorandum to comply with
applicable law, the Company will promptly notify you of such event and
prepare an appropriate amendment or supplement to the Offering
Memorandum so that, at the time that the Offering Memorandum is
delivered to prospective Eligible Purchasers, (i) the statements in the
Offering Memorandum as amended or supplemented, in the light of the
circumstances under which they were made, will not be misleading and
(ii) the Offering Memorandum will comply with applicable law.
18
(e) Promptly from time to time to take such action as you may
reasonably request to qualify the Notes and the Guarantees for offering
and sale under the state securities or Blue Sky laws of such
jurisdictions as you may request (provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject) and to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Notes and the Guarantees.
(f) To use all reasonable best efforts to do and perform all
things required to be done and performed under this Agreement by it
prior to or after the Closing Date and to satisfy all conditions
precedent on its part to the delivery of the Notes and the Guarantees.
(g) Except as contemplated in the Registration Rights
Agreement, not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) that would be integrated with the sale of the Notes and
the Guarantees in a manner that would require the registration under
the Securities Act of the sale to you or the Eligible Purchasers of the
Notes and the Guarantees.
(h) For so long as any Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act and during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, to make available
upon request to any registered holder or beneficial owner of Notes in
connection with any sale thereof and any prospective purchaser of Notes
from such registered holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act.
(i) To use its reasonable best efforts to cause the Notes to
be eligible for trading in The PORTAL(SM) Market ("PORTAL"), a
subsidiary of The Nasdaq Stock Market, Inc., and to permit the Notes to
be eligible for clearance and settlement through DTC.
(j) To apply the net proceeds from the sale of the Notes as
set forth in the Offering Memorandum under the section entitled "Use of
Proceeds."
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary of the Company shall become an
"investment company" within the meaning of such term under the
Investment Company Act and the rules and regulations of the Commission
thereunder.
(l) Except for borrowings under the New Credit Facility, for a
period of 180 days from the date of the Offering Memorandum, not to,
directly or indirectly, sell, contract to sell, grant any option to
purchase, issue any instrument convertible into or exchangeable for, or
otherwise transfer or dispose of, any debt securities of the Company or
any Subsidiary Guarantor in a public or private offering for cash
having a maturity of
19
more than one year from the date of issue of such securities, except
(i) for the Exchange Notes and the Exchange Note Guarantees in
connection with the Exchange Offer or (ii) with the prior consent of
the Initial Purchasers, which consent shall not be unreasonably
withheld.
(m) For a period of three years following the Closing Date, to
furnish to you copies of all materials furnished by the Company to
holders of Notes and all public reports and all reports and financial
statements furnished by the Company to the principal national
securities exchange upon which the Company's common stock or Notes may
be listed pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder.
SECTION 6. Expenses. The Company agrees that, whether or not
the transactions contemplated by this Agreement are consummated or this
Agreement becomes effective or is terminated, to pay all costs, expenses, fees
and taxes incident to and in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the Offering
Memorandum (including, without limitation, financial statements) and all
amendments and supplements thereto (but not, however, legal fees and expenses of
your counsel incurred in connection therewith), (ii) the preparation, printing
(including, without limitation, word processing and duplication costs) and
delivery of this Agreement, the Indenture, all Blue Sky Memoranda and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection herewith and with the Exempt Resales (but not, however, legal fees
and expenses of your counsel incurred in connection with any of the foregoing
other than fees of such counsel plus reasonable disbursements incurred in
connection with the preparation, printing and delivery of such Blue Sky
Memoranda), (iii) the issuance and delivery by the Company and the Subsidiary
Guarantors of the Notes and the Guarantees, (iv) the qualification of the Notes
for offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of your
counsel relating to such registration or qualification), (v) furnishing such
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
all amendments and supplements thereto, as may be reasonably requested for use
in connection with the Exempt Resales, (vi) the preparation of certificates for
the Notes (including, without limitation, printing and engraving thereof), (vii)
the fees, disbursements and expenses of the Company's counsel and accountants,
(viii) all expenses and listing fees in connection with the application for
quotation of the Notes in PORTAL, (ix) the costs and expenses of the Company
relating to investor presentations on any road show undertaken in connection
with the offering of the Notes, including without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show; (x) all fees and expenses (including fees and expenses of counsel) of the
Company in connection with approval of the Notes by DTC for "book-entry"
transfer and (xi) the performance by the Company and the Subsidiary Guarantors
of its other obligations under this Agreement.
20
SECTION 7. Conditions of Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions.
(a) The Offering Memorandum shall have been printed and copies
distributed to you not later than 9:00 A.M., New York City time, on
June 24, 2002, or at such later date and time as you may approve in
writing, and no stop order suspending the qualification or exemption
from qualification of the Notes in any jurisdiction shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(b) No Initial Purchaser shall have discovered and disclosed
to the Company on or prior to such Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Weil, Gotshal & Xxxxxx
LLP, counsel for the Initial Purchasers, is material or omits to state
a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the other
Operative Documents, the Credit Documents, the Swap Agreement and the
Offering Memorandum, and all other legal matters relating to this
Agreement and the Transactions shall be reasonably satisfactory in all
material respects to counsel for the Initial Purchasers, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) Xxxxx & Lardner shall have furnished to the Initial
Purchasers its written opinion, as counsel to the Company and the
Subsidiary Guarantors, addressed to the Initial Purchasers and dated as
of the Closing Date, in form and substance reasonably satisfactory to
the Initial Purchasers and its counsel, substantially in the form
attached hereto as Exhibit B.
(e) Xxxx Xxxxxx, Esq., General Counsel of the Company, shall
have furnished to the Initial Purchasers his written opinion, as
counsel to the Company and the Subsidiary Guarantors, addressed to the
Initial Purchasers and dated as of the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and its
counsel, substantially in the form attached hereto as Exhibit C.
(f) The Initial Purchasers shall have received from Weil,
Gotshal & Xxxxxx LLP, counsel for the Initial Purchasers, such opinion
or opinions, dated as of the Closing Date, with respect to the issuance
and sale of the Notes and the Guarantees, the Offering Memorandum and
other related matters as the Initial Purchasers may reasonably require,
and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon
such matters.
21
(g) Each of the Company, the Subsidiary Guarantors and the
Trustee shall have entered into the Indenture and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(h) Each of the Company, the Subsidiary Guarantors and the
Initial Purchasers shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(i) The Notes shall have been approved for trading in PORTAL
and shall be eligible for clearance and settlement through The
Depository Trust Company.
(j) At the time of execution of this Agreement, the Initial
Purchasers shall have received from KPMG LLP, a letter, in form and
substance satisfactory to the Initial Purchasers, addressed to the
Initial Purchasers and dated the date hereof (i) confirming that they
are independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date hereof (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering
Memorandum, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to initial purchasers.
(k) With respect to the letter of KPMG LLP, referred to in the
preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "INITIAL
LETTER"), the Initial Purchasers shall have received a letter (the
"BRING-DOWN LETTER") of such accountants, addressed to the Initial
Purchasers and dated as of the Closing Date (i) confirming that they
are independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down letter
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Offering Memorandum, as of a date not more than five days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial
letter.
(l) The Initial Purchasers shall have received an executed
copy of the Credit Documents, with all schedules, exhibits and
amendments thereto.
(m) The Initial Purchasers shall have received an executed
copy of the services agreement between the Company and Virtual Care
Provider, Inc. relating to certain services provided by us and Virtual
Care Provider, Inc. to each other.
(n) The Initial Purchasers shall have received (i) a
certificate from the Company, dated the Closing Date, signed by its
Chairman of the Board or Chief
22
Executive Officer and its Chief Financial Officer or Treasurer and (ii)
a certificate from each Subsidiary Guarantor, dated as of the Closing
Date, signed by its President, other executive officer or authorized
signatory stating, as applicable, that:
(A) The representations and warranties of
the Company and the Subsidiary Guarantors, as
applicable, are true and correct as if made on and as
of the Closing Date (other than to the extent any
such representation or warranty is made expressly to
a certain date), and the Company and the Subsidiary
Guarantors, as applicable, have performed all
covenants and agreements and satisfied all conditions
on their part to be performed or satisfied hereunder,
to the extent a party hereto, at or prior to the
Closing Date;
(B) At the Closing Date, since the date
hereof, except as described in the Offering
Memorandum, no event or events have occurred, nor has
any information become known that, individually or in
the aggregate, would have a Material Adverse Effect;
(C) They have carefully examined the
Preliminary Offering Memorandum and the Offering
Memorandum and, in their opinion, the Preliminary
Offering Memorandum and Offering Memorandum, as of
their respective dates, did not, and the Offering
Memorandum, as of the Closing Date, does not include
any untrue statement of a material fact and did not
omit to state a material fact required to be stated
therein or necessary to make the statements therein
not misleading, and since the date of the Offering
Memorandum, no event has occurred which should have
been set forth in a supplement or amendment to
Offering Memorandum; and
(D) The issuance and sale of the Notes and
Guarantees by the Company and the Subsidiary
Guarantors hereunder has not been enjoined
(temporarily or permanently) by any court or
governmental body or agency.
(o) (i) Neither the Company nor any of the Subsidiary
Guarantors shall have sustained since the date of the latest audited
financial statements included in the Offering Memorandum (exclusive of
any amendment or supplement thereto after the date hereof) any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Memorandum or (ii)
since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of the Subsidiary
Guarantors or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and the Subsidiary Guarantors taken as a whole, otherwise than as set
forth or contemplated in the Offering Memorandum, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment
of Xxxxxx Brothers, so material and
23
adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes and the Guarantees being
delivered on such Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Securities Act and (ii) no such
organization shall have publicly announced or privately informed the
Company that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt
securities.
(q) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the Toronto Stock
Exchange or the Nasdaq National Market shall have been suspended or the
settlement of such trading generally shall have been materially
disrupted or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a general banking moratorium shall have been declared by Federal
or state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) or there
shall have occurred any other calamity or crisis, including without
limitation as a result of terrorist activities after the date hereof,
as to make it, in the judgment of Xxxxxx Brothers, impracticable or
inadvisable to proceed with the offering or delivery of the Notes and
the Guarantees being delivered on such Closing Date on the terms and in
the manner contemplated in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
SECTION 8. Indemnification and Contribution.
(a) The Company and the Subsidiary Guarantors shall jointly
and severally indemnify and hold harmless each Initial Purchaser, its
directors, officers and employees and each person, if any, who controls
any Initial Purchaser 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 and sales of
the Notes and the Guarantees), to which that Initial Purchaser,
director, 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 Preliminary Offering
24
Memorandum, the Offering Memorandum or in any amendment or supplement
thereto or (B) in any Blue Sky application or other document prepared
or executed by the Company or the Subsidiary Guarantors (or based upon
any written information furnished by the Company or the Subsidiary
Guarantors) 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 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 Preliminary Offering
Memorandum, the Offering Memorandum or in any amendment or supplement
thereto, or in any Blue Sky Application or Marketing Materials, any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the Notes and the
Guarantees or the offering contemplated hereby, 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 Initial Purchaser through its gross negligence or willful
misconduct), and shall reimburse each Initial Purchaser and each such
director, officer, employee or controlling person promptly upon demand
for any legal or other expenses reasonably incurred by that Initial
Purchaser, 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; provided, however that the Company and the
Subsidiary Guarantors will 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 such untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company through Xxxxxx
Brothers by or on behalf of such Initial Purchaser expressly for
inclusion therein. The foregoing indemnity agreement is in addition to
any liability which the Company and the Subsidiary Guarantors may
otherwise have to any Initial Purchaser or to any director, officer,
employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser shall, severally and not jointly,
indemnify and hold harmless the Company, the Subsidiary Guarantors,
their officers, each of their directors, and each person, if any, who
controls the Company 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, 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 in any Preliminary Offering Memorandum, the
Offering Memorandum or in any amendment or supplement thereto, or in
any Blue Sky Application or (ii) the omission or alleged
25
omission to state in any Preliminary Offering Memorandum, the Offering
Memorandum 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 Initial
Purchaser furnished to the Company through Xxxxxx Brothers by or on
behalf of that Initial Purchaser specifically for inclusion therein,
and shall reimburse the Company, the Subsidiary Guarantors and any such
director, officer or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by the Company or any such
director, officer 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 Initial Purchaser may otherwise have to the Company, 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, that Xxxxxx Brothers shall have the
right to employ one counsel (and one local counsel) to represent
jointly Xxxxxx Brothers and those other Initial Purchasers and their
respective directors, officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Initial Purchasers against the
Company under this Section 8 if, in the reasonable judgment of Xxxxxx
Brothers, it is advisable for Xxxxxx Brothers and those Initial
Purchasers, directors, officers, employees and controlling persons to
be jointly represented by separate counsel, and in that event the fees
and expenses of such separate counsel shall be paid by the Company. 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
26
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 and does not include any
findings of fact or admissions of fault or culpability as to the
indemnified party 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 on the one hand and the Initial Purchasers on the other from
the offering of the Notes and the Guarantees or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Initial Purchasers, 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 benefits
received by the Company, on the one hand, and the Initial Purchasers,
on the other, with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Notes and the Guarantees purchased under this Agreement (before
deducting expenses) received by the Company, on the one hand, and the
total discounts and commissions received by the Initial Purchasers with
respect to the Notes and the Guarantees purchased under this Agreement,
on the other hand, bear to the total gross proceeds from the offering
of the Notes and the Guarantees under this Agreement. 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 Company or
the Initial Purchasers, 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 Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8 were to be determined by pro
rata allocation (even if the Initial Purchasers 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 8 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 or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by it was
resold to Eligible Purchasers
27
exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any 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
Initial Purchasers' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective Purchase
obligations and not joint.
(e) The Initial Purchasers severally confirm and the Company
and the Subsidiary Guarantors acknowledge that the last sentence on the
cover page of the Offering Memorandum, and the first sentence of the
fifth, sixth, seventh and ninth paragraphs, the second sentence of the
seventh paragraph, the sixth sentence of the tenth paragraph and the
eleventh paragraph under the section entitled "Plan of Distribution" in
the Offering Memorandum constitute the only information concerning the
Initial Purchasers furnished in writing to the Company by or on behalf
of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
SECTION 9. Defaulting Initial Purchasers.
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the Notes that
the defaulting Initial Purchaser agreed but failed to purchase on such Closing
Date in the respective proportions which the amount of the Notes set forth
opposite the name of each remaining non-defaulting Initial Purchaser in Schedule
1 hereto bears to the total amount of Notes set forth opposite the names of all
the remaining non-defaulting Initial Purchasers in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Initial Purchasers shall not be
obligated to purchase any of the Notes on such Closing Date if the total amount
of the Notes which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase on such date exceeds 10% of the total amount of Notes to
be purchased on such Closing Date, and any remaining non-defaulting Initial
Purchaser shall not be obligated to purchase more than 110% of the amount of
Notes which it agreed to purchase on such Closing Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchasers, or those other Initial Purchasers satisfactory to Xxxxxx
Brothers who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all of the Notes
to be purchased on such Closing Date. If the remaining Initial Purchasers or
other Initial Purchasers satisfactory to Xxxxxx Brothers do not elect to
purchase the Notes which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase on such Closing Date, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "INITIAL PURCHASER" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases the Notes which a
defaulting Initial Purchaser agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company and the Subsidiary
Guarantors for damages caused by its
28
default. If other Initial Purchasers are obligated or agree to purchase the
Notes of a defaulting or withdrawing Initial Purchaser, either the Xxxxxx
Brothers or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Company or counsel for the Initial Purchasers may be necessary in the
Offering Memorandum or in any other document or arrangement.
SECTION 10. Termination. The obligations of the Initial
Purchasers hereunder may be terminated by Xxxxxx Brothers by notice given to and
received by the Company prior to delivery of and payment for the Notes if, prior
to that time, any of the events described in Sections 7(o), 7(p) and 7(q) shall
have occurred or if the Initial Purchasers shall decline to purchase the Notes
for any reason permitted under this Agreement.
SECTION 11. Reimbursement of Initial Purchasers' Expenses. If
the Company and the Subsidiary Guarantors shall fail to deliver the Notes and
the Guarantees to the Initial Purchasers by reason of any failure, refusal or
inability on the part of the Company and the Subsidiary Guarantors to perform
any agreement on its part to be performed, or because any other condition of the
Initial Purchasers' obligations hereunder required to be fulfilled by the
Company and the Subsidiary Guarantors is not fulfilled, the Company and the
Subsidiary Guarantors will reimburse the Initial Purchasers for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Initial Purchasers in connection with this Agreement and the
proposed purchase of the Notes and the Guarantees, and upon demand the Company
and the Subsidiary Guarantors shall pay the full amount thereof to Xxxxxx
Brothers.
SECTION 12. Notices, etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to the care of Xxxxxx Brothers
Inc., 000 Xxxxxxx Xxxxxx, 19th Floor, Attention: Xxxxxxx Xxxxxxxxxx
(Fax: (000) 000-0000), with a copy to Weil, Gotshal & Xxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxx, Esq.
(Fax: 000-000-0000) and, in the case of any notice pursuant to Section
8(d), to the Director of Litigation, Office of the General Counsel,
Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (Fax: (212)
526-2648);
(b) if to the Company and the Subsidiary Guarantors, shall be
delivered or sent by mail, telex or facsimile transmission to the
Company, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-000,
Attention: Xxxxxx X. Rhinelander, (Fax: (000) 000-0000), with a copy to
Xxxxx & Xxxxxxx, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Xxxxxxx X. Xxxx, Esq. (Fax: (000) 000-0000);
provided, however, that any notice to an Initial Purchaser pursuant to Section
8(d) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its acceptance telex to Xxxxxx
Brothers, which address will be supplied to any other party hereto by Xxxxxx
Brothers upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act
29
and rely upon any request, consent, notice or agreement given or made on behalf
of the Initial Purchasers by Xxxxxx Brothers.
SECTION 13. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers, the Company, the Subsidiary Guarantors and their respective personal
representatives and successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company and the
Subsidiary Guarantors contained in this Agreement shall also be deemed to be for
the benefit of the directors, officers, employees of the Initial Purchasers and
each person or persons, if any, who control any Initial Purchasers within the
meaning of Section 15 of the Securities Act and (b) the indemnity agreement of
the Initial Purchasers contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of directors, officers and any person controlling
the Company and the Subsidiary Guarantors within the meaning of Section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 13, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
SECTION 14. Survival. The respective indemnities,
representations, warranties and agreements of the Company, the Subsidiary
Guarantors and the Initial Purchasers contained in this Agreement or made by or
on behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Notes and the Guarantees and shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
SECTION 15. Definition of the Term "Business Day." For
purposes of this Agreement, "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
SECTION 16. Jurisdiction. Each of the parties hereto
irrevocably consents to the jurisdiction of the courts of the State of New York
and the courts of the United States of America located in the Borough of
Manhattan, City and State of New York, over any suit, action or proceeding with
respect to this Agreement or the transactions contemplated hereby. Each of the
parties hereto waives any objection that it may have to the venue of any suit,
action or proceeding with respect to this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the courts of the
United States of America, in each case, located in the Borough of Manhattan,
City and State of New York or that such suit, action or proceeding brought in
the courts of the State of New York or United States of America, in each case,
located in the Borough of Manhattan, City and State of New York was brought in
an inconvenient court and agrees not to plead or claim the same.
SECTION 17. Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
30
SECTION 18. Counterparts. This Agreement may be executed in
multiple counterparts and, if executed in counterparts, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
31
If the foregoing correctly sets forth the agreement among the
Company, the Subsidiary Guarantors and the Initial Purchasers, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
EXTENDICARE HEALTH SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
EXTENDICARE HEALTH FACILITY HOLDINGS, INC.
EXTENDICARE HEALTH FACILITIES, INC.
COVENTRY CARE, INC.
NORTHERN HEALTH FACILITIES, INC.
EXTENDICARE HOMES, INC.
EXTENDICARE HEALTH NETWORK, INC.
THE PROGRESSIVE STEP CORPORATION
EXTENDICARE OF INDIANA, INC.
EDGEWOOD NURSING CENTER, INC.
ELDER CREST, INC.
HAVEN CREST, INC.
MEADOW CREST, INC.
OAK HILL HOME OF REST AND CARE, INC.
EXTENDICARE GREAT TRAIL, INC.
FIR LANE TERRACE CONVALESCENT CENTER, INC.
ADULT SERVICES UNLIMITED, INC.
ARBORS EAST, INC.
ARBORS AT TOLEDO, INC.
HEALTH POCONOS, INC.
XXXXXXXX PROPERTIES, INC.
COVENTRY CARE HOLDINGS, INC.
UNITED PROFESSIONAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
SIGNATURE PAGE TO PURCHASE AGREEMENT
INDIANA HEALTH AND REHABILITATION
PARTNERSHIP
BY: EXTENDICARE HOMES, INC., AS GENERAL
PARTNER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
BY: EXTENDICARE OF INDIANA, INC., AS
GENERAL PARTNER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
CONCORDIA MANOR, LLC
FIRST COAST HEALTH AND REHABILITATION
CENTER, LLC
XXXXXXX HEIGHTS REHABILITATION CENTER, LLC
TREASURE ISLE CARE CENTER, LLC
BY: EXTENDICARE HOMES, INC., AS SOLE MEMBER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
XXXXXXX STREET, WV, LLC
NEW CASTLE CARE, LLC
BY: FIR LANE TERRACE CONVALESCENT CENTER,
INC., AS SOLE MEMBER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
SIGNATURE PAGE TO PURCHASE AGREEMENT
ALPINE HEALTH AND REHABILITATION CENTER, LLC
COLONIAL CARE, LLC
GREENBRIAR CARE, LLC
GREENBROOK CARE, LLC
HERITAGE CARE, LLC
LADY LAKE CARE, LLC
NEW HORIZON CARE, LLC
NORTH REHABILITATION CARE, LLC
PALM COURT CARE, LLC
XXXXXX MANOR, LLC
ROCKLEDGE CARE, LLC
SOUTH HERITAGE HEALTH AND REHABILITATION
CENTER, LLC
THE OAKS RESIDENTIAL AND REHABILITATION
CENTER, LLC
WINTER HAVEN HEALTH AND REHABILITATION
CENTER, LLC
BY: EXTENDICARE HEALTH FACILITIES, INC., AS
SOLE MEMBER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
ARBORS AT TAMPA, LLC ARBORS
AT BAYONET POINT, LLC
ARBORS AT FAIRLAWN CARE, LLC
ARBORS AT FAIRLAWN REALTY OH, LLC
ARBORS AT SYLVANIA CARE, LLC
ARBORS AT SYLVANIA REALTY OH, LLC
ARBORS WEST CARE, LLC
ARBORS WEST REALTY OH, LLC
COLUMBUS REHABILITATION REALTY OH, LLC
JACKSONVILLE CARE, LLC
SAFETY HARBOR CARE, LLC
KISSIMMEE CARE, LLC
ORANGE PARK CARE, LLC
OREGON CARE, LLC
PORT CHARLOTTE CARE, LLC
SARASOTA CARE, LLC
SEMINOLE CARE, LLC
WINTER HAVEN CARE, LLC
SIGNATURE PAGE TO PURCHASE AGREEMENT
BLANCHESTER CARE, LLC
CANTON CARE, LLC
COLUMBUS REHABILITATION CARE, LLC
DAYTON CARE, LLC
DELAWARE CARE, LLC
GALLIPOLIS CARE, LLC
XXXXXXXX CARE, LLC
LONDON CARE, LLC
MARIETTA CARE, LLC
ROCKMILL CARE, LLC
ROCKSPRINGS CARE, LLC
WATERVILLE CARE, LLC
WOODSFIELD CARE, LLC
BY: NORTHERN HEALTH FACILITIES, INC., AS
SOLE MEMBER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
STONEBRIDGE CARE, LP
EDGEWOOD CARE, LP
ELDERCREST CARE, LP
HAVEN CARE, LP
MEADOW CARE, LP
OAK HILL CARE, LP
BY: COVENTRY CARE HOLDINGS, INC., AS GENERAL
PARTNER
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President - Finance
SIGNATURE PAGE TO PURCHASE AGREEMENT
GREAT TRAIL CARE, LLC
BY: EXTENDICARE GREAT TRAIL, INC., AS SOLE
MEMBER
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Development
FISCAL SERVICES GROUP, LLC
PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS
SOLE MEMBER
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Development
MILFORD CARE, LLC
BY: XXXXXXXX PROPERTIES, INC., AS SOLE
MEMBER
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Development
SIGNATURE PAGE TO PURCHASE AGREEMENT
PARTNERS HEALTH GROUP - FLORIDA, LLC
PARTNERS HEALTH GROUP - LOUISIANA, LLC
PARTNERS HEALTH GROUP - TEXAS, LLC
BY: PARTNERS HEALTH GROUP, LLC
BY: EXTENDICARE HEALTH NETWORK, INC., AS
SOLE MEMBER
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Development
SIGNATURE PAGE TO PURCHASE AGREEMENT
Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------
Authorized Representative
For itself and as representative
of the several Initial Purchasers named
in Schedule 1 hereto
SIGNATURE PAGE TO PURCHASE AGREEMENT
