EXHIBIT 4.2
INSIGHT HEALTH SERVICES HOLDINGS CORP.,
INSIGHT HEALTH SERVICES CORP.
- AND -
THE SUBSIDIARY GUARANTORS LISTED ON SCHEDULE A HERETO
$225,000,000
9-7/8% SENIOR SUBORDINATED NOTES DUE 2011
PURCHASE AGREEMENT
DATED OCTOBER 25, 0000
XXXX XX XXXXXXX SECURITIES LLC
FIRST UNION SECURITIES, INC.
Table of Contents
Page
Section 1. Representations and Warranties.................................. 3
(a) No Registration Required........................................ 3
(b) No Integration of Offerings or General Solicitation............. 3
(c) Eligibility for Resale Under Rule 144A.......................... 4
(d) The Offering Memorandum......................................... 4
(e) Incorporated Documents.......................................... 4
(f) The Remarketing Agreement....................................... 4
(g) The Registration Rights Agreement............................... 4
(h) The DTC Letter of Representations............................... 5
(i) Authorization of the Securities and the Exchange Securities..... 5
(j) Authorization of the Indenture.................................. 6
(k) Descriptions in the Offering Memorandum......................... 6
(l) No Material Adverse Change...................................... 6
(m) Independent Accountants......................................... 7
(n) Preparation of the Financial Statements......................... 7
(o) Incorporation and Good Standing of Company and its
Subsidiaries.................................................... 7
(p) Capitalization and Other Capital Stock Matters.................. 8
(q) Non-Contravention of Instruments; No Further Authorizations
or Approvals Required........................................... 9
(r) No Material Actions or Proceedings.............................. 10
(s) Intellectual Property Rights.................................... 10
(t) All Necessary Permits, Etc...................................... 10
(u) Regulatory Matters.............................................. 10
(v) Medicare/Medicaid Participation................................. 12
(w) Title to Properties............................................. 13
(x) Material Agreements............................................. 13
(y) Tax Law Compliance.............................................. 13
(z) Company Not an "Investment Company"............................. 13
(aa) Insurance....................................................... 13
(bb) No Price Stabilization or Manipulation.......................... 14
(cc) Solvency........................................................ 14
(dd) No Unlawful Contributions or Other Payments..................... 14
(ee) Company's Accounting System..................................... 14
(ff) Compliance with Environmental Laws.............................. 15
(gg) ERISA Compliance................................................ 15
(hh) Regulation S Compliance......................................... 16
(ii) Taxes; Fees..................................................... 16
(jj) No Labor Disputes............................................... 16
Section 2. Issuance and Delivery of the Securities......................... 17
(a) The Securities.................................................. 17
(b) The Closing Date................................................ 17
(c) Delivery of the Notes........................................... 17
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(d) Delivery of Offering Memorandum to the Initial Purchaser........ 17
(e) Initial Purchaser as Qualified Institutional Buyer.............. 17
Section 3. Covenants....................................................... 18
(a) The Initial Purchaser's Review of Proposed Amendments and
Supplements..................................................... 18
(b) Amendments and Supplements to the Offering Memorandum and
Other Securities Act Matters.................................... 18
(c) Copies of the Offering Memorandum............................... 18
(d) Blue Sky Compliance............................................. 18
(e) Depositary...................................................... 19
(f) Additional Issuer Information................................... 19
(g) Future Agreement Not to Offer or Sell Additional Securities..... 20
(h) Future Reports to the Initial Purchaser......................... 20
(i) No Integration.................................................. 20
(j) Legended Securities............................................. 20
(k) PORTAL.......................................................... 20
(l) Rating of Securities............................................ 21
Section 4. Payment of Expenses............................................. 21
Section 5. Additional Covenants............................................ 21
(a) Accountants' Comfort Letter..................................... 21
(b) Opinion of Counsel for the Company.............................. 22
(c) Opinion of General Counsel for the Company...................... 22
(d) Opinion of Regulatory Counsel for the Company................... 22
(e) Officers' Certificate........................................... 22
(f) Bring-down Comfort Letters...................................... 22
(g) Registration Rights Agreement................................... 23
(h) Additional Documents............................................ 23
Section 6. Reimbursement of Initial Purchaser's Expenses................... 23
Section 7. Offer, Sale and Resale Procedures............................... 23
(a) Offers and Sales Only to Qualified Institutional Buyers and
Non-U.S. Persons................................................ 23
(b) No General Solicitation......................................... 23
(c) Restrictions on Transfer........................................ 23
Section 8. Indemnification................................................. 24
(a) Indemnification of the Initial Purchaser........................ 24
(b) Indemnification of the Company and the Guarantors and their
Directors and Officers.......................................... 25
(c) Notifications and Other Indemnification Procedures.............. 25
(d) Settlements..................................................... 26
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Section 9. Contribution.................................................... 27
Section 10. [Intentionally Omitted]......................................... 28
Section 11. Representations and Indemnities to Survive Delivery............. 28
Section 12. Notices......................................................... 28
Section 13. Successors...................................................... 30
Section 14. Partial Unenforceability........................................ 30
Section 15. Governing Law; Consent to Jurisdiction.......................... 30
(a) Governing Law Provisions........................................ 30
(b) Consent to Jurisdiction......................................... 30
Section 16. General Provisions.............................................. 30
SCHEDULE A - Guarantors
SCHEDULE B - Material Agreements
SCHEDULE C - Subsidiaries of InSight Health Services Corp.
SCHEDULE D - Initial Purchasers
EXHIBIT A-1 - Form of Opinion of Xxxx Xxxxxxx LLP
EXHIBIT A-2 - Form of Opinion of Hunton & Xxxxxxxx
EXHIBIT B - Form of Opinion of General Counsel for the Company
EXHIBIT C - Form of Opinion of Regulatory Counsel for the Company
ANNEX 1 - Terms and Conditions of Offers and Sales
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Purchase Agreement
October 25, 0000
XXXX XX XXXXXXX SECURITIES LLC
FIRST UNION SECURITIES, INC.
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Introductory. Pursuant to the terms of a Note Purchase Agreement,
dated October 17, 2001, among InSight Health Services Acquisition Corp., a
Delaware corporation, InSight Health Services Corp., a Delaware corporation (the
"Company"), InSight Health Services Holdings Corp., a Delaware corporation
("Holdings"), the Subsidiary Guarantors (as defined herein), Banc of America
Bridge LLC and Banc of America Securities LLC, (the "Note Purchase Agreement"),
the Company is (i) issuing to Banc of America Securities LLC and First Union
Securities, Inc. (collectively, the "Initial Purchasers"), acting severally and
not jointly, the respective amounts set forth in Schedule D of $200,000,000
aggregate principal amount of the Company's 9-7/8% Senior Subordinated Notes Due
2011 (the "Initial Notes") in exchange for $200,000,000 principal amount of the
Company's 12-1/8% Senior Subordinated Notes due 2011 (the "Existing Notes") and
(ii) issuing and selling to the Initial Purchasers, acting severally and not
jointly, the respective amounts set forth in Schedule D of an additional
$25,000,000 aggregate principal amount of the Company's 9-7/8% Senior
Subordinated Notes due 2011 (the "Additional Notes" and, together with the
Initial Notes, the "Notes). Terms used herein and not otherwise defined herein
shall have the respective meanings assigned to them in the Note Purchase
Agreement.
The Notes will be issued pursuant to an indenture, dated as of
October 30, 2001 (the "Indenture"), among the Company, the Guarantors (as
defined below) and State Street Bank and Trust Company N.A., as trustee (the
"Trustee"). Notes issued in book-entry form will be issued in the name of Cede &
Co., as nominee of The Depository Trust Company (the "Depositary") pursuant to a
letter of representations, to be dated as of the Closing Date (as defined in
Section 2), to be entered into in connection with the issuance of the Securities
(the "DTC Letter of Representations") among the Company, the Trustee and the
Depositary.
The payment of principal of, premium and Liquidated Damages (as
defined in the Indenture), if any, and interest on the Notes and the Exchange
Notes (as defined below) will,
upon issuance of the Notes, become fully and unconditionally guaranteed on a
senior subordinated and unsecured basis, jointly and severally by (i) Holdings,
(ii) each of the Company's directly and indirectly wholly-owned subsidiaries
listed in Schedule A attached hereto, and (iii) any wholly-owned or other
subsidiary of the Company formed or acquired after the Closing Date that
executes an additional guarantee in accordance with the terms of the Indenture,
and respective successors and assigns of Holdings and the subsidiaries of the
Company referred to in (ii) and (iii) above (collectively, the "Guarantors," and
the subsidiaries referred to in (ii) and (iii) above, the "Subsidiary
Guarantors"), pursuant to their guarantees (the "Guarantees"). The Notes and the
Guarantees attached thereto are herein collectively referred to as the
"Securities," and the Exchange Notes and the Guarantees attached thereto are
herein collectively referred to as the "Exchange Securities."
The holders of the Notes will be entitled to the benefits of a
remarketed notes registration rights agreement, to be dated as of the Closing
Date (the "Registration Rights Agreement"), among the Company, the Guarantors
and the Initial Purchasers, substantially in the form of Exhibit E attached to
the Note Purchase Agreement, pursuant to which the Company and the Guarantors
agree to file, within 120 days of the Closing Date, a registration statement
with the Securities and Exchange Commission (the "Commission") registering the
Exchange Securities under the Securities Act of 1933, as amended (the
"Securities Act," which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder).
The Company understands that the Initial Purchasers propose to make
an offering of the Securities on the terms and in the manner set forth herein
and in the Offering Memorandum (as defined below) and agrees that the Initial
Purchasers may sell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the "Subsequent Purchasers") at any
time after the date of this Agreement. The Securities are to be offered and sold
to or through the Initial Purchasers without being registered with the
Commission under the Securities Act, in reliance upon exemptions therefrom. The
terms of the Securities and the Indenture will require that investors that
acquire Securities expressly agree that Securities may only be resold or
otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A under the Securities Act ("Rule 144A") or Regulation S
under the Securities Act ("Regulation S")).
The Company has prepared and delivered to the Initial Purchasers
copies of a preliminary offering memorandum, dated October 19, 2001 (the
"Preliminary Offering Memorandum"), and has prepared and will deliver to the
Initial Purchasers, copies of the Offering Memorandum (defined below),
describing the terms of the Securities, each for use by the Initial Purchasers
in connection with their solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to in this Agreement, the offering memorandum, dated October 25,
2001, including amendments or supplements thereto, any exhibits thereto and the
Incorporated Documents (as defined in Section 1 below), in the most recent form
that has been prepared and delivered by the Company to the Initial Purchasers in
connection with their solicitation of offers to purchase Securities. Further,
any reference to the Preliminary Offering Memorandum or the Offering Memorandum
shall be deemed to refer to and include any Additional Issuer Information (as
defined in Section 3) furnished by the Company prior to the completion of the
distribution of the Securities.
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All references in this Agreement to financial statements and other
information which is "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; all references in this
Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (as amended, the "Exchange Act," which term, as used
herein, includes the rules and regulations of the Commission promulgated
thereunder) which is incorporated or deemed to be incorporated by reference in
the Offering Memorandum; and all references in this Agreement to the Transaction
Documents shall be deemed to mean and include this Purchase Agreement, the
Registration Rights Agreement, the Indenture, the Securities and the DTC Letter
of Representations. References herein to "Subsidiaries" shall mean each
corporation, partnership, joint venture or other entity in which (i) the Company
owns, directly or indirectly, 50% or more of the outstanding voting securities
or equity interests or (ii) the Company or any Subsidiary is the sole general
partner or the sole managing member.
Each of the Company and the Guarantors hereby confirms its
respective agreement with the Initial Purchasers as follows:
Section 1. Representations and Warranties. The Company and each of
the Guarantors hereby jointly and severally represent, warrant and covenant to
each Initial Purchaser as follows:
(a) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section
2(e) hereof and with the procedures set forth in Section 7 hereof, it is
not necessary in connection with the issuance and sale of the Securities
to the Initial Purchasers and the offer, sale and delivery of the
Securities to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under the
Securities Act or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the Indenture
under the Trust Indenture Act of 0000 (xxx "Xxxxx Xxxxxxxxx Xxx," which
term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. None of the
Company or any Guarantor has, directly or indirectly, solicited any offer
to buy or offered to sell, and none of them will, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any
United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require
the Securities to be registered under the Securities Act. None of the
Company, the Guarantors, their respective affiliates (as such term is
defined in Rule 501(b) under the Securities Act (each, an "Affiliate")) or
any person acting on their behalf (other than the Initial Purchasers, as
to whom none of the Company or any Guarantor makes any representation or
warranty) has engaged or will engage, in connection with the offering of
the Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act. With respect
to those Securities sold in reliance upon Regulation S, (i) none of the
Company, the Guarantors, their Affiliates or
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any person acting on their behalf (other than the Initial Purchasers, as
to whom none of the Company or any Guarantor makes any representation or
warranty) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S and (ii) each of the Company, the
Guarantors and their Affiliates and any person acting on their behalf
(other than the Initial Purchasers, as to whom none of the Company or any
Guarantor makes any representation or warranty) has complied and will
comply with the offering restrictions set forth in Regulation S.
(c) Eligibility for Resale Under Rule 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the Closing
Date, of the same class as securities listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act," which term, as used herein, includes
the rules and regulations of the Commission promulgated thereunder) or
quoted in a U.S. automated interdealer quotation system.
(d) The Offering Memorandum. The Offering Memorandum does not, and
at the Closing Date will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
furnished to the Company in writing by the Initial Purchasers expressly
for use in the Offering Memorandum. Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its respective date,
contains all the information specified in, and meeting the requirements of
Rule 144A(d)(4). None of the Company or any Guarantor has distributed and
none of them will distribute, prior to the later of the Closing Date and
the completion of the Initial Purchasers' distribution of the Securities,
any offering material in connection with the offering and sale of the
Securities other than the Preliminary Offering Memorandum, the Offering
Memorandum or as agreed upon by the Initial Purchasers.
(e) Incorporated Documents. The Offering Memorandum as delivered
from time to time shall incorporate by reference the Annual Report of the
Company on Form 10-K for the fiscal year ended June 30, 2001 filed with
the Commission on September 14, 2001 (the "Annual Report"), each Quarterly
Report of the Company on Form 10-Q and each Current Report of the Company
on Form 8-K (and any amendment(s) thereto) filed with the Commission
between the date hereof and the Closing Date. The documents incorporated
or deemed to be incorporated by reference in the Offering Memorandum, at
the time they were, or hereafter are, filed with the Commission
(collectively, the "Incorporated Documents") complied and will comply in
all material respects with the requirements of the Exchange Act.
(f) The Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by each of the Company and the Guarantors.
(g) The Registration Rights Agreement. At the Closing Date, the
Registration Rights Agreement will have been duly authorized, executed and
delivered by, and
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(assuming the due authorization, execution and delivery thereof by the
other parties thereto) will be a valid and binding agreement of, the
Company and each Guarantor, enforceable in accordance with its terms,
except as rights to indemnification and contribution thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles (whether
considered in a proceeding at law or in equity). Pursuant to the
Registration Rights Agreement, the Company and each Guarantor will agree
to file with the Commission, under the circumstances set forth therein,
(i) a registration statement under the Securities Act relating to another
series of debt securities of the Company with terms substantially
identical to the Notes (the "Exchange Notes") to be offered in exchange
for the Notes (the "Exchange Offer") and (ii) to the extent required by
the Registration Rights Agreement, a shelf registration statement pursuant
to Rule 415 of the Securities Act relating to the resale by certain
holders of the Notes, and in each case, to use its best efforts to cause
such registration statements to be declared effective.
(h) The DTC Letter of Representations. At the Closing Date, the DTC
Letter of Representations will have been duly authorized, executed and
delivered by, and (assuming the due authorization, execution and delivery
thereof by the other parties thereto) will be a valid and binding
agreement of, the Company, enforceable in accordance with its terms except
as the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles (whether considered in a proceeding at law or
in equity).
(i) Authorization of the Securities and the Exchange Securities. (i)
The Notes to be issued to the Initial Purchasers are in the form
contemplated by Section 10(a) of the Note Purchase Agreement and by the
Indenture, have been duly authorized for issuance and sale pursuant to
this Agreement and the Indenture and, at the Closing Date, will have been
duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered in exchange for the Existing
Notes (and against payment of the purchase price for the Additional
Notes), will constitute valid and binding agreements of the Company,
enforceable in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles
(whether considered in a proceeding at law or in equity) and will be
entitled to the benefits of the Indenture; (ii) prior to their issuance,
the Exchange Notes will have been duly and validly authorized for issuance
by the Company, and when issued and authenticated in accordance with the
terms of the Indenture, the Registration Rights Agreement and the Exchange
Offer, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of
creditors or by general equitable principles (whether considered in a
proceeding at law or in equity) and will be entitled to the benefits of
the Indenture; (iii) the Guarantees of the
5
Notes will be in the form contemplated by the Indenture, will have been,
prior to their issuance, duly authorized for issuance and sale pursuant to
this Agreement and the Indenture and will have been duly executed by each
of the Guarantors and, when the Guarantees have been authenticated in the
manner provided for in the Indenture and delivered, will constitute valid
and binding agreements of the Guarantors, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles (whether considered in a
proceeding at law or in equity) and will be entitled to the benefits of
the Indenture; and (iv) prior to their issuance, the Guarantees of the
Exchange Notes will be in the form contemplated by the Indenture and will
have been duly and validly authorized for issuance and sale pursuant to
the Indenture and when issued and authenticated in accordance with the
terms of the Indenture, will constitute valid and binding agreements of
the Guarantors, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to
or affecting the rights and remedies of creditors or by general equitable
principles (whether considered in a proceeding at law or in equity) and
will be entitled to the benefits of the Indenture.
(j) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and the Guarantors and, at the Closing Date,
will have been duly executed and delivered by the Company and the
Guarantors and (assuming due authorization, execution and delivery by
other parties thereto) will constitute a valid and binding agreement of
the Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles
(whether considered in a proceeding at law or in equity).
(k) Descriptions in the Offering Memorandum. The Notes, the
Guarantees of the Notes and the Indenture conform, or will conform, in all
material respects to the respective statements relating thereto contained
in the Offering Memorandum. The Exchange Notes and the Guarantees of the
Exchange Notes will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum and the
Registration Statement at the time such Registration Statement becomes
effective.
(l) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum, (i) there has been no
material adverse change or any development that could reasonably be
expected to result in a material adverse change, in the condition,
financial or otherwise, or in the business, assets, properties,
liabilities (contingent or otherwise) or operations, of Holdings or the
Company and its Subsidiaries considered as one entity (any such change or
development is called a "Material Adverse Change"); (ii) Holdings, and the
Company and its Subsidiaries considered as one entity, have not incurred
any material liability or obligation, indirect, direct or contingent, not
in
6
the ordinary course of business nor entered into any material transaction
or agreement not in the ordinary course of business; and (iii) there has
been no dividend or distribution of any kind declared, paid or made by
Holdings, the Company or any of its Subsidiaries on any class of capital
stock (except for dividends paid by a Subsidiary of the Company to the
Company or to another Subsidiary of the Company) or repurchase or
redemption by Holdings, the Company or any of its Subsidiaries of any
class of capital stock.
(m) Independent Accountants. Xxxxxx Xxxxxxxx LLP (the "Independent
Accountants"), who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes the
related notes thereto) included in the Offering Memorandum are independent
public or certified public accountants with respect to the Company within
the meaning of Regulation S-X under the Exchange Act.
(n) Preparation of the Financial Statements. The consolidated
financial statements of the Company, together with the related notes,
included in the Offering Memorandum present fairly, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The financial
statements included in the Offering Memorandum comply as to form with the
applicable requirements of the Securities Act. Such financial statements
have been prepared in conformity with generally accepted accounting
principles as applied in the United States of America applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial data with
respect to the Company and its Subsidiaries set forth in the Offering
Memorandum under the captions "Offering Memorandum Summary -- Summary
Consolidated Historical and Pro Forma Financial and Operating Data,"
"Unaudited Pro Forma Condensed Consolidated Financial Statements" and
"Selected Historical Financial and Operating Data" present fairly, in all
material respects, the historical financial information set forth therein
on a basis consistent with that of the audited and unaudited financial
statements contained in the Offering Memorandum. The unaudited pro forma
financial data of the Company and its Subsidiaries, and the related notes
thereto included in the Offering Memorandum present fairly, in all
material respects, the information contained therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly presented on the
bases described therein, and the assumptions used in the preparation
thereof are believed to be reasonable in light of then existing conditions
and the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(o) Incorporation and Good Standing of Company and its Subsidiaries.
Each of Holdings, the Company and the Subsidiaries of the Company has been
duly organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its organization; each of
Holdings, the Company and the Subsidiaries of the Company has the power
and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum; and each of Holdings,
the Company and the Subsidiary Guarantors has the power and authority to
enter into and/or perform its obligations, as the case may be, under each
of this Agreement, the Indenture, the Registration Rights
7
Agreement, the DTC Letter of Representations, the Securities and the
Exchange Securities to which it is a party. Each of Holdings, the Company
and each of its Subsidiaries is duly qualified as a foreign corporation,
limited liability company or limited partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change.
(p) Capitalization and Other Capital Stock Matters. At the date
specified in such table, the Company had the authorized, issued and
outstanding capitalization as set forth in the Offering Memorandum under
the caption "Capitalization" under the heading "Actual." At the date
specified in such table, on a consolidated basis, after giving pro forma
effect to (i) the issuance and sale of the Securities pursuant hereto,
(ii) the consummation of the Merger, (iii) the funding of the Credit
Facilities, (iv) the Equity Contribution, (v) the Option Rollover, each as
described in the Offering Memorandum, and (vi) the application of the
proceeds from the issuance and sale of the Securities, the funding of the
Credit Facilities, the Equity Contribution and the Option Rollover to the
refinancing transactions described under the caption "Use of Proceeds" in
the Offering Memorandum, the Company would have an authorized and
outstanding capitalization as set forth in the Offering Memorandum under
the caption "Capitalization" under the heading "Pro Forma." All of the
outstanding shares of capital stock of Holdings and the Company have been
duly authorized and validly issued, are fully paid and nonassessable. None
of the outstanding shares of capital stock of Holdings or the Company were
issued in violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities of Holdings
or the Company, as the case may be. Except for rights of first refusal or
"tag-along" or "drag along" rights customarily contained in stockholders'
agreements, partnership agreements or joint venture operating agreements,
there are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable for, any
capital stock of Holdings or the Company or any of the Subsidiaries, other
than those described in the Offering Memorandum. The description of
Holdings' stock option, stock bonus, stock purchase and other stock plans
or arrangements and the options or other rights granted thereunder, set
forth in the Offering Memorandum accurately and fairly describes, in all
material respects, such plans, arrangements, options and rights. As of the
date hereof, all of the issued and outstanding capital stock of the
Company has been duly authorized and validly issued, is fully paid and
nonassessable and is owned directly by Holdings, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim except as
described in the Offering Memorandum. In addition, all of the issued and
outstanding capital stock of each Subsidiary, except as described in the
Offering Memorandum, has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim, except for any security interests, mortgages,
pledges, liens, encumbrances or claims of the lenders existing under the
Credit Agreement, dated as of October 17, 2001, among the Company, the
Guarantors, Bank of America, N.A., as administrative agent, First Union
National Bank, as
8
syndication agent, The CIT Group/Business, Inc., as documentation agent,
and the other lenders party thereto (such agreement, as amended from time
to time, the "Existing Credit Agreement"). The only Subsidiaries of the
Company are those Subsidiaries listed in Schedule C hereto.
(q) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. None of Holdings, the Company or any
of its Subsidiaries is in violation of its charter or by-laws or is in
default or has violated any provision of, or committed or failed to
perform any act which, with or without notice, lapse of time, or both,
would reasonably be expected to constitute a default ("Default") under any
indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease, license or other instrument to which Holdings, the Company or any
of its Subsidiaries is a party or by which it or any of them may be bound
or to which any of the property or assets of Holdings, the Company or any
of its Subsidiaries is subject (each, an "Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a
Material Adverse Change or except for such defaults that have been waived
in writing. The Company's and each Guarantor's execution, delivery and
performance of this Agreement, the Company's and each Guarantor's
execution and delivery of, and the performance by the Company and the
Guarantors of, the Registration Rights Agreement and the Indenture, the
Company's execution and delivery of, and the performance by the Company
of, the DTC Letter of Representations, and the issuance and delivery of
the Securities or the Exchange Securities, and consummation of the
transactions contemplated hereby and thereby and by the Offering
Memorandum (i) will not result in any violation of the provisions of the
partnership agreement, operating agreement, charter or by-laws, as
applicable, of Holdings, the Company or any of its Subsidiaries, (ii) will
not conflict with or constitute a breach of, or Default or a Debt
Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of Holdings, the Company or any of its Subsidiaries
pursuant to, or require the consent of any other party to, any Instrument,
except for such conflicts, breaches, Defaults, Debt Repayment Triggering
Events, liens, charges or encumbrances as would not, individually or in
the aggregate, result in a Material Adverse Change and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to Holdings or the Company or
any of its Subsidiaries except for such violations that would not,
individually or in the aggregate, result in a Material Adverse Change. No
consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or
agency, is required for the Company's or each Guarantor's execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Letter of Representations or the Indenture, to which it
is a party, or the issuance and delivery of the Securities or the Exchange
Securities, or consummation of the transactions contemplated hereby and
thereby and by the Offering Memorandum, except such as will be obtained by
the Company or the Guarantors and are in full force and effect under the
Securities Act, the Trust Indenture Act and such as may be required under
state securities laws or the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Initial Purchasers in the manner contemplated herein and in the Offering
Memorandum and in connection with Holdings', the Company's and the
Subsidiary Guarantors' obligations under the
9
Registration Rights Agreement. As used herein, a "Debt Repayment
Triggering Event" means any event or condition which gives, or with the
giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of material indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by Holdings or the
Company or any of its Subsidiaries.
(r) No Material Actions or Proceedings. Except as otherwise
disclosed in the Offering Memorandum, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the knowledge of
Holdings and the Company, threatened (i) against or affecting Holdings or
the Company or any of the Subsidiaries, (ii) which has as the subject
thereof any property owned or leased by, Holdings, the Company or any of
its Subsidiaries, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined
adversely to Holdings or the Company or such Subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably
be expected to result in a Material Adverse Change or materially and
adversely affect the transactions contemplated by this Agreement.
(s) Intellectual Property Rights. The Company and its Subsidiaries
own, possess or license sufficient trademarks, trade names, patent rights,
copyrights, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to
conduct their businesses as now conducted; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material
Adverse Change. Neither the Company nor any of its Subsidiaries has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject
of an unfavorable decision, ruling or filing would reasonably be expected
to result in a Material Adverse Change and, except as otherwise disclosed
in the Offering Memorandum, neither the Company nor any of its
Subsidiaries is in default under the terms of any license or similar
agreement related to any Intellectual Property Rights necessary to conduct
their business as now conducted or contemplated except as would not
reasonably be expected to result in a Material Adverse Change.
(t) All Necessary Permits, Etc. The Company and each of its
Subsidiaries possess such valid and current certificates, authorizations
or permits issued by the appropriate municipal, state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective
businesses as now conducted except as would not reasonably be expected to
result in a Material Adverse Change, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such license,
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to result in a Material Adverse Change.
(u) Regulatory Matters. To the knowledge of Holdings, the Company
and each Subsidiary Guarantor, none of (i) the Company, any of its
Subsidiaries, or the officers, directors, employees, or agents (as defined
in 42 C.F.R. Part 420 Subpart C and 42 C.F.R. Section 1001.1001(a)(2)) of
the Company or any of its Subsidiaries, or (ii) any
10
entity which the Company or any of its Subsidiaries manages or for which
the Company or any of its Subsidiaries provides billing services ("Managed
Entity") or the employees of any Managed Entity who are leased from the
Company or any of its Subsidiaries, has been charged with, or has been or
is being investigated with respect to, any activity (and with respect to
the officers, directors, agents and employees of the Company or any of its
Subsidiaries or any employee of any Managed Entity as described above,
only as to any activity during their employment or association with the
Company, any Subsidiary of the Company or any Managed Entity) that
materially contravenes or could materially contravene or constitutes or
could constitute a material violation of any Healthcare Law. To the
knowledge of Holdings, the Company and each Subsidiary Guarantor, no
person who has a direct or indirect ownership interest of 5% or more (as
those terms are defined in 42 C.F.R. Part 420 Subpart C and 42 C.F.R.
Section 1001.1001(a)(2)) in the Company or any Subsidiary, has been
charged with, or has been or is being investigated with respect to, any
activity involving the Company or any Subsidiary that materially
contravenes or could materially contravene or constitutes or could
constitute a material violation of any Healthcare Law. To the actual
knowledge of the officers of the Company, none of the officers, directors
and agents of any Managed Entity has been charged with, or has been or is
being investigated with respect to, any activity during their employment
or association with any Managed Entity that materially contravenes or
could materially contravene or constitutes or could constitute a material
violation of any Healthcare Law. To the actual knowledge of the officers
of the Company, no person who has a direct or indirect ownership interest
of 5% or more (as those terms are defined in 42 C.F.R. Part 420 Subpart C
and 42 C.F.R. Section 1001.1001(a)(2)) in a Managed Entity has been
charged with, or has been or is being investigated with respect to, any
activity in connection with the Managed Entity that materially contravenes
or could materially contravene or constitutes or could constitute a
material violation of any Healthcare Law. To the knowledge of Holdings,
the Company and each Subsidiary Guarantor, none of the Company, any of its
Subsidiaries, any Managed Entity or any of the officers, directors,
employees or agents (as described above) of the Company or any Subsidiary
or any employee of any Managed Entity who is leased from the Company or
any Subsidiary, has engaged in any activity (and with respect to the
officers, directors, agents and employees of the Company or any Subsidiary
or any employee of any Managed Entity as described above, only as to any
activity during their employment or association with the Company, any
Subsidiary or any Managed Entity) that materially contravenes or
constitutes a material violation of any Healthcare Law during their
employment or association with the Company, any Subsidiary, or any Managed
Entity. To the actual knowledge of the officers of the Company, none of
the officers, directors or agents of any Managed Entity has engaged in any
activity during their employment or association with the Company, any
Subsidiary or any Managed Entity that materially contravenes or
constitutes a material violation of any Healthcare Law. "Healthcare Law"
means the following laws or regulations relating to the regulation of the
health care industry or to payment for services rendered by healthcare
providers: (i) Sections 1877, 1128, 1128A or 1128B of the Social Security
Act ("SSA"); (ii) any prohibition on the making of any false statement or
misrepresentation of material facts to any governmental agency that
administers a federal or state health care program (including, but not
limited to, Medicare, Medicaid, and the federal Civilian Health and
Medical Plan of the Uniformed Services); (iii) the
11
licensure, certification or registration requirements of health care
facilities, services or equipment, including, but not limited to, the
Mammography Quality Standards Act; (iv) any state certificate of need or
similar law governing the establishment of health care facilities or
services or the making of health care capital expenditures; (v) any state
law relating to fee-splitting or the corporate practice of medicine; (vi)
any state physician self-referral prohibition or state anti-kickback law;
(vii) any criminal offense relating to the delivery of, or claim for
payment for, a healthcare item or service under any federal or state
health care program; (viii) any federal or state law relating to the
interference with or obstruction of any investigation into any criminal
offense; and (ix) any criminal offense under federal or state law relating
to the unlawful manufacture, distribution, prescription or dispensing of a
controlled substance.
(v) Medicare/Medicaid Participation. To the knowledge of Holdings,
the Company and each Subsidiary, none of the Company, any of its
Subsidiaries, or any existing officers or directors of the Company or the
respective Subsidiary who is expected to be an officer, director, agent
(as defined in 42 C.F.R. Section 1001.1001(a)(2)), or managing employee
(as defined in SSA Section 1126(b) or any regulations promulgated
thereunder) of the Company or the respective Subsidiary: (1) has had a
material civil monetary penalty assessed against it under Section 1128A of
the SSA or any regulations promulgated thereunder; (2) has been excluded
from participation under the Medicare program or a federal or state health
care program; or (3) has been convicted (as that term in defined in 42
C.F.R. Section 1001.2) of any of the following categories of offenses as
described in SSA Section 1128(a) and (b)(1), (2), (3) or any regulations
promulgated thereunder: (i) criminal offenses relating to the delivery of
an item or service under Medicare or any federal or state health care
program; (ii) criminal offenses under federal or state law relating to
patient neglect or abuse in connection with the delivery of a healthcare
item or service; criminal offenses under federal or state law relating to
fraud, theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct in connection with the delivery of a healthcare item
or service or with respect to any act or omission in a program operated by
or financed in whole or in part by any federal, state or local
governmental agency; (iii) federal or state laws relating to the
interference with or obstruction of any investigation into any criminal
offense described above in this paragraph; or (iv) criminal offenses under
federal or state law relating to the unlawful manufacture, distribution,
prescription or dispensing of a controlled substance. The Company, a
Subsidiary, or an entity owned in whole or in part by the Company or a
Subsidiary has a Medicare provider number, and a participating provider
agreement in force with a Medicare Part B carrier, and materially meets
all applicable Medicare conditions of coverage, in each locale, as
applicable, in which the Company, such Subsidiary or such entity bills
directly to Medicare for services furnished by the Company, such
Subsidiary or such entity. The Company, a Subsidiary, or an entity owned
in whole or in part by the Company or a Subsidiary has a Medicare provider
number, and a participating provider agreement, and materially satisfies
all applicable Medicaid conditions of coverage, in each state, as
applicable, in which the Company, such Subsidiary, or such other entity
bills directly to such state's Medicaid agency for services provided by
the Company, such Subsidiary, or such other entity for Medicaid patients.
12
(w) Title to Properties. Except as otherwise disclosed in the
Offering Memorandum, the Company and each of its Subsidiaries has good and
marketable title to all their properties and assets reflected as owned in
the financial statements referred to in Section 1(n) above (or elsewhere
in the Offering Memorandum), in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other
defects, except as would not reasonably be expected to result in a
Material Adverse Change. Any real property, improvements, equipment and
personal property held under lease by the Company or any of its
Subsidiaries are held under valid and enforceable leases, except for such
invalidations and unenforceabilities as would not reasonably be expected
to result in a Material Adverse Change.
(x) Material Agreements. The agreements, contracts or instruments
listed as exhibits to the Annual Report and those listed in Schedule B
attached hereto are the only material agreements, contracts or instruments
binding upon Holdings and/or the Company and its Subsidiaries, or
agreements, contracts or instruments that provide for the payments by
Holdings, the Company or any of its Subsidiaries after the date hereof of
$2 million or more.
(y) Tax Law Compliance. The Company and its Subsidiaries have filed
all material federal, state and foreign income and franchise tax returns
required to be filed and have paid all taxes shown on such returns
required to be paid by any of them which are due and payable and, if due
and payable, any related or similar assessment, fine or penalty levied
against any of them. The Company and each Subsidiary Guarantor has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(n) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to which
the tax liability of the Company or any of its Subsidiaries has not been
finally determined, except where such failure would not reasonably be
expected to result in a Material Adverse Change.
(z) Company Not an "Investment Company". Holdings and the Company
have been advised of the rules and requirements under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). None of
Holdings or the Company is an "investment company" within the meaning of
Investment Company Act and each of Holdings and the Company will conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(aa) Insurance. Each of the Company and its Subsidiaries are insured
by recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not
limited to, policies covering real and personal property owned or leased
by the Company and its Subsidiaries against theft, damage, destruction,
acts of vandalism and earthquakes. The Company has no reason to believe
that it or any Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. To the best of the
Company's knowledge, after due inquiry, neither the Company nor any
Subsidiary has been denied
13
any insurance coverage which it has sought or for which it has applied and
there are no claims by the Company or any of its Subsidiaries under any
current insurance policy as to which any insurance company or institution
is denying, or will deny, liability or coverage or defending under a
reservation of rights clause.
(bb) No Price Stabilization or Manipulation. None of the Company,
the Guarantors or any of their respective Affiliates has taken or will
take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities.
(cc) Solvency. Holdings, the Company and each of the Company's
Subsidiaries, taken as a whole, is Solvent. As used herein, the term
"Solvent" means, with respect to Holdings, the Company and its
Subsidiaries, taken as a whole, on a particular date, that on such date
(i) such entity is able to pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the ordinary course of
business, (ii) such entity does not intend to, and does not believe that
it will, incur debts or liabilities beyond such entity's ability to pay as
such debts and liabilities mature in their ordinary course, (iii) such
entity is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such entity's assets
would constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such entity is engaged
or is to engage, (iv) the fair value of the assets of such entity is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such entity and (v) the present
fair salable value of the assets of such entity is not less than the
amount that will be required to pay the probable liability of such entity
on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
(dd) No Unlawful Contributions or Other Payments. Neither the
Company nor any of its Subsidiaries nor, to the best of the Company's or
any Guarantor's knowledge, any employee or agent of the Company or any
Subsidiary, has made any contribution or other payment to any official of,
or candidate for, any federal, state or foreign office in violation of any
law or of the character necessary to be disclosed in the Offering
Memorandum in order to make the statements therein not misleading.
(ee) Company's Accounting System. The Company and each of its
Subsidiaries maintains a system of accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States of America and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with
14
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ff) Compliance with Environmental Laws. Except as otherwise
disclosed in the Offering Memorandum or as would not, individually or in
the aggregate, result in a Material Adverse Change (i) the Company and
each of its Subsidiaries have all permits, authorizations and approvals
required under any Environmental Laws and are in compliance with their
requirements, (ii) neither the Company nor any of its Subsidiaries, to the
knowledge of the Company, after due inquiry, is in violation of any
federal, state, local or foreign law or regulation relating to pollution
or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively,
"Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"Environmental Laws"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its
Subsidiaries under applicable Environmental Laws, or noncompliance with
the terms and conditions thereof, nor has the Company or any of its
Subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that
alleges that the Company or any of its Subsidiaries is in violation of any
Environmental Law; (iii) there is, to the knowledge of the Company, after
due inquiry, no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company
or any Subsidiary has received written notice, and no written notice by
any person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising
out of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company or any of its Subsidiaries, now
or in the past (collectively, "Environmental Claims"), pending or, to the
best of the Company's or any Guarantor's knowledge, threatened against the
Company or any of its Subsidiaries or any person or entity whose liability
for any Environmental Claim the Company or any of its Subsidiaries has
retained or assumed either contractually or by operation of law; and (iv)
to the knowledge of the Company, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that reasonably could result in
a violation of any Environmental Law or form the basis of a potential
Environmental Claim against the Company or any of its Subsidiaries or
against any person or entity whose liability for any Environmental Claim
the Company or any of its Subsidiaries has retained or assumed either
contractually or by operation of law.
(gg) ERISA Compliance. The Company and its Subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder
15
(collectively, "ERISA")) established or maintained by the Company, its
Subsidiaries or their "ERISA Affiliates" (as defined below) are in
compliance in all respects with ERISA or, if not in compliance, would not
reasonably be expected to result in a Material Adverse Change. "ERISA
Affiliate" means, with respect to the Company or a Subsidiary, any member
of any group of organizations described in Sections 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereunder (the "Code") of which the Company
or such Subsidiary is a member. No "reportable event" (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
Subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its Subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under
ERISA). Neither the Company, its Subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of
the Code. Each "employee benefit plan" established or maintained by the
Company, its Subsidiaries or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(hh) Regulation S Compliance. The Company, the Guarantors and their
respective Affiliates and all authorized persons acting on their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) have complied with and will comply with
the offering restrictions requirements of Regulation S in connection with
the offering of the Securities outside the United States and, in
connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902(h).
(ii) Taxes; Fees. There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid in
connection with the execution and delivery of this Agreement or the
issuance or sale by the Company of the Securities.
(jj) No Labor Disputes. As of the date hereof, (i) there is no
unfair labor practice complaint pending against the Company or any of its
Subsidiaries or, to the best knowledge of the Company, threatened against
any of them, before the National Labor Relations Board or any state or
local labor relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or any of its Subsidiaries or,
to the best knowledge of the Company, threatened against any of them, (ii)
there is no material strike, labor dispute, slowdown or stoppage pending
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, threatened against the Company and (iii) the Company is not aware
of any existing, threatened or imminent labor disturbance by the employees
of any of its principal customers, suppliers, manufacturers or
contractors, in each case which is likely to result in a Material Adverse
Change.
16
Any certificate signed by an officer of the Company or any Guarantor
and delivered to the Initial Purchasers pursuant to this Agreement or to counsel
for the Initial Purchasers shall be deemed to be a representation and warranty
by the Company or such Guarantor to the Initial Purchasers as to the matters set
forth therein.
Section 2. Purchase, Sale and Delivery of the Securities.
(a) The Securities. The Company agrees to (x) issue to the Initial
Purchasers, in exchange for all of the Existing Notes held by the Initial
Purchasers, the aggregate principal amount of Notes set forth on Schedule
D hereto and (y) issue and sell to the Initial Purchasers, acting
severally and not jointly, the aggregate principal amount of Additional
Notes set forth on Schedule D hereto at a purchase price equal to 97% of
the principal amount thereof, payable on the Closing Date (it being
acknowledged that the discount of 3% shall be in satisfaction of the fees
payable with respect to the Additional Notes by the Company pursuant to
the second sentence of Section 2 of the Fee Letter). The Notes shall be
resold by the Initial Purchasers at par; provided that, with the consent
of X.X. Childs Associates, L.P. and The Halifax Group, L.L.C., the Initial
Purchasers may resell the Notes at a price below par.
(b) The Closing Date. Delivery of certificates for the Securities in
definitive form to be issued and sold to the Initial Purchasers (and
payment of the purchase price for the Additional Notes) shall be made at
the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000 (or such other place as may be agreed to by the Company
and Banc of America Securities LLC) at 9:00 a.m. New York City time, on
the Exchange Date (as defined in the Note Purchase Agreement), or such
other time and date as Banc of America Securities LLC shall designate by
notice to the Company (the time and date of such closing are called the
"Closing Date"). The Company hereby acknowledges that circumstances under
which the Initial Purchasers may provide notice to postpone the Closing
Date as originally scheduled include, but are in no way limited to, any
determination by the Company or the Initial Purchasers to recirculate to
investors copies of an amended or supplemented Offering Memorandum.
(c) Delivery of the Notes. The Notes shall be delivered as provided
in Section 10(a) of the Note Purchase Agreement. The certificates for the
Notes shall be in such denominations and registered in the name of the
Depositary or its nominee, pursuant to the DTC Letter of Representations,
and shall be made available for inspection on the business day preceding
the Closing Date at a location in New York City, as the Initial Purchasers
may designate. Time shall be of the essence.
(d) Delivery of Offering Memorandum to the Initial Purchasers. Not
later than 12:00 p.m. on the second business day following the date of
this Agreement, the Company shall deliver or cause to be delivered copies
of the Offering Memorandum in such quantities and at such places as the
Initial Purchasers shall reasonably request.
(e) Initial Purchasers as Qualified Institutional Buyers. Each
Initial Purchaser represents and warrants to, and agrees with, the Company
that (i) it is a "qualified institutional buyer" within the meaning of
Rule 144A (a "Qualified
17
Institutional Buyer"), and (ii) with respect to those Securities sold in
reliance on Regulation S, (A) has not engaged and will not engage in any
direct selling efforts within the meaning of Regulation S and (B) has
complied and will comply with the offering restrictions requirements of
Regulations S.
Section 3. Covenants. The Company and each Guarantor further jointly
and severally covenant and agree with each Initial Purchaser as follows:
(a) The Initial Purchasers' Review of Proposed Amendments and
Supplements. Prior to amending or supplementing the Offering Memorandum
(including any amendment or supplement through incorporation by reference
of any report filed under the Exchange Act), the Company shall furnish to
the Initial Purchasers for review a copy of each such proposed amendment
or supplement, and the Company shall not use any such proposed amendment
or supplement to which any Initial Purchaser reasonably objects in writing
within 3 business days (with advice from its independent counsel).
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, prior to the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers,
any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Offering Memorandum in order to make
the statements therein, in the light of the circumstances when the
Offering Memorandum is delivered to a Subsequent Purchaser, not
misleading, or if in the opinion of the Initial Purchasers or counsel for
the Initial Purchasers it is otherwise necessary to amend or supplement
the Offering Memorandum to comply with law, the Company agrees to promptly
prepare (subject to Section 3(a) hereof), and furnish at its own expense
to the Initial Purchasers, amendments or supplements to the Offering
Memorandum so that the statements in the Offering Memorandum as so amended
or supplemented will not, in the light of the circumstances when the
Offering Memorandum is delivered to a Subsequent Purchaser, be misleading
or so that the Offering Memorandum, as amended or supplemented, will
comply with law.
The Company and the Guarantors hereby expressly acknowledge that the
indemnification and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in
this Section 3(b).
(c) Copies of the Offering Memorandum. The Company agrees to furnish
the Initial Purchasers, without charge, as many copies of the Offering
Memorandum and any amendments and supplements thereto as they shall have
reasonably requested prior to or at the time of the original printing of
the Offering Memorandum or any amendment or supplement thereto.
(d) Blue Sky Compliance. Holdings, the Company and the Subsidiary
Guarantors shall cooperate with the Initial Purchasers and counsel for the
Initial Purchasers to qualify or register the Securities for sale under
(or obtain exemptions from the application of) the Blue Sky or state
securities laws of those jurisdictions designated by the Initial
Purchasers, shall comply with such laws and shall continue such
18
qualifications, registrations and exemptions in effect so long as required
for the distribution of the Securities. Holdings, the Company and the
Subsidiary Guarantors shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service
of process in any such jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation. Holdings
and the Company will advise the Initial Purchasers promptly of the
suspension of the qualification or registration of (or any such exemption
relating to) the Securities for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, Holdings, the Company and the
Subsidiary Guarantors shall use their reasonable best efforts to obtain
the withdrawal thereof at the earliest possible moment.
(e) Depositary. The Company will cooperate with the Initial
Purchasers and use its reasonable best efforts to permit the Securities to
be eligible for clearance and settlement through the facilities of the
Depositary.
(f) Additional Issuer Information. Prior to the completion of the
placement of the Securities by the Initial Purchasers with the Subsequent
Purchasers, the Company, or, if permitted by the Exchange Act, Holdings,
shall file, on a timely basis, with the Commission all reports and
documents required to be filed under Section 13 or 15 of the Exchange Act;
provided that if such filings are being made by Holdings, rather than by
the Company, such filings shall adequately disclose the Company's results
of operations and financial condition in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section in at
least such detail as would be required if the Company were filing such
report. In addition, at any time Holdings or the Company is not subject to
Section 13 or 15 of the Exchange Act, Holdings and the Company covenant
that they will furnish, at their expense, upon request, to registered
holders of Securities within the time periods specified in the Exchange
Act (i) all quarterly and annual reports that would be required to be
filed with the Commission on Forms 10-Q and 10-K if Holdings or the
Company were required to file such Forms, (including, in each case,
financial information and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the
annual information only, a report on the annual financial statements by
Holdings' and the Company's certified independent accountants); and (ii)
all current reports that would be required to be filed with the Commission
on Form 8-K if Holdings or the Company were required to file such reports.
In addition, following the date the Company is required to consummate the
exchange offer contemplated by the Registration Rights Agreement, whether
or not required by the Commission, Holdings and the Company will file a
copy of all of the information and reports referred to in clauses (i) and
(ii) above with the Commission for public availability within the time
periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information
available to securities analysts and prospective purchasers of Securities
upon request. In addition, the Company and the Guarantors agree that, for
so long as Securities (but not the Exchange Securities) remain
outstanding, they will furnish to holders and beneficial owners of
Securities and to securities analysts and prospective purchasers of
Securities, upon their request, the information (together with the
documents
19
referred to in the second sentence of this paragraph, the "Additional
Issuer Information") required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(g) Future Agreement Not to Offer or Sell Additional Securities.
Holdings and the Company, during the period of 180 days following the date
of the Offering Memorandum, will not, without the prior written consent of
Banc of America Securities LLC (which consent may be withheld at the sole
discretion of such Initial Purchaser), directly or indirectly, sell,
offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Exchange Act, or otherwise dispose of or transfer, or announce
the offering of, or file any registration statement under the Securities
Act in respect of, any debt securities of the Company or securities
exchangeable for or convertible into debt securities of the Company (other
than to register the Exchange Securities).
(h) Future Reports to the Initial Purchasers. For so long as any
Securities or Exchange Securities remain outstanding, Holdings and the
Company will furnish to the Initial Purchasers (i) as soon as reasonably
practicable after the end of each fiscal year, copies of the Annual Report
of Holdings and the Company containing the balance sheet of Holdings and
the Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of Holdings' and the Company's independent public or
certified public accountants; (ii) as soon as reasonably practicable after
the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
report filed by Holdings and the Company with the Commission; and (iii) as
soon as available, copies of any report or communication of Holdings and
the Company mailed generally to holders of its capital stock or debt
securities (including the holders of the Securities).
(i) No Integration. Each of Holdings and the Company agrees that it
will not and will cause its affiliates not to, make any offer or sale of
securities of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of (i) the issuance and sale of the
Securities by the Company to the Initial Purchaser, (ii) the resale of the
Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the Securities Act
provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(j) Legended Securities. Each certificate for a Note will bear the
legend substantially in the form set forth in Section 10(d) of the Note
Purchase Agreement for the time period and upon the other terms stated in
the Offering Memorandum.
(k) PORTAL. The Company will use its reasonable best efforts to
cause such Notes when issued to be eligible for the National Association
of Securities Dealers, Inc. PORTAL market (the "PORTAL market").
20
(l) Rating of Securities. The Company shall take all reasonable
action necessary to enable Standard & Poor's Ratings Services, a division
of McGraw Hill, Inc. ("S&P"), and Xxxxx'x Investor Services, Inc.
("Moody's") to provide their respective credit ratings to the Securities.
Banc of America Securities LLC, on behalf of the Initial Purchasers,
may, in its sole discretion, waive in writing the performance by Holdings or the
Company of any one or more of the foregoing covenants or extend the time for
their performance.
Section 4. Payment of Expenses. The Company agrees, and Holdings
shall cause the Company, to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Securities to the Initial Purchasers, (ii) all fees and expenses
of the Company's and the Guarantors' counsel, independent public or certified
public accountants and other advisors, (iii) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
each Preliminary Offering Memorandum and the Offering Memorandum (including
financial statements), and all amendments and supplements thereto, (iv) all
filing fees, reasonable attorneys' fees and expenses incurred by the Company,
the Guarantors or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the Blue Sky laws
and, if requested by an Initial Purchaser, preparing and printing a "Blue Sky
Survey" or memorandum, and any supplements thereto, advising such Initial
Purchaser of such qualifications, registrations and exemptions, such fees and
expenses under this clause (iv) not to exceed $20,000 in the aggregate, (v) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture, the Securities and the
Exchange Securities, (vi) all fees and expenses (including reasonable fees and
expenses of counsel) of the Company in connection with approval of the
Securities by the Depositary for "book-entry" transfer, and (vii) the
performance by Company of its other obligations under this Agreement. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Initial Purchasers shall pay their own expenses, including the fees and
disbursements of its counsel, and shall be responsible for all roadshow related
costs.
Section 5. Additional Covenants. The Company and each Guarantor
further jointly and severally covenant and agree with each Initial Purchaser as
follows:
(a) Accountants' Comfort Letter. The Company shall use its best
efforts to cause the Independent Accountants to deliver to the Initial
Purchasers, on the Closing Date, a letter dated the date hereof addressed
to the Initial Purchasers, in form and substance satisfactory to the
Initial Purchasers, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to the Initial
Purchasers, delivered according to Statement of Auditing Standards Nos.
71, 72 and 76 (or any successor bulletins), with respect to the audited
and unaudited financial statements, pro forma, and other financial
information contained in the Offering Memorandum.
21
(b) Opinion of Counsel for the Company. The Company shall use its
best efforts to cause Xxxx Xxxxxxx LLP and Hunton & Xxxxxxxx, counsel for
the Company, to deliver to the Initial Purchasers, on the Closing Date,
opinions of such counsels, dated as of such Closing Date, the forms of
which are attached as Exhibit A-1 and Exhibit A-2, respectively.
(c) Opinion of General Counsel for the Company. The Company shall
use its best efforts to cause Xxxxxxx X. XxxXxxxx-Xxxxx, its General
Counsel to deliver to the Initial Purchasers, on the Closing Date, an
opinion of such counsel, dated as of such Closing Date, the form of which
is attached as Exhibit B.
(d) Opinion of Regulatory Counsel for the Company. The Company shall
use its best efforts to cause Xxxxx Xxxxxx Xxxxxxxx LLP, regulatory
counsel for the Company, to deliver to the Initial Purchasers, on the
Closing Date, an opinion of such counsel, dated as of such Closing Date,
the form of which is attached as Exhibit C.
(e) Officers' Certificate. On the Closing Date, each of Holdings and
the Company shall deliver to the Initial Purchasers written certificates,
executed by the Chief Executive Officer, President, Executive Vice
President or Senior Vice President of each of Holdings and the Company, as
the case may be, and the Chief Financial Officer or Chief Accounting
Officer of each of Holdings and the Company, as the case may be, dated as
of the Closing Date, to the effect that:
(i) for the period from and after the date of this Agreement
and prior to the Closing Date, to their knowledge, after due
inquiry, there has not occurred any Material Adverse Change;
(ii) for the period from the date of this Agreement and prior
to the Closing Date, there has not occurred any downgrading, nor has
any notice been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any
securities of the Company or any of its Subsidiaries by any
"nationally recognized statistical rating organization", as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
(iii) the representations, warranties and covenants of the
Company and each Guarantor, as the case may be, and set forth in
Section 1 of this Agreement are true and correct in all material
respects (without giving effect to any limitation as to
"materiality" or "Material Adverse Change" set forth therein) with
the same force and effect as though expressly made on and as of the
Closing Date; and
(iv) the Company and the Guarantors have complied in all
material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
the Closing Date.
(f) Bring-down Comfort Letters. The Company shall use its best
efforts to cause the Independent Accountants to deliver to the Initial
Purchasers,
22
on the Closing Date, a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that such
Independent Accountants reaffirm the statements made in the letter
furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the Closing
Date.
(g) Registration Rights Agreement. The Company and the Guarantors
shall enter into the Registration Rights Agreement and deliver to the
Initial Purchasers executed counterparts thereof.
(h) Additional Documents. On or before the Closing Date, the Company
shall deliver to the Initial Purchasers and counsel for the Initial
Purchasers such information and documents as the Initial Purchasers and
such counsel may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Securities as contemplated herein,
or in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
Section 6. Reimbursement of Initial Purchasers' Expenses. If the
issuance and sale to the Initial Purchasers of the Securities on the Closing
Date is not consummated because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or to comply with any provision
hereof, the Company agrees to, and Holdings agrees to cause the Company to,
reimburse the Initial Purchasers upon demand for all reasonable out-of-pocket
expenses that shall have been incurred by the Initial Purchasers in connection
with the proposed offering and sale of the Securities.
Section 7. Offer, Sale and Resale Procedures. The Initial
Purchasers, on the one hand, and Holdings and the Company, on the other hand,
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:
(a) Offers and Sales Only to Qualified Institutional Buyers and
Non-U.S. Persons. Offers and sales of the Securities will be made only by
the Initial Purchasers or Affiliates thereof qualified to do so in the
jurisdictions in which such offers or sales are made. Each such offer or
sale shall only be made (A) to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or (B) non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and
sales of the Securities may be made in reliance upon Regulation S under
the Securities Act, upon the terms and conditions set forth in Annex I
hereto, which Annex I is hereby expressly made a part hereof.
(b) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis. No
general solicitation or general advertising (within the meaning of Rule
502(c) under the Securities Act) will be used in the United States in
connection with the offering of the Securities.
(c) Restrictions on Transfer. Upon original issuance by the Company,
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
23
thereof, other than the Exchange Securities) shall bear a legend
substantially in the form set forth in Section 10(d) of the Note Purchase
Agreement.
Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.
Section 8. Indemnification.
(a) Indemnification of the Initial Purchasers. Each of Holdings, the
Company and each of the Subsidiary Guarantors jointly and severally agrees
to 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 Section 15 of the Securities Act and
Section 20 of the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of Holdings and the
Company), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is
based (i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (ii) in whole or in part
upon any inaccuracy in the representations and warranties of the Company
or any Guarantor contained herein; or (iii) in whole or in part upon any
failure of the Company or any Guarantor to perform its obligations
hereunder or under law; or (iv) 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 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 any matter covered by clause (i)
above to the extent such loss, claim, damage, liability or expense is not
covered in items (i) through (iii) (subject to the limitations set forth
below), provided that none of the Company or any Guarantor shall be liable
under this clause (iv) to the extent that a court of competent
jurisdiction shall have determined by a final judgment 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 to
reimburse such Initial Purchaser and each such controlling person for any
and all expenses (including the fees and disbursements of counsel chosen
by Banc of America Securities LLC) as such expenses are reasonably
incurred by such Initial Purchaser or such controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any
loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged
24
omission made in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchasers expressly for use in
any Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto). The indemnity agreement set forth in
this Section 8(a) shall be in addition to any liabilities that Holdings or
the Company and the Subsidiary Guarantors may otherwise have.
(b) Indemnification of the Company and the Guarantors and their
Directors and Officers. Each Initial Purchaser agrees to indemnify and
hold harmless Holdings and the Company and each of their respective
directors and each person, if any, who controls the Company or Holdings
within the meaning of the Securities Act or the Exchange Act against any
loss, claim, damage, liability or expense, as incurred, to which Holdings
or the Company or any such director, or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of the Initial Purchasers), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Offering Memorandum (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Offering Memorandum or the Offering Memorandum (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Initial Purchasers
expressly for use therein; and to reimburse Holdings and the Company or
any such director or controlling person for any legal and other expenses
reasonably incurred by Holdings or the Company or any such director or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. Holdings and the Company hereby acknowledge that the only
information that the Initial Purchasers have furnished to the Company
expressly for use in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto) are the statements set
forth in (A) the seventh full paragraph on introductory page ii of the
Offering Memorandum, (B) the second sentence under the caption "Risk
Factors -- You cannot be sure that an active trading market will develop
for these notes," and (C) the first sentence of the third paragraph, the
first three sentences of the fourth paragraph, the third sentence of the
sixth paragraph and the eighth paragraph under the caption "Plan of
Distribution" in the Offering Memorandum; and the Initial Purchasers
confirm that such statements are correct. The indemnity agreement set
forth in this Section 8(b) shall be in addition to any liabilities that
each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of
25
the commencement thereof, but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action
is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying
party will be entitled to participate in and, to the extent that it shall
elect, jointly with all other indemnifying parties similarly notified, by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of
such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel (together with local counsel), approved by the
indemnifying party (Banc of America Securities LLC in the case of Section
8 and Section 9), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 8(c) hereof, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the final terms of such proposed
settlement as soon as practicable prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No
26
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the
entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party
and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such action, suit or proceeding.
Section 9. Contribution. If the indemnification provided for in
Section 8 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by Holdings, the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Securities pursuant to this Agreement 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 Holdings and the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by Holdings and the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds, if any, from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total discount, if any, received by the Initial Purchasers
bear to the aggregate initial offering price of the Securities. The relative
fault of Holdings, the Company and the Subsidiary Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by Holdings, the Company or the Subsidiary Guarantors, on
the one hand, or the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided that no
additional notice shall be required with respect to any action for which notice
has been given under Section 8(c) for purposes of indemnification.
27
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
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 account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, the Initial
Purchasers shall not be required to contribute any amount in excess of the
discount received by the Initial Purchasers in connection with the Securities
distributed by them. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each director, officer and
employee of any Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Initial Purchasers, and each
director of Holdings and the Company and each person, if any, who controls
Holdings and the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as Holdings and the
Company.
Section 10. [Intentionally Omitted.]
Section 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of Holdings and the Company of their officers and of the Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Initial Purchasers, Holdings or the Company or any of its or their partners,
officers or directors or any controlling person, as the case may be, and will
survive delivery of and payment for the Securities sold hereunder and any
termination of this Agreement.
Section 12. Notices. All communications hereunder shall be in
writing and shall be mailed, hand delivered or by facsimile and confirmed to the
parties hereto as follows:
If to the Initial Purchasers:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Managing Director
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 212-848-7179
Attention: Xxxxxxxxxxx X. Xxxx, Esq.
28
If to the Company or Holdings:
InSight Health Services Corp.
0000 XxxXxxxxx Xxxx.
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
with copies to:
X.X. Childs Associates, L.P.
Xxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Facsimile: 617-753-1101
Attention: Xxxxxx X. Xxx
and to:
The Halifax Group, L.L.C.
0000 Xxxxxxxxxxx Xxxxxx X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx
and to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
and to:
InSight Health Services Corp.
0000 XxxXxxxxx Xxxx.
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
Attention: General Counsel
Any party hereto may change the address for receipt of
communications by giving written notice to the others.
29
Section 13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8 and
Section 9, and in each case their respective successors, and no other person
will have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Securities as such from the Initial Purchasers by
reason of such purchase.
Section 14. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
Section 15. Governing Law; Consent to Jurisdiction.
(a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the
federal courts of the United States of America located in the City and
County of New York or the courts of the State of New York in each case
located in the City and County of New York (collectively, the "Specified
Courts"), and each party hereto irrevocably submits to the non-exclusive
jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding. Service of any process, summons, notice or document
by mail to such party's address set forth above shall be effective service
of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to
the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient
forum.
Section 16. General Provisions. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof except, as to the Initial
Purchasers, the Note Purchase Agreement. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the section headings herein
30
are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
31
Kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
INSIGHT HEALTH SERVICES HOLDINGS CORP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President & Secretary
INSIGHT HEALTH SERVICES CORP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title:
INSIGHT HEALTH CORP.
By:
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title:
SIGNAL MEDICAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title:
OPEN MRI, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
MAXUM HEALTH CORP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
RADIOSURGERY CENTERS, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
MAXUM HEALTH SERVICES CORP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
MRI ASSOCIATES, L.P.
By: InSight Health Corp., its General Partner
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
MAXUM HEALTH SERVICES OF NORTH TEXAS, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
MAXUM HEALTH SERVICES OF DALLAS, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
NDDC, INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
DIAGNOSTIC SOLUTIONS CORP.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Person
The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
FIRST UNION SECURITIES, INC.
By: /s/ Xxxx Xxxx
---------------------------
Name: Xxxx Xxxx
Title: Vice President
SCHEDULE A
GUARANTORS
----------
Guarantor Jurisdiction of Organization
--------- ----------------------------
InSight Health Corp. Delaware
Signal Medical Services, Inc. Delaware
Open MRI, Inc. Delaware
Maxum Health Corp. Delaware
Radiosurgery Centers, Inc. Delaware
Maxum Health Services Corp. Delaware
MRI Associates, L.P. Indiana
Maxum Health Services of North Texas, Inc. Texas
Maxum Health Services of Dallas, Inc. Texas
NDDC, Inc. Texas
Diagnostic Solutions Corp. Delaware
SCHEDULE B
MATERIAL AGREEMENTS
-------------------
1. Credit Agreement, dated as of October 17, 2001, among InSight Health
Services Acquisition Corp., InSight Health Services Holdings Corp.,
InSight Health Services Corp. , the Guarantors, as defined therein, the
lenders from time to time party thereto, First Union National Bank, as
syndication agent, The CIT Group/Business Credit, Inc., as
documentation agent, and Bank of America, N.A., as administrative
agent.
2. Note Purchase Agreement, dated as of October 17, 2001, among InSight
Health Services Acquisition Corp., InSight Health Services Holdings
Corp., InSight Health Services Corp., the Subsidiary Guarantors, as
defined therein, Banc of America Bridge LLC and Banc of America
Securities LLC.
3. Management Agreement, dated as of October 17, 2001, among X.X. Childs
Advisors II., L.P, Halifax Genpar, L.P., InSight Health Services
Holdings Corp. and InSight Health Services Corp.
4. Amended and Restated Stockholders Agreement by and among InSight Health
Services Holdings Corp., X.X. Childs Equity Partners II, L.P., JWC
InSight Co-invest LLC, Halifax Capital Partners, L.P., Xxxxx X. Xxxxxx
and the other parties named therein.
5. Swap Master Agreement, dated as of December 24, 1997, between
NationsBank, N.A. and InSight Health Services Corp., including exercise
of Swap Option dated as of March 29, 2001.
6. Borrower Assignment, Assumption and Release dated as of October 17,
2001 by and between Acquisition Corp. and InSight.
7. InSight Health Services Parent Corp. 2001 Stock Option Plan Stock
Option Agreement between InSight Health Services Holdings Corp. and
each of Xxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx and
Xxxxxxx X. Xxxxxx.
8. Executive Employment Agreement dated as of June 29, 2001, between
InSight Health Services Corp., InSight Health Services Holdings Corp.
and each of Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxxxx, Xxxxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxx X.
Xxxxxxxxx, Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxx.
9. Security Agreement dated as of October 17, 2001 by and among InSight
Health Services Holdings Corp., InSight Health Services Corp. and the
Subsidiary Guarantors (as defined therein).
10. Pledge Agreement dated as of October 17, 2001 by and between InSight
Health Services Holdings Corp., InSight Health Services Corp. and the
Subsidiary Guarantors (as defined therein).
11. Paying Agent Agreement dated as of October 17, 2001 between InSight
Health Services Holdings Corp. and American Stock and Transfer & Trust
Company.
12. Subscription and Contribution Agreement dated as of October 17, 2001 by
and among InSight Health Services Holdings Corp., X.X. Childs Equity
Partners II, L.P., JWC InSight Co-invest LLC, Halifax Capital Partners,
L.P. and Xxxxx X. Xxxxxx.
13. Real Estate Lease for 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxx between Century Properties Fund XIII and NDDC, Inc.
14. Real Estate Lease for 0000 Xxxxxxxx Xxxxx, Suites 4, 5 and 6,
Pleasanton, California between New Plan Excel Realty Trust, Inc. and
InSight Health Corp.
15. Real Estate Lease for 1001 and 0000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxx between Xxxxxx Properties, LLC and InSight
Health Corp.
16. Real Estate Lease for 000 Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxx between
Borstein Partners Ltd. and InSight Health Corp.
17. Real Estate Lease for 00000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx,
Xxxxxxxxxx between Washington Magnetic Resonance Center and InSight
Health Corp.
18. Real Estate Lease for 00 Xxxxxxxx Xxxxx, Xxxx Xxxxx, Xxx Xxxxxx between
Center State Health Group, Inc. and Toms River Imaging Associates, LP.
19. Real Estate Lease for 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx
between CHW Central Coast and St. John's Regional Imaging Center, LLC.
20. Real Estate Lease for 00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx
between 17950 Partners, Ltd. and InSight Health Corp.
21. Purchase Agreement between IHC and Berlex Laboratories dated 5/1/00.
22. Master Service Agreement between IHC and General Electric dated 1/1/97.
23. Agreement between the Company and Lafayette Pharmaceuticals, Inc. dated
2/14/00.
24. Distribution and Service Agreement between IHC and NHD, Inc. dated
2/14/00.
25. Operating Lease with General Electric for 1.5T Signa dated 10/00
(G1238A).
26. Operating Lease with General Electric for 1.5T Signa dated 03/01
(G1242A).
27. Operating Lease with General Electric for 1.5T Signa dated 03/01
(G1243A).
28. Operating Lease with General Electric for 1.5T Signa dated 03/01
(G1244A).
29. Operating Lease with General Electric for 1.5T Signa dated 03/01
(G1245A).
SCHEDULE C
SUBSIDIARIES OF INSIGHT HEALTH SERVICES CORP.
Subsidiary Jurisdiction of Organization
---------- ----------------------------
InSight Health Corp. Delaware
Diagnostic Solutions Corp. Delaware
Maxum Health Corp. Delaware
Maxum Health Services Corp. Delaware
Maxum Health Services of Dallas, Inc. Texas
Maxum Health Services of North Texas, Inc. Texas
NDDC, Inc. Texas
Open MRI, Inc. Delaware
Radiosurgery Centers, Inc. Delaware
Signal Medical Services, Inc. Delaware
Toms River Imaging Associates, L.P. New Jersey
Berwyn Magnetic Resonance Center, LLC Illinois
Connecticut Lithotripsy, LLC Connecticut
Xxxxxx Xxxxxxx MRI, LLC California
Dublin Diagnostic Imaging, LLC Ohio
Garfield Imaging Center, Ltd. California
Granada Hills Open MRI, LLC California
InSight-Premier Health, LLC Maine
Lockport MRI, LLC New York
MRI Associates, L.P. Indiana
St. John's Regional Imaging Center, LLC California
Sun Coast Imaging Center, LLC Florida
Xxxxxx-Xxxxx Imaging, LLC Pennsylvania
SCHEDULE D
----------
INITIAL PURCHASERS
------------------
Aggregate Principal
Amount of Initial Notes
to be issued in
exchange for Existing
Initial Purchasers Notes
------------------ ------------------------
Banc of America Securities LLC ...................... $ 170,000,000
First Union Securities, Inc.......................... $ 30,000,000
------------------------
Total $ 200,000,000
Aggregate Principal
Amount of Additional
Initial Purchasers Notes
------------------ ------------------------
Banc of America Securities LLC ...................... $ 21,250,000
First Union Securities, Inc.......................... $ 3,750,000
------------------------
Total $ 25,000,000
EXHIBIT A-1
FORM OF OPINION OF XXXX XXXXXXX LLP
(i) Each of Holdings and the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) Each of Holdings and the Company has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum and to enter into and perform its
obligations under the Purchase Agreement and the other Transaction Documents to
which it is a party.
(iii) All of the issued and outstanding capital stock of each of
Holdings and the Company has been duly authorized and, to our knowledge, has
been validly issued, is fully paid and non-assessable. Except as described in
the Offering Memorandum, all the outstanding shares of capital stock of the
Company are owned of record by Holdings, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or any pending or threatened
claim.
(iv) The description of Holdings' stock option, stock bonus and
other stock plans or arrangements and the options or other rights granted
thereunder set forth in the Offering Memorandum fairly summarizes, in all
material respects, such plans, arrangements, options and rights.
(v) The issuance and sale of the Notes by the Company will not be
subject to any preemptive right arising by operation of the charter or by-laws
of the Company or the General Corporation Law of the State of Delaware or under
any agreement listed on Schedule 1 hereto.
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by Holdings and the Company.
(vii) Each of the Registration Rights Agreement and the DTC Letter
of Representations has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company, enforceable in accordance with its
terms, except with respect to any indemnification or contribution provision
thereof and subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights and remedies and general principles of equity (regardless
of whether considered in a proceeding at law or in equity), and the Registration
Rights Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, Holdings, enforceable in accordance with its
terms, except with respect to any indemnification or contribution provision
thereof and subject to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors' rights and remedies and general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and Holdings and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes a valid and binding
agreement of the Company and Holdings, enforceable against the Company and
Holdings in accordance with its terms, except with respect
A-1
to any indemnification or contribution provision thereof and subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to creditors' rights and
remedies and general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
(ix) The Notes are in the form contemplated by the Indenture, have
been duly authorized by the Company for issuance and sale pursuant to the
Purchase Agreement and the Indenture and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and delivered against surrender of the Existing Notes in exchange therefor (and,
in the case of the Additional Notes, payment of the purchase price therefor),
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except with respect to any
indemnification or contribution provision thereof and subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to creditors' rights and remedies and
general principles of equity (regardless of whether considered in a proceeding
at law or in equity).
(x) The Board of Directors of the Company has duly adopted by
requisite vote the resolutions necessary to authorize the execution, delivery
and performance of the Exchange Notes. No approval by Holdings, as sole
stockholder of the Company, is required therefor.
(xi) The Guarantee by Holdings of the Notes is in the form
contemplated by the Indenture, has been duly authorized for issuance and sale
pursuant to the Purchase Agreement and the Indenture and, at the Closing Date,
will have been duly executed by Holdings and, when the Notes have been
authenticated in the manner provided for in the Indenture and delivered against
surrender of the Existing Notes in exchange therefor (and, in the case of the
Additional Notes, payment of the purchase price therefor), will constitute the
valid and binding agreement of Holdings, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect relating to
creditors' rights and remedies and general principles of equity (regardless of
whether considered in a proceeding at law or in equity), and will be entitled to
the benefits of the Indenture.
(xii) The Securities, the Indenture and the Registration Rights
Agreement conform in all material respects to the descriptions thereof contained
in the Offering Memorandum.
(xiii) The statements in the Offering Memorandum under the captions
"Offering Memorandum Summary -- The Acquisition and Related Financing
Transactions," "Risk Factors -- Risks Relating to the Notes -- Your right to
receive payments on these notes is junior to the issuer's existing senior
indebtedness and possibly all of its future borrowings. Further, the guarantees
of these notes are junior to all of the guarantors' existing senior indebtedness
and possibly to all their future borrowings," "Risk Factors -- Risks Relating to
the Notes -- Since the notes are unsecured, your right to enforce remedies is
limited by the rights of holders of secured debt," "Risk Factors -- Risks
Relating to the Notes -- You should not rely on our parent company's guarantee
in evaluating an investment in the notes," "Risk Factors -- Risks Relating to
the Notes -- Not all of our subsidiaries guarantee our obligations under the
notes, and the assets
A-2
of the non-guarantor subsidiaries may not be available to make payments on the
notes," "Risk Factors -- Risks Relating to the Notes -- The indenture related to
the notes and the new senior credit facilities will contain various covenants
which limit our management's discretion in the operations of our business,"
"Risk Factors -- Risks Relating to the Notes -- The issuer may not have the
ability to raise the funds necessary to finance the change of control offer
required by the indenture," "Risk Factors -- Risks Relating to the Notes --
Federal and state statutes allow courts, under specific circumstances, to avoid
guarantees and require noteholders to return payments received from guarantors,"
"Risk Factors -- Risks Relating to Our Company and Our Industry -- The interests
of our controlling stockholders could conflict with those of the holders of the
notes offered hereby," "The Acquisition and Related Financing Transactions,"
"Management -- Employment Agreements," "Management -- 2001 Stock Option Plan,"
"Management -- Stock Option Agreements," "Certain Relationships and Related
Transactions," "Description of New Senior Credit Facilities," "Description of
the Notes," "Certain Federal Income Tax Considerations" and "Notice to
Investors," insofar as such statements constitute matters of law, summaries of
legal matters, documents or legal conclusions, have been reviewed by such
counsel, fairly summarize, in all material respects, the matters referred to
therein and do not omit a material fact necessary to make the statements
contained therein not misleading.
(xiv) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency of the federal government of the United States or the State
of New York, is required for the execution, delivery and performance by the
Company or any Guarantor of the Purchase Agreement, the Registration Rights
Agreement, the Indenture or the Securities, as applicable, the execution,
delivery and performance by the Company of the DTC Letter of Representations or
the issuance and delivery by the Company or any Guarantor of the Securities, or
consummation of the transactions contemplated hereby and thereby, except as may
be required under the Securities Act, the Exchange Act, the Trust Indenture Act
and applicable state securities or blue sky laws.
(xv) The execution and delivery of the Purchase Agreement, the
Registration Rights Agreement, the DTC Letter of Representations, the Securities
and the Indenture by the Company and Holdings, to the extent it is a party
thereto, the performance by the Company and Holdings of their respective
obligations thereunder (i) will not result in any violation of the provisions of
the charter or by-laws of the Company or Holdings, as applicable, (ii) will not
constitute a breach of, or Default, or result in the imposition of any lien,
charge or encumbrance upon any property or assets of the Company or Holdings, as
applicable, pursuant to, with respect to the Company, any of the Agreements
listed on Schedule 1 hereto, and with respect to Holdings, any of the Agreements
listed on Schedule 2 hereto which Holdings has identified to us as its only
material agreements; or (iii) to the best knowledge of such counsel, will not
result in any violation of any law or administrative regulation, which a lawyer
exercising customary professional diligence would reasonably recognize as being
applicable to Holdings or the Company with respect to the transactions
contemplated by the Purchase Agreement, the Registration Rights Agreement, the
Indenture and the Securities. Such counsel need express no opinion herein as to
the applicability or effect of Healthcare Laws.
(xvi) Neither the Company nor Holding is, nor after surrender of the
Existing Notes in exchange for the Notes (and receipt of payment for the
Additional Notes) will it be, an "investment company" requiring it to register
under the Investment Company Act.
A-3
(xvii) Assuming the accuracy of the representations, warranties and
covenants of the Company, the Guarantors and the Initial Purchasers contained in
the Purchase Agreement, no registration of the Notes or the Guarantees under the
Securities Act, and no qualification of an indenture under the Trust Indenture
Act with respect thereto, is required in connection with the exchange of the
Existing Notes for the Securities (or, with respect to the Additional Notes, the
purchase thereof) by the Initial Purchasers or the initial resale of the
Securities by the Initial Purchasers to Qualified Institutional Buyers or
non-U.S. persons in the manner contemplated by the Purchase Agreement and the
Offering Memorandum other than any registration or qualification that may be
required in connection with the Exchange Offer contemplated by the Offering
Memorandum or in connection with the Registration Rights Agreement. Such counsel
need express no opinion, however, as to (x) the effect of state securities or
"blue sky" laws, foreign securities laws or the Exchange Act or (y) when or
under what circumstances any Notes initially sold by the Initial Purchasers may
be reoffered or resold.
(xviii) To such counsel's knowledge, other than as described in the
Offering Memorandum, there are no pending or threatened legal or governmental
proceedings to which Holdings is a party that would be required to be described
by Item 103 of Regulation S-K under the Securities Act if the issuance of the
Notes were being registered under the Securities Act but is not so described in
the Offering Memorandum.
(xix) None of the sale, issuance, execution or delivery of the Notes
will contravene 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.
X-0
XXXXXXX X-0
FORM OF OPINION OF HUNTON & XXXXXXXX
(i) Based solely on certificates of public officials and officers of
the Company, including the organizational documents attached thereto, the
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
(ii) Based solely on certificates of public officials and officers
of the Company (which certificates shall be attached as exhibits to such
opinion), and the documents attached to such certificates (including the
organizational documents of the Subsidiary Guarantors), each Subsidiary
Guarantor is in valid existence and in good standing under the laws of its
respective jurisdiction of incorporation or formation as set forth on Schedule I
hereto. Based solely on certificates of public officials and officers of the
Company (which certificates shall be attached as exhibits to such opinion), and
the documents attached to such certificates (including the organizational
documents of the Subsidiary Guarantors), each Subsidiary Guarantor (a) has
corporate or entity power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum and to enter
into the Purchase Agreement and the other Transaction Documents to which it is a
party and (b) to the best of our knowledge, is duly qualified as a foreign
corporation or limited partnership, as the case may be, to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
(iii) All of the issued and outstanding capital stock of each
Subsidiary Guarantor, if a corporation, has been duly authorized and, to our
knowledge, has been validly issued, is fully paid and non-assessable and is
owned by Holdings, directly or through Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or any pending or
threatened claim, except as disclosed in the Offering Memorandum.
(iv) The Purchase Agreement has been duly authorized, executed and
delivered by each Subsidiary Guarantor.
(v) The Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, each
Subsidiary Guarantor, enforceable in accordance with its terms.
(vi) The Indenture has been duly authorized, executed and delivered
by the each Subsidiary Guarantor and (assuming the due authorization, execution
and delivery thereof by the Trustee) constitutes a valid and binding agreement
of each Subsidiary Guarantor, enforceable against each Subsidiary Guarantor in
accordance with its terms.
(vii) The Guarantees by the Subsidiary Guarantors of the Notes are
in the respective forms contemplated by the Indenture, have been duly authorized
for issuance and sale pursuant
A-5
to the Purchase Agreement and the Indenture and have been duly executed by each
of the Subsidiary Guarantors and, assuming the Notes have been authenticated in
the manner provided for in Section 2.02 of the Indenture and delivered against
surrender of the Existing Notes in exchange therefor (and, in the case of the
Additional Notes, assuming the payment of the purchase price therefor), will
constitute the valid and binding agreement of each Subsidiary Guarantor,
enforceable in accordance with its terms and will be entitled to the benefits of
the Indenture.
(viii) The documents incorporated by reference in the Offering
Memorandum (other than the financial statements and related notes thereto and
other financial, statistical and accounting data and supporting schedules
therein, as to which no opinion need be rendered), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act.
(ix) To such counsel's knowledge, there are no pending or threatened
legal or governmental proceedings to which the Company or any of its
subsidiaries is a party that would be required to be described by Item 103 of
Regulation S-K under the Securities Act if the issuance of the Notes were being
registered under the Securities Act but is not so described in the Offering
Memorandum.
The enforceability of the Registration Rights Agreement, the
Indenture and the Guarantees of the Notes by the Subsidiary Guarantors is
subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the rights of creditors generally, and (ii)
general principles of equity, whether considered at law or in equity. We express
no opinion with respect to the indemnification and contribution provisions
contained in the Registration Rights Agreement and the Indenture.
We have participated in various conferences with the officers and
other representatives of the Company and its independent certified public
accountants. In some conferences you and your counsel also participated. At
those conferences, the contents of the Offering Memorandum and Prospectus were
discussed and revised. Since the dates of those conferences, we have inquired of
certain officers whether there has been any material change in the affairs of
the Company.
Because of the inherent limitations in the independent verification of factual
matters, and the character of determinations involved in the preparation of
offering memoranda under the Securities Act, we are not passing upon, and do not
assume any responsibility for, and make no representation that we have
independently verified, the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum. Also, we do not express any opinion or
belief as to the financial statements or other financial and statistical
information contained in the Offering Memorandum, or derived therefrom, or
incorporated therein by reference. However, subject to the foregoing, on the
basis of our participation in the conferences referred to above and our
examination of the documents referred to herein, we advise you that nothing has
come to the attention of the attorneys of this firm who have been engaged in the
representation of the Company in connection with the Company's issuance and sale
of the Notes that leads us to believe that the Offering Memorandum, as of its
date or at the Closing Date, contained or contains an untrue statement of
material fact or omitted or omits to state a material fact necessary
A-6
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
A-7
EXHIBIT B
FORM OF OPINION OF GENERAL COUNSEL FOR THE COMPANY
(i) The statements in the Offering Memorandum under the captions
"Risk Factors -- Risks Relating to Our Company and Our Industry -- Changes in
the rates or methods of third-party reimbursements for diagnostic imaging and
therapeutic services could result in reduced demand for our services or create
downward pricing pressure, which would result in a decline in our revenues and
harm our financial position," "Risk Factors -- Risks Relating to Our Company and
Our Industry -- We may be unable to renew or maintain our customer contracts
which would harm our business and financial results," "Risk Factors -- Risks
Relating to Government Regulation of Our Business," "Business -- Diagnostic
Imaging and Other Equipment," "Business -- Properties," "Business --
Reimbursement of HealthCare Costs," "Business -- Government Regulation,"
"Business -- Compliance Program," "Business -- Legal Proceedings" and "Business
-- Company History," insofar as such statements constitute matters of law,
summaries of legal matters, proceedings, documents or legal conclusions, have
been reviewed by such counsel and fairly present and summarize, in all material
respects, the matters referred to therein. The statements under the captions
"Business -- Proposed Acquisition and Related Financing Transactions," "Business
-- Diagnostic Imaging and Other Equipment," "Business -- Government Regulation,"
" -- Reimbursement of HealthCare Costs," "Business -- Compliance Program,"
"Business -- Company History," "Business -- Properties," "Business -- Legal
Proceedings," "Directors and Executive Officers of the Registrant -- Board of
Directors," "Directors and Executive Officers of the Registrant -- Section 16(a)
Beneficial Ownership Reporting Compliance," "Executive Compensation --
Compensation of Directors," "Executive Compensation -- Indemnification
Agreements," "Executive Compensation -- Employment Agreements and Severance
Arrangements" and "Certain Relationships and Related Transactions" in the Annual
Report of the Company on Form 10-K incorporated by reference in the Offering
Memorandum, insofar as such statements constitute matters of law, summaries of
legal matters, proceedings, documents or legal conclusions, have been reviewed
by such counsel and fairly present and summarize, in all material respects, the
matters referred to therein.
(ii) To such counsel's knowledge, the Company and each Subsidiary
Guarantor has such permits, licenses, franchises, certifications, accreditations
and authorizations (collectively, "Authorizations") from all regulatory or
governmental officials, bodies or tribunals as are necessary to own, lease and
operate its respective properties and to conduct its business in the manner
described in the Offering Memorandum and is eligible to participate in the
Medicare and Medicaid programs as and to the extent described in the Offering
Memorandum and, to such counsel's knowledge, the Company and each Subsidiary
Guarantor has fulfilled and performed all of its material obligations with
respect to such Authorizations or eligibility and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof except where such revocation or termination would not result in a
Material Adverse Change.
(iii) The execution and delivery of the Purchase Agreement, the DTC
Letter of Representations, the Registration Rights Agreement, the Indenture and
the Securities by the Company and the Subsidiary Guarantors and the performance
by the Company and the Subsidiary Guarantors of their respective obligations
thereunder (i) will not result in any
B-1
violation of the provisions of the limited partnership agreement, charter or
by-laws of the Company or any Subsidiary Guarantor, as applicable, or (ii) will
not constitute a breach of, or Default under or result in the imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary Guarantor pursuant to (x) any contract, loan agreement, note
indenture, mortgage, deed of trust, lease or other agreement or instrument filed
by the Company with the Commission (other than the agreements listed on Schedule
1 hereto, as to which such counsel need not express an opinion, or (y) to such
counsel's knowledge, any statute, rule or regulation or any judgment, order or
decree of any governmental authority or court or arbitrator applicable to the
Company or any Subsidiary Guarantor.
(iv) The issuance and sale of the Notes by the Company will not be
subject to any preemptive rights arising under any agreement known to us to
which the Company is a party, other than the agreements listed on Schedule A
hereto, as to which such counsel need not express an opinion.
(v) To the best knowledge of such counsel, neither the Company nor
any of the Subsidiary Guarantors is in violation of its charter or by-laws or
equivalent constitutive document or any law, administrative regulation or
administrative or court decree applicable to it or is in Default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any agreement listed as an Exhibit to the Annual Report or in
Schedule B to the Purchase Agreement to which the Company or any Subsidiary
Guarantor is a party.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of Acquisition and the
Company, representatives of the independent public or certified public
accountants for the Company and with representatives of the Initial Purchaser at
which the contents of the Offering Memorandum, and any supplements or amendments
thereto, and related matters were discussed and revised and, although such
counsel is not passing upon and does not assume any responsibility for, and
makes no representation that such counsel has independently verified, the
accuracy, completeness or fairness of the statements contained in the Offering
Memorandum (other than as specified above), and any supplements or amendments
thereto, subject to the foregoing, no facts have come to such counsel's
attention which would lead such counsel to believe that either the Offering
Memorandum, as of its date or at the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements or other
financial or statistical data derived therefrom, included or incorporated by
reference in the Offering Memorandum or any amendments or supplements thereto).
B-2
EXHIBIT C
FORM OF OPINION OF REGULATORY COUNSEL FOR THE COMPANY
The statements in the Offering Memorandum under the captions "Risk Factors
-- Risks Relating to Our Company and Our Industry -- Changes in the rates or
methods of third-party reimbursements for diagnostic imaging and therapeutic
services could result in reduced demand for our services or create downward
pricing pressure, which would result in a decline in our revenues and harm our
financial position," "Risk Factors -- Risks Relating to Government Regulation of
Our Business," "Business -- Reimbursement of HealthCare Costs" and "Business --
Government Regulation," insofar as such statements constitute a summary of the
legal or regulatory matters or legal or regulatory proceedings referred to
therein, have been reviewed by such counsel, are correct in all material
respects and do not omit a material fact necessary to make the statements
contained therein not misleading. The statements under the captions "Business --
Government Regulation" and " -- Reimbursement of HealthCare Costs" in the Annual
Report of the Company on Form 10-K for the year ended June 30, 2001 incorporated
by reference in the Offering Memorandum, insofar as such statements constitute a
summary of the legal or regulatory matters or legal or regulatory proceedings
referred to therein, have been reviewed by such counsel, are correct in all
material respects and do not omit a material fact necessary to make the
statements contained therein not misleading.
Such counsel need not express any opinion on any representation by the
Company or any omission by the Company to make any disclosure in the Offering
Memorandum or the Annual Report concerning its compliance with any legal or
regulatory matter or the effect upon it of any legal or regulatory matter. Such
counsel's opinion is confined to the summaries of legal and regulatory matters
appearing in the Offering Memorandum and the Annual Report, and such counsel is
not expressing any opinion on whether those summaries include summaries of all
the legal and regulatory matters affecting the Company.
ANNEX I
TERMS AND CONDITIONS OF OFFERS AND SALES
Resale Pursuant to Regulation S or Rule 144A.
Each Initial Purchaser understands that:
(a) Each Initial Purchaser agrees that it has not offered or sold
and will not offer or sell the Securities in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Securities Act (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the offering of the Securities pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act. Such Initial Purchaser
agrees that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Securities (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not issue any circular relating to the Securities, except
such advertisements as permitted by and include the statements required by
Regulation S.
(b) Each Initial Purchaser agrees that, at or prior to confirmation
of a sale of Securities by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day restricted
period referred to in Rule 903(c)(3) under the Securities Act, it will send to
such distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (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 your distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A in transactions that
are exempt from the registration requirements of 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 to substantially the foregoing
effect. Terms used above have the meanings assigned to them in Regulation
S."
