CONFORMED COPY
INSIGHT HEALTH SERVICES CORP.
$100,000,000
9 5/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
June 9, 1998
NationsBanc Xxxxxxxxxx Securities LLC
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sutro & Co. Incorporated
00000 Xxxxx Xxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
InSight Health Services Corp., a Delaware corporation (the "Company"),
proposes to issue and sell (the "Initial Placement") to NationsBanc Xxxxxxxxxx
Securities LLC, Xxxxxx Xxxxxxx & Co. Incorporated and Sutro & Co. Incorporated
(the "Initial Purchasers" and, individually, each an "Initial Purchaser")
$100,000,000 aggregate principal amount of its 9 5/8% Senior Subordinated Notes
Due 2008 (the "Notes"). The Notes are to be fully and unconditionally guaranteed
on an unsecured, senior subordinated basis (the "Note Guarantees") by all
existing and future United States subsidiaries of the Company (other than
Permitted Joint Ventures) (each such existing guarantor, a "Guarantor" and
collectively, the "Guarantors"). The Notes are to be issued under an indenture
(the "Indenture") dated as of June 1, 1998 between the Company, the Guarantors
and State Street Bank and Trust Company, N.A., as trustee (the "Trustee").
This Purchase Agreement (this "Agreement"), the Notes, the Note Guarantees,
the Indenture, the Registration Rights Agreement, dated as of June 12, 1998,
among the Company, the Guarantors and the Initial Purchasers (the "Registration
Rights Agreement") and the Credit Agreement, dated as of October 14, 1997, as
amended as of November 17, 1997,
December 19, 1997 and March 23, 1998 (the "Credit Agreement") and to be amended
(as described in the Final Memorandum) concurrently with the issuance of the
Notes (the "Fourth Amendment"), among the Company, the lenders named therein and
NationsBank, N.A., as agent, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith (the
"Amended Credit Agreement") are herein collectively referred to as the
"Transaction Documents."
The sale of the Notes to the Initial Purchasers will be made without
registration of the Notes under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. You have advised the Company that you will
offer and sell the Notes purchased by you hereunder in accordance with Section 4
hereof as soon as you deem advisable. The Notes will have the benefit of certain
registration rights, pursuant to the Registration Rights Agreement.
In connection with the sale of the Notes, the Company and the Guarantors
have prepared a preliminary offering memorandum, dated May 20, 1998 (the
"Preliminary Memorandum"), and a final offering memorandum, dated June 9, 1998
(the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company, the Guarantors
and the Notes. The Company and the Guarantors hereby confirm that they have
authorized the use of the Preliminary Memorandum and the Final Memorandum, and
any amendment or supplement thereto, in connection with the offer and sale of
the Notes by the Initial Purchasers. Unless stated to the contrary, all
references herein to the Final Memorandum are to the Final Memorandum at the
Execution Time (as defined below) and are not meant to include any amendment or
supplement subsequent to the Execution Time.
The Notes are being issued for purposes of refinancing certain indebtedness
outstanding under the Credit Agreement and for general corporate purposes. Prior
to the Closing Date, the Company will execute an amendment to the Credit
Agreement as described in the Final Memorandum. Capitalized terms used herein
without definition shall have their respective meanings set forth in the Final
Memorandum.
1. Representations and Warranties. The Company represents and warrants to
the Initial Purchasers that:
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(or, if amended or supplemented, the Final Memorandum as amended or
supplemented at the date of any such amendment or supplement and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers specifically for
inclusion therein.
(b) Neither the Company, nor any "Affiliate" (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")) of the
Company or any person acting on its or their behalf (other than the Initial
Purchasers, as to which no representation is made) has, directly or
indirectly, made offers or sales of any security, or solicited offers to
buy any security, under circumstances that would require the registration
of the Notes under the Securities Act.
(c) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers, as to
which no representation is made) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Notes in the United States.
(d) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(e) With respect to those Notes sold in reliance upon Regulation S,
(i) none of the Company, its Affiliates or any person acting on its or
their behalf (other than the Initial Purchasers, as to whom the Company
makes no 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 and its Affiliates and any person acting on its or their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has complied and will comply with the offering
restrictions set forth in Regulation S.
(f) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number of
holders of the securities of the Company.
(g) Neither the Company nor any of its Affiliates has paid or agreed
to pay to any person any compensation for soliciting another to purchase
any securities of the Company (except as contemplated by this Agreement).
(h) Assuming that the representations and warranties of the Initial
Purchasers contained in Section 4 hereof are true and correct in all
material respects
and that the Initial Purchasers comply in all material respects with all of
their covenants and agreements contained herein, it is not required in
connection with the offer, sale and delivery of the Notes in the manner
contemplated by this Agreement and the Final Memorandum to register any of
such securities under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(i) The Company has been advised by the National Association of
Securities Dealers, Inc. (the "NASD") Private Offerings, Resales and
Trading through Automated Linkages market ("PORTAL") that the Notes have
been designated PORTAL eligible securities in accordance with the rules and
regulations of the NASD.
(j) The consolidated financial statements (including the notes
thereto) and schedules of the Company and its subsidiaries and Signal
Medical Services, Inc., a Delaware corporation ("Signal") and its
subsidiaries, each set forth in the Final Memorandum, present fairly in all
material respects the financial position, results of operations and cash
flows of the Company and its subsidiaries and Signal and its subsidiaries,
respectively, as of the dates and for the periods specified therein; since
the date of the latest of such financial statements, there has been no
change or any development or event involving a prospective change which has
had a material adverse effect on (i) the business, operations, properties,
assets, liabilities, net worth, condition (financial or otherwise) or
prospects of the Company and its subsidiaries (including Signal and its
subsidiaries), taken as a whole, or (ii) the ability of the Company to
perform any of its obligations under the Transaction Documents (a "Material
Adverse Effect"); such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
expressly noted in the Final Memorandum); the other financial and
statistical information and data (other than market-related information)
set forth in the Final Memorandum (and any amendment or supplement thereto)
is, in all material respects, accurately presented and prepared on a basis
consistent with such financial statements, except as otherwise stated
therein; and the statistical and marketrelated data included in the Final
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate and are based upon assumptions and
qualifications which the Company considers reasonable and appropriate in
all material respects.
(k) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (iii) have been properly
computed on the bases described therein; the assumptions used in the
preparation of the
pro forma financial data and other pro forma financial information included
in the Final Memorandum are reasonable in all material respects and the
adjustments used therein are appropriate in all material respects to give
effect to the transactions or circumstances referred to therein.
(l) Subsequent to the respective dates as of which information is
given in the Preliminary Memorandum and the Final Memorandum, and except in
each case as described in or contemplated by the Preliminary Memorandum or
the Final Memorandum, as the case may be, (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct
or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company and its subsidiaries have not
purchased any of their outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on their capital
stock; and (iii) there has not been any material change in the capital
stock, short-term debt or long-term debt of the Company or its
subsidiaries.
(m) Each of the Company and its corporate subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full power (corporate and other) to own or lease its properties,
conduct its business as described in the Final Memorandum and to enter into
each Transaction Document to which it is a party and carry out the terms
and provisions of each such Transaction Document to be carried out by it;
the Company and each of its corporate subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases properties or conducts business, except in such jurisdictions in
which the failure to so qualify, singly or in the aggregate, would not have
a Material Adverse Effect.
(n) Each of the subsidiaries of the Company that are limited
partnerships or limited liability companies are and, as of the Closing
Date, will be duly formed, validly existing and in good standing as a
limited partnership or limited liability company, as the case may be, under
the laws of the jurisdiction of its organization or formation, as the case
may be, and each has all requisite limited liability company or partnership
power and authority, as the case may be, under such laws to own, lease and
operate its properties and conduct its business as described in the Final
Memorandum; and each is and, as of the Closing Date, will be duly qualified
to transact business and in good standing in each other jurisdiction which
requires such qualification, whether by reason of the ownership or leasing
of property or the conduct of business, except in such jurisdictions in
which the failure to so qualify, singly or in the aggregate, would not have
a Material Adverse Effect.
(o) The Company has the authorized, and, as of March 31, 1998 issued
and outstanding capitalization as set forth in the Final Memorandum under
the caption
"Capitalization." All of the issued shares of capital stock of the Company
have been duly authorized, validly issued, fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
(p) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire from the Company
any shares of capital stock of, or other ownership interest in, the Company
or any of its subsidiaries except pursuant to existing stock option plans,
a warrant to purchase 15,000 shares of the Company's common stock held by
Xxxxxxx XxXxxxxxx and as otherwise disclosed in the Final Memorandum.
(q) The issued shares of capital stock of each of the Company's
corporate subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, except for directors' qualifying shares
and except as otherwise set forth in the Final Memorandum, are owned of
record and beneficially by the Company, either directly or through wholly
owned subsidiaries, free and clear of any pledge, lien, encumbrance,
security interest, restriction on voting or transfer, preemptive rights or
claim of any third party. No subsidiary of the Company is prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company, except as described in
or contemplated by the Final Memorandum.
(r) Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or bylaws (or similar organizational documents),
(ii) in breach or violation of any law, ordinance, governmental or
administrative rule or regulation or court decree or (iii) in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by which its
respective properties may be bound, except to the extent that any such
breach or violation in the case of (ii) or any such default in the case of
(iii) would not have a Material Adverse Effect.
(s) The issuance, offering and sale of the Notes to the Initial
Purchasers pursuant to this Agreement, the delivery of the Notes under this
Agreement, the compliance by the Company and the Guarantors with the
provisions of each of the Transaction Documents to which it is a party and
the consummation of the other transactions herein and therein contemplated
do not (i) require the consent, approval, authorization, order,
registration or qualification of or with any governmental authority or
court, except such as may be required under state securities or blue sky
laws or except as may be contemplated by the Registration Rights Agreement
or except to the
extent that the absence or failure to obtain such consent, approval,
authorization, order, registration or qualification would not have a
Material Adverse Effect, or (ii) conflict with, result in a breach or
violation of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, any material
contract, loan agreement, note, indenture, mortgage, deed of trust, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party, or by which the Company or any of its subsidiaries
or any of their respective properties is bound, or the charter or by-laws
of the Company or any of its subsidiaries or 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 of its
subsidiaries, except to the extent that any such conflict, breach,
violation or default would not have a Material Adverse Effect (other than
with respect to the Charter and by-laws of the Company and the Guarantors)
or except for such consents that have already been obtained.
(t) The Company and its subsidiaries possess all certificates,
authorizations and permits (including environmental permits) issued by the
appropriate federal, state or foreign regulatory authorities or bodies
necessary to conduct their respective businesses, except for those the lack
of which would not cause a Material Adverse Effect, and neither the Company
nor any of its subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, is reasonably likely to result in
a Material Adverse Effect. Without limiting the generality of the
foregoing, all facilities owned or operated as continuing operations by the
Company or its subsidiaries (the "Company Facilities"), to the extent
described in the Final Memorandum, (i) are certified for participation or
enrollment in the Medicare and Medicaid programs, except where failure to
do so, singly or in the aggregate, would not have a Material Adverse
Effect, (ii) have a current and valid provider contract with the Medicare
and Medicaid programs, except where failure to have such contract, singly
or in the aggregate, would not have a Material Adverse Effect, and (iii)
are in substantial compliance with the terms and conditions of
participation of such programs and have received all approvals or
qualifications necessary for capital reimbursement of the Company's assets
except, in each case, where the failure to be so certified, to have such
contracts, to be in such compliance or to have such approvals or
qualifications, singly or in the aggregate, would not have a Material
Adverse Effect. Except as set forth in the Final Memorandum, neither the
Company nor any of its subsidiaries has received notice from the regulatory
authorities which enforce the statutory or regulatory provisions in respect
of the Medicare or Medicaid programs of any pending or threatened
investigations, surveys (other than routine surveys) or decertification
proceedings, and the Company has reasonably concluded that no such
investigations, surveys or other proceedings which are pending threatened
or imminent are likely to have a Material Adverse Effect.
(u) No legal or governmental proceedings or investigations are pending
to which the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are not
described in the Final Memorandum, and no such proceedings or
investigations, to the best knowledge of the Company, have been threatened
against the Company or any of its subsidiaries, or with respect to any of
their respective properties, except in each case for such proceedings or
investigations that, singly or in the aggregate, are not reasonably likely
to result in a Material Adverse Effect.
(v) The Company and each of its subsidiaries have valid title in fee
simple to all items of real property and title to all personal property
owned by each of them, in each case free and clear of any pledge, lien,
encumbrance, security interest or other defect or claim of any third party,
except (i) such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company or such subsidiary to an extent that such
interference would have a Material Adverse Effect, and (ii) permitted liens
set forth in the Final Memorandum. Any real property and buildings held
under lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as do not
materially interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary.
(w) This Agreement has been duly authorized, executed and delivered by
the Company.
(x) The Registration Rights Agreement, the Amended Credit Agreement
and the Indenture have been duly authorized by all necessary actions of the
Company and, when duly executed and delivered by the Company (and its
subsidiaries, as applicable) and the other parties thereto, will constitute
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the same may be
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally, including
without limitation the effect of statutory or other laws regarding
fraudulent conveyances or transfers or preferential transfers, or (ii)
general principles of equity, whether considered at law or in equity, and
except as the enforceability of rights of indemnification or contribution
may be limited by or under federal or state securities laws or public
policy.
(y) The Notes and the Note Guarantees have been duly authorized by all
necessary action for issuance and sale pursuant to this Agreement and, when
the Notes are executed, authenticated, issued and delivered in the manner
provided for in the Indenture and sold and paid for as provided in this
Agreement, the Notes will constitute legal, valid and binding obligations
of the Company and the Guarantors, respectively,
entitled to the benefits of the Indenture and enforceable against the
Company and the Guarantors, respectively, in accordance with their terms,
except as the same may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally, including without limitation the effect of statutory or other
laws regarding fraudulent conveyances or transfers or preferential
transfers, or (ii) general principles of equity, whether considered at law
or in equity, and except as the enforceability of rights of indemnification
or contribution may be limited by or under federal or state securities laws
or public policy.
(z) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"), which has audited certain
financial statements of the Company and its consolidated subsidiaries and
delivered its reports with respect to the audited consolidated financial
statements of the Company in the Final Memorandum, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder. KPMG Peat Marwick LLP ("KPMG Peat"),
which has audited certain financial statements of Signal and its
consolidated subsidiaries and delivered its reports with respect to the
consolidated audited financial statements of Signal in the Final
Memorandum, are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations thereunder.
(aa) Each of the Company and Signal and each of their respective
subsidiaries maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to maintain asset accountability; (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 the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(bb) Neither the Company nor any of its subsidiaries is now or, after
giving effect to the issuance of the Notes and the consummation of the
transactions contemplated by the Final Memorandum will be (i) insolvent,
(ii) left with unreasonably small capital with which to engage in its
anticipated businesses or (iii) incurring debts beyond its ability to pay
such debts as they become due.
(cc) The Company and its subsidiaries own or otherwise possess the
right to use all patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the foregoing,
and all other proprietary rights and confidential information used in the
conduct of their respective businesses as currently conducted, except to
the extent the absence thereof would not have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received any
notice, or is otherwise aware, of any infringement of or conflict with the
rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, is
reasonably likely to result in a Material Adverse Effect.
(dd) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility (or by appropriate self-insurance)
against such losses and risks and in such amounts as are prudent and
customary in the businesses and in the locations in or at which they are
engaged; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(ee) ERISA:
(i) Definitions:
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that for purposes of Title IV of ERISA is a
member of the controlled group of the Company, or under common
control with the Company, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect
to any Plan unless the 30-day notice requirement with respect to
such event has been waived by the PBGC, or (ii) the requirements
of subsection (1) of Section 4043(b) of ERISA are met with
respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such
Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility
of the Company or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the
withdrawal by the Company or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of
an amendment to a Plan requiring the provision of security to
such Plan pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event
or condition described in Section 4042 of ERISA that constitutes
grounds for the termination of, or the appointment of a trustee
to administer, such Plan.
"Multiemployer Plan" means a multiemployer plan, as defined
in Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years
made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of the Company or any ERISA Affiliate and at least
one trade or business (whether or not incorporated) other than
the Company and the ERISA Affiliates or (b) was so maintained and
in respect of which the Company or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such
plan has been or were to be terminated.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained
for employees of the Company or any ERISA Affiliate and no trade
or business (whether or not incorporated) other than the Company
and the ERISA Affiliates or (b) was so maintained and in respect
of which the Company or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Underfunding" means, with respect to any Plan, the excess,
if any, of the "projected benefit obligations" (within the
meaning of Statement of Financial Accounting Standards 87) under
such Plan (determined using the actuarial assumptions used for
purposes of calculating funding requirements in the most recent
actuarial report for such plan) over the fair market value of the
assets held under the Plan.
"Withdrawal Liability" has the meaning specified in Part I
of Subtitle E of Title IV of ERISA.
(ii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(iii) The aggregate Underfunding with respect to all Plans which
have any Underfunding does not exceed $100,000.
(iv) Neither the Company nor any ERISA Affiliate has incurred or
is reasonably expected to incur any Withdrawal Liability.
(v) Neither the Company nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or has been terminated, within the meaning of Title
IV of ERISA, and no such Multiemployer Plan is reasonably expected to
be in reorganization or to be terminated, within the meaning of Title
IV of ERISA.
(ff) There is (i) 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 more 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, and (ii) no significant strike,
labor dispute, slowdown or stoppage pending against the Company or any of
its subsidiaries or, to the best knowledge of the Company, threatened
against it or any of its subsidiaries which, in the case of (i) or (ii) is
likely to result in a Material Adverse Effect.
(gg) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed, except insofar as the failure to
file such returns, singly or in the aggregate, would not have a Material
Adverse Effect, or has requested extensions thereof and in each case has
paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, other than
those being contested in good faith and for which adequate reserves have
been provided or those currently payable without penalty or interest.
(hh) Neither of the Company nor any Affiliate of the Company has
taken, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to cause or
result in, stabilization or manipulation (as such terms are defined under
the Exchange Act) of the price of any security of the Company to facilitate
the sale or resale of the Notes.
(ii) Except as disclosed in the Final Memorandum, and except as would
not individually or in the aggregate have a Material Adverse Effect (i) the
Company and each of its subsidiaries are in compliance with all applicable
Environmental Laws (as defined below), (ii) the Company and each of its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are in compliance with their
requirements, (iii) there are no pending or, to the best knowledge of the
Company, threatened Environmental Claims (as defined below) against the
Company or any of its subsidiaries and (iv) the Company and each of its
subsidiaries do not have knowledge of any circumstances with respect to any
of their respective properties or operations that could reasonably be
anticipated to form the basis of an Environmental Claim against the Company
or any of its subsidiaries or any of their respective properties or
operations and the business operations relating thereto that would have a
Material Adverse Effect. For purposes of this Agreement, the following
terms shall have the following meanings: "Environmental Law" means, with
respect to any person, any federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any
published judicial or administrative interpretation thereof including any
judicial or administrative order, consent decree or judgment binding on
such person or any of its subsidiaries, relating to the environment,
health, safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any such governmental authority.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
(jj) The Company has reasonably concluded that any and all costs and
liabilities incurred or reasonably expected to be incurred pursuant to any
Environmental Law (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and potential liabilities to third
parties) would not, singly or in the aggregate, have a Material Adverse
Effect.
(kk) Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or their counsel shall be deemed to be
a representation and warranty by the Company to the Initial Purchasers as
to the matters covered thereby.
(ll) The Note Guarantees by the subsidiaries have been duly authorized
by each of the Guarantors, and, when executed, will conform in all material
respects to the description thereof in the Final Memorandum, will be valid
and binding obligations of each of the Guarantors, will be entitled to the
benefits of the Indenture and will be enforceable in accordance with their
terms, except as the same may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally, including without limitation the effect of statutory or
other laws regarding fraudulent conveyances or transfers or preferential
transfers, or (ii) general principles of equity, whether considered at law
or in equity, and except as the enforceability of rights of indemnification
or contribution may be limited by or under federal or state securities laws
or public policy.
(mm) The sale of the Notes to the Initial Purchasers does not
constitute a "prohibited transaction" (as defined in the Employee
Retirement Income Security Act of 1974, as amended).
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to the Initial Purchasers, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company at a purchase price of 97.25% of the
principal amount thereof the principal amount of Notes set forth opposite such
Initial Purchaser's name in Schedule I attached here.
3. Delivery and Payment. Delivery of and payment for the Notes shall be
made at 10:00 a.m. New York City time, on June 12, 1998, or such later date as
the Initial Purchasers shall designate (but in no event later than June 19,
1998), which later date and time may be postponed by agreement between the
Initial Purchasers and the Company (such date and time of delivery and payment
for the Notes being herein called the "Closing Date"). Delivery of the Notes
shall be made to the Initial Purchasers against payment by the Initial
Purchasers of the purchase price thereof to or upon the order of the Company in
immediately available funds or such other manner of payment as may be agreed by
the Company and the Initial Purchasers. Delivery of the Notes shall be made at
such location as the Initial Purchasers shall reasonably designate not later
than 1:00 p.m. on the business day prior to the Closing Date and payment for the
Notes shall be made at the offices of Shearman & Sterling
("Counsel for the Initial Purchasers"), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, with any transfer taxes payable in connection with the transfer of the
Notes fully paid, against payment of the purchase price therefor. Certificates
for the Notes shall be registered in such names and in such denominations as the
Initial Purchasers may request not less than two full business days in advance
of the Closing Date.
The Company agrees to have the Notes available for inspection, checking and
packaging by the Initial Purchasers in New York, New York, not later than 1:00
p.m. on the business day prior to the Closing Date.
4. Offering of Notes by the Initial Purchasers. Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees with the
Company that:
(a) It and any person acting on its behalf has not solicited any offer
to purchase, offered or sold, and will not solicit any offer to purchase,
offer or sell, any Notes except to those it reasonably believes to be (i)
"qualified institutional buyers" (as defined in Rule 144A under the
Securities Act) and that, in connection with each such sale, it has taken
or will take reasonable steps to ensure that the purchaser of such Notes is
aware that such sale is being made in reliance on Rule 144A, (ii) other
institutional "accredited investors" (as defined in Rule 501(a) (1), (2),
(3) or (7) of Regulation D) that, prior to their purchase of the Notes,
deliver to the Initial Purchaser a letter containing the representations
and agreements set forth in the form of Annex A to the Final Memorandum or
(iii) non-U.S. persons outside the United States to whom offers and sales
of the Notes may be made in reliance on Regulation S under the Securities
Act.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Notes in the United States by means of any form
of general solicitation or general advertising (within the meaning of
Regulation D) in the United States.
(c) The Notes offered and sold by the Initial Purchasers in reliance
on Regulation S have been and will be offered and sold only in offshore
transactions (within the meaning of Regulation S) and without any directed
selling efforts (as defined in Regulation S) within the United States, and
the sale of such Notes in reliance on Regulation S is not part of a plan or
scheme to avoid the registration provisions of the Act. It and any person
acting on its behalf has complied and will comply, in all material
respects, with the offering restrictions set forth in Regulation S.
(d) The Initial Purchasers' acquisition of the Notes does not
constitute a "prohibited transaction" (as defined in the Employee
Retirement Income Security Act of 1974, as amended).
(e) It and any person acting on its behalf will offer the Notes for
the initial resale to investors only upon the terms and conditions set
forth in this Agreement and in the Final Memorandum.
(f) Unless prohibited by applicable law, it will furnish to each
person to whom it offers any Notes a copy of the Preliminary Memorandum (as
amended or supplemented) or the Final Memorandum (as amended or
supplemented) and it will furnish to each person to whom it sells any Notes
a copy of the Final Memorandum (as amended or supplemented).
(g) (i) It has not offered or sold and will not offer or sell any
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which do not constitute an offer to the public
in the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 of Great Britain with respect
to anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document in connection
with the issue of the notes to a person who is of a kind described in
Article 8 of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) (No. 2) Order 1996 of Great Britain or is a person to whom
such document may otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as they may reasonably request. The
Company will pay the expenses of printing of all documents relating to the
Offering and will reimburse the Initial Purchasers for payment of the
required PORTAL filing fee.
(b) The Company will not amend or supplement the Final Memorandum
unless the Initial Purchasers shall previously have been advised thereof
and shall not have objected thereto in writing within five business days
after being furnished a copy thereof.
(c) Prior to the consummation of the exchange offer made pursuant to
the Registration Rights Agreement or the effectiveness of an applicable
shelf registration statement if, in the reasonable judgment of the Initial
Purchasers, the Initial Purchasers or any of their Affiliates are required
to deliver an offering memorandum in connection with sales of, or
market-making activities with respect to, the Notes, (A) the Company
will periodically amend or supplement the Final Memorandum so that the
information contained in the Final Memorandum complies with the
requirements of Rule 144A of the Securities Act, (B) the Company will amend
or supplement the Final Memorandum when necessary to reflect any material
changes in the information provided therein so that the Final Memorandum
will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
light of the circumstances existing as of the date the Final Memorandum is
so delivered, not misleading and (C) the Company will provide the Initial
Purchasers with copies of each such amended or supplemented Final
Memorandum, as the Initial Purchasers may reasonably request. The Company
hereby expressly acknowledges that the indemnification and contribution
provisions of Section 8 hereof are specifically applicable and relate to
each offering memorandum, registration statement, prospectus, amendment or
supplement referred to in this Section 5(c).
(d) The Company will arrange for the qualification of the Notes for
sale by the Initial Purchasers under the laws of such jurisdictions as the
Initial Purchasers may reasonably designate and will maintain such
qualifications in effect as long as required for the sale of the Notes.
Notwithstanding the foregoing, the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or to file general consent to service of process or to subject
itself to taxation in any jurisdiction in which it is not otherwise
subject. The Company will promptly advise the Initial Purchasers of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) Whenever the Company publishes or makes available to the public
(by filing with any regulatory authority or securities exchange or by
publishing a press release or otherwise) any information that could
reasonably be expected to be material in the context of the offer and sale
of Notes under this Agreement, the Company shall immediately notify the
Initial Purchasers as to the nature of such information or event. Until the
third anniversary of the Closing Date, the Company will notify the Initial
Purchasers of (i) any decrease in the rating of the Notes or any other debt
securities of the Company by any nationally recognized statistical rating
organization (as defined in Rule 436(g) under the Securities Act) or (ii)
any notice given of any intended or potential decrease in any such rating
or of a possible change in any such rating which does not indicate the
direction of the possible change, promptly after the Company becomes aware
of any such decrease or notice. For a period of two years after the Closing
Date, the Company will also deliver to the Initial Purchasers, as soon as
available and to the extent individually prepared, and without request,
copies of its latest annual report and quarterly statement and any reports
of its auditors thereon.
(f) Neither the Company, any of its Affiliates, nor any person acting
on its or their behalf other than the Initial Purchasers, as to which no
agreement is made,
will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require
the registration of the Notes under the Securities Act (other than pursuant
to the Registration Rights Agreement).
(g) Neither the Company, any of its Affiliates, nor any person acting
on its or their behalf other than the Initial Purchasers, as to which no
agreement is made, will engage, in connection with the offering of the
Notes, (i) in any form of general solicitation or general advertising
(within the meaning of Regulation D) or (ii) in any public offering within
the meaning of Section 4(2) of the Securities Act.
(h) So long as any of the Notes are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the Company will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. Such information, at the date of its
provision by the Company to such holders or prospective purchasers, will
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. This covenant is
intended to be for the benefit of the holders and the prospective
purchasers designated by such holders from time to time of such restricted
securities.
(i) The Company will cooperate with the Initial Purchasers and use its
best efforts to permit the Notes (i) to be eligible for clearance and
settlement through The Depository Trust Company and (ii) to be designated
PORTAL-eligible securities in accordance with the rules and regulations of
the NASD.
(j) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Initial Purchasers, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Notes).
(k) The Company will apply the net proceeds from the sale of the Notes
as set forth in the Final Memorandum under the caption "Use of Proceeds."
6. Conditions to the Obligations of the Initial Purchasers. The obligations
of the Initial Purchasers to purchase the Notes shall be subject to the accuracy
in all material respects of the representations and warranties on the part of
the Company contained herein at the date and time that this Agreement is
executed and delivered by the parties hereto (the "Execution Time"), and at the
Closing Date as specified in Section 6(e), to the accuracy in all material
respects of the statements of the Company made in any certificates pursuant to
the
provisions hereof, to the performance by the Company of its obligations
hereunder at or prior to the Closing Date and to the following additional
conditions:
(a) The Company shall have entered into a Registration Rights
Agreement with the Initial Purchasers substantially in the form attached
hereto as Exhibit A.
(b) The Company shall have furnished to the Initial Purchasers the
opinion of Arent Fox, Counsel for the Company, dated the Closing Date,
substantially to the effect that:
(i) the Company is a corporation validly existing and in good
standing under the laws of Delaware and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases properties or conducts business, except in such
jurisdictions in which the failure to so qualify, singly or in the
aggregate, would not have a Material Adverse Effect;
(ii) each of the Guarantors is a corporation validly existing and
in good standing under the laws of the jurisdiction in which it is
chartered or organized and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases properties or conducts business, except in such jurisdictions
in which the failure to so qualify, singly or in the aggregate, would
not have a Material Adverse Effect;
(iii) the Company has the authorized, and, to such counsel's
knowledge, as of March 31, 1998 issued and outstanding capitalization
as set forth in the Final Memorandum under the caption
"Capitalization." All of the issued shares of capital stock of the
Company have been duly authorized and, to such counsel's knowledge,
have been validly issued and are fully paid and nonassessable and were
not, to such counsel's knowledge, issued in violation of any
preemptive or similar rights;
(iv) the issued shares of capital stock of each of the Guarantors
have been duly authorized and, to such counsel's knowledge, have been
validly issued and are fully paid and nonassessable and, except for
directors qualifying shares and as otherwise set forth in the Final
Memorandum are owned of record by the Company, either directly or
through wholly owned subsidiaries, free and clear, to such counsel's
knowledge, of any pledge, lien, encumbrance, security interest,
restriction on voting or transfer, preemptive rights or claim of any
third party;
(v) this Agreement has been duly authorized, executed and
delivered
by the Company;
(vi) the Registration Rights Agreement and the Indenture have
been duly authorized, executed and delivered by the Company and the
Guarantors and constitute legal, valid and binding obligations of the
Company and the Guarantors, enforceable against the Company in
accordance with their terms, except as the same may be limited by (A)
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or distributions by
corporations to shareholders; (B) general principles of equity,
whether considered at law or at equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing;
or (C) other customary limitations or qualifications stated by such
counsel in the Opinion and reasonably satisfactory to counsel for
Initial Purchasers;
(vii) the Notes and the Note Guarantees have been duly authorized
and, when the Notes are executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers pursuant to this Agreement, will constitute legal,
valid and binding obligations of the Company and the Guarantors,
respectively, entitled to the benefits of the Indenture and
enforceable against the Company and the Guarantors, respectively, in
accordance with their terms, except as may be limited by (A)
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally, including without
limitation the effect of statutory or other laws regarding fraudulent
conveyances or transfers, preferential transfers or distributions by
corporations to shareholders; (B) general principles of equity,
whether considered at law or at equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing;
or (C) other customary limitations or qualifications stated by such
counsel in the Opinion and reasonably satisfactory to counsel for
Initial Purchasers;
(viii) the statements set forth under the headings "Description
of Senior Credit Facilities," "Description of Preferred Stock,"
"Description of Notes," "Certain United States Federal Tax
Considerations for Non-United States Holders," and "Notice to
Investors" in the Final Memorandum, insofar as such statements
constitute summaries of the law, documents and proceedings referred to
therein, fairly summarize the matters referred to therein;
(ix) to the knowledge of such counsel, there are no pending or
threatened legal or governmental proceedings to which the Company is a
party that would be required under the Securities Act to be described
in a registration
statement or a prospectus delivered at the time of the confirmation of
the sale of an offering of securities registered under the Securities
Act that are not described in the Final Memorandum, or, to such
counsel's knowledge that seek to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Notes to the Initial Purchasers;
(x) assuming that the representations and warranties of the
Initial Purchasers are true and correct in all material respects and
that they comply, in all material respects, with all of their
covenants and agreements contained herein, no registration of the
Notes under the Securities Act is required, and no qualification of
the Indenture under the Trust Indenture Act is necessary, for the
offer and sale by the Initial Purchasers of the Notes in the manner
contemplated by this Agreement; and
(xi) the Company is not an "investment company" within the
meaning of the Investment Company Act without taking account of any
exemption arising out of the number of holders of securities of the
Company.
In addition, such counsel shall also state that such counsel has
participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the
Company and the Initial Purchasers at which the contents of the Final
Memorandum and related matters were discussed, and no facts have come to
the attention of such counsel that lead such counsel to believe that the
Final Memorandum, as of its date or as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect
to the financial statements and other financial data included therein).
All references in this Section 6(b) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(c) The Initial Purchasers shall have received from Xxxxxxx X.
MacNivenYoung, General Counsel for the Company, an opinion, dated the
Closing Date, substantially to the effect that:
(i) the statements set forth under the headings "Risk Factors
-Government Regulation," "-- Reimbursement of Health Care Costs," "--
Risk Inherent in the Provision of Diagnostic Imaging Services," "--
Potential Control by GE and Carlyle,""Business -- Government
Regulation," "Legal Proceedings," and "Certain Relationships and
Related Transactions" in the Final Memorandum, insofar as such
statements constitute summaries of the legal
matters, documents and proceedings referred to therein, fairly
summarize the matters referred to therein;
(ii) that the Company and each of its subsidiaries has such
permits, licenses, franchises 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 Final Memorandum and such certifications,
accreditations, and eligibility to participate in the Medicare and
Medicaid programs as and to the extent described in the Final
Memorandum and that, to such counsel's knowledge, the Company and each
of its subsidiaries has fulfilled and performed all of its material
obligations with respect to such Authorizations, certifications,
accreditations 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 have a Material Adverse Effect;
(iii) the issuance, offering and sale and delivery of the Notes
to the Initial Purchasers pursuant to this Agreement, the delivery of
the Notes under this Agreement, the compliance by the Company and the
Guarantors with the other provisions of this Agreement and the
provisions of the Registration Rights Agreement, the Indenture and the
Notes and the consummation of the other transactions herein and
therein contemplated and the consummation of the other transactions
contemplated hereby and in the Final Memorandum do not (i) to such
counsel's knowledge, require the consent, approval, authorization,
order, registration or qualification of or with any governmental
authority or court, except such as may be required under state
securities or blue sky laws or except as may be contemplated by the
Registration Rights Agreement or (ii) (a) violate, result in a breach
or violation of, or constitute a default under the charter or by-laws
of the Company or any of the subsidiaries of the Company or, (b)
result in a breach or violation of, or constitute a default under or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to (1) any contract, loan agreement, note,
indenture, mortgage, deed of trust, lease or other agreement or
instrument filed by the Company with the Commission, or, (2) 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 of the subsidiaries of the Company.
In addition, such counsel shall also state that such counsel has
participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the
Company and the Initial Purchasers at which the contents of the Final
Memorandum and related matters were discussed, and no facts have come to
the attention of such counsel that lead such counsel to believe that the
Final Memorandum, as of its date or as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion with respect
to the financial statements and other financial data included therein).
(d) The Initial Purchasers shall have received from Shearman &
Sterling, counsel for the Initial Purchasers such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the Notes
and other related matters as the Initial Purchasers may reasonably require,
and the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters;
(e) (i) the representations and warranties on the part of the Company
and in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing
Date, and the Company shall have complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;
(ii) since the date of the most recent financial statements included
in the Final Memorandum, there shall have been no change nor any
development or event involving a prospective change constituting a Material
Adverse Effect; and
(iii) the Company shall have furnished to the Initial Purchasers a
certificate of the Company signed by the chief executive officer and the
principal financial or accounting officer of the Company dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and to the effect set forth in clauses (i)
and (ii) above.
(f) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx,
independent accountants for the Company, shall have furnished to the
Initial Purchasers a letter or letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Initial Purchasers, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act, and the applicable rules and regulations thereunder and Rule
101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants (the "AICPA"), and otherwise satisfactory in
form and substance to the Initial Purchasers and Counsel to the Initial
Purchasers.
(g) At the Execution Time and at the Closing Date, KPMG Peat,
independent accountants for Signal, shall have furnished to the Initial
Purchasers a
letter or letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the Initial
Purchasers, confirming that they are independent accountants within the
meaning of the Securities Act and the Exchange Act, and the applicable
rules and regulations thereunder and Rule 101 of the Code of Professional
Conduct of the AICPA and otherwise satisfactory in form and substance to
the Initial Purchasers and Counsel to the Initial Purchasers.
(h) The Notes shall have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Final Memorandum losses or interferences with their
businesses, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Final Memorandum or (ii) since such date, there
shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company or its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Final Memorandum, the effect of
which, in any such case described in clause (i) or (ii), is, in the
reasonable judgment of the Initial Purchasers, so material and adverse as
to make it impracticable or inadvisable to proceed with the offering or the
delivery of the Notes being delivered on the Closing Date on the terms and
in the manner contemplated herein and in the Final Memorandum.
(j) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The Nasdaq National Market, or
in the over-the-counter market shall have been suspended or materially
limited, or minimum prices shall have been established on such exchange;
(ii) a banking moratorium shall have been declared by federal or New York
State authorities; (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States; or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the
reasonable judgment of the Initial Purchasers, impracticable or inadvisable
to proceed with the offering or delivery of the Notes being delivered on
the Closing Date on the terms and in the manner contemplated herein and in
the Final Memorandum.
(k) None of the issuance and sale of the Notes pursuant to this
Agreement or
any of the other transactions contemplated by any of the Transaction
Documents or the Final Memorandum shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall have
been issued or any action, suit or proceeding shall have been commenced
with respect to this Agreement or any of the other transactions
contemplated by the Final Memorandum, before any court or governmental
authority.
(l) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(m) The Fourth Amendment shall have been duly executed and delivered
by the parties thereto.
(n) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at the Closing Date by the Initial Purchasers. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of Counsel for the Initial Purchasers, at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Payment of Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, the Company will pay all expenses incident to
the performance of its obligations under this Agreement, including the fees and
disbursements of its accountants and counsel, the cost of printing and delivery
of the Preliminary Memorandum, the Final Memorandum, all amendments thereof and
supplements thereto, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements, including fees of counsel incurred in compliance
with Section 5(d), the fees and disbursements of the Trustee, the fees of any
agency that rates the Notes and the fees and expenses incurred in connection
with the admission of the Notes for trading in the PORTAL system. If the sale of
the Notes provided for herein is not consummated because any condition to the
obligations of the Initial
Purchasers set forth in Section 6 hereof is not satisfied or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of
default by any of the Initial Purchasers in the purchase of and payment for the
Notes on the Closing Date, the Company will reimburse the Initial Purchasers
upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Notes.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Initial Purchaser, the directors, officers, employees and
agents of each Initial Purchaser and each person who controls any Initial
Purchaser within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Memorandum, the Final Memorandum or any information provided by the Company or
any of its Affiliates or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agree to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission (i) made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Initial Purchasers specifically for
inclusion therein or (ii) made in the Preliminary Memorandum if a copy of the
Final Memorandum was not delivered by or on behalf of the Initial Purchasers to
the person asserting any claim against any of the Initial Purchasers, the Final
Memorandum was required by law to have been so delivered by the Initial
Purchasers and the untrue statement contained in or omission from such
Preliminary Memorandum was corrected in the Final Memorandum. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Initial Purchaser, severally and jointly, agrees to indemnify and
hold harmless the Company, its directors, its officers, its employees, its
agents and each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to such Initial Purchaser, but only with reference to
written information relating to such Initial Purchaser furnished to the Company
by or on behalf of such Initial Purchaser specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement
thereto). This indemnity agreement will be in addition to any liability that
such Initial Purchaser may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page, the first
paragraph on page ii and the information in the third paragraph, the fifth
paragraph, the seventh paragraph and the ninth paragraph under the heading "Plan
of Distribution" in the Preliminary Memorandum and the Final Memorandum
constitute the only information furnished in writing by or on behalf of the
Initial Purchasers for inclusion in the Preliminary Memorandum or the Final
Memorandum (or any amendment or supplement thereto).
(c) 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 the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party and the indemnifying party shall not have
appointed separate counsel reasonably acceptable to the indemnified party to
represent the indemnified party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed within a reasonable time after they are incurred and billed
but in no event to exceed forty-five days after such date, provided that
reasonable supporting
documentation is furnished to the indemnifying party. Such firm shall be
designated in writing by NationsBanc Xxxxxxxxxx Securities LLC in the case of
parties indemnified pursuant to paragraph (a) above and by the Company in the
case of parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent (not to be unreasonably withheld), but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment to the extent required by
paragraph (a) or (b) above, as applicable. 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 the third and fourth sentences of this paragraph, 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 terms of such settlement at least five business days 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. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company, on the one hand, and each Initial Purchaser
severally and not jointly, on the other, agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively, "Losses") to which the Company, on the one hand, and the Initial
Purchasers, on the other, may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and by
such Initial Purchaser, on the other, from the offering of the Notes; provided,
however, that in no case shall any Initial Purchaser be responsible for any
amount in excess of the purchase discount or commission applicable to the Notes
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company, on
the one hand and each Initial Purchaser, on the other, shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, on the one hand, and of such Initial
Purchaser, on the other, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
such Initial
Purchaser shall be deemed to be equal to the total purchase discounts and
commissions received by such Initial Purchaser from the Company in connection
with the purchase of the Notes hereunder. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or such Initial Purchaser. The Company and
the Initial Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take into account the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), 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 8, each person who controls an Initial Purchaser within the meaning of
either the Securities Act or the Exchange Act and each director, officer,
employee and agent of such Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls the Company
within the meaning of either the Securities Act or Exchange Act and each
officer, director, employee and agent of the Company shall have the same rights
to contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any Initial Purchaser shall fail to
purchase and pay for any of the Notes agreed to be purchased by such Initial
Purchaser hereunder and such failure to purchase shall constitute a default in
the performance of its obligations under this Agreement, the remaining Initial
Purchasers shall be obligated severally to take up and pay for the Notes which
the defaulting Initial Purchaser agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Notes which
the defaulting Initial Purchaser agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Notes set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Notes, and if the non-defaulting
Initial Purchasers do not purchase all the Notes, this Agreement will terminate
without liability to the non-defaulting Initial Purchasers or the Company. In
the event of a default by any Initial Purchaser as set forth in this Section 9,
the Closing Date shall be postponed for such period, not exceeding seven days,
as the non-defaulting Initial Purchasers shall determine in order that the
required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Company or any
non-defaulting Initial Purchaser for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Notes, if prior to such time any of the
events described in Section 6(j) or 6(k) shall have occurred or if the Initial
Purchasers shall decline to purchase the Notes for any reason permitted under
this Agreement.
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company, or
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 or the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Notes. The provisions
of Sections 7, 8 and 9 hereof shall survive the termination or cancellation of
this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Initial Purchasers, will be mailed,
delivered or telecopied and confirmed to it at 000 Xxxxx Xxxxxx, Xxxxx 00X, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxx, or, if sent to the Company, will
be mailed, delivered or telecopied and confirmed to the Company at 0000
XxxXxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: General
Counsel.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors. In addition, the
indemnification and contribution provisions in Section 8 hereof are for the
benefit of the directors, officers, employees, agents and controlling persons
referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
If the foregoing correctly states the agreement between the Company
and the Initial Purchasers, please sign and return to us the enclosed duplicate
hereof, whereupon this Agreement and your acceptance shall represent a binding
agreement between the Company and the Initial Purchasers.
Very truly yours,
INSIGHT HEALTH SERVICES CORP.
By:
Name:
Title:
INSIGHT HEALTH CORP.
By:
Name:
Title:
RADIOLOGY SERVICES CORP.
By:
Name:
Title:
OPEN MRI, INC.
By:
Name:
Title:
MAXUM HEALTH CORP.
By:
Name:
Title:
SIGNAL MEDICAL SERVICES, INC.
By:
Name:
Title:
QUEST FINANCIAL SERVICES, INC.
By:
Name:
Title:
RADIOSURGERY CENTERS, INC.
By:
Name:
Title:
MAXUM HEALTH SERVICES CORP.
By:
Name:
Title:
MTS ENTERPRISES, INC.
By:
Name:
Title:
DIAGNOSTEMPS, INC.
By:
Name:
Title:
MAXUM HEALTH SERVICES OF
NORTH TEXAS, INC.
By:
Name:
Title:
MAXUM HEALTH SERVICES OF
ARLINGTON, INC.
By:
Name:
Title:
MAXUM HEALTH SERVICES OF DALLAS, INC.
By:
Name:
Title:
NDDC, INC.
By:
Name:
Title:
DIAGNOSTIC SOLUTIONS CORP.
By:
Name:
Title:
MISSISSIPPI MOBILE TECHNOLOGY, INC.
By:
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
Name:
Title:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
Name:
Title:
SUTRO & CO. INCORPORATED
By:
Name:
Title:
Schedule I
Principal Amount of
Name of Initial Purchaser Notes to be Purchased
------------------------- ---------------------
NationsBanc Xxxxxxxxxx Securities LLC $ 65,000,000
Xxxxxx Xxxxxxx & Co. Incorporated 25,000,000
Sutro & Co. Incorporated 10,000,000
--------------
Total $100,000,000
Exhibit A
Registration Rights Agreement
