Exhibit 4.2
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TRIAD HOSPITALS, INC.
(a Delaware corporation)
7.0% Senior Subordinated Notes due 2013
PURCHASE AGREEMENT
Dated: November 6, 2003
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES BY THE COMPANY
(a) Representations and Warranties......................................3
(i) Offering Memorandum........................................3
(ii) Incorporated Documents.....................................3
(iii) Independent Accountants....................................3
(iv) Financial Statements.......................................3
(v) No Material Adverse Change in Business.....................4
(vi) Good Standing of the Company...............................4
(vii) Good Standing of Designated Subsidiaries...................4
(viii) Capitalization.............................................5
(ix) Authorization of Agreement.................................5
(x) Authorization of the Indenture.............................5
(xi) Authorization of the Original Securities...................5
(xii) Authorization of the Registration Rights Agreement.........5
(xiii) Authorization of the Exchange Securities...................6
(xiv) Description of the Securities and the Indenture............6
(xv) Absence of Defaults and Conflicts..........................6
(xvi) Absence of Labor Dispute...................................7
(xvii) Absence of Proceedings.....................................7
(xviii) Absence of Further Requirements............................7
(xix) Possession of Licenses and Permits.........................8
(xx) Title to Property..........................................8
(xxi) Environmental Laws.........................................8
(xxii) Investment Company Act.....................................9
(xxiii) Similar Offerings..........................................9
(xxiv) Rule 144A Eligibility......................................9
(xxv) No General Solicitation....................................9
(xxvi) No Registration Required..................................10
(xxvii) Reporting Company.........................................10
(xxviii) Regulations T, U and X....................................10
(xxix) Medicare and Medicaid.....................................10
(xxx) Internal Accounting Controls..............................11
(xxxi) Insurance.................................................11
(b) Officer's Certificates.............................................11
SECTION 2. SALE AND DELIVERY TO INITIAL PURCHASERS; CLOSING
(a) Securities.........................................................11
(b) Payment............................................................11
(c) Denominations; Registration........................................12
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SECTION 3. COVENANTS OF THE COMPANY
(a) Offering Memorandum................................................12
(b) Notice and Effect of Material Events...............................12
(c) Amendment to Offering Memorandum and Supplements...................12
(d) Qualification of Securities for Offer and Sale.....................13
(e) Rating of Securities...............................................13
(f) DTC................................................................13
(g) Use of Proceeds....................................................13
(h) Restriction on Sale of Securities..................................13
(i) PORTAL Designation.................................................13
(j) Reporting Requirements.............................................13
SECTION 4. PAYMENT OF EXPENSES
(a) Expenses...........................................................13
(b) Termination of Agreement...........................................14
SECTION 5. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS
(a) Opinion of Counsel for Company.....................................14
(b) Opinion of Counsel for Initial Purchasers..........................14
(c) Officers' Certificate..............................................15
(d) Accountants' Comfort Letter........................................15
(e) Bring-down Comfort Letter..........................................15
(f) Rating.............................................................15
(g) PORTAL.............................................................15
(h) Additional Documents...............................................16
(i) Termination of Agreement...........................................16
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE SECURITIES
(a) Offer and Sale Procedures..........................................16
(i) Offers and Sales only to Qualified Institutional
Buyers.................................................16
(ii) No General Solicitation...................................16
(iii) Purchases by Non-Bank Fiduciaries.........................16
(iv) Subsequent Purchaser Notification.........................16
(v) Minimum Principal Amount..................................17
(vi) Restrictions on Transfer..................................17
(vii) Delivery of Offering Memorandum...........................17
(b) Covenants of the Company...........................................17
(i) Integration...............................................17
(ii) Rule 144A Information.....................................17
(iii) Restriction on Repurchases................................18
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(c) Qualified Institutional Buyer......................................18
(d) Resale Pursuant to Rule 144A.......................................18
(e) Additional Representations and Warranties of Initial Purchasers....18
SECTION 7. INDEMNIFICATION
(a) Indemnification of Initial Purchasers..............................18
(b) Indemnification of Company.........................................19
(c) Actions against Parties; Notification..............................19
(d) Settlement without Consent if Failure to Reimburse.................20
SECTION 8. CONTRIBUTION
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO
SURVIVE DELIVERY
SECTION 10. TERMINATION OF AGREEMENT
(a) Termination; General...............................................22
(b) Termination; Tender Offer..........................................22
(c) Liabilities........................................................22
SECTION 11. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS
SECTION 12. NOTICES
SECTION 13. PARTIES
SECTION 14. TAX TREATMENT
SECTION 15. GOVERNING LAW AND TIME
SECTION 16. EFFECT OF HEADINGS
SECTION 17. COUNTERPARTS
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SCHEDULES
Schedule A - List of Initial Purchasers Sch A-1
Schedule B - Pricing Information Sch B-1
Schedule C - List of Subsidiaries Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's Counsel A-1-1
Exhibit A-2 - Form of Opinion of General Counsel A-2-1
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TRIAD HOSPITALS, INC.
(a Delaware corporation)
$600,000,000
7.0% Senior Subordinated Notes due 2013
PURCHASE AGREEMENT
November 6, 2003
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc of America Securities LLC
as Representatives of the several Initial Purchasers
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Triad Hospitals, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Banc of America Securities LLC ("Banc of
America") and each of the other Initial Purchasers named in Schedule A hereto
(collectively, the "Initial Purchasers", which term shall also include any
initial purchaser substituted as hereinafter provided in Section 11 hereof), for
whom Xxxxxxx Xxxxx and Banc of America are acting as representatives (in such
capacity, the "Representatives"), with respect to the issue and sale by the
Company and the purchase by the Initial Purchasers, acting severally and not
jointly, of the respective principal amounts set forth in said Schedule A of
$600,000,000 aggregate principal amount of the Company's 7.0% Senior
Subordinated Notes due 2013 (the "Original Securities"). The Original Securities
are to be issued pursuant to an indenture dated as of November 12, 2003 (the
"Indenture") between the Company and Citibank, N.A., as trustee (the "Trustee").
Original Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter agreement,
to be dated as of the Closing Time (as defined in Section 2(b)) (the "DTC
Agreement"), among the Company, the Trustee and DTC.
The Company understands that the Initial Purchasers propose to make an
offering of the Original Securities on the terms and in the manner set forth
herein and agrees that the Initial Purchasers may resell, subject to the
conditions set forth herein, all or a portion of the Original Securities to
purchasers ("Subsequent Purchasers") at any time after this Agreement has been
executed and delivered. The Original Securities are to be offered and sold
through the Initial Purchasers without being registered under the Securities Act
of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom.
Pursuant to the terms of the Original Securities and the Indenture, investors
that acquire Original Securities may only resell or otherwise transfer
such Original Securities if such Original Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") of the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission")).
The Company has prepared and delivered to each Initial Purchaser
copies of a preliminary offering memorandum dated November 3, 2003 (the
"Preliminary Offering Memorandum") and has prepared and will deliver to each
Initial Purchaser, on the date hereof or the next succeeding day, copies of a
final offering memorandum dated November 6, 2003 (the "Final Offering
Memorandum"), each for use by such Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Original Securities. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement to
either such document), including exhibits thereto and any documents incorporated
therein by reference, which has been prepared and delivered by the Company to
the Initial Purchasers in connection with their solicitation of purchases of, or
offering of, the Original Securities.
Holders (including subsequent transferees) of the Original Securities
will have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement") to be dated the Closing Time in form and
substance reasonably satisfactory to the Initial Purchasers and conforming to
the description thereof in the Offering Memorandum, for so long as such Original
Securities constitute "Registrable Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to (i) file with the Commission under the circumstances set forth in
the Registration Rights Agreement, (a) a registration statement under the 1933
Act (the "Exchange Offer Registration Statement") relating to the issue of debt
securities (collectively with the Private Exchange Securities (as defined in the
Registration Rights Agreement), the "Exchange Securities" and, together with the
Original Securities, the "Securities,") to be offered in exchange for the
Original Securities (the "Exchange Offer") and issued under the Indenture or an
indenture substantially identical to the Indenture and/or (b) under certain
circumstances set forth in the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement" and together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by certain
holders of the Original Securities and (ii) use their reasonable best efforts to
cause such Registration Statements to be declared effective. This Agreement, the
Original Securities, the Indenture and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "Transaction Documents."
All references in this Agreement to financial statements and schedules
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; and 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 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
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SECTION 1. Representations and Warranties by the Company.
(a) Representations and Warranties. The Company represents and
warrants to each Initial Purchaser as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Initial Purchaser,
as follows:
(i) Offering Memorandum. The Offering Memorandum does not, and at
the Closing Time 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 any Initial
Purchaser through the Representatives expressly for use in the
Offering Memorandum.
(ii) Incorporated Documents. The Offering Memorandum as delivered
from time to time shall incorporate by reference the most recent
Annual Report of the Company on Form 10-K filed with the Commission
and each Quarterly Report of the Company on Form 10-Q and each Current
Report of the Company on Form 8-K filed with the Commission (other
than those furnished to the Commission) since the filing of the end of
the fiscal year to which such Annual Report relates. The documents
incorporated by reference in the Offering Memorandum at the time they
were or hereafter are filed with the Commission complied or will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934
Act Regulations").
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the
Company and its subsidiaries within the meaning of Regulation S-X
under the 1933 Act.
(iv) Financial Statements. The financial statements, together
with the related schedules and notes, included in the Offering
Memorandum present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
selected financial data and the summary financial information included
in the Offering Memorandum present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Offering Memorandum.
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(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum,
except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has 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 this Agreement; and 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 where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Designated Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Designated Subsidiary" and, collectively, the
"Designated Subsidiaries") has been duly organized and is validly
existing as a corporation, a limited liability company or a limited
partnership in good standing under the laws of the jurisdiction of its
incorporation or formation has the requisite power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a
foreign corporation, limited liability company or limited partnership
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
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in
the Offering Memorandum, all of the issued and outstanding capital
stock or ownership interests of each Designated Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity other than those under the Company's
Senior Secured Credit Agreement (as defined in the Offering
Memorandum); none of the outstanding shares of capital stock or
ownership interests of the Designated Subsidiaries was issued in
violation of any preemptive or similar rights of any securityholder of
such Designated Subsidiary.
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(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering
Memorandum under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements, employee benefit plans referred to in the
Offering Memorandum or pursuant to the exercise of convertible
securities or options referred to in the Offering Memorandum). The
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, when executed and delivered by the
Company and the Trustee, will constitute a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to public policy considerations and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xi) Authorization of the Original Securities. The Original
Securities have been duly authorized and, at the Closing Time, will
have been duly executed by the Company and, when authenticated, issued
and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided
in this Agreement, 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 (including, without limitation, all laws relating to
fraudulent transfers) reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to public policy considerations and
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the Indenture.
(xii) Authorization of the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered
by the Company and will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except as (A) the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement
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thereof is subject to public policy considerations and general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (B) any rights to indemnity
or contribution thereunder may be limited by federal and state
securities laws and public policy considerations. On the Closing Date,
the Registration Rights Agreement will conform in all material
respects to the description thereof in the Offering Memorandum under
the caption "Exchange Offer; Registration Rights."
(xiii) Authorization of the Exchange Securities. The Exchange
Securities have been, or on the Closing Time will be, duly and validly
authorized for issuance by the Company and, when issued and
authenticated by the Trustee and delivered to the Company in
accordance with the terms of the Registration Rights Agreement, the
Exchange Offer and the Indenture (assuming due authorization,
execution and delivery thereof by the Trustee), the Exchange
Securities will be legal, valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers) reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to public policy considerations and general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of the Indenture.
(xiv) Description of the Securities and the Indenture. The
Securities and the Indenture will conform in all material respects to
the respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms last
delivered to the Initial Purchasers prior to the date of this
Agreement.
(xv) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Indenture, the Registration Rights Agreement and the Securities
and any other agreement or instrument entered into or issued or to be
entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Offering
Memorandum and the consummation of the transactions contemplated
herein and in the Offering Memorandum (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the caption
"Use of Proceeds") and compliance by the Company with its obliga-
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tions hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a
breach of, or default or a Repayment Event (as defined below) 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, the Agreements and Instruments except for
such conflicts, breaches, defaults, Repayment Events, liens, charges
or encumbrances that, singly or in the aggregate, would not result in
a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or, except as would not have a Material
Adverse Effect, any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of their assets,
properties or operations. As used herein, a "Repayment Event" means
any event or condition which gives the holder of any note, debenture
or other evidence of 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 the Company or
any of its subsidiaries.
(xvi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent which, in either case, would
reasonably be expected to result in a Material Adverse Effect.
(xvii) Absence of Proceedings. Except as disclosed in the
Offering Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its
subsidiaries which would reasonably be expected to result in a
Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated by this Agreement or the performance by the Company of
its obligations hereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective property
or assets is the subject which are not described in the Offering
Memorandum, including ordinary routine litigation incidental to the
business, would not reasonably be expected to result in a Material
Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or for the due execution,
delivery or performance of the Indenture by the Company, except (A)
such as have been already obtained, (B) in connection with the
registration of the Exchange Securities pursuant to the Registration
Rights Agreement, (C) any filings under state securi-
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ties or Blue Sky laws in connection with the sale of the Securities,
(D) the qualification of the Indenture under the Trust Indenture Act
in connection with the Exchange Offer and (E) such filing,
authorization, approval, consent, license, order, registration,
qualification or decree the failure to so make or obtain would not
have a Material Adverse Effect.
(xix) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them
except as disclosed in the Offering Memorandum or where the failure to
so possess would not have a Material Adverse Effect; the Company and
its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except as disclosed in the Offering Memorandum or where the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have 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 Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company
and its subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Offering Memorandum or (b)
would not, singly or in the aggregate, have a Material Adverse Effect
and, except as would not have a Material Adverse Effect, all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Offering Memorandum, are in full force and effect, and neither the
Company nor any of its subsidiaries has any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any subsidiary thereof to the continued
possession of the leased or subleased premises under any such lease or
sublease except for such claims as would not have a Material Adverse
Effect.
(xxi) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or ad-
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ministrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, 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 the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company
threatened, administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating
to Hazardous Materials or Environmental Laws.
(xxii) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) Similar Offerings. Neither the Company nor any of its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly, solicited any
offer to buy, sold or offered to sell or otherwise negotiated in
respect of, or will solicit any offer to buy, sell or offer to sell or
otherwise negotiate in respect of, 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 Original Securities in a manner that
would require the Original Securities to be registered under the 1933
Act.
(xxiv) Rule 144A Eligibility. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth
in Section 2 and the procedures set forth in Section 6 hereof, the
Original Securities are eligible for resale pursuant to Rule 144A and
will not be, at the Closing Time, of the same class as securities
listed on a national securities exchange registered under Section 6 of
the 1934 Act, or quoted in a U.S. automated interdealer quotation
system.
(xxv) No General Solicitation. None of the Company, its
Affiliates or any person acting on its or any of their behalf (other
than the Initial Purchasers, as to whom the Company makes no
representation) has engaged or will engage, in
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connection with the offering of the Original Securities, in any form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the 1933 Act.
(xxvi) No Registration Required. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth
in Section 2 and the procedures set forth in Section 6 hereof and
compliance by all Subsequent Purchasers with the "Notice to Investors"
section in the Offering Memorandum, it is not necessary in connection
with the offer, sale and delivery of the Original Securities to the
Initial Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register
the Original Securities under the 1933 Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
(xxvii) Reporting Company. The Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the 1934 Act.
(xxviii) Regulations T, U and X. None of the Company or any agent
acting on its behalf has taken or will take any action that is
reasonably likely to cause the issuance or sale of the Securities to
violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System, in each case as in effect on the date hereof.
(xxix) Medicare and Medicaid. To the extent described in the
Offering Memorandum and except as otherwise described in the Offering
Memorandum, all facilities owned, operated or managed as continuing
operations by the Company (A) are licensed, to the extent necessary,
under appropriate state laws to conduct the business as described in
the Offering Memorandum, except as would not result in a Material
Adverse Effect; (B) are certified for participation or enrollment in
the Medicare and Medicaid programs; (C) have the benefit of a current
and valid provider contract with the Medicare and Medicaid programs;
and (D) are substantial compliance with the terms and conditions of
participation in such programs and have received all approvals or
qualifications necessary for reimbursement, except, in each case,
where the failure to be so licensed or certified, to have the benefit
of 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. To the knowledge of the Company, the amounts
established as provisions for Medicare and Medicaid adjustments and
adjustments by any other third party payors on the financial
statements of the Company are sufficient in all material respects to
pay any amounts for which the Company may be liable for such
adjustments. Except as described in the Offering Memorandum, the
Company has not 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 are pending, threatened or imminent, in
each case, except such notices or threatened investigations, surveys
or proceedings which singly or in the aggregate would not have a
Material Adverse Effect.
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(xxx) Internal Accounting Controls. The Company and its
Designated Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxxi) Insurance. The Company and its subsidiaries carry or are
entitled to the benefits of insurance in such amounts and covering
such risks as is generally maintained by companies of established
repute engaged in the same or similar business, and all such insurance
is in full force and effect except for failures to have such insurance
in full force and effect or to carry and be entitled to benefits of
insurance which would not have a Material Adverse Effect.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the aggregate principal amount of
Original Securities set forth in Schedule A opposite the name of such Initial
Purchaser, plus any additional principal amount of Original Securities which
such Initial Purchaser may become obligated to purchase pursuant to the
provisions of Section 11 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Original Securities shall be made at the office of Xxxxxx
Xxxxxx & Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (eastern time) on the third business day after the date hereof (unless
postponed in accordance with the provisions of Section 11), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called the "Closing Time"). Payment shall be made to the Company by
wire transfer of immediately available funds to a bank account designated by the
Company, against delivery to the Representatives for the respective accounts of
the Initial Purchasers of certificates for the Original Securities. It is
understood that each Initial Purchaser has authorized the Representatives, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Original Securities which it has agreed to purchase.
Xxxxxxx Xxxxx, individually and not as representative of the Initial Purchasers,
may (but shall not be obligated to) make payment of the purchase price for the
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Original Securities to be purchased by any Initial Purchaser whose funds have
not been received by the Closing Time, but such payment shall not relieve such
Initial Purchaser from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Original
Securities shall be in such denominations ($100,000 or integral multiples of
$1,000 in excess thereof) and registered in such names as the Representatives
may request in writing at least one full business day before the Closing Time.
The certificates representing the Original Securities shall be made available
for examination and packaging by the Initial Purchasers in The City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will notify each
Initial Purchaser, and confirm such notice in writing, of (x) any filing made by
the Company of information relating to the offering of the Original Securities
with any securities exchange or any other regulatory body in the United States
or any other jurisdiction, and (y) prior to the completion of the placement of
the Original Securities by the Initial Purchasers as evidenced by a notice in
writing from the Initial Purchasers to the Company, any material changes in or
affecting the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise which
(i) make any statement in the Offering Memorandum false or misleading or (ii)
are not disclosed in the Offering Memorandum. In such event or if during such
time any event shall occur as a result of which it is necessary, in the
reasonable opinion of any of the Company, its counsel, the Initial Purchasers or
counsel for the Initial Purchasers, to amend or supplement the Final Offering
Memorandum in order that the Final Offering Memorandum not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances
then existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to each Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchasers) so that, as so amended or supplemented, the Final Offering
Memorandum 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 existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers, which consent will not be unreasonably
withheld. Neither the consent of the Ini-
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tial Purchasers, nor the Initial Purchasers' delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will
use its reasonable best efforts, in cooperation with the Initial Purchasers, to
qualify the Original Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Representatives
may designate and will maintain such qualifications in effect as long as
required for the sale of the Original Securities; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(e) 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 Investors Service Inc. ("Moody's") to provide
their respective credit ratings of the Original Securities.
(f) DTC. The Company will cooperate with the Representatives and use
its reasonable best efforts to permit the Original Securities to be eligible for
clearance and settlement through the facilities of DTC.
(g) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Original Securities in the manner specified in the
Offering Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of 60 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of Xxxxxxx Xxxxx, commence a public offering under the 1933 Act
or a private offering under Rule 144A of any other debt securities of the
Company that are substantially similar to the Securities.
(i) PORTAL Designation. The Company will use its reasonable best
efforts to permit the Original Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market.
(j) Reporting Requirements. The Company, during the period when the
Offering Memorandum is required to be delivered pursuant to Section 6(a)(vii)
hereof, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing, delivery to the Initial Purchasers and any filing of the
Offering Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and of each
amendment or supplement thereto, (ii) the preparation, printing and delivery to
the Initial Pur-
-13-
chasers of this Agreement, any Agreement among Initial Purchasers, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Original Securities, (iii) the
preparation, issuance and delivery of the certificates for the Original
Securities to the Initial Purchasers, including any transfer taxes, any stamp or
other duties payable upon the sale, issuance and delivery of the Securities to
the Initial Purchasers and any charges of DTC in connection therewith, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Original Securities under securities laws in
accordance with the provisions of Section 3(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchasers in
connection therewith and in connection with the preparation of the Blue Sky
survey, and any supplement thereto, (vi) the reasonable fees and expenses of the
Trustee, including the reasonable fees and disbursements of counsel for the
Trustee in connection with the Indenture and the Securities, and (vii) any fees
payable in connection with the rating of the Securities, and (viii) any fees and
expenses payable in connection with the initial and continued designation of the
Securities as PORTAL securities under the PORTAL Market Rules pursuant to NASD
Rule 5322; provided, however, that, except as provided in Sections 4(b), 7 and 8
hereof, the Initial Purchasers will pay all of their own costs and expenses,
including the fees and expenses of their counsel, transfer taxes on any resale
of the Securities by them and any advertising expenses in connection with any
offers they make.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
10(a)(i) hereof or by the Company in accordance with the provisions of Section
10(b) hereof, the Company shall reimburse the Initial Purchasers for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The
obligations of the several Initial Purchasers hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof and in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinion of Counsel for Company. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxx Xxxxxxxxxx LLP, counsel for the Company, and Xxxxxx X.
Xxx, General Counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Initial Purchasers, together with signed or
reproduced copies of such letter for each of the other Initial Purchasers
substantially to the effect set forth in Exhibits A-1 and A-2 hereto and to such
further effect as counsel to the Initial Purchasers may reasonably request.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time,
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel for the Initial
Purchasers, together with signed or reproduced copies of such letter for each of
the other Initial Purchasers with respect to the matters set forth in (i), (ii),
(vi) through (x), inclusive, (xvii) and the penultimate paragraph of Exhibit A-1
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdic-
-14-
tions other than the law of the State of New York and the federal law of the
United States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings or business affairs of
the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
the Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, and (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time.
(d) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers containing statements and information of
the type ordinarily included in accountants' "comfort letters" to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter, dated as of
the Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to the Closing Time.
(f) Rating. At the Closing Time, the Original Securities shall be
rated at least "B3" by Moody's and "B" by S&P, and the Company shall have
delivered to the Representatives a letter dated the Closing Time, from each such
rating agency, or other evidence satisfactory to the Representatives, confirming
that the Original Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Original Securities or any of the Company's other debt securities by any
"nationally recognized statistical rating agency", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such
securities rating agency shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of the
Original Securities or any of the Company's other debt securities.
(g) PORTAL. At the Closing Time, the Original Securities shall have
been designated for trading on PORTAL.
-15-
(h) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Representatives and counsel for the Initial Purchasers.
(i) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 7, 8 and 14 shall survive any such termination and
remain in full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Original Securities:
(i) Offers and Sales only to Qualified Institutional Buyers.
Offers and sales of the Original Securities shall only be made to
persons whom the offeror or seller reasonably believes to be qualified
institutional buyers, as defined in Rule 144A under the 1933 Act
("Qualified Institutional Buyers"). Each Initial Purchaser severally
agrees that it will not offer, sell or deliver any of the Original
Securities in any jurisdiction outside the United States.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 0000 Xxx)
will be used in the United States in connection with the offering or
sale of the Original Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a
non-bank Subsequent Purchaser of an Original Security acting as a
fiduciary for one or more third parties, each third party shall, in
the judgment of the applicable Initial Purchaser, be a Qualified
Institutional Buyer.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser
will take reasonable steps to inform, and cause each of its U.S.
Affiliates to take reasonable steps to inform, persons acquiring
Original Securities from such Initial Purchaser or affiliate, as the
case may be, in the United States that the Original Securities (A)
have not been and will not be registered under the 1933 Act, (B) are
being sold to them without registration under the 1933 Act in reliance
on Rule 144A or in accordance with another exemption from registration
under the 1933 Act, as the case may be, and (C) may not be offered,
sold or otherwise transferred except (1) to the Company, (2) outside
the United States in accordance with
-16-
Regulation S, or (3) inside the United States in accordance with (x)
Rule 144A to a person whom the seller reasonably believes is a
Qualified Institutional Buyer that is purchasing such Original
Securities for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or
transfer is being made in reliance on Rule 144A or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Minimum Principal Amount. No sale of the Securities to any
one Subsequent Purchaser will be for less than US$100,000 principal
amount and no Security will be issued in a smaller principal amount.
If the Subsequent Purchaser is a non-bank fiduciary acting on behalf
of others, each person for whom it is acting must purchase at least
US$100,000 principal amount of the Securities.
(vi) Restrictions on Transfer. The transfer restrictions and the
other provisions set forth in the Offering Memorandum under the
heading "Notice to Investors", including the legend required thereby,
shall apply to the Original Securities except as otherwise agreed by
the Company and the Initial Purchasers.
(vii) Delivery of Offering Memorandum. Each Initial Purchaser
will deliver to each purchaser of the Original Securities from such
Initial Purchaser, in connection with its original distribution of the
Original Securities, a copy of the Offering Memorandum, as amended and
supplemented at the date of such delivery.
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) Integration. The Company agrees that it will not and will
cause its Affiliates not to, directly or indirectly, solicit any offer
to buy, sell or make any offer or sale of, or otherwise negotiate in
respect of, securities of the Company of any class if, as a result of
the doctrine of "integration" referred to in Rule 502 under the 1933
Act, such offer or sale would render invalid (for the purpose of (i)
the sale of the Original Securities by the Company to the Initial
Purchasers, (ii) the resale of the Original Securities by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of the
Original Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided
by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder
or otherwise.
(ii) Rule 144A Information. The Company agrees that, in order to
render the Original Securities eligible for resale pursuant to Rule
144A under the 1933 Act, while any of the Original Securities remain
outstanding, it will make available, upon request, to any holder of
Securities or prospective purchasers of Original Securities the
information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the
1934 Act.
-17-
(iii) Restriction on Repurchases. Until the earlier of two years
after the original issuance of the Original Securities or the date
that all of the Original Securities shall have been exchanged for
Exchange Securities the Company will not, and will cause its
Affiliates not to, resell any Original Securities which are
"restricted securities" (as such term is defined under Rule 144(a)(3)
under the 1933 Act), whether as beneficial owner or otherwise (except
as agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in unsolicited
broker's transactions) unless, immediately upon any such purchase, the
Company or any Affiliate of the Company shall submit such Original
Securities to the Trustee for cancellation.
(c) Qualified Institutional Buyer. Each Initial Purchaser severally
and not jointly represents and warrants to, and agrees with, the Company that it
is a "qualified institutional buyer" within the meaning of Rule 144A under the
1933 Act (a "Qualified Institutional Buyer") and an "accredited investor" within
the meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) Resale Pursuant to Rule 144A. Each Initial Purchaser understands
that the Original Securities have not been and will not be registered under the
1933 Act and may not be offered or sold within the United States except pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act. Each Initial Purchaser severally represents and
agrees that it has not offered or sold, and will not offer or sell, any Original
Securities constituting part of its allotment within the United States except in
accordance with Rule 144A under the Securities Act or another applicable
exemption from the registration requirements of the 1933 Act.
(e) Additional Representations and Warranties of Initial Purchasers.
Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Original Securities, except with its affiliates or with the
prior written consent of the Company.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum or the Final 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;
-18-
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the prior written consent of the Company;
and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through the Representatives expressly for use in the Offering
Memorandum (or any amendment thereto).
(b) Indemnification of Company. Each Initial Purchaser severally
agrees to indemnify and hold harmless the Company, each officer or director of
the Company, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company by such Initial Purchaser through the
Representatives expressly for use in the Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action and,
to the extent that the indemnifying party may wish, assume the defense of any
such action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such action, the indemnifying party will not
be liable to such indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense of such action
-19-
other than reasonable costs of investigation; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party. No indemnified party shall, without the prior written consent
of the indemnifying party (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel in accordance with Section
7(a)(iii), such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 60 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 45 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in
Section 7 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Original Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Initial Purchasers on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Original Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net pro-
-20-
ceeds from the offering of the Original Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the total underwriting
discount received by the Initial Purchasers, bear to the aggregate initial
offering price of the Original Securities.
The relative fault of the Company 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 relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8 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 above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased and sold by it hereunder exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each officer and director of the Company and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Initial Purchasers' respective obligations to contribute pursuant
to this Section 8 are several in proportion to the principal amount of Original
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Original Securities to the Initial Purchasers.
-21-
SECTION 10. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Offering Memorandum
(exclusive of any supplement thereto), any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Original Securities or to enforce contracts for the sale of the Original
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Termination; Tender Offer. It is understood that the obligation of
the Company to sell the Securities being sold by them hereunder is subject to
the condition that the Company accept 11% Senior Subordinated Notes due 2009 for
purchase in the tender offer that the Company commenced on October 27, 2003. If
the Company does not accept 11% Senior Subordinated Notes for purchase in such
tender offer, this Agreement may be terminated by the Company upon notice to the
Initial Purchasers at or prior to the Closing Time.
(c) Liabilities. If this Agreement is terminated pursuant to this
Section 10, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 7, 8 and 14 shall survive such termination and remain in full force
and effect.
SECTION 11. Default by One or More of the Initial Purchasers. If one
or more of the Initial Purchasers shall fail at the Closing Time to purchase the
Original Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Initial Purchasers, or any other initial purchasers, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then the Company shall have 24 hours to procure another purchaser of
Defaulted Securities satisfactory to the Representatives. If after arrangements
by the Representatives or the Company for the purchase of Defaulted Securities:
-22-
(a) the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Original Securities to be purchased
hereunder, each of the non-defaulting Initial Purchasers shall be
obligated, severally and not jointly, to purchase the full amount thereof
in the proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting Initial
Purchasers, or
(b) the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Original Securities to be purchased hereunder, this
Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser.
No action taken pursuant to this Section 11 shall relieve any
defaulting Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Offering Memorandum or in
any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section 11.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to the Representatives at Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, 4 World Financial Center, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxx Xxxxxxx, Esq. and Banc of America Securities
LLC, 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxx Xxxxx,
Esq. with a copy to Xxxx X. Xxxxxx at Xxxxxx Xxxxxx & Xxxxxxx LLP, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; notices to the Company shall be directed to it
at 0000 Xxxxxxxx Xxxxxxx, Xxxxx, Xxxxx 00000, attention of General Counsel with
a copy to Xxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxx at Xxxxx Xxxxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. Tax Treatment. Notwithstanding anything to the contrary
contained herein, any confidentiality obligations of the Company and Initial
Purchasers that relate to the transactions contemplated by this and any other
related agreements (the "Transaction") shall not apply to the U.S. federal tax
treatment or U.S. federal tax structure of the Transaction and
-23-
each party hereto (and any employee, representative, or agent of any party) may
disclose to any and all persons, without limitation of any kind, the U.S.
federal tax treatment and U.S. federal tax structure of the Transaction and all
other materials of any kind (including opinions or other U.S. federal tax
analysis) that are provided to any party hereto relating to such U.S. federal
tax treatment and U.S. federal tax structure. However, any such information
relating to such U.S. federal tax treatment and U.S. federal tax structure is
required to be kept confidential to the extent necessary to comply with any
applicable securities laws. The preceding sentences are intended to cause the
Transaction not to be treated as having been offered under conditions of
confidentiality for purposes of Sections 1.6011-4(b)(3) and 301.6111-2(a)(2)(ii)
(or any successor provisions) of the Treasury Regulations issued under the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 16. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 17. Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
-24-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
TRIAD HOSPITALS, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: CFO
-25-
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC OF AMERICA SECURITIES LLC
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
By: Banc of America Securities LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: MD
For themselves and as Representatives of the other Initial Purchasers
named in Schedule A hereto.
-26-
SCHEDULE A
Principal
Amount of
Name of Initial Purchaser Securities
------------------------- ------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated............... $144,000,000
Banc of America Securities LLC................................... $114,000,000
Citigroup Global Markets Inc. ................................... $ 40,000,000
Credit Suisse First Boston LLC .................................. $ 40,000,000
Xxxxxxx, Xxxxx & Co. ............................................ $ 40,000,000
Credit Lyonnais Securities (USA) Inc. ........................... $ 24,000,000
Fleet Securities, Inc. .......................................... $ 24,000,000
X.X. Xxxxxx Securities Inc. ..................................... $ 24,000,000
Scotia Capital (USA) Inc. ....................................... $ 24,000,000
SunTrust Capital Markets, Inc. .................................. $ 24,000,000
Wachovia Capital Markets, LLC.................................... $ 24,000,000
Bear, Xxxxxxx & Co. Inc. ........................................ $ 18,000,000
Xxxxxx Brothers Inc. ............................................ $ 18,000,000
Xxxxxx Xxxxxxx & Co. Incorporated................................ $ 18,000,000
BOSC, Inc. ...................................................... $ 12,000,000
Xxxxxxxx Inc. ................................................... $ 12,000,000
------------
Total............................................................ $600,000,000
============
Sch A-1
SCHEDULE B
TRIAD HOSPITALS, INC.
$600,000,000 Senior Subordinated Notes due 2013
1. The initial public offering price of the Securities shall be 100%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 98.0% of the principal amount thereof.
3. The interest rate on the Securities shall be 7.0% per annum.
4. Prior to November 15, 2008, we may redeem all or any portion of the
Securities at a redemption price equal to 100% of the principal amount plus the
Applicable Premium described in the Offering Memorandum, plus accrued and unpaid
interest to the redemption date. We may redeem the Securities, in whole or in
part, at any time on or after November 15, 2008 at our option at the redemption
prices set forth in the Offering Memorandum under the heading "Description of
the Notes--Optional Redemption," plus accrued and unpaid interest to the
redemption date.
5. On or before November 15, 2006, we may redeem up to 35% of the
Securities with the net proceeds of certain equity offerings at 107.0% of the
principal amount thereof, plus accrued interest, if at least 65% of the
aggregate principal amount of the originally issued Securities remain
outstanding.
Sch B-1
SCHEDULE C
LIST OF SUBSIDIARIES
Triad Holdings III, LLC
Triad Holdings IV, LLC
Triad Holdings, V, LLC
Triad of Indiana, LLC
IOM Healthsystems, LP
Sch C-1
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) 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) The Company has 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.
(iii) The Company is duly qualified as a foreign corporation 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 where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of the Company was issued in
violation of the statutory preemptive rights of any stockholder of the Company.
(v) Each Designated Subsidiary that is a Delaware corporation has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation 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 where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Offering Memorandum, to our knowledge, all
of the issued and outstanding capital stock of each Designated Subsidiary that
is a Delaware corporation has been duly authorized and validly issued, is fully
paid and non-assessable and, to our knowledge, with respect to shares of such
capital stock owned directly or indirectly by the Company, are owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity other than those
under the Company's Senior Secured Credit Agreement (as defined in the Offering
Memorandum).
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(vii) The Indenture has been duly authorized by the Company and, when
executed and delivered by the Company and the Trustee (assuming the due
authorization, execution and de-
A-1-1
livery thereof by the Trustee), will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
(viii) The Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the parties thereto other than
the Company), will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(ix) The Original Securities have been duly authorized by the Company and,
when executed by the Company and authenticated, issued and delivered in the
manner provided in the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee) against payment of the purchase price
therefor as provided in the Purchase Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms.
(x) The Exchange Securities have been duly and validly authorized by the
Company and, when executed, issued and delivered by the Company in exchange for
the Original Securities pursuant to the Exchange Offer in accordance with the
terms of the Registration Rights Agreement, will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, and will be substantially in the form contemplated by, and entitled
to the benefits of, the Indenture.
(xi) The documents incorporated by reference in the Offering Memorandum
(other than the financial statements and the notes thereto, and the other
financial data and statistical data derived from financial data therein and the
exhibits thereto as to which we render no opinion), when they were filed with
the Commission appeared on their face to comply as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder.
(xii) The statements made in the Final Offering Memorandum under the
caption "Material Federal Income Tax Considerations," insofar as they purport to
constitute a summary of United States federal tax law and regulations or legal
conclusions with respect thereto, constitute an accurate summary of the matters
described therein in all material respects.
(xiii) The statements made in the Final Offering Memorandum under the
headings "Summary--The Offering," "Description of the Notes" and "Exchange
Offer; Registration Rights," insofar as they purport to constitute summaries of
the terms of contracts and other documents, constitute accurate summaries of the
terms of such contracts and other documents in all material respects.
(xiv) To our knowledge, no filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any United
States federal, New York or Delaware court or governmental authority or agency
is necessary or required for the due execution, delivery or performance by the
Company of the Indenture and the Registration Rights Agree-
A-1-2
ment for the offering, issuance or sale of the Securities to the Initial
Purchasers except (a) such as have already been obtained and are in full force
and effect, (b) in connection with the registration of the Exchange Securities
pursuant to the Registration Rights Agreement, (c) any filings under state
securities or Blue Sky laws in connection with the sale of the Securities, (d)
the qualification of the Indenture under the Trust Indenture Act in connection
with the Exchange Offer, (e) as disclosed in the Offering Memorandum and (f) for
such authorizations, approvals, consents, licenses, orders, registrations,
qualifications or decrees the failure so to obtain would not have a Material
Adverse Effect and would not materially and adversely affect the consummation of
the transactions contemplated by the Purchase Agreement, the Registration Rights
Agreement or the Indenture.
(xv) Subject to compliance by the parties to the Purchase Agreement with
the representations, covenants and agreements therein, it is not necessary in
connection with the offer, sale and delivery of the Original Securities to the
Initial Purchasers and to each initial Subsequent Purchaser in the manner
contemplated by the Purchase Agreement and the Offering Memorandum to register
the Securities under the 1933 Act or to qualify the Indenture under the Trust
Indenture Act.
(xvi) The execution, delivery and performance by the Company of the
Purchase Agreement, the Indenture and the Securities and the use of the proceeds
from the sale of the Securities as described in the Offering Memorandum under
the caption "Use of Proceeds" and compliance by the Company with its obligations
under the Purchase Agreement, the Indenture and the Securities do not and will
not result in any violation of any United States federal or New York State
statute or the Delaware General Corporation Law or any rule or regulation issued
pursuant to any New York or United States federal court or governmental agency
or body (other than Blue Sky laws and regulations and laws and regulations
relating to the NASD), except for violations that would not result in a Material
Adverse Effect.
(xvii) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
In addition, we have participated in the preparation of the Offering
Memorandum and in conferences with officers and other representatives of the
Company and representatives and counsel of the Initial Purchasers at which the
contents of the Offering Memorandum and related matters were discussed and,
although we have not undertaken to determine independently, nor do we pass upon
or assume any responsibility, explicitly or implicitly, for the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum,
on the basis of and subject to the foregoing (and relying as to materiality upon
information furnished and assessments made by officers and other representatives
of the Company), no facts have come to our attention to lead us to believe that
the Final Offering Memorandum, as of its date and as of the date of this
opinion, contained 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 (in each
case, except as to the financial statements and the notes thereto and the
schedules and other financial
A-1-3
data and statistical data derived from financial data included therein or
omitted therefrom, as to which we express no view).
X-0-0
Xxxxxxx X-0
FORM OF OPINION OF GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
(i) To the knowledge of such counsel, except as disclosed in the
Offering Memorandum, there is no threatened or pending action, suit, proceeding,
inquiry or investigation, 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, before or brought by any court or governmental agency or body applying
Applicable Laws, which would result in a Material Adverse Effect, or which would
materially and adversely affect the consummation of the transactions
contemplated by the Purchase Agreement or the performance by the Company of its
obligations thereunder or under the Securities.
(ii) To the knowledge of such counsel, neither the Company nor
any of its Designated Subsidiaries is in violation of its charter or by-laws.
(iii) To the knowledge of such counsel, the execution, delivery
and performance by the Company of the Purchase Agreement, the Indenture and the
Securities and the use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use of Proceeds" and
compliance by the Company with its obligations under the Purchase Agreement, the
Indenture and the Securities do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default under, any material obligation, agreement, covenant, or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the Offering
Memorandum or incorporated by reference therein.
(iv) To the knowledge of such counsel, the execution, delivery
and performance by the Company of the Purchase Agreement, the Indenture and the
Securities and the use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use of Proceeds" and
compliance by the Company with its obligations under the Purchase Agreement, the
Indenture and the Securities will not result in any violation of any Applicable
Law of any Governmental Authority, except for such violations that would not
result in a Material Adverse Effect.
In rendering such opinions, such counsel may rely, to the extent
such counsel deems necessary, as to factual matters upon certificates or written
statements from officers or other appropriate representatives of the Company and
its subsidiaries and upon certificates of public officials. Such opinions will
be limited to the laws of the State of Texas (and, solely for purposes of the
opinion expressed in paragraph (ii), the Delaware General Corporation Law),
excluding all laws and regulations governing Medicare or any state Medicaid
program, "fraud and abuse" laws and regulations and laws and regulations
regarding illegal remuneration, payments for referrals, false claims or
physician referrals to entities with
A-2-1
which a physician has a financial or other relationship, or laws and regulations
requiring disclosure of financial interests held by physicians in entities to
which they may refer patients for the provision of health care related goods and
services (collectively, "Applicable Laws"). For the purpose of such opinions,
"Governmental Authority" shall mean any Texas executive, judicial,
administrative or regulatory body applying Applicable Law having jurisdiction
over the Company or any of its subsidiaries.
A-2-2
