EXHIBIT 1.1
$750,000,000
VENCOR, INC.
8 5/8% SENIOR SUBORDINATED NOTES DUE 2007
Purchase Agreement
July 16, 1997
X.X. Xxxxxx Securities Inc.
NationsBanc Capital Markets, Inc.
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Vencor, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the several initial purchasers listed in Schedule I hereto (the "Initial
Purchasers") $750,000,000 aggregate principal amount of its 8 5/8% Senior
Subordinated Notes due 2007 (the "Securities"). The Securities will be issued
pursuant to the provisions of an indenture to be dated as of July 21, 1997 (the
"Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum dated June 25, 1997 (the "Preliminary
Memorandum") and has prepared a final offering memorandum dated the date hereof
(the "Final Memorandum" and, with the Preliminary Memorandum, collectively, the
"Offering Memorandum"), for the information of the Initial Purchasers and for
delivery to prospective purchasers of the Securities. As used herein, the terms
"Preliminary Memorandum" and "Final Memorandum" shall include in each case the
documents incorporated by reference therein. The terms "supplement",
"amendment" and "amend" with respect to the Preliminary Memorandum and the Final
Memorandum shall be deemed to refer to and include the filing of any document
with the Securities and Exchange Commission (the "Commission") deemed to be
incorporated by reference therein.
The purchasers of the Securities and their direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement, to be dated
as of the Closing Date and to be substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company
will file one or more registration statements with the Commission registering
with the Commission the Securities or the Exchange Securities referred to (and
as defined) in such Registration Rights Agreement.
The Company hereby agrees with the Initial Purchasers as follows:
1. The Company agrees to issue and sell the Securities to the several
Initial Purchasers as hereinafter provided, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto at a price (the
"Purchase Price") equal to 97.575% of their principal amount plus accrued
interest, if any, from July 21, 1997 to the date of payment and delivery.
2. The Company understands that the Initial Purchasers intend (i) to
offer privately and pursuant to Regulation S under the Securities Act
("Regulation S") their respective portions of the Securities as soon after this
Agreement has become effective as in the judgment of the Initial Purchasers is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Offering Memorandum.
The Company confirms that it has authorized the Initial Purchasers, subject
to the restrictions set forth below, to distribute copies of the Offering
Memorandum in connection with the offering of the Securities. Each Initial
Purchaser hereby makes to the Company the following representations and
agreements:
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(i) it is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act; and
(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act ("Regulation
D") and (B) it will solicit offers for the Securities only from, and will
offer the Securities only to, persons who it reasonably believes to be (x)
in the case of offers inside the United States, "qualified institutional
buyers" within the meaning of Rule 144A under the Securities Act and (y) in
the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers", which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust) that,
in each case, in purchasing the Securities are deemed to have represented
and agreed as provided in the Offering Memorandum.
With respect to offers and sales outside the United States, as described in
clause (ii)(B)(y) above, each Initial Purchaser hereby represents and agrees
with the Company that:
(i) it understands that no action has been or will be taken by the
Company that would permit a public offering of the Securities, or
possession or distribution of the Offering Memorandum or any other offering
or publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes the Offering Memorandum or any such
other material, in all cases at its own expense;
(iii) it understands that the Securities have not been and will not
be registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (x) as part of its distribution at any time and (y) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S.
Accordingly, neither such Initial Purchaser, nor any of its Affiliates, nor
any persons acting on their behalf has engaged or will
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engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and such Initial Purchaser, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S; and
(v) it agrees that, at or prior to confirmation of sales of the
Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise prior to 40 days after the closing of the offering, except
in either case in accordance with Regulation S (or Rule 144A, if
available) under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in this Section 2 and not otherwise defined in this Agreement
have the meanings given to them by Regulation S.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company at 10:00
A.M. on July 21,1997, or at such other time on the same or such other date, not
later than the fifth Business Day thereafter, as the Initial Purchasers and the
Company may agree upon in writing. The time and date of such payment are
referred to herein as the "Closing Date". As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Payment for the Securities shall be made against delivery of the
certificates evidencing the Securities registered in such names and issued in
such denominations as the Initial Purchasers shall request no later than two
Business Days prior to the Closing Date, at the office of Xxxxx Xxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location as the
Initial Purchasers and the Company may agree, with any transfer taxes payable in
connection with the transfer to the Initial Purchasers of the Securities duly
paid by the Company. The certificates for the Securities will be made available
for inspection by the Initial Purchasers at the office of X.X. Xxxxxx Securities
Inc. at the address set forth above not later than 10:00 A.M., New York City
time, on the Business Day prior to the Closing Date.
4. The Company represents and warrants to each Initial Purchaser that:
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(a) the Preliminary Memorandum did not, as of its date, and the Final
Memorandum will not, in the form used by the Initial Purchasers to confirm
sales of the Securities and as of the Closing Date, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
existing at such dates, not misleading; provided, however, that this
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representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information relating to any
Initial Purchaser furnished to the Company in writing by such Initial
Purchaser expressly for use therein;
(b) the documents incorporated by reference in the Final Memorandum,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and any further documents so filed and
incorporated by reference in the Final Memorandum, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(c) the financial statements, and the related notes thereto, included
or incorporated by reference in the Offering Memorandum present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries and of Transitional Hospitals Corporation and its consolidated
subsidiaries as of the dates indicated and the results of their operations
and the changes in their consolidated cash flows for the periods specified;
and said financial statements have been prepared in conformity with
generally accepted accounting principles and practices applied on a
consistent basis; and the pro forma financial information, and the related
notes thereto, included or incorporated by reference in the Offering
Memorandum is based upon good faith estimates and assumptions believed by
the Company to be reasonable;
(d) since the respective dates as of which information is given in the
Preliminary Memorandum and Final Memorandum, there has not been any
material increase in the long-term debt of the Company or any of its
subsidiaries, or any material adverse change or any development involving a
prospective material adverse change, in or affecting the business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a whole
otherwise than as set forth or contemplated in the Offering Memorandum; and
except as set forth or contemplated in the Offering Memorandum, neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to
the Company and its subsidiaries taken as a whole;
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(e) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering
Memorandum, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(f) each of the Company's Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Memorandum, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock of each Significant Subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except for any directors' qualifying shares and except
as described in the Offering Memorandum) are owned by the Company, directly
or indirectly, free and clear of all liens, encumbrances, security
interests and claims. As used herein, the term "Significant Subsidiary"
means any subsidiary of the Company that, together with its subsidiaries
accounts for more than 10% of the consolidated revenues of the Company and
its consolidated subsidiaries or (ii) is the owner of more than 10% of the
consolidated assets of the Company and its consolidated subsidiaries;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding agreement of the Company;
(h) the Securities have been duly authorized, and, when executed,
authenticated and issued under the Indenture and delivered to and paid for
by the Initial Purchasers pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee, the Indenture will constitute a
valid and binding instrument of the Company; and the Securities and the
Indenture conform to the descriptions thereof in the Offering Memorandum;
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(i) the Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding instrument of, the
Company; and the Registration Rights Agreement conforms to the description
thereof in the Offering Memorandum;
(j) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under (I) its Certificate of Incorporation or By-Laws, (II) any
indenture, mortgage, deed of trust or loan agreement or (III) any other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them or any of their respective properties
is bound, except for violations and defaults which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a
whole; the issue and sale of the Securities and the execution, delivery and
performance by the Company of its obligations under the Securities, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries, under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its subsidiaries or
any of their respective properties, except for such conflicts, breaches,
defaults, liens, charges, encumbrances and violations that would not have,
or would not reasonably be expected to have, a material adverse effect on
the Company and its subsidiaries taken as a whole; and no consent,
approval, authorization, order, license, registration, qualification or
notice of or with any court or governmental agency or body is required for
the issue and sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except such consents, approvals,
authorizations, orders, licenses, registrations, qualifications or notices
as may be required under (i) state securities or Blue Sky Laws in
connection with the purchase and distribution of the Securities by the
Initial Purchasers or (ii) under the Securities Act with respect to the
registration of the Exchange Securities pursuant to the terms of the
Registration Rights Agreement;
(k) other than as set forth or contemplated in the Final Memorandum,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its subsidiaries or any of their
respective properties or to which the Company or any of its subsidiaries is
or may be a party or to which any property of the Company or any of its
subsidiaries is or may be the subject which, if determined adversely to the
Company or any of its
7
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) neither the Company, nor any affiliate (as defined in Rule 501(b)
of Regulation D) of the Company has directly, or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the offering
contemplated by the Offering Memorandum;
(m) none of the Company, any affiliate (as defined in Rule 501(b) of
Regulation D) of the Company or any person acting on behalf of any of them
has offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act or, with respect to Securities sold outside the United States to non-
U.S. persons (as defined in Rule 902 under the Securities Act) by means of
any directed selling efforts within the meaning of Rule 902 under the
Securities Act and the Company, any affiliate of the Company and any person
acting on behalf of any of them has complied with and will implement the
"offering restrictions" requirements of Regulation S;
(n) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(o) assuming the accuracy of the representations of the Initial
Purchasers contained in Section 2 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify an indenture under the Trust Indenture Act of
1939, as amended;
(p) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final 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;
8
(q) Ernst & Young LLP, who have audited certain financial statements
of the Company and its subsidiaries, are independent public accountants
with respect to the Company and its subsidiaries as required by the
Securities Act;
(r) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate
located in Cuba;
(s) the Company and its subsidiaries have filed all Federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith, except where the failure to file such returns or
to pay such taxes or assessments would not have, or would not reasonably be
expected to have, a material adverse effect on the Company and its
subsidiaries taken as a whole; and, except as disclosed in the Offering
Memorandum there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any subsidiary
which could have, or reasonably be expected to have, a material adverse
effect on the Company and its subsidiaries taken as a whole;
(t) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except where the failure
to own, possess or obtain such license, permit, certificate, consent,
order, approval or other authorization would not have, or would not
reasonably be expected to have, a material adverse effect on the Company
and its subsidiaries taken as a whole, and except as described in the
Offering Memorandum, neither the Company nor any such subsidiary has
received any notice of any proceedings relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization which revocation or modification could
have, or reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole; and each of the Company and
its subsidiaries is in compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof, except
where such noncompliance would not have, or would not reasonably be
expected to have, a material adverse effect on the Company and its
subsidiaries taken as a whole;
(u) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which could
9
have, or reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole; and
(v) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, Federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have, or would
not reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole.
5. The Company covenants and agrees with each of the several Initial
Purchasers as follows:
(a) to deliver to the Initial Purchasers as many copies of the
Preliminary Memorandum, the Final Memorandum and any documents incorporated
by reference therein (including any amendments and supplements thereto) as
the Initial Purchasers may reasonably request;
(b) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchasers a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchasers reasonably object;
(c) if, at any time prior to the completion of the initial placement
of the Securities, any event shall occur as a result of which it is
necessary to amend or supplement the Offering Memorandum in order to make
the statements therein, in the light of the circumstances when the Offering
Memorandum is delivered to a Initial Purchaser, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
law, forthwith to prepare and furnish, at the expense of the Company, to
the Initial Purchasers and to the dealers (whose names and addresses the
Initial Purchasers will furnish to the Company) to which Securities may
have been sold by the Initial Purchasers on behalf of the Initial
Purchasers and to any other dealers upon request, such amendments or
supplements to the Offering Memorandum as may be necessary so that the
statements in the Offering Memorandum as so amended or supplemented will
not, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering Memorandum
will comply with law;
10
(d) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Securities; provided
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that the Company shall not be required (i) to register or qualify as a
foreign corporation in any jurisdiction where it would not otherwise be
required to register or qualify, (ii) to file a general consent to service
of process or (iii) to subject itself to taxation in any such jurisdiction
if it is not so subject;
(e) so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of all reports or other communications (financial
or other) furnished to holders of Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange or inter-dealer quotation system;
(f) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer,
sell, contract to sell, or otherwise dispose of any debt securities of or
guaranteed by the Company which are substantially similar to the Securities
without the prior written consent of the Initial Purchasers;
(g) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(h) to cooperate with the Initial Purchasers to cause the Securities
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(i) to use its best efforts to have the Securities accepted for
settlement through DTC, Euroclear and Cedel (the Company hereby confirms
that it has authorized the Initial Purchasers to take steps necessary for
that purpose);
(j) during the period of two years after the Closing Date, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule
144 under the Securities Act) to, resell any of the Securities that have
been reacquired by any of them;
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
fees, costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Securities, including any
expenses of the Trustee, (ii) incident to the preparation, printing and
distribution of the Preliminary Memorandum and the Final Memorandum
(including in each case all
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exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Initial Purchasers may designate (including fees of counsel for the Initial
Purchasers and their disbursements), (iv) in connection with the approval
for trading of the Securities on any securities exchange or inter-dealer
quotation system (as well as in connection with the designation of the
Securities as PORTAL securities), (v) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the
Initial Purchasers and dealers of copies of the Offering Memorandum,
including mailing and shipping, as herein provided, (vi) related to any
filing with the National Association of Securities Dealers, Inc., (vii)
payable to rating agencies in connection with the rating of the Securities,
and (viii) any expenses incurred by the Company in connection with a "road
show" presentation to potential investors;
(l) the Company will not take any action prohibited by Regulation M
under the Exchange Act, in connection with the distribution of the
Securities contemplated hereby;
(m) none of the Company, any of its affiliates (as defined in Rule
501(b) of Regulation D) or any person acting on behalf of the Company or
such affiliate will solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general
advertising, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising;
(n) none of the Company, any of its affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on behalf of any
of them will engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S;
(o) none of the Company, any of its affiliates (as defined in
Regulation 501(b) of Regulation D) or any person acting on behalf of them
will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in the Securities Act) which will be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities, and the
Company will take all action that is appropriate or necessary to assure
that its offerings of other securities will not be integrated for purposes
of the Securities Act with the offerings contemplated hereby;
(p) to comply with all of the terms and conditions of the Registration
Rights Agreement; and
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(q) prior to any registration of the Securities pursuant to the
Registration Rights Agreement, or at such earlier time as may be so
required, to qualify the Indenture under the Trust Indenture Act of 1939,
as amended (the "TIA"), and to enter into any necessary supplemental
indentures in connection therewith.
6. The several obligations of the Initial Purchasers hereunder to
purchase the Securities on the Closing Date are subject to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date as if made on and as of
the Closing Date and the Company shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(b) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any downgrading, (ii) any
intended or potential downgrading or (iii) any review or possible change
that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(c) since the respective dates as of which information is given in the
Offering Memorandum, there shall not have been any material increase in the
long-term debt of the Company or any of its subsidiaries, or any material
adverse change or any development involving a prospective material adverse
change, in or affecting the business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum, the effect of which in the
judgment of the Initial Purchasers makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the Closing
Date on the terms and in the manner contemplated in the Offering
Memorandum; and neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order to decree, otherwise than as
set forth or contemplated in the Offering Memorandum;
(d) the Initial Purchasers shall have received on and as of the
Closing Date a certificate of the Chief Financial Officer or Chief
Accounting Officer of the Company to the effect set forth in subsections
(a) and (b) of this Section and to the further effect that
13
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change, in or affecting the
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole from that set forth or contemplated in the Offering Memorandum and
(ii) neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order to decree, otherwise than as set forth
or contemplated in the Offering Memorandum;
(e) Xxxx X. Force, Esq., Senior Vice President, General Counsel and
Corporate Secretary for the Company, shall have furnished to the Initial
Purchasers her written opinion, dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum;
(ii) the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(iii) each of the Company's Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Offering Memorandum, and has been duly qualified
as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require
such qualification, other than where the failure to be so qualified
and in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; and, all of the
outstanding shares of capital stock of each Significant Subsidiary
have been duly and validly authorized and issued, are fully-paid and
non-assessable, and (except for any directors' qualifying shares and
except as otherwise set forth in the Offering Memorandum) are owned
directly or
14
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iv) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or
to which any property of the Company or its subsidiaries is or may be
the subject which, if determined adversely to the Company or any of
its subsidiaries, could individually or in the aggregate have, or
reasonably be expected to have, a material adverse effect on the
business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) to the knowledge of such counsel, neither the Company nor any
of its subsidiaries is, or with the giving of notice or lapse of time
or both would be, in violation of or in default under, (I) its
Certificate of Incorporation or By-Laws, (II) any indenture, mortgage,
deed of trust or loan agreement or (III) any other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the
Company and its subsidiaries taken as a whole; to the knowledge of
such counsel, the issue and sale of the Securities and the execution,
delivery and performance by the Company of its obligations under the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries,
under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their respective properties, except for such
conflicts, breaches, defaults, liens, charges, encumbrances and
violations which individually
15
and in the aggregate are not material to the Company and its
subsidiaries taken as a whole;
(vi) the statements in the Offering Memorandum in the fourth,
fifth, tenth and eleventh paragraphs under "Offering Memorandum
Summary--The Company--Recent Developments" and under "Risk Factors--
Limits on Reimbursement", "--Extensive Regulation", "--Healthcare
Reform Legislation", "--Certain Legal Actions," "Business--
Governmental Regulation" and in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 under the caption
"Legal Proceedings", insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly present such legal matters, documents or proceedings;
(vii) such counsel (A) is of the opinion that each document filed
with the Commission pursuant to the Exchange Act and incorporated by
reference in the Final Memorandum (except for the financial statements
included therein, as to which such counsel need express no opinion)
complied as to form in all material respect, when filed with the
Commission, with the Exchange Act; and (B) has no reason to believe
that (except for the financial statements, schedules and other
statistical and financial data included or incorporated by reference
therein as to which such counsel need express no belief) the Final
Memorandum as of its date of issuance or as amended or supplemented,
if applicable, as of the Closing Date, contained or contains any
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; and
(viii) each of the Company and its subsidiaries owns, possesses or
has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all Federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, except where the failure
to own, possess or obtain any such license, permit, certificate,
consent, order, approval or other authorization would not have, or
would not reasonably be expected to have, a material adverse effect on
the Company and its subsidiaries as a whole; and, except as described
in the Offering Memorandum, neither the Company nor any such
subsidiary has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, which revocation or
modification could have, or reasonably be expected to have, a material
adverse effect on the Company and its subsidiaries taken as a whole;
and each of the Company and its subsidiaries is in compliance
16
with all laws and regulations relating to the conduct of its business
as conducted as of the date of the Offering Memorandum, except where
such noncompliance would not have, or would not reasonably be expected
to have, a material adverse effect on the Company and its subsidiaries
taken as a whole.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the States of Kentucky and Delaware
and the Federal securities laws of the United States, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to Initial Purchasers' counsel) of
other counsel, reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which she relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Initial Purchasers and she
are justified in relying thereon. With respect to the matters to be covered in
subparagraph (vii)(B) above, counsel may state that her belief is based upon her
participation in the preparation of the Offering Memorandum and any amendment or
supplement thereto but is without independent check or verification except as
specified.
The opinion of Xxxx X. Force, Esq. described above shall be rendered to the
Initial Purchasers at the request of the Company and shall so state therein.
(f) Xxxxxxxxxx Xxxx & XxXxxxxx PLLC, counsel for the Company, shall
have furnished to the Initial Purchasers their written opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Securities have been duly authorized, executed and
delivered by the Company and, when duly authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement,
will constitute valid and binding obligations of the Company entitled
to the benefits provided by the Indenture and enforceable in
accordance with their terms, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and equitable principles of general applicability;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the
17
effect of applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and equitable principles of general
applicability;
(iv) the Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding instrument of,
the Company, enforceable against the Company in accordance with its
terms, subject to the effect of applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and equitable
principles of general applicability and except as any rights to
indemnity and contribution may be limited by applicable law;
(v) no consent, approval, authorization, order, license,
registration, qualification or notice of or with any court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated
by this Agreement, the Registration Rights Agreement or the Indenture,
except such consents, approvals, authorizations, registrations,
qualifications or notices as may be required under (i) state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers or (ii) under
the Securities Act with respect to the registration of the Exchange
Securities pursuant to the terms of the Registration Rights Agreement;
(vi) based upon the representations, warranties and agreements of
the Company in subparagraphs (l), (m) and (n) of Xxxxxxx 0,
xxxxxxxxxxxxx (x), (x), (x) and (o) of Section 5 and subparagraph (a)
of Section 6 of this Agreement and of the Initial Purchasers in
Section 2 of this Agreement and on the truth and accuracy of the
representations and agreements deemed to be made by purchasers of the
Securities contained in the Final Memorandum, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers under this Agreement or in connection with the
initial resale of such Securities by the Initial Purchasers in
accordance with Section 2 of this Agreement to register the Securities
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended; provided however that such counsel
-------- -------
need not express any opinion with respect to the conditions under
which the Securities may be further resold;
(vii) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(viii) the statements in the Offering Memorandum under "Plan of
Distribution" and "Notice to Investors", insofar as such statements
constitute a summary of the legal matters or documents referred to
therein, fairly present such legal matters, documents or proceedings;
18
(ix) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Final 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;
and
(x) such counsel has no reason to believe that (except for the
financial statements, schedules and other statistical and financial
data included or incorporated by reference therein as to which such
counsel need express no belief) the Final Memorandum as of its date of
issuance or as amended or supplemented, if applicable, as of the
Closing Date, contained or contains any 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 rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the States of Kentucky and Delaware
and the Federal securities law of the United States, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to Initial Purchasers' counsel) of
other counsel, reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Initial Purchasers and they
are justified in relying thereon. With respect to the matters to be covered in
subparagraph (x) above, counsel may state that their opinion and belief is based
upon their participation in the preparation of the Offering Memorandum and any
amendment or supplement thereto but is without independent check or verification
except as specified.
The opinion of Xxxxxxxxxx Xxxx & XxXxxxxx PLLC described above shall be
rendered to the Initial Purchasers at the request of the Company and shall so
state therein.
(g) Xxxxx Xxxxxx & Xxxxx, counsel for the Company, shall have
furnished to the Initial Purchasers their written opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) the statements in the Offering Memorandum under "Description
of the Credit Agreement"and "Description of Notes", insofar as such
statements constitute a summary of the legal matters or documents
referred to therein, fairly present such legal matters or documents;
and
19
(ii) the issue and sale of the Securities and the execution,
delivery and performance by the Company of its obligations under the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the Credit
Agreement dated as of March 17, 1997, as amended as of March 31, 1997,
and as further amended as of April 22, 1997, May 30, 1997 and June 24,
1997, by and among the Company and Xxxxxx Guaranty Trust Company of
New York, as Documentation Agent and Collateral Agent, Nationsbank
N.A., as Administrative Agent, and the other banks that are parties
thereto, including any related notes, collateral documents,
instruments and agreements in connection therewith.
The opinion of Xxxxx Xxxxxx & Xxxxx described above shall be rendered to
the Initial Purchasers at the request of the Company and shall so state therein.
(h) on the date of the issuance of the Offering Memorandum and also on
the Closing Date, Ernst & Young LLP and Price Waterhouse LLP shall have
furnished to the Initial Purchasers letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in accountants
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Offering Memorandum;
(i) the Initial Purchasers shall have received on and as of the
Closing Date an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel to the Initial
Purchasers, in form and substance satisfactory to you; and
(j) on or prior to the Closing Date the Company shall have furnished
to the Initial Purchasers such further certificates and documents as you
shall reasonably request.
7. The Company agrees to indemnify and hold harmless each Initial
Purchaser, each person, if any, who controls any Initial Purchaser and each
affiliate of any Initial Purchaser which assists such Initial Purchaser in the
distribution of the Securities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any breach or alleged breach of any
of the representations and warranties contained in Section 4, breach or alleged
breach of any of the covenants contained in Section 5 or any untrue statement or
alleged untrue statement of a material fact contained in the Offering Memorandum
(and any amendment or supplement thereto if the Company shall have furnished any
amendments or supplements thereto) or the Preliminary Memorandum, or caused by
any
20
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser
expressly for use therein.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Initial Purchaser, but only with reference to
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser expressly for use in the Offering Memorandum
or any amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
reasonable fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person
shall have mutually agreed to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Initial
Purchasers, each affiliate of any Initial Purchaser which assists such Initial
Purchaser in the distribution of the Securities and such control persons of
Initial Purchasers shall be designated in writing by X.X. Xxxxxx Securities Inc.
and any such separate firm for the Company, its directors, its officers and such
control persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss
21
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (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 Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, 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
shall be deemed to be in the same respective proportions as the net proceeds
from the offering (before deducting expenses) received by the Company and the
total discounts and commissions received by the Initial Purchasers, in each case
as set forth in the table on the cover of the Offering Memorandum, bear to the
aggregate offering price of the Securities. The relative fault of the Company
on the one hand and the Initial Purchasers on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the 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 7 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 that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
22
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased by it were offered exceeds the
amount of any damages that 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 ll(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of the Securities set forth
opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser or any person controlling any Initial Purchaser or by or
on behalf of the Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of or guaranteed by the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Initial Purchasers, is material and adverse and which, in the judgment of
the Initial Purchasers, makes it impracticable to market the Securities on the
terms and in the manner contemplated in the Offering Memorandum.
9. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
23
If, on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
of the Securities to be purchased on such date, the other Initial Purchasers
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as the
Initial Purchasers may specify, to purchase the Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of Securities
--------
that any Initial Purchaser has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess of one-tenth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Initial Purchaser or the Company. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Offering Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
10. If this Agreement shall be terminated by the Initial Purchasers, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchasers' obligations cannot be
fulfilled, the Company agrees to reimburse the Initial Purchasers or such
Initial Purchasers as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
expenses of their counsel) reasonably incurred by such Initial Purchasers in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Initial Purchasers, each affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Securities, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No Initial
24
Purchaser of Securities from any Initial Purchaser shall be deemed to be a
successor by reason merely of such purchase.
12. Any action by the Initial Purchasers hereunder or under the
Registration Rights Agreement may be taken by the Initial Purchasers jointly or
by X.X. Xxxxxx Securities Inc. alone on behalf of the Initial Purchasers, and
any such action taken by the Initial Purchasers jointly or by X.X. Xxxxxx
Securities Inc. alone shall be binding upon the Initial Purchasers. 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 given to the
Initial Purchasers c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (telefax: (000) 000-0000; Attention: Syndicate Department.
Notices to the Company shall be given to it at Vencor, Inc., 0000 Xxxxxxxxx
Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (fax: 000-000-0000);
Attention: Xxxx X. Force, Esq., Senior Vice President, General Counsel and
Secretary.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
25
If the foregoing is in accordance with your understanding, please sign
below.
Very truly yours,
VENCOR, INC.
By:
---------------------------------------
Title:
Accepted: July 16, 1997
X.X. XXXXXX SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
XXXXXXX, XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: X.X. Xxxxxx Securities Inc.
By:
--------------------------------
Title:
26
SCHEDULE I
Principal Amount of
Securities To Be
Initial Purchaser Purchased
----------------- -------------------
X.X. Xxxxxx Securities Inc............................ $425,000,000
NationsBanc Capital Markets, Inc...................... 125,000,000
Xxxxxxx, Sachs & Co................................... 100,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.... 100,000,000
------------
Total:...................................... $750,000,000
============
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