RES-CARE, INC. 7-3/4% Senior Notes due 2013 Purchase Agreement
Exhibit 1
$ 150,000,000
RES-CARE, INC.
7-3/4% Senior Notes due 2013
September 23, 2005
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Res-Care, Inc., a Kentucky corporation (the “Company”), proposes to issue and sell to
the several Initial Purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), for
whom you are acting as representative (the “Representative”), $150,000,000 principal
amount of its 7-3/4% Senior Notes due 2013 (the “Securities”). The Securities will be
issued pursuant to an Indenture to be dated as of October 3, 2005 (the “Indenture”) among
the Company, the guarantors listed in Schedule 2 hereto (the “Guarantors”) and ▇▇▇▇▇ Fargo
Bank, National Association, as trustee (the “Trustee”), and will be guaranteed on an
unsecured senior basis by each of the Guarantors (the “Guarantees”).
The Securities will be sold to the Initial Purchasers without being registered under
the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an
exemption therefrom. The Company has prepared a preliminary offering memorandum dated
September 14, 2005 (the “Preliminary Offering Memorandum”) and will prepare an offering
memorandum dated the date hereof (the “Offering Memorandum”) setting forth information
concerning the Company and the Securities. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this purchase agreement (this “Agreement”).
The Company hereby confirms that it has authorized the use of the Preliminary Offering
Memorandum and the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers solely in the manner contemplated by this Agreement.
Capitalized terms used but not defined herein shall have the meanings given to such terms
in the Offering Memorandum.
Holders of the Securities (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Registration Rights Agreement,
to be dated the Closing Date (as defined below) and substantially in the form attached
hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company
and the Guarantors will agree to file one or more registration statements with the
Securities and Exchange Commission (the “Commission”) providing for the registration under
the Securities Act of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as follows:
1. Purchase and Resale of the Securities. (a) The Company agrees to issue
and sell the Securities to the several Initial Purchasers as provided in this Agreement,
and each Initial Purchaser, on the basis of the representations, warranties and agreements
set forth herein and subject to the conditions set forth herein, agrees, severally and not
jointly, to purchase from the Company the respective principal amount of Securities set
forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal to
98.276% of the principal amount thereof plus accrued interest, if any, from October 3,
2005 to the Closing Date. The Company will not be obligated to deliver any of the
Securities except upon payment for all the Securities to be purchased as provided herein.
(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act (a “QIB”) and an accredited investor within the meaning of
Rule 501(a) under the Securities Act;
(ii) neither it nor any person acting on its behalf has solicited offers for,
or offered or sold, or will solicit offers for, or offer or sell, the Securities by
means of any form of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D under the Securities Act (“Regulation D”) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act; and
(iii) neither it nor any person acting on its behalf has solicited offers for,
or offered or sold, or will solicit offers for, or offer or sell, the Securities as
part of their initial offering except:
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(A) within the United States to persons whom it reasonably believes to
be QIBs in transactions pursuant to Rule 144A under the Securities Act
(“Rule 144A”) and in connection with each such sale, it has taken or will
take reasonable steps to ensure that the purchaser of the Securities is
aware that such sale is being made in reliance on Rule 144A; or
(B) in accordance with the restrictions set forth in Annex A hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Sections 5(f) and
5(h), counsel for the Company and counsel for the Initial Purchasers, respectively, may
rely upon the accuracy of the representations and warranties of the Initial Purchasers,
and compliance by the Initial Purchasers with their agreements, contained in paragraph (b)
above (including Annex A hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may offer and
sell Securities to or through any affiliate of an Initial Purchaser and that any such
affiliate may offer and sell Securities purchased by it to or through any Initial
Purchaser.
(e) The Company and the Guarantors acknowledge and agree that each Initial Purchaser
is acting solely in the capacity of an arm’s length contractual counterparty to the
Company and the Guarantors with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the offering) and not as a
financial advisor or a fiduciary to, or an agent of, the Company, the Guarantors or any
other person. Additionally, no Initial Purchaser is advising the Company, the Guarantors
or any other person as to any legal, tax, investment, accounting or regulatory matters in
any jurisdiction. The Company and the Guarantors shall consult with their own advisors
concerning such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the Initial
Purchasers shall have no responsibility or liability to the Company or the Guarantors with
respect thereto. Any review by the Initial Purchasers of the Company, the Guarantors, the
transactions contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Initial Purchasers and shall not be on behalf of
the Company or the Guarantors.
2. Payment and Delivery. (a) Payment for and delivery of the Securities
will be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, New York, New York at 9:00
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A.M., New York City time, on October 3, 2005, or at such other time or place on the same
or such other date, not later than the fifth business day thereafter, as the
Representative and the Company may agree upon in writing. The time and date of such
payment and delivery is referred to herein as the “Closing Date”.
(b) Payment for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the Representative against
delivery to the nominee of The Depository Trust Company, for the account of the Initial
Purchasers, of one or more global notes representing the Securities (collectively, the
“Global Note”), with any transfer taxes payable in connection with the sale of the
Securities duly paid by the Company. The Global Note will be made available for
inspection by the Representative not later than 1:00 P.M., New York City time, on the
business day prior to the Closing Date.
3. Representations and Warranties of the Company and the Guarantors. The
Company and the Guarantors jointly and severally represent and warrant to each Initial
Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of its date, did
not, and the Offering Memorandum, in the form first used by the Initial Purchasers to
confirm sales of the Securities and as of the Closing Date, will not, contain any 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 the Company and the Guarantors make no representation or
warranty with respect 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 through the Representative expressly for use in the
Preliminary Offering Memorandum and the Offering Memorandum.
(b) Financial Statements. The financial statements and the related notes thereto
included in the Preliminary Offering Memorandum and the Offering Memorandum present fairly
the financial position of the Company and its subsidiaries as of the dates indicated and
the results of their operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods
covered thereby; and the other financial information included in the Preliminary Offering
Memorandum and the Offering Memorandum has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information shown thereby.
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(c) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included in the Preliminary Offering Memorandum and the Offering
Memorandum, (i) there has not been any material change in the capital stock or long-term
debt of the Company or any of its subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class of capital
stock, or any material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial position,
results of operations or prospects of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries taken as a whole or
incurred any liability or obligation, direct or contingent, that is material to the
Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained 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 disturbance or dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum.
(d) Organization and Good Standing. The Company and each of its subsidiaries have
been duly organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and are in
good standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such qualification, and
have all power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the aggregate,
have a material adverse effect on the business, properties, management, financial
position, results of operations or prospects of the Company and its subsidiaries taken as
a whole or on the performance by the Company and the Guarantors of their obligations under
the Securities and the Guarantees (a “Material Adverse Effect”). The Company does not own
or control, directly or indirectly, any corporation, association or other entity other
than the subsidiaries listed in Schedule 3 to this Agreement.
(e) Capitalization. The Company has an authorized capitalization as set forth in the
Preliminary Offering Memorandum and the Offering Memorandum under the heading
“Capitalization”; and all the outstanding shares of capital stock or other equity
interests of each subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable (except, in the case of any foreign subsidiary,
for directors’ qualifying shares) and are owned directly or indirectly by the Company,
free and clear of
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any lien, charge, encumbrance, security interest, restriction on voting or transfer or any
other claim of any third party.
(f) Due Authorization. The Company and each of the Guarantors have full right, power
and authority to execute and deliver this Agreement, the Securities, the Indenture
(including each Guarantee set forth therein), the Exchange Securities and the Registration
Rights Agreement (collectively, the “Transaction Documents”) and to perform their
respective obligations hereunder and thereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby has been duly and
validly taken.
(g) The Indenture. The Indenture has been duly authorized by the Company and each of
the Guarantors and, when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding agreement of the
Company and each of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights generally or by equitable principles relating to
enforceability, regardless of whether the issue of enforceability is considered in a
proceeding in equity or law (collectively, the “Enforceability Exceptions”); and on the
Closing Date, the Indenture will conform in all material respects to the requirements of
the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and
regulations of the Commission applicable to an indenture that is qualified thereunder.
(h) The Securities and the Guarantees. The Securities have been duly authorized by
the Company and, when duly executed, authenticated, issued and delivered as provided in
the Indenture and paid for as provided herein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the
Guarantees have been duly authorized by each of the Guarantors and, when the Securities
have been duly executed, authenticated, issued and delivered as provided in the Indenture
and paid for as provided herein, will be valid and legally binding obligations of each of
the Guarantors, enforceable against each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(i) The Exchange Securities. On the Closing Date, the Exchange Securities (including
the related guarantees) will have been duly authorized by the Company and each of the
Guarantors and, when duly executed, authenticated, issued and delivered as
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contemplated by the Registration Rights Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the Company, as
issuer, and each of the Guarantors, as guarantor, enforceable against the Company and each
of the Guarantors in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the Indenture.
(j) Purchase and Registration Rights Agreements. This Agreement has been duly
authorized, executed and delivered by the Company and each of the Guarantors; and the
Registration Rights Agreement has been duly authorized by the Company and each of the
Guarantors and, when duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding agreement of the Company
and each of the Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions, and except that
rights to indemnity and contribution thereunder may be limited by applicable law and
public policy.
(k) Descriptions of the Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in the Preliminary Offering
Memorandum and the Offering Memorandum.
(l) No Violation or Default. Neither the Company nor any of its subsidiaries is (i)
in violation of its charter or by-laws or similar organizational documents; (ii) in
default, and no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term, covenant or
condition contained in any 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; or (iii) in violation of any
law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) Disclosure Controls and Procedures. The Company has established and maintains
“disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Exchange Act”)); the Company’s “disclosure
controls and procedures” are reasonably designed to ensure (i) that information required
to be disclosed by the Company in the reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in
the rules and regulations of the Commission, and (ii) that such information is accumulated
and communicated to the Company’s management, including
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its Chief Executive Officer and interim Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.
(n) No Conflicts. The execution, delivery and performance by the Company and each of
the Guarantors of each of the Transaction Documents to which each is a party, the issuance
and sale of the Securities (including the Guarantees) and compliance by the Company and
each of the Guarantors with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict with or result in a breach
or violation 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 pursuant to, 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, (ii) result in any violation of the provisions of the charter or by-laws or
similar organizational documents of the Company or any of its subsidiaries or (iii) result
in the violation of any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization, order, registration
or qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company and each
of the Guarantors of each of the Transaction Documents to which each is a party, the
issuance and sale of the Securities (including the Guarantees) and compliance by the
Company and each of the Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, orders and registrations or qualifications (i) as may be
required under applicable state securities laws in connection with the purchase and resale
of the Securities by the Initial Purchasers, (ii) as may be required with respect to the
Exchange Securities (including the related guarantees) under the Securities Act and
applicable state securities laws as contemplated by the Registration Rights Agreement and
(iii) that would not have a Material Adverse Effect upon the ability of the Company to
consummate the offering of the Securities.
(p) Legal Proceedings. Except as described in the Preliminary Offering Memorandum
and the Offering Memorandum, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending 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 that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could reasonably be
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expected to have a Material Adverse Effect; and no such investigations, actions, suits or
proceedings are threatened or, to the best knowledge of the Company and each of the
Guarantors, contemplated by any governmental or regulatory authority or threatened by
others.
(q) Independent Accountants. KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public accountants with
respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants and its
interpretations and rulings thereunder.
(r) Title to Real and Personal Property. The Company and its subsidiaries have good
and marketable title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property that are material to the respective businesses of the
Company and its subsidiaries, in each case free and clear of all liens, encumbrances,
claims and defects and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the Company and
its subsidiaries or (ii) could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(s) Title to Intellectual Property. The Company and its subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇ registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) necessary for the conduct
of their respective businesses; and the conduct of their respective businesses will not
conflict in any material respect with any such rights of others, and the Company and its
subsidiaries have not received any notice of any claim of infringement of or conflict with
any such rights of others.
(t) Investment Company Act. Neither the Company nor any of its subsidiaries is, and
after giving effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Memorandum none of them will be, an
“investment company” or an entity “controlled” by an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, “Investment Company Act”).
(u) Taxes. The Company and its subsidiaries have paid all federal, state, local and
foreign taxes and filed all tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum, there is no tax deficiency that has been,
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or to the knowledge of the Company could reasonably be expected to be, asserted against
the Company or any of its subsidiaries or any of their respective properties or assets.
(v) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations
and filings with, the appropriate federal, state, local or foreign governmental or
regulatory authorities that are necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as described in the Preliminary
Offering Memorandum and the Offering Memorandum, except where the failure to possess or
make the same would not, individually or in the aggregate, have a Material Adverse Effect;
and except as described in the Preliminary Offering Memorandum and the Offering
Memorandum, neither the Company nor any of its subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit or authorization or
has any reason to believe that any such license, certificate, permit or authorization will
not be renewed in the ordinary course.
(w) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the best knowledge of the Company and
each of the Guarantors, is contemplated or threatened, except as would not reasonably be
expected to have a Material Adverse Effect.
(x) Compliance With Environmental Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) have not received notice of any actual
or potential liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except in any such
case for any such failure to comply with, or failure to receive required permits, licenses
or approvals, or liability, as would not, individually or in the aggregate, have a
Material Adverse Effect.
(y) Compliance With ERISA. Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and its affiliates has been maintained in
compliance with its terms and the requirements of any applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended (the “Code”); no prohibited transaction,
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within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
(z) Accounting Controls. The Company and its subsidiaries maintain systems of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(aa) Insurance. The Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts and insures against such losses and
risks as are adequate to protect the Company and its subsidiaries and their respective
businesses; and neither the Company nor any of its subsidiaries has (i) received notice
from any insurer or agent of such insurer that capital improvements or other expenditures
are required or necessary to be made in order to continue such insurance or (ii) any
reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business.
(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to
the best knowledge of the Company and each of the Guarantors, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or any
of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(cc) Solvency. On and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Securities and the other transactions related thereto as
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described in the Offering Memorandum) will be Solvent. As used in this
paragraph, the term “Solvent” means, with respect to a particular date, that on such date
(i) the present fair market value (or present fair saleable value) of the assets of the
Company is not less than the total amount required to pay the liabilities of the Company
on its total existing debts and liabilities (including contingent liabilities) as they
become absolute and matured; (ii) the Company is able to realize upon its assets and pay
its debts and other liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business; (iii) assuming consummation of the issuance
of the Securities as contemplated by this Agreement and the Offering Memorandum, the
Company is not incurring debts or liabilities beyond its ability to pay as such debts and
liabilities mature; (iv) the Company is not engaged in any business or transaction, and
does not propose to engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which the Company is engaged; and (v) the Company is not a
defendant in any civil action that would result in a judgment that the Company is or would
become unable to satisfy.
(dd) No Restrictions on Subsidiaries. No subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other instrument to which it is
a party or is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company any loans or
advances to such subsidiary from the Company or from transferring any of such subsidiary’s
properties or assets to the Company or any other subsidiary of the Company.
(ee) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against any of them or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in connection with the offering and
sale of the Securities.
(ff) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the
same class as securities listed on a national securities exchange registered under Section
6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of
the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective
date, contains or will contain all the information that, if requested by a prospective
purchaser of the Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(gg) No Integration. Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) 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
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the Securities Act), that is or will be integrated with the sale of the Securities in a
manner that would require registration of the Securities under the Securities Act.
(hh) No General Solicitation or Directed Selling Efforts. None of the Company or any
of its affiliates or any other person acting on its or their behalf (other than the
Initial Purchasers, as to which no representation is made) has (i) solicited offers for,
or offered or sold, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act or (ii) engaged
in any directed selling efforts within the meaning of Regulation S under the Securities
Act (“Regulation S”), and all such persons have complied with the offering restrictions
requirement of Regulation S.
(ii) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) (including Annex A hereto)
and their compliance with their agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, to register the Securities
under the Securities Act or to qualify the Indenture under the Trust Indenture Act.
(jj) No Stabilization. Neither the Company nor any of the Guarantors has taken,
directly or indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the Securities.
(kk) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Offering Memorandum
will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System
or any other regulation of such Board of Governors.
(ll) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum and the Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
(mm) Statistical and Market Data. Nothing has come to the attention of the Company
that has caused the Company to believe that the statistical and market-related data
included in the Preliminary Offering Memorandum and the Offering Memorandum is not based
on or derived from sources that are reliable and accurate in all material respects.
13
(nn) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company and, to the best knowledge of the Company, the
Company’s directors and officers, in their capacities as such, are in compliance with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith.
4. Further Agreements of the Company and the Guarantors. The Company and
each of the Guarantors jointly and severally covenant and agree with each Initial
Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial Purchasers as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum (including all
amendments and supplements thereto) as the Representative may reasonably request.
(b) Offering Memorandum, Amendments or Supplements. Before finalizing the Offering
Memorandum or making or distributing any amendment or supplement to the Preliminary
Offering Memorandum or the Offering Memorandum, the Company will furnish to the
Representative and counsel for the Initial Purchasers a copy of the proposed Offering
Memorandum, amendment or supplement for review, and will not distribute any such proposed
Offering Memorandum, amendment or supplement to which the Representative reasonably
objects.
(c) Notice to the Representative. The Company will advise the Representative
promptly, and confirm such advice in writing, (i) of the issuance by any governmental or
regulatory authority of any order preventing or suspending the use of the Preliminary
Offering Memorandum or the Offering Memorandum or the initiation or threatening of any
proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the
completion of the initial offering of the Securities as a result of which the Offering
Memorandum as then amended or supplemented would include any 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 when the Offering Memorandum is
delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any
notice with respect to any suspension of the qualification of the Securities for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the issuance of
any such order preventing or suspending the use of the Preliminary Offering Memorandum or
the Offering Memorandum or suspending any such qualification of the Securities and, if any
such order is issued, will obtain as soon as possible the withdrawal thereof.
14
(d) Ongoing Compliance of the Offering Memorandum. If at any time prior to the
completion of the initial offering of the Securities (i) any event shall occur or
condition shall exist as a result of which the Offering Memorandum as then amended or
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances existing when the Offering Memorandum is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to
comply with law, the Company will immediately notify the Initial Purchasers thereof and
forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers
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 existing when the Offering Memorandum is delivered to a purchaser, be
misleading or so that the Offering Memorandum will comply with law.
(e) Blue Sky Compliance. The Company will qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Representative shall
reasonably request and will continue such qualifications in effect so long as required for
the offering and resale of the Securities; provided that neither the Company nor
any of the Guarantors shall be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not otherwise
be required to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(f) Clear Market. During the period from the date hereof through and including the
date that is 180 days after the date hereof, the Company and each of the Guarantors will
not, without the prior written consent of the Representative, offer, sell, contract to
sell or otherwise dispose of any debt securities issued or guaranteed by the Company or
any of the Guarantors and having a tenor of more than one year.
(g) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Securities as described in the Offering Memorandum under the heading “Use of Proceeds”.
(h) Supplying Information. While the Securities remain outstanding and are
“restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Company and each of the Guarantors will, during any period in which the Company is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to
holders of the Securities and prospective purchasers of the Securities designated by such
holders, upon the request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
15
(i) PORTAL and DTC. The Company will assist the Initial Purchasers in arranging for
the Securities to be designated Private Offerings, Resales and Trading through Automated
Linkages (“PORTAL”) Market 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 and for the Securities to be eligible for clearance and settlement
through The Depository Trust Company (“DTC”).
(j) No Resales by the Company. Until the issuance of the Exchange Securities, 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 acquired by any of
them, except for Securities purchased by the Company or any of its affiliates and resold
in a transaction registered under the Securities Act.
(k) No Integration. Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale,
solicit offers to buy or otherwise negotiate in respect of, any security (as defined in
the Securities Act), that is or will be integrated with the sale of the Securities in a
manner that would require registration of the Securities under the Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None of the Company or any
of its affiliates or any other person acting on its or their behalf (other than the
Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in
any directed selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.
(m) No Stabilization. Neither the Company nor any of the Guarantors will take,
directly or indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the Securities.
5. Conditions of Initial Purchasers’ Obligations. The obligation of each
Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject
to the performance by the Company and each of the Guarantors of their respective covenants
and other obligations hereunder and to the following additional conditions:
(a) Representations and Warranties. The representations and warranties of the
Company and the Guarantors contained herein shall be true and correct on the date hereof
and on and as of the Closing Date; and the statements of the Company, the
16
Guarantors and their respective officers made in any certificates delivered pursuant to
this Agreement shall be true and correct on and as of the Closing Date.
(b) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded the Securities or any other debt
securities or preferred stock issued or guaranteed by the Company or any of the Guarantors
by any “nationally recognized statistical rating organization”, as such term is defined by
the Commission for purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such
organization shall have publicly announced that it has under surveillance or review, or
has changed its outlook with respect to, its rating of the Securities or of any other debt
securities or preferred stock issued or guaranteed by the Company or any of the Guarantors
(other than an announcement with positive implications of a possible upgrading).
(c) No Material Adverse Change. Subsequent to the execution and delivery of this
Agreement, no event or condition of a type described in Section 3(c) hereof shall have
occurred or shall exist, which event or condition is not described in the Offering
Memorandum (excluding any amendment or supplement thereto) and the effect of which in the
judgment of the Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner contemplated
by this Agreement and the Offering Memorandum.
(d) Officer’s Certificate. The Representative shall have received on and as of the
Closing Date a certificate of an executive officer of the Company and of each Guarantor
who has specific knowledge of the Company’s or such Guarantor’s financial matters and is
satisfactory to the Representative (i) confirming that such officer has carefully reviewed
the Offering Memorandum and, to the best knowledge of such officer, the representation set
forth in Section 3(a) hereof is true and correct, (ii) confirming that the other
representations and warranties of the Company and the Guarantors in this Agreement are
true and correct and that the Company and the Guarantors have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied hereunder at or
prior to the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c)
above.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date, KPMG LLP
shall have furnished to the Representative, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Initial Purchasers, in form
and substance reasonably satisfactory to the Representative, 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 Preliminary Offering Memorandum and the
17
Offering Memorandum; provided that the letter delivered on the Closing Date shall
use a “cut-off” date no more than two business days prior to the Closing Date.
(f) Opinion of Counsel for the Company. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC, counsel for the
Company, shall have furnished to the Representative, at the request of the Company, their
written opinion, dated the Closing Date and addressed to the Initial Purchasers, in form
and substance reasonably satisfactory to the Representative, to the effect set forth in
Annex B hereto.
(g) Opinion of Counsel for the Company Pertaining to Regulatory Matters. The
Representative shall have received on and as of the Closing Date an opinion of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, general counsel for the Company, with respect to regulatory matters as the
Representative may reasonably request.
(h) Opinions of Counsel for the Initial Purchasers. The Representative shall have
received on and as of the Closing Date an opinion or opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such documents
and information as they may reasonably request to enable them to pass upon such matters.
The Representative shall have received on and as of the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Green, P.C., special regulatory counsel for the Initial Purchasers, with respect
to such matters as the Representative may reasonably request, and such counsel shall have
received such documents and information as they may reasonably request to enable them to
pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by any
federal, state or foreign governmental or regulatory authority that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of the
Guarantees; and no injunction or order of any federal, state or foreign court shall have
been issued that would, as of the Closing Date, prevent the issuance or sale of the
Securities or the issuance of the Guarantees.
(j) Good Standing. The Representative shall have received on and as of the Closing
Date satisfactory evidence of the good standing of the Company and its subsidiaries in
their respective jurisdictions of organization and their good standing in such other
jurisdictions as the Representative may reasonably request, in each case in writing or any
standard form of telecommunication, from the appropriate governmental authorities of such
jurisdictions.
18
(k) Registration Rights Agreement. The Initial Purchasers shall have received a
counterpart of the Registration Rights Agreement that shall have been executed and
delivered by a duly authorized officer of the Company and each of the Guarantors.
(l) PORTAL and DTC. The Securities shall have been approved by the NASD for trading
in the PORTAL Market and shall be eligible for clearance and settlement through DTC.
(m) Additional Documents. On or prior to the Closing Date, the Company and the
Guarantors shall have furnished to the Representative such further certificates and
documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are
in form and substance reasonably satisfactory to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each Initial
Purchaser, its affiliates, directors and officers and each person, if any, who controls
such Initial Purchaser within the meaning of 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, legal fees and other expenses reasonably
incurred in connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are based upon,
any untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement
thereto) or any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading, except insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information
relating to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representative expressly for use therein.
(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of the Guarantors, each of their
respective directors and officers and each person, if any, who controls the Company or any
of the Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but
only with respect to any losses, claims, damages or liabilities
19
that arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information
relating to such Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representative expressly for use in the Preliminary Offering
Memorandum and the Offering Memorandum (or any amendment or supplement thereto), it being
understood and agreed that the only such information consists of the following: the third
paragraph regarding the offering of the notes, the fifth and sixth sentences of the
thirteenth paragraph regarding market making and the fifteenth paragraph regarding
overallotment, stabilization and syndicate covering under the heading “Plan of
Distribution.”
(c) Notice and Procedures. 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 indemnification may be sought pursuant to either
paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying Person”) in
writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under such subsection except to the extent
that it has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under such subsection. If any such proceeding shall
be brought or asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others
entitled to indemnification pursuant to this Section 6 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel related
to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the 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; (iii) the Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) 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 and agreed 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
20
are incurred. Any such separate firm for any Initial Purchaser, its affiliates, directors
and officers and any control persons of such Initial Purchaser shall be designated in
writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc. and any such separate firm for the Company, the
Guarantors and any control persons of the Company and the Guarantors 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 each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days after receipt
by the Indemnifying Person of such request and (ii) the 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 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 indemnification
could have been sought hereunder by such Indemnified Person, unless such settlement (x)
includes an unconditional release of such Indemnified Person, in form and substance
reasonably satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b)
above 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 and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities 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) but
also the relative fault of the Company and the Guarantors 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 and the Guarantors 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 (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
21
received by the Initial Purchasers in connection therewith, as provided in this Agreement,
bear to the aggregate offering price of the Securities. The relative fault of the Company
and the Guarantors 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 any Guarantor or by the Initial
Purchasers and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this Section 6
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 paragraph (d) above.
The amount paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall an Initial Purchaser
be required to contribute any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser with respect to the offering of the
Securities 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 11(f) of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations
to contribute pursuant to this Section 6 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies that may otherwise be available to
any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute discretion
of the Representative, by notice 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 the New York Stock Exchange or the over-the-counter
market; (ii) trading of any securities issued or guaranteed by the Company or any of the
Guarantors shall have been suspended on any exchange or in any over-the-counter market;
(iii) a general moratorium on commercial banking activities shall have been declared by
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
22
calamity or crisis, either within or outside the United States, that, in the judgment of
the Representative, is material and adverse and makes it impracticable or inadvisable to
proceed with the offering, sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial
Purchaser defaults on its obligation to purchase the Securities that it has agreed to
purchase hereunder, the non-defaulting Initial Purchasers may in their discretion arrange
for the purchase of such Securities by other persons satisfactory to the Company on the
terms contained in this Agreement. If, within 36 hours after any such default by any
Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase
of such Securities, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting Initial
Purchasers to purchase such Securities on such terms. If other persons become obligated
or agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date for up to
five full business days in order to effect any changes that in the opinion of counsel for
the Company or counsel for the Initial Purchasers may be necessary in the Offering
Memorandum or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Offering Memorandum that effects any such
changes. As used in this Agreement, the term “Initial Purchaser” includes, for all
purposes of this Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 8, purchases Securities that a defaulting
Initial Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Securities of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate principal
amount of such Securities that remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have the right to
require each non-defaulting Initial Purchaser to purchase the principal amount of
Securities that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser’s pro rata share (based on the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not
been made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate principal
amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the right
described in paragraph (b) above, then this Agreement shall terminate without liability
23
on the part of the non-defaulting Initial Purchasers. Any termination of this Agreement
pursuant to this Section 8 shall be without liability on the part of the Company or the
Guarantors, except that the Company and each of the Guarantors will continue to be liable
for the payment of expenses as set forth in Section 9 hereof and except that the
provisions of Section 6 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Guarantors or any non-defaulting Initial
Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company and each of
the Guarantors jointly and severally agree to pay or cause to be paid all costs and
expenses incident to the performance of their respective obligations hereunder, including
without limitation, (i) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any taxes payable in that connection; (ii)
the costs incident to the preparation and printing of the Preliminary Offering Memorandum
and the Offering Memorandum (including any amendment or supplement thereto) and the
distribution thereof; (iii) the costs of reproducing and distributing each of the
Transaction Documents; (iv) the fees and expenses of the Company’s and the Guarantors’
counsel and independent accountants; (v) the fees and expenses 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 Representative may designate and
the preparation, printing and distribution of a Blue Sky Memorandum (including the related
fees and expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee and any
paying agent (including related fees and expenses of any counsel to such parties); (viii)
all expenses and application fees incurred in connection with the application for the
inclusion of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (ix) all expenses incurred by the Company in connection
with any “road show” presentation to potential investors; provided that the Initial
Purchasers will pay 50% of the aircraft expenses incurred in connection with such road
show.
(b) If (i) this Agreement is terminated pursuant to Section 7, (ii) the Company for
any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii)
the Initial Purchasers decline to purchase the Securities for any reason permitted under
this Agreement, the Company and each of the Guarantors jointly and severally agrees to
reimburse the Initial Purchasers for all out-of-pocket costs and expenses (including the
fees and expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.
24
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective successors and
any controlling persons referred to herein, and the affiliates, officers and directors of
each Initial Purchaser referred to in Section 6 hereof. Nothing in this Agreement is
intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein.
No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor
merely by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company, the
Guarantors or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination of this Agreement or
any investigation made by or on behalf of the Company, the Guarantors or the Initial
Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405
under the Securities Act; (b) 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; (c) the term
“Exchange Act” means the Securities Exchange Act of 1934, as amended; and (d) the term
“subsidiary” has the meaning set forth in Rule 405 under the Securities Act.
13. Miscellaneous. (a) Authority of the Representative. Any action by the
Initial Purchasers hereunder may be taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the
Initial Purchasers, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall be
binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication. Notices to the Initial Purchasers shall be given to
the Representative c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇ Tulip. Notices to the Company and the
Guarantors shall be given to them at Res-Care, Inc., ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(c) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
25
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be
an original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
26
If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.
| Very truly yours, | ||||
| RES-CARE, INC. | ||||
| By | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||||
| Vice President and Interim Chief | ||||
| Financial Officer |
||||
| By | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||||
| On behalf of the GUARANTORS listed in Schedule 2 hereto | ||||
27
Accepted: September 23, 2005
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
several Initial Purchasers listed
in Schedule 1 hereto.
By
|
/s/ ▇▇▇▇▇▇ Tulip |
|||
| Authorized Signatory | ||||
| ▇▇▇▇▇▇▇, SACHS & CO. | ||||
| /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. | ||||
28
Schedule 1
| Initial Purchasers | Principal Amount | |||
▇.▇. ▇▇▇▇▇▇ Securities Inc. |
$ | 54,822,335 | ||
▇▇▇▇▇▇▇, Sachs & Co. |
54,822,335 | |||
▇▇▇▇▇▇▇▇▇ & Company, Inc. |
22,842,640 | |||
Avondale Partners, LLC |
6,091,371 | |||
NatCity Investments, Inc. |
4,568,528 | |||
First Analysis Securities Corporation |
4,187,817 | |||
SunTrust Capital Markets, Inc. |
2,664,975 | |||
Total |
$ | 150,000,000 | ||
29
Schedule 2
Guarantors
| NAME | STATE OF INCORPORATION/FORMATION | |
The Academy for Individual Excellence, Inc.
|
Delaware | |
Alternative ▇▇▇▇▇▇▇, ▇▇▇.
|
California | |
Alternative Youth Services, Inc.
|
Delaware | |
Arbor E&T, LLC
|
Kentucky | |
Bald Eagle Enterprises, Inc.
|
Missouri | |
Capital TX Investments, Inc.
|
Delaware | |
CATX Properties, Inc.
|
Delaware | |
CNC/Access, Inc.
|
Rhode Island | |
Community Advantage, Inc.
|
Delaware | |
Community Alternatives Illinois, Inc.
|
Delaware | |
Community Alternatives Kentucky, Inc.
|
Delaware | |
Community Alternatives Missouri, Inc.
|
Missouri | |
Community Alternatives Nebraska, Inc.
|
Delaware | |
Community Alternatives Texas Partner, Inc.
|
Delaware | |
Community Alternatives Virginia, Inc.
|
Delaware | |
Creative Networks, LLC
|
Arizona | |
EduCare Community Living – Texas Living Centers, Inc.
|
Texas | |
General Health Corporation d/b/a Arizona Youth Associates |
Arizona | |
Habilitation Opportunities of Ohio, Inc.
|
Ohio | |
Health Services Personnel, Inc.
|
North Carolina | |
J. & J. Care Centers, Inc.
|
California | |
New Summit School Corporation
|
Delaware | |
Normal Life, Inc.
|
Kentucky | |
PeopleServe, Inc.
|
Delaware | |
RAISE Geauga, Inc.
|
Ohio | |
Res-Care Alabama, Inc.
|
Delaware | |
Res-Care California, Inc. d/b/a RCCA Services |
Delaware | |
ResCare DTS International, LLC
|
Delaware | |
Res-Care Illinois, Inc.
|
Delaware | |
ResCare International, Inc.
|
Delaware | |
Res-Care Kansas, Inc.
|
Delaware | |
Res-Care New Jersey, Inc.
|
Delaware | |
Res-Care New Mexico, Inc.
|
Delaware | |
Res-Care Ohio, Inc.
|
Delaware | |
Res-Care Oklahoma, Inc.
|
Delaware | |
Res-Care Other Options, Inc.
|
Delaware | |
Res-Care Premier, Inc.
|
Delaware | |
Res-Care Training Technologies, Inc.
|
Delaware | |
Res-Care Washington, Inc.
|
Delaware | |
Rockcreek, Inc.
|
California | |
RSCR California, Inc.
|
Delaware | |
RSCR Inland, Inc.
|
California | |
RSCR West Virginia
|
Delaware | |
Southern Home Care Services, Inc.
|
Georgia | |
Tangram Rehabilitation Network, Inc.
|
Texas |
| NAME | STATE OF INCORPORATION/FORMATION | |
Texas Home Management, Inc.
|
Delaware | |
THM Homes, Inc.
|
Delaware | |
Youthtrack, Inc.
|
Delaware | |
EduCare Community Living Limited Partnership
|
Kentucky | |
Normal Life of Indiana
|
Indiana | |
▇▇▇▇▇▇▇▇ Group Homes, Inc.
|
Missouri | |
▇▇▇▇▇ Management, Inc.
|
Missouri | |
Bolivar Developmental Training Center, Inc.
|
Missouri | |
Bolivar Estates, Inc.
|
Missouri | |
Ebenezer Estates, Inc.
|
Missouri | |
Fort ▇▇▇▇▇ Estates, Inc.
|
Missouri | |
Hillside Estates, Inc.
|
Missouri | |
Hydesburg Estates, Inc.
|
Missouri | |
Individualized Supported Living, Inc.
|
Missouri | |
Meadow Lane Estates
|
Missouri | |
Missouri Progressive Services, Inc.
|
Missouri | |
Oak Wood Suites of Bolivar, Inc.
|
Missouri | |
Oakview Estates of Bolivar, Inc.
|
Missouri | |
Pebble Creek Estates
|
Missouri | |
River Bluff Estates, Inc.
|
Missouri | |
Sha Ree Estates, Inc.
|
Missouri | |
Upward Bound, Inc.
|
Missouri | |
Willard Estates, Inc.
|
Missouri | |
Careers in Progress, Inc.
|
Louisiana | |
EduCare Community Living – Normal Life, Inc.
|
Texas | |
Normal Life of California, Inc.
|
California | |
Normal Life of Central Indiana, Inc.
|
Indiana | |
Normal Life Family Services, Inc.
|
Louisiana | |
Normal Life of Georgia, Inc.
|
Georgia | |
Normal Life of Lafayette, Inc.
|
Louisiana | |
Normal Life of Lake ▇▇▇▇▇▇▇, Inc.
|
Louisiana | |
Normal Life of Louisiana, Inc.
|
Louisiana | |
Normal Life of Southern Indiana, Inc.
|
Indiana | |
Res-Care Florida, Inc.
|
Florida | |
EduCare Community Living Corporation-America
|
Delaware | |
PSI Holdings, Inc.
|
Ohio | |
VOCA Corporation of America
|
Oho | |
VOCA Residential Services, Inc.
|
Ohio | |
B.W.J. Opportunity Centers, Inc.
|
Texas | |
The Citadel Group, Inc.
|
Texas | |
EduCare Community Living Corporation – Gulf Coast
|
Texas | |
EduCare Community Living Corporation – Missouri
|
Missouri | |
EduCare Community Living Corporation – Nevada
|
Nevada | |
EduCare Community Living Corporation – New Mexico
|
New Mexico | |
EduCare Community Living Corporation – North Carolina
|
North Carolina | |
EduCare Community Living Corporation – Texas
|
Texas | |
Community Alternatives of Washington, D.C., Inc.
|
District of Columbia |
31
| NAME | STATE OF INCORPORATION/FORMATION | |
VOCA Corp.
|
Ohio | |
VOCA Corporation of Florida
|
Florida | |
VOCA Corporation of Indiana
|
Indiana | |
VOCA of Indiana, LLC
|
Indiana | |
VOCA Corporation of Maryland
|
Maryland | |
VOCA Corporation of New Jersey
|
New Jersey | |
VOCA Corporation of North Carolina
|
North Carolina | |
VOCA Corporation of Ohio
|
Ohio | |
VOCA Corporation of West Virginia, Inc.
|
West Virginia | |
Employ-Ability Unlimited, Inc.
|
Ohio |
32
Schedule 3
Subsidiaries
| NAME | STATE OF INCORPORATION/FORMATION | |
The Academy for Individual Excellence, Inc.
|
Delaware | |
Alternative ▇▇▇▇▇▇▇, ▇▇▇.
|
California | |
Alternative Youth Services, Inc.
|
Delaware | |
Arbor E&T, LLC
|
Kentucky | |
Bald Eagle Enterprises, Inc.
|
Missouri | |
Capital TX Investments, Inc.
|
Delaware | |
CATX Properties, Inc.
|
Delaware | |
CNC/Access, Inc.
|
Rhode Island | |
Community Advantage, Inc.
|
Delaware | |
Community Alternatives Illinois, Inc.
|
Delaware | |
Community Alternatives Kentucky, Inc.
|
Delaware | |
Community Alternatives Missouri, Inc.
|
Missouri | |
Community Alternatives Nebraska, Inc.
|
Delaware | |
Community Alternatives Texas Partner, Inc.
|
Delaware | |
Community Alternatives Virginia, Inc.
|
Delaware | |
Creative Networks, LLC
|
Arizona | |
EduCare Community Living – Texas Living Centers, Inc.
|
Texas | |
General Health Corporation d/b/a Arizona Youth Associates |
Arizona | |
Habilitation Opportunities of Ohio, Inc.
|
Ohio | |
Health Services Personnel, Inc.
|
North Carolina | |
J. & J. Care Centers, Inc.
|
California | |
Middle East Training LLC
|
Jordan | |
New Summit School Corporation
|
Delaware | |
Normal Life, Inc.
|
Kentucky | |
PeopleServe, Inc.
|
Delaware | |
RAISE Geauga, Inc.
|
Ohio | |
Res-Care Alabama, Inc.
|
Delaware | |
Res-Care California, Inc. d/b/a RCCA Services |
Delaware | |
ResCare DTS International, LLC
|
Delaware | |
Res-Care Illinois, Inc.
|
Delaware | |
ResCare International, Inc.
|
Delaware | |
Res-Care Kansas, Inc.
|
Delaware | |
Res-Care New Jersey, Inc.
|
Delaware | |
Res-Care New Mexico, Inc.
|
Delaware | |
Res-Care Ohio, Inc.
|
Delaware | |
Res-Care Oklahoma, Inc.
|
Delaware | |
Res-Care Other Options, Inc.
|
Delaware | |
Res-Care Premier, Inc.
|
Delaware | |
Res-Care Premier Canada, Inc.
|
Province of Ontario | |
Res-Care Training Technologies, Inc.
|
Delaware | |
Res-Care Washington, Inc.
|
Delaware | |
Rockcreek, Inc.
|
California | |
RSCR California, Inc.
|
Delaware | |
RSCR Inland, Inc.
|
California | |
RSCR West Virginia
|
Delaware |
33
| NAME | STATE OF INCORPORATION/FORMATION | |
Southern Home Care Services, Inc.
|
Georgia | |
Tangram Rehabilitation Network, Inc.
|
Texas | |
Texas Home Management, Inc.
|
Delaware | |
THM Homes, Inc.
|
Delaware | |
Youthtrack, Inc.
|
Delaware | |
EduCare Community Living Limited Partnership
|
Kentucky | |
Normal Life of Indiana
|
Indiana | |
▇▇▇▇▇▇▇▇ Group Homes, Inc.
|
Missouri | |
▇▇▇▇▇ Management, Inc.
|
Missouri | |
Bolivar Developmental Training Center, Inc.
|
Missouri | |
Bolivar Estates, Inc.
|
Missouri | |
Ebenezer Estates, Inc.
|
Missouri | |
Fort ▇▇▇▇▇ Estates, Inc.
|
Missouri | |
Hillside Estates, Inc.
|
Missouri | |
Hydesburg Estates, Inc.
|
Missouri | |
Individualized Supported Living, Inc.
|
Missouri | |
Meadow Lane Estates
|
Missouri | |
Missouri Progressive Services, Inc.
|
Missouri | |
Oak Wood Suites of Bolivar, Inc.
|
Missouri | |
Oakview Estates of Bolivar, Inc.
|
Missouri | |
Pebble Creek Estates
|
Missouri | |
River Bluff Estates, Inc.
|
Missouri | |
Sha-Ree Estates, Inc.
|
Missouri | |
Upward Bound, Inc.
|
Missouri | |
Willard Estates, Inc.
|
Missouri | |
Careers in Progress, Inc.
|
Louisiana | |
EduCare Community Living – Normal Life, Inc.
|
Texas | |
Normal Life of California, Inc.
|
California | |
Normal Life of Central Indiana, Inc.
|
Indiana | |
Normal Life Family Services, Inc.
|
Louisiana | |
Normal Life of Georgia, Inc.
|
Georgia | |
Normal Life of Lafayette, Inc.
|
Louisiana | |
Normal Life of Lake ▇▇▇▇▇▇▇, Inc.
|
Louisiana | |
Normal Life of Louisiana, Inc.
|
Louisiana | |
Normal Life of Southern Indiana, Inc.
|
Indiana | |
Res-Care Florida, Inc.
|
Florida | |
EduCare Community Living Corporation America
|
Delaware | |
PSI Holdings, Inc.
|
Ohio | |
VOCA Corporation of America
|
Oho | |
VOCA Residential Services, Inc.
|
Ohio | |
B.W.J. Opportunity Centers, Inc.
|
Texas | |
The Citadel Group, Inc.
|
Texas | |
EduCare Community Living Corporation – Gulf Coast
|
Texas | |
EduCare Community Living Corporation – Missouri
|
Missouri | |
EduCare Community Living Corporation – Nevada
|
Nevada | |
EduCare Community Living Corporation – New Mexico
|
New Mexico | |
EduCare Community Living Corporation – North Carolina
|
North Carolina |
34
| NAME | STATE OF INCORPORATION/FORMATION | |
EduCare Community Living Corporation – Texas
|
Texas | |
Community Alternatives of Washington, D.C., Inc.
|
District of Columbia | |
VOCA Corp.
|
Ohio | |
VOCA Corporation of Florida
|
Florida | |
VOCA Corporation of Indiana
|
Indiana | |
VOCA of Indiana, LLC
|
Indiana | |
VOCA Corporation of Maryland
|
Maryland | |
VOCA Corporation of New Jersey
|
New Jersey | |
VOCA Corporation of North Carolina
|
North Carolina | |
VOCA Corporation of Ohio
|
Ohio | |
VOCA Corporation of West Virginia, Inc.
|
West Virginia | |
Employ-Ability Unlimited, Inc.
|
Ohio |
35
ANNEX A
Restrictions on Offers and Sales Outside the United States
In connection with offers and sales of Securities outside the United States:
(a) Each Initial Purchaser acknowledges that the Securities have not been 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 pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
(i) Such Initial Purchaser has offered and sold the Securities, and will offer
and sell the Securities, (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, only in accordance with Regulation S under the
Securities Act (“Regulation S”) or Rule 144A or any other available exemption from
registration under the Securities Act.
(ii) None of such Initial Purchaser or any of its affiliates or any other
person acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and all such persons have complied
and will comply with the offering restrictions requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, such Initial Purchaser will have sent to each
distributor, dealer or other person receiving a selling concession, fee or other
remuneration that purchase Securities from it during the distribution compliance
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, as amended (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 (i) as part of their distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering of the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule 144A or any other
available exemption from registration under the Securities Act. Terms used
above have the meanings given to them by Regulation S.”
36
(iv) Such Initial Purchaser has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company.
Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in this
Agreement have the meanings given to them by Regulation S.
(c) In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), each Initial
Purchaser represents and agrees that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State (the “Relevant
Implementation Date”) it has not made and will not make an offer of Securities to the
public in that Relevant Member State prior to the publication of a prospectus in relation
to the Securities which has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member State and notified
to the competent authority in that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of Securities to the public in that Relevant Member
State at any time:
• to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose
corporate purpose is solely to invest in securities;
• to any legal entity which has two or more of (1) an average of at
least 250 employees during the last financial year; (2) a total
balance sheet of more
than €43,000,000 and (3) an annual net
turnover of more than €50,000,000, as shown in its last annual or
consolidated accounts; or
• in any other circumstances which do not require the publication by the
Company of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For the purposes of this provision, the expression an “offer of Securities to the public”
in relation to any Securities in any Relevant Member State means the communication in any
form and by any means of sufficient information on the terms of the offer and the
Securities to be offered so as to enable an investor to decide to purchase or subscribe
the Securities, as the same may be varied in that Member State by any measure implementing
the Prospectus Directive in that Member State and the expression “Prospectus Directive”
means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant
Member State.
(d) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
(i) it is a person whose ordinary activities involve it in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
its businesses and it has not offered or sold and will not offer or sell the
Securities other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or who it is reasonable to expect will
acquire, hold, manage or dispose of investments (as principal or agent) for the
purposes of their businesses where the issue of the Securities would otherwise
constitute a contravention of Section 19 of the United Kingdom Financial Services
and Markets Act 2000 (the ‘‘FSMA’’) by the Company;
(ii) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the FSMA) received by it
in connection with the issue or sale of any Securities in circumstances in which
Section 21(1) of the FSMA does not apply to the Company or the Guarantors; and
(iii) it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.
(e) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
• The Securities may not be offered or sold by means of any document other than to
persons whose ordinary business is to buy or sell shares or debentures, whether as
principal or agent, or in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no
advertisement, invitation or document relating to the Securities may be issued,
whether in Hong Kong or elsewhere, which is directed at, or the contents of which
are likely to be accessed or read by, the public in Hong Kong (except if permitted
to do so under the securities laws of Hong Kong) other than with respect to
Securities which are or are intended to be disposed of only to persons outside Hong
Kong or only to “professional investors” within the meaning of the Securities and
Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.
(f) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
• the Securities have not been and will not be registered under the Securities and
Exchange Law of Japan (the Securities and Exchange Law) and
each Initial Purchaser agrees that it will not offer or sell any securities,
directly or indirectly, in Japan or to, or for the benefit of, any resident of
Japan (which term as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan), or to others for
re-offering or resale, directly or indirectly, in Japan or to a resident of Japan,
except pursuant to an exemption from the registration requirements of, and
otherwise in compliance with, the Securities and Exchange Law and any other
applicable laws, regulations and ministerial guidelines of Japan.
(g) Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:
• This offering memorandum has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this offering memorandum and any
other document or material in connection with the offer or sale, or invitation or
subscription or purchase, of the Securities may not be circulated or distributed,
nor may the Securities be offered or sold, or be made the subject of an invitation
for subscription or purchase, whether directly or indirectly, to persons in
Singapore other than under circumstances in which such offer, sale or invitation
does not constitute an offer or sale, or invitation for subscription or purchase,
of the Securities to the public in Singapore.
Each Initial Purchaser acknowledges 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 Preliminary Offering Memorandum, 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.
Annex B
[Form of Opinion of Counsel for the Company]
(i) The Company and each of the subsidiaries listed on Schedule 1 hereto
(collectively, the “Specified Subsidiaries”) have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the conduct of
their respective businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the businesses in
which they are engaged, except where the failure to be so qualified or have such power or
authority would not, individually or in the aggregate, have a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in the Offering
Memorandum under the heading “Capitalization”; and all the outstanding shares of capital
stock or other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable (except, in the case of
any foreign subsidiary, for directors’ qualifying shares).
(iii) The Company and each of the Guarantors have full right, power and authority to
execute and deliver each of the Transaction Documents to which each is a party and to
perform their respective obligations thereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby has been duly and
validly taken.
(iv) The Indenture has been duly authorized, executed and delivered by the Company
and each of the Guarantors and, assuming due execution and delivery thereof by the
Trustee, constitutes a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in accordance with
its terms, subject to the Enforceability Exceptions; and the Indenture conforms in all
material respects with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture that is qualified thereunder.
(v) The Securities have been duly authorized, executed and delivered by the Company
and, when duly authenticated as provided in the Indenture and paid for as provided in this
Agreement, will be duly and validly issued and outstanding and will constitute valid and
legally binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture; and the Guarantees have been duly authorized by each of the
Guarantors and, when the Securities have been duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided in this Agreement, will be
valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(vi) The Exchange Securities (including the related guarantees) have been duly
authorized by the Company and each of the Guarantors and, when duly executed,
authenticated, issued and delivered as contemplated by the Registration Rights Agreement,
will be duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company, as issuer, and each of the Guarantors, as guarantor,
enforceable against the Company and each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(vii) This Agreement has been duly authorized, executed and delivered by the Company
and the Guarantors; and the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and each of the Guarantors and, when duly executed
and delivered by the other parties thereto, will constitute a valid and legally binding
agreement of the Company and each of the Guarantors enforceable against the Company and
each of the Guarantors in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may be limited
by applicable law and public policy.
(viii) Each Transaction Document conforms in all material respects to the description
thereof contained in the Preliminary Offering Memorandum and the Offering Memorandum.
(ix) The execution, delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Company and each
of the Guarantors with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict with or result in a breach
or violation 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 the Specified Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of the Specified Subsidiaries is a party or by which the Company or any of
the Specified Subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the Company or
any of the Specified Subsidiaries or (iii) result in the violation of any law or statute
or any judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(x) No consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Company and each of the Guarantors of each of
the Transaction Documents to which each is a party, the issuance and sale of the
Securities (including the Guarantees) and compliance by the Company and each of the
Guarantors with the terms thereof and the consummation of the transactions contemplated by
the Transaction Documents, except for such consents, approvals, authorizations, orders and
registrations or qualifications as may be required (i) under applicable state securities
laws in connection with the purchase and resale of the Securities by the Initial
Purchasers and (ii) with respect to the Exchange Securities (including the related
guarantees) under the Securities Act and applicable state securities laws as contemplated
by the Registration Rights Agreement.
(xi) To the best knowledge of such counsel, except as described in the Offering
Memorandum, there are no legal, governmental or regulatory investigations, actions, suits
or proceedings pending to which the Company or any of the Specified Subsidiaries is or may
be a party or to which any property of the Company or any of the Specified Subsidiaries is
or may be the subject that, individually or in the aggregate, if determined adversely to
the Company or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and to the best knowledge of such counsel no such investigations, actions,
suits or proceedings are threatened or contemplated by any governmental or regulatory
authority or threatened by others.
(xii) The descriptions in the Offering Memorandum of statutes, legal, governmental
and regulatory proceedings and contracts and other documents are accurate in all material
respects; and the statements in the Offering Memorandum under the heading “Material United
States federal income and estate tax considerations”, to the extent that they constitute
summaries of matters of law or regulation or legal conclusions, fairly summarize the
matters described therein in all material respects.
(xiii) Neither the Company nor any of its subsidiaries is, and after giving effect to
the offering and sale of the Securities and the application of the proceeds thereof as
described in the Offering Memorandum none of them will be, an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the Investment
Company Act.
(xiv) Neither the issuance, sale and delivery of the Securities nor the application
of the proceeds thereof by the Company as described in the Offering Memorandum will
violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.
(xv) Assuming the accuracy of the representations, warranties and agreements of the
Company, the Guarantors and the Initial Purchasers contained in this Agreement,
it is not necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the Indenture under the
Trust Indenture Act.
Such counsel shall also state that they have participated in conferences with
representatives of the Company and with representatives of its independent accountants and
counsel at which conferences the contents of the Preliminary Offering Memorandum and the
Offering Memorandum and any amendment and supplement thereto and related matters were
discussed and, although such counsel assume no responsibility for the accuracy,
completeness or fairness of the Preliminary Offering Memorandum and the Offering
Memorandum and any amendment or supplement thereto (except as expressly provided above),
nothing has come to the attention of such counsel to cause such counsel to believe that
the Preliminary Offering Memorandum, as of its date, contained any untrue statement of a
material fact or omitted to state a material fact or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or
that the Offering Memorandum or any amendment or supplement thereto, as of its date and
the Closing Date, contained or contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than, in each case, the
financial statements and other financial information contained therein, as to which such
counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and the Guarantors and public
officials that are furnished to the Initial Purchasers.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLC described above shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein, and shall permit
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Initial Purchasers, to rely on such opinion
and shall so state therein.
Schedule 1 to Annex B
Specified Subsidiaries
| NAME | STATE OF INCORPORATION/FORMATION | |
Normal Life, Inc.
|
Kentucky | |
PeopleServe, Inc.
|
Delaware | |
Community Alternatives Kentucky, Inc.
|
Delaware | |
Texas Home Management, Inc.
|
Delaware | |
RSCR West Virginia, Inc.
|
Delaware | |
Normal Life of Indiana
|
Indiana | |
Res-Care New Mexico, Inc.
|
Delaware | |
Alternative Youth Services, Inc.
|
Delaware | |
RSCR California, Inc.
|
Delaware | |
Res-Care Kansas, Inc.
|
Delaware | |
VOCA of Indiana, LLC
|
Indiana | |
Res-Care Oklahoma, Inc.
|
Delaware | |
Res-Care Ohio, Inc.
|
Delaware | |
Community Advantage, Inc.
|
Delaware | |
Res-Care California, Inc. d/b/a RCCA Services |
Delaware |
Exhibit A
[Form of Registration Rights Agreement]