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EXHIBIT 1.1
▇▇▇▇▇▇▇ ENTERPRISES, INC.
___% Senior Notes Due 2006
UNDERWRITING AGREEMENT
February __, 1996
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CHEMICAL SECURITIES INC.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Subject to the terms and conditions herein contained, ▇▇▇▇▇▇▇
Enterprises, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ"),
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇▇ Inc., ▇.▇. ▇▇▇▇▇▇
Securities Inc. and Chemical Securities Inc. (collectively with DLJ, the
"Underwriters") an aggregate of $150,000,000 principal amount of its ___%
Senior Notes Due 2006 (the "Securities"), which notes are irrevocably and
unconditionally guaranteed by the guarantors listed on Schedule II hereto (each
a "Guarantor" and collectively, the "Guarantors"). The Securities are to be
issued pursuant to the provisions of an Indenture to be dated as of February
__, 1996 (the "Indenture"), by and among the Company, the Guarantors and
Chemical Bank, as Trustee (the "Trustee").
For purposes of this agreement, the term "Securities" means
the Securities together with the guarantees (the "Guarantees") thereof by each
of the Guarantors.
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1. Registration Statement and Prospectus. The Company and
the Guarantors have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated pursuant thereto (collectively, the "Act"), a
registration statement on Form S-3 (No. 33-64111), with respect to the
Securities, including a preliminary prospectus, subject to completion, relating
to the Securities. The registration statement, as amended at the time it
becomes effective (including in each case all documents incorporated or deemed
incorporated by reference therein, if any, all financial statements and
exhibits, and the information, if any, contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to
be a part of the registration statement at the time of its effectiveness
pursuant to Rule 430A of the Act) and any post-effective amendment to the
registration statement on Form S-3 and any additional registration statement
relating to the issuance of additional Securities filed pursuant to Rule 462
under the Act is hereinafter referred to as the "Registration Statement"; and
the prospectus, constituting a part of the Registration Statement at the time
it became effective, or such revised prospectus as shall be provided to the
Underwriters for use in connection with the offering of the Securities by the
Underwriters (the "Offering") that differs from the prospectus on file with the
Commission at the time the Registration Statement became effective (including,
in each case, all documents incorporated or deemed incorporated by reference
therein, if any), whether or not filed with the Commission pursuant to Rule
424(b) under the Act, is hereinafter referred to as the "Prospectus."
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell to the Underwriters,
and the Underwriters agree, severally and not jointly, to purchase from the
Company, the Securities in the respective principal amounts set forth opposite
their names on Schedule I hereto, plus such amount as they may individually
become obligated to purchase pursuant to Section 8 hereof, at a purchase price
equal to ___% of the principal amount thereof (the "Purchase Price").
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The yield of the Securities shall not be lower than the
maximum price recommended by DLJ acting as "qualified independent underwriter"
within the meaning of Schedule E to the By-Laws of the National Association of
Securities Dealers, Inc. (the "NASD").
3. Delivery and Payment. Delivery to you of and payment for
the Securities shall be made at 10:00 A.M., New York City time, on the third or
fourth business day (such time and date being referred to as the "Closing
Date") following the date of the initial public offering of the Securities as
advised by you to the Company, at the Office of DLJ at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as you shall reasonably designate. The
Closing Date and the location of delivery of, and the form of payment for, the
Securities may be varied by agreement between DLJ and the Company.
The Securities in definitive form shall be registered in such
names and issued in such denominations, which shall be in increments of no less
than $1,000, as you shall request in writing not later than two full business
days prior to the Closing Date, and shall be made available to you at the
offices of DLJ (or at such other place as shall be acceptable to you) for
inspection not later than 10:00 A.M., New York City time, on the business day
next preceding the Closing Date. The Securities shall be delivered to you on
the Closing Date with any transfer taxes payable upon initial issuance thereof
duly paid by the Company, for your respective accounts against payment of the
Purchase Price by certified or official bank check or checks payable in New
York Clearing House or similar next-day funds to the order of the Company.
4. Agreements of the Company. The Company and the
Guarantors, as applicable, agree with each of you that:
(a) The Company and the Guarantors will, if the
Registration Statement has not heretofore become effective under the Act, and
if otherwise necessary or required by law, file an amendment to the
Registration Statement or, if necessary pursuant to Rule 430A of the Act, a
post-effective amendment to the Registration Statement, in each case as soon as
practicable after the execution and delivery of this Agreement, and will use
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their best efforts to cause the Registration Statement or such post-effective
amendment to become effective at the earliest possible time. If the
Registration Statement has become effective and the Company and the Guarantors,
omitting from the Prospectus certain information in reliance upon Rule 430A of
the Act, elect not to file a post-effective amendment pursuant to Rule 430A of
the Act, they will file the form of Prospectus required by Rule 424(b) of the
Act within the time period specified by Rule 430A and Rule 424(b) of the Act.
The Company and the Guarantors will otherwise comply fully and in a timely
manner with the applicable provisions of Rule 424, Rule 430A and Rule 462 of
the Act.
(b) The Company will advise you promptly and, if
requested by any of you, confirm such advice in writing, (i) when the
Registration Statement has become effective, if and when the Prospectus is sent
for filing pursuant to Rule 424 of the Act and when any post-effective
amendment to the Registration Statement becomes effective, (ii) of the receipt
of any comments from the Commission or any state securities commission or any
other regulatory authority that relate to the Registration Statement or
requests by the Commission or any state securities commission or any other
regulatory authority for any amendment or supplement to the Registration
Statement or any amendment or supplements to the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or of the
suspension of qualification of the Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by the
Commission or any state securities commission or any other regulatory authority
and (iv) of the happening of any event during the period referred to in
paragraph (d), below, which makes any statement of a material fact made in the
Registration Statement untrue or which requires the making of any additions to
or changes in the Registration Statement in order to make the statements
therein not misleading or that makes any statement of a material fact made in
the Prospectus untrue or which requires the making of any addition to or change
in the Prospectus in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company shall
use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or
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exemption of the Securities under any Federal or state securities or Blue Sky
laws, and, if at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state securities
commission or any other regulatory authority shall issue an order suspending
the qualification or exemption of the Securities under any state securities or
Blue Sky laws, the Company shall use every reasonable effort to obtain the
withdrawal or lifting of such order at the earliest possible time.
(c) Promptly after the Registration Statement
becomes effective, and from time to time thereafter for such period in your
reasonable judgment as a prospectus is required to be delivered in connection
with sales of the Securities by an Underwriter or a dealer, the Company will
furnish to each Underwriter and each dealer, without charge, as many copies of
the Prospectus (and of any amendment or supplement to the Prospectus) as you
may reasonably request.
(d) If during such period as in your judgment you
are required to deliver a prospectus in connection with offers or sales of the
Securities by you any event shall occur as a result of which it becomes
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing as of the date the
Prospectus is delivered to an offeree or a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with any law, the
Company and the Guarantors will promptly prepare and file with the Commission
an appropriate amendment or supplement to the Prospectus so that the statements
in the Prospectus, as so amended or supplemented, will not, in the light of the
circumstances existing as of the date the Prospectus is so delivered, be
misleading, and will comply with applicable law, and will promptly notify you
of such event and amendment or supplement and furnish to you without charge
such number of copies thereof as you may reasonably request.
(e) The Company will mail and make generally
available to its security holders, as soon as practicable and for the time
period specified by Rule 158 under the Act, a consolidated earnings statement
which shall satisfy the provisions of Section 11(a) and Rule
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158 of the Act and to advise you in writing when such statement has been made
available.
(f) Whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, the Company will pay
and be responsible for all costs, charges, liabilities, expenses, fees and
taxes incurred in connection with or incident to (i) the preparation, printing,
filing, distribution and delivery under the Act of the Registration Statement
(including financial statements and exhibits), each preliminary prospectus, the
Prospectus and all amendments and supplements thereto, (ii) the registration
with the Commission and the issuance and delivery of the Securities, (iii) the
preparation, printing, execution, distribution and delivery of this Agreement,
the Indenture, any memoranda describing state securities or Blue Sky laws and
all other agreements, memoranda, reports, correspondence and other documents
printed, distributed and delivered in connection with the offering of the
Securities, provided, however, that fees of legal counsel to the Underwriters
for legal work concerning Blue Sky laws be limited as set forth in (f)(iv),
below, (iv) the registration or qualification of the Securities for offer and
sale under the securities or Blue Sky laws of the jurisdictions referred to in
paragraph (i), below (including, in each case, the fees and disbursements of
counsel relating to such registration or qualification and memoranda relating
thereto, which fees and disbursements of counsel shall not exceed $10,000, and
any filing fees in connection therewith), (v) furnishing such copies of the
Registration Statement (including exhibits), Prospectus and preliminary
prospectuses, and all amendments and supplements to any of them, including any
document incorporated by reference therein, as may be requested by the
Underwriters or by dealers, (vi) the filing, registration and clearance with
the National Association of Securities Dealers, Inc. (the "NASD") of the
Underwriters' compensation in connection with the offering of the Securities
(including, without limitation, any filing fees in connection therewith), (vii)
the listing of the Securities, if any, on any stock exchange or automated
quotation system, or other similar markets, (viii) the rating of the Securities
by investment rating agencies, (ix) the costs of distributing the terms of
agreement relating to the organization of the underwriting syndicate and
selling group to the members thereof by mail, telex or other means of
communication,
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(x) any "qualified independent underwriter" as required by Schedule E of the
Bylaws of the NASD (including fees and disbursements of counsel for such
qualified independent underwriter, which fees and disbursements of counsel
shall not exceed $5,000) and (xi) the performance by the Company of its other
obligations under this Agreement, including (without limitation) the fees of
the Trustee, the cost of its personnel and other internal costs, the cost of
printing and engraving the certificates representing the Securities, and all
expenses and taxes incident to the sale and delivery of the Securities to the
Underwriters; provided, however, that with respect to items (i), (ii), (iii)
(except for legal fees arising from legal work concerning Blue Sky laws, which
legal fees shall be limited as set forth above), (v), (vi), (vii), (viii), (ix)
and (xi) of this paragraph (f), the Company will not be responsible for any
fees or expenses of legal counsel to the Underwriters.
(g) The Company will furnish to each of the
Underwriters, without charge, two (2) copies (plus one additional copy to your
legal counsel) of the Registration Statement as first filed with the Commission
and of each amendment or supplement to it, including each post-effective
amendment and all exhibits filed therewith, and will furnish to each of the
Underwriters, such number of copies of the manually executed Registration
Statement and such number of conformed copies of the Registration Statement as
so filed and of each amendment to it, including each post-effective amendment,
as you may reasonably request.
(h) The Company and the Guarantors will not file any
amendment or supplement to the Registration Statement, whether before or after
the time when it becomes effective, or make any amendment or supplement to the
Prospectus, of which you shall not previously have been advised and provided a
copy within two business days prior to the filing thereof (or such reasonable
amount of time as is necessitated by the exigency of such amendment or
supplement) or to which you shall reasonably object; and the Company and the
Guarantors will prepare and file with the Commission, promptly upon your
reasonable request, any amendment or supplement to the Registration Statement
or amendment or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by you, and
will use
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their best efforts to cause the same to become effective as promptly as
possible.
(i) Prior to any public offering of the Securities,
the Company and the Guarantors will cooperate with you and your counsel in
connection with the registration or qualification of the Securities for offer
and sale by the Underwriters under the state securities or Blue Sky laws of
such jurisdictions as you may reasonably request. The Company and the
Guarantors will continue such qualification in effect so long as required by
law for distribution of the Securities and will file such consents to service
of process or other documents as may be necessary in order to effect such
registration or qualification (provided that neither the Company nor any
Guarantor shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified nor to take any action that would
subject it to general consent to service of process in any jurisdiction in
which it is not now so subject).
(j) The Company will timely complete all required
filings and otherwise comply fully in a timely manner with all provisions of
the Securities Exchange Act of 1934, as amended, including the rules and
regulations thereunder (collectively, the "Exchange Act"), to effect the
registration of the Securities pursuant thereto, and will file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the offer
or sale of Securities. The Company will cause the Securities to be listed on
the New York Stock Exchange and will use its best efforts to maintain such
listing while any of the Securities are outstanding.
(k) (i) So long as the Securities are outstanding
and whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall mail or arrange to
have mailed to the record holders of the Securities, as soon as practicable
after the Company files or would have been required to file such with the
Commission, annual and quarterly financial statements substantially equivalent
to financial statements that would have been included in
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a report filed with the Commission on Forms 10-Q and 10-K, if the Company were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's independent auditors as such would be required in such reports to the
Commission, and, in each case, together with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" which would be so
required. In addition, whether or not required by the rules and regulations of
the Commission, the Company will file a copy of all such information and
reports with the Commission for public availability (unless the Commission will
not accept such a filing) and will make such information available to
securities analysts and prospective investors upon request.
(ii) The Company shall mail to each of the
Underwriters, without charge, a copy of each report or such other publicly
available information furnished to holders of the Securities, or filed with the
Commission, whether or not required by law or pursuant to the Indenture, and
such other publicly available information concerning the Company and its
subsidiaries (each, a "Subsidiary" and collectively, the "Subsidiaries") as you
may reasonably request, at the same time as such reports or other information
are furnished to such holders.
(l) During the period beginning on the date of this
Agreement and continuing to and including the Closing Date, there will be no
transactions entered into by the Company or any of the Subsidiaries, except for
such transactions which either singly or in the aggregate could not have a
material adverse effect on the business, results of operations or prospects of
the Company and its Subsidiaries, taken as a whole (a "Material Adverse
Effect"), and there will be no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(m) The Company will not voluntarily claim, and will
actively resist any attempts to claim, the benefit of any usury laws against
the holders of the Securities.
(n) The Company will use the proceeds from the sale
of the Securities in the manner described in the Prospectus under the caption
"Use of Proceeds."
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(o) During the period referred to in paragraph (l),
(x) the Company will not offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company or the Subsidiaries or warrants, rights, or
options to purchase debt securities of the Company (other than (i) the
Securities, (ii) commercial paper issued in the ordinary course of business)
and (iii) industrial revenue bond refundings and (y) none of the Subsidiaries
will offer, sell, contract to sell or otherwise dispose of any debt securities
or warrants, rights or options to purchase debt securities (other than
commercial paper issued in the ordinary course of business), in any case
without the prior written consent of DLJ, which consent will not be
unreasonably withheld.
(p) The Company and the Guarantors will use their
best efforts to do and perform all things required to be done and performed
under this Agreement by them prior to or after the Closing Date and to satisfy
all conditions precedent on their part to the delivery of the Securities.
5. Representations and Warranties. The Company and the
Guarantors represent and warrant to each Underwriter that:
(a) When the Registration Statement becomes
effective, including on the date of any post-effective amendment, at the date
of the Prospectus (if different) and at the Closing Date, the Registration
Statement will comply in all material respects with the provisions of the Act,
and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and each supplement or
amendment thereto will not at the date of the Prospectus, at the date of any
such supplement or amendment and at the Closing Date, contain 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 under
which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Registration Statement or the Prospectus (or any supplement
or amendment to them) made in reliance upon and in conformity with information
relating to any Underwriter
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furnished to the Company in writing by or on behalf of such Underwriter through
DLJ expressly for use therein. The Company and the Guarantors acknowledge for
all purposes under this Agreement (including this paragraph and Section 6
hereof) that the statements set forth in the last paragraph on the cover page
and in paragraph three and the last paragraph under the caption "Underwriting"
in the Prospectus constitute the only written information furnished to the
Company by or on behalf of any Underwriter through DLJ expressly for use in the
Registration Statement, the preliminary prospectus, or the Prospectus (or any
amendment or supplement to any of them) and that the Underwriters shall not be
deemed to have provided any information (and therefore are not responsible for
any statements or omissions) pertaining to any arrangement or agreement with
respect to any party other than the Underwriters. When the Registration
Statement becomes effective, including at the date of any post-effective
amendment, at the date of the Prospectus and any amendment or supplement
thereto (if different) and at the Closing Date, the Indenture will have been
qualified under and will conform in all material respects to the requirements
of the Trust Indenture Act of 1939, as amended, and the rules and regulations
promulgated pursuant thereto (collectively, the "TIA"). No contract or
document of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
has not been described and filed as required.
(b) Each preliminary prospectus and the Prospectus,
filed as part of the Registration Statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to Rule 424 or 430A
under the Act, complied when so filed in all material respects with the Act.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any preliminary prospectus, when they became or become effective under the Act
or were or are filed with the Commission under the Exchange Act, as the case
may be, conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable.
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(d) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any governmental
body, agency or official which prevents the issuance of the Securities,
suspends the effectiveness of the Registration Statement, prevents or suspends
the use of any preliminary prospectus or suspends the sale of the Securities in
any jurisdiction referred to in Section 4(i) hereof; no injunction, restraining
order, or order of any nature by any Federal or state court has been issued
with respect to the Company or any of the Subsidiaries which would prevent or
suspend the issuance or sale of the Securities, the effectiveness of the
Registration Statement, or the use of any preliminary prospectus or Prospectus
in any jurisdiction referred to in Section 4(i) hereof; no action, suit or
proceeding before any court or arbitrator or any governmental body, agency or
official, domestic or foreign, is pending against or, to the best of the
Company's knowledge, threatened against, the Company or any of the Subsidiaries
which, if adversely determined, would interfere with or adversely affect the
issuance of the Securities or could reasonably be expected to affect the
validity of this Agreement, the Indenture or the Securities; and the Company
and the Guarantors have complied with every request of the Commission or any
securities authority or agency of any jurisdiction for additional information
(to be included in the Registration Statement or the Prospectus or otherwise).
(e) The capitalization table set forth in the
Prospectus under the caption "Capitalization" identifies in reasonable detail
as of the date specified all outstanding short-term and long-term indebtedness
and stockholders' equity of the Company and the Subsidiaries, prior to the
Offering and the Exchange (as defined in the Prospectus), pro forma to give
effect to the Exchange and pro forma as adjusted to give effect to the Offering
and the application of proceeds therefrom; and since the respective dates as of
which information is given in the Registration Statement and the Prospectus
there has been no material change in the capital stock or long-term debt of the
Company and the Subsidiaries taken as a whole.
(f) The Indenture has been duly authorized by the
Company and the Guarantors and, when duly executed and delivered in accordance
with its terms, will be a valid and legally binding agreement of the Company
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and the Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and except to the extent that a waiver of rights under any usury laws
may be unenforceable.
(g) The Securities have been duly authorized by the
Company and the Guarantors, as applicable, and, on the Closing Date will have
been duly executed by the Company and the Guarantors and will, when issued,
executed, authenticated and delivered in accordance with the Indenture and paid
for in accordance with the terms of this Agreement, constitute valid and
legally binding obligations of the Company and the Guarantors, enforceable
against the Company and the Guarantors according to their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies generally
and to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity) and except to the extent that a
waiver of rights under any usury laws may be unenforceable, will be entitled to
the benefits of the Indenture and will conform in all material respects to the
description thereof in the Prospectus. The ranking of the Securities will be
as set forth in the Indenture and the Prospectus.
(h) This Agreement has been duly authorized and
validly executed and delivered by the Company and the Guarantors and
constitutes a valid and legally binding agreement of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws affecting creditors' rights
and remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and except
to the extent that indemnification from liability in connection with the
Federal securities laws may be unenforceable.
(i) The execution and delivery of this Agreement,
the Indenture and the Securities by the Company
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and the Guarantors, as applicable, the issuance and sale of the Securities, the
performance of this Agreement and the Indenture and the consummation of the
transactions contemplated by this Agreement and the Indenture (A) will not
conflict with or constitute or result in a breach or violation of any (or an
event which, with notice or lapse of time, or both, would constitute a breach
or violation of) of the respective charters or bylaws of the Company or any of
the Guarantors or any of the terms or provisions of, or (B) will not constitute
a default or cause an acceleration of any obligation under or result in the
imposition or creation of (or the obligation to create or impose) any security
interest, mortgage, pledge, claim, lien, encumbrance or adverse interest of any
nature (each, a "Lien") with respect to, any obligation, bond, agreement, note,
debenture, or other evidence of indebtedness, or any indenture, mortgage, deed
of trust or other agreement, lease, license or instrument to which the Company
or any of the Subsidiaries is a party or by which it or any of them is bound,
or to which any properties of the Company or any of the Subsidiaries is or may
be subject, or any order of any court or governmental agency, body or official
having jurisdiction over the Company or any of the Subsidiaries or any of their
properties, or (C) will not violate or conflict with any statute, judgment,
decree, order, rule of any court, governmental agency or other body or
self-regulatory organization applicable to the Company or any of the
Subsidiaries, or any of their respective assets or properties, except, in the
case of (B) and (C), for such defaults, accelerations, Liens, violations or
conflicts which, singly or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
(j) No authorization, approval or consent or order
of, or filing with, any court or governmental body, agency or official is
necessary in connection with the transactions contemplated by this Agreement,
except such as may be required by the NASD or have been obtained and made under
the Act, the TIA or state securities or Blue Sky laws or regulations. Neither
the Company nor any of its affiliates is presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
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(k) The Securities have been approved for listing on
the New York Stock Exchange, subject to official notice of issuance.
(l) The Company and each of the Subsidiaries has
been duly organized, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the requisite power
and authority to carry on its business as it is currently being conducted, to
own, lease and operate its properties and, as applicable, to authorize the
offering of the Securities, to execute, deliver and perform their respective
obligations under this Agreement, the Indenture and the Securities, as
applicable, and to issue, sell and deliver the Securities, as applicable, and
each is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction where the operation, ownership
or leasing of property or the conduct of its business requires such
qualification, except where the failure so to be qualified could not reasonably
be expected to have a Material Adverse Effect.
(m) All of the issued and outstanding shares of
capital stock of, or other ownership interests in, each Subsidiary have been
duly authorized and validly issued, and all of the shares of capital stock of,
or other ownership interests in, each Subsidiary are owned, directly or through
Subsidiaries, by the Company. All such shares of capital stock are fully paid
and nonassessable, and are owned free and clear of any Lien, except as set
forth in the Credit Agreement (as such term is defined in the Indenture).
There are no outstanding subscriptions, rights, warrants, options, calls,
convertible or exchangeable securities, commitments of sale, or Liens related
to or entitling any person to purchase or otherwise to acquire any shares of
the capital stock of, or other ownership interest in, any Subsidiary.
(n) Neither the Company nor any of the Subsidiaries
is in violation of its respective charter or bylaws or in default in the
performance of any obligation, bond, agreement, debenture, note or any other
evidence of indebtedness, or any indenture, mortgage, deed of trust or other
contract, lease, license, permit, certificate or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them is bound,
or to which any of the property or assets
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of the Company or of any of the Subsidiaries is subject, except as, singly or
in the aggregate, could not have a Material Adverse Effect.
(o) Except as set forth in the Prospectus, there is
no action, suit, or proceeding before or by any court or governmental agency or
body, or arbitration board or tribunal, domestic or foreign, pending against or
affecting the Company or any of the Subsidiaries, or any of their respective
assets or properties, which is required to be disclosed in the Registration
Statement or the Prospectus, or which singly or in the aggregate would have a
Material Adverse Effect or which might materially and adversely affect the
Company's or the Guarantors' performance of their obligations pursuant to this
Agreement or the transactions contemplated hereby, and to the best of the
Company's and the Guarantors' knowledge, after such inquiry as is conducted in
the Company's and the Subsidiaries' ordinary course of business, no such
action, suit, or proceeding is contemplated or threatened, except for those
which singly or in the aggregate would not have a Material Adverse Effect.
Neither the Company nor any of the Subsidiaries is subject to any judgement,
order, decree, rule or regulation of any court, governmental authority or
arbitration board or tribunal, except for those judgements, orders, decrees,
rules or regulations which singly or in the aggregate would not have a Material
Adverse Effect.
(p) Neither the Company nor any of the Subsidiaries
is in violation of any Federal, state or local laws and regulations relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of toxic or
hazardous substances, materials or wastes, or petroleum and petroleum products
("Materials of Environmental Concern"), or the storage, disposal, transport or
handling of Materials of Environmental Concern (collectively, "Environmental
Laws"), which violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations, except where such violations
either singly or in the aggregate would not have a Material Adverse Effect; to
the best of the Company's knowledge, neither the Company nor any Subsidiary
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has received any communication (written or oral), whether from a governmental
authority or otherwise, alleging any such violation or noncompliance; there is
no pending or, to the best of the Company's knowledge, threatened claim,
action, investigation or notice (written or oral) by any person or entity
alleging potential liability for investigatory, cleanup, or governmental
responses costs, or natural resources or property damages, or personal
injuries, attorney's fees or penalties relating to (x) the presence, or release
into the environment, of any Material of Environmental Concern at any location
owned or operated by the Company or any Subsidiary, now or in the past, or (y)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law (collectively, "Environmental Claims"), except as either
singly or in the aggregate would not have a Material Adverse Effect.
(q) Neither the Company nor any Subsidiary is in
violation of any Federal, state or local law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable wage or hour laws that
singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the Prospectus, there is (A) no
significant unfair labor practice complaint pending against the Company or any
Subsidiary or, to the best knowledge of the Company, threatened against any of
them, before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any Subsidiary or, to the best knowledge of the
Company, threatened against any of them, and (B) no labor dispute in which the
Company or any Subsidiary is involved nor, to the best knowledge of the
Company, is any labor dispute imminent, other than routine disciplinary and
grievance matters and periodic collective bargaining contract negotiations.
The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and the regulations and published interpretations
thereunder; no "reportable event" (as defined in ERISA and the regulations and
published interpretations thereunder) has occurred with respect to any "pension
plan" (as defined in ERISA and the regulations and published interpretations
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thereunder) established or maintained by the Company or any of its
Subsidiaries; the amount of "unfunded benefit liabilities" (as defined in ERISA
and the regulations and published interpretations thereunder) under all
"pension plans" does not exceed $2,000,000; neither the Company nor any of the
Subsidiaries has incurred and does not expect to incur liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Section 4971, 4975, or 4980B of the Internal Revenue
Code of 1986, as amended (the "Code"); and each "pension plan" established or
maintained by the Company that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(r) Except as disclosed in the Prospectus and except
as singly or in the aggregate could not have a Material Adverse Effect, the
Company and each Subsidiary has good and marketable title, free and clear of
all Liens, to all property and assets described in the Registration Statement
as being owned by it and such properties and assets, in the aggregate, are in
good repair and suitable for use as so described. All leases to which the
Company or each Subsidiary is a party are valid and binding and no default has
occurred or is continuing thereunder which singly or in the aggregate could
result in a Material Adverse Effect, and the Company and each Subsidiary enjoy
peaceful and undisturbed possession under all such leases to which any of them
is a party as lessee with such exceptions as singly or in the aggregate could
not have a Material Adverse Effect.
(s) The Company and its Subsidiaries maintain
insurance at least in such amounts and covering at least such risks as is
adequate for the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(t) The firm of accountants that has certified or
shall certify the applicable consolidated financial statements and supporting
schedule and the notes thereto of the Company filed or to be filed with the
Commission as part of the Registration Statement and the Prospectus are
independent auditors with respect to
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the Company and the Subsidiaries, as required by the Act. The consolidated
financial statements, together with related schedule and notes, set forth or
incorporated by reference in the Prospectus and the Registration Statement,
comply as to form in all material respects with the requirements of the Act and
fairly present the consolidated financial position of the Company and the
Subsidiaries at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated, in
accordance with generally accepted accounting principles in the United States
of America ("GAAP") consistently applied throughout such periods in accordance
with Regulation S-X. The pro forma financial statements contained in the
Registration Statement have been prepared on a basis consistent with such
historical statements, except for the pro forma adjustments specified otherwise
therein, and give effect to assumptions made on a reasonable basis and present
fairly the historical and proposed transactions contemplated to be addressed by
the preliminary prospectuses, the Prospectus and this Agreement. The Company's
ratios of earnings to fixed charges (actual and, if any, pro forma) included in
the Prospectus under the captions "Prospectus Summary - Summary Financial
Information" and "Selected Historical Financial Information" and in Exhibit 12
to the Registration Statement have been calculated in compliance with Item
503(d) of the Commission's Regulation S-K. The other financial and statistical
information and data included or incorporated by reference in the Prospectus
and in the Registration Statement, historical and pro forma, are accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company.
(u) Subsequent to the respective dates as of which
information is presented in the Registration Statement and the Prospectus and
up to the Closing Date, (i) neither the Company nor any of the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are
material to the Company and the Subsidiaries, taken as a whole, nor entered
into any transaction not in the ordinary course of business, except for such
transactions which, either singly or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (ii) there has been no decision or
judgment in the nature of litigation or arbitration that singly or in the
aggregate could have a Material Adverse
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Effect, (iii) there has not been, singly or in the aggregate, any material
adverse change, or any development which could reasonably be expected to
involve a material adverse change, in the properties, facilities, plans,
business, results of operations, general affairs, management, condition
(financial or otherwise), prospects or business affairs of the Company or the
Subsidiaries, taken as a whole (any of the items set forth in clause (i), (ii),
or (iii), above, a "Material Adverse Change").
(v) To the best of the Company's knowledge, all Tax
Returns (as hereinafter defined) required to be filed by the Company or any of
the Subsidiaries in any jurisdiction have been filed and all Taxes (as
hereinafter defined), including withholding Taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without penalty
or interest. All Tax Returns (as hereinafter defined) filed by the Company and
its Subsidiaries prior to the date hereof were complete and accurate in all
material respects. No material claim for assessment or collection of Taxes is
presently being asserted against the Company or its Subsidiaries. Furthermore,
except as disclosed to the Underwriters, the Company and its Subsidiaries are
not parties to any pending action, proceeding or investigation by any
governmental authority for the assessment or collection of Taxes, nor does the
Company have knowledge of any such threatened action, proceeding or
investigation, except as, singly or in the aggregate, could not result in a
Material Adverse Effect. Except as disclosed to the Underwriters, to the best
of the knowledge of the Company and its Subsidiaries, no material waivers of
statutes of limitation in respect of any Tax Returns have been given by or
requested of the Company or any of its Subsidiaries, nor has the Company or any
of its Subsidiaries agreed to any extension of time with respect to a Tax
assessment or deficiency. No material claim by any authority in a jurisdiction
where the Company or any of its Subsidiaries does not currently file a Tax
Return is pending to the effect that the Company or any of its Subsidiaries is
or may be subject to taxation by that jurisdiction. No Liens are presently
imposed upon or asserted against any of the Company's or any of its
Subsidiaries' assets as a result of or in connection with any failure,
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or alleged failure, to pay any Tax. As of the Closing Date, the Company and
its Subsidiaries will not have any agreement, whether or not written, providing
for the payment of Tax liabilities or entitlement to refunds with any other
party. The Company and its Subsidiaries have withheld and paid all Taxes that
in its reasonable opinion are required to be withheld in connection with any
amounts paid or owing to any employee, creditor, independent contractor or
other third party with respect to the business of the Company or its
Subsidiaries. The unpaid income Taxes of the Company and its Subsidiaries with
respect to historical periods for which tax returns were required to be filed
by the Company and its Subsidiaries do not exceed the reserve for Tax liability
(as opposed to any reserve for deferred Taxes established to reflect temporary
differences between book and tax income) set forth on the most recent balance
sheet of the Company, as adjusted for the passage of time through the date
hereof in accordance with the past custom and practice of the Company in filing
its Tax Returns. For purposes of this Agreement, the terms "Tax" and "Taxes"
shall mean all federal, state, local or foreign income, payroll, employee
withholding, unemployment insurance, social security, sales, use, service use,
leasing use, excise, franchise, gross receipts, value added, alternative or
add-on minimum, estimated, occupation, real and personal property, stamp,
transfer, workers' compensation, severance, windfall profits, environmental
(including taxes under Section 59A of the Internal Revenue Code of 1986, as
amended), or other tax of the same or of a similar nature, including any
interest, penalty, or addition thereto, whether disputed or not. The term "Tax
Return" means any return, declaration, report, form, claim for refund, or
information return or statement relating to Taxes or income subject to
taxation, or any amendment thereto, and including any schedule or attachment
thereto.
(w) (i) Each of the Company and the Subsidiaries
has all certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals or rights (each, an "Authorization") of and
from, and has made all declarations and filings with, all Federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, necessary or required, in its reasonable opinion,
to own, lease, license and use its properties and assets and to conduct its
business in the manner described
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in the Prospectus in the states wherein presently operated, and such other
certifications, accreditations and eligibility to participate in specified
programs as and to the extent described in the Registration Statement and
Prospectus, including, without limitation, to the extent so described,
eligibility to participate in Medicare and Medicaid, except where failure to do
so, singly or in the aggregate, would not have a Material Adverse Effect, (ii)
each of such Authorizations, certifications, accreditations and determinations
of eligibility are valid and in full force and effect, except as singly or in
the aggregate would not have a Material Adverse Effect, (iii) the Company and
the Subsidiaries are in compliance in all respects with the terms and
conditions of all such Authorizations, certifications, accreditations and
determinants of eligibility and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with respect
thereto, except where failure to do so, singly or in the aggregate, would not
have a Material Adverse Effect and (iv) neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such Authorization, certification, accreditation or
determination of (except in the ordinary course of business in connection with
the receipt of a routine survey that outlines areas which require Company or
Subsidiary action to maintain compliance or to preclude such revocation or
modification) that would have a Material Adverse Effect and no such
Authorization contains any restrictions that are materially burdensome to any
of them. The Company and the Subsidiaries possess the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") presently employed by them in connection with the
businesses now operated by them, and neither the Company nor any of the
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to the foregoing except as singly or in
the aggregate could not have a Material Adverse Effect. To the best of the
Company's knowledge, the use of such Intellectual Property in connection with
the business and operations of the Company and the Subsidiaries does not
infringe on the rights of any person, except as, singly or in the aggregate,
could not have a Material Adverse Effect.
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(x) The Company and each of the Subsidiaries
maintains a system 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
GAAP 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.
(y) Neither the Company nor any of the Subsidiaries
is (i) an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended,
or (ii) a "holding company" or a "subsidiary company" of a holding company, or
an "affiliate" thereof within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(z) Except as disclosed in the Prospectus, there are
no business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(aa) Each certificate signed by any officer of the
Company or any Subsidiary and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by the Company
or such Subsidiary, as applicable, to each Underwriter as to the matters
covered thereby.
(ab) Neither the Company nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its Subsidiaries,
has used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment; or, to the
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best of the Company's knowledge, is in violation of any Federal "fraud and
abuse legislation" or Federal "anti-kickback law."
(ac) To the extent described in the Prospectus, all
facilities owned or operated as continuing operations by the Company or the
Subsidiaries (the "Company Facilities") (i) are certified for participation or
enrollment in the Medicare and Medicaid programs, except where failure to do
so, singly or in the aggregate, would not have a Material Adverse Effect, (ii)
have a current and valid provider contract with the Medicare and Medicaid
programs, except where failure to have such contract, singly or in the
aggregate, would not have a Material Adverse Effect, and (iii) are in
substantial compliance with the terms and conditions of participation of such
programs and have received all approvals or qualifications necessary for
capital reimbursement of the Company's assets except, in each case, where the
failure to be so certified, to have such contracts, to be in such compliance or
to have such approvals or qualifications, singly or in the aggregate, would not
have a Material Adverse Effect. To the knowledge of the Company, the amounts
established as provisions for Medicare and Medicaid adjustments and adjustments
by any other third party payors on the financial statements of the Company and
the Subsidiaries are sufficient in all material respects to pay any amounts for
which the Company or any of the Subsidiaries may be liable. Neither the
Company nor any of the Subsidiaries has received notice from the regulatory
authorities which enforce the statutory or regulatory provisions in respect of
the Medicare or Medicaid programs of any pending or threatened investigations,
surveys (other than routine surveys) or decertification proceedings, and
neither the Company nor any of the Subsidiaries has any reason to believe that
any such investigations, surveys or proceedings are pending, threatened or
imminent which notices or threatened actions singly or in the aggregate are
likely to have a Material Adverse Effect.
(ad) Each such Company Facility is licensed by the
proper state department of health to conduct its business in substantially the
manner conducted by such Company Facility and is authorized to operate the
number of beds utilized therein. The Company Facilities are presently in
substantial compliance with all of the
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terms, conditions and provisions of such licenses. The facilities, equipment,
staffing and operations of the Company Facilities satisfy the applicable state
licensing requirements in all material respects.
6. Indemnification.
(a) The Company and each of the Guarantors jointly
and severally, agree to indemnify and hold harmless (i) each of the
Underwriters and (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any of the
Underwriters (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "controlling person"), and (iii) the respective
officers, directors, partners, employees, representatives and agents of any of
the Underwriters or any controlling person (any person referred to in clause
(i), (ii) or (iii) may hereinafter be referred to as an "Indemnified Person")
to the fullest extent lawful, from and against any and all losses, claims,
damages, judgments, actions, costs, assessments, expenses and other liabilities
(collectively, "Liabilities"), including without limitation and as incurred,
reimbursement of all reasonable costs of investigating, preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of counsel to any Indemnified Person, directly or indirectly
caused by, related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any supplement or amendment thereto), or the
Prospectus (including any amendment or supplement thereto) or any preliminary
prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
(in the case of the Prospectus, in light of the circumstances under which they
were made) not misleading, except insofar as such Liabilities are caused by an
untrue statement or omission or alleged untrue statement or omission that is
(x) made in reliance upon and in conformity with information relating to any of
the Underwriters furnished in writing to the Company by or on behalf of the
Underwriter through DLJ expressly for use in the Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any amendment or
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supplement thereto) or any preliminary prospectus or (y) with respect to the
Underwriter from whom the person asserting the Liabilities purchased
Securities, made in any preliminary prospectus if a copy of the Prospectus (as
amended or supplemented, if the Company shall have furnished the Underwriters
with such amendments or supplements thereto on a timely basis) was not
delivered by or on behalf of such Underwriter to the person asserting the
Liabilities, if required by law to have been so delivered by the Underwriter
seeking indemnification, at or prior to the written confirmation of the sale of
the Securities, and it shall be finally determined by a court of competent
jurisdiction, in a judgment not subject to appeal or review, that the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such Liability. The Company shall notify you promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement which involves the Company or an Indemnified
Person.
The Company and each of the Guarantors, jointly and severally,
also agree to indemnify and hold harmless each Indemnified Person from and
against any and all losses, claims, damages, liabilities and judgments incurred
as a result of such Indemnified Person's connection to DLJ in its capacity as a
"qualified independent underwriter" within the meaning of Schedule E to the
By-Laws of the NASD in connection with the offering of the Securities, except
for any losses, claims, damages, liabilities and judgments resulting solely
from such Indemnified Person's willful misconduct or gross negligence.
(b) In case any action or proceeding (for all
purposes of this Section 6, including any governmental investigation) shall be
brought or asserted against any of the Indemnified Persons with respect to
which indemnity may be sought against the Company or any Guarantor, such
Underwriter (or the Underwriter controlled by such controlling person) promptly
shall notify the Company in writing; provided that the failure to give such
notice shall not relieve the Company or any Guarantor of its obligations
pursuant to this Agreement, except to the extent the Company or such Guarantor
was prejudiced by such failure to provide such notice. Upon receiving
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such notice, the Company or any Guarantor shall be entitled to participate in
any such action or proceeding and to assume, at its sole expense, the defense
thereof, with counsel reasonably satisfactory to such Indemnified Person (who
shall not, except with the consent of the Indemnified Person, be counsel to the
Company or a Guarantor of the Company) and, after written notice from the
Company to such Indemnified Person of its election so to assume the defense
thereof within fifteen (15) business days after receipt of the notice from the
Indemnified Person of such action or proceeding, the Company and the Guarantors
shall not be liable to such Indemnified Person hereunder for legal expenses of
other counsel subsequently incurred by such Indemnified Person in connection
with the defense thereof, other than reasonable costs of investigation, unless
(i) the Company and the Guarantors agree to pay such reasonable fees and
expenses, or (ii) the Company fails promptly to assume such defense or fails to
employ counsel reasonably satisfactory to such Indemnified Person, or (iii) the
named parties to any such action or proceeding (including any impleaded
parties) include both such Indemnified Person and the Company or an affiliate
of the Company, and either (x) there may be one or more legal defenses
available to such Indemnified Person that are different from or additional to
those available to the Company or such affiliate or (y) a conflict may exist
between such Indemnified Person and the Company or such affiliate. In the
event of any of clause (i), (ii) and (iii) of the immediately preceding
sentence, if such Indemnified Person notifies the Company in writing, the
Company shall not have the right to assume the defense thereof and such
Indemnified Person shall have the right to employ its own counsel in any such
action and the reasonable fees and expenses of such counsel shall be paid, as
incurred, by the Company, which shall be reimbursed to the extent that it is
ultimately determined that an Indemnified Party is not entitled to
indemnification or contribution hereunder, it being understood, however, that
the Company and the Guarantors shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions
or proceedings arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for each such Indemnified
Person; provided, however, that if indemnity may be sought pursuant to the
second paragraph
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of this Section, then, in addition to such separate firm for each such
Indemnified Person, the indemnifying party shall be liable for the reasonable
fees and expenses of not more than one separate firm (in addition to any local
counsel) for each Indemnified Person that is a party to an action or proceeding
arising from DLJ's participation as a "qualified independent underwriter." In
the case of any such separate firm for such Indemnified Person, such firm shall
be designated in writing by such Indemnified Person. The Company and the
Guarantors shall be liable for any settlement of any such action or proceeding
effected with the Company's prior written consent, which consent will not be
unreasonably withheld, and the Company and the Guarantors agree to indemnify
and hold harmless any Indemnified Person from and against any Liabilities by
reason of any settlement of any action effected with the written consent of the
Company. The Company and the Guarantors agree to be liable for any settlement
of any proceeding effected without its written consent if (i) such settlement
is entered into more than thirty (30) business days after receipt by the
Company of the aforesaid request for payment in respect of an indemnification
obligation pursuant hereto and (ii) the Company shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement. The Company and the Guarantors shall not, without the prior
written consent of each Indemnified Person, which consent shall not be
unreasonably withheld, settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened action,
claim, litigation or proceeding in respect of which indemnification or
contribution may be sought pursuant hereto (whether or not any Indemnified
Person is a party thereto), unless such settlement, compromise, consent or
termination includes an unconditional release of each Indemnified Person from
all Liabilities arising out of such action, claim, litigation or proceeding.
(c) Each of the Underwriters agrees, severally and
not jointly, to indemnify and hold harmless (i) the Company, (ii) each person,
if any, who controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company, and (iii) the Company's officers and
directors who sign the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each of the Indemnified Persons, but
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only with respect to claims and actions based on information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
DLJ expressly for use in the Registration Statement, Prospectus or preliminary
prospectus, as applicable. In case any action or proceeding (including any
governmental investigation) shall be brought or asserted against the Company,
any of its directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any preliminary prospectus in
respect of which indemnity is sought against any Underwriter pursuant to the
foregoing sentence, the Underwriter shall have the rights and duties given to
the Company (except that if the Company shall have assumed the defense thereof,
such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and each such controlling person
shall have the rights and duties given to the Indemnified Person by Section
6(b) above.
(d) If the indemnification provided for in this
Section 6 is finally determined by a court of competent jurisdiction to be
unavailable to an indemnified party in respect of any Liabilities referred to
herein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the one
hand and the indemnified party on the other hand from the offering of the
Securities or (ii), if the allocation provided by clause (i), above, is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i), above, but also the
relative fault of the indemnifying parties and the indemnified party, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Guarantors, on the one hand, and any of the Underwriters
(and its related Indemnified Persons), on the other hand, shall be deemed to be
in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and Guarantors bear to the total underwriting discounts and
commissions
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received by such Underwriter, in each case as set forth in the Prospectus. The
relative benefits received by the Company and the Guarantors, on the one hand,
and the "qualified independent underwriter" (and its related Indemnified
Persons), on the other hand, shall be deemed to be in the same proportion as
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
total fee paid to the "qualified independent underwriter" in its capacity as
"qualified independent underwriter" bear to the total price to the public of
the Securities, in each case as set forth in the Prospectus. The relative
fault of the Company and the Guarantors, on the one hand, and the Underwriter
or "qualified independent underwriter," 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 related to information supplied by the Company or a Guarantor or
the Underwriter or "qualified independent underwriter" and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The indemnity and contribution obligations
of the Company and the Guarantors set forth herein shall be in addition to any
liability or obligation the Company and the Guarantors may otherwise have to
any Indemnified Person.
The Company, the Guarantors and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 6(d)
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, judgments, liabilities or expenses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, none of the Underwriters (and their related Indemnified Persons)
shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the total underwriting discount
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applicable to the Securities purchased by such Underwriter exceeds the amount
of any damages or liabilities which such Underwriter (and its related
Indemnified Persons) has otherwise been required to pay or incur 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 6(d) are several in proportion to the
respective aggregate principal amount of Securities purchased by each of the
Underwriters hereunder and not joint.
7. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters to purchase any Securities under this
Agreement are subject to the satisfaction of each of the following conditions
on the Closing Date:
(a) All of the representations and warranties of the
Company and the Guarantors contained in this Agreement shall be true and
correct on the Closing Date, with the same force and effect as if made on and
as of the Closing Date. The Company and the Guarantors shall have performed or
complied with all of their obligations and agreements herein contained and
required to be performed or complied with by each of them in all material
respects at or prior to the Closing Date.
(b) (i) The Registration Statement shall have become
effective (or, if a post-effective amendment is required to be filed pursuant
to Rule 430A or 462 of the Act, such post-effective amendment shall have become
effective (or, if any Securities are sold in reliance upon Rule 430A of the Act
and no post-effective amendment is so required to be filed, the form of
prospectus required by Rule 424(b) of the Act shall have been timely filed with
the Commission in accordance with Section 4(a) hereof)) on the date of this
Agreement or at such later date and time as you may approve in writing, (ii) at
the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or, to the best of
the knowledge of the Company, contemplated by the Commission and
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every request for additional information on the part of the Commission shall
have been complied with in all material respects, and (iii) no stop order
suspending the sale of the Securities in any jurisdiction referred to in
Section 4(i) shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or, to the best knowledge of the
Company, threatened and every request for additional information on the part of
any state securities commission has been complied with in all material
respects.
(c) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any
governmental agency, body or official which would, as of the Closing Date,
prevent the issuance of the Securities; and no injunction, restraining order or
order of any nature by any court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the
Securities. Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) of the Act.
(d) (i) Since the earlier of the date hereof or the
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any Material Adverse Change, (ii) since
the date of the latest balance sheet included in the Registration Statement and
the Prospectus, there shall not have been any Material Adverse Change, or
development involving a prospective Material Adverse Change, in the capital
stock or debt, of the Company or any of the Subsidiaries (except for any change
resulting from the adoption or implementation of Rule 121 by the Financial
Accounting Standards Board) and (iii) the Company and the Subsidiaries shall
have no liability or obligation, direct or contingent, that is material to the
Company and the Subsidiaries, individually or in the aggregate, and which is
not disclosed in the Registration Statement and the Prospectus.
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(e) You shall have received a certificate of each of
(i) the Company, executed by the Chief Operating Officer and the Senior Vice
President, Controller and Chief Accounting Officer and (ii) each Guarantor,
executed by one or more officers of such Guarantor, each dated the Closing
Date, confirming, as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 7.
(f) On the Closing Date, you shall have received:
(1) an opinion (satisfactory to you and your
counsel), dated the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company,
to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Delaware.
(ii) The Indenture has been duly authorized, executed
and delivered by the Company and each Guarantor listed on Section A of
Schedule II attached hereto (the "Section A Guarantors"), and
(assuming due authorization, execution and delivery by the Trustee) is
the legally valid and binding agreement of each of the Company and the
Section A Guarantors, enforceable against the Company and the Section
A Guarantors in accordance with its terms.
(iii) The Securities, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be legally valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms.
(iv) The Guarantees have been duly authorized by
each of the Section A Guarantors, and when executed in accordance with
the terms of the Indenture and upon due execution, authentication and
delivery of the Securities and upon payment therefor, will be legally,
valid
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and binding obligations of the Section A Guarantors, enforceable
against the Section A Guarantors in accordance with their terms.
(v) The Indenture has been duly qualified under the
Trust Indenture Act.
(vi) The Underwriting Agreement has been duly
authorized, executed and delivered by the Company and each of the
Section A Guarantors.
(vii) The issuance and sale of the Securities by the
Company and the Section A Guarantors pursuant to the Underwriting
Agreement will not result in the violation by the Company or any
Section A Guarantor of its Certificate of Incorporation or Bylaws or
any federal or California or New York statute, rule or regulation
known to such counsel to be applicable to the Company or any Section A
Guarantor (other than federal or state securities laws, which are
specifically addressed elsewhere herein).
(viii) To the best of such counsel's knowledge, no
consent, approval, authorization or order of, or filing with, any
federal or California or New York court or governmental agency or body
is required for the consummation of the issuance and sale of the
Securities by the Company and the Section A Guarantors pursuant to the
Underwriting Agreement, except such as have been obtained under the
Act and such as may be required under state securities laws in
connection with the purchase and distribution of such Securities by
the Underwriters.
(ix) Neither the Company nor any of the Subsidiaries
is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as
amended.
(x) The Registration Statement has become effective
under the Act and, to the best
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of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act and no proceedings therefor have been initiated by the Commission;
and any required filing of the Prospectus pursuant to Rule 424(b)
under the Act has been made in accordance with Rule 424(b) and 430A
under the Act.
(xi) The Registration Statement and the Prospectus
comply as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act, the Trust Indenture
Act and the rules and regulations of the Commission thereunder; it
being understood, however, that such counsel need express no opinion
with respect to the financial statements, schedules and other
financial and statistical data included in the Registration Statement
or the Prospectus or with respect to the Form T-1. In passing upon
the compliance as to form of the Registration Statement and the
Prospectus, such counsel may assume that the statements made and
incorporated by reference therein are correct and complete.
(xii) The statements set forth in the Prospectus
under the headings "Description of Senior Notes," insofar as such
statements constitute a summary of legal matters, documents or
proceedings, are accurate in all material respects.
2(A) In giving their opinion required by subsection
f(1) of this Section 7, such counsel may state that such opinion is limited as
to matters governed by the federal laws of the Unites States of America, the
laws of the States of New York and California, and the General Corporation Laws
of the State of Delaware. In addition, such counsel shall state that it has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters' representatives, at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel need not pass
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36
upon, and need not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus and need not have made any independent check or verification
thereof, during the course of such participation (relying as to materiality to
a large extent upon the statements of officers and other representatives of the
Company), such counsel shall state that no facts came to such counsel's
attention that caused it to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus as of its
date contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that such counsel need express no belief with respect to the financial
statements, schedules and other financial and statistical data included in the
Registration Statement or the Prospectus or incorporated therein or with
respect to the Form T-1.
The opinions relating to the enforceability of the Indenture,
the Securities and the Guarantees, respectively, shall be subject to the
following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors, including without limitation the effect on the Guarantees of Section
547 or 548 of the Federal Bankruptcy Code and comparable provisions of state
law; (ii) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or law, and the discretion of the court
before which any proceeding therefor may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of provisions
providing for the indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is contrary to public
policy; (iv) no opinion shall be expressed concerning the enforceability of the
waiver of rights or defenses contained in Section 4.6 of the Indenture; and (v)
the manner by which the acceleration of the Securities may affect the
collectibility of that portion of the stated principal
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amount thereof which might be determined to constitute unearned interest
thereon.
(2)(B) You shall have received an opinion dated the
Closing Date, from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., general counsel of the Company,
in form and substance reasonably satisfactory to you, (which may state that
such opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of Delaware and the laws of the State
of California) to the effect that:
(i) Each of the Company and the
Subsidiaries is a duly incorporated and validly existing corporation
in good standing under the laws of its respective jurisdiction of
organization, has the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, to
execute, deliver and perform its obligations pursuant to the Indenture
and this Agreement and to guarantee the Securities as contemplated by
this Agreement and is duly qualified as a foreign corporation and in
good standing in each jurisdiction where the ownership, leasing or
operation of property or the conduct of its business requires such
qualification other than in jurisdictions where the failure to qualify
would not have a Material Adverse Effect; and each of this Agreement,
the Securities and the Indenture has been duly authorized, executed
and delivered by the Company and the Guarantors.
(ii) The execution and delivery of this
Agreement and the Indenture, the issuance and sale of the Securities,
the performance by the Company and the Guarantors of their obligations
pursuant to this Agreement and the Indenture, as applicable, and the
consummation of the transactions contemplated by this Agreement and
the Indenture (A) will not conflict with or result in a breach or
violation of any of the respective charters or bylaws of the Company
or any of the Subsidiaries or the terms or provisions of, (B) will not
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constitute a default by the Company or any Subsidiary under any
statute, rule or regulation or to the best of such counsel's
knowledge, any material agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them is
bound, or to which any of the assets or properties of the Company or
any of the Subsidiaries is subject, or to the best of such counsel's
knowledge any order of any court or governmental agency, body or
official having jurisdiction over the Company or any of the
Subsidiaries or any of their properties, and (C) will not result in
the violation by the Company or any Subsidiary of any federal or state
statute, rule or regulation known to such counsel to be applicable to
the Company or such Subsidiary, as the case may be (other than federal
and state securities laws), except, with respect to clauses (B) and
(C), where such defaults or violations, either singly or in the
aggregate, would not have a Material Adverse Effect.
(iii) To the best of such counsel's
knowledge, no consent, approval, authorization or order of, or filing
with, any federal or state court or governmental agency or body is
required for the consummation of the issuance and sale, pursuant to
this Agreement, of the Securities by the Guarantors listed in Section
B to Schedule II attached hereto (the "Section B Guarantors"), except
such as have been obtained under the Act and such as may be required
under state securities laws in connection with the purchase and
distribution of such Securities by the Underwriters.
(iv) To the best of such counsel's
knowledge, each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus, at the time it was filed
or last amended (except for financial statements, the notes thereto
and related schedules and other financial, numerical, statistical or
accounting data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no
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39
opinion), complied as to form to the applicable requirements of the
Exchange Act.
(v) To the best of such counsel's
knowledge, there is no current, pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary or to which
any of their respective property is subject, which is of such a
material nature as to be required to be disclosed in the Registration
Statement, which is not adequately disclosed in the Prospectus.
(vi) Each of the Company and its
Subsidiaries has such Authorizations from all regulatory or
governmental officials, bodies and tribunals as are, in its reasonable
opinion, necessary to own, lease and operate its respective properties
and to conduct its business in the manner described in the Prospectus
and such certifications, accreditations and eligibility to participate
in specified programs as and to the extent described in the
Registration Statement and Prospectus, including, without limitation,
eligibility to participate in Medicare and Medicaid programs, except
where the failure to have such Authorizations, certifications or to be
eligible would not have a Material Adverse Effect.
(vii) To the best of such counsel's knowledge,
except as otherwise set forth in the Prospectus, the Company and each
of its Subsidiaries has good and marketable title, free and clear of
all Liens, except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being
owned by it, except where failure to have such title or to be free of
such Liens would not have a Material Adverse Effect.
(viii) All of the issued and outstanding
shares of capital stock of, or other ownership interests in, each
Subsidiary are owned directly or through Subsidiaries, by the
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Company, are fully paid and nonassessable, and to the best of such
Counsel's knowledge and except as set forth in the Credit Agreement
are owned free and clear of any Lien.
(ix) The descriptions in the Registration
Statement and the Prospectus of statutes, legal and governmental
proceedings, contracts and other documents and regulatory matters,
including, without limitation, the matters described under the
headings "Business--Governmental Regulation," "Business--Employees"
and "Description of Certain Indebtedness" in the Prospectus, insofar
as such statements constitute summaries of legal matters, documents or
proceedings referred to therein are accurate in all material respects
and fairly present the information required to be shown.
(x) To the best of such counsel's
knowledge, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or Liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in,
any Subsidiary.
(g) You shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for the
Underwriters, in form and substance reasonably satisfactory to you.
(h) You shall have received letters on and as of the
date hereof as well as on and as of the Closing Date (in the latter case
constituting an affirmation of the statements set forth in the former, in form
and substance satisfactory to you, from ▇▇▇▇▇ & Young LLP, independent auditors
complying with Rule 2-01 of Regulation S-X of the Commission, with respect to
the consolidated financial statements and certain financial information
contained in the Registration Statement and the Prospectus as you shall
reasonably require.
(i) All corporate proceedings and other legal
matters incident to the authorization, form and validity of this Agreement, the
Securities, the Registration
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Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
and such counsel shall have been furnished with such documents, in addition to
those set forth above, as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in this Section 7,
in order to evidence the accuracy, completeness and satisfaction in all
material respects of any of the representations, warranties or conditions
herein contained and to render the opinion referred to in Section 7(g).
(j) Prior to the Closing Date, the Company shall
have furnished to you such further information, certificates and documents as
you may reasonably request.
(k) The Company shall not have failed at or prior to
the Closing Date to perform or comply in all material respects with any of the
agreements herein contained and required to be performed or complied with by
the Company at or prior to the Closing Date.
8. Effective Date of Agreement, Default and Termination.
This Agreement shall become effective upon the later of (i) the execution and
delivery of this Agreement by the parties hereto, (ii) unless the Company
intends to rely on Rule 430A of the Act, the effectiveness of the Registration
Statement, and (iii) if the Company intends to rely on Rule 430A of the Act,
the earlier of the effectiveness of a post-effective amendment filed in
compliance with Rule 430A or Rule 462 of the Act or the filing of a final
prospectus pursuant to Rule 424(b).
This Agreement may be terminated at any time on or prior to
the Closing Date by DLJ by notice to the Company if any of the following has
occurred: (i) subsequent to the date the Registration Statement is declared
effective or the date of this Agreement, any Material Adverse Change which, in
the judgment of DLJ, impairs the investment quality of the Securities, (ii) any
outbreak or escalation of hostilities or other national or international
calamity, crisis or emergency or material adverse change in the financial
markets of the United States or elsewhere, or any other substantial national or
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international calamity or emergency if the effect of such outbreak, escalation,
calamity, crisis or emergency would, in DLJ's judgment make it impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of
the Securities, (iii) any suspension or limitation of trading generally in
securities on the New York, American or Pacific Stock Exchanges, the National
Association of Securities Dealers Automated Quotation National Market, or the
over-the-counter markets or any setting of minimum prices for trading on such
exchanges or markets, (iv) any declaration of a general banking moratorium by
either Federal or New York authorities, (v) the taking of any action by any
Federal, state or local government or agency in respect of its monetary or
fiscal affairs that in DLJ's judgment has a material adverse effect on the
financial markets in the United States, and would, in DLJ's judgment, make it
impracticable or inadvisable to market the Securities to enforce contracts for
the sale of the Securities, (vi) any securities of the Company or any of the
Subsidiaries shall have been downgraded or placed on any "watch list" for
possible downgrading or reviewed for a possible change that does not indicate
the direction of the possible change by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule 436(g)(2) of
the Act, (vii) the delisting of the Common Stock from the Nasdaq-NM, NYSE or
American or Pacific Stock Exchanges, or (viii) the enactment, publication,
decree or other promulgation of any Federal or state statute, regulation, or
rule or order of any court or other governmental authority which in the
judgment of DLJ could have a Material Adverse Effect.
If this Agreement shall be terminated by the Underwriters
pursuant to clause (i), (vi), or (vii) of the second paragraph of this Section
8 or because of the failure or refusal on the part of the Company or any of the
Guarantors to comply in all material respects with the terms or to fulfill any
of the conditions of this Agreement, the Company agrees to reimburse you for
all reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by you. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has
agreed to pay pursuant to Section 4(f) hereof. If this Agreement is terminated
pursuant to this Section 8, such
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termination shall be without liability of any Underwriter to the Company or any
Guarantor.
If on the Closing Date any of the Underwriters shall fail or
refuse to purchase the Securities which it has agreed to purchase hereunder on
such date, and the aggregate principal amount of such Securities that such
defaulting Underwriter or Underwriters, as the case may be, agreed but failed
or refused to purchase does not exceed 10% of the total principal amount of
such Securities to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion
which the amount of Securities set forth opposite its name in Schedule I hereto
bears to the aggregate principal amount of Securities which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you (at your option) may specify, to purchase the
Securities that such defaulting Underwriter or Underwriters, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of Securities that any Underwriter
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 8 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If, on the Closing
Date any of the Underwriters shall fail or refuse to purchase the Securities,
as the case may be, and the total principal amount of Securities with respect
to which such default occurs exceeds 10% of the total amount of Securities to
be purchased on such date by all Underwriters and arrangements satisfactory to
you and the Company for the purchase of such Securities are not made within 48
hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Underwriters and the Company, except as
otherwise provided in this Section 8. In any such case that does not result in
termination of this Agreement, either you or the Company may postpone the
Closing Date for not longer than seven (7) days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve a defaulting Underwriter from liability in respect
of any default of any such Underwriter under this Agreement.
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9. Notices. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to it at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-0155, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇, and (b) if to any
Underwriter, to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Department, and, in
each case, with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, or in any case to
such other address as the person to be notified may have requested in writing.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY, ON BEHALF OF
ITSELF AND THE GUARANTORS , HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF
NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS
AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY
DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH COURT. THE COMPANY, ON BEHALF OF ITSELF AND THE GUARANTORS, IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
11. Severability. Any determination that any provision of
this Agreement may be, or is, unenforceable shall not affect the enforceability
of the remainder of this Agreement.
12. Successors. Except as otherwise provided, this Agreement
has been and is made solely for the benefit of and shall be binding upon the
Company, the Guarantors, the Underwriters, any Indemnified Person referred
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to herein and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The terms "successors and assigns" shall
not include a purchaser of any of the Securities from any of the Underwriters
merely because of such purchase.
13. Certain Definitions. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act.
14. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in one or more counterpart, the executed
counterparts shall each be deemed to be an original, not all such counterparts
shall together constitute one and the same instrument.
15. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to effect
the meaning or interpretation of, this Agreement.
16. Survival. The indemnities and contribution provisions
and the other agreements, representations and warranties of the Company, its
officers and directors, the Guarantors and of the Underwriters set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Securities, regardless
of (i) any investigation, or statement as to the results thereof, made by or on
behalf of any of the Underwriters or by or on behalf of the Company, the
officers or directors of the Company or any controlling person of the Company
or the Subsidiaries, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of this Agreement.
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This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument. Please confirm that the
foregoing correctly sets forth the agreement among the Company and you.
Very truly yours,
▇▇▇▇▇▇▇ ENTERPRISES, INC.
By: ________________________
Name:
Title:
THE GUARANTORS LISTED ON
SCHEDULE II HERETO
By: ▇▇▇▇▇▇▇ ENTERPRISES, INC.
By: ________________________
Name:
Title:
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The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CHEMICAL SECURITIES INC.
Acting on behalf of themselves
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: _______________________
Name:
Title:
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▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
By: _______________________
Name:
Title:
▇▇▇▇▇▇▇▇ INC.
By: _______________________
Name:
Title:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: _______________________
Name:
Title:
CHEMICAL SECURITIES INC.
By: _______________________
Name:
Title:
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SCHEDULE I
Principal
Amount
------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation . . . . . . . . . $
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . .
▇.▇. ▇▇▇▇▇▇ Securities Inc. . . . . . . .
Chemical Securities Inc. . . . . . . . . .
------------
Total . . . . . . . . . . . . . . $150,000,000
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SCHEDULE II
GUARANTORS
SECTION A
American Transitional Hospitals, Inc.
▇▇▇▇▇▇▇ Health and Rehabilitation Services, Inc.
▇▇▇▇▇▇▇ Enterprises -- California, Inc.
▇▇▇▇▇▇▇ Enterprises -- Florida, Inc.
▇▇▇▇▇▇▇ Enterprises -- Texas, Inc.
Pharmacy Corporation of America
SECTION B
A.B.C. Health Equipment Corp.
AdviNet, Inc.
AGI-Camelot, Inc.
AGI-▇▇▇▇▇▇▇▇ County Health Care, Inc.
Alliance Health Services, Inc.
Alliance Home Health Care, Inc.
Amco Medical Service, Inc.
American Transitional Care Centers of Texas, Inc.
American Transitional Care Dallas -- Ft. Worth, Inc.
American Transitional Health Care, Inc.
American Transitional Hospitals of Indiana, Inc.
American Transitional Hospitals of Oklahoma, Inc.
American Transitional Hospitals of Tennessee, Inc.
American Transitional Hospitals -- Texas Medical
Center, Inc.
ATH -- Clear Lake, Inc.
ATH Columbus, Inc.
ATH Del Oro, Inc.
ATH Heights, Inc.
ATH Oklahoma City, Inc.
ATH Tucson, Inc.
▇▇▇▇▇▇▇ Acquisition Corporation
▇▇▇▇▇▇▇ Assisted Living, Inc.
▇▇▇▇▇▇▇ Enterprises -- Alabama, Inc.
▇▇▇▇▇▇▇ Enterprises -- Arizona, Inc.
▇▇▇▇▇▇▇ Enterprises -- Arkansas, Inc.
▇▇▇▇▇▇▇ Enterprises -- Colorado, Inc.
▇▇▇▇▇▇▇ Enterprises -- Connecticut, Inc.
▇▇▇▇▇▇▇ Enterprises -- Delaware, Inc.
▇▇▇▇▇▇▇ Enterprises -- Distribution Services, Inc.
▇▇▇▇▇▇▇ Enterprises -- District of Columbia, Inc.
▇▇▇▇▇▇▇ Enterprises -- Garden Terrace, Inc.
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▇▇▇▇▇▇▇ Enterprises -- Georgia, Inc.
▇▇▇▇▇▇▇ Enterprises -- Hawaii, Inc.
▇▇▇▇▇▇▇ Enterprises -- Idaho, Inc.
▇▇▇▇▇▇▇ Enterprises -- Illinois, Inc.
▇▇▇▇▇▇▇ Enterprises -- Indiana, Inc.
▇▇▇▇▇▇▇ Enterprises -- Iowa, Inc.
▇▇▇▇▇▇▇ Enterprises -- Kansas, Inc.
▇▇▇▇▇▇▇ Enterprises -- Kentucky, Inc.
▇▇▇▇▇▇▇ Enterprises -- Louisiana, Inc.
▇▇▇▇▇▇▇ Enterprises -- Maine, Inc.
▇▇▇▇▇▇▇ Enterprises -- Maryland, Inc.
▇▇▇▇▇▇▇ Enterprises -- Massachusetts, Inc.
▇▇▇▇▇▇▇ Enterprises -- Michigan, Inc.
▇▇▇▇▇▇▇ Enterprises -- Minnesota, Inc.
▇▇▇▇▇▇▇ Enterprises -- Mississippi, Inc.
▇▇▇▇▇▇▇ Enterprises -- Missouri, Inc.
▇▇▇▇▇▇▇ Enterprises -- Montana, Inc.
▇▇▇▇▇▇▇ Enterprises -- Nebraska, Inc.
▇▇▇▇▇▇▇ Enterprises -- Nevada, Inc.
▇▇▇▇▇▇▇ Enterprises -- New Hampshire, Inc.
▇▇▇▇▇▇▇ Enterprises -- New Jersey, Inc.
▇▇▇▇▇▇▇ Enterprises -- New Mexico, Inc.
▇▇▇▇▇▇▇ Enterprises -- North Carolina, Inc.
▇▇▇▇▇▇▇ Enterprises -- North Dakota, Inc.
▇▇▇▇▇▇▇ Enterprises -- Ohio, Inc.
▇▇▇▇▇▇▇ Enterprises -- Oklahoma, Inc.
▇▇▇▇▇▇▇ Enterprises -- Oregon, Inc.
▇▇▇▇▇▇▇ Enterprises -- Pennsylvania, Inc.
▇▇▇▇▇▇▇ Enterprises -- Rhode Island, Inc.
▇▇▇▇▇▇▇ Enterprises -- South Carolina, Inc.
▇▇▇▇▇▇▇ Enterprises -- Tennessee, Inc.
▇▇▇▇▇▇▇ Enterprises -- Utah, Inc.
▇▇▇▇▇▇▇ Enterprises -- Vermont, Inc.
▇▇▇▇▇▇▇ Enterprises -- Virginia, Inc.
▇▇▇▇▇▇▇ Enterprises -- Washington, Inc.
▇▇▇▇▇▇▇ Enterprises -- West Virginia, Inc.
▇▇▇▇▇▇▇ Enterprises -- Wisconsin, Inc.
▇▇▇▇▇▇▇ Enterprises -- Wyoming, Inc.
▇▇▇▇▇▇▇ Enterprises Japan Limited
▇▇▇▇▇▇▇ Enterprises Medical Equipment Corporation
▇▇▇▇▇▇▇ Enterprises Rehabilitation Corporation
▇▇▇▇▇▇▇ Holdings I, Inc.
▇▇▇▇▇▇▇ Manor Inc. of Hawaii
▇▇▇▇▇▇▇ Real Estate Holdings, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Depositor, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Cay Manor, Inc.
Brownstone Pharmacy, Inc.
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Columbia-Valley Nursing Home, Inc.
Commercial Management, Inc.
Computran Systems, Inc.
Continental Care Centers of Council Bluffs, Inc.
DD Wholesale, Inc.
▇▇▇▇▇▇▇▇▇▇ Drug, Inc.
▇▇▇▇▇▇▇▇▇▇ Rx Services of Rhode Island, Inc.
▇▇▇▇▇▇▇▇▇▇ Rx Services of Massachusetts, Inc.
Forest City Building Ltd.
Hallmark Convalescent Homes, Inc.
Healthcare Prescription Services, Inc.
Home Medical Systems, Inc.
Hospice Preferred Choice, Inc.
Hospital Facilities Corporation
Insta-Care Holdings, Inc.
Insta-Care Pharmacy Services Corporation
Insurance Software Packages, Inc.
Kenwood View Nursing Home, Inc.
Liberty Nursing Homes, Incorporated
Medical Arts Health Facility of Lawrenceville, Inc.
Medical Health Industries, Inc.
MedView Services, Incorporated
Moderncare of Lumberton, Inc.
Nebraska City S-C-H, Inc.
Nursing Home Operators, Inc.
Omni Med B, Inc.
▇▇▇▇▇▇▇▇ Health Care, Inc.
Pharmacy Corporation of America -- Massachusetts, Inc.
Pharmacy Dynamics Group, Inc.
Phymedsco, Inc.
Resource Opportunities, Inc.
Salem No. 1, Inc.
South Alabama Nursing Home, Inc.
South Dakota -- ▇▇▇▇▇▇▇ Enterprises, Inc.
Spectra Rehab Alliance, Inc.
Synergos, Inc.
Synergos -- North Hollywood, Inc.
Synergos -- Pleasant Hill, Inc.
Synergos -- Scottsdale, Inc.
▇▇▇▇▇▇ County Health Facility, Inc.
TMD Disposition Company
Vantage Healthcare Corporation
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