EXHIBIT 10.1
$200,000,000
MANOR CARE, INC.
6.25% Senior Notes due 2013
Purchase Agreement
April 10, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Manor Care, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell (the "Offering") $200,000,000 aggregate principal amount of its 6.25%
Senior Notes due 2013 (the "Securities"). The Securities will be issued pursuant
to an Indenture to be dated as of April 15, 2003 (the "Indenture") between the
Company, each of the subsidiaries of the Company listed on Schedule 1 hereto
(each a "Guarantor" and together, the "Guarantors") and National City Bank, as
trustee (the "Trustee"). The Securities will be guaranteed by guarantees (the
"Guarantees", and each a "Guarantee") of each of the Guarantors. The Company
hereby confirms its agreement with ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMorgan"),
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, UBS Warburg LLC, Bank of
America Securities LLC, BNY Capital Markets, Inc., NatCity Investments, Inc. and
SunTrust Capital Markets, Inc. (together with JPMorgan, the "Initial
Purchasers") concerning the purchase of the Securities from the Company by the
several Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated April 9, 2003 (the "Preliminary Offering
Memorandum") and will prepare an offering memorandum dated the date hereof (the
"Offering
Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to the
Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to
include all amendments and supplements thereto, unless otherwise noted. The
Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Securities by the Initial Purchasers in accordance with
Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act (the "Exchange
Offer Registration Statement") registering an issue of senior notes of the
Company and related guarantees of each of Guarantors (the "Exchange Securities")
which are identical in all material respects to the Securities (except that the
Exchange Securities will not contain terms with respect to transfer
restrictions) and the Guarantees and under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Concurrently with the consummation of the Offering, or shortly thereafter
the Company intends to (i) enter into a revolving credit facility with Bank of
America, N.A., as administrative agent, JPMorgan Chase Bank, as syndication
agent, Banc of America Securities LLC, as sole lead arranger and sole book
manager, the lenders named therein and the subsidiary guarantors named therein
for an aggregate borrowing of up to $200,000,000 (the "New Credit Facility"),
and (ii) issue and sell $90,000,000 aggregate principal amount of its
Convertible Senior Notes due 2023 (the "Convertible Notes"). The Convertible
Notes will be issued pursuant to an indenture to be dated as of April 15, 2003
(the "Convertible Notes Indenture") among the Company, the subsidiary guarantors
named therein and the Trustee. Assuming these transactions are consummated
concurrently, the proceeds from the sale of the Securities, together with
borrowings under the New Credit Facility and proceeds of the sale of the
Convertible Notes, will be used (i) to repay outstanding indebtedness of the
Company under its existing credit facility, (ii) purchase shares of the
Company's common stock (iii) to pay related fees and expenses and (iv) for
general corporate purposes, including additional repurchases of shares of the
Company's common stock.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company and each of
the Guarantors. The Company and the Guarantors jointly and severally represent
and warrant to, and agree with, the several Initial Purchasers on and as of the
date hereof and the Closing Date (as defined in Section 3) that:
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(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and each of the Guarantors make no representation or warranty as to
information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum in reliance upon and in conformity
with written information relating to the Initial Purchasers furnished to
the Company or the Guarantors by or on behalf of any Initial Purchaser
specifically for use therein as specified in Section 16 hereof (the
"Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or, until such time as the
Exchange Securities are issued pursuant to an effective registration
statement, to qualify the Indenture under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
(d) The Company and each of its subsidiaries have been duly
incorporated or formed, as the case may be, and are validly existing
corporations or limited liability companies, as the case may be, in good
standing under the laws of their respective jurisdictions of incorporation
or formation as the case may be, are duly qualified to do business and are
in good standing as foreign corporations or foreign limited liability
companies, as the case may be, in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure
to so qualify or have such power or authority would not, singularly or in
the aggregate, reasonably be expected to result in a material adverse
effect on the condition (financial or otherwise), results of operations or
business or prospects of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"). Schedule 2 sets forth all of the direct and
indirect subsidiaries of the Company.
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(e) The Company has an authorized capitalization as set forth in the
Offering Memorandum under the heading "Capitalization"; all of the
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable. Except
as noted on Schedule 2, all the outstanding shares of capital stock or
membership interests, as the case may be, of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free
and clear of any lien, charge, encumbrance, security interest, restriction
upon voting or transfer or any other claim of any third party.
(f) The Company and each of the Guarantors has full right and
authority to execute and deliver this Agreement, the Indenture (including
the Guarantees set forth therein), the Registration Rights Agreement, the
Securities (in the case of the Company only), the Exchange Securities (in
the case of the Company only) and the related guarantees (collectively, the
"Transaction Documents") and to perform their respective obligations
hereunder and thereunder; and, as of the Closing Date, all corporate or
limited liability company action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby
will have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and each of the Guarantors and constitutes a valid and legally
binding agreement of the Company and each of the Guarantors, except as
rights to indemnification and contribution may be limited by public policy
considerations or applicable law.
(h) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(i) The Indenture has been duly authorized by the Company and each of
the Guarantors and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
by general equitable principles
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(whether considered in a proceeding in equity or at law). On the Closing
Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder.
(j) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in the
Indenture (assuming the Indenture is the valid and legally binding
obligation of the Trustee and due authentication of the Securities by the
Trustee) and paid for as provided herein, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations
of the Company, as issuer, and each of the Guarantors, as guarantors,
entitled to the benefits of the Indenture and enforceable against the
Company, as issuer, and each of the Guarantors, as guarantors, in
accordance with their terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(k) Each of the Guarantors that, as of the date of the Guarantees, is
a guarantor of the $150,000,000 of 7 1/2% Senior Notes due 2006 issued by
Manor Care of America, Inc. and the $200,000,000 of 8% Senior Notes due
2008 issued by Manor Care, Inc. is also a Guarantor of the Securities.
Schedule 3 attached hereto sets forth all the Significant Subsidiaries of
the Company (as within the meaning of Rule 1-02 under Regulation S-X
promulgated by the Commission) and each such Significant Subsidiary is a
Guarantor of the Securities. The Guarantees have been duly authorized by
each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid
for as provided herein (assuming due authorization, execution and delivery
of the Indenture by the Trustee and due authentication of the Securities by
the Trustee), will constitute valid and legally binding obligations of each
of the Guarantors, enforceable against the Guarantors in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and to general equitable principles (whether considered in
a proceeding in equity or at law).
(l) The Exchange Securities have been duly authorized by the Company
and the related guarantees have been duly authorized by each of the
Guarantors and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and the Registration Rights Agreement (assuming
the Indenture is the valid and legally binding obligation of the Trustee)
will constitute a valid and legally binding obligation of the Company, as
issuer, and each of the Guarantors, as guarantors, enforceable against the
Company, as issuer, and each of the Guarantors, as guarantors, in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar
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laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(m) Each of the Indenture and the Registration Rights Agreement
conforms in all material respects to the description thereof contained in
the Offering Memorandum.
(n) The execution, delivery and performance by the Company and each of
the Guarantors of each of the Transaction Documents to which it is a party,
the issuance, authentication, sale and delivery of the Securities and
compliance by the Company and each of the Guarantors with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws (or any other comparable
organizational documents) of the Company or any of its subsidiaries or any
statute or any judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets;
and no consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or governmental agency or
body under any such statute, judgment, order, decree, rule or regulation is
required for the execution, delivery and performance by the Company and
each of the Guarantors of each of the Transaction Documents to which each
is a party, the issuance, authentication, sale and delivery of the
Securities, the issuance of the Guarantees, the issuance, authentication
and delivery of the Exchange Securities and the related guarantees and
compliance by the Company and each of the Guarantors with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, filings,
registrations or qualifications which shall have been obtained or made
prior to the Closing Date and as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided
in the Registration Rights Agreement.
(o) Ernst & Young LLP are independent certified public accountants
with respect to the Company and its subsidiaries (i) as required by the
Securities Act and the rules and regulations of the Commission thereunder
and (ii) within the meaning of Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder. The historical financial statements
(including the related notes) contained in the Offering Memorandum comply
as to form in all material
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respects with the requirements applicable to a registration statement on
Form S-1 under the Securities Act (except that certain supporting schedules
are omitted); such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly present the financial
position of the entities purported to be covered thereby at the respective
dates indicated and the results of their operations and their cash flows
for the respective periods indicated; and the financial information
contained in the Offering Memorandum under the headings "Offering
Memorandum Summary--Summary Consolidated Financial Data", "Capitalization
of the Company", "Selected Historical Consolidated Financial Data", and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" are derived from the accounting records of the Company and its
subsidiaries and fairly present the information purported to be shown
thereby. The as adjusted financial information contained in the Offering
Memorandum has been prepared on a basis consistent with the historical
financial statements contained in the Offering Memorandum (except for the
adjustments specified therein). The other historical financial and
statistical information and data included in the Offering Memorandum are,
in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company.
(p) Except as otherwise disclosed in the Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property or assets of
the Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse
Effect, and to the best knowledge of the Company, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(q) No action has been taken and no statute, rule, regulation or order
has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Securities or the issuance of the
Guarantees or suspends the sale of the Securities in any jurisdiction; no
injunction, restraining order or order of any nature by any federal or
state court of competent jurisdiction has been issued with respect to the
Company or any of its subsidiaries which would prevent or suspend the
issuance or sale of the Securities or the issuance of the Guarantees or the
use of the Preliminary Offering Memorandum or the Offering Memorandum in
any jurisdiction; no action, suit or proceeding is pending against or, to
the best knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the issuance
of the Securities or the issuance of the Guarantees or in any manner draw
into question the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and the
Company has complied with any
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and all requests by any securities authority in any jurisdiction for
additional information to be included in the Preliminary Offering
Memorandum and the Offering Memorandum.
(r) Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws (or other comparable organizational
documents), (ii) in default, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject, which, singularly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect,
or (iii) in violation of any law, ordinance, governmental rule, regulation
or court decree to which it or its property or assets may be subject which,
singularly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(s) The Company and each of its subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies which are necessary for the ownership
of their respective properties or the conduct of their respective
businesses as described in the Offering Memorandum, except where the
failure to possess or make the same would not, singularly or in the
aggregate, have a Material Adverse Effect, and neither the Company nor any
of its subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit,
which, singularly or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in the
ordinary course.
(t) The Company and each of its subsidiaries have filed all material
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof and have paid all taxes due and owing
thereon, other than those being contested in good faith and for which
adequate reserves have been provided. No tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the Company or any of its subsidiaries have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have) a Material Adverse
Effect, except those deficiencies for which adequate reserves have been
established.
(u) Neither the Company nor any of its 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 (the "Investment
Company Act"), and the rules and regulations of the Commission thereunder.
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(v) The Company and each of its subsidiaries maintain 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 generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) The Company and each of its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, as are
consistent with industry practice to protect the Company and its
subsidiaries and their respective businesses. Neither the Company nor any
of its subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
(x) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) presently employed by them in
connection with the respective businesses now operated by them; and the use
of such rights in connection with their respective businesses will not
conflict in any material respect with, and the Company and its subsidiaries
have not received any notice of any claim of conflict with, any such rights
of others, except such conflicts which, singularly or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(y) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property which are material to the business of
the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as
do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or could not reasonably
be expected to have a Material Adverse Effect, except with respect to
secured debt described in the Offering Memorandum.
(z) Except for those that could not reasonably be expected to have a
Material Adverse Effect, no labor disturbance by or dispute with the
employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened.
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(aa) Except to the extent such events could not reasonably be expected
to have a Material Adverse Effect, no "prohibited transaction" (as defined
in Section 406 of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the "Code")) or accumulated funding deficiency" (as
defined in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan of the Company or any of its
subsidiaries; each such employee benefit plan is in compliance with
applicable law, including ERISA and the Code; the Company and each of its
subsidiaries have not incurred and do not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from,
any pension plan for which the Company or any of its subsidiaries would
have any liability; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which could cause the
loss of such qualification.
(bb) Except as described in the Offering Memorandum, there has been no
storage, generation, transportation, handling, treatment, disposal,
discharge, emission or other release of any kind of toxic or other wastes
or other hazardous substances by, due to or caused by the Company or any of
its subsidiaries (or, to the best knowledge of the Company, any other
entity (including any predecessor) for whose acts or omissions the Company
or any of its subsidiaries is or could reasonably be expected to be liable)
upon any of the property now or previously owned or leased by the Company
or any of its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule (including
rule of common law), regulation, order, judgment, decree or permit, give
rise to any liability, except for any violation or liability that could not
reasonably be expected to have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; and there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which
the Company or any of its subsidiaries has any knowledge, except for any
such disposal, discharge, emission or other release of any kind which could
not reasonably be expected to have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect.
(cc) On and immediately after the Closing Date, the Company and each
of the Guarantors (after giving effect to the issuance of the Securities
and to the other transactions related thereto as described in the Offering
Memorandum) will be Solvent. As used in this paragraph, the term "Solvent"
means, with respect to a particular date, that on such date the present
fair market value (or present fair
10
saleable value) of the assets of the Company or such Guarantor, as the case
may be, is not less than the total amount required to pay the probable
liabilities of the Company or such Guarantor on its total existing debts
and liabilities (including contingent liabilities) as they become absolute
and matured, the Company or such Guarantor is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business,
assuming the sale of the Securities as contemplated by this Agreement and
the Offering Memorandum, the Company or such Guarantor is not incurring
debts or liabilities beyond its ability to pay as such debts and
liabilities mature and the Company or such Guarantor is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which the Company or such Guarantor is engaged. In computing
the amount of such contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
(dd) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the Company
or any of its subsidiaries.
(ee) Neither the Company nor any of its subsidiaries or agents has
taken, and none of them will take, any action that might cause this
Agreement or the issuance and sale of the Securities or the issuance of the
Guarantees to violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(ff) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Company or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Securities.
(gg) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(hh) None of the Company, any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as such term is defined in Regulation S under the Securities Act
("Regulation S")), and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S to the extent
applicable.
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(ii) Exclusive of the Initial Purchasers, neither the Company nor any
of its affiliates has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as such term is defined in the Securities Act), which is or will
be integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities Act.
(jj) None of the Company or any of its affiliates or any other person
acting on its or their behalf has engaged, in connection with the offering
of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(kk) Neither the Company nor any of its affiliates has taken and will
not take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act in connection with the offering of the Securities.
(ll) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(mm) Since the date as of which information is given in the Offering
Memorandum (exclusive of amendments or supplements after the date hereof),
except as otherwise stated therein, (i) there has been no material adverse
change or any development involving a prospective material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs, management or business prospects of the Company, whether or not
arising in the ordinary course of business, (ii) none of the Company or any
of its subsidiaries has incurred any material liability or obligation,
direct or contingent, other than in the ordinary course of business, (iii)
none of the Company or any of its subsidiaries has entered into any
material transaction other than in the ordinary course of business, (iv)
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or any dividend or distribution of any
kind declared, paid or made by the Company or any of its subsidiaries on
any class of its capital stock, or any redemption in respect thereof and
(v) neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood
or other calamity, in each case not covered by insurance, or from any labor
disturbance or dispute, except in each case as otherwise disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum.
(nn) No Guarantor is currently prohibited, directly or indirectly,
under any agreement or other instrument to which it is a party or is
subject, from paying any dividends to the Company, from making any other
distribution on such Guarantor's capital stock, from repaying to the
Company any loans or advances to such Guarantor from the Company or from
transferring any of such
12
Guarantor's properties or assets to the Company or any other subsidiary of
the Company.
(oo) Nothing has come to the attention of the Company that has caused
the Company to believe that the statistical and market-related data
included in the Preliminary Offering Memorandum and the Offering Memorandum
is not based on or derived from sources that are reliable and accurate in
all material respects.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 4 hereto at a purchase price equal to 98.436% of
the principal amount thereof. The Company shall not be obligated to deliver any
of the Securities except upon payment for all of the Securities to be purchased
as provided herein.
(b) The Initial Purchasers have advised the Company that they propose to
offer the Securities for resale upon the terms and subject to the conditions set
forth herein and in the Offering Memorandum. Each Initial Purchaser, severally
and not jointly, represents, warrants to and agrees with the Company that (i) it
is purchasing the Securities pursuant to an exemption from registration under
the Securities Act, (ii) it has not solicited offers for, or offered or sold,
and will not solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act ("Regulation D") and (iii)
it has solicited and will solicit offers for the Securities only from, and has
offered or sold and will offer, sell or deliver the Securities, as part of their
initial offering, only (A) within the United States to persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers"), as defined in Rule 144A under the Securities Act ("Rule
144A"), or if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to it that each such account is a Qualified Institutional Buyer to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A and (B) outside the United States to persons other than U.S.
persons in reliance on Regulation S under the Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) such Initial Purchaser is a Qualified Institutional Buyer, with
such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
Securities.
13
(ii) the Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act.
(iii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of its distribution at any
time and (B) otherwise until 40 days after the later of the commencement of
the offering of the Securities and the Closing Date, only in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act.
(iv) none of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts (as such term is defined in Regulation S) with
respect to the Securities or the Guarantees, and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S.
(v) at or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold within the United States or to, or
for the account or benefit of U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering of the Securities
and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act. Terms used
above have the meanings given to them by Regulation S."
(vi) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that (i) it has not offered or sold and prior to the date six months
after the Closing Date will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the United Kingdom
14
Public Offers of Securities Regulations 1995 (as amended); (ii) it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the United Kingdom Financial Services and
Markets Act 2000 (the "FSMA")) received by it in connection with the issue or
sale of any Securities in circumstances in which Section 21(1) of the FSMA does
not apply to the Company or the Guarantors; and (iii) it has complied and will
comply with all applicable provisions of the FSMA with respect to anything done
by it in relation to the Securities in, from or otherwise involving the United
Kingdom.
(e) Each Initial Purchaser, severally and not jointly, agrees that, prior
to or simultaneously with the confirmation of sale by such Initial Purchaser to
any purchaser of any of the Securities purchased by such Initial Purchaser from
the Company pursuant hereto, such Initial Purchaser shall furnish to that
purchaser a copy of the Offering Memorandum (and any amendment or supplement
thereto that the Company shall have furnished to such Initial Purchaser prior to
the date of such confirmation of sale where required by applicable law). In
addition to the foregoing, each Initial Purchaser acknowledges and agrees that
the Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 5(d), (e) and (g), counsel for the Company and
for the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers and their compliance
with their agreements contained in this Section 2, and each Initial Purchaser
hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial Purchasers may
sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and payment
for the Securities shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Company, at 10:00 A.M., New York City time, on April
15, 2003, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchasers and the Company
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the Securities
shall be made to the Company by wire or book-entry transfer of same-day funds to
such account or accounts as the Company shall specify prior to the Closing Date
or by such other means as the parties hereto shall agree prior to the Closing
Date against delivery to the Initial Purchasers of the certificates evidencing
the Securities. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Initial Purchasers hereunder. Upon delivery, the Securities shall be in
global form, registered in such names and in such denominations as JPMorgan on
behalf of the Initial Purchasers shall have requested in writing not less than
two full business days prior to the Closing Date. The Company agrees to make one
or more global certificates evidencing the Securities available for
15
inspection by JPMorgan on behalf of the Initial Purchasers in New York, New York
at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company and each of the Guarantors. Each of
the Company and each of the Guarantors agrees with each of the several Initial
Purchasers:
(a) during the period referred to in Section 4(d), to advise the
Initial Purchasers promptly and, if requested, confirm such advice in
writing, of the happening of any event which makes any statement of a
material fact made in the Offering Memorandum untrue or which requires the
making of any additions to or changes in the Offering Memorandum (as
amended or supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; to advise the Initial Purchasers promptly of any order
preventing or suspending the use of the Preliminary Offering Memorandum or
the Offering Memorandum, of any suspension of the qualification of the
Securities for offering or sale in any jurisdiction and of the initiation
or threatening of any proceeding for any such purpose; and to use its
reasonable best efforts to prevent the issuance of any such order
preventing or suspending the use of the Preliminary Offering Memorandum or
the Offering Memorandum or suspending any such qualification and, if any
such suspension is issued, to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
16
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and prospective purchasers of the Securities
designated by such holders);
(f) for so long as the Securities are outstanding, upon the request of
an Initial Purchaser, to furnish to the Initial Purchasers copies of any
annual reports, quarterly reports and current reports filed by the Company
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms as may be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company to the Trustee
or to the holders of the Securities pursuant to the Indenture or the
Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Company and its subsidiaries
shall not be obligated to qualify as foreign corporations or limited
liability companies in any jurisdiction in which they are not so qualified
or to file a general consent to service of process in any jurisdiction;
(h) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its affiliates not to, and not to authorize or
knowingly permit any person acting on their behalf to, solicit any offer to
buy or offer to sell the
17
Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act;
and not to offer, sell, contract to sell or otherwise dispose of, directly
or indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section 4(2)
of the Securities Act to cease to be applicable to the offering and sale of
the Securities as contemplated by this Agreement and the Offering
Memorandum;
(k) for a period of 90 days from the date of the Offering Memorandum,
not to offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Company or any of its subsidiaries
(other than the Securities or the Exchange Notes) without the prior written
consent of the Initial Purchasers;
(l) during the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchasers,
not to, and not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Company or any
of its affiliates and resold in a transaction registered under the
Securities Act;
(m) in connection with the offering of the Securities, until JPMorgan
on behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent active trading in or of raising the price of the
Securities;
(n) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(o) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
(p) to do and perform all things required to be done and performed by
it under this Agreement that are within its reasonable control prior to or
after the Closing Date, and to use its reasonable best efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
18
(q) to not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture;
(r) to not take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(s) prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing
communications in the ordinary course of business and consistent with the
past practices of the Company and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers,
unless in the judgment of the Company and its counsel, and after
notification to the Initial Purchasers, such press release or communication
is required by law; and
(t) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
(u) Neither the Company nor any of the Guarantors will take, directly
or indirectly, any action designed to or that could reasonably be expected
to cause or result in any stabilization or manipulation of the price of the
Securities.
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and the Guarantors contained
herein, to the accuracy of the statements of the Company, the Guarantors and
each of their respective officers made in any certificates delivered pursuant
hereto, to the performance by the Company and the Guarantors of their
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceedings for the purpose
shall have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and disclosed
to the Company on or prior to the Closing Date that the Offering Memorandum
or any amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel for the Initial Purchasers, is
material or omits to
19
state any fact which, in the opinion of such counsel is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate or limited liability company proceedings and other
legal matters incident to the authorization, form and validity of each of
the Transaction Documents and the Offering Memorandum, and all other legal
matters relating to the Transaction Documents and the transactions
contemplated thereby, shall be satisfactory in all material respects to the
Initial Purchasers, and the Company and each of the Guarantors shall have
furnished to the Initial Purchasers all documents and information that they
or their counsel may reasonably request to enable them to pass upon such
matters.
(d) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Illinois LLC shall have furnished to the Initial
Purchasers their written opinion, as special counsel to the Company and
certain of the Guarantors, addressed to the Initial Purchasers and dated
the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, substantially in the form set forth in Annex B-1
hereto.
(e) R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel of the Company, shall have
furnished to the Initial Purchasers his written opinion, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially in the
form set forth in Annex B-2 hereto.
(f) ▇▇▇▇ ▇▇▇▇▇ LLP, special regulatory counsel for the Company, shall
have furnished to the Initial Purchasers their written opinion, addressed
to the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially in the
form set forth in Annex B-3 hereto.
(g) The Initial Purchasers shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they request for the purpose
of enabling them to pass upon such matters.
(h) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, P.C., special regulatory counsel for the
Initial Purchasers, shall have furnished to the Initial Purchasers their
written opinion, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Initial
Purchasers.
(i) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial Letter") of Ernst & Young LLP, addressed to the
Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers.
20
(j) The Company shall have furnished to the Initial Purchasers a
letter (the "Bring-Down Letter") of Ernst & Young LLP, addressed to the
Initial Purchasers and dated the Closing Date (A) confirming that they are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder, (B)
stating, as of the date of the Bring-Down Letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Offering Memorandum,
as of a date not more than three business days prior to the date of the
Bring-Down Letter), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by the
Initial Letter are accurate and (C) confirming in all material respects the
conclusions and findings set forth in the Initial Letter.
(k) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of its chief executive officer or its
chief financial officer stating that (A) such officers have carefully
examined the Offering Memorandum, (B) in their opinion, the Offering
Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
since the date of the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and would not
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (C) as of the Closing Date,
the representations and warranties of the Company and the each of the
Guarantors, as applicable, in this Agreement are true and correct in all
material respects, the Company and the each of the Guarantors, as
applicable, have complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder on or prior to the
Closing Date, and subsequent to the date of the most recent financial
statements contained in the Offering Memorandum (exclusive of amendments or
supplements to the Offering Memorandum after the date hereof), there has
been no material adverse change in the financial position or results of
operation of the Company or any of its subsidiaries, or any change, or any
development including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects of
the Company and its subsidiaries taken as a whole, except as set forth in
the Offering Memorandum (exclusive of amendments or supplements after the
date hereof).
(l) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement that shall have been executed and delivered
by a duly authorized officer or agent of the Company and of each of the
Guarantors.
21
(m) The Indenture shall have been duly executed and delivered by the
Company, each of the Guarantors and the Trustee, and the Securities shall
have been duly executed and delivered by the Company and duly authenticated
by the Trustee.
(n) The Securities shall have been approved by the NASD for trading in
the PORTAL Market and shall be eligible for clearance and settlement
through DTC.
(o) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(p) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchasers would materially impair the
ability of the Initial Purchasers to purchase, hold or effect resales of
the Securities contemplated hereby.
(q) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the effect
of which, in any such case described above, is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the
terms and in the manner contemplated by this Agreement and the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(r) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Securities or the issuance of the Guarantees; and no
injunction, restraining order or order of any other nature by any federal
or state court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the Securities or
the issuance of the Guarantees.
(s) Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded the Securities or
any
22
other debt securities or preferred stock issued or guaranteed by the
Company or any of the Guarantors by any "nationally recognized statistical
rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, or has changed its outlook with respect to, its rating of the
Securities or of any other debt securities or preferred stock issued or
guaranteed by the Company or any of the Guarantors (other than an
announcement with positive implications of a possible upgrading).
(t) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading generally shall
have been suspended or materially limited on the New York Stock Exchange or
the over-the-counter market; (ii) trading of any securities issued or
guaranteed by the Company or any of the Guarantors shall have been
suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities or material disruption
of securities clearance or settlement systems shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred
any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United
States, that, in the judgment of JPMorgan, is material and adverse and
makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the terms and in the manner contemplated by
this Agreement and the Offering Memorandum.
(u) JPMorgan shall have received on and as of the Closing Date
satisfactory evidence of the good standing of the Company and its
Significant Subsidiaries in their respective jurisdictions of organization
and their good standing in the other jurisdictions set forth on Schedule 3
hereto, in each case in writing or any standard form of telecommunication,
from the appropriate governmental authorities of such jurisdictions.
(v) On or prior to the Closing Date, the Company and the Guarantors
shall have furnished to JPMorgan such further certificates and documents as
JPMorgan may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
6. Termination. The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers, in their absolute discretion, by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(p),
(q), (r), (s) or (t) shall have occurred and be continuing.
23
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any Initial
Purchaser defaults in the performance of its obligations under this Agreement,
the non-defaulting Initial Purchasers may make arrangements for the purchase of
the Securities which such defaulting Initial Purchaser agreed but failed to
purchase by other persons satisfactory to the Company and the non-defaulting
Initial Purchasers, but if no such arrangements are made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
the non-defaulting Initial Purchasers, the Company, or the Guarantors, except
that the Company and the Guarantors will continue to be liable for the payment
of expenses to the extent set forth in Sections 8 and 12 and except that the
provisions of Sections 9 and 10 shall not terminate and shall remain in effect.
As used in this Agreement, the term "Initial Purchasers" includes, for all
purposes of this Agreement unless the context otherwise requires, any party not
listed in Schedule 4 hereto that, pursuant to this Section 7, purchases
Securities which a defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, any of the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this Agreement
shall have been terminated due to the failure to comply with any of subsection
of Section 5 (other than due to the events described in Section 5(p), (r) or (t)
(other than clause (ii) of Section 5(t)), in which case each party will be
responsible for its own expenses) or pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason or (c) the Initial Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement, the Company and the
each of the Guarantors shall reimburse the Initial Purchasers for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase and resale of the Securities. If
this Agreement is terminated pursuant to Section 7 by reason of the default of
one or more of the Initial Purchasers, neither the Company nor the Guarantors
shall be obligated to reimburse any defaulting Initial Purchaser on account of
such expenses.
9. Indemnification. (a) The Company and each of the Guarantors shall
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section
24
9(a) and Section 10 as an Initial Purchaser), from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, without limitation, any loss, claim, damage, liability or action
relating to purchases and sales of the Securities), to which that Initial
Purchaser may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or in any information provided by the Company or any Guarantor pursuant
to Section 4(e) or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Initial Purchaser promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company and each of the Guarantors shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with any Initial Purchasers' Information; and provided,
further, that with respect to any such untrue statement in or omission from the
Preliminary Offering Memorandum, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any such Initial Purchaser to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by such Initial Purchaser and any such
loss, claim, damage, liability or action of or with respect to such Initial
Purchaser results from the fact that both (A) to the extent required by
applicable law, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Securities to
such person and (B) the untrue statement in or omission from the Preliminary
Offering Memorandum was corrected in the Offering Memorandum unless, in either
case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall indemnify and
hold harmless the Company, each Guarantor and their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 9(b) and Section 10
as the Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering
25
Memorandum or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any Initial
Purchasers' Information provided by such Initial Purchaser, and shall reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 9(a) or 9(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 9 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
26
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (x) includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceedings and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
The obligations of the Company, each of the Guarantors and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Company, each of the Guarantors or the Initial Purchasers, as
the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and each of the Guarantors on the one hand and
the Initial Purchasers on the other from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and each of the Guarantors on the one hand and the Initial Purchasers on
the other with respect to the statements or omissions that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the each of the Guarantors on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by or on behalf of the Company and each of the Guarantors, on the one hand, and
the total discounts and commissions received by the Initial Purchasers with
respect to the Securities purchased under this Agreement, on the other, bear to
the total gross
27
proceeds from the sale of the Securities under this Agreement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to the Company and each of the
Guarantors or information supplied by the Company and each of the Guarantors on
the one hand or to any Initial Purchasers' Information on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omissions. The
Company, each of the Guarantors and the Initial Purchasers agree that it would
not be just and equitable if contributions pursuant to this Section 10 were to
be determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 10 shall be deemed to include, for purposes of this Section 10, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute as provided
in this Section 10 are several in proportion to their respective purchase
obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
each of the Guarantors and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except as provided in Sections 9 and 10 with respect to officers, directors,
employees, representatives, agents and controlling persons of the Company and
each of the Guarantors and affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Initial Purchasers and in
Section 4(e) with respect to holders and prospective purchasers of the
Securities. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Expenses. The Company and each of the Guarantors agrees with the
Initial Purchasers to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements
28
thereto; (c) the costs of reproducing and distributing each of the Transaction
Documents; (d) the costs incident to the preparation, printing and delivery of
the certificates evidencing the Securities, including stamp duties and transfer
taxes, if any, payable upon issuance of the Securities; (e) the fees and
expenses of the Company's counsel and independent accountants; (f) the fees and
expenses of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
for the Initial Purchasers); (g) any fees charged by rating agencies for rating
the Securities; (h) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties); (i) all
expenses and application fees incurred in connection with the application for
the inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC; and (j) all other costs and expenses
incident to the performance of the obligations of the Company and the Guarantors
under this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that except as provided in this Section 12 and
Section 8, the Initial Purchasers shall pay their own costs and expenses,
including the fees and disbursements of their counsel and any advertising
expenses (other than with respect to any roadshow presentation) connected with
any offers they may make.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, each of the
Guarantors and the Initial Purchasers contained in this Agreement or made by or
on behalf of the Company, each of the Guarantors or the Initial Purchasers
pursuant to this Agreement or any certificate delivered pursuant hereto shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any of
their respective affiliates, officers, directors, employees, representatives,
agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail or
telecopy transmission to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. Tulip, Managing Director
(telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇); or
(b) if to the Company or the Guarantors, shall be delivered or sent by
mail or telecopy transmission to the address of the Company set forth in
the Offering Memorandum, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ (telecopier no.: (419)
252-5571), with copies to General Counsel (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇)
and ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Illinois LLC (telecopier no.: (312)
993-9767).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request,
29
consent, notice or agreement given or made on behalf of the Initial Purchasers
by JPMorgan.
15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Initial Purchasers' Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: the statements concerning the
Initial Purchasers contained in the third paragraph, the fifth and sixth
sentences of the eighth paragraph, the tenth paragraph, and the third, fourth,
fifth, seventh and ninth sentences of the eleventh paragraph under the heading
"Plan of Distribution".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed agreement, counterparts
shall each be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
21. Authority of JPMorgan. Any action by the Initial Purchasers
hereunder may be taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of the Initial
Purchasers, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall be
binding upon the Initial Purchasers.
30
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
MANOR CARE, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Secretary and
General Counsel
31
SUBSIDIARY GUARANTORS
AMERICAN HOSPITAL BUILDING CORPORATION
AMERICANA HEALTHCARE CENTER OF PALOS
TOWNSHIP, INC.
AMERICANA HEALTHCARE CORPORATION OF GEORGIA
AMERICANA HEALTHCARE CORPORATION OF NAPLES
ANCILLARY SERVICES MANAGEMENT, INC.
▇▇▇▇▇ NURSING HOME, INC.
BIRCHWOOD MANOR, INC.
BLUE RIDGE REHABILITATION SERVICES, INC.
CANTERBURY VILLAGE, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
CHESAPEAKE MANOR, INC.
DEKALB HEALTHCARE CORPORATION
DEVON MANOR CORPORATION
DISTCO, INC.
DIVERSIFIED REHABILITATION SERVICES, INC.
▇▇▇▇▇▇▇ MANOR, INC.
EAST MICHIGAN CARE CORPORATION
EXECUTIVE ADVERTISING, INC.
EYE-Q NETWORK, INC.
32
FOUR SEASONS NURSING CENTERS, INC.
GEORGIAN BLOOMFIELD, INC.
GREENVIEW MANOR, INC.
HCR HOME HEALTH CARE AND HOSPICE, INC.
HCR HOSPITAL HOLDING COMPANY, INC.
HCR INFORMATION CORPORATION
HCR MANORCARE MEDICAL SERVICES OF FLORIDA,
INC.
HCR PHYSICIAN MANAGEMENT SERVICES, INC.
HCR REHABILITATION CORP.
HCRA OF TEXAS, INC.
HCRC INC.
HEALTH CARE AND RETIREMENT CORPORATION OF
AMERICA
HEARTLAND CAREPARTNERS, INC.
HEARTLAND EMPLOYMENT SERVICES, INC.
HEARTLAND HOME CARE, INC.
HEARTLAND HOME HEALTH CARE SERVICES, INC.
HEARTLAND HOSPICE SERVICES, INC.
HEARTLAND INFORMATION SERVICES, INC.
(fka Heartland Medical Information Services)
HEARTLAND MANAGEMENT SERVICES, INC.
33
HEARTLAND REHABILITATION SERVICES OF
FLORIDA, INC.
HEARTLAND REHABILITATION SERVICES, INC.
HEARTLAND SERVICES CORP.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, RPT - ▇▇▇▇ ▇▇▇▇▇▇▇▇, RPT
PHYSICAL THERAPY PROFESSIONAL ASSOCIATES,
INC.
HGCC OF ALLENTOWN, INC.
IN HOME HEALTH, INC.
INDUSTRIAL WASTES, INC.
IONIA MANOR, INC.
JACKSONVILLE HEALTHCARE CORPORATION
KENSINGTON MANOR, INC.
KNOLLVIEW MANOR, INC.
LEADER NURSING AND REHABILITATION CENTER OF
BETHEL PARK, INC.
LEADER NURSING AND REHABILITATION CENTER OF
GLOUCESTER, INC.
LEADER NURSING AND REHABILITATION CENTER OF
▇▇▇▇▇ TOWNSHIP, INC.
LEADER NURSING AND REHABILITATION CENTER OF
VIRGINIA INC.
LINCOLN HEALTH CARE, INC.
MANOR CARE AVIATION, INC.
MANOR CARE OF AKRON, INC.
▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, INC
MANOR CARE OF ARIZONA, INC.
MANOR CARE OF ARLINGTON, INC.
MANOR CARE OF BOCA RATON, INC.
MANOR CARE OF BOYNTON BEACH, INC.
MANOR CARE OF CANTON, INC.
MANOR CARE OF CENTERVILLE, INC
MANOR CARE OF CHARLESTON, INC.
MANOR CARE OF CINCINNATI, INC.
MANOR CARE OF COLUMBIA, INC.
MANOR CARE OF DARIEN, INC.
MANOR CARE OF DELAWARE COUNTY, INC.
MANOR CARE OF DUNEDIN, INC.
MANOR CARE OF FLORIDA, INC.
MANOR CARE OF HINSDALE, INC.
MANOR CARE OF KANSAS, INC.
MANOR CARE OF KINGSTON COURT, INC.
MANOR CARE OF LARGO, INC.
MANOR CARE OF LEXINGTON, INC.
MANOR CARE OF MEADOW PARK, INC.
MANOR CARE OF MIAMISBURG, INC
MANOR CARE OF NORTH ▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF PINEHURST, INC.
35
MANOR CARE OF PLANTATION, INC.
MANOR CARE OF ROLLING ▇▇▇▇▇▇▇, INC.
MANOR CARE OF ROSSVILLE, INC.
MANOR CARE OF SARASOTA, INC.
MANOR CARE OF ▇▇▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF WILMINGTON, INC.
MANOR CARE OF YORK (NORTH), INC.
MANOR CARE OF YORK (SOUTH), INC.
MANOR CARE PROPERTIES, INC.
MANORCARE HEALTH SERVICES OF BOYNTON BEACH, INC.
MANORCARE HEALTH SERVICES OF NORTHHAMPTON
COUNTY, INC.
MANORCARE HEALTH SERVICES OF VIRGINIA, INC
MANORCARE HEALTH SERVICES, INC.
MARINA VIEW MANOR, INC.
MEDI-SPEECH SERVICE, INC.
MID-SHORE PHYSICAL THERAPY ASSOCIATES, INC.
MILESTONE HEALTH SYSTEMS, INC.
MILESTONE HEALTHCARE, INC.
MILESTONE REHABILITATION SERVICES, INC.
MILESTONE STAFFING SERVICES, INC.
36
MILESTONE THERAPY SERVICES, INC.
MNR FINANCE CORP.
MRC REHABILITATION, INC.
NEW MANORCARE HEALTH SERVICES, INC.
PEAK REHABILITATION, INC.
PERRYSBURG PHYSICAL THERAPY, INC
PHYSICAL OCCUPATIONAL AND SPEECH THERAPY,
INC.
PNEUMATIC CONCRETE, INC.
PORTFOLIO ONE, INC.
REHABILITATION ADMINISTRATION CORPORATION
REHABILITATION ASSOCIATES, INC.
REHABILITATION SERVICES OF ROANOKE, INC.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ HEALTHCARE, INC.
RIDGEVIEW MANOR, INC.
▇▇▇▇▇▇ PARK NURSING CENTER, INC.
RVA MANAGEMENT SERVICES, INC.
SILVER SPRING - WHEATON NURSING HOME, INC.
SPRINGHILL MANOR, INC.
STEWALL CORPORATION
37
STRATFORD MANOR, INC.
STUTEX CORP.
SUN VALLEY MANOR, INC.
THE NIGHTINGALE NURSING HOME, INC.
THERAPY ASSOCIATES, INC.
THERASPORT PHYSICAL THERAPY, INC.
THREE RIVERS MANOR, INC.
TOTALCARE CLINICAL LABORATORIES, INC.
WASHTENAW HILLS MANOR, INC.
WHITEHALL MANOR, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary of each of the above-
referenced corporations
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
38
COLEWOOD LIMITED PARTNERSHIP
By: American Hospital Building Corporation,
its General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
39
HCR HOSPITAL, LLC
By: HCR Hospital Holding Company, Inc.,
its sole member
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
40
ANCILLARY SERVICES, LLC
By: Heartland Rehabilitation Services, Inc.,
its sole member
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
41
BOOTH LIMITED PARTNERSHIP
By: Jacksonville Healthcare Corporation, its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
▇▇▇▇▇▇▇ FARMS ARDEN, LLC
COLONIE ARDEN, LLC
CRESTVIEW HILLS, LLC
FIRST LOUISVILLE ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ LLC
HANOVER ARDEN, LLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
KENWOOD ARDEN, LLC
LIVONIA ARDEN, LLC
MEMPHIS ARDEN, LLC
NAPA ARDEN, LLC
ROANOKE ARDEN, LLC
SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
SILVER SPRING ARDEN, LLC
SUSQUEHANNA ARDEN LLC
TAMPA ARDEN, LLC
WALL ARDEN, LLC
WARMINSTER ARDEN LLC
▇▇▇▇▇▇▇▇ VILLE ▇▇▇▇▇, LLC
43
By: Manor Care of America, Inc., the
sole member of each of the above-
referenced limited liability companies
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
44
BATH ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AUSTIN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF KENWOOD, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SAN ANTONIO, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SUSQUEHANNA, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF WARMINSTER, LLC
FRESNO ARDEN, LLC
MESQUITE HOSPITAL, LLC
TUSCAWILLA ARDEN, LLC
By: Manor Care Health Services, Inc., the
sole member of each of the above-
referenced limited liability companies
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.P.
By: Mesquite Hospital, LLC, its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
46
Accepted: April 10, 2003
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
NATCITY INVESTMENTS, INC.
SUNTRUST CAPITAL MARKETS, INC.
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
________________________________
Authorized Signatory
47
SCHEDULE 1
GUARANTORS
SUBSIDIARY GUARANTORS
AMERICAN HOSPITAL BUILDING
CORPORATION
AMERICANA HEALTHCARE CENTER OF
PALOS TOWNSHIP, INC.
AMERICANA HEALTHCARE CORPORATION
OF GEORGIA
AMERICANA HEALTHCARE CORPORATION
OF NAPLES
ANCILLARY SERVICES MANAGEMENT, INC.
▇▇▇▇▇ NURSING HOME, INC.
BIRCHWOOD MANOR, INC.
BLUE RIDGE REHABILITATION SERVICES,
INC.
CANTERBURY VILLAGE, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
CHESAPEAKE MANOR, INC.
DEKALB HEALTHCARE CORPORATION
DEVON MANOR CORPORATION
DISTCO, INC.
DIVERSIFIED REHABILITATION SERVICES,
INC.
▇▇▇▇▇▇▇ MANOR, INC.
EAST MICHIGAN CARE CORPORATION
EXECUTIVE ADVERTISING, INC.
EYE-Q NETWORK, INC.
FOUR SEASONS NURSING CENTERS, INC.
GEORGIAN BLOOMFIELD, INC.
GREENVIEW MANOR, INC.
HCR HOME HEALTH CARE AND HOSPICE,
INC.
HCR HOSPITAL HOLDING COMPANY, INC.
HCR INFORMATION CORPORATION
HCR MANORCARE MEDICAL SERVICES OF
FLORIDA, INC.
HCR PHYSICIAN MANAGEMENT SERVICES,
INC.
HCR REHABILITATION CORP.
HCRA OF TEXAS, INC.
HCRC INC.
HEALTH CARE AND RETIREMENT
CORPORATION OF AMERICA
HEARTLAND CAREPARTNERS, INC.
HEARTLAND EMPLOYMENT SERVICES, INC.
HEARTLAND HOME CARE, INC.
HEARTLAND HOME HEALTH CARE
SERVICES, INC.
HEARTLAND HOSPICE SERVICES, INC.
HEARTLAND INFORMATION SERVICES, INC.
(fka Heartland Medical Information Services)
HEARTLAND MANAGEMENT SERVICES,
INC.
HEARTLAND REHABILITATION SERVICES
OF FLORIDA, INC.
HEARTLAND REHABILITATION SERVICES,
INC.
HEARTLAND SERVICES CORP.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, RPT - ▇▇▇▇ ▇▇▇▇▇▇▇▇,
RPT PHYSICAL THERAPY PROFESSIONAL
ASSOCIATES, INC.
HGCC OF ALLENTOWN, INC.
IN HOME HEALTH, INC.
INDUSTRIAL WASTES, INC.
IONIA MANOR, INC.
JACKSONVILLE HEALTHCARE
CORPORATION
KENSINGTON MANOR, INC.
KNOLLVIEW MANOR, INC.
LEADER NURSING AND REHABILITATION
CENTER OF BETHEL PARK, INC.
LEADER NURSING AND REHABILITATION
CENTER OF GLOUCESTER, INC.
LEADER NURSING AND REHABILITATION
CENTER OF ▇▇▇▇▇ TOWNSHIP, INC.
LEADER NURSING AND REHABILITATION
CENTER OF VIRGINIA INC.
LINCOLN HEALTH CARE, INC.
MANOR CARE AVIATION, INC.
MANOR CARE OF AKRON, INC.
MANOR CARE OF AMERICA, INC
MANOR CARE OF ARIZONA, INC.
MANOR CARE OF ARLINGTON, INC.
MANOR CARE OF BOCA RATON, INC.
MANOR CARE OF BOYNTON BEACH, INC.
MANOR CARE OF CANTON, INC.
MANOR CARE OF CENTERVILLE, INC
MANOR CARE OF CHARLESTON, INC.
MANOR CARE OF CINCINNATI, INC.
MANOR CARE OF COLUMBIA, INC.
MANOR CARE OF DARIEN, INC.
MANOR CARE OF DELAWARE COUNTY, INC.
MANOR CARE OF DUNEDIN, INC.
MANOR CARE OF FLORIDA, INC.
MANOR CARE OF HINSDALE, INC.
MANOR CARE OF KANSAS, INC.
MANOR CARE OF KINGSTON COURT, INC.
MANOR CARE OF LARGO, INC.
MANOR CARE OF LEXINGTON, INC.
MANOR CARE OF MEADOW PARK, INC.
MANOR CARE OF MIAMISBURG, INC
MANOR CARE OF NORTH ▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF PINEHURST, INC.
MANOR CARE OF PLANTATION, INC.
MANOR CARE OF ROLLING ▇▇▇▇▇▇▇, INC.
MANOR CARE OF ROSSVILLE, INC.
MANOR CARE OF SARASOTA, INC.
MANOR CARE OF ▇▇▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF WILMINGTON, INC.
MANOR CARE OF YORK (NORTH), INC.
MANOR CARE OF YORK (SOUTH), INC.
MANOR CARE PROPERTIES, INC.
MANORCARE HEALTH SERVICES OF
BOYNTON BEACH, INC.
MANORCARE HEALTH SERVICES OF
NORTHHAMPTON COUNTY, INC.
MANORCARE HEALTH SERVICES OF
VIRGINIA, INC.
MANORCARE HEALTH SERVICES, INC.
MARINA VIEW MANOR, INC.
MEDI-SPEECH SERVICE, INC.
MID-SHORE PHYSICAL THERAPY
ASSOCIATES, INC.
MILESTONE HEALTH SYSTEMS, INC.
MILESTONE HEALTHCARE, INC.
MILESTONE REHABILITATION SERVICES,
INC.
MILESTONE STAFFING SERVICES, INC.
MILESTONE THERAPY SERVICES, INC.
MNR FINANCE CORP.
MRC REHABILITATION, INC.
NEW MANORCARE HEALTH SERVICES, INC.
PEAK REHABILITATION, INC.
PERRYSBURG PHYSICAL THERAPY, INC
PHYSICAL OCCUPATIONAL AND SPEECH
THERAPY, INC.
PNEUMATIC CONCRETE, INC.
PORTFOLIO ONE, INC.
REHABILITATION ADMINISTRATION
CORPORATION
REHABILITATION ASSOCIATES, INC.
REHABILITATION SERVICES OF ROANOKE,
INC.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ HEALTHCARE, INC.
RIDGEVIEW MANOR, INC.
▇▇▇▇▇▇ PARK NURSING CENTER, INC.
RVA MANAGEMENT SERVICES, INC.
SILVER SPRING - WHEATON NURSING
HOME, INC.
SPRINGHILL MANOR, INC.
STEWALL CORPORATION
STRATFORD MANOR, INC.
STUTEX CORP.
SUN VALLEY MANOR, INC.
THE NIGHTINGALE NURSING HOME, INC.
THERAPY ASSOCIATES, INC.
THERASPORT PHYSICAL THERAPY, INC.
THREE RIVERS MANOR, INC.
TOTALCARE CLINICAL LABORATORIES,
INC.
WASHTENAW HILLS MANOR, INC.
WHITEHALL MANOR, INC.
COLEWOOD LIMITED PARTNERSHIP
HCR HOSPITAL, LLC
ANCILLARY SERVICES, LLC
BOOTH LIMITED PARTNERSHIP
ANNANDALE ARDEN, LLC
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
▇▇▇▇▇▇▇ FARMS ▇▇▇▇▇, LLC
COLONIE ARDEN, LLC
CRESTVIEW HILLS, LLC
FIRST LOUISVILLE ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ LLC
HANOVER ARDEN, LLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
KENWOOD ARDEN, LLC
LIVONIA ARDEN, LLC
MEMPHIS ARDEN, LLC
NAPA ARDEN, LLC
ROANOKE ARDEN, LLC
SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
SILVER SPRING ARDEN, LLC
SUSQUEHANNA ARDEN LLC
TAMPA ARDEN, LLC
WALL ARDEN, LLC
WARMINSTER ARDEN LLC
▇▇▇▇▇▇▇▇ VILLE ▇▇▇▇▇, LLC
BATH ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF KENWOOD, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SAN ANTONIO, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SUSQUEHANNA, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF WARMINSTER, LLC
FRESNO ARDEN, LLC
MESQUITE HOSPITAL, LLC
TUSCAWILLA ARDEN, LLC
HCR MANORCARE MESQUITE, L.P.
SCHEDULE 2
SUBSIDIARIES
MANOR CARE SUBSIDIARIES
HCRC INC. * Guarantor
HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA * Guarantor
HCR REHABILITATION CORP. * Guarantor
HEARTLAND REHABILITATION SERVICES, INC. * Guarantor
MANOR CARE OF AMERICA, INC * Guarantor
MANORCARE HEALTH SERVICES, INC. * Guarantor
AMERICAN HOSPITAL BUILDING CORPORATION Guarantor
AMERICANA HEALTHCARE CENTER OF PALOS TOWNSHIP, INC. Guarantor
AMERICANA HEALTHCARE CORPORATION OF GEORGIA Guarantor
AMERICANA HEALTHCARE CORPORATION OF NAPLES Guarantor
ANCILLARY SERVICES MANAGEMENT, INC. Guarantor
ANCILLARY SERVICES, LLC Guarantor
ANNANDALE ARDEN, LLC Guarantor
▇▇▇▇▇ NURSING HOME, INC. Guarantor
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC Guarantor
BATH ARDEN, LLC Guarantor
▇▇▇▇▇▇▇ FARMS ▇▇▇▇▇, LLC Guarantor
BIRCHWOOD MANOR, INC. Guarantor
BLUE RIDGE REHABILITATION SERVICES, INC. Guarantor
BOOTH LIMITED PARTNERSHIP Guarantor
CANTERBURY VILLAGE, INC. Guarantor
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC. Guarantor
CHESAPEAKE MANOR, INC. Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AUSTIN, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF KENWOOD, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SAN ANTONIO, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SUSQUEHANNA, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF WARMINSTER, LLC Guarantor
COLEWOOD LIMITED PARTNERSHIP Guarantor
COLONIE ARDEN, LLC Guarantor
CRESTVIEW HILLS, LLC Guarantor
DEKALB HEALTHCARE CORPORATION Guarantor
DEVON MANOR CORPORATION Guarantor
DISTCO, INC. Guarantor
DIVERSIFIED REHABILITATION SERVICES, INC. Guarantor
▇▇▇▇▇▇▇ MANOR, INC. Guarantor
EAST MICHIGAN CARE CORPORATION Guarantor
EXECUTIVE ADVERTISING, INC. Guarantor
EYE-Q NETWORK, INC. Guarantor
FIRST LOUISVILLE ARDEN, LLC Guarantor
FOUR SEASONS NURSING CENTERS, INC. Guarantor
FRESNO ARDEN, LLC Guarantor
▇▇▇▇▇▇ ▇▇▇▇▇ LLC Guarantor
GEORGIAN BLOOMFIELD, INC. Guarantor
GREENVIEW MANOR, INC. Guarantor
HANOVER ARDEN, LLC Guarantor
HCR HOME HEALTH CARE AND HOSPICE, INC. Guarantor
HCR HOSPITAL HOLDING COMPANY, INC. Guarantor
HCR HOSPITAL, LLC Guarantor
Asterisk indicates a "Significant Subsidiary"
MANOR CARE SUBSIDIARIES
HCR INFORMATION CORPORATION Guarantor
HCR MANORCARE MEDICAL SERVICES OF FLORIDA, INC. Guarantor
HCR MANORCARE MESQUITE, L.P. Guarantor
HCR PHYSICIAN MANAGEMENT SERVICES, INC. Guarantor
HCRA OF TEXAS, INC. Guarantor
HEARTLAND CAREPARTNERS, INC. Guarantor
HEARTLAND EMPLOYMENT SERVICES, INC. Guarantor
HEARTLAND HOME CARE, INC. Guarantor
HEARTLAND HOME HEALTH CARE SERVICES, INC. Guarantor
HEARTLAND HOSPICE SERVICES, INC. Guarantor
HEARTLAND INFORMATION SERVICES, INC. (fka Heartland Medical Information Services, Inc.) Guarantor
HEARTLAND MANAGEMENT SERVICES, INC. Guarantor
HEARTLAND REHABILITATION SERVICES OF FLORIDA, INC. Guarantor
HEARTLAND SERVICES CORP. Guarantor
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, RPT - ▇▇▇▇ ▇▇▇▇▇▇▇▇, RPT PHYSICAL THERAPY PROFESSIONAL ASSOCIATES, INC. Guarantor
HGCC OF ALLENTOWN, INC. Guarantor
IN HOME HEALTH, INC. Guarantor
INDUSTRIAL WASTES, INC. Guarantor
IONIA MANOR, INC. Guarantor
JACKSONVILLE HEALTHCARE CORPORATION Guarantor
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC Guarantor
KENSINGTON MANOR, INC. Guarantor
KENWOOD ARDEN, LLC Guarantor
KNOLLVIEW MANOR, INC. Guarantor
LEADER NURSING AND REHABILITATION CENTER OF BETHEL PARK, INC. Guarantor
LEADER NURSING AND REHABILITATION CENTER OF GLOUCESTER, INC. Guarantor
LEADER NURSING AND REHABILITATION CENTER OF ▇▇▇▇▇ TOWNSHIP, INC. Guarantor
LEADER NURSING AND REHABILITATION CENTER OF VIRGINIA INC. Guarantor
LINCOLN HEALTH CARE, INC. Guarantor
LIVONIA ARDEN, LLC Guarantor
MANOR CARE AVIATION, INC. Guarantor
MANOR CARE OF AKRON, INC. Guarantor
MANOR CARE OF ARIZONA, INC. Guarantor
MANOR CARE OF ARLINGTON, INC. Guarantor
MANOR CARE OF BOCA RATON, INC. Guarantor
MANOR CARE OF BOYNTON BEACH, INC. Guarantor
MANOR CARE OF CANTON, INC. Guarantor
MANOR CARE OF CENTREVILLE, INC Guarantor
MANOR CARE OF CHARLESTON, INC. Guarantor
MANOR CARE OF CINCINNATI, INC. Guarantor
MANOR CARE OF COLUMBIA, INC. Guarantor
MANOR CARE OF DARIEN, INC. Guarantor
MANOR CARE OF DELAWARE COUNTY, INC. Guarantor
MANOR CARE OF DUNEDIN, INC. Guarantor
MANOR CARE OF FLORIDA, INC. Guarantor
MANOR CARE OF HINSDALE, INC. Guarantor
MANOR CARE OF KANSAS, INC. Guarantor
MANOR CARE OF KINGSTON COURT, INC. Guarantor
MANOR CARE OF LARGO, INC. Guarantor
MANOR CARE OF LEXINGTON, INC. Guarantor
Asterisk indicates a "Significant Subsidiary"
MANOR CARE SUBSIDIARIES
MANOR CARE OF MEADOW PARK, INC. Guarantor
MANOR CARE OF MIAMISBURG, INC Guarantor
MANOR CARE OF NORTH ▇▇▇▇▇▇▇▇, INC. Guarantor
MANOR CARE OF PINEHURST, INC. Guarantor
MANOR CARE OF PLANTATION, INC. Guarantor
MANOR CARE OF ROLLING ▇▇▇▇▇▇▇, INC. Guarantor
MANOR CARE OF ROSSVILLE, INC. Guarantor
MANOR CARE OF SARASOTA, INC. Guarantor
MANOR CARE OF ▇▇▇▇▇▇▇▇▇▇, INC. Guarantor
MANOR CARE OF WILMINGTON, INC. Guarantor
MANOR CARE OF YORK (NORTH), INC. Guarantor
MANOR CARE OF YORK (SOUTH), INC. Guarantor
MANOR CARE PROPERTIES, INC. Guarantor
MANORCARE HEALTH SERVICES OF BOYNTON BEACH, INC. Guarantor
MANORCARE HEALTH SERVICES OF VIRGINIA, INC. Guarantor
MANORCARE HEALTH SERVICES OF NORTHHAMPTON COUNTY, INC. Guarantor
MARINA VIEW MANOR, INC. Guarantor
MEDI-SPEECH SERVICE, INC. Guarantor
MEMPHIS ARDEN, LLC Guarantor
MESQUITE HOSPITAL, LLC Guarantor
MID-SHORE PHYSICAL THERAPY ASSOCIATES, INC. Guarantor
MILESTONE HEALTH SYSTEMS, INC. Guarantor
MILESTONE HEALTHCARE, INC. Guarantor
MILESTONE REHABILITATION SERVICES, INC. Guarantor
MILESTONE STAFFING SERVICES, INC. Guarantor
MILESTONE THERAPY SERVICES, INC. Guarantor
MNR FINANCE CORP. Guarantor
MRC REHABILITATION, INC. Guarantor
NAPA ARDEN, LLC Guarantor
NEW MANORCARE HEALTH SERVICES, INC. Guarantor
PEAK REHABILITATION, INC. Guarantor
PERRYSBURG PHYSICAL THERAPY, INC Guarantor
PHYSICAL, OCCUPATIONAL, AND SPEECH THERAPY, INC. Guarantor
PNEUMATIC CONCRETE, INC. Guarantor
PORTFOLIO ONE, INC. Guarantor
REHABILITATION ADMINISTRATION CORPORATION Guarantor
REHABILITATION ASSOCIATES, INC. Guarantor
REHABILITATION SERVICES OF ROANOKE, INC. Guarantor
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC. Guarantor
▇▇▇▇▇▇▇▇ HEALTHCARE, INC. Guarantor
RIDGEVIEW MANOR, INC. Guarantor
ROANOKE ARDEN, LLC Guarantor
▇▇▇▇▇▇ PARK NURSING CENTER, INC. Guarantor
RVA MANAGEMENT SERVICES, INC. Guarantor
SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC Guarantor
SILVER SPRING - WHEATON NURSING HOME, INC. Guarantor
SILVER SPRING ARDEN, LLC Guarantor
SPRINGHILL MANOR, INC. Guarantor
STEWALL CORPORATION Guarantor
STRATFORD MANOR, INC. Guarantor
Asterisk indicates a "Significant Subsidiary"
MANOR CARE SUBSIDIARIES
STUTEX CORP. Guarantor
SUN VALLEY MANOR, INC. Guarantor
SUSQUEHANNA ARDEN LLC Guarantor
TAMPA ARDEN, LLC Guarantor
THE NIGHTINGALE NURSING HOME, INC. Guarantor
THERAPY ASSOCIATES, INC. Guarantor
THERASPORT PHYSICAL THERAPY, INC. Guarantor
THREE RIVERS MANOR, INC. Guarantor
TOTALCARE CLINICAL LABORATORIES, INC. Guarantor
TUSCAWILLA ARDEN, LLC Guarantor
WALL ARDEN, LLC Guarantor
WARMINSTER ARDEN LLC Guarantor
WASHTENAW HILLS MANOR, INC. Guarantor
WHITEHALL MANOR, INC. Guarantor
WILLIAMSVILLE ARDEN, LLC Guarantor
DECA LIMITED PARTNERSHIP (not 100% owned)
▇▇▇▇▇▇ & COMPANY, INC. (dormant)
HEARTLAND PROVIDER THERAPY NETWORK, INC. (dormant)
ELMHURST LIMITED PARTNERSHIP (dormant and not 100% owned)
HCR MANOR CARE MESQUITE LP (dormant)
HEART LAND ASIA (MAURITIUS) LIMITED (Foreign)
HEARTLAND BANGALORE TRANSCRIPTION AND SERVICES PRIVATE LIMITED (Foreign)
HEARTLAND DELHI TRANSCRIPTION AND SERVICES PRIVATE LIMITED (Foreign)
HEARTLAND INFORMATION AND CONSULTANCY SERVICES PRIVATE LIMITED (Foreign)
MANORCARE HEALTH SERVICES OF OKLAHOMA, INC. (dormant)
MANORCARE HEALTH SERVICES OF DELAWARE COUNTY, INC. (dormant)
MANOR CARE SUPPLY COMPANY (dormant)
MANORCARE HEALTH SERVICES OF WASHINGTON, INC. (dormant)
MID-ATLANTIC POST ACUTE NETWORK, INC. (dormant and not 100% owned)
NUVISTA REFRACTIVE SURGERY AND LASER CENTERS, INC. (dormant and not 100% owned)
PLM, INC. (not 100% owned)
PLM LIMITED PARTHERSHIP (not 100% owned)
VISION MANAGEMENT SERVICES, INC. (not 100% owned)
WINTER PARK NURSING CENTER, INC (not 100% owned)
Asterisk indicates a "Significant Subsidiary"
SCHEDULE 3
SIGNIFICANT SUBSIDIARIES
HCRC Inc.
Manor Care of America, Inc.
ManorCare Health Services, Inc.
Health Care and Retirement Corporation of America
HCR Rehabilitation Corp.
Heartland Rehabilitation Services, Inc.
JURISDICTIONS
Texas
Ohio
Michigan
Florida
Pennsylvania
Illinois
SCHEDULE 4
INITIAL PURCHASERS
Initial Purchaser Principal Amount
----------------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. $ 48,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ $ 48,000,000
Incorporated
UBS Warburg LLC $ 48,000,000
Banc of America Securities LLC $ 32,000,000
BNY Capital Markets, Inc. $ 8,000,000
NatCity Investments, Inc. $ 8,000,000
SunTrust Capital Markets, Inc $ 8,000,000
------------
Total $200,000,000
ANNEX A
[Form of Exchange and Registration Rights Agreement]
ANNEX A
MANOR CARE, INC.
$200,000,000
6.25% Senior Notes due 2013
REGISTRATION RIGHTS AGREEMENT
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Manor Care, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("JPMorgan") ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, UBS Warburg LLC, Banc of America Securities
LLC, BNY Capital Markets, Inc., NatCity Investments, Inc., and SunTrust Capital
Markets, Inc. (together with JPMorgan, the "Initial Purchasers"), upon the terms
and subject to the conditions set forth in a purchase agreement dated April 10,
2003 (the "Purchase Agreement"), $200,000,000 aggregate principal amount of its
6.25% Senior Notes due 2013 (the "Securities") to be jointly and severally
guaranteed (the "Guarantees") by the subsidiaries of the Company listed on
Schedule 1 and signatories hereto (collectively, the "Guarantors"). Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company and the Guarantors agree with the Initial
Purchasers, for the benefit of the holders (including the Initial Purchasers) of
the Securities and the Exchange Securities (as defined herein) (collectively,
the "Holders"), as follows:
1. Registered Exchange Offer. Unless the Registered Exchange Offer (as
defined herein) shall not be permitted by applicable federal law, the Company
shall (i) use reasonable best efforts to prepare and, not later than 90 days
following the date of original issuance of the Securities (the "Issue Date"),
file with the Commission a
registration statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act with respect to a proposed offer to
the Holders of the Securities and the Guarantees (the "Registered Exchange
Offer") to issue and deliver to such Holders, in exchange for the Securities and
the Guarantees, a like aggregate principal amount of debt securities of the
Company and guarantees thereof by the Guarantors (the "Exchange Securities")
that are identical in all material respects to the Securities, except for the
transfer restrictions relating to the Securities, (ii) use its commercially
reasonable efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 150 days after the Issue Date
and the Registered Exchange Offer to be consummated no later than 180 days after
the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 20 business days (or longer, if required by
applicable law) after the date on which notice of the Registered Exchange Offer
is mailed to the Holders (such period being called the "Exchange Offer
Registration Period"). The Exchange Securities will be issued under the
Indenture or an indenture (the "Exchange Securities Indenture") between the
Company, the Guarantors and the Trustee or such other bank or trust company that
is reasonably satisfactory to the Initial Purchasers, as trustee (the "Exchange
Securities Trustee"), such indenture to be identical in all material respects to
the Indenture, except for the transfer restrictions relating to the Securities
(as described above).
As soon as practicable after the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for Exchange Securities
(assuming that such Holder (a) is not an affiliate of the Company or an
Exchanging Dealer (as defined herein) not complying with the requirements of the
next sentence, (b) is not an Initial Purchaser holding Securities that have, or
that are reasonably likely to have, the status of an unsold allotment in an
initial distribution, (c) acquires the Exchange Securities in the ordinary
course of such Holder's business and (d) has no arrangements or understandings
with any person to participate in the distribution of the Exchange Securities)
and to trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States. The Company, the Guarantors, the Initial Purchasers and each Exchanging
Dealer acknowledge that, pursuant to current interpretations by the Commission's
staff of Section 5 of the Securities Act, each Holder that is a broker-dealer
electing to exchange Securities, acquired for its own account as a result of
market-making activities or other trading activities, for Exchange Securities
(an "Exchanging Dealer"), is required to deliver a prospectus containing
substantially the information set forth in Annex A hereto on the cover, in Annex
B hereto in the "Exchange Offer Procedures" section and the "Purpose of the
Exchange Offer" section and in Annex C hereto in the "Plan of Distribution"
section of such prospectus in connection with a sale of any such Exchange
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer.
- 2 -
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 20
business days (or longer, if required by applicable law) after the date on which
notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time prior to
the close of business, New York City time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are applicable
to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(b) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder, Exchange Securities
equal in principal amount to the Securities of such Holder so accepted for
exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
- 3 -
The Indenture or the Exchange Securities Indenture, as the case may be,
shall provide that the Securities and the Exchange Securities shall vote and
consent together on all matters as one class and that none of the Securities or
the Exchange Securities will have the right to vote or consent as a separate
class on any matter.
Interest on each Exchange Security issued pursuant to the Registered
Exchange Offer will accrue from the last interest payment date on which interest
was paid on the Securities surrendered in exchange therefor or, if no interest
has been paid on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Company and the
Guarantors will ensure that (i) any Exchange Offer Registration Statement and
any amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) for any other reason the Registered Exchange Offer is not
consummated within 180 days after the Issue Date, or (iii) any Initial Purchaser
so requests with respect to Securities or (iv) any applicable law or
interpretations do not permit any Holder to participate in the Registered
Exchange Offer, or (v) any Holder that participates in the Registered Exchange
Offer does not receive freely transferable Exchange Securities in exchange for
tendered Securities, or (vi) the Company so elects, then the following
provisions shall apply:
- 4 -
(a) The Company and the Guarantors shall use their reasonable best
efforts to file as promptly as practicable (but in no event more than 20
business days after so required or requested pursuant to this Section 2) with
the Commission (the "Shelf Filing Date"), and thereafter shall use their
commercially reasonable efforts to cause to be declared effective, a shelf
registration statement on an appropriate form under the Securities Act relating
to the offer and sale of the Transfer Restricted Securities (as defined below)
by the Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "Shelf
Registration Statement" and, together with any Exchange Offer Registration
Statement, a "Registration Statement").
(b) The Company and the Guarantors shall use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the prospectus forming part thereof to be used by Holders of Transfer
Restricted Securities for a period ending on the earlier of (i) two years from
the Issue Date or such shorter period that will terminate when all the Transfer
Restricted Securities covered by the Shelf Registration Statement have been sold
pursuant thereto and (ii) the date on which the Securities become eligible for
resale without volume restrictions pursuant to Rule 144 under the Securities Act
(in any such case, such period being called the "Shelf Registration Period").
The Company and the Guarantors shall be deemed not to have used their reasonable
best efforts to keep the Shelf Registration Statement effective during the
requisite period if they voluntarily take any action that would result in
Holders of Transfer Restricted Securities covered thereby not being able to
offer and sell such Transfer Restricted Securities during that period, unless
such action is required by applicable law.
(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to the
Company by or on behalf of any Holder specifically for use therein (the
"Holders' Information")) does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus (in
either case, other than with respect to Holders' Information), does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) In the absence of the events described in clauses (i) through (vi)
of the first paragraph of this Section 2, the Company and the Guarantors shall
not be
- 5 -
permitted to discharge its obligations hereunder by means of the filing of a
Shelf Registration Statement.
3. Additional Interest. (a) The parties hereto agree that the Holders
of Transfer Restricted Securities will suffer damages if the Company and the
Guarantors fail to fulfill their obligations under Section 1 or Section 2, as
applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if (i) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to 90 days after the Issue Date or the
Shelf Registration Statement is not filed with the Commission on or before the
Shelf Filing Date, (ii) the Exchange Offer Registration Statement is not
declared effective within 150 days after the Issue Date or the Shelf
Registration Statement is not declared effective within 90 days of the Shelf
Filing Date, (iii) the Registered Exchange Offer is not consummated on or prior
to 180 days after the Issue Date, or (iv) the Shelf Registration Statement is
filed and declared effective within 90 days after the Shelf Filing Date but
shall thereafter cease to be effective (at any time that the Company and the
Guarantors are obligated to maintain the effectiveness thereof) without being
succeeded within 30 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company and the Guarantors will be jointly and
severally obligated to pay additional interest to each Holder of Transfer
Restricted Securities, during the period of one or more such Registration
Defaults, in an amount equal to $0.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder until (i) the applicable
Registration Statement is filed, (ii) the Exchange Offer Registration Statement
is declared effective and the Registered Exchange Offer is consummated, (iii)
the Shelf Registration Statement is declared effective or (iv) the Shelf
Registration Statement again becomes effective, as the case may be, which rate
will be increased by an additional $ 0.05 per week per $1,000 principal amount
of Transfer Restricted Securities for each 90-day period that any additional
interest described in this Section 3 continues to accrue; provided that the rate
for additional interest will not exceed $0.15 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued additional interest will
be paid to each Holder in the same manner as interest payments on the Transfer
Restricted Securities on semi-annual payment dates that correspond to interest
payment dates for the Transfer Restricted Securities. Additional interest only
accrues during a Registration Default. Following the cure of all Registration
Defaults, the accrual of additional interest will cease. As used herein, the
term "Transfer Restricted Securities" means each Security, until the earliest to
occur of: (i) the date on which such Security has been exchanged for a freely
transferable Exchange Security in the Registered Exchange Offer, (ii) the date
on which such Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iii) the
date on which such Security is distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant to Rule 144(k) under the
Securities Act. Notwithstanding anything to the contrary in this Section 3(a),
neither the Company nor the Guarantors shall be required to pay additional
interest to a Holder of Transfer Restricted Securities if such Holder failed to
comply with its obligations to make the
- 6 -
representations set forth in the second to last paragraph of Section 1 or failed
to provide the information required to be provided by it, if any, pursuant to
Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under the
Indenture immediately upon the happening of each and every Registration Default.
The Company and the Guarantors shall pay the additional interest due on the
Transfer Restricted Securities by depositing with the Paying Agent (which may
not be the Company for these purposes), in trust, for the benefit of the Holders
thereof, prior to 10:00 a.m., New York City time, on the next interest payment
date specified by the Indenture and the Securities, sums sufficient to pay the
additional interest then due. The additional interest due shall be payable on
each interest payment date specified by the Indenture and the Securities to the
record holder entitled to receive the interest payment to be made on such date.
Each obligation to pay additional interest shall be deemed to accrue from and
including the date of the applicable Registration Default.
(c) The parties hereto agree that the additional interest provided for
in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as any Initial
Purchaser may reasonably propose within five business days after the delivery of
such document to such Initial Purchaser; (ii) include the information set forth
in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement.
(b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such person,
confirm such advice in writing (which advice pursuant to clauses (ii)-(v) hereof
shall be
- 7 -
accompanied by an instruction to suspend the use of the prospectus until the
requisite changes have been made):
(i) when any Registration Statement and any amendment thereto has been
filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to
any Registration Statement or the prospectus included therein or for
additional information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities or the Exchange
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included therein in
order that the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) The Company and the Guarantors will make every reasonable effort to
obtain the withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules and, if any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
- 8 -
(f) The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Company will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to each Initial
Purchaser, each Exchanging Dealer and such other persons that are required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus included in the Exchange Offer Registration
Statement or the Shelf Registration Statement and any amendment or supplement
thereto as such Initial Purchaser, Exchanging Dealer or other persons may
reasonably request; and the Company and the Guarantors consent to the use of
such prospectus or any amendment or supplement thereto by any such Initial
Purchaser, Exchanging Dealer or other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement, the
Company and the Guarantors will use their reasonable best efforts to register or
qualify, or cooperate with the Holders of Securities or Exchange Securities
included therein and their respective counsel in connection with the
registration or qualification of, such Securities or Exchange Securities for
offer and sale under the securities or blue sky laws of such jurisdictions as
any such Holder reasonably requests in writing and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Securities or Exchange Securities covered by such Registration Statement;
provided that the Company and the Guarantors will not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject.
(i) The Company and the Guarantors will cooperate with the Holders of
Securities or Exchange Securities to facilitate the timely preparation and
delivery of certificates representing Securities or Exchange Securities to be
sold pursuant to any Registration Statement free of any restrictive legends and
in such denominations and registered in such names as the Holders thereof may
request in writing at least two business days prior to sales of Securities or
Exchange Securities pursuant to such Registration Statement.
(j) If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company and the Guarantors are required to
maintain an effective Registration Statement, the Company will promptly prepare
and file with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Securities or
Exchange Securities from a Holder, the
- 9 -
prospectus will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities or the
Exchange Securities, as the case may be, and provide the applicable trustee with
the Securities or the Exchange Securities, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company and the Guarantors will comply with all applicable
rules and regulations of the Commission and will make generally available to its
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earning statement satisfying the provisions
of Section 11(a) of the Securities Act covering a twelve month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act); provided that in no event shall
such earning statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statement shall cover such
12-month period.
(m) The Company and the Guarantors will cause the Indenture or the
Exchange Securities Indenture, as the case may be, to be qualified under the
Trust Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v) (a "Suspension
Notice"), such Holder will discontinue disposition of such Transfer Restricted
Securities until such Holder's receipt of copies of the supplemental or amended
prospectus contemplated by Section 4(j) or until advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may be
resumed. Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated prospectuses or (ii) deliver to the Company (at the Company's
expense)
- 10 -
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus covering such Transfer Restricted Securities that was current
at the time of receipt of the Suspension Notice. If the Company shall give any
notice under Section 4(b)(ii) through (v) during the period that the Company is
required to maintain an effective Registration Statement (the "Effectiveness
Period"), such Effectiveness Period shall be extended by the number of days
during such period from and including the date of the giving of such notice to
and including the date when each seller of Transfer Restricted Securities
covered by such Registration Statement shall have received (x) the copies of the
supplemental or amended prospectus contemplated by Section 4(j) (if an amended
or supplemental prospectus is required) or (y) the Advice (if no amended or
supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Company and the
Guarantors shall enter into such customary agreements (including, if requested,
an underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities
and Exchange Securities being sold or the managing underwriters (if any) shall
reasonably request in order to facilitate any disposition of Securities or
Exchange Securities pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by a representative of, and Special
Counsel (as defined below) acting for, Holders of a majority in aggregate
principal amount of the Securities and Exchange Securities being sold and any
underwriter participating in any disposition of Securities or Exchange
Securities pursuant to such Shelf Registration Statement, all relevant financial
and other records, pertinent corporate documents and properties of the Company
and its subsidiaries and (ii) use its reasonable best efforts to have its
officers, directors, employees, accountants and counsel supply all relevant
information reasonably requested by such representative, Special Counsel or any
such underwriter (an "Inspector") in connection with such Shelf Registration
Statement.
(r) In the case of a Shelf Registration Statement, the Company shall,
if requested by Holders of a majority in aggregate principal amount of the
Securities and Exchange Securities being sold, their Special Counsel or the
managing underwriters (if any) in connection with such Shelf Registration
Statement, use its reasonable best efforts to cause (i) its counsel to deliver
an opinion relating to the Shelf Registration Statement and the Securities or
Exchange Securities, as applicable, in customary form, (ii) its officers to
execute and deliver all customary documents and certificates requested by
Holders of a majority in aggregate principal amount of the Securities and
Exchange Securities being sold, their Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to provide a
comfort letter or letters in customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of Auditing
Standards No. 72.
- 11 -
5. Registration Expenses. The Company and the Guarantors will bear all
expenses incurred in connection with the performance of its obligations under
Sections 1, 2, 3 and 4 and the Company will reimburse the Initial Purchasers and
the Holders for the reasonable fees and disbursements of one firm of attorneys
(in addition to any local counsel) chosen by the Holders of a majority in
aggregate principal amount of the Securities and the Exchange Securities to be
sold pursuant to each Registration Statement (the "Special Counsel") acting for
the Initial Purchasers or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company and each of the Guarantors shall jointly and severally
indemnify and hold harmless each Holder (including, without limitation, any such
Initial Purchaser or Exchanging Dealer), its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6 and
Section 7 as a Holder) from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales of Securities or Exchange Securities), to which that Holder may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse each Holder promptly upon demand for any legal or other expenses
reasonably incurred by that Holder in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Guarantors
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Holders' Information; and
provided, further, that with respect to any such untrue statement in or omission
from any related preliminary prospectus, the indemnity agreement contained in
this Section 6(a) shall not inure to the benefit of any Holder from whom the
person asserting any such loss, claim, damage, liability or action received
Securities or Exchange Securities to the extent that such loss, claim, damage,
liability or action of or with respect to such Holder results from the fact that
both (A) a copy of the final prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of such Securities or Exchange
Securities to such person and (B) the untrue statement in or omission from
- 12 -
the related preliminary prospectus was corrected in the final prospectus unless,
in either case, such failure to deliver the final prospectus was a result of
non-compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, each Guarantor and their respective
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company or any Guarantor
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6(b) and Section 7 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement or any prospectus forming part
thereof or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any
Holders' Information furnished to the Company by such Holder, and shall
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that no such Holder shall be liable for any indemnity claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Securities or Exchange Securities pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its
- 13 -
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 6 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than the reasonable costs of investigation;
provided, however, that an indemnified party shall have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment or if the
indemnifying party has not paid the expenses and fees for which it is liable 20
days after notice by the indemnified party of request for reimbursement. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement or admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such
- 14 -
loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Guarantors from the offering and sale of the Securities, on
the one hand, and a Holder with respect to the sale by such Holder of Securities
or Exchange Securities, on the other, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and each of the Guarantors on
the one hand and such Holder on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and each of the Guarantors on the one
hand and a Holder on the other with respect to such offering and such sale shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities (before deducting expenses) received by or on behalf
of the Company and each of the Guarantors, on the one hand, and the total
discounts and commissions received by such Holder with respect to the Securities
or Exchange Securities, on the other, bear to the total gross proceeds from the
sale of Securities or Exchange Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to the Company and each of the Guarantors or information
supplied by the Company and each of the Guarantors on the one hand or to any
Holders' Information supplied by such Holder on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 7 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 7 shall be deemed to include, for purposes of this Section
7, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Securities or Exchange Securities shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities or Exchange Securities sold by such
indemnifying party to any purchaser exceeds the amount of any damages which such
indemnifying party has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Rules 144 and 144A. So long as any Transfer Restricted Securities
remain outstanding, the Company shall use its reasonable best efforts to file
the reports required to be filed by it under Rule 144A(d)(4) under the
Securities Act and the Exchange Act in a timely manner and, if at any time the
Company is not required to file
- 15 -
such reports, it will, upon the written request of any Holder of Transfer
Restricted Securities, make publicly available other information so long as
necessary to permit sales of such Holder's securities pursuant to Rules 144 and
144A. The Company and the Guarantors covenant that they will take such further
action as any Holder of Transfer Restricted Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Transfer Restricted Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon the
written request of any Holder of Transfer Restricted Securities, the Company and
the Guarantors shall deliver to such Holder a written statement as to whether it
has complied with such requirements. Notwithstanding the foregoing, nothing in
this Section 8 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
9. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities or Exchange
Securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate principal amount of the Securities and the
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
- 16 -
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 10(b),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy in
like manner to the Initial Purchasers.
(2) if to an Initial Purchaser, initially at its address set forth in
the Purchase Agreement;
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement; and
(4) if to the Guarantors, initially at the address of the Guarantors
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon the
Company, the Guarantors and their respective successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
- 17 -
(h) Remedies. In the event of a breach by the Company or any of the
Guarantors or by any Holder of any of their respective obligations under this
Agreement, each Holder or the Company or any Guarantor, as the case may be, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages (other than the recovery of damages for a breach by the
Company or any Guarantor of their obligations under Sections 1 or 2 hereof for
which additional interest has been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The
Company, each Guarantor and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. Each of the Company and each Guarantor
represents, warrants and agrees that (i) it has not entered into, shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii)
without limiting the generality of the foregoing, without the written consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Transfer Restricted Securities, it shall not grant to any person the right to
request the Company to register any debt securities of the Company under the
Securities Act unless the rights so granted are not in conflict or inconsistent
with the provisions of this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor the
Guarantors nor any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) shall have the right to include any
securities of the Company in any Shelf Registration or Registered Exchange Offer
other than Transfer Restricted Securities.
(k) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
- 18 -
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
MANOR CARE, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Secretary and
General Counsel
- 19 -
SUBSIDIARY GUARANTORS
AMERICAN HOSPITAL BUILDING
CORPORATION
AMERICANA HEALTHCARE CENTER OF
PALOS TOWNSHIP, INC.
AMERICANA HEALTHCARE CORPORATION
OF GEORGIA
AMERICANA HEALTHCARE CORPORATION
OF NAPLES
ANCILLARY SERVICES MANAGEMENT, INC.
▇▇▇▇▇ NURSING HOME, INC.
BIRCHWOOD MANOR, INC.
BLUE RIDGE REHABILITATION SERVICES,
INC.
CANTERBURY VILLAGE, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
CHESAPEAKE MANOR, INC.
DEKALB HEALTHCARE CORPORATION
DEVON MANOR CORPORATION
DISTCO, INC.
DIVERSIFIED REHABILITATION SERVICES,
INC.
▇▇▇▇▇▇▇ MANOR, INC.
EAST MICHIGAN CARE CORPORATION
EXECUTIVE ADVERTISING, INC.
EYE-Q NETWORK, INC.
- 20 -
FOUR SEASONS NURSING CENTERS, INC.
GEORGIAN BLOOMFIELD, INC.
GREENVIEW MANOR, INC.
HCR HOME HEALTH CARE AND HOSPICE,
INC.
HCR HOSPITAL HOLDING COMPANY, INC.
HCR INFORMATION CORPORATION
HCR MANORCARE MEDICAL SERVICES OF
FLORIDA, INC.
HCR PHYSICIAN MANAGEMENT SERVICES,
INC.
HCR REHABILITATION CORP.
HCRA OF TEXAS, INC.
HCRC INC.
HEALTH CARE AND RETIREMENT
CORPORATION OF AMERICA
HEARTLAND CAREPARTNERS, INC.
HEARTLAND EMPLOYMENT SERVICES, INC.
HEARTLAND HOME CARE, INC.
HEARTLAND HOME HEALTH CARE
SERVICES, INC.
HEARTLAND HOSPICE SERVICES, INC.
HEARTLAND INFORMATION SERVICES, INC.
(fka Heartland Medical Information Services)
- 21 -
HEARTLAND MANAGEMENT SERVICES,
INC.
HEARTLAND REHABILITATION SERVICES
OF FLORIDA, INC.
HEARTLAND REHABILITATION SERVICES,
INC.
HEARTLAND SERVICES CORP.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, RPT - ▇▇▇▇ ▇▇▇▇▇▇▇▇,
RPT PHYSICAL THERAPY PROFESSIONAL
ASSOCIATES, INC.
HGCC OF ALLENTOWN, INC.
IN HOME HEALTH, INC.
INDUSTRIAL WASTES, INC.
IONIA MANOR, INC.
JACKSONVILLE HEALTHCARE
CORPORATION
KENSINGTON MANOR, INC.
KNOLLVIEW MANOR, INC.
LEADER NURSING AND REHABILITATION
CENTER OF BETHEL PARK, INC.
LEADER NURSING AND REHABILITATION
CENTER OF GLOUCESTER, INC.
LEADER NURSING AND REHABILITATION
CENTER OF ▇▇▇▇▇ TOWNSHIP, INC.
LEADER NURSING AND REHABILITATION
CENTER OF VIRGINIA INC.
LINCOLN HEALTH CARE, INC.
MANOR CARE AVIATION, INC.
- 22 -
MANOR CARE OF AKRON, INC.
MANOR CARE OF AMERICA, INC
MANOR CARE OF ARIZONA, INC.
MANOR CARE OF ARLINGTON, INC.
MANOR CARE OF BOCA RATON, INC.
MANOR CARE OF BOYNTON BEACH, INC.
MANOR CARE OF CANTON, INC.
MANOR CARE OF CENTERVILLE, INC
MANOR CARE OF CHARLESTON, INC.
MANOR CARE OF CINCINNATI, INC.
MANOR CARE OF COLUMBIA, INC.
MANOR CARE OF DARIEN, INC.
MANOR CARE OF DELAWARE COUNTY, INC.
MANOR CARE OF DUNEDIN, INC.
MANOR CARE OF FLORIDA, INC.
MANOR CARE OF HINSDALE, INC.
MANOR CARE OF KANSAS, INC.
MANOR CARE OF KINGSTON COURT, INC.
MANOR CARE OF LARGO, INC.
MANOR CARE OF LEXINGTON, INC.
MANOR CARE OF MEADOW PARK, INC.
MANOR CARE OF MIAMISBURG, INC
- 23 -
MANOR CARE OF NORTH OLMSTED, INC.
MANOR CARE OF PINEHURST, INC.
MANOR CARE OF PLANTATION, INC.
MANOR CARE OF ROLLING ▇▇▇▇▇▇▇, INC.
MANOR CARE OF ROSSVILLE, INC.
MANOR CARE OF SARASOTA, INC.
MANOR CARE OF ▇▇▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF WILMINGTON, INC.
MANOR CARE OF YORK (NORTH), INC.
MANOR CARE OF YORK (SOUTH), INC.
MANOR CARE PROPERTIES, INC.
MANORCARE HEALTH SERVICES OF
BOYNTON BEACH, INC.
MANORCARE HEALTH SERVICES OF
NORTHHAMPTON COUNTY, INC.
MANORCARE HEALTH SERVICES OF
VIRGINIA, INC.
MANORCARE HEALTH SERVICES, INC.
MARINA VIEW MANOR, INC.
MEDI-SPEECH SERVICE, INC.
MID-SHORE PHYSICAL THERAPY
ASSOCIATES, INC.
MILESTONE HEALTH SYSTEMS, INC.
MILESTONE HEALTHCARE, INC.
- 24 -
MILESTONE REHABILITATION SERVICES,
INC.
MILESTONE STAFFING SERVICES, INC.
MILESTONE THERAPY SERVICES, INC.
MNR FINANCE CORP.
MRC REHABILITATION, INC.
NEW MANORCARE HEALTH SERVICES, INC.
PEAK REHABILITATION, INC.
PERRYSBURG PHYSICAL THERAPY, INC
PHYSICAL OCCUPATIONAL AND SPEECH
THERAPY, INC.
PNEUMATIC CONCRETE, INC.
PORTFOLIO ONE, INC.
REHABILITATION ADMINISTRATION
CORPORATION
REHABILITATION ASSOCIATES, INC.
REHABILITATION SERVICES OF ROANOKE,
INC.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ HEALTHCARE, INC.
RIDGEVIEW MANOR, INC.
▇▇▇▇▇▇ PARK NURSING CENTER, INC.
RVA MANAGEMENT SERVICES, INC.
SILVER SPRING - WHEATON NURSING
- 25 -
HOME, INC.
SPRINGHILL MANOR, INC.
STEWALL CORPORATION
STRATFORD MANOR, INC.
STUTEX CORP.
SUN VALLEY MANOR, INC.
THE NIGHTINGALE NURSING HOME, INC.
THERAPY ASSOCIATES, INC.
THERASPORT PHYSICAL THERAPY, INC.
THREE RIVERS MANOR, INC.
TOTALCARE CLINICAL LABORATORIES,
INC.
WASHTENAW HILLS MANOR, INC.
WHITEHALL MANOR, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary of each of the
above-referenced corporations
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 26 -
COLEWOOD LIMITED PARTNERSHIP
By: American Hospital Building Corporation, its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 27 -
HCR HOSPITAL, LLC
By: HCR Hospital Holding Company, Inc., its
sole member
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 28 -
ANCILLARY SERVICES, LLC
By: Heartland Rehabilitation Services, Inc., its
sole member
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 29 -
BOOTH LIMITED PARTNERSHIP
By: Jacksonville Healthcare Corporation, its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 30 -
ANNANDALE ARDEN, LLC
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
▇▇▇▇▇▇▇ FARMS ARDEN, LLC
COLONIE ARDEN, LLC
CRESTVIEW HILLS, LLC
FIRST LOUISVILLE ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ LLC
HANOVER ARDEN, LLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
KENWOOD ARDEN, LLC
LIVONIA ARDEN, LLC
MEMPHIS ARDEN, LLC
NAPA ARDEN, LLC
ROANOKE ARDEN, LLC
SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
SILVER SPRING ARDEN, LLC
SUSQUEHANNA ARDEN LLC
TAMPA ARDEN, LLC
WALL ARDEN, LLC
WARMINSTER ARDEN LLC
▇▇▇▇▇▇▇▇ VILLE ▇▇▇▇▇, LLC
- 31 -
By: Manor Care of America, Inc., the
sole member of each of the above-
referenced limited liability companies
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 32 -
BATH ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AUSTIN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF KENWOOD, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SAN ANTONIO, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SUSQUEHANNA, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF WARMINSTER, LLC
FRESNO ARDEN, LLC
MESQUITE HOSPITAL, LLC
TUSCAWILLA ARDEN, LLC
By: Manor Care Health Services, Inc., the
sole member of each of the above-
referenced limited liability companies
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 33 -
HCR MANORCARE MESQUITE, L.P.
By: Mesquite Hospital, LLC, its
General Partner
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, General
Counsel and Secretary
Address: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone:▇▇▇-▇▇▇-▇▇▇▇
- 34 -
Confirmed and accepted as of the date first above written:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
NATCITY INVESTMENTS, INC.
SUNTRUST CAPITAL MARKETS, INC.
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________
Authorized Signatory
- 35 -
SCHEDULE I
GUARANTORS
AMERICAN HOSPITAL BUILDING
CORPORATION
AMERICANA HEALTHCARE CENTER OF
PALOS TOWNSHIP, INC.
AMERICANA HEALTHCARE CORPORATION
OF GEORGIA
AMERICANA HEALTHCARE CORPORATION
OF NAPLES
ANCILLARY SERVICES MANAGEMENT, INC.
▇▇▇▇▇ NURSING HOME, INC.
BIRCHWOOD MANOR, INC.
BLUE RIDGE REHABILITATION SERVICES,
INC.
CANTERBURY VILLAGE, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇, INC.
CHESAPEAKE MANOR, INC.
DEKALB HEALTHCARE CORPORATION
DEVON MANOR CORPORATION
DISTCO, INC.
DIVERSIFIED REHABILITATION SERVICES,
INC.
▇▇▇▇▇▇▇ MANOR, INC.
EAST MICHIGAN CARE CORPORATION
EXECUTIVE ADVERTISING, INC.
EYE-Q NETWORK, INC.
FOUR SEASONS NURSING CENTERS, INC.
GEORGIAN BLOOMFIELD, INC.
GREENVIEW MANOR, INC.
HCR HOME HEALTH CARE AND HOSPICE,
INC.
HCR HOSPITAL HOLDING COMPANY, INC.
HCR INFORMATION CORPORATION
HCR MANORCARE MEDICAL SERVICES OF
FLORIDA, INC.
HCR PHYSICIAN MANAGEMENT SERVICES,
INC.
HCR REHABILITATION CORP.
HCRA OF TEXAS, INC.
HCRC INC.
HEALTH CARE AND RETIREMENT
CORPORATION OF AMERICA
HEARTLAND CAREPARTNERS, INC.
HEARTLAND EMPLOYMENT SERVICES, INC.
HEARTLAND HOME CARE, INC.
HEARTLAND HOME HEALTH CARE
SERVICES, INC.
HEARTLAND HOSPICE SERVICES, INC.
HEARTLAND INFORMATION SERVICES, INC.
(f/k/a Heartland Medical Information Services)
HEARTLAND MANAGEMENT SERVICES,
INC.
HEARTLAND REHABILITATION SERVICES
OF FLORIDA, INC.
HEARTLAND REHABILITATION SERVICES,
INC.
HEARTLAND SERVICES CORP.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, RPT - ▇▇▇▇ ▇▇▇▇▇▇▇▇,
RPT PHYSICAL THERAPY PROFESSIONAL
ASSOCIATES, INC.
HGCC OF ALLENTOWN, INC.
IN HOME HEALTH, INC.
INDUSTRIAL WASTES, INC.
IONIA MANOR, INC.
JACKSONVILLE HEALTHCARE
CORPORATION
KENSINGTON MANOR, INC.
KNOLLVIEW MANOR, INC.
LEADER NURSING AND REHABILITATION
CENTER OF BETHEL PARK, INC.
LEADER NURSING AND REHABILITATION
CENTER OF GLOUCESTER, INC.
LEADER NURSING AND REHABILITATION
CENTER OF ▇▇▇▇▇ TOWNSHIP, INC.
LEADER NURSING AND REHABILITATION
CENTER OF VIRGINIA INC.
LINCOLN HEALTH CARE, INC.
MANOR CARE AVIATION, INC.
MANOR CARE OF AKRON, INC.
MANOR CARE OF AMERICA, INC
MANOR CARE OF ARIZONA, INC.
MANOR CARE OF ARLINGTON, INC.
MANOR CARE OF BOCA RATON, INC.
MANOR CARE OF BOYNTON BEACH, INC.
MANOR CARE OF CANTON, INC.
MANOR CARE OF CENTERVILLE, INC
MANOR CARE OF CHARLESTON, INC.
MANOR CARE OF CINCINNATI, INC.
MANOR CARE OF COLUMBIA, INC.
MANOR CARE OF DARIEN, INC.
MANOR CARE OF DELAWARE COUNTY, INC.
MANOR CARE OF DUNEDIN, INC.
MANOR CARE OF FLORIDA, INC.
MANOR CARE OF HINSDALE, INC.
MANOR CARE OF KANSAS, INC.
MANOR CARE OF KINGSTON COURT, INC.
MANOR CARE OF LARGO, INC.
MANOR CARE OF LEXINGTON, INC.
MANOR CARE OF MEADOW PARK, INC.
MANOR CARE OF MIAMISBURG, INC
MANOR CARE OF NORTH ▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF PINEHURST, INC.
MANOR CARE OF PLANTATION, INC.
MANOR CARE OF ROLLING ▇▇▇▇▇▇▇, INC.
MANOR CARE OF ROSSVILLE, INC.
MANOR CARE OF SARASOTA, INC.
MANOR CARE OF ▇▇▇▇▇▇▇▇▇▇, INC.
MANOR CARE OF WILMINGTON, INC.
MANOR CARE OF YORK (NORTH), INC.
MANOR CARE OF YORK (SOUTH), INC.
MANOR CARE PROPERTIES, INC.
MANORCARE HEALTH SERVICES OF
BOYNTON BEACH, INC.
MANORCARE HEALTH SERVICES OF
NORTHHAMPTON COUNTY, INC.
MANORCARE HEALTH SERVICES OF
VIRGINIA, INC.
MANORCARE HEALTH SERVICES, INC.
MARINA VIEW MANOR, INC.
MEDI-SPEECH SERVICE, INC.
MID-SHORE PHYSICAL THERAPY
ASSOCIATES, INC.
MILESTONE HEALTH SYSTEMS, INC.
MILESTONE HEALTHCARE, INC.
MILESTONE REHABILITATION SERVICES,
INC.
MILESTONE STAFFING SERVICES, INC.
MILESTONE THERAPY SERVICES, INC.
MNR FINANCE CORP.
MRC REHABILITATION, INC.
NEW MANORCARE HEALTH SERVICES, INC.
PEAK REHABILITATION, INC.
PERRYSBURG PHYSICAL THERAPY, INC
PHYSICAL OCCUPATIONAL AND SPEECH
THERAPY, INC.
PNEUMATIC CONCRETE, INC.
PORTFOLIO ONE, INC.
REHABILITATION ADMINISTRATION
CORPORATION
REHABILITATION ASSOCIATES, INC.
REHABILITATION SERVICES OF ROANOKE,
INC.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ HEALTHCARE, INC.
RIDGEVIEW MANOR, INC.
▇▇▇▇▇▇ PARK NURSING CENTER, INC.
RVA MANAGEMENT SERVICES, INC.
SILVER SPRING - WHEATON NURSING
HOME, INC.
SPRINGHILL MANOR, INC.
STEWALL CORPORATION
STRATFORD MANOR, INC.
STUTEX CORP.
SUN VALLEY MANOR, INC.
THE NIGHTINGALE NURSING HOME, INC.
THERAPY ASSOCIATES, INC.
THERASPORT PHYSICAL THERAPY, INC.
THREE RIVERS MANOR, INC.
TOTALCARE CLINICAL LABORATORIES,
INC.
WASHTENAW HILLS MANOR, INC.
WHITEHALL MANOR, INC.
COLEWOOD LIMITED PARTNERSHIP
HCR HOSPITAL, LLC
ANCILLARY SERVICES, LLC
BOOTH LIMITED PARTNERSHIP
ANNANDALE ARDEN, LLC
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
▇▇▇▇▇▇▇ FARMS ▇▇▇▇▇, LLC
COLONIE ARDEN, LLC
CRESTVIEW HILLS, LLC
FIRST LOUISVILLE ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇ LLC
HANOVER ARDEN, LLC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
KENWOOD ARDEN, LLC
LIVONIA ARDEN, LLC
MEMPHIS ARDEN, LLC
NAPA ARDEN, LLC
ROANOKE ARDEN, LLC
SAN ▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC
SILVER SPRING ARDEN, LLC
SUSQUEHANNA ARDEN LLC
TAMPA ARDEN, LLC
WALL ARDEN, LLC
WARMINSTER ARDEN LLC
▇▇▇▇▇▇▇▇ VILLE ▇▇▇▇▇, LLC
BATH ARDEN, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF ▇▇▇▇▇▇, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF KENWOOD, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SAN ANTONIO, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF SUSQUEHANNA, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ OF WARMINSTER, LLC
FRESNO ARDEN, LLC
MESQUITE HOSPITAL, LLC
TUSCAWILLA ARDEN, LLC
HCR MANORCARE MESQUITE, L.P.
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until ______, 2013, all dealers
effecting transactions in the Exchange Securities may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
ANNEX B-1
[Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
Annex B-1
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LETTERHEAD)
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Manor Care, Inc., a Delaware
corporation (the "COMPANY"), in connection with the sale to you (the "INITIAL
PURCHASERS") on the date hereof by the Company of $200,000,000 in aggregate
principal amount of the Company's 6.25% Senior Notes due 2013 (the "SECURITIES")
and the guarantee of the Securities pursuant to the Indenture (as defined below)
(the "GUARANTEES") by each of the subsidiaries of the Company set forth on
Exhibit A hereto (the "GUARANTORS"), pursuant to a Purchase Agreement, dated
April 10, 2003 (the "PURCHASE AGREEMENT"), among you, the Company and the
Guarantors. The Securities and the Guarantees are being issued pursuant to an
Indenture, dated as of the date hereof (the "INDENTURE"), among the Company, the
Guarantors and National City Bank, as trustee (the "TRUSTEE"). The Purchase
Agreement, the Indenture (including the Guarantees set forth therein), the
Securities and the Exchange and Registration Rights Agreement, dated as of April
15, 2003, among you, the Company and the Guarantors (the "REGISTRATION RIGHTS
AGREEMENT") are sometimes referred to herein collectively as the "OFFERING
DOCUMENTS". This letter is being furnished to you pursuant to Section 5(d) of
the Purchase Agreement.
As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of this letter. We have
examined, among other things, the following:
(a) The Purchase Agreement;
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 2
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LOGO)
(b) The Indenture (including the Guarantees set forth therein);
(c) The offering memorandum prepared by the Company, dated April 10,
2003 (the "OFFERING MEMORANDUM");
(d) The Registration Rights Agreement; and
(e) The Securities.
As to facts material to the opinions, statements and assumptions expressed
herein, we have, with your consent, relied upon oral or written statements and
representations of officers and other representatives of the Company and others,
including the representations and warranties of the Company and each of the
Guarantors in the Purchase Agreement. We have not independently verified such
factual matters.
We are opining herein as to the effect on the subject transaction only of
the federal laws of the United States, the internal laws of the State of New
York and, in numbered paragraphs 1, 3, 5 and 7 of this letter, the Delaware
General Corporation Law, and we express no opinion with respect to the
applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws, or as to any matters
of municipal law or the laws of any local agencies within any state. Various
issues concerning certain laws and regulations applicable to the Company are
addressed in the opinions or statements of belief of R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇ LLP of even date herewith, which have separately been provided to you, and
we express no opinion or belief with respect to those matters.
The opinions expressed herein apply only to the Company and the following
subsidiaries of the Company: (i) HCRC Inc., a Delaware corporation, Manor Care
of America, Inc., a Delaware corporation, and ManorCare Health Services, Inc., a
Delaware corporation (together, the "DELAWARE SIGNIFICANT SUBSIDIARIES"); and
(ii) Health Care and Retirement Corporation of America, an Ohio corporation,
Heartland Rehabilitation Services, Inc., an Ohio corporation, and HCR
Rehabilitation Corp., an Ohio corporation (together, the "OHIO SIGNIFICANT
SUBSIDIARIES"). The Ohio Significant Subsidiaries and the Delaware Significant
Subsidiaries are referred to herein, together, as the "SIGNIFICANT
SUBSIDIARIES".
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 3
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LOGO)
1. The Indenture, including the Guarantees set forth therein, has
been duly authorized, executed and delivered by the Company and each of
the Delaware Significant Subsidiaries.
2. The Indenture, including the Guarantees set forth therein,
constitutes a legally valid and binding agreement of the Company and each
of the Significant Subsidiaries, enforceable against the Company and each
of the Significant Subsidiaries in accordance with its terms. The
Indenture conforms in all material respects to the description thereof
contained in the Offering Memorandum. The statements in the Offering
Memorandum under the caption "Description of notes", insofar as they
purport to describe or summarize certain provisions of the Indenture, are
accurate summaries or descriptions in all material respects.
3. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and each of the Delaware Significant
Subsidiaries.
4. The Registration Rights Agreement constitutes a legally valid
and binding agreement of the Company and each of the Significant
Subsidiaries, enforceable against the Company and each of the Significant
Subsidiaries in accordance with its terms. The Registration Rights
Agreement conforms in all material respects to the description thereof
contained in the Offering Memorandum. The statements in the Offering
Memorandum under the caption "Description of notes" and "Registration
rights", insofar as they purport to describe or summarize certain
provisions of the Registration Rights Agreement, are accurate summaries or
descriptions in all material respects.
5. The Securities have been duly authorized by all necessary
corporate action of the Company.
6. Upon payment as provided for in the Purchase Agreement, the
Securities, when executed, issued and authenticated in accordance with the
terms of the Indenture and delivered to you, will be legally valid and
binding obligations of the Company, enforceable in accordance with their
terms, and the Guarantees as set forth in the Indenture will be the
legally valid and binding obligation of each of the Significant
Subsidiaries, enforceable in accordance with their terms. The Securities
conform in all material respects to the description thereof contained in
the Offering Memorandum. The statements in the Offering Memorandum under
the caption "Description of notes", insofar as they purport to describe or
summarize certain provisions of the Securities, are accurate summaries or
descriptions in all material respects.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 4
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LOGO)
7. The securities to be issued pursuant to the Registration
Rights Agreement (the "EXCHANGE SECURITIES") have been duly authorized by
all necessary corporate action of the Company.
8. Upon payment as provided for in the Indenture and the
Registration Rights Agreement, the Exchange Securities, when executed,
issued, authenticated and delivered, will be legally valid and binding
obligations of the Company, enforceable in accordance with their terms,
and the Guarantees as set forth in the Indenture will be the legally valid
and binding obligation of each of the Significant Subsidiaries,
enforceable in accordance with their terms. The Exchange Securities
conform in all material respects to the description thereof contained in
the Offering Memorandum. The statements in the Offering Memorandum under
the caption "Description of notes", insofar as they purport to describe or
summarize certain provisions of the Exchange Securities, are accurate
summaries or descriptions in all material respects.
9. Assuming the accuracy of the representations, warranties and
agreements of the Company and each of the Guarantors and of the Initial
Purchasers contained in the Purchase Agreement, no registration of the
Securities under the Securities Act of 1933, and no qualification of the
Indenture under the Trust Indenture Act, is required for the purchase of
the Securities, together with the related Guarantees, by you or the
initial resale of the Securities, and the related Guarantees, by you to
Qualified Institutional Buyers or to purchasers in compliance with
Regulation S, in each case in the manner contemplated by the Purchase
Agreement and the Offering Memorandum. We express no opinion, however, as
to when or under what circumstances any Securities initially sold by you
may be reoffered or resold.
The opinions rendered in paragraphs 2, 4, 6 and 8 relating to the
enforceability of the Indenture (including the Guarantees set forth therein),
the Registration Rights Agreement, the Securities and the Exchange Securities,
respectively, are subject to the following exceptions, limitations and
qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
preference, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors; (ii) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law (including
the possible unavailability of specific performance or injunctive relief),
concepts of materiality, reasonableness, good faith and fair dealing, and the
discretion of the court before which any proceeding therefor may be brought; and
(iii) exclusively with respect to paragraph 4, 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.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 5
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LOGO)
With respect to the opinions rendered in paragraphs 2, 4, 6 and 8, we have
assumed the power of, and the due authorization, execution and delivery of the
Indenture (including the Guarantees set forth therein), the Registration Rights
Agreement, the Securities and the Exchange Securities, respectively, by, the
Ohio Significant Subsidiaries.
We have not been requested to express and, with your knowledge and
consent, do not render any opinion as to the applicability to the obligations of
(i) the Company under the Indenture and the Securities or (ii) the Significant
Subsidiaries under the Indenture (including the Guarantees set forth therein) of
▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or applicable state law
(including, without limitation, Article 10 of the New York Debtor and Creditor
Law) relating to fraudulent transfers and obligations.
With your consent, we have assumed for purposes of this opinion that (i)
each of the Initial Purchasers and the Trustee (a) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization; (b) has the requisite power and authority to execute and deliver
and to perform its obligations under each of the Offering Documents to which it
is a party; and (c) has duly authorized, executed and delivered each such
Offering Document; (ii) with respect to each of the parties to the Offering
Documents other than the Company and the Delaware Significant Subsidiaries, each
Offering Document to which it is a party constitutes its legally valid and
binding agreement, enforceable against it in accordance with its terms; and
(iii) the Trustee is in compliance, generally and with respect to acting as
Trustee under the Indenture, with all applicable laws and regulations.
This opinion is delivered only to you in your capacity as Initial
Purchasers under the Purchase Agreement and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, assigned to, quoted to, or
relied upon by any other person, firm or corporation for any purpose (including
any person, firm or corporation that acquires Securities from you) without our
prior written consent, which may be granted or withheld in our sole discretion.
Very truly yours,
(▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LETTERHEAD)
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Manor Care, Inc., a Delaware
corporation (the "COMPANY"), in connection with the sale to you (the "INITIAL
PURCHASERS") on the date hereof by the Company of $200,000,000 in aggregate
principal amount of the Company's 6.25% Senior Notes due 2013 (the "SECURITIES")
and the guarantee of the Securities pursuant to the Indenture (as defined below)
(the "GUARANTEES") by each of the subsidiaries of the Company set forth on
Exhibit A hereto (the "GUARANTORS"), pursuant to a Purchase Agreement, dated
April 10, 2003 (the "PURCHASE AGREEMENT"), among you, the Company and the
Guarantors. The Securities and the Guarantees are being issued pursuant to an
Indenture, dated as of the date hereof (the "INDENTURE"), among the Company, the
Guarantors and National City Bank, as trustee. The Purchase Agreement, the
Indenture (including the Guarantees set forth therein), the Securities and the
Exchange and Registration Rights Agreement, dated as of April 15, 2003, among
you, the Company and the Guarantors are sometimes referred to herein
collectively as the "OFFERING DOCUMENTS." The term "OFFERING MEMORANDUM" refers
to the offering memorandum prepared by the Company, dated April 10, 2003. This
letter is being furnished to you pursuant to Section 5(d) of the Purchase
Agreement.
The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information, and many
determinations involved in the preparation of
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 2
the Offering Memorandum and Offering Documents are of a wholly or partially
non-legal character or related to legal matters outside the scope of our opinion
to you of even date herewith (the "OPINION"). Therefore, we are not passing upon
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Offering Memorandum, (except to the extent
expressly set forth in the numbered paragraphs 2, 4, 6 and 8 of the Opinion and
in our opinion regarding tax matters to you of even date), and have not made an
independent check or verification thereof (except as aforesaid). However, in the
course of acting as counsel to the Company in connection with the preparation by
the Company of the Offering Memorandum, we reviewed the Offering Memorandum and
participated in conferences and telephone conversations with officers and other
representatives of the Company, the independent public accountants for the
Company, your representatives and your counsel, during which conferences and
conversations the contents of the Offering Memorandum and related matters were
discussed. We also reviewed certain corporate records and documents, letters
from counsel and accountants, and oral and written statements of officers and
other representatives of the Company and others as to the existence and
consequence of certain factual and other matters. We considered the foregoing in
light of our understanding of applicable U.S. federal securities laws and our
experience gained through practice thereunder.
Based on our participation and review as described above, we advise you
that during the course of our services in connection with our representation of
the Company no facts came to our attention that caused us to believe that the
Offering Memorandum, as of its date or as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to (i) the financial statements,
schedules, or other financial data included in, or omitted from, the Offering
Memorandum, (ii) Health Care Laws (as defined in the opinion of ▇▇▇▇ ▇▇▇▇▇ LLP
of even date herewith) and the legal matters, documents and proceedings relating
to such Health Care Laws and (iii) statutes, ordinances, administrative
decisions, rules or regulations of counties, towns, municipalities or special
political subdivisions relating to long-term care facilities (including nursing
facilities, skilled nursing facilities and assisted living facilities), home
health agencies, hospices and acute care hospitals.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 3
This opinion is delivered only to you in your capacity as Initial
Purchasers under the Purchase Agreement and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, assigned to, quoted to, or
relied upon by any other person, firm or corporation for any purpose (including
any person, firm or corporation that acquires Securities from you) without our
prior written consent, which may be granted or withheld in our sole discretion.
Very truly yours,
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
The Bank of New York
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes Due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Manor Care, Inc., a Delaware
corporation (the "COMPANY"), in connection with the sale to you on the date
hereof by the Company of $200,000,000 in aggregate principal amount of the
Company's 6.25% Senior Notes Due 2013 (the "SECURITIES") and the guarantee of
the Securities pursuant to the Indenture (the "GUARANTEES") by each of the
subsidiaries of the Company set forth on Exhibit A hereto (the "GUARANTORS"),
pursuant to a Purchase Agreement, dated April 10, 2003 (the "PURCHASE
AGREEMENT"), among you, the Company and the Guarantors. The Securities and the
Guarantees are being issued pursuant to an Indenture, dated the date hereof,
among the Company, the Guarantors and National City Bank, as trustee. In
connection with the sale of the Securities, the Company has prepared an offering
memorandum, dated April 10, 2003 (the "OFFERING MEMORANDUM"). The facts as we
understand them, and upon which with your permission we rely in rendering the
opinion herein, are set forth in the Offering Memorandum. This letter is being
furnished to you pursuant to Section 5(d) of the Purchase Agreement.
We are opining as to the effect on the subject transaction only of the
federal income tax laws of the United States, and we express no opinion with
respect to the applicability thereto, or the effect thereon, of other federal
laws, the laws of any state or any other jurisdiction or as to any other matters
of municipal law or the laws of any local agencies within any state. Our opinion
is not binding upon the Internal Revenue Service or the courts. Furthermore, no
assurance can be given that future legislation, judicial or administrative
changes, on either a prospective or retroactive basis, would not adversely
affect the accuracy of the conclusions stated in the following paragraph.
▇▇ ▇▇▇▇▇▇ Securities, Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
APRIL __, 2003
PAGE 2
Based on the facts and assumptions and subject to the limitations set
forth in the Offering Memorandum, the statements under the caption "Certain
United States federal income tax considerations" in the Offering Memorandum,
insofar as they purport to constitute summaries of matters of United States
federal income tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects.
No opinion is expressed as to any matter not discussed herein.
This opinion is rendered to you as of the date of this letter, and we
undertake no obligation to update this opinion subsequent to the date hereof.
This opinion is based on various statutory provisions, regulations promulgated
thereunder and interpretations thereof by the Internal Revenue Service and the
courts having jurisdiction over such matters, all of which are subject to change
either prospectively or retroactively. Also, any variation or difference in the
facts from those set forth in the Offering Memorandum may affect the conclusions
stated herein.
This opinion is rendered only to you, and is for your use in connection
with the transaction described herein upon the understanding that we are not
hereby assuming professional responsibility to any other person whatsoever. This
opinion is not intended for the express or implied benefit of any third party
and is not to be used or relied upon by any other person or for any other
purpose without our prior written approval in each instance.
Very truly yours,
ANNEX B-2
[Form of Opinion of R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇]
Annex B-2
(MANOR CARE, INC. LETTERHEAD)
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
I am Vice President and General Counsel of Manor Care, Inc. and
represented it in connection with the sale to you (the "INITIAL PURCHASERS") on
the date hereof by Manor Care, Inc., a Delaware corporation (the "COMPANY"), of
$200,000,000 in aggregate principal amount of the Company's 6.25% Senior Notes
due 2013 (the "SECURITIES") and the guarantee of the Securities pursuant to the
Indenture (as defined below) (the "GUARANTEES") by each of the subsidiaries of
the Company set forth on Exhibit A hereto (the "GUARANTORS"), pursuant to a
Purchase Agreement, dated April 10, 2003 (the "PURCHASE AGREEMENT"), among you,
the Company and the Guarantors. The Securities and the Guarantees are being
issued pursuant to an Indenture, dated as of the date hereof (the "INDENTURE"),
among the Company, the Guarantors and National City Bank, as trustee. The
Purchase Agreement, the Indenture (including the Guarantees set forth therein),
the Securities and the Exchange and Registration Rights Agreement, dated as of
April 15, 2003, among you, the Company and the Guarantors (the "REGISTRATION
RIGHTS AGREEMENT") are sometimes referred to herein collectively as the
"OFFERING DOCUMENTS." This letter is being furnished to you pursuant to Section
5(e) of the Purchase Agreement.
As such counsel, I have made such legal and factual examinations and
inquiries as I have deemed necessary or appropriate for purposes of this
opinion. In addition, I have obtained and relied upon certificates and
assurances from public officials as I have deemed necessary.
Various issues concerning certain laws and regulations applicable to the
Company are addressed in the opinions of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Illinois LLC and ▇▇▇▇
▇▇▇▇▇ LLP of even date herewith, which have separately been provided to you, and
I express no opinion or belief with respect to those matters except as expressly
set forth herein.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Bank
APRIL 15, 2003
PAGE 2
Subject to the foregoing and the other matters set forth herein, it is my
opinion that, as of the date hereof:
1. Each of the Company and each of its subsidiaries has been duly
incorporated or formed, as the case may be, and is validly existing as a
corporation, limited liability company, partnership or limited partnership, as
the case may be, in good standing under the laws of its respective jurisdiction
or incorporation or formation as the case may be, is duly qualified to do
business and is in good standing as a foreign corporation, limited liability
company, partnership or limited partnership, as the case may be, in each
jurisdiction in which its ownership or lease of property or the conduct of its
respective businesses requires such qualification, and has all power and
authority necessary to own or hold its respective properties and to conduct the
businesses in which it is engaged (except where the failure to so qualify or
have such power or authority would not, singularly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), results of
operations or business or prospects of the Company and its subsidiaries taken as
a whole (a "MATERIAL ADVERSE EFFECT").
2. The Company has an authorized capitalization as set forth in the
offering memorandum prepared by the Company, dated April 10, 2003 (the "OFFERING
MEMORANDUM"), and all of the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; except as described on Schedule 2 of the Purchase Agreement, all
of the issued Shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and other than as set forth or contemplated in the Offering Memorandum, are
owned directly or indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or any other
claim of any third party.
3. The descriptions in the Offering Memorandum of statutes, legal and
governmental proceedings and contracts and other documents, except for the
matters addressed in the ▇▇▇▇ ▇▇▇▇▇ LLP opinion to which I am not opining, are
accurate in all material respects; and I do not have actual knowledge of any
current or pending legal or governmental actions, suits or proceedings which
would be required to be described in the Offering Memorandum if the Offering
Memorandum were a prospectus included in a registration statement on Form S-1
which are not described as so required.
4. The Company and each of the Guarantors has full corporate,
partnership or limited liability company power to execute and deliver each of
the Offering Documents and to perform their respective obligations thereunder,
and all corporate, partnership or limited liability company action required to
be taken for the due and proper authorization, execution and delivery of each of
the Offering
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Bank
APRIL 15, 2003
PAGE 3
Documents and the consummation of the transactions contemplated thereby by the
Company and each of the Guarantors have been duly and validly taken.
5. The Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
6. The execution, delivery and performance by the Company and each of
the Guarantors of each of the Offering Documents, the issuance, authentication,
sale and delivery of the Securities, the issuance of the Guarantees and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Offering Documents will
not:
(i) result in a breach or violation of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject;
(ii) result in any violation of the provisions of the charter or by-laws
(or other comparable organizational documents) of the Company or any
of its subsidiaries;
(iii) result in the violation of any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets; or
(iv) require the consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental
agency or body under any such statute, judgment, order, decree, rule
or regulation for the execution, delivery and performance by the
Company and each of the Guarantors of each of the Offering
Documents, the issuance, authentication, sale and delivery of the
Securities, the issuance of the Guarantees and compliance by the
Company and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Offering
Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (a) which have been
obtained or made prior to the Closing Date and (b) as may be
required to be obtained or made under the Securities Act and
applicable state securities laws as provided in the Registration
Rights Agreement.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Bank
APRIL 15, 2003
PAGE 4
7. Except as otherwise disclosed in the Offering Memorandum, to the
best of my knowledge, there are no pending actions or suits or judicial,
arbitral, rule-making, administrative or other proceedings to which the Company
or any of the Guarantors is a party or of which any property or assets of the
Company or any of the Guarantors is the subject which (i) singularly or in the
aggregate, if determined adversely to the Company or any of the Guarantors,
could reasonably be expected to have a Material Adverse Effect or (ii) questions
the validity or enforceability of any of the Offering Documents or any action
taken or to be taken thereto; and, except as otherwise disclosed in the Offering
Memorandum, to the best of my knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
8. Neither the Company nor any of the Guarantors is (i) in violation of
its charter or by-laws (or other comparable organizational documents), (ii) in
default, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to which it
is a party or by which it is bound or to which any of its property or assets is
subject, which, singularly or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, or (iii) in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject which, singularly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
This opinion is delivered only to you in your capacity as Initial
Purchasers under the Purchase Agreement and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, assigned to, quoted to, or
relied upon by any other person, firm or corporation for any purpose (including
any person, firm or corporation that acquires Convertible Notes from you)
without my prior written consent, which may be granted or withheld in my sole
discretion.
Very truly yours,
(MANOR CARE, INC. LETTERHEAD)
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
I am Vice President and General Counsel of Manor Care, Inc. and
represented it in connection with the sale to you (the "INITIAL PURCHASERS") on
the date hereof by Manor Care, Inc., a Delaware corporation (the "COMPANY"), of
$200,000,000 in aggregate principal amount of the Company's 6.25% Senior Notes
due 2013 (the "SECURITIES") and the guarantee of the Securities pursuant to the
Indenture (as defined below) (the "GUARANTEES") by each of the subsidiaries of
the Company set forth on Exhibit A hereto (the "GUARANTORS"), pursuant to a
Purchase Agreement, dated April 10, 2003 (the "PURCHASE AGREEMENT"), among you,
the Company and the Guarantors. The Securities and the Guarantees are being
issued pursuant to an Indenture, dated as of the date hereof (the "INDENTURE"),
among the Company, the Guarantors and National City Bank, as trustee. The
Purchase Agreement, the Indenture (including the Guarantees set forth therein),
the Securities and the Exchange and Registration Rights Agreement, dated as of
April 15, 2003, among you, the Company and the Guarantors, are sometimes
referred to herein collectively as the "OFFERING DOCUMENTS". The term "OFFERING
MEMORANDUM" refers to the offering memorandum prepared by the Company, dated
April 10, 2003. This letter is being furnished to you pursuant to Section 5(e)
of the Purchase Agreement.
The primary purpose of my representation of the Company in connection with
the preparation by the Company of the Offering Memorandum was not to establish
or confirm factual matters or financial or quantitative information, and many
determinations involved in the preparation of the Offering Memorandum and
Offering Documents are of a wholly or partially non-legal character or related
to legal matters outside the scope of my opinion to you of even date herewith.
Therefore, I am not passing upon
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
APRIL 2003
PAGE 2
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Offering Memorandum, and have not made an
independent check or verification thereof. However, in the course of my
representation of the Company in connection with the preparation by the Company
of the Offering Memorandum, I reviewed the Offering Memorandum and participated
in conferences and telephone conversations with officers and other
representatives of the Company, the independent public accountants for the
Company, your representatives and your counsel, during which conferences and
conversations the contents of the Offering Memorandum and related matters were
discussed. I also reviewed certain corporate records and documents, letters from
counsel and accountants, and oral and written statements of officers and other
representatives of the Company and others as to the existence and consequence of
certain factual and other matters.
Based on my participation and review as described above, I advise you that
during the course of my representation of the Company no facts came to my
attention that caused me to believe that the Offering Memorandum, as of its date
or as of the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that I express no belief with respect
to (i) the financial statements, schedules, or other financial data included or
incorporated by reference in, or omitted from, the Offering Memorandum and (ii)
Health Care Laws (as defined in the opinion of ▇▇▇▇ ▇▇▇▇▇ LLP of even date
herewith) and the legal matters, documents and proceedings relating to such
Health Care Laws but do express a belief with respect to statutes, ordinances,
administrative decisions, rules or regulations of counties, towns,
municipalities or special political subdivisions relating to long-term care
facilities (including nursing facilities, skilled nursing facilities and
assisted living facilities), home health agencies, hospices and acute care
hospitals.
This opinion is delivered only to you in your capacity as Initial
Purchasers under the Purchase Agreement and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, assigned to, quoted to, or
relied upon by any other person, firm or corporation for any purpose (including
any person, firm or corporation that acquires Securities from you) without my
prior written consent, which may be granted or withheld in my sole discretion.
Very truly yours,
ANNEX B-3
[Form of Opinion of ▇▇▇▇ ▇▇▇▇▇ LLP]
Annex B-3
(▇▇▇▇ ▇▇▇▇▇ LLP Letterhead)
April 15, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: $200,000,000 6.25% Senior Notes due 2013
of Manor Care, Inc.
Ladies and Gentlemen:
We have acted as special health care regulatory counsel to Manor Care,
Inc. in connection with the sale to you on the date hereof by Manor Care, Inc.,
a Delaware corporation (the "COMPANY"), of $200,000,000 in aggregate principal
amount of the Company's 6.25% Senior Notes due 2013 (the "SECURITIES") and the
guarantee of the Securities pursuant to the Indenture (as defined below) (the
"GUARANTEES") by the Guarantors, as defined in the Purchase Agreement (the
"GUARANTORS"), pursuant to a Purchase Agreement, dated April 10, 2003 (the
"PURCHASE AGREEMENT"), among you, the Company and the Guarantors. The Securities
and the Guarantees are being issued pursuant to an Indenture, dated as of the
date hereof (the "INDENTURE"), among the Company, the Guarantors and National
City Bank, as trustee. This opinion is being rendered to you pursuant to Section
5(f) of the Purchase Agreement. The Purchase Agreement, the Indenture (including
the Guarantees set forth therein), the Securities and the Registration Rights
Agreement (as defined in the Purchase Agreement) are sometimes referred to
herein collectively as the "OFFERING DOCUMENTS". Capitalized terms used herein
without definition have the meanings assigned to them in the Purchase Agreement.
For purposes of issuing this opinion letter, we have been requested to
review the offering memorandum, dated April 10, 2003 relating to the Securities
(the "Offering Memorandum") and specifically those sections of the Offering
Memorandum describing Health Care Laws. For purposes of this opinion letter,
"HEALTH CARE LAWS" means statutes, judicial rulings and decrees, and
administrative or governmental regulations regulating long-term care facilities
(including nursing facilities, skilled nursing facilities and assisted living
facilities), home health agencies, hospices and acute care hospitals of the
United States and of the states in which the Company and its subsidiaries
operate, including, but not limited to, the Health Insurance Portability and
Accountability Act of 1996; Titles XVIII and XIX of the Social Security Act, 42
U.S.C. Section 1395 et seq. and Section 1396 et seq., the federal anti-kickback
statute, 42 U.S.C. Section 1320a-7b(b); the civil monetary penalties law, 42
U.S.C. Section 1320a-7a; the False Claims Act, 31 U.S.C.. Sections
3729-3733; the physician self-referral law, 42 U.S.C. Section 1395nn, and state
licensure and other state laws, but specifically excluding statutes, ordinances,
administrative decisions, rules or regulations of
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 2
counties, towns, municipalities or special political subdivisions to the extent
that they deal with any of the foregoing. Further, we have not examined or
otherwise considered, and this opinion letter does not address, any other laws
or questions of law, statutes, ordinances, rules or regulations other than the
Health Care Laws.
We have made such legal and factual examinations and inquiries as we have
deemed necessary or appropriate for purposes of this opinion. In our
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and the conformity to authentic
original documents of all documents submitted to us as copies. As to facts
material to the opinions, statements and assumptions expressed herein, we have,
with your consent, relied upon oral or written statements and representations of
officers and other representatives of the Company, the Guarantors and others. In
addition, we have obtained and relied upon such certificates and assurances from
public officials as we have deemed necessary.
Based upon, subject to and limited by the foregoing and the exceptions and
limitations set forth below, it is our opinion that, as of the date hereof, the
descriptions in the Offering Memorandum of statutes and amendments or proposed
amendments thereto, proposed legislation, legal and governmental proceedings and
contracts and other documents, insofar as such descriptions constitute summaries
of the Health Care Laws and the legal matters, documents and proceedings
relating to such Health Care Laws, are accurate in all material respects.
Furthermore, we do not have actual knowledge of any current or pending legal or
governmental actions, suits or proceedings arising under or pursuant to a Health
Care Law, to which the Company or any subsidiary is a party, which would be
required to be described in the Offering Memorandum if the Offering Memorandum
were a prospectus included in a registration statement on Form S-1 which are not
described as so required.
The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information, and many
determinations involved in the preparation of the Offering Memorandum and
Offering Documents are of a wholly or partially non-legal character or related
to legal matters outside the scope of our opinion. Therefore, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Memorandum (except to the
extent expressly set forth in the immediately preceding paragraph), and have not
made an independent check or verification thereof (except as stated above).
However, in the course of acting as special health care regulatory counsel to
the Company in connection with the preparation by the Company of the Offering
Memorandum, we reviewed the Offering Memorandum and participated in conferences
and telephone conversations with officers and other representatives of the
Company, the independent public accountants for the Company, your
representatives and your counsel, during which conferences and conversations the
contents of the Offering Memorandum and related matters were discussed. We also
reviewed certain corporate records and documents, and oral and written
statements of officers and other representatives of the Company and others as to
the existence and consequence of certain factual and other matters. We
considered the foregoing in light of our understanding of applicable Health Care
Laws and our experience gained through practice thereunder.
Based upon our participation and review as described above, we advise you
that during the course of our services in connection with this matter no facts
came to our attention that caused us to
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
APRIL 15, 2003
PAGE 3
believe that the Offering Memorandum, as of its date or as of the date hereof,
with respect to Health Care Laws and the legal matters, documents and
proceedings relating to such Health Care Laws, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein with respect to Health Care Laws, in
the light of the circumstances under which they were made, not misleading (it
being understand that we express no belief with respect to the financial
statements or other financial data included in, or omitted from, the Offering
Memorandum).
The foregoing opinions are subject to the following additional
assumptions, exceptions, limitations and qualifications: We are members of the
Bar of the District of Columbia and do not hold ourselves out as experts on the
general laws of any other state. We do, however, as a practice area of
specialization, provide legal representation to companies such as and including
the Company with respect to the laws and regulations of states which directly or
indirectly impact upon the provision of health care services. Therefore, this
opinion does not relate to the laws of any other state other than the District
of Columbia except certain state and federal regulatory laws that are
specifically relevant to the rendering of this opinion and which specifically
apply to the nature and scope of the Company's business. Any opinion herein as
to the laws of other states is based solely on the latest compilations of the
relevant statutes and case law of other states available to us through online
services and compilations.
The opinions in this letter are limited to the matters set forth herein,
no opinion may be inferred or implied beyond the opinions expressly stated in
this letter, and our opinions must be read in conjunction with the assumptions,
limitations, exceptions and qualifications set forth in this letter. We assume
no obligation to update this opinion letter to advise you of any change in facts
or laws subsequent to the date hereof.
This opinion and statements of belief are rendered only to you and are
solely for your benefit in connection with the transactions covered hereby. This
opinion and statements of belief may not be relied upon by you for any other
purpose, or furnished to, quoted to, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Very truly yours,
▇▇▇▇ ▇▇▇▇▇ LLP