$500,000,000
INTEGRATED HEALTH SERVICES, INC.
9 1/4% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
------------------
September 8, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CITICORP SECURITIES, INC.
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Integrated Health Services, Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to issue
and sell to you, as the initial purchasers (the "Initial Purchasers"),
$500,000,000 aggregate principal amount of its 9 1/4% Senior Subordinated Notes
due 2008 (the "Notes"). The Notes will be issued pursuant to the provisions of
an Indenture, to be dated as of September 11, 1997 (the "Indenture"), between
the Company and First Union National Bank, as Trustee (the "Trustee").
The Company wishes to confirm as follows its agreement with
the Initial Purchasers in connection with the purchase and resale of the Notes.
1. Preliminary Offering Memorandum and Offering Memorandum.
The Notes will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company has
prepared a preliminary offering memorandum, dated August 26, 1997 (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated September
8, 1997 (the "Offering Memorandum"), setting forth information regarding the
Company and the Notes. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include all amendments
and supplements thereto and any documents filed under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder (collectively, the "Exchange
Act") which are incorporated by reference therein. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Preliminary Offering Memorandum, the Offering Memorandum
or any amendment or supplement thereto. 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 Notes by the
Initial Purchasers.
The Company understands that the Initial Purchasers propose to
make offers and sales (the "Exempt Resales") of the Notes purchased by the
Initial Purchasers hereunder only on the terms and in the manner set forth in
the Offering Memorandum and Section 2 hereof, as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and delivered to persons
whom the Initial Purchasers reasonably believe to be qualified institutional
buyers ("Qualified Institutional Buyers") as defined in Rule 144A under the Act,
as such rule may be amended from time to time ("Rule 144A"), in transactions
under Rule 144A (such persons being referred to herein as the "Eligible
Purchasers").
It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, the Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
SUCH LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE
OR OTHER TRANSFER IS (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (a)(2), (a)(3) OR
(a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH OF THE FOREGOING CASES
SUCH OFFER, SALE OR OTHER TRANSFER IS IN COMPLIANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF
THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM PROVIDED FOR
IN THE INDENTURE (A COPY OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF THIS SECURITY
AFTER THE RESALE RESTRICTION TERMINATION DATE. ANY TRANSFEREE OF THIS
SECURITY SHALL BE DEEMED TO HAVE REPRESENTED EITHER (A) THAT IT IS NOT
USING THE ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT ("ERISA") OR THE INTERNAL REVENUE CODE
(THE "CODE") TO PURCHASE THIS SECURITY OR (B) THAT ITS PURCHASE AND
CONTINUED HOLDING OF THE SECURITY WILL BE COVERED BY A U.S. DEPARTMENT
OF LABOR CLASS EXEMPTION WITH RESPECT TO PROHIBITED TRANSACTIONS UNDER
SECTION 406(a) OF ERISA.
It is also understood and acknowledged that holders (including
subsequent transferees) of the Notes will have the registration rights set forth
in the registration rights agreement (the "Registration Rights Agreement"), to
be dated the date hereof, in substantially the form of Exhibit A hereto.
Pursuant to the Registration Rights Agreement, the Company will agree (i) to
file with the Commission, under the circumstances set forth therein, a
registration statement on the appropriate form under the Act relating to a
proposed exchange offer (the "Registered Exchange Offer") to the holders of the
Notes to issue and deliver to such holders, in exchange for the Notes, a like
principal amount of debt securities of the Company identical in all material
respects to the Notes (the "New Notes") and (ii) to use its reasonable best
efforts to cause such registration statement to be declared effective. If (a)
the Company is not permitted to effect the Registered Exchange Offer because the
Registered Exchange Offer would violate any applicable law or the applicable
interpretations of the Commission's staff or because of any change in currently
prevailing interpretations of the Commission's staff or (b) the Registered
Exchange Offer has not been consummated for any other reason within 240 days
after the Closing Date (as defined herein), then the Company shall file and use
its reasonable best efforts to cause to be declared effective a registration
statement on an appropriate form under the Act relating to the offer and sale of
the Notes by the holders thereof from time to time in accordance with the
methods of distribution set forth in such registration statement and Rule 415
under the Act. The registration statement to be filed under the Act pursuant to
the Registration Rights Agreement is hereinafter referred to as the
"Registration Statement." This Agreement, the Indenture and the Registration
Rights Agreement are hereinafter referred to collectively as the "Operative
Documents".
Capitalized terms used herein without definition have the
respective meanings specified therefor in the Indenture or the Offering
Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company
hereby agrees, subject to all the terms and conditions set forth herein, to
issue and sell to each Initial Purchaser and, upon the basis of the
representations, warranties and agreements of the
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Company herein contained and subject to all the terms and conditions set forth
herein, each Initial Purchaser agrees, severally and not jointly, to purchase
from the Company, at a purchase price of 97.375% of the principal amount
thereof, the principal amount of Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Notes for sale upon the terms and conditions set forth in
this Agreement and in the Offering Memorandum. Each Initial Purchaser hereby
represents and warrants to, and agrees with, the Company that such Initial
Purchaser (i) is purchasing the Notes pursuant to a private sale exempt from
registration under the Act, (ii) will not solicit offers for, or offer or sell,
the Notes by means of any form of general solicitation or general advertising or
in any manner involving a public offering within the meaning of Section 4(2) of
the Act, and (iii) will solicit offers for the Notes only from, and will offer,
sell or deliver the Notes as part of its initial offering, only to persons whom
the Initial Purchasers reasonably believe to be Qualified Institutional Buyers,
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 the Initial Purchasers 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 in each case, in transactions under Rule
144A. The Initial Purchasers have advised the Company that they will offer the
Notes to Eligible Purchasers at a price initially equal to 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance of the
Notes. Such price may be changed by the Initial Purchasers at any time
thereafter without notice.
The Initial Purchasers understand that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 7(c)(xiii) and 7(e) hereof, counsel to the Company and counsel to the
Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and agreements and the Initial Purchasers hereby consent to such
reliance.
3. Delivery of the Notes and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Notes shall be made at the office of
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 A.M., New
York City time, on September 11, 1997 (the "Closing Date"). The place of closing
for the Notes and the Closing Date may be varied by agreement between the
Initial Purchasers and the Company.
The Notes will be delivered to the Initial Purchasers against
payment of the purchase price therefor by wire transfer of federal or other same
day funds to an account or accounts designated by the Company. The Notes will be
evidenced by one or more global securities in definitive form (the "Global
Note") and will be registered in the name of Cede & Co. as nominee of The
Depository Trust Company ("DTC"). The Notes to be delivered to the Initial
Purchasers shall be made available to the Initial Purchasers in New York City
for inspection not later than 9:30 a.m., New York City time, on the business day
next preceding the Closing Date.
4. Agreements of the Company. The Company agrees with the
Initial Purchasers as follows:
(a) The Company will advise the Initial Purchasers promptly
and, if requested by them, will confirm such advice in writing, within the
period of time referred to in paragraph (e) below, of any change in the
Company's condition (financial or other), business, prospects, properties, net
worth or results of operations, or of the happening of any event,
4
which makes any statement made in the Offering Memorandum (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Offering Memorandum (as then amended or supplemented) in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Offering Memorandum (as then amended or supplemented) to comply
with any law.
(b) The Company will furnish to the Initial Purchasers,
without charge, as of the date of the Offering Memorandum, such number of copies
of the Offering Memorandum as may then be amended or supplemented as they may
reasonably request.
(c) The Company will not make any amendment or supplement to
the Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which they shall
reasonably object after being so advised or file any document which upon filing
becomes an Incorporated Document, without delivering a copy of such document to
the Initial Purchasers, prior to or concurrently with such filing.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Initial Purchasers, without charge,
in such quantities as the Initial Purchasers shall have requested or may
hereafter reasonably request, copies of the Preliminary Offering Memorandum. The
Company consents to the use, in accordance with the securities or Blue Sky laws
of the jurisdictions in which the Notes are offered by the Initial Purchasers
and by dealers, prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Company. The Company
consents to the use of the Offering Memorandum (and of any amendment or
supplement thereto) in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Notes are offered by the Initial Purchasers and by
all dealers to whom Notes may be sold, in connection with the offering and sale
of the Notes.
(e) If, at any time prior to completion of the distribution of
the Notes by the Initial Purchasers to Eligible Purchasers, any event shall
occur that in the judgment of the Company or in the opinion of counsel for the
Initial Purchasers should be set forth in the Offering Memorandum (as then
amended or supplemented) in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Offering Memorandum, or to file under the
Exchange Act any document which upon filing becomes an Incorporated Document, to
comply with any law, the Company will forthwith prepare an appropriate
supplement or amendment thereto or such document, and will expeditiously furnish
to the Initial Purchasers and dealers a reasonable number of copies thereof. In
the event that the Company and the Initial Purchasers agree that the Offering
Memorandum should be amended or supplemented, or that a document should be filed
under the Exchange Act which upon filing becomes an Incorporated Document, the
Company, if requested by the Initial Purchasers, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement or such document.
(f) The Company will cooperate with the Initial Purchasers and
with their counsel in connection with the qualification of the Notes for
offering and sale by the Initial Purchasers and by dealers under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may designate
and will file such consents to service of process or other documents necessary
or appropriate in order to effect such qualification; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is
5
not now so qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Notes, in any jurisdiction where it is not now so subject.
(g) So long as any of the Notes are outstanding, the Company
will furnish to the Initial Purchasers (i) as soon as available, a copy of each
report of the Company mailed to stockholders or filed with the Commission, and
(ii) from time to time such other information concerning the Company as the
Initial Purchasers may request.
(h) If this Agreement shall terminate or shall be terminated
after execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to Section 10 hereof or by notice given by the Initial Purchasers
terminating this Agreement pursuant to Section 9 or Section 11 hereof) or if
this Agreement shall be terminated by the Initial Purchasers because of any
failure or refusal on the part of the Company to comply with the terms or
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the Initial Purchasers for all out-of-pocket expenses (including fees and
expenses of its counsel) reasonably incurred by it in connection herewith, but
without any further obligation on the part of the Company for loss of profits or
otherwise.
(i) The Company will apply the net proceeds from the sale of
the Notes to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum.
(j) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Company has not taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Notes to facilitate the sale or resale of the Notes. Except as permitted by
the Act, the Company will not distribute any offering material in connection
with the Exempt Resales.
(k) The Company will use its best efforts to cause the Notes
to be eligible for trading on The PORTAL Market.
(l) From and after the Closing Date, so long as any of the
Notes are outstanding and are "Restricted Securities" within the meaning of the
Rule 144(a)(3) under the Act or, if earlier, until two years after the Closing
Date, and during any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company will furnish to holders of the Notes and
prospective purchasers of Notes 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 Act to permit compliance with Rule 144A in
connection with resale of the Notes.
(m) The Company agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Notes in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Notes.
(n) The Company agrees to comply with all of the terms and
conditions of the Registration Rights Agreement, and all agreements set forth in
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
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(o) The Company agrees that prior to any registration of the
Notes pursuant to the Registration Rights Agreement, or at such earlier time as
may be so required, the Indenture shall be qualified under the Trust Indenture
Act of 1939 (the "1939 Act") and will cause to be entered into any necessary
supplemental indentures in connection therewith.
5. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and Offering
Memorandum with respect to the Notes have been prepared by the Company for use
by the Initial Purchasers in connection with the Exempt Resales. No order or
decree preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum or any amendment or supplement thereto, or any order asserting that
the transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates and the Offering Memorandum as of the
Closing Date, did not or will not at any time 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, except that this
representation and warranty does not apply to statements in or omissions from
the Preliminary Offering Memorandum and Offering Memorandum made in reliance
upon and in conformity with information relating to the Initial Purchasers
furnished to the Company in writing by or on behalf of the Initial Purchasers
expressly for use therein.
(c) The Incorporated Documents heretofore filed were filed in
a timely manner and, when they were filed (or, if any amendment with respect to
any such document was filed, when such document was filed), conformed in all
material respects to the requirements of the Exchange Act and did 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 any further Incorporated Documents will, when so filed, be filed in a timely
manner and conform in all material respects to the requirements of the Exchange
Act and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Indenture has been duly and validly authorized by the
Company and, upon its execution, delivery and performance by the Company and
assuming due authorization, execution, delivery and performance by the Trustee,
will be a valid and binding agreement of the Company, enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally, and
conforms in all material respects to the description thereof in the Offering
Memorandum; and no qualification of the Indenture under the 1939 Act is required
in connection with the offer and sale of the Notes contemplated hereby or in
connection with the Exempt Resales.
(e) The Notes have been duly authorized by the Company and,
when executed by the Company and authenticated by the Trustee in accordance with
the Indenture and delivered to the Initial Purchasers against payment therefor
in accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally, and the
7
Notes will conform in all material respects to the description thereof in the
Offering Memorandum.
(f) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or, except as set forth in the Offering
Memorandum, similar rights and were issued and sold in compliance with all
applicable Federal and state securities laws; and the authorized capital stock
of the Company conforms to the description thereof in the Offering Memorandum.
(g) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries (as hereinafter
defined) taken as a whole (a "Material Adverse Effect").
(h) All the Company's subsidiaries (as defined in the Act)
included in Exhibit 21 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, together with those subsidiaries of the Company
identified in Schedule II to this Agreement, are referred to herein individually
as a "Subsidiary" and collectively as the "Subsidiaries." Each Subsidiary is a
corporation or limited partnership duly organized, validly existing and in good
standing in the jurisdiction of its organization, with full corporate or
partnership power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum, and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify or be in good standing does not have a Material
Adverse Effect. None of the subsidiaries of the Company other than the
Subsidiaries is engaged in any business activities or operations or has any
material assets or liabilities. All the outstanding shares of capital stock of
each of the Subsidiaries which is a corporation have been duly authorized and
validly issued, are fully paid and nonassessable, and are wholly owned by the
Company directly or indirectly through one of the other Subsidiaries, free and
clear of any lien, adverse claim, security interest, equity or other
encumbrance, except as described in the Offering Memorandum and except for the
shares of capital stock of certain Subsidiaries pledged to Citibank, N.A., as
administrative agent ("Citibank"), in connection with the Company's Revolving
Credit Agreement dated as of May 15, 1996 with Citibank and the lenders from
time to time party thereto (the "Credit Agreement") and/or to Meditrust Mortgage
Investments, Inc. and/or any of its affiliates (collectively, "Meditrust"). Each
limited partnership agreement pursuant to which the Company or a Subsidiary
holds a general partnership interest in a limited partnership which is a
Subsidiary is in full force and effect and constitutes the legal, valid and
binding agreement of the parties thereto, enforceable against such parties in
accordance with the terms thereof, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; and there has
been no material breach of or default under, and no event which with notice or
lapse of time would constitute a material breach of or default under, such
agreements by the Company or any Subsidiary or, to the Company's best knowledge,
any other party to such agreements.
8
(i) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties, is subject, that are not disclosed in the
Offering Memorandum and which, if adversely decided, are reasonably likely to
cause a Material Adverse Effect or materially affect the issuance of the Notes
or the consummation of the transactions contemplated by the Operative Documents.
There are no material agreements, contracts, indentures, leases or other
instruments that are not described in the Offering Memorandum or that are
required to be filed as an exhibit to any Incorporated Document that are not so
filed. Neither the Company nor any Subsidiary is involved in any strike, job
action or labor dispute with any group of employees, and, to the Company's
knowledge, no such action or dispute is threatened, which is reasonably likely
to have a Material Adverse Effect.
(j) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, except where any such
violation or violations in the aggregate would not have a Material Adverse
Effect or (ii) in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their respective properties may be bound, except
as may be disclosed in the Offering Memorandum.
(k) Neither the issuance, offer, sale or delivery of the
Notes, the execution, delivery or performance of this Agreement, the Indenture
or the Registration Rights Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby or thereby (i) requires any
consent, approval, authorization or other order of, or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required in connection with the
registration under the Act of the Notes and/or the New Notes in accordance with
the Registration Rights Agreement, the qualification of the Indenture under the
1939 Act and except for compliance with the securities or Blue Sky laws of
various jurisdictions) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, in any material respect, any
material agreement, indenture, lease or other instrument to which the Company or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate in any material
respect any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(l) The accountants, KPMG Peat Marwick LLP and Deloitte &
Touche LLP, who have certified or shall certify the financial statements
included as part of the Offering Memorandum (or any amendment or supplement
thereto), are independent certified public
9
accountants under Rule 101 of the AICPA's Code of Professional Conduct, and its
interpretation and rulings.
(m) The historical financial statements, together with the
related schedules and notes forming part of the Offering Memorandum (and any
amendment or supplement thereto), comply as to form with the requirements of the
Exchange Act and present fairly in all material respects the consolidated
financial position, results of operations and changes in stockholders' equity
and cash flows of each of the Company and its Subsidiaries, First American
Health Care of Georgia, Inc. ("First American") and RoTech Medical Corporation
("RoTech") on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) is accurately presented and, to the extent such information
and data is derived from the financial books and records of the Company and its
Subsidiaries, First American or RoTech, as the case may be, is prepared on a
basis consistent with such financial statements and the books and records. The
pro forma financial statements and other pro forma financial information
included or incorporated by reference in the Offering Memorandum have been
prepared in accordance with the Commission's rules and guidelines with respect
to pro forma financial information and have been properly compiled on the basis
described therein, and the assumptions used in the preparation thereof are, in
the Company's opinion, reasonable.
(n) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement and the
Registration Rights Agreement; the execution and delivery of, and the
performance by the Company of its obligations under, this Agreement and the
Registration Rights Agreement have been duly and validly authorized by the
Company, and this Agreement and the Registration Rights Agreement have been duly
executed and delivered by the Company and constitute the valid and legally
binding agreements of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement hereof and thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity, and except as rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities laws or
principles of public policy.
(o) Except as disclosed in the Offering Memorandum (or any
amendment or supplement thereto), subsequent to the date as of which such
information is given in the Offering Memorandum (or any amendment or supplement
thereto), neither the Company nor any of the Subsidiaries has incurred any
liability or obligation, direct or contingent, or entered into any transaction,
not in the ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any material change in the
capital stock, or material increase in the short-term or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which could reasonably be expected to involve a
prospective material adverse change, in the condition (financial or other),
business, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(p) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the Offering
Memorandum or in an Incorporated Document or exhibit thereto,
10
and all the property described in the Offering Memorandum as being held under
lease by each of the Company and the Subsidiaries is held by it under valid,
subsisting and enforceable leases, with only such exceptions as in the aggregate
are not materially burdensome and do not interfere in any material respect with
the conduct of the business of the Company and the Subsidiaries taken as a
whole.
(q) Except as permitted by the Act, the Company has not
distributed and, prior to the later to occur of the Closing Date and completion
of the distribution of the Notes, will not distribute any offering material in
connection with the offering and sale of the Notes other than the Preliminary
Offering Memorandum and Offering Memorandum.
(r) Each of the Company and the Subsidiaries and, to the
Company's knowledge, the owners of the facilities and other businesses managed
by the Company or any Subsidiary have such permits, licenses, franchises,
certificates and other approvals or authorizations of governmental or regulatory
authorities ("Permits") as are necessary under applicable law to own their
respective properties and to conduct their respective business in the manner
described in the Offering Memorandum (including, without limitation, such
Permits as are required under such federal, state and other health care laws,
and under such HMO or similar licensure laws and such insurance laws and
regulations, as are applicable thereto), and with respect to those facilities
and other businesses that participate in Medicare and/or Medicaid, to receive
reimbursement under Medicare and Medicaid, subject in each case to such
qualifications as may be set forth in the Offering Memorandum and except to the
extent that the failure to have such Permits would not have a Material Adverse
Effect; the Company and each of the Subsidiaries have fulfilled and performed in
all material respects, all their respective material obligations with respect to
the Permits, and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit, subject in
each case to such qualification as may be set forth in the Offering Memorandum
and except to the extent that any such revocation or termination would not have
a Material Adverse Effect; and, except as described in the Offering Memorandum,
none of the Permits contains any restriction that is materially burdensome to
the Company or any of the Subsidiaries.
(s) The business practices of the Company and each of its
Subsidiaries do not violate in any material respect any applicable provisions of
federal or state law governing Medicare or any state Medicaid program, including
without limitation, Sections 1320a-7a and 1320a-7b of Title 42 of the United
States Code, and no individual with an ownership or control interest, as defined
in 42 U.S.C. ss.1320a-3(a)(3), in the Company or any of its Subsidiaries, or who
is an officer, director, or managing employee, as defined in 42 U.S.C.
ss.1320a-5(b), of the Company or any of its Subsidiaries is a person described
in 42 U.S.C. ss.1320a-7(b)(8)(B), and the Company's and each of its
Subsidiaries' business practices do not violate in any material respect any
applicable provisions of federal or state law regarding physician ownership of,
or financial relationship with, or referral to entities providing health care
related goods or services, or laws requiring disclosure of financial interests
held by physicians in entities to which they may refer patients for the
provision of health care related goods or services.
(t) The information presented in the Offering Memorandum under
the caption "Business of RoTech" fairly presents the information purported to be
shown and 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.
11
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) Neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any Subsidiary
has made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation, which violation
would have a Material Adverse Effect.
(w) Except as disclosed in the Offering Memorandum, the
Company and each of the Subsidiaries have filed all tax returns required to be
filed, which returns are true and correct in all material respects, and neither
the Company nor any Subsidiary is in default in the payment of any taxes which
were payable pursuant to said returns or any assessments with respect thereto,
except where the failure to file such returns and make such payments would not
have a Material Adverse Effect.
(x) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Offering Memorandum as being owned by any of them or
necessary for the conduct of their respective businesses, and the Company is not
aware of any claim to the contrary or any challenge by any other person to the
rights of the Company and the Subsidiaries with respect to the foregoing.
(y) The Company is not and, upon sale of the Notes to be
issued and sold thereby in accordance herewith and the application of the net
proceeds to the Company of such sale as described in the Offering Memorandum
under the caption "Use of Proceeds," will not be an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(z) When the Notes are issued and delivered pursuant to this
Agreement, such Notes will not be of the same class (within the meaning of Rule
144A(d)(3) under the Act) as any security of the Company that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated interdealer quotation system.
(aa) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Act) of the Company has
directly, or through any agent (provided that no representation is made as to
the Initial Purchasers or any person acting on their behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Act) which is or will be integrated with the
offering and sale of the Notes in a manner that would require the registration
of the Notes under the Act or (ii) engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in connection with
the offering of the Notes.
(ab) The Company is not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale of the
Notes by the Initial Purchasers.
12
(ac) Assuming (i) that the representations and warranties in
Section 2 hereof are true, (ii) the Initial Purchasers comply with the covenants
set forth in Section 2 hereof and (iii) that each person to whom the Initial
Purchasers offer, sell or deliver the Notes is a Qualified Institutional Buyer,
the purchase and sale of the Notes pursuant hereto (including the Initial
Purchasers' proposed offering of the Notes on the terms and in the manner set
forth in the Offering Memorandum and Section 2 hereof) is exempt from the
registration requirements of the Act.
(ad) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes to the Initial Purchasers or by
the Initial Purchasers to Eligible Purchasers will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code. The representation made by the Company in the preceding sentence is made
in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible Purchasers as
set forth in the Offering Memorandum under the section entitled "Notice to
Investors."
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or Offering
Memorandum or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to such Initial
Purchaser furnished in writing to the Company by or on behalf of such Initial
Purchaser expressly for use in connection therewith; provided, however, that the
indemnification contained in this paragraph (a) with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchaser (or
to the benefit of any person controlling any Initial Purchaser) on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Notes by such Initial Purchaser to any person if the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
the Preliminary Offering Memorandum was corrected in the Offering Memorandum and
such Initial Purchaser sold Notes to that person without sending or giving at or
prior to the written confirmation of such sale, a copy of the Offering
Memorandum (as then amended or supplemented) if the Company has previously
furnished sufficient copies thereof to such Initial Purchaser. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Initial Purchaser or any person controlling any Initial Purchaser in respect
of which indemnity may be sought against the Company, such Initial Purchaser or
such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Initial Purchaser or any
such controlling person shall have the right to employ separate counsel in any
such action, suit or proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Initial
Purchaser or such controlling person unless (i) the indemnifying
13
parties have agreed in writing to pay such fees and expenses, (ii) the
indemnifying parties have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Initial Purchaser or such controlling
person and the indemnifying parties and such Initial Purchaser or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Initial Purchaser or such controlling person). It
is understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Initial Purchasers and controlling persons not
having actual or potential differing interests with the Initial Purchasers or
among themselves, which firm shall be designated in writing by ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of any
such action, suit or proceeding effected without their written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties agree
to indemnify and hold harmless any Initial Purchaser, to the extent provided in
paragraph (a), and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, and its directors and officers, and
any person who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act to the same extent as the indemnity from the
Company to each Initial Purchaser set forth in paragraph (a) hereof, but only
with respect to information relating to such Initial Purchaser furnished in
writing by or on behalf of such Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or Offering Memorandum or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors or officers, or any such controlling person
based on the Preliminary Offering Memorandum or Offering Memorandum, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against such Initial Purchaser pursuant to this paragraph (c), such Initial
Purchaser shall have the rights and duties given to the Company by paragraph (b)
above (except that if the Company shall have assumed the defense thereof such
Initial Purchaser shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Initial Purchaser's expense), and the
Company, its directors and officers, and any such controlling person shall have
the rights and duties given to the Initial Purchasers by paragraph (b) above.
The foregoing indemnity agreement shall be in addition to any liability which
the Initial Purchasers may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchasers on the other hand from the
offering of the Notes, or (ii) if the allocation
14
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchasers, in each
case as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company on the one hand and the Initial Purchasers on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or by the Initial Purchasers on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price of the Notes purchased and resold by it as contemplated
hereby exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or 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 includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 6 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser, the Company, its directors or officers or any
person controlling the Company, (ii) acceptance of any Notes and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Initial Purchaser or any person controlling any Initial Purchaser, or to the
Company, its directors or officers or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 6.
15
7. Conditions of the Initial Purchasers' Obligations. The
several obligations of the Initial Purchasers to purchase the Notes hereunder
are subject to the following conditions:
(a) At the time of execution of this Agreement and on the
Closing Date, no order or decree preventing the use of the Offering Memorandum
or any amendment or supplement thereto, or any order asserting that the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending or, to the knowledge of
the Company, be contemplated. No stop order suspending the sale of the Notes in
any jurisdiction designated by the Initial Purchasers shall have been issued and
no proceedings for that purpose shall have been commenced or shall be pending
or, to the knowledge of the Company, shall be contemplated.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Offering Memorandum, which in the opinion
of the Initial Purchasers, would materially adversely affect the market for the
Notes, or (ii) any event or development relating to or involving the Company or
any officer or director of the Company which makes any statement made in the
Offering Memorandum untrue or which, in the opinion of the Company and its
counsel or the Initial Purchasers and their counsel, requires the making of any
addition to or change in the Offering Memorandum in order to state a material
fact required by any law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Offering
Memorandum to reflect such event or development would, in the opinion of the
Initial Purchasers, materially adversely affect the market for the Notes.
(c) The Initial Purchasers shall have received on the Closing
Date an opinion of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., counsel for the Company, dated
the Closing Date and addressed to the Initial Purchasers, to the effect that:
(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum (and any
amendment or supplement thereto);
(ii) Each Significant Subsidiary (as defined in Section
1.02(w) of Regulation S-X promulgated under the Act) is a corporation validly
existing and in good standing under the laws of the jurisdiction of its
organization, with full corporate power and authority to own, lease, and operate
its properties and to conduct its business as described in the Offering
Memorandum (and any amendment or supplement thereto); and all the outstanding
shares of capital stock of each of the Significant Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and to the
knowledge of such counsel, are wholly owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any security
interest, lien, adverse claim, equity or other encumbrance, except as described
in the Offering Memorandum and except for the shares of capital stock of certain
Subsidiaries pledged to Citibank as agent in connection with the Credit
Agreement and/or to Meditrust;
16
(iii) The authorized capital stock of the Company is as
set forth under the caption "Capitalization" in the Offering Memorandum;
(iv) The Company has corporate power and authority to
enter into this Agreement and the Registration Rights Agreement and to issue,
sell and deliver the Notes to be sold by it to the Initial Purchasers as
provided herein, and this Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company and are valid, legal
and binding agreements of the Company, enforceable against the Company in
accordance with their terms, except (A) as enforcement of rights to indemnity
and contribution hereunder and thereunder may be limited by Federal or state
securities laws or principles of public policy and (B) subject to the
qualification that the enforceability of the Company's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles;
(v) The Indenture has been duly and validly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to the qualification that the
enforceability of the Company's obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by general
equitable principles; and no qualification of the Indenture under the 1939 Act
is required in connection with the offer and sale of the Notes contemplated
hereby or in connection with the Exempt Resales;
(vi) The Notes have been duly and validly authorized by
the Company and when executed by the Company in accordance with the Indenture
and, assuming due authentication of the Notes by the Trustee, upon delivery to
the Initial Purchasers against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, subject to the qualification that the enforceability of the Company's
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(vii) Neither the offer, sale or delivery of the Notes,
the execution, delivery or performance by the Company of this Agreement, the
Registration Rights Agreement or the Indenture, compliance by the Company with
the provisions hereof or thereof nor consummation by the Company of the
transactions contemplated hereby or thereby constitutes or will constitute a
breach or violation of, or a default under, in any material respect, the
certificate or articles of incorporation or bylaws or other organizational
documents of the Company or any of the Significant Subsidiaries or any material
agreement, indenture, lease or other instrument to which the Company or any of
the Significant Subsidiaries is a party or by which any of them or any of their
respective properties is bound that is an exhibit to any Incorporated Document
or is known to such counsel, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
the Significant Subsidiaries pursuant to the terms of any material agreement or
instrument to which any of them is a party or by which any of them may be bound
or to which any of the property or assets of any of them is subject that is an
exhibit to any Incorporated Document or is known to such counsel, nor will any
such action result in any violation in any material respect of any existing law,
or any regulation, ruling (assuming compliance with all applicable state
securities
17
and Blue Sky laws and, in the case of the Registration Rights Agreement, the Act
and the Exchange Act and the 1939 Act), judgment, injunction, order or decree
known to such counsel, applicable to the Company or the Significant Subsidiaries
or any of their respective properties;
(viii) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the
Exchange Act, or such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Notes, or such as may be required
to qualify the Indenture under the 1939 Act, and such as may be required in
connection with the performance by the Company of its obligations under the
Registration Rights Agreement, as to which such counsel need not express an
opinion) for the valid issuance and sale of the Notes to the Initial Purchasers
as contemplated by this Agreement;
(ix) The Incorporated Documents (except for the
financial statements and the notes thereto and the schedules and other financial
and statistical data included therein, as to which such counsel need not express
any opinion), at the time they were filed, appear on their face to have complied
as to form in all material respects with the requirements of the Exchange Act;
(x) To the knowledge of such counsel, (A) there are no
legal or governmental proceedings pending or threatened against the Company or
any of the Subsidiaries, or to which the Company or any of the Subsidiaries, or
any of their property, are subject, which are not disclosed in the Offering
Memorandum and which, if adversely decided, are reasonably likely to cause a
Material Adverse Effect or materially affect the issuance of the Notes or the
consummation of the transactions contemplated by the Operative Documents and (B)
there are no material agreements, contracts, indentures, leases or other
instruments, that are not described in the Offering Memorandum (or any amendment
or supplement thereto) or that are required to be filed as an exhibit to any
Incorporated Document that are not filed as required;
(xi) The statements in the Offering Memorandum, insofar
as they are descriptions of contracts, agreements or other legal documents, or
refer to statements of law or legal conclusions, are accurate in all material
respects and present fairly the information described therein;
(xii) When the Notes are issued and delivered pursuant
to this Agreement, such Notes will not be of the same class (within the meaning
of Rule 144A(d)(3) under the Act) as any security of the Company that is listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that is quoted in a United States automated interdealer quotation system;
(xiii) No registration of the Notes under the Act is
required for the sale of the Notes to the Initial Purchasers as contemplated in
this Agreement or for the Exempt Resales (assuming (A) that any Eligible
Purchaser who buys the Notes in the Exempt Resales is a Qualified Institutional
Buyer and (B) the accuracy of the Initial Purchasers' representations and those
of the Company in this Agreement regarding the absence of general solicitation
in connection with the Exempt Resales);
(xiv) The Company is not required to deliver the
information specified in Rule 144A(d)(4) in connection with the offering and
resale of the Notes by the Initial Purchasers; and
18
(xv) Although such counsel has not undertaken, except as
otherwise indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements in the Offering Memorandum, such counsel has participated in the
preparation of the Offering Memorandum, including review and discussion of the
contents thereof, and has reviewed the Incorporated Documents, and, relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Company, nothing has come to the attention of such
counsel that has caused them to believe that the Offering Memorandum, as of its
date and as of the Closing Date contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading or that any amendment or supplement to the Offering
Memorandum, as of its respective date, and as of the Closing Date contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other financial
and statistical data included or incorporated by reference in the Offering
Memorandum and information furnished by or on behalf of the Initial Purchasers).
The opinion of such counsel shall be limited to the laws of
the United States, the State of New York and the internal corporation law of the
State of Delaware.
(d) The Initial Purchasers shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel of the Company,
dated the Closing Date and addressed to the Initial Purchasers to the effect
that:
(i) The Company is duly registered and qualified to
conduct its business and is in good standing as a foreign corporation in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or qualify or to be in good standing does not have a Material
Adverse Effect;
(ii) All the shares of capital stock of the Company
outstanding prior to the issuance of the Notes have been duly authorized and
validly issued, are fully paid and nonassessable;
(iii) Each Subsidiary is duly registered and qualified
to conduct its business and is in good standing as a foreign corporation or
limited partnership in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify or to be in
good standing does not have a Material Adverse Effect;
(iv) Neither the Company nor any of the Subsidiaries is
in violation in any material respect of its respective certificate or articles
of incorporation or bylaws, or other organizational documents, or to the best
knowledge of such counsel after reasonable inquiry, is in default in any
material respect in the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound, except as disclosed in
the Offering Memorandum and except to the extent that any such violation or
default would not have a Material Adverse Effect;
19
(v) Such counsel has no reason to believe that the
Company and its Subsidiaries do not have all Permits (including, without
limitation, such Permits as are necessary under such federal and state health
care laws and under such HMO and similar licensure laws and such insurance laws
and regulations as are applicable to the Company and its Subsidiaries) as are
necessary to own, lease and operate its properties and conduct its business,
except to the extent that the failure to have such Permits would not have a
Material Adverse Effect; and to the best knowledge of such counsel after
reasonable inquiry there are no proceedings pending or threatened against the
Company or any of its Subsidiaries that may cause any such Permit that is
material to the conduct of the business of the Company or any of its
Subsidiaries to be revoked, withdrawn, cancelled, suspended or not renewed;
(vi) Such counsel has no reason to believe that (a) the
business practices of the Company or any of its Subsidiaries violate in any
material respect any applicable provisions of federal or state law governing
Medicare or any state Medicaid program, including without limitation, Sections
1320a-7a and 1320a-7b of Title 42 of the United States Code, or that any
individual with an ownership or control interest, as defined in 42 U.S.C.
ss.1320a-3(a)(3), in the Company or any of its Subsidiaries or who is an
officer, director, or managing employee as defined in 42 U.S.C. ss.1320a-5(b),
of the Company or any of its Subsidiaries is a person described in 42 U.S.C.
ss.1320a-7(b)(8)(B), or that (b) the Company's or any Subsidiary's business
practices violate in any material respect any applicable provisions of federal
or state law regarding physician ownership of, or financial relationship with,
or referral to entities providing health care related goods or services, or laws
requiring disclosure of financial interests held by physicians in entities to
which they may refer patients for the provision of health care related goods or
services; and to the best knowledge of such counsel after reasonable inquiry,
neither the Company nor any of its Subsidiaries is in violation of any other
law, ordinance, administrative or governmental rule or regulation applicable to
the Company or any of its Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries, except to the extent that any such violation would not have a
Material Adverse Effect; and
(vii) Although such counsel has not undertaken, except
as otherwise indicated in such counsel's opinion, to determine independently,
and does not assume any responsibility for, the accuracy, completeness or
fairness of the statements in the Offering Memorandum, such counsel has
participated in the preparation of the Offering Memorandum and the Incorporated
Documents, and nothing has come to the attention of such counsel that has caused
such counsel to believe that the Offering Memorandum, as of its date and as of
the Closing Date, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or that any amendment or supplement to the Offering Memorandum,
as of its respective date, and as of the Closing Date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other financial
and statistical data included or incorporated by reference in the Offering
Memorandum and information furnished by or on behalf of the Initial Purchasers).
(e) The Initial Purchasers shall have received on the Closing
Date an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, dated
the Closing Date, and addressed to the Initial Purchasers, with respect to the
matters referred to in clauses (iv), (v), (vi), (xiii)
20
and (xv) of the foregoing paragraph (c) and such other related matters as the
Initial Purchasers may request.
(f) The Initial Purchasers shall have received letters
addressed to the Initial Purchasers, and dated the date hereof and the Closing
Date from KPMG Peat Marwick LLP and Deloitte & Touche LLP, independent certified
public accountants, substantially in the forms heretofore approved by the
Initial Purchasers.
(g) (i) There shall not have been any material change in the
capital stock of the Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary course of business)
from that set forth or contemplated in the Offering Memorandum (or any amendment
or supplement thereto); (ii) there shall not have been, since the respective
dates as of which information is given in the Offering Memorandum (or any
amendment or supplement thereto), except as may otherwise be stated in the
Offering Memorandum (or any amendment or supplement thereto), any material
adverse change in the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (iii) the Company and the Subsidiaries shall not
have any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Offering
Memorandum (or any amendment or supplement thereto); and (iv) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and the
Initial Purchasers shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief accounting officer of the
Company (or such other officers as are acceptable to the Initial Purchasers), to
the effect set forth in this Section 7(g) and in Section 7(h) hereof.
(h) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) The Initial Purchasers shall have received certificates
dated the date hereof and the Closing Date signed by the chief accounting
officer of the Company substantially in the forms heretofore approved by the
Initial Purchasers, respecting the Company's compliance with the financial
covenants set forth in each of the Company's indentures, the Credit Agreement
and certain other agreements of the Company.
(j) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g) under the Act, that (i) it is downgrading its rating assigned to
any class of securities of the Company, or (ii) except as disclosed in the
Offering Memorandum, it is reviewing its ratings assigned to any class of
securities of the Company with a view to possible downgrading, or with negative
implications, or direction not determined.
(k) The Notes shall have been approved for trading on PORTAL.
(l) Prior to the date of this Agreement, the Company shall
have received and shall have furnished to the Initial Purchasers copies of the
requisite written consent of the lenders party to the Credit Agreement to the
consummation by the Company of the transactions contemplated by the Operative
Documents and the Offering Memorandum.
21
(m) The Company shall have furnished or caused to be furnished
to the Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
Any certificate or document signed by any officer of the
Company and delivered to the Initial Purchasers, or to counsel for the Initial
Purchasers, shall be deemed a representation and warranty by the Company to the
Initial Purchasers as to the statements made therein.
8. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction of the
Offering Memorandum (including financial statements thereto), and each amendment
or supplement thereto; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Offering Memorandum, the Preliminary Offering Memorandum,
the Incorporated Documents, and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Notes; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes, including any stamp taxes in connection
with the original issuance and sale of the Notes; (iv) the printing (or
reproduction) and delivery of this Agreement, the Indenture, the Registration
Rights Agreement, the preliminary and supplemental Blue Sky Memoranda and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Notes; (v) the application for quotation of
the Notes on PORTAL; (vi) the qualification of the Notes for offer and sale
under the securities or Blue Sky laws of the several states as provided in
Section 4(f) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such qualification); (vii) the performance by the Company of its
obligations under the Registration Rights Agreement; (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (ix) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Notes. The Company hereby agrees that it will pay in full on the Closing
Date the fees and expenses referred to in clause (vi) of this Section 8 by
delivering to counsel for the Initial Purchasers on such date a check payable to
such counsel in the requisite amount.
9. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
Until such time as this Agreement shall have become effective, it may be
terminated by the Company, by notifying the Initial Purchasers, or by the
Initial Purchasers, by notifying the Company.
Any notice under this Section 9 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
10. Default by an Initial Purchaser. If any Initial Purchaser
shall fail or refuse to purchase the Notes which it is obligated to purchase on
the Closing Date, and arrangements satisfactory to the non-defaulting Initial
Purchasers and the Company for the
22
purchase of such Notes by the non-defaulting Initial Purchasers or by another
party or parties satisfactory to the non-defaulting Initial Purchasers and the
Company are not made within thirty-six (36) hours after such default, this
Agreement shall terminate without liability on the part of the non-defaulting
Initial Purchasers or the Company. In any such case which does not result in
termination of this Agreement, either the non-defaulting Initial Purchasers or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven (7) days, in order that the required changes, if any, in
the Offering Memorandum or any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve a defaulting Initial
Purchaser from liability in respect of such default under this Agreement. The
term "Initial Purchaser" as used in this Agreement includes, for all purposes of
this Agreement, any party not identified in this Agreement who purchases Notes
which a defaulting Initial Purchaser is obligated, but fails or refuses, to
purchase.
11. Termination of Agreement. This Agreement shall be subject
to termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company, by notice to the
Company, if prior to the Closing Date (i) trading in securities generally on the
New York Stock Exchange, American Stock Exchange or the Nasdaq National Market
shall have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, the effect of which on
the financial markets of the United States is such as to make it, in the
judgment of the Initial Purchasers, impracticable or inadvisable to commence or
continue the offering of the Notes on the terms set forth on the cover page of
the Offering Memorandum or to enforce contracts for the resale of the Notes by
the Initial Purchasers. Notice of such termination may be given to the Company
by telegram, telecopy or telephone and shall be subsequently confirmed by
letter.
12. Information Furnished by the Initial Purchasers. The
statements set forth in the stabilization legend on the inside front cover, the
last paragraph on the cover page and in the third and seventh paragraphs under
the caption "Plan of Distribution" in the Preliminary Offering Memorandum and
Offering Memorandum, constitute the only information furnished by or on behalf
of the Initial Purchasers as such information is referred to in Sections 5(b)
and 6 hereof, except that each of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇, Lufkin &
▇▇▇▇▇▇▇▇ Securities Corporation and Citicorp Securities, Inc. has furnished the
information relating to them contained in the eighth paragraph, and Citicorp
Securities, Inc. has furnished the information contained in the ninth paragraph,
under the caption "Plan of Distribution" contained in the Preliminary Offering
Memorandum and the Offering Memorandum.
13. Miscellaneous. Except as otherwise provided in Sections 4,
9 and 11 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General
Counsel, with a copy to Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. or (ii) if to the Initial Purchasers,
to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Manager, Investment Banking Division, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
This Agreement has been and is made solely for the benefit of
the Initial Purchasers, the Company, its directors, its officers and the
controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and
23
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from the Initial Purchasers of
any of the Notes in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York
without giving effect to the choice of laws or conflict of laws principles
thereof.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
24
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchasers.
Very truly yours,
INTEGRATED HEALTH SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President-
Finance
Accepted in New York, New York
September 8, 1997
Confirmed as of the date first above mentioned.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CITICORP SECURITIES, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
II
SCHEDULE I
INTEGRATED HEALTH SERVICES, INC.
Principal Amount
Initial Purchaser of Notes
----------------- ----------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc......................................... $250,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated........................ 100,000,000
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation................................. 75,000,000
Citicorp Securities, Inc................................. 75,000,000
------------
Total.................................................... $500,000,000
============
SCHEDULE II
-----------
========================================================================================================================
STATE OF STATE(S)
COMPANY INCORPORATION QUALIFIED TO DO BUSINESS
------------------------------------------------------------------------------------------------------------------------
HEALTH CARE INDUSTRIES Florida
------------------------------------------------------------------------------------------------------------------------
IHS ACQUISITION XX, INC. California
------------------------------------------------------------------------------------------------------------------------
IHS NETWORK SERVICES, INC. Delaware Florida
------------------------------------------------------------------------------------------------------------------------
INTEGRATED HEALTH SERVICES OF
▇▇▇▇, INC. Delaware Washington
------------------------------------------------------------------------------------------------------------------------
SYMPHONY RESPIRATORY SERVICES, INC. Delaware Arkansas
Arizona
California
District of Columbia
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Michigan
Minnesota
Missouri
Mississippi
North Carolina
Nebraska
New Hampshire
New Jersey
New York
Ohio
Oklahoma
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
Wisconsin
West Virginia
Wyoming
------------------------------------------------------------------------------------------------------------------------
TEXAS LPC, INC. Texas
------------------------------------------------------------------------------------------------------------------------
WEST COAST CAMBRIDGE, INC. California
------------------------------------------------------------------------------------------------------------------------
WOODRIDGE CONVALESCENT CENTER, INC.
CENTER, INC. Texas
========================================================================================================================