Exhibit 1
EXECUTION VERSION
HANGER ORTHOPEDIC GROUP, INC.
$200,000,000
10 3/8% Senior Notes due 2009
PURCHASE AGREEMENT
February 8, 2002
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
BNP Paribas Securities Corp.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Hanger Orthopedic Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Initial Purchasers named in Schedule 1
hereto (the "Initial Purchasers") $200,000,000 in aggregate principal amount of
its 10 3/8% Senior Notes due 2009 (the "Notes") guaranteed (the "Guarantees") by
all of the Company's direct and indirect U.S. subsidiaries signatories hereto
(collectively, the "Guarantors") pursuant to the terms of an indenture (the
"Indenture"), to be dated February 15, 2002, between the Company, the Guarantors
and Wilmington Trust Company, as trustee (the "Trustee").
The Notes will be offered and sold to you pursuant to an exemption from
the registration requirements under the Securities Act of 1933, as amended (the
"Securities Act"). The Company has prepared a preliminary offering memorandum,
dated January 28, 2002 (as amended or supplemented and including any and all
information incorporated by reference therein, the "Preliminary Offering
Memorandum"), and will prepare a final offering memorandum (as amended or
supplemented and including any and all information incorporated by reference
therein, the "Offering Memorandum"), to be dated February 8, 2002, relating to
the Company, the Notes and the Guarantees. Unless stated to the contrary, any
references herein to "amend," "amendment," or "supplement" with respect to the
Offering Memorandum shall be deemed to include any information filed under the
Exchange Act of 1934, as amended (the "Exchange Act") after the date hereof
which is incorporated by reference therein.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the
Notes (and all securities issued in exchange therefor or in substitution
therefor) shall bear substantially the following legend:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN "OFFSHORE
TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (A) THE DATE WHICH IS TWO YEARS
(OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR
THE LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE
THE OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (B) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (I) TO THE COMPANY, (II) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) FOR SO
LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT 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,
(IV) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT OR (V) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY,
THE TRUSTEE, AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (IV) OR (V) TO REQUIRE THAT AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO THE COMPANY, THE TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED
BY THE TRANSFEROR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
You have advised the Company that you will make offers and sales (the
"Exempt Resales") of the Notes purchased hereunder on the terms set forth in the
Offering Memorandum solely to (i) persons whom you reasonably believe to be
"qualified institutional buyers" as defined in Rule 144A under the Securities
Act ("QIBs") and (ii) outside the United States to persons other than U.S.
Persons in offshore transactions meeting the requirements of Regulation S under
the Securities Act ("Regulation S") (such persons specified in clauses (i) and
(ii) being referred to herein as the "Eligible Purchasers"). As used herein, the
terms "offshore transaction," "United States" and "U.S. person" have the
respective meanings given to them in Regulation S. You will offer the Notes to
Eligible Purchasers initially at a price equal to 100% of the principal amount
thereof. Thereafter, the offering price may be changed at any time without
notice.
In connection with the offering of the Notes, the Company and the
Guarantors will enter into a new revolving credit facility in the amount of up
to $75.0 million pursuant to a credit agreement among the Company, the
Guarantors, BNP Paribas, as the administrative agent and the other lenders
thereto (the "New Credit Facility"). The initial net proceeds of the New Credit
Facility along with the proceeds from the sale of the Notes will be used to
refinance all of the Company's and the Guarantors' outstanding obligations under
their existing credit facility (the "Existing Credit Facility"). The refinancing
of the Existing Credit Facility, the entering into of the New Credit Facility,
the sale of the Notes and the application of the proceeds of the New Credit
Facility and the offering of the Notes as provided in the "Use of Proceeds"
section of the Offering Memorandum are collectively referred to herein as the
"Transactions."
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement") among the Company, the Guarantors and the
Initial Purchasers, to be dated as of the Closing Date, in the form of Exhibit A
hereto, for so long as such Notes constitute "Transfer Restricted Securities"
(as defined in the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company and the Guarantors will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein, (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") relating to a separate series of the
Company's 10 3/8% Senior Notes due 2009 (the "Exchange Notes") to be offered in
exchange for the Notes (such offer to exchange being referred to collectively as
the "Registered Exchange Offer") and (ii) if required by the terms of the
Registration Rights Agreement, a shelf registration statement pursuant to Rule
415 under the Securities Act (the "Shelf Registration Statement") relating to
the resale by certain holders of the Notes, and to use their best efforts to
cause such Registration Statements to be declared effective. This Agreement, the
Notes, the Exchange Notes, the Guarantees, the Exchange Note Guarantees (as
defined below), the Indenture and Registration Rights Agreement are hereinafter
referred to collectively as the "Operative Documents." This is to confirm the
agreements concerning the purchase of the Notes from the Company by the Initial
Purchasers.
SECTION 1. Representations, Warranties and Agreements of the Company and
the Guarantors. The Company and the Guarantors, jointly and severally,
represent, warrant and agree that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum have been or will be prepared by the Company and Guarantors
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 order asserting that the
transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act has been issued and no
proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company and Guarantors, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates did not, and the Offering
Memorandum as of the Closing Date will not, contain an untrue statement
of a material fact or omit to state a material fact necessary, in order
to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions
from the Preliminary Offering Memorandum and the 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, as specifically
identified in Section 8(e) hereof. The portions of the Company's Proxy
Statement incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum (the "Proxy Statement") do not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy
Statement, when it was filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(c) The Company and each of its subsidiaries (as defined in
Section 15) have been duly organized, are validly existing and are in
good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification. The Company and each of its subsidiaries have all power
and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, and none of the
subsidiaries of the Company, other than Hanger Prosthetics & Orthotics,
Inc. and Southern Prosthetic Supply, Inc., is a "significant subsidiary,"
as such term is defined in Rule 405 under the Securities Act.
(d) The Company has an authorized capitalization as set forth in
the Preliminary Offering Memorandum, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the description
thereof contained in the Offering Memorandum; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid and non-
assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, other than liens
encumbrances, equities or claims contemplated under the New Credit
Facility or otherwise described in the Offering Memorandum, and none of
such shares of capital stock was issued in violation of preemptive or
other similar rights arising by operation of law, under the charter and
bylaws of the Company or under any agreement to which the Company or any
subsidiary is a party or otherwise.
(e) Each of the Company and the Guarantors has all requisite power
and authority to execute, deliver and perform its respective obligations
under this Agreement and each of the other Operative Documents to which
it is a party.
(f) This Agreement has been duly and validly authorized, executed
and delivered by the Company and the Guarantors.
(g) The Registration Rights Agreement has been duly and validly
authorized by the Company and each of the Guarantors, and when duly
executed by the proper officers of the Company and each of the Guarantors
(assuming due execution and delivery by the Initial Purchasers) and
delivered by the Company and each of the Guarantors, will constitute a
legal, valid and binding agreement of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and except that rights to indemnification and contribution
thereunder may be limited by federal or state securities laws or public
policy relating thereto.
(h) The Indenture has been duly and validly authorized by the
Company and each of the Guarantors, and when duly executed by the proper
officers of the Company and each of the Guarantors (assuming due
execution and delivery by the Trustee) and delivered by the Company and
each of the Guarantors, will constitute a legal, valid and binding
agreement of the Company and each of the Guarantors enforceable against
the Company and each of the Guarantors in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity). No
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), is required in connection with the
offer and sale of the Notes contemplated hereby or in connection with the
Exempt Resales. The Indenture conforms to the requirements of the Trust
Indenture Act and the rules and regulations thereunder applicable to an
indenture that is qualified thereunder.
(i) The Notes have been duly and validly authorized by the Company
and when duly issued by the Company in accordance with the terms of the
Indenture and, assuming due authentication of the Notes by the Trustee,
when delivered to the Initial Purchasers against payment therefor in
accordance with the terms hereof will have been validly issued and
delivered, and will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(j) The Guarantees have been duly and validly authorized by each
of the Guarantors and when duly endorsed on the Notes in accordance with
the terms of 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 constitute legal, valid
and binding obligations of each of the Guarantors entitled to the
benefits of the Indenture and enforceable against each of the Guarantors
in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
(k) The Exchange Notes have been duly and validly authorized by
the Company and if and when duly issued by the Company in accordance with
the terms of the Indenture and, assuming due authentication of the
Exchange Notes by the Trustee, if and when delivered in accordance with
the Registered Exchange Offer contemplated by the Registration Rights
Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(l) The guarantees of the Exchange Notes (the "Exchange Note
Guarantees") have been duly and validly authorized by each of the
Guarantors and if and when duly endorsed on the Exchange Notes in
accordance with the terms of the Indenture and, assuming due
authentication of the Exchange Notes by the Trustee, if and when the
Exchange Notes are delivered in accordance with the Registered Exchange
Offer contemplated by the Registration Rights Agreement, will constitute
legal, valid and binding obligations of each of the Guarantors entitled
to the benefits of the Indenture and enforceable against each of the
Guarantors in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity).
(m) The Company and the Guarantors have all requisite corporate
power and authority to enter into (A) the New Credit Facility and (B) any
and all other agreements and instruments ancillary to or entered into in
connection with the transaction contemplated by the New Credit Facility
(items (A) and (B) are referred to collectively as the "Credit
Documents").
(n) Each of the New Credit Facility and the other Credit Documents
have been duly and validly authorized, executed and delivered by the
Company and the Guarantors and (assuming due authorization, execution and
delivery by the other parties thereto) constitutes a legal, valid and
binding agreement of each of the Company and the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity). Prior
to the initial borrowing of approximately $36.9 million, the Company will
have at least $75.0 million of borrowings available to it under the New
Credit Facility after the Closing of the sale of the Notes, the receipt
by the Company of the proceeds therefrom and the application of such
proceeds as described under the caption "Use of Proceeds" in the Offering
Memorandum. All representations and warranties made by the Company in the
New Credit Facility and the other Credit Documents are true and correct
in all material respects as of the date hereof.
(o) The Indenture, the Notes, the Guarantees, the Registration
Rights Agreement and the Credit Documents conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(p) The execution, delivery and performance of this Agreement, the
other Operative Documents and the New Credit Facility and the other
Credit Documents by the Company and the Guarantors and the consummation
of the Transactions will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement, license 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 bylaws of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except as may be required in connection with
(1) the registration of the Notes, the Exchange Notes, the Guarantees
and/or the Exchange Note Guarantees under the Securities Act in
accordance with the Registration Rights
Agreement, (2) qualification of the Indenture under the Trust Indenture
Act and (3) compliance with the securities or Blue Sky laws of various
jurisdictions, no consent, approval, authorization or order of, or filing
or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement,
any of the other Operative Documents or the New Credit Facility and the
other Credit Documents by the Company and the Guarantors and the
consummation of the Transactions.
(q) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum comply as to
form in all material respects with the requirements of Regulation S-X
under the Securities Act and present fairly the financial condition and
results of operations and cash flows of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principals
applied on a consistent basis throughout the periods involved. The other
financial data, selected pro forma ratios, operating data and statistical
information and data included in the Offering Memorandum is presented
fairly and has been prepared on a basis consistent with such financial
statements and the books and records of the Company.
(r) Except as set forth 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, if determined
adversely to the Company or any of its subsidiaries, might have a
material adverse effect on the general affairs, management, consolidated
financial position, shareholders' equity, results of operations, business
or prospects of the Company and its subsidiaries (a "Material Adverse
Effect"), and to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.
(s) Except as set forth in the Offering Memorandum, there are no
contracts, agreements or understandings between the Company and/or the
Guarantors and any person granting such person the right to require the
Company or the Guarantors to file a registration statement under the
Securities Act with respect to any securities of the Company or the
Guarantors owned or to be owned by such person or to require the Company
or the Guarantors to include such securities in the securities to be
registered pursuant to the Exchange Offer Registration Statement or the
Shelf Registration Statement or in any securities registered or to be
registered pursuant to any other registration statement filed by or
required to be filed by the Company or the Guarantors under the
Securities Act.
(t) Except as disclosed in the Offering Memorandum, since the date
of the latest audited consolidated financial statements of the Company
included in the Offering Memorandum, none of the Company, any Guarantor
or any of the other subsidiaries of the Company has incurred any
liability or obligation, direct or contingent, or entered into any
transaction, in each case not in the ordinary course of business, that is
material to the Company, any Guarantor or any of the other subsidiaries
of the Company, taken as a whole, and there has not occurred, to the
knowledge of the Company and the Guarantors,
any development or event involving a Material Adverse Effect (as defined
below) and, except as disclosed in or contemplated by the Offering
Memorandum, there has been no (i) dividend or distribution of any kind
declared, paid or made by the Company or its affiliates on any class of
its respective capital stock, (ii) issuance of securities by the Company
or its affiliates (other than the Notes and the Guarantees offered
thereby or pursuant to an issuance by the Company or its affiliates of
options to purchase the capital stock of the Company or its affiliates)
or (iii) material increase in short-term or long-term debt of the Company
or the Guarantors.
(u) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or 15(d) of the Exchange Act. All
reports filed by the Company with the Commission pursuant to Section 13
or 15(d) of the Exchange Act comply as to form with the Exchange Act and
the rules and regulations of the Commission thereunder.
(v) The Company and each Guarantor (i) makes and keeps accurate
books and records and (ii) maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions
are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the recorded accountability for its assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the Offering
Memorandum and who have delivered the initial letter referred to in
Section 7(j) hereof, are independent public accountants as required by
the Securities Act and the rules and regulations promulgated thereunder.
(x) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources from which the
Company and the subsidiaries believe to be reliable and accurate.
(y) Each of the Company and its subsidiaries has such permits,
licenses, patents, franchises, certificates of need and other approvals
or authorizations of governmental or regulatory authorities ("Permits")
as are necessary under applicable law to own its properties and to
conduct its businesses in the manner described in the Offering
Memorandum, except as disclosed in or specifically contemplated by the
Offering Memorandum; each of the Company and its subsidiaries has
fulfilled and performed in all material respects, all of its 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, except as disclosed in, or
specifically contemplated by, the Offering Memorandum; and, except as
disclosed in, or specifically contemplated by, the Offering Memorandum,
none of the Permits contains any restriction
that is materially burdensome (other than such burdens as are common or
customary to such Permits) to any of the Company or its subsidiaries.
(z) The Company and each of its such subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(aa) The Company and each of its subsidiaries own or possess
adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others, and the
Company and the Guarantors are not aware of any pending or threatened
claim to the contrary or any pending or threatened challenge by any other
person to the rights of the Company and its subsidiaries with respect to
the foregoing which, if determined adversely to any of the Company or its
subsidiaries, would have a Material Adverse Effect.
(bb) There are no contracts or other documents which would be
required to be described in a prospectus included in or filed as an
exhibit to a registration statement on Form S-1 under the Securities Act
that have not been described in the Offering Memorandum or filed with the
Commission.
(cc) No relationship, direct or indirect, exists between or among
the Company, the Guarantors or any other subsidiary of the Company on the
one hand, and the directors, officers, shareholders, customers or
suppliers of the Company or its subsidiaries on the other hand, which
would be required to be described in a prospectus included in a
registration statement on Form S-1 under the Securities Act that is not
described in the Offering Memorandum.
(dd) No labor disturbance by the employees of the Company or any
of its subsidiaries exists or, to the knowledge of the Company, is
imminent which might be expected to have a Material Adverse Effect.
(ee) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined
in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has
not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(ff) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof and paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries, nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect.
(gg) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter, bylaws or other organizational documents, (ii)
is in default in any material respect, 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 agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject
or (iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of
its business.
(hh) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(ii) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company
or any of its subsidiaries (or, to the knowledge of the Company, any of
its predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any toxic
wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or
with respect to which the Company or any of its subsidiaries have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not
be
reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes",
"toxic wastes", "hazardous substances" and "medical wastes" shall have
the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(jj) No default or event of default with respect to any
Indebtedness (as such term is defined in the Indenture) will exist as a
result of the execution and delivery of this Agreement, the other
Operative Documents or the Credit Documents or the consummation of the
Transactions and each of the Company and its subsidiaries has duly
performed or observed all material obligations, agreements, covenants or
conditions contained in any contract, indenture, mortgage, agreement or
instrument relating to any Indebtedness.
(kk) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case,
free and clear of all liens, encumbrances and defects except such as are
described in the Offering Memorandum or such as do not materially affect
the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and all assets held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such assets by the Company
and its subsidiaries.
(ll) Immediately after the consummation of the Transactions, the
fair value and present fair saleable value of the assets of the Company
and each of its subsidiaries (each on a consolidated basis) will exceed
the sum of its stated liabilities and identified contingent liabilities;
none of the Company nor any of its subsidiaries (each on a consolidated
basis) is, nor will any of the Company or any of its subsidiaries (each
on a consolidated basis) be, after giving effect to the execution,
delivery and performance of this Agreement and the other Operative
Documents and the New Credit Facility and the other Credit Documents and
the consummation of the Transactions, (A) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (B) unable to pay its debts (contingent or otherwise) as they
mature or (C) otherwise insolvent.
(mm) Neither the Company nor any subsidiary is, or, as of the
Closing Date (as defined below) after giving effect to the Transactions
and the application of the proceeds as described in the Offering
Memorandum under the section entitled "Use of Proceeds," neither the
Company nor any subsidiary will be, an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(nn) Neither the Company nor any of its subsidiaries has engaged
in any activities which are prohibited, or are cause for criminal or
civil penalties and/or mandatory or permissive exclusion from Medicare or
Medicaid, under Section 1320a-7, 1320a-7a, 1320a-7b, or 1395nn of Title
42 of the United States Code, the federal
TRICARE statute, the Federal False Claims Act 31 U.S.C.ss.3729-3733, or
the regulations promulgated pursuant to such statutes or regulations or
related state or local statutes or by generally recognized professional
standards of care or conduct. Neither the Company nor to the knowledge of
the Company any other person who has a direct or indirect ownership or
control interest in the Company or any of its subsidiaries or who is an
officer, director, agent or managing employee of the Company or any
subsidiary: (1) has had a civil monetary penalty assessed against it
under Section 1128A of the Social Security Act ("SSA"); (2) has been
excluded from participation under the Medicare program or a Federal
Health Care Program (as that term is defined in SSA Section 1128(B)(f));
or (3) has been convicted (as that term is defined in 42 C.F.R.ss.1001.2)
of any of the categories of offenses described in SSA Section 1128(a) and
(b)(1), (2) and (3).
(oo) Neither the Company nor any other affiliate (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D")) 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
Securities Act) which is or could be integrated with the offering and
sale of the Notes and the Guarantees in a manner that would require the
registration of the Notes and the Guarantees under the Securities Act or
(ii) engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D, including, but not limited to,
advertisements, articles, notices or other communications published in
any newspaper, magazine, or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising) in connection with the
offering of the Notes and the Guarantees. Neither the Company nor any
Guarantor has offered, sold or issued any securities, or securities that
are convertible into other securities, with terms that are substantially
similar to the Notes and the Guarantees during the six-month period
preceding the date of the Offering Memorandum, including any sales
pursuant to Section 4(2) of the Securities Act or Regulation D or
Regulation S under the Securities Act.
(pp) Each of the Preliminary Offering Memorandum and the Offering
Memorandum and each amendment or supplement thereto, as of its date,
contains the information specified in, and meets the requirements of,
Rule 144A(d)(4) under the Act.
(qq) Neither the Company nor any Guarantor has distributed and,
prior to the later to occur of the Closing Date and completion of the
distribution of the Notes and the Guarantees, will not distribute any
offering material in connection with the offering and sale of the Notes
other than the Preliminary Offering Memorandum and the Offering
Memorandum.
(rr) When issued and delivered pursuant to this Agreement, the
Notes will not be of the same class (within the meaning of Rule 144A
under the Securities Act) as securities of the Company that are listed on
a national securities exchange registered under Section 6 of the Exchange
Act or that are quoted in a U.S. automated inter-dealer quotation system.
(ss) Assuming (i) that your representations and warranties in
Section 2 of this Agreement are true, (ii) compliance by you with the
covenants set forth herein and (iii) that each of the Eligible Purchasers
is a QIB or a person who acquires the Notes and the Guarantees outside
the United States in an "offshore transaction" and is not a "U.S. person"
(within the meaning of Rule 904 of Regulation S), it is not necessary in
connection with the purchase of the Notes and the Guarantees and the
offer and initial resale of the Notes and the Guarantees by you in the
manner contemplated by this Agreement and the Offering Memorandum, to
register the Notes and the Guarantees under the Securities Act or to
qualify the Indenture under the Trust Indenture Act.
(tt) None of the Company, any Guarantor or any of their affiliates
or any person acting on their behalf has engaged or will engage in any
directed selling efforts within the meaning of Rule 902(b) of Regulation
S with respect to the Notes, and the Company, the Guarantors and their
other affiliates and all persons acting on their behalf have complied
with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Notes outside of the
United States and in connection therewith, the Offering Memorandum will
contain the disclosure required by Rule 902(h). The sales of the Notes
pursuant to Regulation S are not part of a plan or scheme to evade the
registration provision of the Securities Act.
(uu) The Notes sold by the Company in reliance on Regulation S
will be represented upon issuance by a temporary global security that may
not be exchanged for definitive securities until the expiration of the
40-day restricted period referred to in Rule 903(c)(3) of the Securities
Act and only upon certification of beneficial ownership of such Notes by
non-U.S. persons or U.S. persons who purchased such Notes in transactions
that were exempt from the registration requirements of the Securities
Act.
(vv) Neither the Company nor any of its subsidiaries has taken or
will take, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Notes
and the Guarantees to facilitate the sale or resale of the Notes and the
Guarantees.
(ww) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities
Act (i) has imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the Company's
retaining any rating assigned as of the date hereof to the Company or any
of their respective securities or (ii) has indicated to the Company that
it is considering (A) the downgrading, suspension or withdrawal of, or
any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (B) any negative change
in the outlook for any rating of the Company.
(xx) The Company has not taken, and will not take, any action that
might cause this Agreement or the issuance or sale of the Notes and the
Guarantees to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
(yy) The Company and each Guarantor understands that the Initial
Purchaser and, for purposes of the opinions to be delivered to the
Initial Purchaser pursuant to Section 7 hereof, counsel to the Company
and counsel to the Initial Purchasers, will rely upon the accuracy and
truth of the foregoing representations and hereby consents to such
reliance.
SECTION 2. Representations, Warranties and Agreements of the Initial
Purchasers. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to, and agrees with, the Company and the Guarantors,
that:
(a) Such Initial Purchaser is a QIB 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 Notes and the
Guarantees.
(b) Such Initial Purchaser (i) is not acquiring the Notes and the
Guarantees with a view to any distribution thereof or with any present
intention of offering or selling any of the Notes and the Guarantees in a
transaction that would violate the Securities Act or any state securities
laws or any other applicable jurisdiction; (ii) in connection with the
Exempt Resales, will solicit offers to buy the Notes and the Guarantees
only from, and will offer to sell the Notes and the Guarantees only to,
the Eligible Purchasers in accordance with this Agreement and on the
terms contemplated by the Offering Memorandum; and (iii) will not offer
or sell the Notes and the Guarantees, nor has it offered or sold the
Notes and the Guarantees by, or otherwise engaged in, any form of general
solicitation in connection with the offering of the Notes and the
Guarantees.
(c) The Notes and the Guarantees have not been and will not be
registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S under the Securities Act or
pursuant to an exemption from the registration requirements of the
Securities Act. Such Initial Purchaser represents that it has not
offered, sold or delivered the Notes and the Guarantees, and will not
offer, sell or deliver the Notes and the Guarantees (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 Notes and the Guarantees and
the Closing Date (such period, the "Distribution Compliance Period"),
within the United States or to, or for the account or benefit of U.S.
persons, except in accordance with Rule 144A under the Securities Act.
Accordingly, such Initial Purchaser represents and agrees that neither
it, its affiliates nor any persons acting on its behalf have engaged or
will engage in any directed selling efforts within the meaning of Rule
902(c) of Regulation S with respect to the Notes and the Guarantees, and
its affiliates and all persons acting on its behalf have complied and
will comply with the offering restrictions requirements of Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Notes and Guarantees (other than a sale
pursuant to Rule 144A), it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that
purchases Notes and Guarantees from them during the Distribution
Compliance Period a confirmation or notice substantially to the following
effect:
"The Notes covered hereby have not been registered under the
Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering or the closing date,
except in either case in accordance with Regulation S (or Rule
144A if available) under the Securities Act, and in connection
with any subsequent sale by you of the Notes covered hereby in
reliance on Regulation S during the period referred to above to
any distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice substantially
to the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S."
(e) All offers and sales of the Notes and the Guarantees by such
Initial Purchaser pursuant to Regulation S are and will be "offshore
transactions" within the meaning of Regulation S and are not and will not
be part of a plan or scheme to evade the registration provisions of the
Securities Act.
(f) Such Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to you pursuant to Section 7
hereof, counsel to the Company and counsel to the Initial Purchasers,
will rely upon the accuracy and truth of the foregoing representations
and hereby consents to such reliance.
The terms used in this Section 2 that have meanings assigned to them in
Regulation S are used herein as so defined.
SECTION 3. Purchase of the Notes and the Guarantees by the Initial
Purchasers. On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees to
sell the Notes (and cause the Guarantors to issue the Guarantees) to the several
Initial Purchasers and each of the Initial Purchasers, severally and not
jointly, agrees to purchase the amount of Notes set opposite that Initial
Purchaser's name in Schedule 1 hereto. Each Initial Purchaser will purchase such
aggregate principal amount of Notes at an aggregate purchase price equal to 97%
of the principal amount thereof (the "Purchase Price").
The Company shall not be obligated to deliver any of the Notes to be
delivered on the Closing Date (as defined below), except upon payment for all
the Notes and the Guarantees to be purchased on the Closing Date as provided
herein.
SECTION 4. Delivery of and Payment for the Notes and the Guarantees.
(a) Delivery of and payment for the Notes and the Guarantees shall
be made at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 9:00 A.M., New York City time, on the fifth
full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between ▇▇▇▇▇▇ Brothers
and the Company. This date and time are sometimes referred to as the
"Closing Date."
(b) On the Closing Date, one or more Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to
the aggregate principal amount of Notes sold pursuant to Eligible Resales
(collectively, the "Global Notes"), shall be delivered by the Company to
the Initial Purchasers against payment by the Initial Purchasers of the
purchase price thereof by wire transfer of immediately available funds as
the Company may direct by written notice delivered to you no later than
two business days prior to the Closing Date. The Global Notes in
definitive form shall be made available to the Initial Purchasers for
inspection not later than 2:00 p.m. on the business day prior to the
Closing Date.
SECTION 5. Further Agreements of the Company. The Company agrees:
(a) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of the issuance by the Commission or any
state securities commission of any stop order suspending the
qualification or exemption from qualification of the Notes and the
Guarantees for offering or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (ii) the
happening of any event that makes any statement of a material fact made
in the Preliminary Offering Memorandum or the Offering Memorandum untrue
or which requires the making of any additions to or changes in the
Preliminary Offering Memorandum or Offering Memorandum in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company shall use all reasonable
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of the Notes and the Guarantees under any
state securities or Blue Sky laws and, if at any time any state
securities commission shall issue any stop order suspending the
qualification or exemption of the Notes and the Guarantees under any
state securities or Blue Sky laws, the Company shall use all reasonable
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish to you without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as you may reasonably request. The
Company consents to the use of the Preliminary Offering Memorandum and
the Offering Memorandum, and any amendments and supplements thereto
required pursuant to this Agreement, by you in connection with the Exempt
Resales that are in compliance with this Agreement.
(c) Not to amend or supplement the Offering Memorandum prior to
the Closing Date or during the period referred to in (d) below unless you
shall previously have been advised of, and shall not have reasonably
objected to, such amendment or supplement within a reasonable time, but
in any event not longer than three days after being furnished a copy of
such amendment or supplement. The Company shall promptly prepare, upon
any reasonable request by you, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with
Exempt Resales.
(d) If, in connection with any Exempt Resales or market making
transactions after the date of this Agreement and prior to the
consummation of the Registered Exchange Offer, any event shall occur
that, in the judgment of the Company or in your judgment or the judgment
of counsel to you, makes any statement of a material fact in the Offering
Memorandum untrue or that requires the making of any additions to or
changes in the Offering Memorandum in order to make the statements in the
Offering Memorandum, in the light of the circumstances at the time that
the Offering Memorandum is delivered to prospective Eligible Purchasers,
not misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, the Company will promptly
notify you of such event and prepare an appropriate amendment or
supplement to the Offering Memorandum so that, at the time that the
Offering Memorandum is delivered to prospective Eligible Purchasers, (i)
the statements in the Offering Memorandum as amended or supplemented, in
the light of the circumstances under which they were made, will not be
misleading and (ii) the Offering Memorandum will comply with applicable
law.
(e) Promptly from time to time to take such action as you may
reasonably request to qualify the Notes and the Guarantees for offering
and sale under the state securities or Blue Sky laws of such
jurisdictions as you may request (provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject) and to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Notes and the Guarantees.
(f) To use all best efforts to do and perform all things required
to be done and performed under this Agreement by it prior to or after the
Closing Date and to satisfy all conditions precedent on its part to the
delivery of the Notes and the Guarantees.
(g) Except as contemplated in the Registration Rights Agreement,
not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
that would be integrated with the sale of the Notes and the Guarantees in
a manner that would require the registration under the Securities Act of
the sale to you or the Eligible Purchasers of the Notes and the
Guarantees.
(h) For so long as any Notes remain outstanding and during any
period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available to any registered holder or beneficial
owner of Notes in connection with any sale thereof and any prospective
purchaser of Notes from such registered holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act.
(i) To use its best efforts to cause the Notes to be eligible for
trading in The PORTALSM Market ("PORTAL"), a subsidiary of The Nasdaq
Stock Market, Inc., and to permit the Notes to be eligible for clearance
and settlement through DTC.
(j) To apply the net proceeds from the sale of the Notes as set
forth in the Offering Memorandum under the section entitled "Use of
Proceeds."
(k) To take such steps as shall be necessary to ensure that none
of the Company nor any subsidiary of the Company shall become an
"investment company" within the meaning of such term under the Investment
Company Act and the rules and regulations of the Commission thereunder.
(l) Except for borrowings under the New Credit Facility, for a
period of 180 days from the date of the Offering Memorandum, not to,
directly or indirectly, sell, contract to sell, grant any option to
purchase, issue any instrument convertible into or exchangeable for, or
otherwise transfer or dispose of, any debt securities of the Company in a
public or private offering for cash having a maturity of more than one
year from the date of issue of such securities, except (i) for the
Exchange Notes and the Exchange Note Guarantees in connection with the
Exchange Offer or (ii) with the prior consent of the Initial Purchasers,
which consent shall not be unreasonably withheld.
(m) For a period of five years following the Closing Date, to
furnish to you copies of all materials furnished by the Company to its
shareholders and holders of Notes and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Company's common stock or
Notes may be listed pursuant to requirements of or agreements with such
exchange or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder.
SECTION 6. Expenses. The Company agrees that, whether or not the
transactions contemplated by this Agreement are consummated or this Agreement
becomes effective or is terminated, to pay all costs, expenses, fees and taxes
incident to and in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all amendments and
supplements thereto (but not, however, legal fees and expenses of your counsel
incurred in connection therewith), (ii) the preparation, printing (including,
without limitation, word processing and duplication costs) and delivery of this
Agreement, the Indenture, all Blue Sky Memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection herewith and with the Exempt Resales (but not, however, legal fees
and expenses of your counsel incurred in connection with any of the foregoing
other than fees of such counsel plus reasonable disbursements incurred in
connection with the preparation, printing and delivery of such Blue Sky
Memoranda), (iii) the issuance and delivery by the Company and the Guarantors of
the Notes and the Guarantees, (iv) the qualification of the Notes for offer and
sale under the securities or Blue Sky laws of the several states (including,
without limitation, the reasonable fees and disbursements of your counsel
relating to such registration or qualification), (v) furnishing such copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for use in
connection with the Exempt Resales, (vi) the preparation of certificates for the
Notes (including, without limitation, printing and engraving thereof), (vii) the
fees, disbursements and expenses of the Company's counsel and accountants,
(viii) all expenses and listing fees in
connection with the application for quotation of the Notes in PORTAL, (ix) the
costs and expenses of the Company relating to investor presentations on any road
show undertaken in connection with the offering of the Notes, including without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and one-half of the cost of any aircraft chartered in connection
with the road show; (x) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with approval of the Notes by DTC for
"book-entry" transfer and (xi) the performance by the Company and the Guarantors
of its other obligations under this Agreement.
SECTION 7. Conditions of Initial Purchasers' Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions.
(a) The Offering Memorandum shall have been printed and copies
distributed to you not later than 9:00 A.M., New York City time, on
February 14, 2002, or at such later date and time as you may approve in
writing, and no stop order suspending the qualification or exemption from
qualification of the Notes in any jurisdiction shall have been issued and
no proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) No Initial Purchaser shall have discovered and disclosed to
the Company on or prior to such Closing Date that the Offering Memorandum
or any amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the
Initial Purchasers, is material or omits to state a 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 proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the other
Operative Documents, the Credit Documents, the Offering Memorandum, and
all other legal matters relating to this Agreement and the Transactions
shall be reasonably satisfactory in all material respects to counsel for
the Initial Purchasers, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) ▇▇▇▇▇ and Lardner shall have furnished to the Initial
Purchasers its written opinion, as counsel to the Company and the
Guarantors, addressed to the Initial Purchasers and dated as of the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers and its counsel, substantially in the form attached
hereto as Exhibit B.
(e) The Initial Purchasers shall have received from Weil, Gotshal
& ▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, such opinion or
opinions, dated as of the Closing
Date, with respect to the issuance and sale of the Notes and the
Guarantees, the Offering Memorandum and other related matters as the
Initial Purchasers may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(f) Each of the Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(g) Each of the Company, the Guarantors and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(h) The Notes shall have been approved for trading in PORTAL and
shall be eligible for clearance and settlement through The Depository
Trust Company.
(i) At the time of execution of this Agreement, the Initial
Purchasers shall have received from Pricewaterhouse Coopers LLP, a
letter, in form and substance satisfactory to the Initial Purchasers,
addressed to the Initial Purchasers and dated the date hereof (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date hereof
(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 five days prior to
the date hereof), the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to initial purchasers.
(j) With respect to the letter of Pricewaterhouse Coopers, LLP,
referred to in the preceding paragraph and delivered to the Initial
Purchasers concurrently with the execution of this Agreement (the
"initial letter"), the Initial Purchasers shall have received a letter
(the "bring-down letter") of such accountants, addressed to the Initial
Purchasers and dated as of the Closing Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) 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 five days prior to
the date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters covered
by the initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(k) The Initial Purchasers shall have received a copy of the
Credit Documents, with all schedules, exhibits and amendments thereto,
certified by an executive officer of the Company as a true, correct and
complete copy as of the Closing Date.
(l) The Initial Purchasers shall have received (i) a certificate
from the Company, dated the Closing Date, signed by its Chairman of the
Board or President and its Chief Financial Officer or Treasurer and (ii)
a certificate from each Guarantor, dated as of the Closing Date, signed
by its President stating, as applicable, that:
(A) The representations and warranties of the Company and
the Guarantors, as applicable, are true and correct as if made on
and as of the Closing Date (other than to the extent any such
representation or warranty is made expressly to a certain date),
and the Company and the Guarantors, as applicable, have performed
all covenants and agreements and satisfied all conditions on their
part to be performed or satisfied hereunder, to the extent a party
thereto, at or prior to the Closing Date;
(B) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Offering
Memorandum, except as described in the Offering Memorandum, no
event or events have occurred, nor has any information become
known that, individually or in the aggregate, would have a
material adverse effect on the consolidated financial position,
shareholders' equity, results of operation, business or prospects
of the Company and its subsidiaries;
(C) They have carefully examined the Preliminary Offering
Memorandum and the Offering Memorandum and, in their opinion the
Preliminary Offering Memorandum and Offering Memorandum, as of
their respective dates, did not, and the Offering Memorandum, as
of the Closing Date, does 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 to make the statements therein
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 Offering Memorandum; and
(D) The issuance and sale of the Notes and Guarantees by
the Company and the Guarantors hereunder has not been enjoined
(temporarily or permanently) by any court or governmental body or
agency.
(m) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Offering Memorandum (exclusive of any amendment or
supplement thereto after the date hereof) any loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum or (ii) since such date there
shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Offering Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of ▇▇▇▇▇▇ Brothers,
so material and adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the Notes and the Guarantees
being delivered on such Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
(n) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Securities Act and (ii) no such organization shall
have publicly announced or privately informed the Company that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities
of the Company on any exchange or in the over-the-counter market, shall
have been suspended or the settlement of such trading generally shall
have been materially disrupted or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) or there shall have occurred any other calamity or crisis,
including without limitation as a result of terrorist activities after
the date hereof, as to make it, in the judgment of ▇▇▇▇▇▇ Brothers,
impracticable or inadvisable to proceed with the public offering or
delivery of the Notes and the Guarantees being delivered on such Closing
Date on the terms and in the manner contemplated in the Offering
Memorandum.
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 counsel for the Initial Purchasers.
SECTION 8. Indemnification and Contribution.
(a) The Company and the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its directors,
officers and employees and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Notes and the
Guarantees), to which that
Initial Purchaser, director, officer, employee or controlling person may
become subject, under the Securities Act 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 (A) in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto or (B) in any blue
sky application or other document prepared or executed by the Company or
the Guarantors (or based upon any written information furnished by the
Company or the Guarantors) specifically for the purpose of qualifying any
or all of the Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application") or (C) in any materials or
information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Notes
("Marketing Materials"), including any roadshow or investor presentations
made to investors by the Company (whether in person or electronically),
(ii) the omission or alleged omission to state in any Preliminary
Offering Memorandum, the Offering Memorandum or in any amendment or
supplement thereto, or in any Blue Sky Application or Marketing
Materials, any material fact required to be stated therein or necessary
to make the statements therein not misleading or (iii) any act or failure
to act or any alleged act or failure to act by any Initial Purchaser in
connection with, or relating in any manner to, the Notes and the
Guarantees or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company and the Guarantors shall not be liable under
this clause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Initial Purchaser through
its gross negligence or willful misconduct), and shall reimburse each
Initial Purchaser and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Initial Purchaser, director, officer,
employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Company and
the Guarantors may otherwise have to any Initial Purchaser or to any
director, officer, employee or controlling person of that Initial
Purchaser.
(b) Each Initial Purchaser shall, severally and not jointly,
indemnify and hold harmless the Company, the Guarantors, their officers,
each of their directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company, the Guarantors or any such
director, officer or controlling person may become subject, under the
Securities Act 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
Preliminary Offering Memorandum, the Offering Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application or (ii)
the omission or alleged omission to state in any Preliminary Offering
Memorandum, the Offering Memorandum or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be
stated
therein or necessary to make the statements therein 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 written information concerning such Initial
Purchaser furnished to the Company through ▇▇▇▇▇▇ Brothers by or on
behalf of that Initial Purchaser specifically for inclusion therein, and
shall reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company
or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Initial Purchaser may otherwise have to the Company, the Guarantors or
any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 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 under this Section 8, 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 8 except to the extent it has been materially prejudiced 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 8. 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 8 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
▇▇▇▇▇▇ Brothers shall have the right to employ counsel to represent
jointly ▇▇▇▇▇▇ Brothers and those other Initial Purchasers and their
respective directors, officers, employees and controlling persons who may
be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Initial Purchasers against the Company
under this Section 8 if, in the reasonable judgment of ▇▇▇▇▇▇ Brothers,
it is advisable for ▇▇▇▇▇▇ Brothers and those Initial Purchasers,
directors, officers, employees and controlling persons to be jointly
represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding and does not
include any findings of fact or admissions of fault or culpability as to
the indemnified
party or (ii) 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 the consent of the indemnifying party or
if there be a final judgment of 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.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, 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 on
the one hand and the Initial Purchasers on the other from the offering of
the Notes and the Guarantees or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one
hand, and the Initial Purchasers on the other with respect to the
statements or omissions which 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
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 Notes and the Guarantees purchased
under this Agreement (before deducting expenses) received by the Company,
on the one hand, and the total discounts and commissions received by the
Initial Purchasers with respect to the Notes and the Guarantees purchased
under this Agreement, on the other hand, bear to the total gross proceeds
from the offering of the Notes and the Guarantees under this Agreement.
The relative fault shall be determined by reference to whether the untrue
or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Initial Purchasers, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Guarantors and the
Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8 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 which 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 8 shall be deemed to include, for purposes of
this Section 8(d), 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 8(d), no Initial Purchaser shall be required
to contribute any amount in excess of the amount by which the total price
at which the Notes purchased by it was resold to Eligible Purchasers
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 8(d) are several in proportion to their respective Purchase
obligations and not joint.
(e) The Initial Purchasers severally confirm and the Company and
the Guarantors acknowledge that the last sentence on the cover page of
the Offering Memorandum, [and the sixth sentence of the sixth paragraph
and the seventh, eighth, twelfth, thirteenth and fourteenth paragraphs]
under the section entitled "Plan of Distribution" in the Offering
Memorandum constitute the only information concerning the Initial
Purchasers furnished in writing to the Company by or on behalf of the
Initial Purchasers specifically for inclusion in the Offering Memorandum.
SECTION 9. Defaulting Initial Purchasers.
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the Notes that
the defaulting Initial Purchaser agreed but failed to purchase on such Closing
Date in the respective proportions which the amount of the Notes set forth
opposite the name of each remaining non-defaulting Initial Purchaser in Schedule
1 hereto bears to the total amount of Notes set forth opposite the names of all
the remaining non-defaulting Initial Purchasers in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Initial Purchasers shall not be
obligated to purchase any of the Notes on such Closing Date if the total amount
of the Notes which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase on such date exceeds 10% of the total amount of Notes to
be purchased on such Closing Date, and any remaining non-defaulting Initial
Purchaser shall not be obligated to purchase more than 110% of the amount of
Notes which it agreed to purchase on such Closing Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchasers, or those other Initial Purchasers satisfactory to ▇▇▇▇▇▇
Brothers who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all of the Notes
to be purchased on such Closing Date. If the remaining Initial Purchasers or
other Initial Purchasers satisfactory to ▇▇▇▇▇▇ Brothers do not elect to
purchase the Notes which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase on such Closing Date, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Initial Purchaser" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases the Notes which a
defaulting Initial Purchaser agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Initial Purchaser of
any liability it may have to the Company and the Guarantors for damages caused
by its default. If other Initial Purchasers are obligated or agree to purchase
the Notes of a defaulting or withdrawing Initial Purchaser, either the ▇▇▇▇▇▇
Brothers 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.
SECTION 10. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by ▇▇▇▇▇▇ Brothers by notice given to and received
by the Company prior to delivery of and payment for the Notes if, prior to that
time, any of the events described in Sections 7(m), 7(n) and 7(o) shall have
occurred or if the Initial Purchasers shall decline to purchase the Notes for
any reason permitted under this Agreement.
SECTION 11. Reimbursement of Initial Purchasers' Expenses. If the Company
and the Guarantors shall fail to deliver the Notes and the Guarantees to the
Initial Purchasers by reason of any failure, refusal or inability on the part of
the Company and the Guarantors to perform any agreement on its part to be
performed, or because any other condition of the Initial Purchasers' obligations
hereunder required to be fulfilled by the Company and the Guarantors is not
fulfilled, the Company and the Guarantors will reimburse the Initial Purchasers
for all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase of the Notes and the Guarantees, and upon demand the
Company and the Guarantors shall pay the full amount thereof to ▇▇▇▇▇▇ Brothers.
SECTION 12. 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, telex or facsimile transmission to the care of ▇▇▇▇▇▇ Brothers
Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 19th Floor, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇, Esq. (Fax:
▇▇▇-▇▇▇-▇▇▇▇) and, in the case of any notice pursuant to Section 8(d), to
the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Company and the Guarantors, shall be delivered or
sent by mail, telex or facsimile transmission to the Company, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇, (Fax: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq. (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
provided, however, that any notice to an Initial Purchaser pursuant to Section
8(d) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its acceptance telex to ▇▇▇▇▇▇
Brothers, which address will be supplied to any other party hereto by ▇▇▇▇▇▇
Brothers upon request. 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, consent, notice or agreement given or made on
behalf of the Initial Purchasers by ▇▇▇▇▇▇ Brothers.
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the
Guarantors and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (a) the representations, warranties, indemnities and
agreements of the Company and the Guarantors contained in this Agreement shall
also be deemed to be for the benefit of the directors, officers, employees of
the Initial Purchasers and each person or persons, if any, who control any
Initial Purchasers within the meaning of Section 15 of the Securities Act and
(b) the indemnity agreement of the Initial Purchasers contained in Section 8(b)
of this Agreement shall be deemed to be for the benefit of directors, officers
and any person controlling the Company and the Guarantors within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 13, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Guarantors and the Initial
Purchasers contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and the Guarantees and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
SECTION 15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Securities Act.
SECTION 16. Jurisdiction. Each of the parties hereto irrevocably consents
to the jurisdiction of the courts of the State of New York and the courts of the
United States of America located in the Borough of Manhattan, City and State of
New York, over any suit, action or proceeding with respect to this Agreement or
the transactions contemplated hereby. Each of the parties hereto waives any
objection that it may have to the venue of any suit, action or proceeding with
respect to this Agreement or the transactions contemplated hereby in the courts
of the State of New York or the courts of the United States of America, in each
case, located in the Borough of Manhattan, City and State of New York or that
such suit, action or proceeding brought in the courts of the State of New York
or United States of America, in each case, located in the Borough of Manhattan,
City and State of New York was brought in an inconvenient court and agrees not
to plead or claim the same.
SECTION 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 18. Counterparts. This Agreement may be executed in multiple
counterparts and, if executed in counterparts, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
SECTION 19. 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.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
If the foregoing correctly sets forth the agreement among the Company,
the Guarantors and the Initial Purchasers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
HANGER ORTHOPEDIC GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
A.D. ▇▇▇▇▇ COMPANY
ADVANCED ORTHOPEDIC TECHNOLOGIES, INC.
ADVANCED ORTHOPEDIC TECHNOLOGIES
(▇▇▇▇▇▇▇), INC.
DOBI-SYMPLEX, INC.
▇.▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ CO., INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & SON ORTHOTICS &
PROSTHETICS, INC.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & SON, INC.
HANGER PROSTHETICS & ORTHOTICS, INC.
HANGER PROSTHETICS & ORTHOTICS EAST, INC.
HANGER PROSTHETICS & ORTHOTICS HOLDINGS,
INC.
HANGER PROSTHETICS & ORTHOTICS WEST, INC.
HPO, INC.
MEADOWBROOK ORTHOPEDICS, INC.
MEDICAL ARTS O&P SERVICES, INC.
OPNET, INC.
ORTHOTIC & PROSTHETIC REHABILITATION
TECHNOLOGIES, INC.
PROGRESSIVE ORTHOPEDIC
SOUTHERN PROSTHETIC SUPPLY, INC.
UNIVERSITY ORTHOTIC & PROSTHETIC
CONSULTANTS, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and
Treasurer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/
------------------------------------
Authorized Representative
For itself and as representative
of the several Initial Purchasers named
in Schedule 1 hereto
SCHEDULE 1
Principal Amount
Initial Purchasers of Notes
------------------ --------
▇▇▇▇▇▇ Brothers Inc............................ $80,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc..................... 50,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc....................... 50,000,000
BNP Paribas Securities Corp.................... 20,000,000
Total $200,000,000
============
EXHIBIT A
Registration Rights Agreement
EXHIBIT B
Form of ▇▇▇▇▇ and ▇▇▇▇▇▇▇ Opinion
1. The Company and each of the Guarantors have been duly organized and
are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification and have all requisite power and authority to own, lease and
operate its properties and carry on its business as now being conducted.
2. The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the Offering
Memorandum and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid,
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
3. Except as set forth in the Offering Memorandum, (A) no options,
warrants or other rights to purchase from the Company or any of its subsidiaries
shares of capital stock or ownership interests in the Company or any subsidiary
are outstanding, (B) no agreements or other obligations to issue, or other
rights to convert, any obligation into, or exchange any securities for, shares
of capital stock or ownership interests in the Company or any subsidiary are
outstanding and (C) no holder of securities of the Company or any subsidiary is
entitled to have such securities registered under a registration statement filed
by the Company pursuant to the Registration Rights Agreement.
4. The Company and each of the Guarantors has all requisite corporate
power and authority to execute and deliver each of the Operative Documents to
which it is a party and to perform its respective obligations thereunder. The
execution, delivery and performance of each of the Operative Documents by the
Company and each of the Guarantors have been duly authorized by all necessary
corporate action on the part of the Company and each of the Guarantors.
5. The Agreement has been duly and validly authorized, executed and
delivered by the Company and each of the Guarantors and, assuming due
authorization, execution and delivery thereof by the Initial Purchasers,
constitutes a legal, valid and binding obligation of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and except that
rights to indemnification and contribution thereunder may be limited by federal
or state securities laws or public policy relating thereto.
6. The Indenture has been duly and validly authorized, executed and
delivered by the Company and each of the Guarantors and, assuming due
authorization, execution and delivery thereof by the Trustee, constitutes a
legal, valid and binding obligation of the Company and each of the Guarantors
enforceable against the Company and each of the Guarantors in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
7. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company and each of the Guarantors
and, assuming due authorization, execution and delivery thereof by the Initial
Purchasers, constitutes a legal, valid and binding obligation of the Company and
each of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity), and
except that rights to indemnification and contribution thereunder may be limited
by federal or state securities laws or public policy relating thereto.
8. The Company and the Guarantors have all requisite power and authority
to enter into the Credit Documents. The Credit Documents have been duly and
validly authorized, executed and delivered by the Company and each of the
Guarantors and, assuming due authorization, execution and delivery thereof by
the other parties thereto, constitutes legal, valid and binding obligations of
the Company and each of the Guarantors enforceable against the Company and each
of the Guarantors in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
9. The Notes are in the form contemplated by the Indenture. The Notes
have been duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Trustee and upon payment and delivery in
accordance with the terms of the Agreement, will constitute legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
10. The issuance of the Exchange Notes has been duly and validly
authorized by the Company, and when executed, issued, authenticated and
delivered in exchange for the
Notes in accordance with the terms of the Registration Rights Agreement, the
Exchange Offer and the Indenture, will constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
11. The Guarantees have been duly authorized, executed and issued by the
respective Guarantors and, assuming due authentication of the Notes by the
Trustee, upon payment and delivery in accordance with the terms of this
Agreement will constitute legal, valid and binding obligations of the Guarantors
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
12. The Exchange Note Guarantees have been duly and validly authorized by
the Guarantors, and when executed, issued and delivered in exchange for the
Guarantees in accordance with the terms of the Registration Rights Agreement,
the Exchange Offer and the Indenture, will constitute legal, valid and binding
obligations of each of the Guarantors enforceable against each of the Guarantors
in accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights and remedies generally, and subject,
as to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
13. The Indenture, the Notes, the Guarantees, the Registration Rights
Agreement and the Credit Documents conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
14. None of the Company or the subsidiaries is in violation of its
certificate of incorporation or bylaws (or similar organizational document), to
such counsel's knowledge, in breach or violation of any statute, judgment,
decree, order, rule or regulation applicable to any such breach or violation
which would not, individually or in the aggregate, have a Material Adverse
Effect, or in breach or default under (nor has any event occurred which, with
notice or passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any material document, agreement
or other instrument known to such counsel (including in any event any of the
foregoing which have been filed by the Company with the Commission), except for
any such breach, default, violation or event which would not, individually or in
the aggregate, have a Material Adverse Effect.
15. The execution, delivery and performance by the Company and each of
the Guarantors of the Operative Documents and the Credit Documents to which it
is a party, the
consummation of the Transactions and compliance by the Company and each of the
Guarantors with the provisions thereof, and the issuance and sale of the Notes
and the Guarantees as provided pursuant to the Agreement, will not conflict
with, constitute a default under or violate (a) any of the terms, conditions or
provisions of the certificate or articles of incorporation or bylaws (or similar
organizational document) of the Company and each of the Guarantors, (b) any of
the terms, conditions or provisions of any material document, agreement or other
instrument to which the Company or any of the Guarantors is a party, (c) any New
York, Delaware corporate or federal law or regulation (other than federal
securities laws, as to which we express no opinion in this paragraph and state
securities or blue sky laws, as to which we express no opinion), or (d) any
judgment, writ, injunction, decree, order or ruling of any court or governmental
authority binding on the Company or any of the Guarantors of which we are aware.
16. No consent, approval, waiver, license or authorization or other
action by or filing with any governmental authority is required in connection
with the execution and delivery by the Company and each of the Guarantors of the
Operative Documents and the Credit Documents to which it is a party or the
consummation by the Company and each of the Guarantors of the Transactions, or
the issuance and sale by the Company of the Notes and the Guarantees as provided
in the Agreement, except for (a) federal securities laws (as to which we express
no opinion in this paragraph) and state securities or blue sky laws (as to which
we express no opinion) and (b) those already obtained and which are in full
force and effect.
17. The Company and its subsidiaries have obtained all Permits necessary
to conduct the businesses now or proposed to be conducted by them as described
in the Offering Memorandum, the lack of which would, individually or in the
aggregate, have a Material Adverse Effect; and each of the Company and its
subsidiaries has fulfilled and performed all of its obligations with respect to
such 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.
18. To the best of such counsel's knowledge, the Company and its
subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by them as
described in the Offering Memorandum, and none of the Company or its
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse Effect.
19. To our knowledge, there are no holders of securities of the Company
or any of the Guarantors who, by reason of the execution by the Company and each
of the Guarantors of the Agreement or the consummation by the Company and each
of the Guarantors of the transactions contemplated thereby, have the right,
pursuant to any material document, agreement or other instrument to which either
the Company or any of the Guarantors is a party, to request or demand that the
Company or any of the Guarantors register under the Securities Act securities
held by them.
20. Assuming (i) the representations of the Initial Purchasers contained
in the Agreement are true, correct and complete and (ii) compliance by the
Initial Purchasers with their covenants set forth in the Agreement, it is not
necessary in connection with the offer, sale and delivery of the Notes to the
Initial Purchasers pursuant to the Agreement or the offer and resales of the
Notes by the Initial Purchasers, in the manner contemplated by the Agreement and
described in the Offering Memorandum, to register the Notes under the Securities
Act or to qualify the Indenture under the Trust Indenture Act.
21. To our knowledge, there are no legal or governmental proceedings
pending or overtly threatened 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, if determined adversely to the Company or any
of its subsidiaries, might have a Material Adverse Effect.
22. To the knowledge of such counsel, there are no legal or governmental
proceedings involving or affecting the Company or its subsidiaries or any of
their respective properties or assets which would be required to be described in
a prospectus pursuant to the Act that are not described in the Offering
Memorandum, nor are there any material contracts or other documents which would
be required to be described in a prospectus pursuant to the Act that are not
described in the Offering Memorandum
23. Neither the consummation of the Transactions nor the sale, issuance,
execution or delivery of the Notes will violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
24. The statements made in the Offering Memorandum under the heading
"Certain U.S. Federal Income Tax Considerations" insofar as such statements
purport to constitute statements of law or legal conclusions are accurate in all
material respects.
25. The statements made in the Offering Memorandum under the captions
"Description of Other Indebtedness and Preferred Stock," "Description of the
Notes," "Business - Government Regulation," "Business - Legal Proceedings,"
"Certain Relationships and Related Party Transactions," "Notice to Investors"
and "Plan of Distribution," in each case insofar as such statements constitute
summaries of legal matters, documents or proceedings referred to therein, fairly
present the information called for which respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to therein
in all material respects.
26. The Company and each of the Guarantors is not and, after giving
effect to the issuance and sale of the Notes in accordance with the terms of the
Agreement and the application of the net proceeds therefrom, will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
27. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date (except for the financial statements, including the
notes thereto, pro forma financial statements and other financial and
statistical data included or incorporated by reference therein, as to which we
express no opinion), contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Securities Act.
28. When the Notes and the Guarantees are issued and delivered pursuant
to the Agreement, no securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Notes or the Guarantees of the
Company or the Guarantors will be listed on any national securities exchange or
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or quoted on an automated inter-dealer quotation system.
We have participated in conferences with the officers and other
representatives of the Company and the Guarantors, representatives of the
independent public accountants for the Company and the Guarantors, the Initial
Purchasers and counsel for the Initial Purchasers in connection with the
preparation of the Offering Memorandum and although we have not independently
verified and are not passing upon and assume no responsibility for the accuracy,
completeness, or fairness of the statements contained in the Offering Memorandum
(except to the extent specified in paragraphs 24 and 25 above), no facts have
come to our attention which lead us to believe that the Offering Memorandum, at
any time from the date thereof through the date of the Closing, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to the financial statements and
related notes, the financial projections, the other financial, statistical and
accounting data included in or appended as exhibits to the Offering Memorandum).