EXHIBIT 1.1
FOUNTAIN VIEW, INC.
11 1/4% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
------------------
April 0, 0000
Xxxxxxx, Xxxxx & Xx.
Xxxxxxx Xxxxx Securities Inc.
Paribas Corporation
Sutro & Co. Incorporated
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Fountain View, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$120,000,000 principal amount of the 11 1/4% Senior Subordinated Notes due 2008
of the Company specified above (the "Notes"). The Notes will be fully and
unconditionally guaranteed (the "Guarantees", and together with the Notes, the
"Securities") as to payment of principal, interest, liquidated damages, if any,
and premium, if any, on a senior subordinated basis, jointly and severally, by
each of the Company's current subsidiaries, which are set forth in Schedule II
attached hereto, and specified future subsidiaries (each a "Guarantor", and
collectively, the "Guarantors"). All references to "subsidiaries" contained
herein, assume the consummation of all transactions contemplated by the
Acquisition Documents (as defined herein) as of the date hereof.
1. The Company and each of the Guarantors, jointly and severally,
represents and warrants to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated March 27, 1998 (the
"Preliminary Offering Circular") and an offering circular, dated April
9, 1998 (the "Offering Circular"), in each case including the
international supplement thereto, have been prepared in connection with
the offering of the Securities. Any reference to the Preliminary
Offering Circular or the Offering Circular shall be deemed to refer to
and include any Additional Issuer Information (as defined in Section
5(f)) furnished by the Company prior to the completion of the
distribution of the Securities. The Preliminary Offering Circular or
the Offering Circular and any amendments or supplements thereto did not
and will not, as of their respective dates, and in the case of the
Offering Circular, as of the Time of Delivery (as defined below),
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however,
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that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by a Purchaser through Xxxxxxx,
Sachs & Co. expressly for use therein;
(b) No registration of the Securities under the Securities Act of
1933, as amended (the "Act"), and no qualification of an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act")
with respect thereto, is required for the offer, sale and initial resale
of the Notes by the Purchasers in the manner contemplated by this
Agreement;
(c) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Offering Circular 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 Circular which would have a material adverse effect on the
current or future financial position or prospects, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"); and, since the respective dates as
of which information is given in the Offering Circular, there has not
been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Offering Circular;
(d) The Company and 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 Circular or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings 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 property and buildings
by the Company and its subsidiaries;
(e) Each of the Company and its subsidiaries has been duly
incorporated or organized as a limited partnership and is validly
existing as a corporation or limited partnership in good standing under
the laws of its jurisdiction of incorporation or organization, with
corporate or partnership power and authority to own its properties and
conduct its business as described in the Offering Circular, and has been
duly qualified as a foreign corporation or partnership for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
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(f) The Company and each of the Guarantors has all requisite
corporate or partnership power and authority to execute, deliver and
perform its respective obligations under this Agreement, the Indenture
(as defined below), the Notes, the Guarantees, the Registration Rights
Agreement (as defined below), the Exchange Notes (as defined below) and
the Exchange Guarantees (as defined below) (collectively, the "Operative
Documents") to which they are, or will be, a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the corporate or partnership power and authority to issue,
sell and deliver the Notes and the Exchange Notes and to issue the
Guarantees and the Exchange Guarantees, as applicable, as provided
herein and therein;
(g) Each of the Preliminary Offering Circular and the Offering
Circular, as of their respective dates, contains the information
specified in Rule 144A(d)(4) under the Act;
(h) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; all of the issued shares of capital stock
or other equity interests of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying shares) are owned, or
upon consummation of the Transactions will be owned, directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims except such as are described in the Offering
Circular; and the Company has no subsidiaries other than the Guarantors
listed on the signature pages hereto;
(i) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors;
(j) The registration rights agreement in the form attached hereto
as Annex II (the "Registration Rights Agreement"), has been duly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered by the Company and each of the Guarantors, will
be the valid and legally 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 as to enforcement,
bankruptcy, reorganization, insolvency or other similar laws affecting
creditors' rights generally or by general principles of equity and, as
to rights of indemnification or contribution, to principles of public
policy or federal or state securities laws relating thereto; pursuant to
the Registration Rights Agreement, the Company will agree to file with
the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein a registration statement under the Act
relating to another series of debt securities and Guarantees of the
Company and the Guarantors, respectively, with terms identical to the
Notes (the "Exchange Notes") and the Guarantees (the "Exchange
Guarantees" and together with the Exchange Notes, the "Exchange
Securities") to be offered in exchange for the Securities (the "Exchange
Offer"), and to the extent required by the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the
Act relating to the resale of the Securities by holders thereof, and, as
provided in the Registration Rights Agreement, to use commercially
reasonable efforts to
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cause such applicable registration statement or registration statements
to be declared effective; and the Registration Rights Agreement will
conform to the description thereof in the Offering Circular;
(k) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture among the Company, the Guarantors and State
Street Bank and Trust Company of California, N.A., as Trustee (the
"Trustee"), under which they are to be issued (the "Indenture"), which
will be substantially in the form previously delivered to you; the
Indenture has been duly authorized and, when executed and delivered by
the Company and the Trustee, the Indenture will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, reorganization, insolvency
and other similar laws relating to or affecting creditors' rights
generally and to general principles of equity; and the Notes and the
Indenture will conform to the descriptions thereof in the Offering
Circular and will be in substantially the form previously delivered to
you;
(l) The Exchange Notes have been duly authorized for issuance by
the Company, and when issued and authenticated in accordance with the
terms of the Indenture and the Registration Rights Agreement, will be
the valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity (whether considered in a proceeding in equity or at
law); and the Exchange Notes, when issued, will conform to the
description thereof in the Offering Circular;
(m) The Guarantees have been duly authorized by each of the
Guarantors and, when executed and delivered in accordance with the terms
of the Indenture and when the Notes have been issued and authenticated
in accordance with the terms of the Indenture and delivered to and paid
for by the Purchasers in accordance with the terms of this Agreement,
will be the valid and legally binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, reorganization, insolvency or other similar laws affecting
creditors' rights generally or by general principles of equity; and the
Guarantees, when issued, will conform to the description thereof in the
Offering Circular;
(n) The Exchange Guarantees have been duly authorized by each of
the Guarantors and, when executed and delivered in accordance with the
terms of the Indenture and when the Exchange Notes are issued and
authenticated in accordance with the terms of the Indenture and the
Registration Rights Agreement, will be the valid and legally binding
obligation of the Guarantors, enforceable against the Guarantors in
accordance with their terms, except as the enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency or other
similar laws affecting creditors' rights generally or by general
principles of
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equity; and the Exchange Guarantees, when issued, will conform to the
description thereof in the Offering Circular;
(o) The Company and each of its subsidiaries, as applicable, has
all requisite corporate or partnership power and authority to execute,
deliver and perform its respective obligations under (i) the credit
agreement (the "New Credit Facility") by and among the Company, Bank of
Montreal and the various other lenders named therein, and (ii) any and
all other agreements and instruments ancillary to or entered into in
connection with the transactions contemplated by the New Credit Facility
(items (i) and (ii) are referred to collectively as the "Credit
Documents"). Each of the Credit Documents has been, or will prior to
the Time of Delivery (as defined in Section 4(a) below) be, duly
authorized by the Company and each of its subsidiaries named therein
and, when duly executed and delivered by the Company and each of its
subsidiaries named therein will be the valid and legally binding
obligation of the Company and each of its subsidiaries named therein,
enforceable against each of them in accordance with its terms, subject,
as to enforcement, to bankruptcy, reorganization, insolvency and other
similar laws relating to or affecting creditors' rights generally and to
general principles of equity. The Company will have at least $11.0
million of borrowings available to it under the New Credit Facility
after giving effect to the Transactions. All representations and
warranties to be made by the Company or any of its subsidiaries under
any of the Credit Documents will be true and correct in all material
respects as of the Time of Delivery as if made at the Time of Delivery;
provided, that any such representations and warranties that speak as of
a specific date shall be deemed to be made as of such date;
(p) The Company and each of its subsidiaries, as applicable, has
all requisite corporate power and authority to execute, deliver and
perform its respective obligations under (i) the Investment Agreement
(the "Investment Agreement"), dated as of March 27, 1998, by and among
the Company, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx,
Heritage Fund II, L.P., Heritage Investors II, L.L.C., Heritage Fund II
Investment Corporation, HFV Holdings, LLC, Nassau Capital Partners II,
L.P., NAS Partners I LLC, Paribas North America, Inc., Phoenix Home Life
Mutual Insurance Company, PMI Mezzanine Fund, L.P., GS Private Equity
Partners, L.P., GS Private Equity Partners Offshore, L.P., and Sutro
Investment Partners V, LLC, (ii) the Agreement and Plan of Merger, dated
as of February 6, 1998 (the "Merger Agreement"), by and among the
Company, FV-SCC Acquisition Corp., Summit Care Corporation and Heritage
Fund II, L.P. and (iii) any and all other agreements and side letters
ancillary to or entered into in connection with the transactions
contemplated by any of the foregoing (items (i), (ii) and (iii) are
referred to collectively as the "Acquisition Documents"). Each of the
Acquisition Documents has been duly authorized, and has been, or prior
to the Time of Delivery of any such Acquisition Document will be,
executed and delivered by the Company and each of its subsidiaries named
therein, and, constitutes or will constitute the valid and legally
binding obligation of the Company and each of its subsidiaries named
therein, enforceable against each of them in accordance with its terms,
subject, as to enforcement, to bankruptcy, reorganization, insolvency
and other similar laws relating to or affecting creditors' rights
generally and to general principles of equity and except that certain
indemnification and contribution
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provisions may be limited by considerations of public policy or federal
or state securities laws relating thereto. All representations and
warranties made by any party under any of the Acquisition Documents,
dated and delivered prior to this Agreement, are true and correct in all
material respects as of the date hereof (except to the extent that any
such representations and warranties are expressly made with respect to a
specific date) and all of the representations and warranties made by any
party under any of the Acquisition Documents to be dated and delivered
after the date of this Agreement will be true and correct in all
material respects as of the date of such Acquisition Documents;
(q) The Company has delivered to the Purchasers true and correct,
executed copies of each of the Acquisition Documents that have been
executed and delivered to date and there have not been, and prior to the
Time of Delivery will not be, any amendments, alterations, modifications
or waivers to any of the Acquisition Documents or the exhibits or
schedules thereto other than those as to which the Purchasers shall
previously have been advised and shall not have reasonably objected in
writing after being furnished a copy thereof. The Company has delivered
to the Purchasers true and correct executed copies of the Credit
Documents, and there have been and prior to the Time of Delivery will
not be any alterations, modifications or waivers to any of such Credit
Documents or the exhibits or schedules thereto other than those as to
which the Purchasers shall previously have been advised and shall not
have reasonably objected in writing after being furnished a copy
thereof. The Acquisition Documents and Credit Documents will conform in
all material respects to the descriptions thereof in the Offering
Circular;
(r) Except as disclosed in the Preliminary Offering Circular and
the Offering Circular, and after giving effect to the transactions
contemplated by the Acquisition Documents, there are no outstanding (i)
securities or obligations of the Company or any of the Guarantors
convertible into or exchangeable for any capital stock of the Company or
any such Guarantor, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any of the Guarantors any such capital
stock or any such convertible or exchangeable securities or obligations,
or (iii) obligations of the Company or any of the Guarantors to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options;
(s) There are no holders of securities of the Company or any of
the Guarantors who, by reason of the execution of this Agreement or any
other Operative Document by the Company or the Guarantors, as the case
may be, or the consummation of the transactions contemplated hereby and
thereby, have the right to request or demand that the Company or any of
the Guarantors register under the Act or analogous foreign laws and
regulations any securities held by them (other than pursuant to the
Registration Rights Agreement or the Investor Registration Rights
Agreement, as defined in the Offering Circular);
(t) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of
the Securities Exchange Act of 1934,
6
as amended (the "Exchange Act"), or any regulation promulgated
thereunder, including, without limitation, Regulations T, U, and X of
the Board of Governors of the Federal Reserve System;
(u) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
(v) Except for certain consents required in connection with the
transactions contemplated by the Acquisition Documents, which will
either be obtained prior to the Time of Delivery or are not material,
the issue and sale of the Securities and the compliance by the Company
and each of the Guarantors with all of the provisions of this Agreement,
each of the other Operative Documents, the Credit Documents and the
Acquisition Documents and the consummation of the transactions herein
and therein contemplated 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 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 action result in any violation of
the provisions of the Certificate of Incorporation, Articles of
Incorporation, Bylaws, or other governing documents, as applicable, of
the Company or any of the Guarantors 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; no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the consummation
by the Company or any of its subsidiaries of the other transactions
contemplated by this Agreement, the other Operative Documents, the
Credit Documents and the Acquisition Documents, except for the filing of
a registration statement pertaining to the Exchange Securities by the
Company and each of the Guarantors with the Commission pursuant to the
Act, the Registration Rights Agreement and Section 5(k) hereof, such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Purchasers
and such filings (all of which have been made) as may be required under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "Xxxx-Xxxxx-Xxxxxx Act"); and the applicable waiting period under
the Xxxx-Xxxxx-Xxxxxx Act has expired or been terminated in accordance
with the provisions thereof without any action by the United States
Department of Justice or Federal Trade Commission to prevent
consummation of any of the foregoing transactions;
(w) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation, Articles of
Incorporation, Bylaws or other governing documents or in default in any
material respect in the performance or observance of any obligation,
covenant or condition contained in any indenture, mortgage, deed
7
of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(x) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions "Offering
Circular Summary--The Transactions", "Certain Relationships and Related
Transactions", "Certain Federal Income Tax Consequences", "Description
of Other Indebtedness" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair in all material respects;
(y) Other than as set forth in the Offering Circular, 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 of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(z) Neither the Company nor any of the Guarantors is, or after
giving effect to the offering and sale of the Securities will be, an
"investment company", or an entity "controlled" by an "investment
company", as such terms are defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(aa) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Act ("Rule 144A")) as securities which
are listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system;
(bb) None of the Company, the Guarantors, or any person acting on
its or their behalf has offered or sold the Securities by means of any
general solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Securities sold outside the
United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of
Rule 902 under the Act and the Company, the Guarantors, any affiliate of
the Company and the Guarantors, and any person acting on its or their
behalf has complied with and will implement the "offering restriction"
within the meaning of such Rule 902;
(cc) Within the preceding six months, none of the Company, the
Guarantors or any other person acting on its or their behalf has offered
or sold to any person any Securities, or any securities of the same or a
similar class as the Securities, other than Securities offered or sold
to the Purchasers hereunder. The Company and the Guarantors will take
reasonable precautions designed to insure that any offer or sale, direct
or indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act) of any Securities or any substantially similar
8
security issued by the Company and the Guarantors, within six months
subsequent to the date on which the distribution of the Securities has
been completed (as notified to the Company by Xxxxxxx, Xxxxx & Co.), is
made under restrictions and other circumstances reasonably designed not
to affect the status of the offer and sale of the Securities in the
United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Act. None of
the Company, the Guarantors or any of its or their affiliates or any
person acting on its or their behalf (other than the Purchasers, as to
whom the Company and the Guarantors make no representation) has engaged
or will engage in any directed selling efforts within the meaning of
Regulation S under the Act with respect to the Notes or the Guarantees;
(dd) The Company and each of the Guarantors maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect thereto;
(ee) The consolidated historical financial statements of the
Company and Summit Care Corporation, together with the notes thereto,
set forth in the Preliminary Offering Circular and the Offering Circular
comply as to form in all material respects with the requirements under
Regulation S-X of the Commission and fairly present the consolidated
financial position of the Company and its subsidiaries and Summit Care
Corporation and its subsidiaries as of the dates indicated and the
results of their operations and their cash flows for the periods
indicated, in accordance with generally accepted accounting principles
consistently applied throughout such periods (except as otherwise
disclosed therein). The pro forma financial statements contained in the
Preliminary Offering Circular and the Offering Circular comply as to
form in all material respects with the requirements of the rules
promulgated under the Act and have been prepared on a basis consistent
with the historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical and proposed transactions
contemplated by this Agreement, the other Operative Documents, the
Credit Documents and the Acquisition Documents. The other financial and
statistical information and data included in the Preliminary Offering
Circular and the Offering Circular, historical and pro forma, are, in
all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company and the Guarantors. The statistical and market-related data
included in the Preliminary Offering Circular and the Offering Circular
are based on or derived from sources which the Company and the
Guarantors believe to be reliable and accurate in all material respects;
(ff) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, and of Summit Care
Corporation and its
9
subsidiaries, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(gg) The Company and each of the Guarantors has complied in all
respects with all laws, regulations and orders applicable to them or
their businesses the violation of which would have a Material Adverse
Effect;
(hh) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, (i) the Company and each of the Guarantors has
all certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "Authorization") of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or required
to engage in the business currently conducted by it in the manner
described in the Offering Circular; (ii) all such Authorizations are
valid and in full force and effect; and (iii) the Company and each of
the Guarantors is in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto;
(ii) The Company and each of the Guarantors owns or possesses or
has the right to use the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
the "Intellectual Property") presently employed by it in connection
with, and material to, individually or in the aggregate, the operation
of the businesses now operated by it, and neither the Company nor any of
the Guarantors has received any notice of infringement of or conflict
with asserted rights of others with respect to the foregoing which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
To the best knowledge of the Company and the Guarantors, the use of such
Intellectual Property in connection with the business and operations of
the Company and the Guarantors does not infringe on the rights of any
person, except as would not, individually or in the aggregate, result in
a Material Adverse Effect;
(jj) All tax returns required to be filed by the Company or any of
the Guarantors in all jurisdictions have been timely and duly filed,
other than those filings being contested in good faith, except where the
failure to so file any such returns could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
There are no tax returns of the Company or any of the Guarantors that
are currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which the Company or any of
the Guarantors has received notice), where the findings of such audit,
if adversely determined, would result in a Material Adverse Effect. All
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided or those currently payable without
penalty or interest;
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(kk) The Company and each of the Guarantors maintains insurance
covering their properties, operations, personnel and businesses which
insures against such losses and risks as is adequate in accordance with
its reasonable business judgment to protect the Company and the
Guarantors and their businesses. Neither the Company nor the Guarantors
has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force at the Time of Delivery;
(ll) Except as disclosed in the Preliminary Offering Circular and
the Offering Circular, there are no business relationships or related
party transactions which would be required to be disclosed therein by
Item 404 of Regulation S-K promulgated under the Act and each business
relationship or related party transaction described therein is a fair
and accurate description of the relationships and transactions so
described in all material respects;
(mm) The Company and each of the Guarantors 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 or any
Guarantor would have any liability; neither the Company nor any of the
Guarantors has incurred or expects to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Section 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 or any Guarantor 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, except, in each case, as would not have a Material
Adverse Effect;
(nn) There is (i) no material unfair labor practice complaint
pending against the Company or any of the Guarantors, or, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement
is so pending against the Company or any of the Guarantors, or, to the
best knowledge of the Company, threatened against any of them, (ii) no
material strike, labor dispute, slowdown or stoppage pending against the
Company or any of the Guarantors nor, to the best knowledge of the
Company and the Guarantors, threatened against the Company or any of the
Guarantors and (iii) to the best knowledge of the Company and the
Guarantors, no union representation question existing with respect to
the employees of the Company or any of the Guarantors and, to the best
knowledge of the Company and the Guarantors, no union organizing
activities are taking place, except, in each case, as would not have a
Material Adverse Effect;
11
(oo) The Company and each of the Guarantors has reviewed the effect
of Environmental Laws (as defined below) and the disposal of hazardous
or toxic substances, wastes, pollutants and contaminants on the
business, assets, operations and properties of the Company and each of
the Guarantors, and identified and evaluated associated costs and
liabilities (including, without limitation, any material capital and
operating expenditures required for clean-up, closure of properties and
compliance with environmental, safety or similar laws or regulations
applicable to it or its business or property relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
all permits, licenses and approvals, all related constraints on
operating activities and all potential liabilities to third parties). On
the basis of such reviews, the Company and the Guarantors have
reasonably concluded that such associated costs and liabilities would
not have a Material Adverse Effect. Neither the Company nor any of the
Guarantors (i) has violated any Environmental Laws, (ii) lacks any
permit, license or other approval required of it under applicable
Environmental Laws or (iii) is violating any term or condition of such
permit, license or approval, which could reasonably be expected to,
either individually or in the aggregate, have a Material Adverse Effect;
(pp) None of the Company, the Guarantors or, to the Company's and
the Guarantors' knowledge, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any
of the Guarantors, has used any corporate funds during the last five
years for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any 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, as amended; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment,
except, in each case, such as would not have a Material Adverse Effect;
(qq) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(rr) Other than as contemplated by or described in this Agreement,
there is no broker, finder or other party that is entitled to receive
from the Company or any of the Guarantors any brokerage or finder's fee
or other fee or commission as a result of any of the transactions
contemplated by this Agreement or any of the Operative Documents; and
(ss) Each certificate signed by any officer of the Company or any
Guarantor and delivered at the Time of Delivery to the Purchasers or
counsel for the Purchasers shall be deemed to be a representation and
warranty by the Company or such Guarantor, as the case may be, to the
Purchasers as to the matters covered thereby.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not
12
jointly, to purchase from the Company, at a purchase price of 97.0% of the
principal amount thereof, the principal amount of Notes (together with the
Guarantees thereof) set forth opposite the name of such Purchaser in Schedule I
hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company and the
Guarantors that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A in transactions meeting the requirements of Rule 144A or
(ii) upon the terms and conditions set forth in Annex I to this Agreement;
(b) It is an institutional "accredited investor" (within the meaning of
Rule 501 of the Act); and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Company
in Federal (same day) funds, by causing DTC to credit the Securities to the
account of Xxxxxxx, Sachs & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co. for
checking at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m.,
New York City time, on April 16, 1998 or such other time and date as Xxxxxxx,
Sachs & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7 hereof, will be delivered at such time and date at the
offices of Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (the "Closing Location"), and the Securities will be delivered
at the Designated Office, all at the Time of Delivery. A meeting will be held
at the Closing Location at 1:00 p.m., New York City time, on the New York
Business Day next preceding the Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of this Section
4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and 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.
13
5. Each of the Company and the Guarantors party hereto, jointly and
severally, agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make no
amendment or any supplement to the Offering Circular which shall be disapproved
by you promptly after reasonable notice thereof; and to furnish you with copies
thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request 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 Securities,
provided that in connection therewith neither the Company nor any Guarantor
shall be required to qualify as a foreign corporation or to file a general
consent to service of process or become subject to taxation in any jurisdiction;
(c) To furnish the Purchasers with six copies of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' reports in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such reports, signed by the accountants, and additional copies
thereof in such quantities as you may from time to time reasonably request, and
if, at any time prior to the expiration of nine months after the date of the
Offering Circular, any event shall have occurred as a result of which the
Offering Circular as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until
the date six months after the Time of Delivery, not to offer, sell contract to
sell or otherwise dispose of, except as provided hereunder any securities of the
Company or any of its subsidiaries that are substantially similar to the
Securities (other than the Exchange Securities pursuant to the Exchange Offer);
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to
time of Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the "Additional
Issuer Information") satisfying the requirements of subsection (d)(4)(i) of Rule
144A under the Act;
14
(g) If requested by you, to use its best efforts to cause the Securities
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail (the foregoing shall
be deemed satisfied by the delivery of Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q);
(i) During a period of five years from the date of the Offering Circular,
to furnish to you copies of all reports or other communications (financial or
other) of the type that would be customarily furnished to public stockholders of
the Company, and to deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the Commission
or any securities exchange on which the Securities or any class of securities of
the Company are listed; and (ii) such additional information concerning the
business and financial condition of the Company and its subsidiaries as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(j) During the period of two years after the Time of Delivery, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule 144
under the Act ("Rule 144")) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of them;
(k) To comply with all terms of the Registration Rights Agreement,
including, without limitation, filing on or prior to 90 days after the Time of
Delivery and using commercially reasonable efforts to cause to be declared or
become effective under the Act, on or prior to 150 days after the Time of
Delivery, a registration statement on Form S-4 providing for the registration of
the Exchange Securities, and the exchange of the Securities for the Exchange
Securities, all in a manner which will permit persons who acquire the Exchange
Securities to resell the Exchange Securities pursuant to Section 4(1) of the
Act; and
(l) To use the net proceeds received by them from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. Each of the Company and the Guarantors party hereto, jointly and
severally, covenant and agree with the several Purchasers that the Company
and/or the Guarantors will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's and the Guarantors' counsel and
accountants in connection with the issue of the Securities and all other
expenses in connection with the preparation, printing and filing of the
Preliminary Offering Circular and the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any agreement
among Purchasers, this Agreement, the Registration Rights Agreement, the
Indenture, the Blue Sky Memoranda, closing documents
15
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
reasonable and customary fees and disbursements of counsel for the Purchasers in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the cost of preparing the Securities; (vi) the fees
and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (vii) any cost incurred in connection with the designation of
the Securities for trading in PORTAL; and (viii) all other costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Purchasers will pay all of their own costs and expenses, including the fees of
their counsel, and transfer taxes on resale of any of the Securities by them.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Guarantors herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company and the Guarantors
shall have performed all of their obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have furnished to
you such opinion or opinions, dated the Time of Delivery, with respect to such
matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass
upon such matters;
(b) Counsel for the Company shall have furnished to you their written
opinions, dated the Time of Delivery, in form and substance satisfactory to you,
to substantially the effect set forth below, with the opinions as to federal and
Delaware law to be provided by Xxxxxx, Hall & Xxxxxxx and the opinions as to
California, Texas and New York Law to be provided by Xxxxxxx, Phleger & Xxxxxxxx
LLP, subject in the case of each such opinion to reasonable and customary
qualifications and assumptions:
(i) The Company and each of the Guarantors is validly existing as a
corporation or limited partnership in good standing under the laws of its
jurisdiction of organization, with corporate or partnership power and
authority to own its properties and conduct its business as described in
the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction (such counsel being entitled to
16
rely in respect of the opinion in this clause upon certificates provided by
the relevant officers of the Secretaries of State in specified
jurisdictions);
(iv) All of the issued shares of capital stock or other equity
interests of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company;
(v) To the best of such counsel's knowledge and other than as set
forth in the Offering Circular, there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which would, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors;
(vii) The Notes have been duly authorized, executed and delivered by
the Company, and constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture;
(viii) The Exchange Notes have been duly authorized by the Company,
and when executed, authenticated and delivered in accordance with the terms
of the Indenture, will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture;
(ix) The Guarantees have been duly authorized, executed and
delivered by each of the Guarantors, and constitute valid and legally
binding obligations of the Guarantors;
(x) The Exchange Guarantees have been duly authorized by each of
the Guarantors, and when issued and delivered and the Exchange Notes have
been executed, authenticated and delivered in accordance with the terms of
the Indenture, will constitute valid and legally binding obligations of the
Guarantors;
(xi) The Indenture has been duly authorized, executed and delivered
by the Company and the Guarantors and constitutes a valid and legally
binding instrument of the Company and the Guarantors, enforceable in
accordance with its terms;
(xii) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities,
the Indenture, the Registration Rights Agreement and this Agreement and
the consummation of the transactions herein and therein contemplated 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 or instrument identified
to such counsel as material to the Company or any of its subsidiaries, nor
will such actions result in any violation of the provisions of the
respective Certificate of
17
Incorporation, Articles of Incorporation, Bylaws or other governing
documents of the Company or its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body known to be
applicable to the Company or any of its subsidiaries or any of their
properties;
(xiii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities by the Company and the
Guarantors or the consummation by the Company or the Guarantors of the
transactions contemplated by this Agreement or the Indenture or the
Registration Rights Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers, and except for
authorizations required to be obtained from the Commission under the
Registration Rights Agreement;
(xiv) The statements set forth in the Offering Circular under the
caption "Description of Notes", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions "Offering
Circular Summary--The Transactions", "Certain Relationships and Related
Transactions", "Certain Federal Income Tax Consequences", "Description of
Other Indebtedness" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
true and accurate summaries thereof in all material respects;
(xv) No registration of the Securities under the Act, and no
qualification of an indenture under the Trust Indenture Act, with respect
thereto, is required for the offer, sale and initial resale of the
Securities by the Purchasers in the manner contemplated by this Agreement
assuming (i) the accuracy of, and compliance with, the Purchasers'
representations and agreements contained in Section 3 and Annex I of this
Agreement, and (ii) the accuracy of, and compliance with, the
representations and agreements of the Company and the Guarantors set forth
in Sections 1(g), 1(aa), 1(bb), 1(cc) and 5 of this Agreement;
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act.
In addition, the opinion of Xxxxxx, Xxxx & Xxxxxxx shall state that
such counsel have participated in conferences with officers and other
representatives of the Company and the Guarantors, representatives of the
independent public accountants for the Company and the Guarantors,
representatives of the Purchasers and their counsel in connection with the
preparation of the Offering Circular and have considered the matters required to
be stated therein and the statements contained therein and, although such
counsel have not independently verified and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of such statements
(except as indicated in clause (xiv) above), on the basis of the foregoing, such
counsel shall confirm that no facts came to their attention that caused them to
believe that the Offering Circular, as of its date or as of the Time of
Delivery, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood
18
that such counsel express no view as to any of the financial statements, the
notes thereto and schedules and other financial and statistical data included in
the Offering Circular);
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Ernst & Young LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you;
(d) (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 Circular 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 Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular 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, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement and in
the Offering Circular;
(e) On or after the date hereof (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) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market
("NASDAQ"); (ii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iii) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering Circular;
or (iv) the occurrence of any material adverse change in the existing,
financial, political or economic conditions in the United States or elsewhere
which, in the judgment of the Representatives, would materially and adversely
affect the financial markets or the markets for Securities and other debt
securities;
(g) The Securities shall have been designated for trading on PORTAL;
(h) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of Offering Circulars on the New York
Business Day next succeeding the date of this Agreement;
19
(i) The Company, the Guarantors and the Trustee shall have entered into
the Indenture and the Purchasers shall have received counterparts, conformed as
executed, thereof.
(j) The Company, the Guarantors and the Purchasers shall have entered into
the Registration Rights Agreement in the form attached hereto as Annex II and
the Purchasers shall have received counterparts, conformed as executed, thereof.
(k) Prior to or simultaneously with the closing of the transactions
contemplated by Section 2 hereof, the Company and the Guarantors shall have
consummated the Merger (as defined in the Offering Circular) and the other
transactions contemplated by the Acquisition Documents to be effective on or
prior to such date, and shall have entered into the New Credit Facility.
(l) Prior to or simultaneously with the closing of the transactions
contemplated by Section 2 hereof, the Company shall have entered into each of
the Employment Agreements (as defined in the Offering Circular) and each of such
Employment Agreements shall be in the form previously agreed to by the
Purchasers and described in the Offering Circular.
(m) Xxxxxx & Xxxxxxx, counsel for the Purchasers, shall have been
furnished with final, executed copies of each of the documents set forth above
and such other documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 7 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(n) Xxxxxx, Hall & Xxxxxxx, and each other counsel for the Company or the
Guarantors, shall have furnished to you copies of all of their opinions, along
with reliance letters addressed to you and dated the Time of Delivery, delivered
in connection with the Credit Documents and the transactions contemplated
thereby;
(o) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company and the Guarantors
satisfactory to you as to the accuracy of the representations and warranties of
the Company and the Guarantors herein at and as of such Time of Delivery, as to
the performance by the Company and the Guarantors of all of their obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in this Section and as to such other matters as you may
reasonably request.
8. (a) The Company and the Guarantors will, jointly and severally,
indemnify and hold harmless each Purchaser against any losses, claims, damages
or liabilities, joint or several, to which such Purchaser may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such action or claim as such expenses are
20
incurred; provided, however, that the Company and the Guarantors shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Purchaser will, severally and not jointly, indemnify and hold
harmless the Company and the Guarantors against any losses, claims, damages or
liabilities to which the Company or the Guarantors may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Offering Circular or the Offering Circular, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Purchaser through Xxxxxxx, Xxxxx &
Co. expressly for use therein; and will reimburse the Company and the Guarantors
for any legal or other expenses reasonably incurred by the Company or the
Guarantors in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any
21
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Guarantors on
the one hand and the Purchasers on the other from the offering of the
Securities. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Guarantors on the one hand
and the Purchasers on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand and
the Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Purchasers, in each case as set forth in the Offering Circular. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantors on the one hand or the Purchasers on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Guarantors and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this Section 8
shall be in addition to any liability which the Company and the Guarantors may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Purchaser within the meaning of the Act; and
the obligations of the Purchasers under this Section 8 shall be in addition to
any liability which the respective Purchasers may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company and the Guarantors and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If
22
within thirty-six hours after such default by any Purchaser you do not arrange
for the purchase of such Securities, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Securities on such terms. In
the event that, within the respective prescribed periods, you notify the Company
that you have so arranged for the purchase of such Securities, or the Company
notifies you that it has so arranged for the purchase of such Securities, you or
the Company shall have the right to postpone the Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Offering Circular, or in any other documents or
arrangements, and the Company agrees to prepare promptly any amendments to the
Offering Circular which in your opinion may thereby be made necessary. The term
"Purchaser" as used in this Agreement shall include any person substituted under
this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Guarantors and the several Purchasers,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, the Guarantors or any officer or director or controlling person of the
Company or the Guarantors, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company and the Guarantors
as provided herein, the Company and the Guarantors will reimburse the Purchasers
through you for all reasonable out-of-pocket expenses approved in
23
writing by you, including fees and disbursements of counsel, reasonably incurred
by the Purchasers in making preparations for the purchase, sale and delivery of
the Securities, but the Company and the Guarantors shall then be under no
further liability to any Purchaser except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, Xxxxxxx, Sachs & Co. shall act on behalf of
each of the Purchasers, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Purchaser made
or given by Xxxxxxx, Xxxxx & Co.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you in care of Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department, with a copy to
Xxxx Xxxxxxxxx, Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx
00000; and if to the Company or any of the Guarantors shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company set forth
in the Offering Circular, Attention: Secretary, with a copy to Xxxxxxx X.X.
Xxxxx, Esq., Xxxxxx Hall & Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000; provided, however, that any notice to a Purchaser pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Purchaser at its address set forth in its Purchasers'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and the
Guarantors and each person who controls the Company, the Guarantors or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
24
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers, the Company
and each of the Guarantors named below. It is understood that your acceptance
of this letter on behalf of each of the Purchasers is pursuant to the authority
set forth in a form of Agreement among Purchasers, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
FOUNTAIN VIEW, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE CALIFORNIA, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE PHARMACY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SKILLED CARE NETWORK
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SNF PHARMACY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
S-1
SUMMIT CARE TEXAS EQUITY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE-TEXAS NO. 2, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE-TEXAS NO. 3, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE MANAGEMENT TEXAS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SUMMIT CARE TEXAS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
FOUNTAIN VIEW HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
AIB CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
S-2
ALEXANDRIA CONVALESCENT HOSPITAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
BIA HOTEL CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
BRIER OAK CONVALESCENT, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
ELMCREST CONVALESCENT HOSPITAL
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
FOUNTAINVIEW CONVALESCENT HOSPITAL
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
FOUNTAIN VIEW MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
RIO HONDO NURSING CENTER
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
S-3
LOCOMOTION HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
LOCOMOTION THERAPY, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
ON-TRACK THERAPY CENTER, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
I.'N O., INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
SYCAMORE PARK CONVALESCENT CENTER
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Securities Inc.
Paribas Corporation
Sutro & Co. Incorporated
By:________________________________________
(Xxxxxxx, Sachs & Co.)
S-4
LOCOMOTION HOLDINGS, INC.
By:______________________________
Name:
Title:
LOCOMOTION THERAPY, INC.
By: _____________________________
Name:
Title:
ON-TRACK THERAPY CENTER, INC.
By: _____________________________
Name:
Title:
I.'N O., INC.
By: _____________________________
Name:
Title:
SYCAMORE PARK CONVALESCENT CENTER
By:______________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx Securities Inc.
Paribas Corporation
Sutro & Co. Incorporated
By: /s/ Xxxxxxx, Sachs & Co.
------------------------------------
(Xxxxxxx, Xxxxx & Co.)
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- --------------
Xxxxxxx, Sachs & Co........................................ $ 71,667,000
Xxxxxxx Xxxxx Securities Inc............................... 29,667,000
Paribas Corporation........................................ 17,666,000
Sutro & Co. Incorporated................................... 1,000,000
--------------
Total................................................... $120,000,000
SCHEDULE II
GUARANTORS
Summit Care Corporation, a California corporation
Summit Care-California, Inc., a California corporation
Summit Care Pharmacy, Inc., a California corporation
Skilled Care Network, a California corporation
Summit Care Texas Equity, Inc., a California corporation
AIB Corp., a California corporation
Alexandria Convalescent Hospital, Inc., a California corporation
BIA Hotel Corp., a California corporation
Brier Oak Convalescent, Inc., a California corporation
Elmcrest Convalescent Hospital, a California corporation
Fountainview Convalescent Hospital, a California corporation
Fountain View Management, Inc., a California corporation
Rio Honda Nursing Center, a California corporation
On-Track Therapy Center, Inc., a California corporation
I.'N O., Inc., a California corporation
Sycamore Park Convalescent Hospital, a California corporation
SNF Pharmacy, Inc., a California corporation
Summit Care-Texas No. 2, Inc., a Texas corporation
Summit Care-Texas No. 3, Inc., a Texas corporation
Summit Care Management Texas, Inc., a Texas corporation
Summit Care Texas, L.P., a Texas limited partnership
Fountain View Holdings, Inc., a Delaware corporation
Locomotion Holdings, Inc., a Delaware corporation
Locomotion Therapy, Inc., a Delaware corporation
ANNEX I
TERMS AND CONDITIONS OF SALES
UNDER REGULATION S UNDER THE ACT
(1) The Securities have not been and will not be registered under the 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 Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A or pursuant to Paragraph 2 of this Annex I under the
Act. Accordingly, each Purchaser agrees that neither it, its affiliates nor any
persons acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and it and they have complied
and will comply with the offering restrictions requirement of Regulation S.
Each Purchaser agrees that, at or prior to confirmation of sale of Securities
(other than a sale pursuant to Rule 144A) or pursuant to Paragraph 2 of this
Annex I, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "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 and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only
Annex I-1
issue or pass on in the United Kingdom any document received by it in connection
with the issuance of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Xxxxx & Co.'s express written consent and then only at its own
risk and expense.
Annex I-2
