EXHIBIT 1.1
Vicar Operating, Inc.
9.875% Senior Subordinated Notes due 2009
unconditionally guaranteed as to the
payment of principal, premium,
if any, and interest by
the Guarantors listed on Schedule I hereto
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PURCHASE AGREEMENT
November 20, 2001
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Vicar Operating, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Xxxxxxx, Sachs & Co. (the "Purchaser") an aggregate of
$170,000,000 principal amount of the Senior Subordinated Notes of the Company
specified above (the "Securities"). The Securities will be unconditionally
guaranteed (the "Guarantees"), on a joint and several basis, by the Guarantors
named in Schedule 1 hereto (the "Guarantors" and, together with the Company, the
"Issuers") as provided for in the Indenture (as defined below) and, unless the
context otherwise requires, any reference to the "Securities" shall include a
reference to the related Guarantees.
The Company is a wholly owned subsidiary of VCA Antech, Inc., a Delaware
corporation ("Holdings"). Holdings will be a Guarantor under the Indenture.
1. The Issuers, jointly and severally, represent and warrant to, and agree
with, the Purchaser that:
(a) A preliminary offering circular, dated October 31, 2001 (the
"Preliminary Offering Circular"), and an offering circular, dated November
20, 2001 (the "Offering Circular"), 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 Issuers prior to the completion of the distribution of the Securities.
The Preliminary Offering Circular and the Offering Circular and any
amendments or supplements thereto did not and will not, as of their
respective dates,
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, 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 the Purchaser expressly
for use therein;
(b) None of Holdings, the Company nor any of the Company's
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; 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 Holdings, the Company or any of the
Company's 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 Holdings, the Company and the Company's
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular;
(c) Holdings, the Company and the Company's 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 Holdings, the Company and the Company's subsidiaries; and
any real property and buildings held under lease by Holdings, the Company
and the Company's 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 the Company's subsidiaries;
(d) Each of the Issuers and each "significant subsidiary" of the
Company (as such term is defined in Rule 1.02 of Regulation S-X) (each, a
"Significant Subsidiary") that is not a Guarantor (such Significant
Subsidiaries, together with the Issuers, the "VCA Entities") has been duly
incorporated or, in the case of a limited partnership or limited liability
company, formed, and is validly existing as a corporation, partnership or
limited liability company in good standing under the laws of the
jurisdiction of its incorporation or formation, with power and authority
(corporate, limited partnership or limited liability company and other) to
own its properties and conduct its business as described in the Offering
Circular and has been duly qualified as a foreign corporation, partnership
or limited liability company 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, except
such as would not reasonably be expected to have, individually or in the
aggregate, a material adverse
PAGE 2
effect on (i) the current and future financial position, stockholders'
equity, results of operations of the Issuers and their subsidiaries taken
as a whole or (ii) the ability of the Issuers to perform their obligations
under this Agreement, the Securities, the Indenture or the Exchange and
Registration Rights Agreement (a "Material Adverse Effect");
(e) Holdings has an authorized capitalization as set forth in the
Offering Circular under the caption "Capitalization;" the authorized
capital stock of the Company is 1,000 shares of common stock, of which 100
shares are outstanding and are owned directly by Holdings (and such shares
of common stock of the Company are the only asset of Holdings); all of the
issued shares of Holdings and the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and, except as
set forth in the Offering Circular, are free and clear of all liens,
encumbrances, equities or claims; and all of the issued shares of capital
stock or membership interests of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable
and, except as set forth in the Offering Circular, are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; no wholly owned subsidiary of Holdings (other than (i)
the Company or (ii) a subsidiary of Holdings for which articles of
dissolution (or similar documents) have been filed in such subsidiary's
jurisdiction of incorporation or organization) is not a Guarantor;
(f) The Securities have been duly authorized by the Issuers and, when
duly authenticated, issued and delivered pursuant to this Agreement, will
have been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Issuers entitled to the benefits
provided by the indenture to be dated as of November 27, 2001 (the
"Indenture") among the Issuers and Chase Manhattan Bank and Trust Company,
National Association, as trustee (the "Trustee"), under which they are to
be issued, which will be substantially in the form previously delivered to
you, enforceable against the Issuers in accordance with their terms,
subject to (i) bankruptcy, insolvency, receivership, reorganization and
other laws relating to or affecting creditors' rights and (ii) general
equity principles whether addressed in a proceeding in equity or at law
(the matters summarized in clauses (i) and (ii) collectively, the
"Enforceability Exceptions"); the Indenture has been duly authorized by the
Issuers and, when executed and delivered by the Issuers, the Indenture will
constitute a valid and legally binding obligation of the Issuers,
enforceable against the Issuers in accordance with its terms, subject, to
the Enforceability Exceptions and the Securities and the Indenture will
conform in all material respects, to the descriptions thereof in the
Offering Circular and will be in substantially the form previously
delivered to you;
(g) The Exchange and Registration Rights Agreement, dated as of the
Time of Delivery (as defined herein), among the Issuers and the Purchaser
(the "Exchange and Registration Rights Agreement") has been duly
authorized, executed and delivered by each of the Issuers and constitutes a
valid and legally binding obligation of each of the Issuers, enforceable in
accordance with its terms, subject to the Enforceability Exceptions and to
limitations arising under law or public policy on the enforceability of
indemnity, contribution and similar claims; and the Exchange and
PAGE 3
Registration Rights Agreement will conform in all material respects to the
description thereof in the Offering Circular and will be substantially in
the form previously delivered to you;
(h) The Exchange Securities (as defined in the Exchange and
Registration Rights Agreement) have been duly authorized by each of the
Issuers and, when executed, authenticated, issued and delivered in
accordance with the Indenture and the Exchange and Registration Rights
Agreement, will constitute valid and legally binding obligations of each of
the Issuers, entitled to the benefits provided by the Indenture, under
which they are to be issued, and enforceable against each of the Issuers in
accordance with their terms, subject to the Enforceability Exceptions;
(i) 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
United States Securities Exchange Act of 1934, 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;
(j) Prior to the date hereof, no VCA Entity nor any affiliate of a VCA
Entity 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;
(k) The issue and sale of the Securities and the compliance by the
Issuers with all of the provisions of the Securities, the Indenture, the
Exchange and Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will not
(i) 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 any VCA
Entity is a party or by which any VCA Entity is bound or to which any of
the property or assets of any VCA Entity is subject, (ii) violate any
provision of the Certificate of Incorporation or By-laws or similar
governing documents of Holdings or the Company or any of the Company's
subsidiaries or (iii) violate any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over any
VCA Entity or any of their properties except, in the case of clauses (i)
and (iii) of this paragraph, where such conflicts, breaches, violations or
defaults would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and 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 Issuers of the transactions
contemplated by this Agreement, the Exchange and Registration Rights
Agreement or the Indenture, except for the filing of a registration
statement by the Issuers with the Securities and Exchange Commission (the
"Commission") pursuant to the United States Securities Act of 1933, as
amended (the "Act"), and 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 Purchaser;
PAGE 4
(l) No VCA Entity is (i) in violation of its Certificate of
Incorporation or By-laws or other similar governing documents or (ii) in
default in the performance or observance of any obligation, covenant or
condition contained in any indenture, mortgage, deed 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 except, in the case of
clause (ii) of this paragraph, where such default would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect;
(m) 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 "Certain
Federal Income Tax Consequences" and "Underwriting," insofar as they
purports to summarize the provisions of the laws and documents referred to
therein fairly and accurately summarize the subject matter thereof in all
material respects;
(n) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which Holdings or the Company
or any of the Company's subsidiaries is a party or of which any property of
Holdings, the Company or any of the Company's subsidiaries is the subject
which, if determined adversely to Holdings or the Company or any of the
Company's 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;
(o) 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) as any other securities of the Issuers 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;
(p) None of Holdings, the Company nor any of the Company's
subsidiaries is, nor after giving effect to the offering and sale of the
Securities will be, an "investment company," as such term is defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(q) Neither the Company nor any person acting on its 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, any affiliate of the Company and any person acting on its or their
behalf has complied with and will implement the "offering restrictions"
within the meaning of such Rule 902;
(r) Within the preceding six months, neither the Company nor any other
person acting on behalf of the Company 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 Purchaser
hereunder. The Company will take
PAGE 5
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 security
issued by the Company, 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;
(s) 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;
(t) The financial statements included in the Offering Circular present
fairly in all material respects the financial position of Holdings and its
consolidated subsidiaries as of the dates shown and their results of
operations, changes in stockholders' equity and cash flows for the periods
shown, and such financial statements have been prepared in conformity in
all material respects with the generally accepted accounting principles in
the United States applied on a consistent basis. The information set forth
under the captions "Offering Circular Summary-- Summary Consolidated
Financial Data" and "Selected Historical Consolidated Financial Data"
included in the Offering Circular present fairly the information set forth
therein on a basis consistent in all material respects with that of the
audited financial statements of Holdings and its consolidated subsidiaries.
The ratios of earnings to fixed charges set forth in the Offering Circular
under the caption "Selected Historical Consolidated Financial Data" have
been calculated in compliance with item 503(d) of Regulation S-K;
(u) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of Holdings and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(v) Holdings, the Company and the Company's subsidiaries possess all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and have made all declarations and filings with, all
federal, state, local and other governmental authorities, and all courts
and other tribunals, presently required or necessary to own or lease, as
the case may be, and to operate their respective properties and to carry on
their respective businesses as now or proposed to be conducted as set forth
in the Offering Circular ("Permits"), except where the failure to obtain
such Permits (by possession, declaration or filing) would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect;
(w) Except as described in the Offering Circular (A) Holdings, the
Company and each of the Company's subsidiaries is in compliance with and
not subject to any known liability under applicable Environmental Laws (as
defined below), (B) Holdings, the Company and each of the Company's
subsidiaries has made all filings and provided all notices required under
any applicable Environmental Law, and has, and is in compliance with, all
Permits required under any applicable Environmental
PAGE 6
Laws and each of them is in full force and effect, (C) to the best
knowledge of the Company, there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or
threatened against Holdings, the Company or any of the Company's
subsidiaries under any Environmental Law, (D) no lien, charge, encumbrance
or restriction has been recorded under any Environmental Law with respect
to any assets, facility or property owned or leased by Holdings, the
Company or any of the Company's subsidiaries, (E) none of Holdings, the
Company or any of the Company's subsidiaries has received written notice
that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or any state "superfund" law, (F) no property
or facility of Holdings, the Company or any of the Company's subsidiaries
is listed or, to the best knowledge of the Company, proposed for listing on
the National Priorities List under CERCLA, except such as would not
reasonably be expected to have, individually and in the aggregate, a
Material Adverse Effect;
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, provincial, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions, discharges,
releases or threatened releases of hazardous materials into the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of hazardous materials, and (iii) underground and aboveground
storage tanks and related piping, and emissions, discharges, releases or
threatened releases therefrom;
(x) There is no strike or material labor dispute, slowdown or work
stoppage with the employees of Holdings, the Company or any of the
Company's subsidiaries which is pending or, to the best knowledge of the
Company, threatened;
(y) Holdings, the Company and the Company's subsidiaries have filed
all federal, state, local and foreign tax returns which have been required
to be filed except where the failure to so file such returns would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and has paid all taxes shown thereon and all
assessments received by it to the extent that such taxes have become due
and are not being contested in good faith; and there is no tax deficiency
which has been or might reasonably be expected to be asserted or threatened
against Holdings, the Company or any of the Company's subsidiaries that
could result, individually or in the aggregate, in a Material Adverse
Effect;
(z) Each of Holdings, the Company and the Company's subsidiaries
carries insurance (including self-insurance, if any) in such amounts and
covering such risks as in its reasonable determination is adequate for the
conduct of its business and the value of its properties;
PAGE 7
(aa) Except as described in the Offering Circular, none of Holdings,
the Company nor any of the Company's subsidiaries has incurred any
liability for any prohibited transaction or accumulated funding deficiency
or any complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which
Holdings, the Company or any of the Company's subsidiaries makes or ever
has made a contribution and in which any employee of Holdings, the Company
or any such subsidiary is or has ever been a participant, which would,
individually or in the aggregate, have a material adverse effect. With
respect to such plans, each of Holdings, the Company and the Company's
subsidiaries is in compliance in all respects with all applicable
provisions of ERISA, except where the failure to so comply would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
(bb) Assuming that the representations and warranties of the Purchaser
contained in Section 3 and Annex I are true and correct and that the
Purchaser complies with its agreements contained in Section 3 and Annex I,
it is not necessary in connection with the offer, sale and delivery of the
Securities to the Purchaser or the reoffer and resale by the Purchaser in
the manner contemplated by this Agreement and the Offering Circular to
register the Securities under the Act or to qualify the Indenture in
respect of the Securities under the United States Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); and
(cc) The laboratory internal revenue growth percentage figures
included in the Offering Circular are computed by the Company in the manner
set forth in the Offering Circular under the caption "Summary Consolidated
Financial Data," footnote 5, and are based upon estimates and assumptions
all of which, taken as a whole, management of the Company believes to be
reasonable. In addition, management of the Company has no reason to believe
that the sources from which the pre-acquisition historical laboratory
revenue information provided to the Company by the sellers of the
applicable laboratories and used by the Company in determining laboratory
revenue of acquired laboratories are not reliable, reasonable and accurate.
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to the Purchaser, and, subject to the terms and conditions
herein set forth, the Purchaser agrees to purchase from the Company, at a
purchase price of 97.0% of the principal amount thereof, plus accrued interest,
if any, from November 27, 2001 to the Time of Delivery (as defined below),
$170,000,000 aggregate principal amount of Securities.
3. Upon the authorization by you of the release of the Securities, the
Purchaser proposes to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and the
Purchaser hereby represents and warrants to, and agrees with, the Company that:
(a) It will offer and sell the Securities only to: persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A;
PAGE 8
(b) It is an "accredited investor" (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 the Purchaser hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to
Xxxxxxx, Xxxxx & Co., through the facilities of The Depository Trust Company
("DTC"), for the account of the Purchaser, against payment by or on behalf of
the Purchaser of the purchase price therefor by wire transfer, payable to the
order of the Company in Federal (same day) funds. The Company will cause the
certificates representing the Securities to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery at the office
of DTC or its designated custodian (the "Designated Office"). The Securities to
be purchased by the 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 DTC or its designated custodian. The Company will
deliver the Securities to Xxxxxxx, Sachs & Co. by causing DTC to credit the
Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The time and date of
such delivery and payment shall be 12:00 p.m., New York City time, on November
27, 2001 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 Purchaser
pursuant to Section 7(h) hereof, will be delivered at such time and date at the
offices of Akin, Gump, Strauss, Xxxxx & Xxxx, LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxx
Xxxxxxx, Xxxxxxxxxx (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 9:00 a.m., Pacific time, on the California
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, "California Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in
California are generally authorized or obligated by law or executive order to
close.
5. The Issuers, jointly and severally, agree with the Purchaser:
(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;
PAGE 9
(b) Promptly from time to time to take such commercially reasonable
action as you may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions within the United States 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 no Issuer shall be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Purchaser with two copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of
the Company with the independent accountants' report(s) in the Offering
Circular, and any amendment or supplement containing amendments to the
financial statements covered by such report(s), signed by the accountants,
and additional written and electronic 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 the Purchaser and to
any dealer in securities as many written and electronic 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 any Issuer that are substantially similar to the Securities;
(e) Not to be or become, at any time prior to the expiration of two
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 is 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;
(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.;
PAGE 10
(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
Holdings 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), to make available to its
stockholders consolidated summary financial information of Holdings and its
subsidiaries for such quarter in reasonable detail;
(i) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of Holdings or the Company
generally, 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 Holdings or the Company is listed; and (ii) such
additional information concerning the business and financial condition of
Holdings or the Company as you may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of Holdings, the Company and the Company's subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission or furnished by Holdings or the Company to the Trustee or to the
holders of the Securities pursuant to the Indenture or the Trust Indenture
Act;
(j) During a period of two years after the Time of Delivery, the
Company will not resell, and will use its reasonable best efforts to
prevent any of its "affiliates" (as defined in Rule 144 under the Act)
from, reselling any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them;
(k) To use the net proceeds received by it 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. The Issuers, jointly and severally, covenant and agree with the
Purchaser to pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Issuers' 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 Purchaser and dealers; (ii) the cost of
printing or producing this Agreement, the Indenture, the Blue Sky and Legal
Investment Memoranda, closing documents (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 fees and disbursements of counsel for the
Purchaser 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
PAGE 11
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 10 hereof, the
Purchaser will pay all of its own costs and expenses, including the fees of its
counsel, transfer taxes on resale of any of the Securities by it, and any
advertising expenses connected with any offers it may make.
7. The obligations of the Purchaser hereunder shall be subject, in its
discretion, to the condition that all representations and warranties and other
statements of the Issuers herein are, at and as of the Time of Delivery, true
and correct, the condition that the Issuers shall have performed all of their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Purchaser, shall have
furnished to you its 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 Issuers1 shall have furnished to you their written
opinions, dated the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) Each of Holdings, the Company and any Significant Subsidiary
of the Company has been duly incorporated or, in the case of a limited
partnership or limited liability company, formed and each of the
Issuers is validly existing as a corporation, partnership or limited
liability company in good standing under the laws of the jurisdiction
of its incorporation or formation, with power and authority
(corporate, partnership or limited liability company and other) to own
its properties and conduct its business as described in the Offering
Circular and has been duly qualified as a foreign corporation,
partnership or limited liability company 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 has any
permanently located employees, except where the failure to be so
qualified and in good standing would not have a Material Adverse
Effect (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Issuers, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
------------------------------
1 To be appropriately divided between Irell & Xxxxxxx LLP and Akin, Gump,
Strauss, Xxxxx & Xxxx, LLP.
PAGE 12
(ii) Holdings has an authorized capitalization as set forth in
the Offering Circular; the authorized capital stock of the Company is
1,000 shares of common stock, of which 100 shares are outstanding and
are owned directly by Holdings; and all of the issued shares of
capital stock of each of Holdings and the Company have been duly and
validly authorized and issued and are fully paid and non-assessable
and, except as set forth in the Offering Circular, are free and clear
of all liens, encumbrances, equities or claims created pursuant to any
material contract to which any of the Issuers is a party or, to the
knowledge of such counsel, all other liens, encumbrances, equities or
claims;
(iii) All of the issued shares of capital stock or membership
interests of each Significant Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable,
and (except for directors' qualifying shares and except as otherwise
set forth in the Offering Circular) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates);
(iv) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings
pending to which any of the Issuers is a party or of which any
property of the Issuers or any of the Issuers is the subject; and, to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(v) The Purchase Agreement has been duly authorized, executed and
delivered by each of the Issuers;
(vi) The 9.875% Senior Subordinated Notes due 2009 (the "Notes")
have been duly authorized by the Company (including any temporary
global Note), and the Guarantees have been duly authorized by the
Guarantors, and the Notes, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and
paid for by the Purchaser in accordance with the terms of the Purchase
Agreement, will be valid and legally binding obligations of the
Company, and the Guarantees will be valid and legally binding
obligations of the Guarantors, entitled to the benefits provided by
the Indenture and enforceable against the Issuers, as applicable, in
accordance with their terms, subject to the Enforceability Exceptions;
and the Notes, the Guarantees and the Indenture conform in all
material respects to the descriptions thereof in the Offering
Circular;
(vii) The Indenture has been duly authorized, executed and
delivered by the Issuers and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject to the
Enforceability
PAGE 13
Exceptions and to limitations arising under law or public policy on
the enforceability of the Trustee's rights to indemnity and similar
claims;
(viii) The Exchange and Registration Rights Agreement has been
duly authorized, executed and delivered by each of the Issuers and
constitutes a valid and legally binding agreement of each of the
Issuers, enforceable in accordance with its terms, subject to the
Enforceability Exceptions and to limitations arising under law or
public policy on the enforceability of indemnity, contribution and
similar claims;
(ix) The notes to be issued in exchange for the Notes as
contemplated by the Exchange and Registration Rights Agreement (the
"Exchange Notes") have been duly authorized by the Company, and the
guarantees to be issued in exchange for the Guarantees as contemplated
by the Exchange and Registration Rights Agreement (the "Exchange
Guarantees") have been duly authorized by the Guarantors, and, the
Exchange Notes when executed, authenticated, issued and delivered in
accordance with the Indenture and the Exchange and Registration Rights
Agreement, will constitute valid and legally binding obligations of
the Company, and the Exchange Guarantees will be valid and legally
binding obligations of the Guarantors, entitled generally to the
benefits provided by the Indenture, under which they are to be issued,
and enforceable against each of the Issuers, as applicable, in
accordance with their terms, subject to the Enforceability Exceptions;
(x) The issue and sale of the Notes by the Company, and the
compliance by the Issuers with all of the provisions of the Notes, the
Guarantees, the Indenture, the Exchange and Registration Rights
Agreement and the Purchase Agreement and the consummation of the
transactions herein and therein contemplated will not, to the best of
such counsel's knowledge, 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 Issuers taken as a whole, and listed on a schedule to
such counsel's opinion to which Holdings or the Company or any of the
Company's subsidiaries is a party or by which Holdings or the Company
or any of the Company's subsidiaries is bound or to which any of the
property or assets of Holdings, the Company or any of the Company's
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the Certificate of Incorporation or By-laws or
similar governing documents of any Issuer or any statute or any order
that is known to such counsel, rule or regulation of any court or
governmental agency or body having jurisdiction over any Issuer or any
of their properties, in each case, that in such counsel's experience
are customarily applicable to transactions such as those contemplated
by the purchase and distribution of the Securities by the Purchaser;
PAGE 14
(xi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
that in such counsel's experience are customarily applicable to
transactions such as those contemplated by the purchase and
distribution of the Securities by the Purchaser is required for the
issue and sale of the Securities or the consummation by the Issuers of
the transactions contemplated by the Purchase Agreement or the
Indenture, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws (and, in the case of the exchange of
securities as contemplated by the Exchange and Registration Rights
Agreement, the Act) in connection with the purchase and distribution
of the Securities by the Purchaser and such consents, approvals,
authorizations, registrations and qualifications as have already been
obtained;
(xii) 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 the Exchange and
Registration Rights Agreement, and under the captions "Description of
Certain Indebtedness and Preferred Stock," "Certain Federal Income Tax
Consequences" and "Underwriting," insofar as they purport to summarize
the provisions of the laws and documents referred to therein, fairly
and accurately summarize the subject matter thereof in all material
respects;
(xiii) Assuming that the representations and warranties of the
Issuers contained in Section 1 and the representations and warranties
of the Purchaser contained in Section 3 are true and correct and that
the Purchaser complies with its agreements contained in Section 3, no
registration of the Securities under the Act, and no qualification of
an indenture under the United States Trust Indenture Act of 1939 with
respect thereto, is required for the offer, sale and initial resale of
the Securities by the Purchaser in the manner contemplated by the
Purchase Agreement (it being understood that such counsel need proffer
no opinion as to any subsequent resale);
(xiv) None of the Issuers is an "investment company," as such
term is defined in the Investment Company Act;
(xv) None of the Issuers is in violation of its Certificate of
Incorporation, By-laws or similar governing documents or, except as
disclosed in the Offering Circular, in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any bond, debenture, note or any other evidence
of indebtedness, indenture, mortgage, deed 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; and
(xvi) The statements set forth in the Offering Circular under the
caption "Business-Government Regulation," "Business-Animal
Hospitals-Ownership Limitations," "Business-Legal Proceedings,"
"Management" and "Related Party Transactions" insofar as they purport
to describe laws, legal
PAGE 15
proceedings, legal matters and documents fairly and accurately
summarize the subject matter thereof in all material respects.
In addition, Akin, Gump, Strauss, Xxxxx & Xxxx, LLP shall state that they
have participated in discussions with your representatives, representatives of
the Issuers and their counsel and independent public accountants concerning the
preparation of the Offering Circular. Such counsel shall state that, although
they are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of any of the statements in the Offering Circular
(except to the extent specified elsewhere in such letter or with reference to
such counsel), no facts have come to their attention that lead such counsel to
believe that the Offering Circular (other than the financial statements and
other financial data contained therein as to which such counsel need express no
belief), on the date of such Offering Circular and 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 necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(c) On the date of the Offering Circular prior to the execution of
this Agreement, and also at the Time of Delivery, Xxxxxx Xxxxxxxx LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof in form and substance satisfactory to you, to the effect
set forth in Annex I hereto;
(d) (i) None of Holdings, the Company or any of the Company's
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
Holdings, the Company or any of the Company's 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 Holdings, the Company and the Company's, 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 Purchaser so material and adverse as to make it impracticable or
inadvisable to proceed with the sale 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 Holdings' or the Company's debt securities or
Holdings' preferred stock 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 Holdings' or the Company's debt
securities or Holdings' preferred stock;
(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
PAGE 16
the New York Stock Exchange, Nasdaq or in the over-the-counter market; (ii)
a suspension or material limitation in any trading in the Company's
securities on the New York Stock Exchange, Nasdaq or in the
over-the-counter market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war; or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere if the effect of any such
event specified in clause (iii), (iv) or (v) in the judgment of the
Purchaser makes it impracticable or inadvisable to proceed with the sale or
the delivery of the Securities on the terms and in the manner contemplated
in this Agreement and in the Offering Circular;
(g) The Securities have been designated for trading on PORTAL;
(h) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of each of the Issuers
satisfactory to you as to the accuracy of the representations and
warranties of the Issuers herein at and as of such Time of Delivery, as to
the performance by the Issuers of all of their obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (d) and (e) of this Section and as to such other matters as
you may reasonably request;
(i) Holdings shall have obtained the requisite amendment and/or
waiver, as applicable, from the holders of its 15.5% Senior Notes due 2010
as of the Time of Delivery on terms previously disclosed to the Purchaser;
(j) The Company shall have obtained the requisite amendment and/or
waiver, as applicable, from the holders of its 13.5% Senior Subordinated
Notes due 2010 as of the Time of Delivery on terms previously disclosed to
the Purchaser;
(k) The Company shall have obtained the requisite amendment to the
Credit and Guaranty Agreement dated as of September 20, 2000 as of the Time
of Delivery on terms previously disclosed to the Purchaser;
(l) The Purchaser shall have received the Exchange and Registration
Rights Agreement executed by the Company and the Guarantors and such
agreement shall be in full force and effect at all times from and after the
Time of Delivery; and
(m) Holdings shall have consummated its initial public offering of
equity securities as of the Time of Delivery on terms previously disclosed
to the Purchaser.
8. (a) The Issuers, jointly and severally, will indemnify and hold harmless
the 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
PAGE 17
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 the 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
incurred; PROVIDED, HOWEVER, that the Issuers 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 the Purchaser expressly for
use therein.
(b) The Purchaser will indemnify and hold harmless each Issuer against any
losses, claims, damages or liabilities to which such Issuer 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 the Purchaser expressly for use
therein; and will reimburse each Issuer for any legal or other expenses
reasonably incurred by such Issuer 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
PAGE 18
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 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 Issuers on the one hand and the Purchaser 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 Issuers on the one hand and
the Purchaser 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 Issuers on the one hand and the Purchaser 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 Issuers bear to the total
underwriting discounts and commissions received by the Purchaser, 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 Issuers on the one hand or the Purchaser
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Issuers
and the Purchaser agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation 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), the
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities purchased 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.
(e) The obligations of the Issuers under this Section 8 shall be in
addition to any liability which the Issuers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Purchaser within the meaning of the Act; and the obligations of the Purchaser
under this Section 8 shall be in addition to any liability which the Purchaser
may otherwise have and shall extend, upon the same terms and
PAGE 19
conditions, to each officer and director of the Issuers and to each person, if
any, who controls any Issuer within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties and
other statements of the Issuers and the Purchaser, 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 the Purchaser or any controlling person of the Purchaser, or any Issuer, or
any officer or director or controlling person of any Issuer, and shall survive
delivery of and payment for the Securities.
10. If this Agreement shall be terminated by fault of the Purchaser, the
Issuers shall not then be under any liability to the 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 Issuers as provided herein,
the Issuers, jointly and severally, agree to reimburse the Purchaser for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchaser in making
preparations for the purchase, sale and delivery of the Securities, but the
Issuers shall then be under no further liability to the Purchaser except as
provided in Sections 6 and 8 hereof.
11. All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchaser shall be delivered or sent by mail, telex or
facsimile transmission to you, Xxxxxxx, Xxxxx & Co., at 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department, with a copy to Xxxxxxx
X. Xxxxxxxx, Esq., Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000; and if to the Issuers 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. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchaser, the Issuers and, to the extent provided in Sections 8 and 9
hereof, the officers and directors of the Issuers and each person who controls
any Issuer or the 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 the Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15. 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.
16. The Company is authorized, subject to applicable law, to disclose any
and all aspects of this potential transaction that are necessary to support any
U.S. federal
PAGE 20
income tax benefits expected to be claimed with respect to such transaction,
without the Purchaser imposing any limitation of any kind.
PAGE 21
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
this letter and such acceptance hereof shall constitute a binding agreement
between the Purchaser and each of the Issuers.
Very truly yours,
VICAR OPERATING, INC.
By: /S/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
VCA ANTECH, INC.
By: /S/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
SUBSIDIARY GUARANTORS:
AAH MERGER CORPORATION
ACADEMY ANIMAL, INC.
XXXXXXXX ANIMAL HOSPITAL, INC.
ANIMAL CLINIC OF SANTA XXXX, INC.
BERWYN VETERINARIAN HOSPITAL, INC.
ANIMAL CENTER, INC.
CLARMAR ANIMAL HOSPITAL, INC.
PAGE S-1
CACOOSING ANIMAL HOSPITAL, LTD.
XXXXXXXX VETERINARY CLINIC, INC.
DIAGNOSTIC VETERINARY SERVICE, INC.
EAGLE PARK ANIMAL CLINIC, INC.
EAGLE RIVER VETERINARY HOSPITAL, INC.
EDGEBROOK, INC.
FLORIDA VETERINARY LABORATORIES, INC.
FOX CHAPEL ANIMAL HOSPITAL, INC.
FREEHOLD VETERINARY HOSPITAL, INC.
XXXX ANIMAL HOSPITAL, INC.
GOLDEN MERGER CORPORATION
H.B. ANIMAL CLINICS, INC.
HIGHLANDS ANIMAL HOSPITAL, INC.
KIRKWOOD ANIMAL HOSPITAL-LEA M.E.
XXXXX, V.M.D., P.A.
KIRKWOOD ANIMAL HOSPITAL BOARDING AND
GROOMING, INC.
LAKE XXXXXXX VETERINARY CLINIC, INC.
LAKEWOOD ANIMAL HOSPITAL, INC.
XXXXXXX VETERINARY HOSPITAL, INC.
PAGE S-2
XXXXXXXXX VETERINARY CLINIC, INC.
MAIN STREET SMALL ANIMAL HOSPITAL, INC.
M.S. ANIMAL HOSPITALS, INC.
XXXXXX ANIMAL HOSPITAL
NEWARK ANIMAL HOSPITAL, INC.
NORTH ROCKVILLE VETERINARY HOSPITAL, INC.
NORTHERN ANIMAL HOSPITAL, INC.
NORTHSIDE ANIMAL HOSPITAL, P.C.
XXXXX ANIMAL HOSPITAL, INC.
OAK HILL VETERINARY HOSPITAL, INC.
OLD TOWN VETERINARY HOSPITAL, INC.
PETS' RX NEVADA, INC.
PETS' RX, INC.
PPI OF PENNSYLVANIA, INC.
PRINCETON ANIMAL HOSPITAL, INC.
PROFESSIONAL VETERINARY SERVICES, INC.
RIVIERA ANIMAL HOSPITAL, INC.
SILVER SPUR ANIMAL HOSPITAL, INC.
SOUTH COUNTY VETERINARY CLINIC, INC.
PAGE S-3
SOUTHEAST AREA VETERINARY MEDICAL CENTER, P.C.
SPANISH RIVER ANIMAL HOSPITAL, INC.
TAMPA ANIMAL MEDICAL CENTER, INC.
THE PET PRACTICE (FLORIDA), INC.
THE PET PRACTICE (ILLINOIS), INC.
THE PET PRACTICE (MASSACHUSETTS), INC.
THE PET PRACTICE OF MICHIGAN, INC.
VCA - XXXXX, INC.
VCA ALBANY ANIMAL HOSPITAL, INC.
VCA KANEOHE ANIMAL HOSPITAL
VCA - ROSSMOOR, INC.
VCA ALABAMA, INC.
VCA ALBUQUERQUE, INC.
VCA ALL PETS ANIMAL COMPLEX, INC.
VCA ALPINE ANIMAL HOSPITAL, INC.
VCA XXXXXXXX OF CALIFORNIA ANIMAL HOSPITAL, INC.
VCA ANIMAL HOSPITALS, INC.
VCA APAC ANIMAL HOSPITAL, INC.
PAGE S-4
VCA CACOOSING ANIMAL HOSPITAL, INC.
VCA CASTLE XXXXXXX VETERINARY HOSPITAL, INC.
VCA CENTERS-TEXAS, INC.
VCA CENVET, INC.
VCA CLARMAR ANIMAL HOSPITAL, INC.
VCA CLINICAL VETERINARY LABS, INC.
VCA CLINIPATH LABS, INC.
VCA CLOSTER, INC.
VCA XXXXXXXX ANIMAL HOSPITAL, INC.
VCA DOVER ANIMAL HOSPITAL, INC.
VCA EAGLE RIVER ANIMAL HOSPITAL, INC.
VCA EAST ANCHORAGE ANIMAL HOSPITAL, INC.
VCA GREATER SAVANNAH ANIMAL HOSPITAL, INC.
VCA HOWELL BRANCH ANIMAL HOSPITAL, INC.
VCA LAMB AND XXXXXXX ANIMAL HOSPITAL, INC.
VCA XXXXXXX ANIMAL HOSPITAL, INC.
VCA XXXXX ANIMAL HOSPITAL, INC.
VCA MARINA ANIMAL HOSPITAL, INC.
PAGE S-5
VCA XXXXXX-XXXXXXXXX #152
VCA MISSION, INC.
VCA NORTHBORO ANIMAL HOSPITAL, INC.
VCA NORTHWEST VETERINARY DIAGNOSTICS, INC.
VCA OF COLORADO-XXXXXXXX, INC.
VCA OF NEW YORK, INC.
VCA OF SAN XXXX, INC.
VCA OF XXXXXXXX, INC.
VCA PROFESSIONAL ANIMAL LABORATORY, INC.
VCA REAL PROPERTY ACQUISITION CORPORATION
VCA REFERRAL ASSOCIATES ANIMAL HOSPITAL, INC.
VCA XXXXXX ANIMAL HOSPITAL, INC.
VCA SILVER SPUR ANIMAL HOSPITAL, INC.
VCA SOUTH SHORE ANIMAL HOSPITAL, INC.
VCA ST. PETERSBERG ANIMAL HOSPITAL, INC.
VCA TEXAS MANAGEMENT, INC.
VCA WYOMING ANIMAL HOSPITAL, INC.
PAGE S-6
VETERINARY CENTERS OF AMERICA-TEXAS, L.P.
VETERINARY HOSPITALS, INC.
W.E. XXXXXXXX, D.V.M., WORTH ANIMAL
HOSPITAL, CHARTERED
WEST LOS ANGELES VETERINARY MEDICAL GROUP, INC.
XXXXXXX X. XXXXX, LTD.
XXXXXXX, INC.
By: /S/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
and President
PAGE S-7
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
By: /S/ XXXXXXX, SACHS & CO.
-----------------------------
(Xxxxxxx, Xxxxx & Co.)
PAGE S-8
SCHEDULE I
GUARANTORS
VCA ANTECH, INC.
AAH MERGER CORPORATION
ACADEMY ANIMAL, INC.
XXXXXXXX ANIMAL HOSPITAL, INC.
ANIMAL CENTER, INC.
ANIMAL CLINIC OF SANTA XXXX, INC.
BERWYN VETERINARIAN HOSPITAL, INC.
CACOOSING ANIMAL HOSPITAL, LTD.
CLARMAR ANIMAL HOSPITAL, INC.
XXXXXXXX VETERINARY CLINIC, INC.
DIAGNOSTIC VETERINARY SERVICE, INC.
EAGLE PARK ANIMAL CLINIC, INC.
EAGLE RIVER VETERINARY HOSPITAL, INC.
EDGEBROOK, INC.
FLORIDA VETERINARY LABORATORIES, INC.
FOX CHAPEL ANIMAL HOSPITAL, INC.
FREEHOLD VETERINARY HOSPITAL, INC.
XXXX ANIMAL HOSPITAL, INC.
GOLDEN MERGER CORPORATION
H.B. ANIMAL CLINICS, INC.
HIGHLANDS ANIMAL HOSPITAL, INC.
KIRKWOOD ANIMAL HOSPITAL-LEA M.E. XXXXX, V.M.D., P.A.
KIRKWOOD ANIMAL HOSPITAL BOARDING AND GROOMING, INC.
LAKE XXXXXXX VETERINARY CLINIC, INC.
LAKEWOOD ANIMAL HOSPITAL, INC.
XXXXXXX VETERINARY HOSPITAL, INC.
PAGE S-I-1
XXXXXXXXX VETERINARY CLINIC, INC.
MAIN STREET SMALL ANIMAL HOSPITAL, INC.
M.S. ANIMAL HOSPITALS, INC.
XXXXXX ANIMAL HOSPITAL
NEWARK ANIMAL HOSPITAL, INC.
NORTH ROCKVILLE VETERINARY HOSPITAL, INC.
NORTHERN ANIMAL HOSPITAL, INC.
NORTHSIDE ANIMAL HOSPITAL, P.C.
XXXXX ANIMAL HOSPITAL, INC.
OAK HILL VETERINARY HOSPITAL, INC.
OLD TOWN VETERINARY HOSPITAL, INC.
PETS' RX NEVADA, INC.
PETS' RX, INC.
PPI OF PENNSYLVANIA, INC.
PRINCETON ANIMAL HOSPITAL, INC.
PROFESSIONAL VETERINARY SERVICES, INC.
RIVIERA ANIMAL HOSPITAL, INC.
SILVER SPUR ANIMAL HOSPITAL, INC.
SOUTH COUNTY VETERINARY CLINIC, INC.
SOUTHEAST AREA VETERINARY MEDICAL CENTER, P.C.
SPANISH RIVER ANIMAL HOSPITAL, INC.
TAMPA ANIMAL MEDICAL CENTER, INC.
THE PET PRACTICE (FLORIDA), INC.
THE PET PRACTICE (ILLINOIS), INC.
THE PET PRACTICE OF MASSACHUSETTS, INC.
THE PET PRACTICE OF MICHIGAN, INC.
VCA - XXXXX, INC.
VCA ALBANY ANIMAL HOSPITAL, INC.
VCA KANEOHE ANIMAL HOSPITAL
VCA - ROSSMOOR, INC.
PAGE S-I-2
VCA ALABAMA, INC.
VCA ALBUQUERQUE, INC.
VCA ALL PETS ANIMAL COMPLEX, INC.
VCA ALPINE ANIMAL HOSPITAL, INC.
VCA XXXXXXXX OF CALIFORNIA ANIMAL HOSPITAL, INC.
VCA ANIMAL HOSPITALS, INC.
VCA APAC ANIMAL HOSPITAL, INC.
VCA CACOOSING ANIMAL HOSPITAL, INC.
VCA CASTLE XXXXXXX VETERINARY HOSPITAL, INC.
VCA CENTERS-TEXAS, INC.
VCA CENVET, INC.
VCA CLARMAR ANIMAL HOSPITAL, INC.
VCA CLINICAL VETERINARY LABS, INC.
VCA CLINIPATH LABS, INC.
VCA CLOSTER, INC.
VCA XXXXXXXX ANIMAL HOSPITAL, INC.
VCA DOVER ANIMAL HOSPITAL, INC.
VCA EAGLE RIVER ANIMAL HOSPITAL, INC.
VCA EAST ANCHORAGE ANIMAL HOSPITAL, INC.
VCA GREATER SAVANNAH ANIMAL HOSPITAL, INC.
VCA HOWELL BRANCH ANIMAL HOSPITAL, INC.
VCA LAMB AND XXXXXXX ANIMAL HOSPITAL, INC.
VCA XXXXXXX ANIMAL HOSPITAL, INC.
VCA XXXXX ANIMAL HOSPITAL, INC.
VCA MARINA ANIMAL HOSPITAL, INC.
VCA XXXXXX-XXXXXXXXX #152
VCA MISSION, INC.
VCA NORTHBORO ANIMAL HOSPITAL, INC.
PAGE S-I-3
VCA NORTHWEST VETERINARY DIAGNOSTICS, INC.
VCA OF COLORADO - XXXXXXXX, INC.
VCA OF NEW YORK, INC.
VCA OF SAN XXXX, INC.
VCA OF XXXXXXXX, INC.
VCA PROFESSIONAL ANIMAL LABORATORY, INC.
VCA REAL PROPERTY ACQUISITION CORPORATION
VCA REFERRAL ASSOCIATES ANIMAL HOSPITAL, INC.
VCA XXXXXX ANIMAL HOSPITAL, INC.
VCA SILVER SPUR ANIMAL HOSPITAL, INC.
VCA SOUTH SHORE ANIMAL HOSPITAL, INC.
VCA ST. PETERSBURG ANIMAL HOSPITAL, INC.
VCA TEXAS MANAGEMENT, INC.
VCA WYOMING ANIMAL HOSPITAL, INC.
VETERINARY CENTERS OF AMERICA-TEXAS, L.P.
VETERINARY HOSPITALS, INC.
W.E. XXXXXXXX, D.V.M., WORTH ANIMAL HOSPITAL, CHARTERED
WEST LOS ANGELES VETERINARY MEDICAL GROUP, INC.
XXXXXXX X. XXXXX, LTD.
XXXXXXX, INC.
PAGE S-I-4
ANNEX I
Pursuant to Section 7(c) of the Purchase Agreement, the accountants shall
furnish letters to the Purchaser to the effect that:
(i) They are independent certified public accountants with respect to
Holdings and its subsidiaries under rule 101 of the American Institute of
Certified Public Accountants' Code of Professional Conduct, and its
interpretations and rulings;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Act and the related published rules and regulations;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Offering Circular
agrees with the corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such five fiscal
years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of Holdings and its subsidiaries, inspection of the minute books
of Holdings and its subsidiaries since the date of the latest audited
financial statements included in the Offering Circular, inquiries of
officials of Holdings and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in
the Offering Circular are not in conformity with generally accepted
accounting principles applied on the basis substantially consistent
with the basis for the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
PAGE A-II-1
(C) the unaudited financial statements which were not included in
the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Offering Circular and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Offering Circular or any increase in the consolidated
long-term debt of Holdings and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Purchaser, or any increases in any items specified by
the Purchaser, in each case as compared with amounts shown in the
latest balance sheet included in the Offering Circular except in each
case for changes, increases or decreases which the Offering Circular
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Purchaser, or
any increases in any items specified by the Purchaser, in each case as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Purchaser,
except in each case for decreases or increases which the Offering
Circular discloses have occurred or may occur or which are described
in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
PAGE A-II-2
information specified by the Purchaser, which are derived from the general
accounting records of Holdings and its subsidiaries, which appear in the
Offering Circular, and have compared certain of such amounts, percentages
and financial information with the accounting records of Holdings and its
subsidiaries and have found them to be in agreement.
PAGE A-II-3
