EXHIBIT 1.1
DAVITA INC.
THE GUARANTORS NAMED HEREIN
$225,000,000
9 1/4% Series A Senior Subordinated Notes due 2011
Purchase Agreement
April 6, 2001
$225,000,000
9 1/4% Series A Senior Subordinated Notes due 2011
of DAVITA INC.
PURCHASE AGREEMENT
April 6, 2001
CREDIT SUISSE FIRST BOSTON CORPORATION
BANC OF AMERICA SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES CORPORATION
BNY CAPITAL MARKETS, INC.
SCOTIA CAPITAL (USA) INC.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, NY 10010
Dear Sirs:
DAVITA INC., a Delaware corporation (the "Company"), proposes to issue
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and sell to the initial purchasers named on Schedule A hereto (each, an "Initial
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Purchaser" and collectively, the "Initial Purchasers") an aggregate of
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$225,000,000 in principal amount of its 9 1/4% Series A Senior Subordinated
Notes due 2011 (the "Series A Notes"), subject to the terms and conditions set
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forth herein. The Series A Notes are to be issued pursuant to the provisions of
an indenture (the "Indenture"), to be dated as of the Closing Date (as defined
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below), among the Company, the Guarantors (as defined below) and U.S. Trust
Company of Texas, National Association, as trustee (the "Trustee"). The Series
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A Notes and the Series B Notes (as defined below) issuable in exchange therefor
are collectively referred to herein as the "Notes." The Notes will be
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irrevocably and unconditionally guaranteed (the "Subsidiary Guarantees") as to
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payment of principal, premium, if any, interest and Liquidated Damages (as
defined in the Indenture), if any, on a senior subordinated
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basis, jointly and severally, by each of the entities listed on Schedule B,
hereto (each, a "Guarantor" and collectively, the "Guarantors"). Capitalized
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terms used but not-defined herein shall have the meanings given to such terms in
the Indenture.
1. Offering Circular. The Series A Notes will be offered and sold to
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the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
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Company and the Guarantors have prepared a preliminary offering circular, dated
March 23, 2001 (the "Preliminary Offering Circular") and a final offering
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circular, dated April 6, 2001 (the "Offering Circular"), relating to the Series
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A Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor or in substitution thereof) shall bear
the following legend:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (3) PURSUANT
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TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (1) THROUGH (5) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
2. Agreements to Sell and Purchase. On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amount of
Series A Notes set forth opposite the name of such Initial Purchaser on Schedule
A hereto at a purchase price equal to 97.5% of the principal amount thereof (the
"Purchase Price").
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3. Terms of Offering. The Initial Purchasers have advised the
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Company that the Initial Purchasers will make offers (the "Exempt Resales") of
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the Series A Notes purchased hereunder on the terms set forth in the Offering
Circular, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs"), and (ii) to persons permitted to purchase
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the Series A Notes in offshore transactions in reliance upon Regulation S under
the Act (each, a "Regulation S Purchaser") (such persons specified in clauses
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(i) and (ii) being referred to herein as the "Eligible Purchasers"). The
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Initial Purchasers will offer the Series A
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Notes to Eligible Purchasers initially at a price equal to 100% of the principal
amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
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below), in substantially the form of Exhibit A hereto, for so long as such
Series A Notes constitute "Transfer Restricted Securities" (as defined in the
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Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
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therein, (i) a registration statement under the Act (the "Exchange Offer
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Registration Statement") relating to the Company's 9 1/4% Series B Senior
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Subordinated Notes due 2011 (the "Series B Notes"), to be offered in exchange
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for the Series A Notes (such offer to exchange being referred to as the
"Exchange Offer") and the Subsidiary Guarantees thereof and (ii) a shelf
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registration statement pursuant to Rule 415 under the Act (the "Shelf
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Registration Statement" and, together with the Exchange Offer Registration
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Statement, the "Registration Statements") relating to the resale by certain
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holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. This Agreement, the Indenture, the Notes, the Subsidiary
Guarantees and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "Operative Documents."
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4. Delivery and Payment.
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(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
4 Times Square, New York, New York 10036, or such other location as may be
mutually acceptable. Such delivery and payment shall be made at 9:00 a.m. New
York City time, on April 11, 2001 or at such other time on the same date or such
other date as shall be agreed upon by the Initial Purchasers and the Company in
writing. The time and date of such delivery and the payment for the Series A
Notes are herein called the "Closing Date."
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(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the
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aggregate principal amount of the Series A Notes (collectively, the "Global
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Note"), shall be delivered by the Company to the Initial Purchasers (or as the
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Initial Purchasers direct) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchasers of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Note shall be made available to the Initial Purchasers for inspection
not later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
5. Agreements of the Company and the Guarantors. Each of the
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Company and the Guarantors hereby agrees with each Initial Purchaser as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Series A Notes for offering or sale in
any jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Circular or the Offering Circular untrue or that requires any additions to or
changes in the Preliminary Offering Circular or the Offering Circular in order
to make the statements therein not misleading. The Company and the Guarantors
shall use their best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other federal or state regulatory authority shall issue an order suspending
the qualification or exemption of any Series A Notes under any state securities
or Blue Sky laws, the Company and the Guarantors shall use their best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company as many copies of the Preliminary Offering
Circular and the Offering Circular, and any amendments or supplements thereto,
as the Initial Purchasers may reasonably request for the time period specified
in Section 5(c). Subject to the Initial Purchasers' compliance with its
representations and warranties and agreements set forth in Section 7 hereof, the
Company consents to the use of the Preliminary Offering Circular and the
Offering Circular, and any amendments
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and supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial
Purchasers an Offering Circular is required by law to be delivered in connection
with Exempt Resales by the Initial Purchasers or in connection with market-
making activities of the Initial Purchasers (which period with respect to
market-making activities shall not exceed 180 days after the date hereof), (i)
not to make any amendment or supplement to the Offering Circular of which the
Initial Purchasers shall not previously have been advised or to which the
Initial Purchasers shall reasonably object after being so advised and (ii) to
prepare promptly upon any Initial Purchaser's reasonable request, any amendment
or supplement to the Offering Circular which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Circular in order to make the statements therein, in the
light of the circumstances when such Offering Circular is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering Circular
to comply with any applicable law, forthwith to prepare an appropriate amendment
or supplement to such Offering Circular so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Circular will comply with
applicable law, and to furnish to the Initial Purchasers and such other persons
as the Initial Purchasers may designate such number of copies thereof as the
Initial Purchasers may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction
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in which it is not now so qualified or to take any action that would subject it
to general consent to service of process or taxation other than as to matters
and transactions relating to the Preliminary Offering Circular, the Offering
Circular or Exempt Resales, in any jurisdiction in which it is not now
so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) For a period of five years from the date hereof, and thereafter
upon request for so long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company or any of the Guarantors to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company or any of the Guarantors is listed
and such other publicly available information concerning the Company and/or its
subsidiaries as the Initial Purchasers may reasonably request.
(h) So long as any of the Series A Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder of Series A Notes in connection
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with any sale thereof and any prospective purchaser of such Series A Notes from
such holder, the information ("Rule 144A Information") required by Rule
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144A(d)(4) under the Act.
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(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Guarantors under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales, and all
other fees and expenses in connection with the preparation, printing, filing and
distribution of the Preliminary Offering Circular, the Offering Circular and all
amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and reasonable fees and disbursements of counsel for the Initial Purchasers
in connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Series A Notes
and the Subsidiary Guarantees, (vi) all expenses and listing fees in connection
with the application for quotation of the Series A Notes in the National
Association of Securities Dealers, Inc. ("NASD") Automated Quotation System -
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PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
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counsel in connection with the Indenture, the Notes and the Subsidiary
Guarantees, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement, and
(xi) and all other costs and expenses incident to the performance of the
obligations of the Company and the Guarantors hereunder for which provision is
not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for
so long as the Series A Notes are outstanding.
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(k) To obtain the approval of DTC for "book-entry" transfer of the
Notes, and to comply with all of its agreements set forth in the representation
letters of the Company and the Guarantors to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any Guarantor substantially similar to the
Notes and the Subsidiary Guarantees (other than (i) the Notes and the Subsidiary
Guarantees and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes and the
related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes and Subsidiary Guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Series A Notes
and the Subsidiary Guarantees thereof and to comply with all applicable federal
and state securities laws in connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Subsidiary Guarantees.
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6 Representation, Warranties and Agreements of the Company and the
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Guarantors. As of the date hereof, each of the Company and the Guarantors
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represents and warrants to, and agrees with, each Initial Purchaser that:
(a) The Preliminary Offering Circular as of its date did not, and the
Offering Circular as of its date does not, and any supplement or amendment to
them will not, contain any untrue statement of a material fact or omit to state
any 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, except that the representations and warranties contained
in this Section 6(a) shall not apply to pricing terms and other financial terms
intentionally left blank in the Preliminary Offering Circular or statements in
or omissions from the Preliminary Offering Circular or the Offering Circular (or
any supplement or amendment thereto) based upon information relating to the
Initial Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use therein. The parties hereto acknowledge that for purposes of
this Agreement, including this Section 6(a) and Section 8 hereof, the only
information furnished to the Company in writing by the Initial Purchasers
expressly for use in the Preliminary Offering Circular or the Offering Circular
is the information set forth: (i) on the cover page of the Offering Circular
with respect to the price of the Series A Notes; (ii) the second paragraph of
text on page i of the Preliminary Offering Circular; (iii) the second paragraph
of text on page i of the Offering Circular; (iv) the tenth paragraph of text
under the caption "Plan of Distribution" in the Preliminary Offering Circular
and (v) the tenth paragraph of text under the caption "Plan of Distribution" in
the Offering Circular. No stop order preventing the use of the Preliminary
Offering Circular or the Offering Circular, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.
(b) Each of the Company and its subsidiaries has been duly organized,
is validly existing and is in good standing under the laws of its jurisdiction
of organization and has the power and authority, corporate or other, to carry on
its business as described in the Preliminary Offering Circular and the Offering
Circular and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign organization authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not (i) have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole or (ii)
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materially adversely affect the ability of the Company or the Guarantors to
issue and perform under the Notes or the Subsidiary Guarantees (any of the
events set forth in clauses (i) or (ii), a "Material Adverse Effect").
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(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.
(d) The entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock, or other ownership interests, of each of the Company's
subsidiaries have been duly authorized and validly issued and, in the case of
shares of capital stock, are fully paid and non-assessable, and, except as set
forth on Schedule C hereto, are owned by the Company, directly or indirectly
through one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature (each, a "Lien"),
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other than the pledge of certain of such shares, or other ownership interests,
as applicable, to secure the obligations under the Second Amended and Restated
Revolving Credit Agreement, dated as of July 14, 2000, and the Second Amended
and Restated Term Loan Agreement, dated as of July 14, 2000 (collectively, the
"Credit Facilities").
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(e) This Agreement has been duly authorized, executed and delivered
by the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and each of
the Guarantors and, on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors. When the Indenture has been
duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with
its terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability as applied by the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity). On the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TIA" or "Trust
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Indenture Act"), and the rules and regulations of the Commission applicable to
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an indenture which is qualified thereunder.
(g) The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability as applied by the court before
which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity). On the Closing
Date, the Series A Notes will conform in all material respects to the
description thereof contained in the Offering Circular.
(h) On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding at law or
in equity).
(i) The Subsidiary Guarantee to be endorsed on the Series A Notes by
each Guarantor has been duly authorized by such Guarantor and, on the Closing
Date, will have been duly executed and delivered by each such Guarantor. When
the Series A Notes have been issued, executed and authenticated in accordance
with the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Subsidiary Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid
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and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability as applied by the court before
which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity). On the Closing
Date, the Subsidiary Guarantees to be endorsed on the Series A Notes will
conform in all material respects to the description thereof contained in the
Offering Circular.
(j) The Subsidiary Guarantee to be endorsed on the Series B Notes by
each Guarantor has been duly authorized by such Guarantor and, when issued, will
have been duly executed and delivered by each such Guarantor. When the Series B
Notes have been issued, executed and authenticated in accordance with the terms
of the Exchange Offer and the Indenture, the Subsidiary Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of such Guarantor, enforceable against
such Guarantor in accordance with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as applied by the court
before which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity). When the Series
B Notes are issued, authenticated and delivered, the Subsidiary Guarantees to be
endorsed on the Series B Notes will conform as to legal matters to the
description thereof in the Offering Circular.
(k) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, on the Closing Date, will have been duly
executed and delivered by the Company and each of the Guarantors. When the
Registration Rights Agreement has been duly executed and delivered, the
Registration Rights Agreement will be a valid and binding agreement of the
Company and each of the Guarantors, enforceable against the Company and each
Guarantor in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally, (ii) public
policy or laws limiting rights of indemnity or contribution and (iii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability
14
as applied by the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding at law or
in equity). On the Closing Date, the Registration Rights Agreement will conform
in all material respects to the description thereof in the Offering Circular.
(l) Neither the Company nor any of its subsidiaries is in (i)
violation of its respective charter or by-laws or other organizational documents
or (ii) default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease 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 or their respective
property is bound, except to the extent such default, if any, would not have a
Material Adverse Effect.
(m) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and each of the Guarantors, compliance
by the Company and each of the Guarantors with all provisions hereof and thereof
and the consummation of the transactions contemplated hereby and thereby will
not, assuming the Notes are sold in the manner contemplated by this Agreement,
(i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
have been obtained or as may be required under the securities or Blue Sky laws
of the various states and, with respect to performance of the Registration
Rights Agreement, the Securities Act and the Trust Indenture Act), (ii) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, (A) the charter or by-laws or other organizational documents of the
Company or any of its subsidiaries or (B) any indenture, loan agreement,
mortgage, lease 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
or their respective property is bound, after receipt of any required consents,
which consents have been obtained, (iii) violate or conflict with any applicable
law or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any of its
subsidiaries or their respective property, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under, any 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 or their respective property is
bound, or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries or
result in any other impairment of the rights of the holder of any such
Authorization, except, with respect to clauses (ii)(B), (iv) and (v) above, for
any violation, conflict, breach, default, Lien, termination, suspension,
15
revocation or impairment which would not, singly or in the aggregate, have a
Material Adverse Effect.
(n) Except as disclosed in the Offering Circular, there are no legal
or governmental proceedings (i) pending to which the Company or any of its
subsidiaries is a party or to which any of their respective property is subject,
or (ii) to the Company's knowledge, threatened to which the Company or any of
its subsidiaries could be a party or to which any of their respective property
could be subject, in either case, which if determined adversely to the Company
or such subsidiary, as applicable, would, singly or in the aggregate, have a
Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
------------------
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any
-----
provisions of the Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(q) There is no claim, cause of action, investigation or notice by
any person or entity alleging potential liability (including, without
limitation, alleged or potential liability or investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company or any of its subsidiaries
arising out of, based on or resulting from (A) the presence or release into the
environment of any Hazardous Material (as defined) at any location, whether or
not owned by the Company or any of its subsidiaries, as the case may be, or (B)
any violation or alleged violation of any Environmental Law, which would, singly
or in the aggregate, have a Material Adverse Effect. The term "Hazardous
Material" means (i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (ii)
any "hazardous waste" as defined by the Resource Conservation and
16
Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl, and (v) any pollutant or contaminant or hazardous
dangerous or toxic chemical, material, waste or substance regulated under or
within the meaning of any other law relating to protection of human health or
the environment or imposing liability or standards of conduct concerning any
such chemical material, waste or substance.
(r) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
-------------
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and, except with respect to the matters
discussed in the "Business--United States Attorney's inquiry" and "Business--
Laboratory payment reviews" sections of the Offering Circular, no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to the
Company or any of its subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
(s) To the best of the Company's knowledge after due inquiry, the
accountants, KPMG LLP and PricewaterhouseCoopers LLP, that have certified the
financial statements and supporting schedules included in the Preliminary
Offering Circular and the Offering Circular, are or were independent public
accountants with respect to the Company and the Guarantors, as required by the
Act and the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in the Preliminary Offering Circular and
the Offering Circular comply as to form in all material respects with the
requirements applicable to registration statements
17
on Form S-1 under the Act, except for the exclusion of the condensed
consolidating financial information with respect to the Company's subsidiaries
that would be required by Rule 3-10 of Regulation S-X.
(t) The historical financial statements, together with related
schedules and notes forming part of the Offering Circular (and any amendment or
supplement thereto), present fairly the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Circular at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Circular (and any amendment or
supplement thereto) 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.
(u) The pro forma financial and statistical information and data
included in the Offering Circular are, in all material respects, accurately
presented and prepared on a basis consistent with the pro forma financial
statements that were prepared in connection with the transactions contemplated
hereby by the Company, and reviewed by its independent public accountants, on a
basis consistent with the historical consolidated financial statements of the
Company and such pro forma financial statements give effect to assumptions used
in the preparation thereof on a reasonable basis and in good faith and present
fairly the historical and proposed transactions contemplated by the Offering
Circular.
(v) The industry, statistical and market-related data included in the
Offering Circular, to the best knowledge of the Company and each of the
Guarantors, is true and accurate in all material respects and is based on or
derived from sources which the Company and the Guarantors believe to be reliable
and accurate.
(w) Neither the Company nor any Guarantor is, and, after giving
effect to the offering and sale of the Series A Notes and the application of the
net proceeds thereof as described in the Offering Circular, neither the Company
nor any Guarantor will be, an "investment company," as such term is defined in
the Investment Company Act of 1940, as amended.
18
(x) No person has the right, under any contract, agreement or
understanding between any such person and the Company or any Guarantor, in
connection with, or as a result of, the transactions contemplated hereby or by
the Registration Rights Agreement, to require the Company or such Guarantor to
file a registration statement under the Act with respect to any debt securities
of the Company or such Guarantor or to require the Company or such Guarantor to
include any securities of the Company or any Guarantor with the Notes and
Subsidiary Guarantees registered pursuant to any Registration Statement, other
than the Registration Rights Agreement.
(y) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take prior
to completion of the distribution of the Notes, any action that would cause this
Agreement or the issuance or sale of the Series A Notes to violate Regulation T
(12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System.
(z) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company or any Guarantor that it is considering
imposing) any condition (financial or otherwise) on the Company's or any
Guarantor's retaining any rating assigned to the Company or any Guarantor, any
securities of the Company or any Guarantor or (ii) has indicated to the Company
or any Guarantor that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, any Guarantor or any securities of
the Company or any Guarantor.
(aa) Since the respective dates as of which information is given in
the Offering Circular other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and its subsidiaries, taken as a whole, (ii) there has not been any
material adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the Company or
any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
19
(bb) Each of the Preliminary Offering Circular and the Offering
Circular, as of its date, contains all the information specified in, and meeting
the requirements of, Rule 144A(d)(4) under the Act.
(cc) Each of the Company and its subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by it which is material to the business of
the Company and its subsidiaries, taken as a whole, in each case free and clear
of all Liens 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
materially 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 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.
(dd) When the Series A Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Series A Notes nor
the Subsidiary Guarantees will be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company or the Guarantors that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
(ee) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company, the Guarantors
or any of their respective affiliates or representatives (other than the Initial
Purchasers and any of their respective affiliates or representatives who are not
affiliates or representatives of the Company or any Guarantor, as to whom the
Company and the Guarantors make no representation) in connection with the offer
and sale of the Series A Notes contemplated hereby, including, but not limited
to, articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising. No securities of the same class as the Series A Notes
have been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
20
(ff) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA, assuming the Notes
are sold in the manner contemplated by this Agreement.
(gg) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers and any of their respective affiliates or persons acting
on their behalf who are not affiliates of the Company or any Guarantor or acting
on their behalf, 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 ("Regulation S") with respect
------------
to the Series A Notes or the Subsidiary Guarantees.
(hh) The sale of the Series A Notes pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of the Act.
(ii) The Company, the Guarantors and their respective affiliates
and all persons acting on their behalf (other than the Initial Purchasers and
any of their respective affiliates or persons acting on their behalf who are not
affiliates of the Company or any Guarantor or acting on their behalf, as to whom
the Company and the Guarantors make no representation) have complied with and
will comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Series A Notes outside the United States
and, in connection therewith, the Offering Circular will contain the disclosure
required by Rule 902(h).
(jj) The Series A Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903(b)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S. persons
or U.S. persons who purchased such Series A Notes in transactions that were
exempt from the registration requirements of the Act.
(kk) No registration under the Act of the Series A Notes or the
Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial Purchasers as contemplated hereby or for
the Exempt Resales assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof.
21
(ll) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are, in the opinion of management, reasonable and
customary in the businesses in which they are engaged; and neither the Company
nor any of its subsidiaries (i) has received notice from any insurer or agent of
such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or (ii)
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that would not have a Material Adverse
Effect.
(mm) Except as disclosed in the Offering Circular, no
relationship, direct or indirect, exists between or among the Company or any of
its subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, which would be required by the Act to be described in the Offering
Circular if the Offering Circular were a prospectus included in a registration
statement on Form S-1 filed with the Commission.
(nn) To the best knowledge of the Company, no significant
collective bargaining organizing activities are taking place with respect to the
Company or any of its subsidiaries.
(oo) The Company and each of its subsidiaries 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 asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(pp) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction, or any extensions related
thereto, have been filed, other than those filings being contested in good
faith, and all such returns are true, accurate and complete in all material
respects, and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the
22
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(qq) All indebtedness of the Company and the Guarantors that will
be repaid with the proceeds of the issuance and sale of the Series A Notes was
incurred, and the indebtedness represented by the Series A Notes is being
incurred, for proper purposes and in good faith and each of the Company and the
Guarantors was, at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Series A Notes, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) solvent, and had at the time
of the incurrence of such indebtedness that will be repaid with the proceeds of
the issuance and sale of the Series A Notes and will have on the Closing Date
(after giving effect to the application of the proceeds from the issuance of the
Series A Notes) sufficient capital for carrying on their respective business and
were, at the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Series A Notes, and will be on
the Closing Date (after giving effect to the application of the proceeds from
the issuance of the Series A Notes) able to pay their respective debts as they
mature.
(rr) No action has been taken and no law, statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency or body which prevents the execution, delivery and performance of any of
the Operative Documents, the issuance of the Series A Notes or the Subsidiary
Guarantees, or suspends the sale of the Series A Notes or the Subsidiary
Guarantees in any jurisdiction referred to in Section 5(e); and no injunction,
restraining order or other order or relief of any nature by a federal or state
court or other tribunal of competent jurisdiction has been issued with respect
to the Company or any of its subsidiaries which would prevent or suspend the
issuance or sale of the Series A Notes or the Subsidiary Guarantees in any
jurisdiction referred to in Section 5(e).
(ss) Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and the Guarantors and counsel to the Initial
23
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the
--------------------------------------------------
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to persons whom such Initial Purchaser reasonably believes
to be (x) QIBs, in reliance on the exemption from the registration requirements
of the Act provided by Rule 144A and (y) Regulation S Purchasers, in offshore
transactions in reliance upon R egulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, persons whom such
Initial Purchaser reasonably believes to be Eligible Purchasers. Each Initial
Purchaser further agrees that it will offer to sell the Series A Notes only to,
and will solicit offers to buy the Series A Notes only from (A) Eligible
Purchasers that the Initial Purchaser reasonably believes to be QIBs and (B)
Regulation S Purchasers, in each case, that agree that (x) the Series A Notes
purchased by them may be resold, pledged or otherwise transferred within the
time period referred to under Rule 144(k)
24
(taking into account the provisions of Rule 144(d) under the Act, if applicable)
under the Act, as in effect on the date of the transfer of such Series A Notes,
only (I) to the Company or any of its subsidiaries, (II) to a person whom the
seller reasonably believes is a QIB purchasing for its own account or for the
account of a QIB in a transaction meeting the requirements of Rule 144A under
the Act, (III) in an offshore transaction (as defined in Rule 902 under the Act)
meeting the requirements of Rule 904 of the Act, (IV) in a transaction meeting
the requirements of Rule 144 under the Act, (V) to an institutional "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act (an "Accredited Institution") that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Series A Note and,
if such transfer is in respect of an aggregate principal amount of Series A
Notes less than $250,000, an opinion of counsel acceptable to the Company that
such transfer is in compliance with the Act, (VI) in accordance with another
exemption from the registration requirements of the Act (and based upon an
opinion of counsel acceptable to the Company) or (VII) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any state of the United States or any other applicable
jurisdiction and (y) they will deliver to each person to whom such Series A
Notes or an interest therein is transferred a notice substantially to the effect
of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged and will not engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A Notes or
the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Act (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering of the Series A
25
Notes pursuant hereto and the Closing Date, other than in accordance with
Regulation S of the Act or another exemption from the registration requirements
of the Act. Such Initial Purchaser agrees that, during such 40-day restricted
period, it will not cause any advertisement with respect to the Series A Notes
(including any "tombstone" advertisement) to be published in any newspaper or
periodical or posted in any public place and will not issue any circular
relating to the Series A Notes, except such advertisements as permitted by and
include the statements required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the 40-
day restricted period referred to in Rule 903(b)(3) under the Act, it will send
to such distributor, dealer or person receiving a selling concession, fee or
other remuneration a confirmation or notice to substantially the following
effect:
"The Series A Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within the
--------------
United States or to, or for the account or benefit of, U.S.
persons (i) as part of your 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 under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities Act),
and in connection with any subsequent sale by you of the Series A
Notes covered hereby in reliance on Regulation S during the
period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you
must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation
S."
(j) Such Initial Purchaser agrees that the Series A Notes
offered and sold in reliance on Regulation S will be represented upon issuance
by a global security that may not be exchanged for definitive securities until
the expiration of the 40-day restricted period referred to in Rule 903(b)(3) of
the Act and only upon certification of beneficial ownership of such Series A
Notes by non-U.S. persons or U.S. persons who purchased such Series A Notes in
transactions that were exempt from the registration requirements of the Act.
26
Such Initial Purchaser acknowledges that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchaser will rely upon the accuracy and
truth of the foregoing representations and Such Initial Purchaser hereby
consents to such reliance.
8. Indemnification.
---------------
(a) The Company and each Guarantor agree, jointly and severally, to
indemnify and hold harmless each Initial Purchaser, its directors, its officers
and each person, if any, who controls such Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Circular (or any amendment or supplement thereto), the Preliminary
Offering Circular or any Rule 144A Information provided by the Company or any
Guarantor to any holder or prospective purchaser of Series A Notes pursuant to
Section 5(h) or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to such
Initial Purchaser furnished in writing to the Company by such Initial Purchaser,
which, for purposes of this Section 8, the parties agree is limited to the
information as set forth in Section 6(a) of this Agreement; provided, however,
that the foregoing indemnity agreement with respect to any Preliminary Offering
Circular shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Circular (as then amended or supplemented, provided by
the Company to the several Initial Purchasers in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages and liabilities and judgements
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Circular.
27
(b) Each Initial Purchaser agrees, severally and not jointly with all
other Initial Purchasers, to indemnify and hold harmless the Company and the
Guarantors, and their respective directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company or the Guarantors, to the same extent as the foregoing
indemnity from the Company and the Guarantors to the Initial Purchasers but only
with reference to information relating to such Initial Purchaser furnished in
writing to the Company by such Initial Purchaser expressly for use in the
Preliminary Offering Circular or the Offering Circular, which, for purposes of
this Section 8, the parties agree is limited to the information as set forth in
Section 6(a) of this Agreement.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
indemnified party"), the indemnified party shall promptly notify the person
- ------------ -----
against whom such indemnity may be sought (the "indemnifying party") in writing
------------ -----
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), no Initial Purchaser shall be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Initial Purchaser). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of
28
attorneys (in addition to any local counsel) for all indemnified parties and all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by Credit Suisse First Boston Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action 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 the
indemnified party.
(d) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and such Initial Purchaser on the
other hand from the offering of the Series A Notes or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and such Initial Purchaser, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and such Initial Purchaser, on the other hand, shall
be deemed to be in the
29
same proportion as the total net proceeds from the offering of the Series A
Notes (after underwriting discounts and commissions, but before deducting
expenses) received by the Company, and the total discounts and commissions
received by such Initial Purchaser bear to the total price to investors of the
Series A Notes. The relative fault of the Company and the Guarantors, on the one
hand, and such Initial Purchaser, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantors, on the one
hand, or such Initial Purchaser, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Guarantors, and the Initial Purchasers agree that
it would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
30
9. Conditions of Initial Purchasers' Obligations. The obligations
---------------------------------------------
of the Initial Purchasers to purchase the Series A Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantors contained in this Agreement that are qualified as to materiality
shall be true and correct on the Closing Date and such representations and
warranties that are not so qualified shall be true and correct in all material
respects on the Closing Date, in each case with the same force and effect as if
made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change in, any rating of
the Company or any Guarantor or any securities of the Company or any Guarantor
(including, without limitation, the placing of any of the foregoing ratings on
credit watch with negative or developing implications or under review with an
uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any change, nor shall any notice have
been given of any potential or intended change, in the outlook for any rating of
the Company or any Guarantor or any securities of the Company or any Guarantor
by any such rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a lower rating
to the Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given in
the Offering Circular other than as set forth in the Offering Circular
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in the long-
term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Circular.
31
(d) You shall have received on the Closing Date (i) a certificate
dated the Closing Date, signed by the Chief Executive Officer and the Chief
Financial Officer of the Company and each of the Guarantors, confirming the
matters set forth in Sections 6(aa), 9(a) and 9(b) and stating that each of the
Company and the Guarantors has complied with all the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied on or prior to the Closing Date and (ii) a certificate dated the
Closing Date, signed by the Chief Financial Officer of the Company, stating that
the industry, statistical and market-related data included in the Offering
Circular has been reviewed by such person and, to the best of his knowledge,
subject to the risks and limitations described in the Preliminary Offering
Circular and the Offering Circular, is true and accurate in all material
respects and is based on or derived from sources which the Company believes to
be reliable and accurate, which certificate shall be in form and substance
satisfactory to counsel for the Initial Purchasers.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Riordan & McKinzie, a Professional Law Corporation, counsel for the
Company and the Guarantors, to the effect that:
(i) the Company has been duly organized, is validly
existing and is in good standing under the laws of its
jurisdiction of organization and has the corporate power and
authority to carry on its business as described in the Offering
Circular and to own, lease and operate its properties;
(ii) the Series A Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will
be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance
with their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of
32
general applicability as applied by the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity);
(iii) the Subsidiary Guarantees have been duly
authorized and, when the Series A Notes are executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Subsidiary
Guarantees endorsed thereon will be valid and binding obligations
of the Guarantors, enforceable in accordance with their terms
except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally
and (y) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability as applied by the court before which any proceeding
therefor may be brought (regardless of whether such enforcement
is considered in a proceeding at law or in equity);
(iv) the Indenture has been duly authorized, executed
and delivered by the Company and each Guarantor and is a valid
and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance
with its terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability as applied by the court
before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding at law
or in equity);
(v) this Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors;
33
(vi) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors and is a valid and binding agreement of the Company
and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity);
(vii) the Series B Senior Notes have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered in exchange
for Series A Notes in accordance with the provisions of the
Indenture and the Exchange Offer, will be entitled to the
benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally
and (y) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability as applied by the court before which any proceeding
therefor may be brought (regardless of whether such enforcement
is considered in a proceeding at law or in equity);
(vii) when the Series B Notes are executed and
authenticated in accordance with the provisions of the Indenture
and delivered in exchange for Series A Notes in accordance with
the Indenture and the Exchange Offer, the Guarantees endorsed
thereon will be valid and binding obligations of the Guarantors,
enforceable in accordance with
34
their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability as applied by the court
before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding at law
or in equity);
(ix) the statements under the captions "Certain
Relationships and Related Transactions," "Description of Debt,"
"Description of Notes" and "Federal Income Tax Consequences to
Non-U.S. Holders" in the Offering Circular, insofar as such
statements constitute a summary of the legal matters, documents
or proceedings referred to therein, fairly present in all
material respects such legal matters, documents and proceedings;
(x) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and
each of the Guarantors, compliance by the Company and each of the
Guarantors with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby
will not (i) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental
body or agency (except such as have been obtained or as may be
required under the securities or Blue Sky laws of the various
states and, with respect to the Registration Rights Agreement,
the Securities Act and the Trust Indenture Act), (ii) conflict
with or constitute a breach of any of the terms or provisions of,
or a default under, (A) the charter or by-laws or other
organizational documents of the Company or any of its
subsidiaries or (B) the Credit Facilities, after receipt of any
required consents, which consents have been obtained; the
Indenture, dated June 12, 1996, between Renal Treatment Centers,
Inc. and PNC Bank, National Association, including the first and
second supplemental indentures thereto; the
35
Guaranty, dated March 31, 1998, made by the Company in favor of
PNC Bank, National Association; or the Indenture, dated as of
November 18, 1998, between the Company and United States Trust
Company of New York except, with respect to this clause (ii)(B),
for any breach or default which would not, singly or in the
aggregate, have a Material Adverse Effect; or (iii) violate or
conflict with those laws, rules and regulations which, in such
counsel's experience, are normally applicable to transactions of
the type contemplated by the Operative Documents;
(xi) the Company is not and, upon the offering and sale
of the Series A Notes and the application of the net proceeds
thereof as described in the Offering Circular, will not be, an
"investment company" as such term is defined in the Investment
Company Act of 1940, as amended;
(xii) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. It is not necessary in connection with the
offer, sale and delivery of the Series A Notes to the Initial
Purchasers in the manner contemplated by this Agreement or in
connection with the Exempt Resales to qualify the Indenture under
the TIA;
(xiii) no registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the
Initial Purchasers as contemplated by this Agreement or for the
Exempt Resales assuming that (i) each Initial Purchaser is a QIB,
or a Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements
contained in Section 7 of this Agreement, (iii) the accuracy of
the representations of the Company and the Guarantors set forth
in Sections 5(h) and 6(dd), (ee), (ff), (gg), (hh), (ii) and (jj)
of this Agreement; and
(xiv) no facts have come to such counsel's attention
that have caused such counsel to believe that the Offering
36
Circular (including the documents incorporated by reference, as
amended) as of its date and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading (it being understood such counsel
expresses no opinion on the financial statements or other
financial and statistical (other than industry) data included or
incorporated by reference in the Offering Circular).
The opinion of Riordan & McKinzie described in Section 9(e) above
shall be rendered to you at the request of the Company and the Guarantors and
shall so state therein. In giving such opinion with respect to the matters
covered by Section 9(e)(xiv), counsel for the Company may state in their opinion
that, in its capacity as special counsel to the Company, such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company
and representatives of the Initial Purchasers at which the contents of the
Offering Circular and related matters were discussed and that such counsel does
not pass upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Circular
(except as indicated in clause (ix) above) and has made no independent check or
verification thereof.
In giving the enforceability opinions specified in clauses (ii)
through (iv) and (vi) through (viii) above, Riordan & McKinzie may assume that
the laws governing the subject documents are the same as California law with
respect to the contemplated transactions; provided, that such counsel must state
in its opinion that, without independent check or verification, it is not aware
of any exceptions to enforceability of the subject documents under the laws
governing the same that would be required to be stated in such counsel's opinion
if such counsel were opining as to the laws governing such documents but are not
so stated in such opinion due to the fact that such opinion is with respect to
California law.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of McDermott, Will & Emery, regulatory counsel for the Company and the
Guarantors, to the effect that:
37
(i) the statements under the captions "Business --
Physician relationships," "--Sources of revenue" "--United States
Attorney's inquiry," "--Laboratory payment reviews" and "--
Government regulation," in the Offering Circular, insofar as such
statements constitute a summary of the legal matters, documents
or proceedings referred to therein, fairly present in all
material respects such legal matters, documents and proceedings;
(ii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or to which any of their
respective property is subject which would be required to be
described in the Offering Circular if the Offering Circular were
a registration statement on Form S-1 under the Act that is not so
described in the Offering Circular;
(iii) such counsel has no reason to believe that, as of the
date of the Offering Circular or as of the Closing Date, the
"Business--Physician relationships," "--Sources of revenue," "--
United States Attorney's inquiry," "--Laboratory payment reviews"
and "--Government regulation" sections of the Offering Circular,
as amended or supplemented, if applicable contain any 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.
The opinion of McDermott, Will & Emery described in Section 9(f) above
shall be rendered to you at the request of the Company and the Guarantors and
shall so state therein. In giving such opinion with respect to the matters
covered by Section 9(f)(iii), regulatory counsel for the Company may state that
their opinion and belief are based upon their participation in the preparation
of the Offering Circular and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification except as specified. Such counsel need express no opinion or
belief with respect to the financial statements or other financial data or
statistical data (other than industry data) included or incorporated by
reference in the Offering Circular.
38
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Steven J. Udicious, General Counsel of the Company, to the effect that:
(i) each of the Company's subsidiaries has been duly
organized, is validly existing and is in good standing under the
laws of its jurisdiction of organization and has the power and
authority, corporate or other, to carry on its business as
described in the Offering Circular and to own, lease and operate
its properties;
(ii) each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign organization
authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material
Adverse Effect;
(iii) all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive or
similar rights;
(iv) the entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company. All of the
outstanding shares of capital stock, or other ownership
interests, of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-
assessable, and, except as set forth on Schedule C hereto, are
owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any Lien, other than the pledge
of certain of such shares, or other ownership interests, as
applicable, to secure the obligations under the Credit
Facilities;
(v) the Series A Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by
39
the Initial Purchasers in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable
in accordance with their terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting
creditors' rights generally and (y) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability as applied by the
court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a
proceeding at law or in equity);
(vi) the Subsidiary Guarantees have been duly authorized
and, when the Series A Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, the Subsidiary Guarantees endorsed
thereon will be valid and binding obligations of the Guarantors,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity);
(vii) the Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor and is a valid and
binding agreement of the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its
terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally
40
and (y) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability as applied by the court before which any proceeding
therefor may be brought (regardless of whether such enforcement
is considered in a proceeding at law or in equity);
(viii) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the
Guarantors and is a valid and binding agreement of the Company
and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity);
(ix) the Series B Senior Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for Series
A Notes in accordance with the provisions of the Indenture and
the Exchange Offer, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (x)
the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors' rights generally and (y) rights
of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity);
41
(x) when the Series B Notes are executed and
authenticated in accordance with the provisions of the Indenture
and delivered in exchange for Series A Notes in accordance with
the Indenture and the Exchange Offer, the Guarantees endorsed
thereon will be valid and binding obligations of the Guarantors,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability as
applied by the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in
a proceeding at law or in equity);
(xi) the statements under the captions "Business --
Physician relationships," "--Sources of revenue," "--United
States Attorney's inquiry," "--Laboratory payment reviews," "--
Government regulation" and "--Legal proceedings" in the Offering
Circular, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein,
fairly present in all material respects such legal matters,
documents and proceedings;
(xii) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best
of such counsel's knowledge after due inquiry, neither the
Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease 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 or their respective property is bound, except to the
extent such default, if any, could not reasonably be expected to
have a Material Adverse Effect;
(xiii) the execution, delivery and performance of this
Agreement and the other Operative Documents by the
42
Company and each of the Guarantors, compliance by the Company and
each of the Guarantors with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and
thereby will not (i) conflict with or constitute a breach of any
of the terms or provisions of, or a default under, any indenture,
loan agreement, mortgage, lease 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 or their respective
property is bound, after receipt of any required consents, which
consents have been obtained, (ii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree
of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property, (iii) result in the imposition or creation
of (or the obligation to create or impose) a Lien under, any
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 or their respective property is bound, or (iv)
result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its
subsidiaries or result in any other impairment of the rights of
the holder of any such Authorization, except for any violation,
conflict, breach, default, Lien, termination, suspension,
revocation or impairment which would not, singly or in the
aggregate, have a Material Adverse Effect;
(xiv) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or to which any of their
respective property is subject which would be required to be
described in the Offering Circular if the Offering Circular were
a registration statement on Form S-1 under the Act that is not
so described in the Offering Circular;
(xv) neither the Company nor any of its subsidiaries has
violated any Environmental Law or any provisions of ERISA, any
provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for
43
such violations which, singly or in the aggregate, would not have
a Material Adverse Effect;
(xvi) to the best of such counsel's knowledge, each of
the Company and its subsidiaries has such Authorizations of, and
has made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under
any applicable Environmental Laws, as are necessary to own,
lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each
such Authorization is valid and in full force and effect and each
of the Company and its subsidiaries is in compliance with all the
terms and conditions thereof and with the rules and regulations
of the authorities and governing bodies having jurisdiction with
respect thereto; and, except as set forth in the Offering
Circular, no event has occurred (including, without limitation,
the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the
holder of any such Authorization; and such Authorizations contain
no restrictions that are burdensome to the Company or any of its
subsidiaries; except where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect;
(xvii) to the best of such counsel's knowledge after due
inquiry, no person has the right, under any contract, agreement
or understanding between any such person and the Company or any
Guarantor, in connection with, or as a result of, the
transactions contemplated hereby or by the Registration Rights
Agreement, to require the Company or such Guarantor to file a
registration statement under the Act with respect to
44
any debt securities of the Company or such Guarantor or to
require the Company or such Guarantor to include any securities
of the Company or any Guarantor with the Notes and Subsidiary
Guarantees registered pursuant to any Registration Statement,
other than the Registration Rights Agreement; and
(xviii) no facts have come to such counsel's attention
that have caused such counsel to believe that the Offering
Circular (including the documents incorporated by reference, as
amended) as of its date and as of the Closing Date contained or
contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading (it being understood such counsel
expresses no opinion on the financial statements or other
financial and statistical (other than industry) data included or
incorporated by reference in the Offering Circular).
The opinion of the General Counsel described in Section 9(g) above
shall be rendered to you at the request of the Company and the Guarantors and
shall so state therein. In giving such opinion with respect to the matters
covered by Section 9(g)(xviii), the General Counsel may state in his opinion
that, in his capacity as General Counsel, he has participated in conferences
with officers and other representatives of the Company, representatives of the
independent public accountants for the Company and representatives of the
Initial Purchasers at which the contents of the Offering Circular and related
matters were discussed and that such counsel does not pass upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Circular (except as indicated in clause
(xi) above) and has made no independent check or verification thereof.
In giving the enforceability opinions specified in clauses (v) through
(x) above, the General Counsel may assume that the laws governing the subject
documents are the same as Pennsylvania law with respect to the contemplated
transactions; provided, that such counsel must state in his opinion that,
without independent check or verification, he is not aware of any exceptions to
enforceability of the subject documents under the laws governing the same that
would be required
45
to be stated in such counsel's opinion if such counsel were opining as to the
laws governing such documents but are not so stated in such opinion due to the
fact that such opinion is with respect to Pennsylvania law.
(h) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(i) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance reasonably
satisfactory to the Initial Purchasers from each of KPMG LLP and
PricewaterhouseCoopers LLP, independent public accountants, containing the
information and statements of the type ordinarily included in accountants'
"comfort letters" to the Initial Purchasers with respect to the financial
statements and certain financial information contained in the Offering Circular.
(j) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(k) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(l) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(m) Neither the Company nor the Guarantors shall have failed at or
prior to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Guarantors, as the case may be, at or prior to the Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall
------------------------------------------
become effective upon the execution and delivery of this Agreement by the
parties hereto.
46
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Circular, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule A bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant
47
to this Section 10 by an amount in excess of one-ninth of such principal amount
of the Series A Notes without the written consent of such Initial Purchaser. If
on the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Company for purchase of such the Series A Notes are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Initial Purchaser and the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Offering
Circular or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to 21250 Hawthorne Boulevard, Suite 800, Torrance, CA 90503, (310)
792-2600 and (ii) if to the Initial Purchasers, c/o Credit Suisse First Boston
Corporation, 11 Madison Avenue, New York, New York 11010, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Guarantors and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series A Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, any Guarantor, the officers or directors of the
Company or any Guarantor, or any person controlling the Company or any
Guarantor, (ii) acceptance of the Series A Notes and payment for them hereunder
and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company and each Guarantor, jointly
and
48
severally, agree to reimburse the Initial Purchasers for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof.
The Company and each Guarantor also agree, jointly and severally, to reimburse
the Initial Purchasers and its officers, directors and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all reasonable fees and expenses
(including without limitation the reasonable fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the directors of the Company and the
Guarantors and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Series A Notes from the Initial Purchasers
merely because of such purchase. Notwithstanding anything herein to the
contrary, other than with respect to assignments to affiliates of the Initial
Purchasers, no Initial Purchaser may assign its rights hereunder prior to
completion of the distribution of the Notes without the prior written consent of
the Company, which consent shall not be unreasonably withheld.
49
This Agreement shall be governed and construed in accordance with the
laws of the State of New York, including, without limitation, Section 5-1401 of
the New York General Obligations Law.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
DAVITA INC.
By: ---------------------------
Steven Udicious
Vice President, General Counsel and Secretary
S-1
GUARANTORS
----------
CARROLL COUNTY DIALYSIS FACILITY, INC.
CONTINENTAL DIALYSIS CENTER, INC.
CONTINENTAL DIALYSIS CENTER OF SPRINGFIELD-FAIRFAX, INC.
DIALYSIS SPECIALISTS OF DALLAS, INC.
EAST END DIALYSIS CENTER, INC.
ELBERTON DIALYSIS FACILITY, INC.
FLAMINGO PARK KIDNEY CENTER, INC.
LINCOLN PARK DIALYSIS SERVICES, INC.
MASON-DIXON DIALYSIS FACILITIES, INC.
OPEN ACCESS SONOGRAPHY, INC.
PENINSULA DIALYSIS CENTER, INC.
RENAL TREATMENT CENTERS, INC.
RENAL TREATMENT CENTERS-CALIFORNIA, INC.
RENAL TREATMENT CENTERS-HAWAII, INC.
RENAL TREATMENT CENTERS-ILLINOIS, INC.
RENAL TREATMENT CENTERS-MID-ATLANTIC, INC.
RENAL TREATMENT CENTERS-NORTHEAST, INC.
S-2
RENAL TREATMENT CENTERS-SOUTHEAST, INC.
RENAL TREATMENT CENTERS-WEST, INC.
RTC-TEXAS ACQUISITION, INC.
RTC TN, INC.
TOTAL ACUTE KIDNEY CARE, INC.
TOTAL RENAL CARE, INC.
TOTAL RENAL CARE OF COLORADO, INC.
TOTAL RENAL LABORATORIES, INC.
TOTAL RENAL RESEARCH, INC.
TOTAL RENAL SUPPORT SERVICES, INC.
TRC OF NEW YORK, INC.
TRI-CITY DIALYSIS CENTER, INC.
By:___________________________________________
Steven Udicious
Vice President, General Counsel and Secretary of each
of the above
TRC WEST, INC.
By:________________________________________
David Manheim
Vice President and Secretary
S-3
RTC HOLDINGS, INC.
By:__________________________________
Steven J. Udicious
President
BEVERLY HILLS DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
CRESCENT CITY DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-4
HOUSTON KIDNEY CENTER/TOTAL RENAL CARE INTEGRATED SERVICE
NETWORK LIMITED PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
KENNER REGIONAL DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
SUNRISE DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-5
TOTAL RENAL CARE/PERALTA RENAL CENTER PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE/PIEDMONT DIALYSIS PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE TEXAS LIMITED PARTNERSHIP
By: TOTAL RENAL CARE, INC.
Its: General Partner
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-6
TRC-INDIANA, LLC
By: TOTAL RENAL CARE, INC.
Its: Manager
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
TOTAL RENAL CARE OF UTAH, L.L.C.
By: TOTAL RENAL CARE, INC.
By:___________________________________
Steven Udicious
Vice President, General Counsel and
Secretary
S-7
INITIAL PURCHASERS
- ------------------
CREDIT SUISSE FIRST BOSTON CORPORATION
By:_______________________________
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:_______________________________
Name:
Title:
SUNTRUST EQUITABLE SECURITIES CORPORATION
By:_______________________________
Name:
Title:
BNY CAPITAL MARKETS, INC.
By:_______________________________
Name:
Title:
SCOTIA CAPITAL (USA) INC.
By:_______________________________
Name:
Title:
S-8
SCHEDULE A
Initial Purchasers
Principal
Initial Purchasers: Amount of Notes
- ------------------- ---------------
Credit Suisse First Boston Corporation $ 90,000,000
Banc of America Securities LLC $ 90,000,000
SunTrust Equitable Securities Corporation $ 22,500,000
BNY Capital Markets, Inc. $ 11,250,000
Scotia Capital (USA) Inc. $ 11,250,000
-----------------
Total $ 225,000,000
A-1
SCHEDULE B
Guarantors
Beverly Hills Dialysis Partnership
Carroll County Dialysis Facility, Inc.
Continental Dialysis Center, Inc.
Continental Dialysis Center of Springfield-Fairfax, Inc.
Crescent City Dialysis Partnership
Dialysis Specialists of Dallas, Inc.
East End Dialysis Center, Inc.
Elberton Dialysis Center, Inc.
Flamingo Park Kidney Center, Inc.
Houston Kidney Center/Total Renal Care Integrated Service Network LP
Kenner Regional Dialysis Partnership
Lincoln Park Dialysis Services, Inc.
Mason-Dixon Dialysis Facilities, Inc.
Open Access Sonography, Inc.
Peninsula Dialysis Center, Inc.
Renal Treatment Centers, Inc.
Renal Treatment Centers - California
Renal Treatment Centers - Hawaii, Inc.
Renal Treatment Centers - Illinois, Inc.
Renal Treatment Centers - Mid-Atlantic, Inc.
Renal Treatment Centers - Northeast, Inc.
Renal Treatment Centers - Southeast, Inc.
Renal Treatment Centers - West, Inc.
RTC Holdings, Inc.
RTC - Texas Acquisition, Inc.
RTC TN, Inc.
Sunrise Dialysis Partnership
Total Acute Kidney Care, Inc.
Total Renal Care, Inc.
Total Renal Care of Colorado, Inc.
Total Renal Care/Peralta Renal Center Partnership
Total Renal Care/Piedmont Dialysis Center Partnership
Total Renal Care Texas Limited Partnership
Total Renal Care of Utah, L.L.C.
TRC of New York, Inc.
B-1
TRC West, Inc.
Total Renal Laboratories, Inc.
Total Renal Research, Inc.
Total Renal Support Services, Inc.
TRC - Indiana LLC
Tri-City Dialysis Center, Inc.
B-2
SCHEDULE C
SUBSIDIARIES OF DAVITA INC.
- ----------------------------------------------------------------------------------------------------------
Percentage Owned by
Subsidiary DaVita and its Subsidiaries
- ----------------------------------------------------------------------------------------------------------
Astro, Hobby, West Mt., Renal Care Ltd. Partnership 98.5%
- ----------------------------------------------------------------------------------------------------------
Bay Area Dialysis Partnership 66.67%
- ----------------------------------------------------------------------------------------------------------
Beverly Hills Dialysis Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Burbank Dialysis Partnership 50.1%
- ----------------------------------------------------------------------------------------------------------
Capital Dialysis Partnership 20.0%
- ----------------------------------------------------------------------------------------------------------
Carroll County Dialysis Facility, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Carroll County Dialysis Facility Limited Partnership 66.7%
- ----------------------------------------------------------------------------------------------------------
Continental Dialysis Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Continental Dialysis Center of Springfield-Fairfax, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Crescent City Dialysis Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Dialysis Specialists of Dallas, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Dialysis Treatment Centers of Macon, LLC 20.0%
- ----------------------------------------------------------------------------------------------------------
East End Dialysis Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Eastmont Partnership 60.78%
- ----------------------------------------------------------------------------------------------------------
Eaton Canyon Dialysis Partnership 87.5%
- ----------------------------------------------------------------------------------------------------------
Elberton Dialysis Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Flamingo Park Kidney Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Garey Dialysis Center Partnership 60.0%
- ----------------------------------------------------------------------------------------------------------
C-1
- ----------------------------------------------------------------------------------------------------------
Guam Renal Care Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Houston Kidney Center/Total Renal Care Integrated Service Network LP 100.0%
- ----------------------------------------------------------------------------------------------------------
Hutchinson Dialysis, L.L.C. 50.0%
- ----------------------------------------------------------------------------------------------------------
Kenner Regional Dialysis Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Lincoln Park Dialysis Services, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Los Angeles Dialysis Center 64.62%
- ----------------------------------------------------------------------------------------------------------
Mason-Dixon Dialysis Facilities, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
MD Investments, LLC 50.1%
- ----------------------------------------------------------------------------------------------------------
Moncrief Dialysis Center/Total Renal Care, LP 30.0%
- ----------------------------------------------------------------------------------------------------------
Open Access Sonography, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Pacific Coast Dialysis Center 93.0%
- ----------------------------------------------------------------------------------------------------------
Pacific Dialysis Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Peninsula Dialysis Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - California 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - Hawaii, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - Illinois, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - Mid-Atlantic, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - Northeast, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - Southeast, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Renal Treatment Centers - West, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
RTC Holdings, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
RTC - Texas Acquisition, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
RTC TN, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
C-2
- ----------------------------------------------------------------------------------------------------------
San Gabriel Valley Partnership 75.0%
- ----------------------------------------------------------------------------------------------------------
Sunrise Dialysis Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Timpanogos, L.L.C (formerly Total Renal Care Provo, LLC) 51.0%
- ----------------------------------------------------------------------------------------------------------
Total Acute Kidney Care, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care of Colorado, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care/Crystal River Dialysis, L.C. 33.3%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care Hollywood Partnership 65.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care North Carolina, LLC 85.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care/Peralta Renal Center Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care Petersburg, LLC 25.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care/Piedmont Dialysis Center Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care Puerto Rico, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care Texas Limited Partnership 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Care of Utah, L.L.C. 100.0%
- ----------------------------------------------------------------------------------------------------------
TRC of New York, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
TRC West, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Laboratories, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Research, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Support Services, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
Total Renal Support Services of North Carolina, LLC 85.0%
- ----------------------------------------------------------------------------------------------------------
TRC Dyker Heights, L.P. 70.0%
- ----------------------------------------------------------------------------------------------------------
TRC El Paso Limited Partnership 50.1%
- ----------------------------------------------------------------------------------------------------------
TRC Four Corners Dialysis Clinics, LLC 51.0%
- ----------------------------------------------------------------------------------------------------------
C-3
- ----------------------------------------------------------------------------------------------------------
TRC - Georgetown Regional Dialysis LLC 80.0%
- ----------------------------------------------------------------------------------------------------------
TRC - Indiana LLC 100.0%
- ----------------------------------------------------------------------------------------------------------
TRC - Petersburg, LLC 25.0%
- ----------------------------------------------------------------------------------------------------------
Tri-City Dialysis Center, Inc. 100.0%
- ----------------------------------------------------------------------------------------------------------
University Park Dialysis Partnership 50.0%
- ----------------------------------------------------------------------------------------------------------
Wilshire Dialysis Partnership 50.0%
- ----------------------------------------------------------------------------------------------------------
C-4
EXHIBIT A
Form of Registration Rights Agreement