Exhibit 10.1
CONCENTRA OPERATING CORPORATION
THE SUBSIDIARY GUARANTORS NAMED HEREIN
$190,000,000
13% Series A Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
August 17, 1999
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
DEUTSCHE BANK SECURITIES INC.
FLEET SECURITIES, INC.
$190,000,000
13% Series A Senior Subordinated Notes due 2009
of
CONCENTRA OPERATING CORPORATION
PURCHASE AGREEMENT
August 17, 1999
Donaldson, Lufkin & Jenrette Securities Corporation
Chase Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Fleet Securities, Inc.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Concentra Operating Corporation, a Nevada corporation (the
"COMPANY") and a wholly owned subsidiary of Concentra Managed Care, Inc.
("HOLDINGS"), proposes to issue and sell to Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Chase Securities Inc., Credit Suisse First
Boston Corporation, Deutsche Bank Securities Inc. and Fleet Securities, Inc.
(each an "INITIAL PURCHASER" and, together, the "INITIAL PURCHASERS") an
aggregate of $190,000,000 in principal amount of its 13% Series A Senior
Subordinated Notes due 2009 (the "SERIES A NOTES"), subject to the terms and
conditions set 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 below), between the Company, the Subsidiary Guarantors named therein
and United States Trust Company of New York, as trustee (the "Trustee"). The
Series A Notes and the Series B Notes (as defined below) issuable in exchange
therefor are collectively referred to herein as the "NOTES." The Notes
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will be guaranteed (the "SUBSIDIARY GUARANTEES") by all existing and future
subsidiaries of the Company (the "SUBSIDIARY GUARANTORS") except Permitted Joint
Ventures, as further provided in the Indenture. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Offering
Memorandum (as defined herein).
1. OFFERING MEMORANDUM. The Series A Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company and the Subsidiary Guarantors have prepared a preliminary
offering memorandum, dated July 23, 1999 (the "PRELIMINARY OFFERING
MEMORANDUM"), and a final offering memorandum, dated August 5, 1999 (the
"OFFERING MEMORANDUM"), each relating to the Series 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 (other than the Series B Notes) issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
OR (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) 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, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
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RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) 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
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
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 severally
agrees 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 97.25% of the principal amount thereof (the "PURCHASE
PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
the Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, 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
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
(i) and (ii) being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
Purchasers will offer the Series A Notes to Eligible Purchasers initially at the
offering
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price set forth on the cover of the Offering Memorandum. 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,
substantially as described in the Offering Memorandum and containing other
customary and reasonable provisions. Pursuant to the Registration Rights
Agreement, the Company will agree to file with the Securities and Exchange
Commission (the "COMMISSION"), under the circumstances set forth therein, (i) a
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to the Company's 13% Series B Senior Subordinated Notes due
2009 (the "SERIES B NOTES"), to be offered in exchange for the Series A Notes
(such offer to exchange being referred to as the "EXCHANGE OFFER") and/or (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series A Notes and use its reasonable 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, the Registration Rights Agreement, the Contribution Agreement, the
Merger Agreement and the Senior Credit Facilities (each as defined in the
Offering Memorandum) are hereinafter sometimes referred to collectively as the
"OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Series A Notes shall be made at the offices of Reboul, MacMurray, Hewitt,
Maynard & Kristol or such locations as may be mutually acceptable to the parties
hereto. Such delivery and payment shall be made at 9:00 a.m., New York City
time, on the eighth business day following the date of this Agreement (August
17, 1999) or at such other time as shall be agreed upon by the Initial
Purchasers and the Company. The time and date of such delivery and the payment
are herein called the "CLOSING DATE."
(b) One or more of the Series A Notes in the 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
aggregate principal amount of the Series A Notes (collectively, the "GLOBAL
NOTE"), shall be delivered by the Company to the Initial Purchasers (or as the
Initial Purchasers direct), in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial
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Purchasers of the Purchase Price thereof by wire transfer in same day funds to
an account designated by 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. The Company hereby agrees with
each Initial Purchaser as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by an Initial Purchaser, 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 an Initial Purchaser 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 Offering
Memorandum, as then amended or supplemented, untrue or that requires any
additions to or changes in the Offering Memorandum, as then amended or
supplemented, in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company shall use
its reasonable 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 shall use its reasonable 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, without charge, as many
copies of the Offering Memorandum, and any amendments or supplements thereto, as
the Initial Purchasers may reasonably request. Subject to the Initial
Purchasers' compliance with their representations and warranties and agreements
set forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum (prior to the availability of the Offering
Memorandum) and the Offering Memorandum, and any amendments and supplements
thereto, 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 Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers prior to the consummation of
the Exchange Offer (i) not
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to make any amendment or supplement to the Offering Memorandum of which the
Initial Purchasers shall not previously have been advised or to which the
Initial Purchasers shall reasonably object within a reasonable time after being
so advised and (ii) to prepare promptly upon the Initial Purchasers' reasonable
request, any amendment or supplement to the Offering Memorandum which may be
necessary or advisable in connection with Exempt Resales or such market-making
activities.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur as a result of which it becomes necessary to amend
or supplement the Offering Memorandum in order to make the statements therein,
in the light of the circumstances as of the date the Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with any applicable law,
promptly to prepare an appropriate amendment or supplement to such Offering
Memorandum 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 Memorandum, as so amended or supplemented, 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 the 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 reasonably request and to continue
such qualification in effect so long as required to consummate such 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 Subsidiary Guarantor shall
be required in connection therewith to register or qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or to take
any action that would subject it to service of process or taxation other than as
to matters and transactions relating to Exempt Resales, in any jurisdiction in
which it is not now so subject.
(f) So long as the Notes are outstanding, for a period of
two (2) years after the Closing Date and thereafter so long as an Initial
Purchaser is making a market in the Notes, 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 Subsidiary Guarantors to its security holders (other
than reports or other communications in the ordinary
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course from the Subsidiary Guarantors to the Company and no one else) or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and/or its subsidiaries as DLJ may
reasonably request.
(g) So long as any of the Series A Notes remain outstanding
and during any period in which the Company and the Subsidiary 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 with any sale thereof and any prospective purchaser of such Series
A Notes designated by such holder, upon request, the information ("RULE 144A
INFORMATION") required by Rule 144A(d)(4) under the Act.
(h) 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 performance of the obligations of the Company
under this Agreement, including, without limitation: (i) all fees and expenses
in connection with the preparation, printing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum and all amendments and supplements
thereto (including financial statements) prior to or during the period specified
in Section 5(c), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by them as specified herein, (ii) all
costs and expenses related to the issuance 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 reproduction of any
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 for offer and sale under the
securities or Blue Sky laws of the several states referred to in Section 5(e)
hereof 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,
(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 - PORTAL ("PORTAL"), (vii) the
reasonable fees and expenses of the Trustee and Trustee's counsel in connection
with the Indenture and the Notes, (viii) all 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, and
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(xi) all other costs and expenses incurred in the performance of the obligations
of the Company and its Subsidiary Guarantors hereunder for which provision is
not otherwise made in this Section; PROVIDED, HOWEVER, that the Initial
Purchasers shall pay the costs and expenses of their counsel.
(i) 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.
(j) 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 letter of the Company to DTC relating to the approval of the
Notes by DTC for "book entry" transfer.
(k) 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
Holdings (other than the Holdco Notes) or any warrants, rights or options to
purchase or otherwise acquire debt securities of the Company or Holdings
substantially similar to the Notes (other than the Notes and the Subsidiary
Guarantees) without the prior written consent of DLJ, which consent shall not be
unreasonably withheld.
(l) Not to, and not to permit any of its affiliates (as
such term is defined in Rule 501(b) under the Act) 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 reasonably be expected to 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.
(m) Except in connection with the Exchange Offer or the
filing of the Shelf Registration Statement, as the case may be, or following the
effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, not to, and not to authorize or
knowingly permit any person acting on its behalf to, solicit any offer to buy or
offer to sell the Notes by means of any form of general solicitation or general
advertising (as such terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act.
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(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 Subsidiary Guarantors registered pursuant to the Act to be offered in
exchange for the Series A Notes and the Subsidiary Guarantees and to comply, in
all material respects, with all applicable federal and state securities laws in
connection with the Exchange Offer.
(p) To comply, in all material respects, 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.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SUBSIDIARY GUARANTORS. As of the date hereof, each of the Company and the
Subsidiary Guarantors jointly and severally represents and warrants to each
Initial Purchaser (it being understood that all representations and warranties
herein with respect to the condition, financial or otherwise, or the earnings,
business, management or operations of the Company give effect to the
Transactions as if they had occurred as of the date hereof) that:
(a) The Preliminary Offering Memorandum as of its date did
not and the Offering Memorandum as of the date hereof does not, and as of the
Closing Date the Offering Memorandum, as supplemented or amended, 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 paragraph (a)
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum or the Offering Memorandum (or any supplement or amendment thereto)
based solely upon information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser expressly for use therein. The
Company acknowledges for all purposes of this Agreement that (i) the last
paragraph on the cover page of the Preliminary Offering Memorandum and the
Offering Memorandum, (ii) the information contained in the first paragraph, the
first and third sentences of the third paragraph, the ninth paragraph, the tenth
paragraph, the eleventh paragraph and the twelfth paragraph under the caption
"Plan
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of Distribution" in the Preliminary Offering Memorandum and the Offering
Memorandum, and (iii) the information regarding stabilization on page ii of the
Preliminary Offering Memorandum and the Offering Memorandum constitute the only
information relating to the Initial Purchasers furnished to the Company in
writing by any Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum and that the Initial Purchasers shall not
be deemed to have provided any other information (and therefore are not
responsible for any such statement or omission) pertaining to any arrangement or
agreement with respect to any party other than the Initial Purchasers. No
contract or document that would be required to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus contained in a
registration statement on Form S-1 filed under the Act is not so described. The
agreements listed on SCHEDULE C hereto represent all of the material agreements
of the Company that would be required to be filed as exhibits if the Offering
were to be made pursuant to a registration statement on Form S-1. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, 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, Holdings and the Subsidiary
Guarantors has been duly organized and is validly existing as a corporation,
business trust or limited partnership (as the case may be) in good standing
under the laws of the respective states in which they have been organized as
outlined in SCHEDULE B. The Subsidiary Guarantors listed in SCHEDULE B are the
Company's only subsidiaries. Each of the Company and Holdings has full corporate
power and authority to carry on its business and to own, lease and operate its
properties as described in the Preliminary Offering Memorandum and the Offering
Memorandum. Each of the Company and the Subsidiary Guarantors has the requisite
corporate power and authority to authorize the offering of the Notes and the
Subsidiary Guarantees, respectively, and each of the Company, Holdings and the
Subsidiary Guarantors has the requisite power to execute, deliver and perform
its obligations under each Operative Document to which it is a party. Each of
the Company and the Subsidiary Guarantors is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which such qualification is required, except where the failure to be so
qualified or in good standing would not (i) have a material adverse effect on
the business, prospects, financial condition or results of operations of the
Company and the Subsidiary Guarantors, taken as a whole, (ii) materially
interfere with or materially adversely affect the issuance or marketability of
the Series A Notes pursuant hereto or (iii) materially adversely affect in any
manner the validity of this Agreement or any of the other Operative
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Documents (the events referred to in clauses (i) through (iii), each a "MATERIAL
ADVERSE EFFECT").
(c) All of the outstanding capital stock of the Company (i)
has been duly authorized and validly issued, (ii) is fully paid, nonassessable
and not subject to any preemptive or similar rights and (iii) is owned by
Holdings free and clear of all liens, encumbrances, pledges, claims, security
interests, mortgages, assessments, easements, rights of way, covenants,
restrictions, rights of first refusal, defects in title, encroachments and other
burdens or adverse claims (collectively "LIENS") (other than Liens on such
capital stock pursuant to the Senior Credit Facilities). The entities, other
than the Company, listed in Schedule B hereto are the only subsidiaries (other
than the Permitted Joint Ventures), direct or indirect, of the Company. All of
the outstanding capital stock of each such Subsidiary Guarantor and Holdings (i)
has been duly authorized and validly issued, (ii) is fully paid, nonassessable
and not subject to any preemptive or similar rights and (iii) in the case of
each Subsidiary Guarantor, is owned by the Company, directly or indirectly,
through one or more subsidiaries, free and clear of all Liens (other than Liens
on such capital stock pursuant to the Senior Credit Facilities).
(d) This Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors and, assuming the due
execution and delivery by the Initial Purchasers, is a valid and binding
agreement of the Company and the Subsidiary Guarantors, enforceable against the
Company and the Subsidiary Guarantors in accordance with its terms, except (i)
as the enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) for general principles of equity
(regardless of whether enforcement is brought in a proceeding at law or in
equity) and (iii) limitations of applicable law regarding the enforceability of
any rights to contribution or indemnification.
(e) On the Closing Date, the Indenture will have been duly
authorized and validly executed and delivered by the Company and the Subsidiary
Guarantors. When the Indenture has been duly executed and delivered by the
Company and the Subsidiary Guarantors, the Indenture will be a valid and binding
agreement of the Company and the Subsidiary Guarantors, enforceable against the
Company and the Subsidiary Guarantors in accordance with its terms (assuming the
due execution and delivery of the Indenture by the Trustee) except (i) as the
enforceability thereof may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) for general principles of equity (regardless
of whether enforcement is brought in a proceeding at law or in equity) and (iii)
the waiver as
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to stay, extension or usury laws may not be enforceable. 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"), and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.
(f) On the Closing Date, the Series A Notes and the
Subsidiary Guarantees to be endorsed on the Series A Notes by each Subsidiary
Guarantor will have been duly authorized and validly executed and delivered by
the Company and the Subsidiary Guarantors, respectively. When the Series A Notes
and the Subsidiary Guarantees 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 and the Subsidiary Guarantees will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company and the
Subsidiary Guarantors, respectively, enforceable against the Company and the
Subsidiary Guarantors, respectively, in accordance with their terms except (i)
as the enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) for general principles of equity
(regardless of whether enforcement is brought in a proceeding at law or in
equity) and (iii) the waiver as to stay, extension or usury laws may not be
enforceable. The Series A Notes and the Subsidiary Guarantees to be endorsed on
the Series A Notes by each Subsidiary Guarantor, when authenticated, executed
and delivered, will conform in all material respects to the description thereof
contained in the Offering Memorandum.
(g) On the Closing Date, the Series B Notes and the
Subsidiary Guarantees to be endorsed on the Series B Notes by each Subsidiary
Guarantor will have been duly authorized by the Company and the Subsidiary
Guarantors, respectively. When the Series B Notes and the Subsidiary Guarantees
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 Series B Notes and the Subsidiary
Guarantees will be entitled to the benefits of the Indenture and will be the
valid and binding obligations of the Company and the Subsidiary Guarantors,
respectively, enforceable against the Company and the Subsidiary Guarantors,
respectively, in accordance with their terms, except (i) as the enforceability
thereof may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors' right
generally, (ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity) and (iii) the waiver
as to stay, extension or usury laws may not be enforceable. The Series B Notes
and the Subsidiary
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Guarantees to be endorsed on the Series B Notes by each Subsidiary Guarantor,
when authenticated, executed and delivered, will conform in all material
respects to the description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Registration Rights Agreement
will have been duly authorized and validly executed and delivered by the Company
and the Subsidiary Guarantors. When the Registration Rights Agreement has been
duly executed and delivered by the Company and the Subsidiary Guarantors, the
Registration Rights Agreement will be a valid and binding agreement of the
Company and the Subsidiary Guarantors, enforceable against the Company and the
Subsidiary Guarantors in accordance with its terms (assuming the due execution
and delivery of the Registration Rights Agreement by the Initial Purchasers)
except (i) as the enforceability thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, (ii) for general principles of
equity (regardless of whether enforcement is brought in a proceeding at law or
in equity) and (iii) limitations of applicable law regarding the enforceability
of any rights to contribution or indemnification. On the Closing Date, the
Registration Rights Agreement conforms in all material respects to the
description thereof in the Offering Memorandum.
(i) On the Closing Date, each of the Contribution
Agreement, the Merger Agreement and the Senior Credit Facilities will have been
duly authorized and validly executed and delivered by the Company, Holdings and
the Subsidiary Guarantors (to the extent a party thereto), and will be valid and
binding agreements of each respective entity, enforceable against each in
accordance with its terms (assuming the due execution and delivery of each of
the Contribution Agreement, the Merger Agreement and the Senior Credit
Facilities by each other party thereto) except (i) as the enforceability thereof
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and (ii)
for general principles of equity (regardless of whether enforcement is brought
in a proceeding at law or in equity). On the Closing Date, each of the
Contribution Agreement, the Merger Agreement and the Senior Credit Facilities
conforms in all material respects to the respective descriptions thereof in the
Offering Memorandum and each transaction comprising the Transactions conforms,
in all material respects, to the descriptions thereof in the Offering
Memorandum.
(j) None of the Company, Holdings, any of the Permitted
Joint Ventures or any of the Subsidiary Guarantors (i) is in violation of its
organizational documents or by-laws, or (ii)(a) before giving effect to the
Transactions is, or (b) assuming that the Transactions are consummated as
contemplated by the Offering Memorandum will
-14-
be, 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, Holdings, any of the Permitted
Joint Ventures or any of the Subsidiary Guarantors is a party or by which the
Company, Holdings, any Permitted Joint Venture or any Subsidiary Guarantor or
any of their respective property is bound, except for any such defaults in (ii)
as would not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(k) The execution, delivery and performance by the
Company, Holdings and each Subsidiary Guarantor of each Operative Agreement to
which any of them is a party, the issuance and sale of the Series A Notes and
the Subsidiary Guarantees as contemplated by this Agreement and the Offering
Memorandum and the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering Memorandum will not
(i) except to the extent such has been obtained, 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 and are in full
force and effect and as may be required under the securities or Blue Sky laws of
the various states and except, in the case of the Registration Rights Agreement,
such as may be required under the 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 of the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor or (B) any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor, taken as a whole, to which
the Company, Holdings, any Permitted Joint Venture or any Subsidiary Guarantor
is a party or by which the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor or their respective property is bound, (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, Holdings, any Permitted Joint Venture or any Subsidiary Guarantor
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,
Holdings, any Permitted Joint Venture or any Subsidiary Guarantor or their
respective property is bound (other than any Lien pursuant to the Senior Credit
Facilities), or (v) result in the termination or revocation of any permit (as
defined below) of the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor or result in any other impairment of the rights of the
holder of any such permit, except in the case of clauses (i), (ii) (B), (iv) and
(v), as would not, singly or in the aggregate, have Material Adverse Effect.
-15-
(l) The Company, each Permitted Joint Venture and each
Subsidiary Guarantor has good and marketable title to, or valid leasehold
interests in, all its real or personal properties material to the business of
the Company, each Permitted Joint Venture and each Subsidiary Guarantor, taken
as a whole, in each case free and clear of all Liens, except for Liens under the
Senior Credit Facilities or such as do not, singly or in the aggregate, have a
Material Adverse Effect. Any real property and buildings held under lease by the
Company, any Permitted Joint Venture or any Subsidiary Guarantor are held by the
Company or such Permitted Joint Venture or Subsidiary Guarantor under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
business by the Company, the Permitted Joint Ventures and the Subsidiary
Guarantors.
(m) There is no legal or governmental proceeding pending
or, to the Company's knowledge, threatened to which the Company, Holdings or any
Subsidiary Guarantor is bound or could reasonably be expected to be a party or
to which any of their respective property is or could reasonably be expected to
be subject, except for any such proceedings as would not, singly or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
(n) 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 or performance of any of
the Operative Documents, the consummation of any of the transactions
contemplated thereunder or the issuance of the Series A Notes or the Subsidiary
Guarantees, or suspends the sale of the Series A Notes in any jurisdiction
referred to in Section 5(e). 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, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor which would prevent or
suspend the issuance or sale of the Series A Notes in any jurisdiction referred
to in Section 5(e) or the consummation of any transaction contemplated by the
Operative Documents.
(o) Except as could not reasonably be expected, singly or
in the aggregate, to have a Material Adverse Effect, (i) the Company, Holdings,
the Permitted Joint Ventures and the Subsidiary Guarantors are not in violation
of any Federal, state or local laws or regulations relating to pollution or
protection of human health or the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("ENVIRONMENT LAWS") or any provisions of
the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, which violation includes, but is not limited to, noncompliance with
or lack of any permits (as defined below) or other governmental
-16-
authorizations; and (ii) (A) the Company, Holdings, the Permitted Joint Ventures
and the Subsidiary Guarantors have not received any communication, whether from
a governmental authority or otherwise, alleging any such violation or
noncompliance, and there are no circumstances, either past, present or that are
reasonably foreseeable, that are reasonably likely to lead to such violation in
the future, (B) there is no pending or, to the Company's knowledge, threatened
claim, action, investigation or notice by any person or entity alleging
potential liability for investigatory, cleanup, or governmental response costs,
or natural resources or property damages, or personal injuries, attorney's fees
or penalties relating to any actual, alleged or, to the Company's knowledge,
threatened pollution or contamination, or, to the Company's knowledge, any
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law (collectively, "ENVIRONMENTAL CLAIMS"), and (C) there are no
past or present actions, activities, circumstances, conditions, events or
incidents that could reasonably be expected to form the basis of any
Environmental Claim against the Company, Holdings, any Permitted Joint Venture
or any Subsidiary Guarantor or against any person or entity whose liability for
any Environmental Claim the Company, Holdings, any Permitted Joint Venture or
any Subsidiary Guarantor has retained or assumed either contractually or by
operation of law. 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 permit, 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.
(p) Except for the Initial Purchasers, there are no
contracts, agreements or understandings between the Company, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor and any person granting such
person the right to require the Company, Holdings, any Permitted Joint Venture
or any Subsidiary Guarantor to file a registration statement under the Act with
respect to any securities of the Company, the Permitted Joint Ventures or such
Subsidiary Guarantor or to require the Company, the Permitted Joint Ventures or
the Subsidiary Guarantors to include securities held by such person in the
Registration Statements contemplated by the Registration Rights Agreement.
(q) None of the Company, Holdings, any Permitted Joint
Venture or any Subsidiary Guarantor has (i) taken, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the Company or
Holdings to facilitate the sale or resale of the Notes or (ii) since the date of
the Preliminary Offering Memorandum (A) sold, bid for, purchased or paid any
person any compensation for soliciting purchases of the Notes or
-17-
(B) paid or agreed to pay to any person any compensation for soliciting another
to purchase any other securities of the Company or Holdings.
(r) Except for this Agreement, there are no contracts,
agreements or understandings between the Company, Holdings, any Permitted Joint
Venture or any Subsidiary Guarantor and any person that would give rise to a
valid claim against the Company, Holdings, any Permitted Joint Venture, any
Subsidiary Guarantor or any Initial Purchaser for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and sale
of the Notes.
(s) The Company has no knowledge of any actionable
violation by the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor of any Federal, state or local law relating to employment
practices, discrimination in the hiring, promotion or pay of employees or any
applicable wage or hour laws, or of any provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations promulgated
thereunder that would, singly or in the aggregate, have a Material Adverse
Effect. There is (A) no material unfair labor practice complaint pending against
the Company, Holdings, any Permitted Joint Venture or any Subsidiary Guarantor
or, to the best knowledge of the Company, threatened against it, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor, before the National Labor
Relations Board or any state or local labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is pending against the Company, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor or, to the knowledge of the
Company, threatened against it, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor, (B) no labor strike, dispute, slowdown or stoppage ("LABOR
DISPUTE") in which the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor is involved nor, to the best knowledge of the Company, is
any Labor Dispute imminent, other than routine disciplinary and grievance
matters, or (C) no union representation question existing with respect to the
employees of the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor except with respect to any matter specified in clause (A),
(B) or (C) above as would not, singly or in the aggregate, have a Material
Adverse Effect. Except as set forth in the Offering Memorandum, there exist no
material employment, consulting, severance or termination agreements or
arrangements between the Company, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor and any current or former officer or director of the
Company, Holdings, any Permitted Joint Venture or any Subsidiary Guarantor and
there are no collective bargaining or other labor union agreements to which the
Company, Holdings, Yankee, any Permitted Joint Venture or any Subsidiary
Guarantor is a party or by which any of them is bound.
-18-
(t) Each of the Company, Holdings, the Permitted Joint
Ventures and the Subsidiary Guarantors has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals ("PERMITS") of, and
has made all filings with and notice to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable Environmental
Laws, laws relating to the provisions of occupational healthcare services,
medical review services and the operation of managed care provider networks as
are necessary to own, lease, license and operate its properties and to conduct
its business, except where the failure to have any such permit or to make any
such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such permit is valid and in full force and effect and the
Company, Holdings, each Permitted Joint Venture and each Subsidiary Guarantor is
in compliance with all the terms and conditions of its permits and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; no event has occurred (including the receipt
of any notice from any authority or governing body) which allows or, after
notice or elapse of time or both, would allow revocation, suspension or
termination of any such permit, 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 permit; and such permits contain no restrictions that are unduly burdensome
to the Company, Holdings, such Permitted Joint Venture or such Subsidiary
Guarantor, except, in each case, 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.
(u) Except as would not, singly or in the aggregate, have
a Material Adverse Effect: (i) the Company, Holdings, the Permitted Joint
Ventures and the Subsidiary Guarantors own or possess, free and clear of all
Liens (other than Liens under the Senior Credit Facilities), valid rights to all
patents, patent rights, copyrights, computer databases and software, logos,
slogans, inventions, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names and all licenses,
applications and registrations related to the foregoing used in the business of
the Company, Holdings, such Permitted Joint Venture or such Subsidiary Guarantor
(collectively, the "INTELLECTUAL PROPERTY"); (ii) none of the Company, Holdings,
the Permitted Joint Ventures or the Subsidiary Guarantors has received any
notice of infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or has knowledge of any infringement of the
Intellectual Property by any person; and (iii) to the best of the Company's
knowledge after due inquiry, the use of the Intellectual Property in connection
with the
-19-
business and operations of the Company, Holdings, each Permitted Joint Venture
and each Subsidiary Guarantor does not infringe on the rights of any person.
(v) The Company, Holdings, each of the Permitted Joint
Ventures and each of the Subsidiary Guarantors are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company, Holdings, any of the Permitted Joint Ventures
nor any of the Subsidiary Guarantors (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 reasonably be expected
to have a Material Adverse Effect.
(w) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Company, Holdings,
any of the Permitted Joint Ventures or any of the Subsidiary Guarantors on the
one hand and the directors, officers, stockholders, customers or suppliers of
the Company, Holdings, any of the Permitted Joint Ventures or any of the
Subsidiary Guarantors on the other hand, which would be required by the Act to
be described in the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on Form S-1 filed with the
Commission.
(x) Except as set forth in the Offering Memorandum or
except for such violations which, singly or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, to the Company's
and Holdings' knowledge, neither the Company, any of the Permitted Joint
Ventures, any of the Subsidiary Guarantors nor any affiliated professional
corporation, partnership or association has violated any federal, state or local
statutes, rules or regulations or permit requirements relating to fraud and
abuse, self-referral, fee-splitting, the corporate practice of medicine, the
Programs (as defined in Section 6 (mm) below), workers' compensation, automobile
insurance and other laws that regulate the ownership or operation of managed
care provider networks or the provision of occupational healthcare services,
cost containment services or medical review services or healthcare services
generally or require licensing, certification or other approval of such services
provided (collectively, the "RELEVANT HEALTHCARE LAWS"). Except for such
violations which, singly or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, to the Company's and Holdings'
knowledge, neither the Company, any of the Permitted Joint Ventures, any of the
Subsidiary Guarantors nor any affiliated
-20-
professional corporation, partnership or association has engaged in a pattern or
practice of making payments intended to obtain or induce patient referrals for
any of their operations.
(y) The accountants, Arthur Andersen LLP, that have
certified the financial statements and related notes included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to Holdings and the Company as would be required by the
Act and the Exchange Act if the Offering Memorandum were a prospectus included
in a registration statement on Form S-1 filed with the Commission under the Act.
The historical financial statements, together with the related notes, included
in the Preliminary Offering Memorandum and the Offering Memorandum comply as to
form in all material respects with the requirements applicable to registration
statements on Form S-1 under the Act.
(z) The historical financial statements, together with
related notes forming part of the Preliminary Offering Memorandum and the
Offering Memorandum (and any amendment or supplement thereto), present fairly
the financial position, results of operations and changes in financial position
of the Company on the basis stated in the Preliminary Offering Memorandum and
the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related 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 included in the Preliminary
Offering Memorandum and the Offering Memorandum (and any amendment or supplement
thereto) are presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(aa) The PRO FORMA financial statements and the related
notes of the Company and Holdings included in the Preliminary Offering
Memorandum and the Offering Memorandum have been prepared in all material
respects in accordance with the accounting requirements of Article 11 of
Regulation S-X of the Commission applicable to registration statements on Form
S-1; the assumptions used in the preparation of such PRO FORMA financial
statements are, in the opinion of the management of the Company and Holdings,
reasonable; and the PRO FORMA adjustments reflected in such PRO FORMA financial
statements have been properly applied in all material respects to the historical
amounts in the compilation of such PRO FORMA financial statements. The other PRO
FORMA financial and statistical information and data included in the Preliminary
Offering Memorandum and the Offering Memorandum are, in all material respects,
presented and prepared on a basis consistent with such PRO FORMA financial
statements.
-21-
(bb) Each of the Company, Holdings and the Subsidiary
Guarantors is not and, after giving effect to the consummation of the
Transactions, will not be, an "investment company," as such term is defined in
the Investment Company Act of 1940, as amended.
(cc) Neither the Company, Holdings nor any agent acting on
behalf of the Company or Holdings has taken, and none of them will take, 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.
(dd) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in the Offering
Memorandum (including, without limitation, the Transactions and 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, the
Permitted Joint Ventures and the Subsidiary Guarantors 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, the Permitted Joint Ventures and the Subsidiary Guarantors
taken as a whole and (iii) the Company, the Permitted Joint Ventures and the
Subsidiary Guarantors taken as a whole have not incurred any material liability
or obligation, direct or contingent.
(ee) 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, Holdings or any Subsidiary
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's, Holdings' or any Subsidiary Guarantor's retaining
any rating assigned to the Company, Holdings or any Subsidiary Guarantor or any
securities of the Company, Holdings or any Subsidiary Guarantor or (ii) has
indicated to the Company, Holdings or any Subsidiary Guarantor that it is
considering (a) the downgrading, suspension, or withdrawal of, or any review for
a possible change in, any rating so assigned or (b) any change in the outlook
for any rating of the Company or Holdings or any securities of the Company,
Holdings or any Subsidiary Guarantor.
(ff) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Act.
-22-
(gg) 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 Subsidiary
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.
(hh) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) was or will be used by the
Company, Holdings, the Permitted Joint Ventures, the Subsidiary Guarantors or
any of their respective representatives (other than the Initial Purchasers, as
to whom the Company makes 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 where attendees have been invited by general solicitation or general
advertising. No securities of the same class as the Series A Notes or the
Subsidiary Guarantees have been issued and sold by the Company or the Subsidiary
Guarantors within the six-month period immediately prior to the date hereof.
(ii) No registration under the Act of the Series A Notes or
the Subsidiary Guarantees is required for the sale of the Series A Notes 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.
(jj) Assuming the accuracy of the Initial Purchasers'
representations, warranties and agreements set forth in Section 7 hereof, prior
to the effectiveness of any Registration Statement, the Indenture is not
required to be qualified under the TIA.
(kk) The Company has established 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.
-23-
(ll) Immediately after and after giving effect to the
offering of the Series A Notes as contemplated hereby and the consummation of
the Transactions, (i) the present fair salable value of the Company's and each
Subsidiary Guarantor's assets shall be more than the amount that will be
required to pay its debts (including contingent and unliquidated debts) as they
become absolute and matured, (ii) the Company's and each Subsidiary Guarantor's
assets, at a fair valuation, shall be greater than the sum of its debts
(including contingent and unliquidated debts), (iii) the Company and each
Subsidiary Guarantor shall not be engaged in a business or transaction for which
its remaining assets are unreasonably small in relation to such business or
transaction, and (iv) the Company and each Subsidiary Guarantor shall not intend
to incur or believe that it will incur debts beyond its ability to pay such
debts as they become absolute and matured. The Company and each Subsidiary
Guarantor disclaim any intent to hinder, defraud or delay its creditors, or to
prefer some creditors over other creditors, and believes that the Notes and the
Subsidiary Guarantees are being incurred for proper purposes in good faith.
(mm) To the best of the Company's knowledge, neither (A)
the Company or Holdings, (B) any subsidiary of the Company or Holdings, nor (C)
any affiliated entity, including without limitation any professional
corporation, partnership or association, with which the Company, Holdings, any
Permitted Joint Ventures or any Subsidiary Guarantors contracts and through
which services are provided (each a "GROUP MEMBER" or collectively, the "GROUP
MEMBERS") has received any indication or notice, written or oral, from
representatives of state workers' compensation bureaus or organizations or the
Medicare, Medicaid or CHAMPUS programs (collectively, the "PROGRAMS") or any
other federal or state agency that any of the Group Members' agreements or
arrangements are contrary to any federal or state fraud and abuse laws or
regulations or federal or state self-referral laws or regulations.
(nn) All Group Members that provide items and services
reimbursed by the Programs are eligible to participate in the Programs.
(oo) The Group Members employ personnel familiar with the
various laws and regulations governing workers' compensation and reimbursement
under the Programs and conduct periodic audits of the Group Members' billing and
collection procedures. To the best of the Company's knowledge, (i) each Group
Member is in substantial compliance with those laws and regulations; and (ii)
except as otherwise indicated in the Offering Memorandum, no Group Member has
received any indication or notice, written or oral, from representatives of the
Programs or any other federal or state agency that any of the Group Members'
billing procedures will be audited.
-24-
(pp) To the best of the Company's knowledge, the Group
Members are in compliance with the laws and regulations pertaining to (i)
physician licensure and (ii) physician fee-splitting in all states in which they
are organized and otherwise authorized to conduct business, and are not engaged,
either directly or indirectly, in either the unauthorized or unlicensed practice
of medicine or in prohibited physician fee-splitting arrangements, except where
such failure to be in compliance, singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(qq) To the best of the Company's knowledge, the Group
Members are in substantial compliance with the terms and conditions of the
Corporate Integrity Program of Holdings to be assumed by the Company, except
where such failure to be in compliance, singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(rr) To the best of the Company's knowledge, no Group
Member, or any individual or business entity with which a Group Member contracts
and through which services are provided, has received any indication or notice,
written or oral, from representatives of the United States Department of Health
and Human Services or any other federal or state agency or accrediting body
regarding any matters, including but not limited to the revocation, suspension,
termination or modification of any applicable licenses, certifications,
accreditations or supplier numbers, which has had or could have with the passage
of time a Material Adverse Effect.
(ss) The Company and Holdings meet the requirements as set
forth in FASB Statement No. 94 and APB Opinion No. 16, as interpreted by FASB
Emerging Issues Task Force Issue No. 97-2 ("EITF 97-2") with respect to all
Group Members whose financial statements are consolidated with those of the
Company and Holdings.
(tt) None of the Company, Holdings, the Subsidiary
Guarantors, the Permitted Joint Ventures nor any of their respective affiliates
or any person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Company, Holdings and the Subsidiary Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S with respect to the Series A Notes or the
Subsidiary Guarantees. Subject to the accuracy of the representations and
warranties of the Initial Purchasers in Section 7 hereof, the Series A Notes
offered and sold in reliance on Regulation S have been and will be offered and
sold only in offshore transactions. Subject to the accuracy of the
representations and warranties of the Initial
-25-
Purchasers in Section 7 hereof, 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.
(uu) The Company, Holdings, the Permitted Joint Ventures,
the Subsidiary Guarantors and their respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the Company,
Holdings and the Subsidiary 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 Memorandum will contain the
disclosure required by Rule 902(g).
(vv) Each certificate signed by any officer of the Company,
Holdings, or any Subsidiary Guarantor and delivered to the Initial Purchasers or
counsel for the Initial Purchasers in connection with this Agreement on or prior
to the Closing Date shall be deemed to be a representation and warranty of the
Company to the Initial Purchasers as to the matters covered thereby.
The Company and the Subsidiary Guarantors acknowledge 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
counsel to the Initial 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 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 (x) QIB's in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.
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(c) Such Initial Purchaser represents and warrants that (i)
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, and (ii) it has not and will not solicit offers
for or offer to sell Series A Notes in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(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, 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 are
QIBs, and (B) Regulation S Purchasers, in each case, that are deemed to have
agreed 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)
(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) in accordance with another
exemption from the registration requirements of the Act (and based upon an
opinion of counsel acceptable to the Company) or (VI) 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 or 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.
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(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 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 are 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). Terms used above
have the meanings assigned to them in Regulation S."
The Initial Purchasers acknowledge that the Company and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and the
Initial Purchasers hereby consent to such reliance.
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8. INDEMNIFICATION.
(a) The Company and each Subsidiary Guarantor agree,
jointly and severally, to indemnify and hold harmless the Initial Purchasers,
its directors, its officers and each person, if any, who controls an 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 Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Company, Holdings or any Subsidiary 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 an Initial Purchaser
furnished in writing to the Company by such Initial Purchaser; and PROVIDED,
FURTHER, that the Company and each Subsidiary Guarantor shall not be liable to
any Initial Purchaser under the indemnity agreement in this subsection (a) with
respect to any Preliminary Offering Memorandum to the extent that any such loss,
claim, damage or liability of such Initial Purchaser results from the fact that
such Initial Purchaser sold Series A Notes to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Offering Memorandum or of the Offering
Memorandum as then amended or supplemented in any case where such delivery is
required by the Act if the Company or any Subsidiary Guarantor has previously
furnished copies thereof in sufficient quantity to such Initial Purchaser and
the loss, claim, damage or liability of such Initial Purchaser results from an
untrue statement or omission of a material fact contained in the Preliminary
Offering Memorandum which was identified in writing at such time to such Initial
Purchaser and corrected in the Offering Memorandum.
(b) Each Initial Purchaser severally and not jointly agrees
to indemnify and hold harmless the Company and the Subsidiary 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 Subsidiary Guarantors, to the same extent as the foregoing
indemnity from the Company and the Subsidiary Guarantors to the Initial
Purchasers but only with reference to information
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relating to such Initial Purchaser furnished in writing to the Company by such
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum (or any supplement or amendment thereto).
(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), an Initial Purchaser shall not
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 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 DLJ, 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
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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 Subsidiary Guarantors, on the one hand, and the 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 Subsidiary Guarantors, on the one hand, and any 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 Subsidiary Guarantors, on the one hand, and any
Initial Purchaser, on the other hand, shall be deemed to be in the 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 the
Initial Purchasers bear to the total price to investors of the Series A Notes.
The relative fault of the Company and the Subsidiary Guarantors, on the one
hand, and any of the Initial Purchasers, on the other hand, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to the information supplied by the Company or the
Subsidiary Guarantors, on the one hand, or an 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.
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The Company and the Subsidiary 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 amounts
of Series A Notes purchased by each of the Initial Purchasers hereunder, and not
joint.
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 Subsidiary Guarantors contained in this Agreement shall be true and
correct on the date hereof and on the Closing Date 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 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, Holdings or the Subsidiary Guarantors or any securities of the
Company, Holdings or the Subsidiary Guarantors (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
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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, Holdings or the Subsidiary Guarantors or
any securities of the Company, Holdings or the Subsidiary Guarantors 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) The Initial Purchasers shall have received on the
Closing Date a certificate dated the Closing Date, signed by the President and
the Chief Financial Officer of the Company and each of the Subsidiary
Guarantors, confirming, as of the Closing Date, the matters set forth in
paragraphs (a), (b), (e), (q), (r) and (s) (the first clause of which may be
limited to the Company's knowledge) of this Section 9 and, Section 6(dd) and
stating that each of the Company and the Subsidiary Guarantors has complied in
all material respects with all the agreements and conditions herein contained
and required to be complied with and satisfied on or prior to the Closing Date.
(d) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in the Offering
Memorandum (including, without limitation, the Transaction and 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, prospects, management or operations of the Company and the Subsidiary
Guarantors, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or increase in the long-term
debt of the Company or any of the Subsidiary Guarantors and (iii) neither the
Company nor any of the Subsidiary Guarantors shall not have incurred any
material liability or obligation, direct or contingent, the effect of which, in
any such case described in clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in your good
faith judgment, is material and adverse and, in your good faith judgment, makes
it impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(e) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance or
sale of any of the Notes, prevent the consummation of the Transactions or
otherwise have a Material Adverse Effect; no action, suit or proceeding shall be
pending against or, to the knowledge of the Company and Holdings, threatened
against, the Company, Holdings, any of the Permitted Joint Ventures or any of
the Subsidiary Guarantors before any court or arbitrator or any governmental
body, agency or official which would reasonably be expected to prohibit,
interfere with or
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adversely affect the issuance or sale of the Notes, the consummation of the
Transactions or otherwise have a Material Adverse Effect; and no stop order,
injunction, restraining order, or order of any nature preventing the use of the
Offering Memorandum, 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 shall have been issued.
(f) On the Closing Date, the Initial Purchasers shall have
received an opinion, dated the Closing Date, of Schreck Morris, special Nevada
counsel for the Company and the Subsidiary Guarantors organized under the laws
of the State of Nevada substantially to the effect that:
(1) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
Nevada and has the corporate power and authority to carry on its
business and to own, lease and operate its properties as
described in the Preliminary Offering Memorandum and the
Offering Memorandum.
(2) The Company has the requisite corporate power and
authority to authorize the offering of the Notes and to execute,
deliver and perform its obligations under each Operative
Document to which it is a party.
(3) All the outstanding shares of capital stock of the
Company (i) have been duly authorized and validly issued, (ii)
are fully paid and non-assessable and (iii) are not subject to
any statutory preemptive or, to such counsel's knowledge after
due inquiry, any non-statutory preemptive rights or similar
rights.
(4) Each of the Subsidiary Guarantors organized under the
laws of the state of Nevada (the "NEVADA GUARANTORS") is a
corporation validly existing and in good standing under the laws
of the State of Nevada and has the corporate power and authority
to carry on its business and to own, lease and operate its
properties as described in the Preliminary Offering Memorandum
and the Offering Memorandum.
(5) Each of the Nevada Guarantors has the requisite
corporate power and authority to execute, deliver and perform
its obligations under each Operative Document of which it is a
party.
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(6) All the outstanding shares of capital stock of the
Nevada Guarantors (i) have been duly authorized and validly
issued, (ii) are fully paid and non-assessable and (iii) are not
subject to any statutory preemptive or, to such counsel's
knowledge after due inquiry, any non-statutory preemptive rights
or similar rights.
(7) Each of the Operative Documents to which the Company or
the Nevada Guarantors is a party has been duly authorized,
executed, delivered and, in the case of the Series A Notes,
issued by the Company and the Nevada Guarantor, as applicable.
(8) The Series B Notes have been duly authorized by the
Company.
(9) The execution, delivery and performance by the Company,
Holdings and each Subsidiary Guarantor of each Operative
Document to which any of them is a party, the issuance and sale
of the Series A Notes and the Subsidiary Guarantees as
contemplated by this Agreement and the Offering Memorandum and
the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering
Memorandum will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency of the State of Nevada
(except such as may be required under the securities or Blue Sky
laws of such state), (ii) constitute a breach of any of the
terms or provisions of, or a default under, the charter or
by-laws of the Company or any Nevada Guarantor, or (iii) to such
counsel's knowledge, violate any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency of the State of Nevada having
jurisdiction over the Company, Holdings or any Subsidiary
Guarantor or their respective property.
(10) No law, statute, rule or regulation or order has been
enacted or adopted by any governmental agency or body of the
State of Nevada which prevents the execution, delivery or
performance of any of the Operative Documents, the consummation
of any of the transactions contemplated thereunder, or which
prevents or suspends the issuance of the Series A Notes.
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(g) On the Closing Date, the Initial Purchasers shall have
received an opinion, dated the Closing Date, of Richard A. Parr II, general
counsel for the Company, Holdings and the Subsidiary Guarantors, substantially
to the effect that:
(1) Each of the Subsidiary Guarantors (other than those
organized under the laws of the State of Nevada and
Massachusetts) (the "RELEVANT GUARANTORS") has been duly
organized, is validly existing as a corporation in good standing
under the laws of the jurisdiction of incorporation as set out
in SCHEDULE B and has full corporate power and authority to
carry on its business and to own, lease and operate its
properties as described in the Preliminary Offering Memorandum
and the Offering Memorandum. Each of the Relevant Guarantors has
the requisite corporate power and authority to authorize the
offering of the Subsidiary Guarantees and to execute, deliver
and perform its obligations under each Operative Document to
which it is a party.
(2) Each of the Company, Holdings and the Subsidiary
Guarantors is duly qualified and is in good standing as a
foreign corporation authorized to do business in each
jurisdiction in which such qualification is required, except
where the failure to be so qualified or in good standing would
not be reasonably expected to have a Material Adverse Effect.
(3) All of the outstanding capital stock of Holdings and
each Relevant Guarantor (i) has been duly authorized and validly
issued and (ii) is fully paid, nonassessable and, to such
counsel's knowledge after due inquiry and other than under the
Stockholders Agreement as defined under the Indenture, not
subject to preemptive or similar rights. All of the outstanding
capital stock of each Subsidiary Guarantor and is owned of
record, directly or indirectly, through one or more
subsidiaries, by the Company free and clear of all Liens (other
than Liens on such capital stock pursuant to the Senior Credit
Facilities). All of the outstanding capital stock of the Company
are owned of record by Holdings free and clear of all Liens
(other than Liens on such capital stock pursuant to the Senior
Credit Facilities).
(4) The Subsidiary Guarantees have been duly authorized,
executed and delivered by the Relevant Guarantors.
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(5) Each of the Operative Documents to which Holdings or a
Relevant Guarantor is a party has been duly authorized, executed
and delivered by Holdings or such Relevant Guarantor, as
applicable.
(6) The execution, delivery and performance by the Company,
Holdings and each Subsidiary Guarantor of each Operative
Document to which any of them is a party, the issuance and sale
of the Series A Notes and the Subsidiary Guarantees as
contemplated by this Agreement and the Offering Memorandum and
the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering
Memorandum will not (i) except to the extent such has been
obtained, require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities
or Blue Sky laws of the various states and except, in the case
of the Registration Rights Agreement, such as may be required
under the 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, Holdings, any Permitted Joint Venture or any Subsidiary
Guarantor or (B) any indenture, loan agreement, mortgage, lease
or other agreement or instrument that is material to the
Company, Holdings, any Permitted Joint Venture or any Subsidiary
Guarantor, taken as a whole, to which the Company, Holdings, any
Permitted Joint Venture or any Subsidiary Guarantor is a party
or by which the Company, Holdings, any Permitted Joint Venture
or any Subsidiary Guarantor or their respective property is
bound, (iii) to such counsel's knowledge after due inquiry,
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, Holdings, any Permitted Joint Venture or any Subsidiary
Guarantor 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, Holdings, any Permitted Joint Venture or any Subsidiary
Guarantor or their respective property is bound, or (v) result
in the termination or revocation of any permit (as defined
below) of the Company, Holdings, any Permitted Joint Venture or
any Subsidiary Guarantor or result in any other impairment of
the rights of the holder of any such permit, except
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in the case of clauses (i), (ii) (B), (iv) and (v), as would
not, singly or in the aggregate, have a Material Adverse Effect.
(7) 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, Holdings, any Permitted Joint Venture or any
Subsidiary Guarantor which would prevent or suspend the issuance
or sale of the Series A Notes or the consummation of any
transaction contemplated by the Operative Documents.
(8) The agreements listed on SCHEDULE C hereto represent
all of the material agreements of the Company that would be
required to be filed as exhibits if the Offering were to be made
pursuant to a registration statement on Form S-1.
(9) The statements in the Offering Memorandum under the
captions "Offering Memorandum Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Certain Projections," "Business,"
"Management," "Certain Relationships and Related Transactions,"
"The Transactions and Use of Proceeds," "Description of Notes",
"Description of Certain Indebtedness" and "Documents
Incorporated by Reference" 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.
(10) To the best of counsel's knowledge after due inquiry,
there is no legal or governmental proceeding pending or
threatened to which the Company, Holdings or any Subsidiary
Guarantor is bound or could reasonably be expected to be a party
or to which any of their respective property is or could
reasonably be expected to be subject, except for any such
proceedings as would not, singly or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
(11) Neither the Company, Holdings, any Permitted Joint
Venture nor any Subsidiary Guarantor is in violation of its
charter or bylaws or other organizational documents and, to the
knowledge of such counsel after due inquiry, neither the
Company, Holdings, any Permitted Joint Venture nor any
Subsidiary Guarantor (a) is in default in the performance of
-38-
any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company,
Holdings, any Permitted Joint Venture and any Subsidiary
Guarantor , taken as a whole, to which the Company, Holdings,
any Permitted Joint Venture or any Subsidiary Guarantor is a
party or by which the Company, Holdings, any Permitted Joint
Venture or any Subsidiary Guarantor or their respective property
is bound, or (b) is in violation of any applicable statute, rule
or regulation (including, without limitation, any Environmental
Law, any Relevant Healthcare Laws or any provision of ERISA or
the rules and regulations promulgated thereunder) or any order,
writ or decree of any court or governmental agency or body
having jurisdiction over the Company, Holdings, any Permitted
Joint Venture or any Subsidiary Guarantor or their respective
property, except in the case of (a) and (b), for such violations
which, singly or in the aggregate, would not have a Material
Adverse Effect.
(12) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the
Company, Holdings, any of the Permitted Joint Ventures or any of
the Subsidiary Guarantors on the one hand and the directors,
officers, stockholders, customers or suppliers of the Company,
Holdings, any of the Permitted Joint Ventures or any of the
Subsidiary Guarantors on the other hand, which would be required
by the Act to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a registration
statement on Form S-1 filed with the Commission.
(h) On the Closing Date, the Initial Purchasers shall have
received an opinion,dated the Closing Date, of Reboul, MacMurray, Hewitt,
Maynard & Kristol, special counsel to the Company, Holdings and the Subsidiary
Guarantors substantially to the effect that:
(1) Holdings has been duly organized, is validly existing
as a corporation in good standing under the laws of the
jurisdiction of incorporation and has full corporate power and
authority to carry on its business and to own, lease and operate
its properties as described in the Preliminary Offering
Memorandum and the Offering Memorandum. Each of the Holdings and
Yankee has the requisite corporate power and authority to
authorize, execute, deliver and perform its obligations under
each Operative Document to which it is a party.
-39-
(2) All of the outstanding capital stock of Holdings issued
after the merger under the Merger Agreement is consummated (i)
has been duly authorized and validly issued and (ii) is fully
paid, nonassessable and, to such counsel's knowledge after due
inquiry, not subject to preemptive or similar rights.
(3) Assuming due authorization by the Company and the
Subsidiary Guarantors, this Agreement has been duly executed and
delivered by the Company and the Subsidiary Guarantors.
(4) Assuming the due authorization of the Indenture by the
Company, the Subsidiary Guarantors and the Trustee, the
Indenture has been duly executed and delivered by the Company
and the Subsidiary Guarantors and the Indenture is a valid and
binding agreement of the Company and the Subsidiary Guarantors,
enforceable against the Company and the Subsidiary Guarantors in
accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) for general
principles of equity (regardless of whether enforcement is
brought in a proceeding at law or in equity) and (iii) the
waiver as to stay, extension or usury laws may not be
enforceable.
(5) Assuming the Subsidiary Guarantees have been duly
authorized, 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, the Series A Notes and the Subsidiary Guarantees will
be valid and binding obligations of the Company and the
Subsidiary Guarantors, respectively, entitled to the benefits of
the Indenture and enforceable against the Company and the
Subsidiary Guarantors, respectively, in accordance with their
terms, except (i) as the enforceability thereof may be limited
by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally, (ii) for general principles of
equity (regardless of whether enforcement is brought in a
proceeding at law or in equity) and (iii) the waiver as to stay,
extension or usury laws may not be enforceable.
(6) The Registration Rights Agreement has been duly
executed and delivered by the Company and the Subsidiary
Guarantors, and
-40-
assuming the due authorization, execution and delivery of the
Registration Rights Agreement by the Company, the Subsidiary
Guarantors and the Initial Purchasers, the Registration Rights
Agreement is a valid and binding agreement of the Company and
the Subsidiary Guarantors, enforceable against the Company and
the Subsidiary Guarantors in accordance with its terms, except
(i) as the enforceability thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally, (ii)
for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity) and
(iii) no opinion need be expressed as to the validity, binding
nature or enforceability of any rights to contribution or
indemnification contained in the Registration Rights Agreement.
(7) The Contribution Agreement, on the Closing Date, will
have been duly executed and delivered by the Company and
Holdings and will be valid and binding agreements of each
respective party, enforceable against each in accordance with
their terms (assuming the due execution and delivery of the
Contribution Agreement by each other party thereto) except (i)
as the enforceability thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and
(ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity).
(8) The statements in the Offering Memorandum under the
captions "Certain Relationships and Related Transactions --
Equity Investor Agreements" "The Transactions and Use of
Proceeds," "Description of Notes" and "Description of Certain
Indebtedness" 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.
(9) Such counsel is of the opinion ascribed to it in the
Offering Memorandum under the caption "Certain U.S. Federal
Income Tax Considerations".
(10) Each of the Company, Holdings and the Subsidiary
Guarantors is not and, after giving effect to the consummation
of the
-41-
Transactions, will not be, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
(11) Each of the Preliminary Offering Memorandum and the
Offering Memorandum (except for the financial statements,
including the notes thereto, and supporting schedules and other
financial, statistical and accounting data included therein or
omitted therefrom, as to which no opinion is expressed), as of
its date and as amended or supplemented through the date hereof,
appear on its face to comply with the requirements of Rule
144A(d)(4) under the Act.
(12) 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. No registration under the Act of the
Series A Notes or qualification of the Indenture under the TIA
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 (i) the accuracy of, and compliance with, the
Initial Purchasers' representations and agreements contained in
Section 7 of this Agreement and (ii) the accuracy of the
representations and agreements of the Company set forth in this
Agreement and (iii) that the offer, sale and delivery of the
Series A Notes have been made as contemplated by this Agreement
and the Offering Memorandum.
(13) To such counsel's knowledge after due inquiry, 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 or
performance of any of the Operative Documents, the consummation
of any of the transactions contemplated thereunder or the
issuance of the Series A Notes or the Subsidiary Guarantees, or
suspends the sale of the Series A Notes.
(14) 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 Subsidiary 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.
-42-
In addition such counsel shall state that although such counsel
has not independently verified the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, no facts have come to such
counsel's attention to cause it to believe that, as of the date of the Offering
Memorandum or as of the Closing Date, the Offering Memorandum, as amended or
supplemented, if applicable (except for the financial statements and other
financial data included therein, as to which such counsel need not express any
belief) contains any untrue statement of a material fact or omits 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.
(i) On the Closing Date, the Initial Purchasers shall have
received an opinion, dated the Closing Date, of Ropes & Gray, special
Massachusetts counsel for the Company and the Subsidiary Guarantors organized
under the laws of the Commonwealth of Massachusetts (namely Concentra Managed
Care Services, Inc. (the "MASSACHUSETTS CORPORATE SUBSIDIARY") and Concentra
Managed Care Business Trust (the "MASSACHUSETTS BUSINESS TRUST SUBSIDIARY",
together with the Massachusetts Corporate Subsidiary, the "MASSACHUSETTS
Guarantors")) substantially to the effect that:
(1) Massachusetts Corporate Subsidiary (a) is a validly
existing corporation under the laws of the Commonwealth of
Massachusetts and is in good standing with the Secretary of
State of The Commonwealth of Massachusetts and (b) has the
corporate power and authority to (i) carry on its business and
to own, lease and operate its properties as described in the
Preliminary Offering Memorandum and the Offering Memorandum and
(ii) to execute, deliver and perform its obligations under each
of the Operative Documents to which it is a party.
(2) Massachusetts Business Trust Subsidiary (a) is, under
the laws of The Commonwealth of Massachusetts, a validly
existing unincorporated voluntary association with transferrable
shares commonly known as a "Massachusetts Business Trust" and
(b) has the corporate power and authority under its Declaration
of Trust as interpreted under Massachusetts law (i) to carry on
its business and to own, lease and operate its properties as
described in the Preliminary Offering Memorandum and the
Offering Memorandum and (ii) to execute, deliver and perform its
obligations under each of the Operative Documents to which it is
a party.
-43-
(3) All the outstanding shares of capital stock of the
Massachusetts Corporate Subsidiary and all the outstanding
shares of the Massachusetts Business Trust Subsidiary (i) have
been duly authorized and validly issued, (ii) are fully paid
and, in the case of the Massachusetts Corporate Subsidiary, are
non-assessable, and (iii) are not subject to any statutory or
common law preemptive rights or any such rights arising under
the charter or by-laws of the Massachusetts Corporate Subsidiary
or under the Declaration of Trust of the Massachusetts Business
Trust Subsidiary.
(4) Each of the Operative Documents to which each of the
Massachusetts Guarantors is a party has been duly authorized,
executed and delivered by each such Massachusetts Guarantor.
(5) The execution, delivery and performance by each of the
Company, Holdings and each Massachusetts Guarantor of each
Operative Document to which such person is a party, the issuance
and sale of the Series A Notes and the Subsidiary Guarantees as
contemplated by this Agreement and the Offering Memorandum and
the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering
Memorandum will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency of the Commonwealth of
Massachusetts (except such as may be required under the
securities or Blue Sky laws of such state), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or
a default under, the charter or by-laws of the Massachusetts
Corporate Subsidiary or the Declaration of Trust of the
Massachusetts Business Trust Subsidiary, or (iii) to such
counsel's knowledge, violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court
or any governmental body or agency of the Commonwealth of
Massachusetts having jurisdiction over the Company, Holdings or
any Massachusetts Guarantor or their respective property.
(6) No action has been taken, to such counsel's knowledge,
and no law, statute, rule or regulation or order has been
enacted, adopted or issued by any governmental agency or body of
the Commonwealth of Massachusetts which prevents the execution,
delivery or performance of any of the Operative Documents, the
consummation of any of the transactions contemplated thereunder
or the issuance of the Series A Notes or the Subsidiary
Guarantees.
-44-
(j) The Initial Purchasers shall have received on the Closing Date
an opinion, dated the Closing Date, of Sullivan & Cromwell, counsel for the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers.
(k) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof in
form and substance satisfactory to the Initial Purchasers from Arthur Andersen
LLP, independent public accountants, in each case 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 Memorandum.
(l) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(m) The Company and the Subsidiary Guarantors shall have executed
the Registration Rights Agreement and the Initial Purchasers shall have received
an original copy of each thereof, duly executed by the Company and the
Subsidiary Guarantors.
(n) The Company, the Subsidiary Guarantors and the Trustee shall
have executed the Indenture and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company, the Trustee and the
Subsidiary Guarantors.
(o) Neither the Company nor the Subsidiary Guarantors shall have
failed at or prior to the Closing Date to perform or comply in all material
respects with any of the agreements herein contained and required to be
performed or complied with by the Company at or prior to the Closing Date.
(p) On the Closing Date, the Initial Purchasers shall have
received a solvency opinion from Valuation Research, dated the Closing Date, as
to the solvency of the Company (on a consolidated basis) after giving effect to
the Transactions and the financings and transactions contemplated herein in form
and substance reasonably satisfactory to the Initial Purchasers.
(q) The Senior Credit Facilities (as defined in the Offering
Memorandum) shall have been executed by the parties thereto and, on the Closing
Date, the closing of the Senior Credit Facilities (including, without
limitation, the borrowing of all term loans thereunder) shall have been
consummated simultaneously with the consummation of the offering of the Notes.
-45-
(r) All of the conditions precedent to the Merger Agreement (as
defined in the Offering Memorandum) shall have been satisfied or waived and the
merger of Yankee with and into Holdings contemplated thereby shall have been
consummated.
(s) On the Closing Date, the Contribution Agreement shall have
been executed by the parties thereto.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the delivery of this Agreement by the parties
hereto.
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 would, in the
Initial Purchasers' judgment, make it impracticable to market the Series A Notes
on the terms and in the manner contemplated in the Offering Memorandum, (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 security exchange as the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company of any Subsidiary
Guarantors or Holdings 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 of the Initial Purchasers shall fail or
refuse to purchase the Series A Notes which it has agreed to purchase hereunder
on such date and the aggregate principal amount of the Series A Notes which such
defaulting Initial Purchaser agreed but failed or
-46-
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 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 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 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 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
and the Subsidiary Guarantors. 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, to the Offering Memorandum 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. Any notice of
termination pursuant to this Section 10 shall be by telephone, telex, facsimile
or telegraph, confirmed in writing by letter sent within three days thereof.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Concentra Operating Corporation, 5080 Spectrum Drive, Suite 400, West Tower,
Addison, TX 75248, Attention: Richard A. Parr II, with a copy to Welsh, Carson,
Anderson & Stowe VIII, L.P., 320 Park Avenue, Suite 2500, New York, NY 10022,
Attention: Paul B. Queally, and with a copy to Reboul, MacMurray, Hewitt,
Maynard & Kristol, 45 Rockefeller Plaza, New York, NY 10111, Attention: Jonathan
P. Cramer, Esq., (ii) if to any Initial Purchasers, c/o Donaldson, Lufkin &
Jenrette Securities Corporation, 227 Park Avenue, New York, New York 10172,
Attention: Syndicate Department, with a copy to Sullivan & Cromwell, 1888
Century Park East, Los Angeles, California 90067-1725, Attention: Alison S.
Ressler, Esq. or (iii) 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 and agreements of the Company,
the Subsidiary 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 an Initial Purchaser, the officers or directors of an Initial
Purchaser, any
-47-
person controlling an Initial Purchaser, the Company, the officers or directors
of the Company or any Subsidiary Guarantor, or any person controlling the
Company or any Subsidiary 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
Subsidiary Guarantor, jointly and severally, agrees to reimburse the Initial
Purchasers for all out-of-pocket expenses (including the fees and disbursements
of counsel) reasonably incurred by them. Notwithstanding any termination of this
Agreement, the Company and each Subsidiary Guarantor, jointly and severally,
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(h) hereof. The Company and each Subsidiary Guarantor also agrees to reimburse
the Initial Purchasers, their respective directors and officers and any person
controlling an Initial Purchaser for any and all fees and expenses (including,
without limitation, the fees and disbursements of counsel) reasonably incurred
by them in connection with enforcing their rights under this Agreement.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the parties hereto and their
respective successors and the officers and directors and other persons referred
to in Section 8, 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.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
-48-
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Subsidiary Guarantors and the Initial
Purchasers.
Very truly yours,
CONCENTRA OPERATING
CORPORATION
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
CONCENTRA MANAGEMENT
SERVICES, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
CONCENTRA PREFERRED SYSTEMS,
INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
CONCENTRA MANAGED CARE
SERVICES, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Clerk
-49-
CONCENTRA HEALTH SERVICES, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
PROMPT ASSOCIATES, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
FIRST NOTICE SYSTEMS, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
FOCUS HEALTHCARE MANAGEMENT
INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
-50-
HILLMAN CONSULTING, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Vice President
CRA MANAGED CARE OF
WASHINGTON, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Vice President
OCI HOLDINGS, INC.
By: /s/ Daniel J. Thomas
--------------------------
Name: Daniel J. Thomas
Title: President
-51-
CRA MCO, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Vice President
DRUG FREE CONSORTIUM, INC.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Vice President
CONCENTRA MANAGED CARE
BUSINESS TRUST
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary
OCCUCENTERS I, L.P.
By: /s/ Richard A. Parr II
--------------------------
Name: Richard A. Parr II
Title: Secretary of
Concentra Health Services,
Inc., the General Partner of
OccuCenters I, L.P.
-52-
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ William G. Payne
------------------------
Name: William G. Payne
Title: Vice President
CHASE SECURITIES INC.
By: /s/ Dawn E. Conn
------------------------
Name: Dawn E. Conn
Title: Vice President
-53-
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Harold W. Bogle
----------------------------
Name: Harold W. Bogle
Title: Managing Director
DEUTSCHE BANK SECURITIES INC.
By: /s/ Lorenz Zimmerman
----------------------------
Name: Lorenz Zimmerman
Title: Managing Director
FLEET SECURITIES, INC.
By: /s/ Scott Vallar
----------------------------
Name: Scott Vallar
Title: Managing Director
-54-
SCHEDULE A
Principal Amount
Initial Purchasers of Notes
- -------------------------------------------------------- -----------------------
Donaldson, Lufkin & Jenrette
Securities Corporation................................. $60,800,000
Chase Securities Inc.................................... 60,800,000
Credit Suisse First Boston Corporation.................. 22,800,000
Deutsche Bank Securities Inc............................ 22,800,000
Fleet Securities, Inc................................... 22,800,000
Total................................................ $190,000,000
-55-
SCHEDULE B
- --------------------------------------------------------------------------------
NAME OF COMPANY STATE OF INCORPORATION
- --------------------------------------------------------------------------------
Concentra Managed Care, Inc. ("Holdings") Delaware
- --------------------------------------------------------------------------------
Concentra Operating Corporation (the "Company") Nevada
- --------------------------------------------------------------------------------
Yankee Acquisition Corp. ("Yankee") Delaware
- --------------------------------------------------------------------------------
SUBSIDIARY GUARANTORS:
- --------------------------------------------------------------------------------
Concentra Management Services, Inc. Nevada
- --------------------------------------------------------------------------------
Concentra Preferred Systems, Inc. Delaware
- --------------------------------------------------------------------------------
Concentra Managed Care Services, Inc. Massachusetts
- --------------------------------------------------------------------------------
Concentra Health Services, Inc. Nevada
- --------------------------------------------------------------------------------
Prompt Associates, Inc. Delaware
- --------------------------------------------------------------------------------
First Notice Systems, Inc. Delaware
- --------------------------------------------------------------------------------
Focus Healthcare Management, Inc. Tennessee
- --------------------------------------------------------------------------------
QMC3, Inc. Colorado
- --------------------------------------------------------------------------------
Hillman Consulting, Inc. Nevada
- --------------------------------------------------------------------------------
CRA Managed Care of Washington, Inc. Washington
- --------------------------------------------------------------------------------
OCI Holdings, Inc. Nevada
- --------------------------------------------------------------------------------
CRA MCO, Inc. Nevada
- --------------------------------------------------------------------------------
Drug Free Consortium, Inc. Texas
- --------------------------------------------------------------------------------
Concentra Managed Care Business Trust Massachusetts
- --------------------------------------------------------------------------------
OccuCenters I, L.P. Texas
- --------------------------------------------------------------------------------
SCHEDULE C
List of Material Agreements
[ TO BE PROVIDED BY REBOUL/ RICHARD PARR]
-57-