Exhibit 1.1
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QUEST DIAGNOSTICS INCORPORATED
(a Delaware corporation)
6 3/4% Senior Notes Due 2006
7 1/2% Senior Notes Due 2011
PURCHASE AGREEMENT
Dated: June 20, 2001
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Table of Contents
Page
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SECTION 1. Representations and Warranties.........................................................4
(a) Representations and Warranties by the Company and the Guarantors.......................4
(i) Compliance with Registration Requirements...................................4
(ii) Incorporated Documents......................................................4
(iii) Independent Accountants.....................................................5
(iv) Financial Statements........................................................5
(v) No Material Adverse Change in Business......................................5
(vi) Good Standing of the Company................................................6
(vii) Good Standing of Subsidiaries...............................................6
(viii) Authorization of Agreement..................................................7
(ix) Authorization and Description of the Indenture..............................7
(x) Authorization and Description of Securities and Guarantees..................7
(xi) Authorization and Description of the Refinancing Transactions...............8
(xii) Non-Guarantor Subsidiaries..................................................8
(xiii) Absence of Defaults and Conflicts...........................................8
(xiv) Absence of Labor Disputes...................................................9
(xv) Absence of Proceedings......................................................9
(xvi) Accuracy of Exhibits.......................................................10
(xvii) Possession of Intellectual Property........................................10
(xviii) Absence of Further Requirements............................................10
(xix) Possession of Licenses and Permits.........................................11
(xx) Licensing and Accreditation of Laboratories................................11
(xxi) Title to Property..........................................................11
(xxii) Insurance..................................................................12
(xxiii) Solvency...................................................................12
(xxiv) Stabilization or Manipulation..............................................12
(xxv) Environmental Laws.........................................................12
(xxvi) Registration Rights........................................................13
(xxvii) Accounting Controls........................................................13
(xxviii) Investment Company Act.....................................................13
(b) Officer's Certificates...............................................................13
SECTION 2. Sale and Delivery to Underwriters; Closing............................................14
(a) Securities and Guarantees.............................................................14
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(b) Payment...............................................................................14
(c) Denominations; Registration...........................................................14
SECTION 3. Covenants of the Company and the Guarantors...........................................14
(a) Compliance with Securities Regulations and Commission Requests........................14
(b) Filing of Amendments..................................................................15
(c) Delivery of Registration Statements...................................................15
(d) Delivery of Prospectuses..............................................................15
(e) Continued Compliance with Securities Laws.............................................16
(f) Blue Sky Qualifications...............................................................16
(g) Rule 158..............................................................................16
(h) Use of Proceeds.......................................................................16
(i) Restriction on Sale of Securities.....................................................16
(j) Reporting Requirements................................................................17
(k) Interim Financial Statements..........................................................17
(l) Rating of Securities..................................................................17
(m) DTC Clearance.........................................................................17
(n) Refinancing Documents.................................................................17
SECTION 4. Payment of Expenses...................................................................17
(a) Expenses..............................................................................17
(b) Termination of Agreement..............................................................18
SECTION 5. Conditions of Underwriters' Obligations...............................................18
(a) Effectiveness of Registration Statement...............................................18
(b) Opinion of Counsel for the Company....................................................18
(c) Opinion of Deputy General Counsel of the Company......................................19
(d) Opinion of Counsel for the Underwriters...............................................19
(e) Officers' Certificate.................................................................19
(f) Accountant's Comfort Letters and Consent..............................................19
(g) Bring-down Comfort Letters............................................................19
(h) No Objection..........................................................................20
(i) Maintenance of Rating.................................................................20
(j) New Credit Agreement..................................................................20
(k) Tender Offer..........................................................................20
(l) Additional Documents..................................................................20
(k) Termination of Agreement..............................................................20
SECTION 6. Indemnification.......................................................................21
(a) Indemnification of the Underwriters...................................................21
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(b) Indemnification of Company, Guarantors, Directors and Officers........................22
(c) Actions against Parties; Notification.................................................22
(d) Settlement without Consent if Failure to Reimburse....................................23
SECTION 7. Contribution..........................................................................23
SECTION 8. Representations, Warranties and Agreements to Survive Delivery........................25
SECTION 9. Termination of Agreement..............................................................25
(a) Termination; General..................................................................25
(b) Liabilities...........................................................................25
SECTION 10. Default by One or More of the Underwriters............................................25
SECTION 11. Default by the Company and the Guarantors..................................................26
SECTION 12. Notices ...........................................................................26
SECTION 13. Parties ...........................................................................26
SECTION 14. Governing Law and Time................................................................27
SECTION 15. Effect of Headings....................................................................27
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Schedule A-Underwriters
Schedule B-Pricing Information
Schedule C-Guarantors
Schedule D-Subsidiaries
Exhibit A-Form of Opinion of Shearman & Sterling
Exhibit B-Form of Opinion of Deputy General Counsel of the Company
Exhibit C-Form of Comfort Letters
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QUEST DIAGNOSTICS INCORPORATED
(a Delaware corporation)
$275,000,000 6 3/4% Senior Notes due 2006
$275,000,000 7 1/2% Senior Notes due 2011
PURCHASE AGREEMENT
June 20, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Credit Suisse First Boston Corporation
Banc of America Securities LLC
UBS Warburg LLC
Wachovia Securities, Inc.
BNY Capital Markets, Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Quest Diagnostics Incorporated, a Delaware corporation (the "Company"),
and each of the Guarantors listed on Schedule C hereto (the "Guarantors"),
confirm their respective agreements with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Credit Suisse First
Boston Corporation ("CSFB," together with Merrill Lynch, the "Joint Book-Running
Managers") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, CSFB, Banc of America Securities LLC, UBS Warburg LLC, Wachovia
Securities, Inc. and BNY Capital Markets, Inc. are acting as representatives (in
such capacity, the "Representatives"), with respect to (i) the issue and sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the respective principal amounts set forth in said Schedule B of
$275,000,000 aggregate principal amount of the Company's 6 3/4% Senior Notes due
2006 and $275,000,000 aggregate principal amount of the Company's 7 1/2% Senior
Notes due 2011 (collectively, the "Securities") and (ii) the issue and sale by
the Guarantors and the purchase by the Underwriters, acting severally and not
jointly, of the senior guarantees (the "Guarantees") of the Company's
obligations under the Securities. The
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Securities and the Guarantees are to be issued pursuant to an indenture dated as
of June 27, 2001 (the "Base Indenture") among the Company, the Guarantors and
Bank of New York, as trustee (the "Trustee"), as supplemented by the First
Supplemental Indenture, to be dated as of June 27, 2001, among the Company, the
Guarantors and the Trustee (the "First Supplemental Indenture"), establishing
the form and terms of the Securities (collectively with the Base Indenture, the
"Indenture").
The Securities and the Guarantees are being issued as part of a
refinancing to repay all of the Company's outstanding indebtedness under the
Credit Agreement dated as of August 16, 1999 among the Company and the lenders
as parties thereto (the "Existing Credit Agreement") and to effect a tender
offer to the holders of the Company's 10 3/4% Senior Subordinated Notes due 2006
(the "Tender Offer"). The Tender Offer will be effected as set forth in the
Offer to Purchase dated May 24, 2001 (the "Offer to Purchase"). Previous to or
simultaneous with the Closing Time as defined below, the Company intends to
repay all of the indebtedness outstanding under the Existing Credit Agreement
and to terminate the obligations of the Company and the guarantors thereunder.
The Company has received commitments from Merrill Lynch Capital
Corporation, Credit Suisse First Boston Corporation, New York Branch ("CSFB
NY"), Bank of America, N.A. ("Bank of America"), UBS AG, Stamford Branch, The
Bank of New York ("BONY"), Wachovia Bank, N.A. ("Wachovia") and others (the
"Lenders") to provide the Company with $650 million in senior unsecured credit
facilities pursuant to a Credit Agreement (the "New Credit Agreement"), to be
entered into simultaneously with the closing of the issuance of the Securities
and the Guarantees at the Closing Time by the Company, the Guarantors, certain
banks which are signatories thereto (the "Banks") and Banc of America Securities
LLC and UBS Warburg LLC ("UBS Warburg") as co-lead arrangers and joint-book
managers, Bank of America as administrative agent, CSFB NY and BONY as
co-documentation agents, Merrill Lynch Capital Corporation and UBS Warburg as
co-syndication agents and Wachovia as managing agent. The New Credit Agreement,
the Tender Offer and all other documents and instruments executed in connection
with or pursuant to any of the foregoing are collectively referred to herein as
the "Refinancing Documents." The borrowings pursuant to the New Credit Agreement
and the Tender Offer are collectively referred to herein as the "Refinancing
Transactions."
The Company understands that the Underwriters propose to make a public
offering of the Securities and the Guarantees as soon as the Representatives
deem advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-54310) covering the
registration of the Securities and the Guarantees under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement was
declared effective by the Commission on June 1, 2001 and the Indenture has been
duly qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a final prospectus and final prospectus supplement
in accordance with the provisions of paragraph (b) of Rule 424 of the rules
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and regulations of the Commission or (ii) if the Company has elected to rely
upon Rule 434 of the 1933 Act Regulations, prepare and file a term sheet or
abbreviated term sheet (the "Term Sheet") in accordance with the provisions of
Rule 434 and Rule 424(b). The aforementioned registration statement (as amended
from time to time), including the exhibits thereto, schedules thereto, if any,
and the documents incorporated by reference therein, including the information,
if any, deemed to be a part thereof pursuant to Rule 430A of the 1933 Act
Regulations (the "Rule 430A Information") or Rule 434 of the 1933 Act
Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement;" and the final prospectus and the final prospectus
supplement relating to the offering of the Securities and the Guarantees, in the
form furnished to the Underwriters by the Company for use in connection with the
offering of the Securities and the Guarantees, are collectively referred to
herein as the "Prospectus;" provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
this Agreement. Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, then all references to the
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable Term Sheet in the form first furnished to the Underwriters by
the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any
prospectus and any amendment or supplement thereto that omitted, as applicable,
the Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form of prospectus filed with the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations and was used after the effectiveness
of the Registration Statement and prior to the execution and delivery of this
Agreement. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" (or other
references of like import) in the Registration Statement, any preliminary
prospectus or the Prospectus or any amendment or supplement thereto shall be
deemed to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus or any amendment or supplement
thereto, as the case may be; and all references in this Agreement to amendments
or supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under
the 1934 Act which is incorporated by reference in the Registration Statement,
such preliminary prospectus or the Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and the Guarantors.
The Company and each of the Guarantors, jointly and severally, represent and
warrant to each Underwriter as of the date hereof and as of the Closing Time
referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with. The Indenture has been duly qualified under the
1939 Act. All of the Guarantors are registrants under the Registration
Statement.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time, the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Joint Book-Running Managers expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they
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were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing
Time, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified
the audited financial statements and supporting schedule included in
the Registration Statement are independent public accountants as
required by the 1933 Act, the 1933 Act Regulations, the 1934 Act and
the 1934 Act Regulations.
(iv) Financial Statements. The financial statements (other
than the pro forma financial statements) included or incorporated by
reference in the Registration Statement and the Prospectus, together
with the related schedule and notes, present fairly (A) the financial
position of the Company and its Subsidiaries (as defined below) on a
consolidated basis and SmithKline Beecham Clinical Laboratories, Inc.
and certain related affiliates, respectively, at the dates indicated
and (B) the statements of operations, stockholders' equity and cash
flows of the Company and its Subsidiaries on a consolidated basis and
of SmithKline Beecham Clinical Laboratories, Inc. and certain related
affiliates on a consolidated basis, respectively, for the periods
specified. Such financial statements have been prepared in conformity
with accounting principles generally accepted in the United States
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement. The pro forma or as adjusted information
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial information and have been properly
compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein. There are no historical or pro forma financial
statements which are required by the 1933 Act, the 1933 Act Regulations
and Regulation S-X to be included in the Registration Statement and the
Prospectus which are not included as required. The financial
information regarding the Guarantors included or incorporated by
reference in the Registration Statement and the Prospectus complies
with the requirements of Rule 3-10 of Regulation S-X.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein or
contemplated thereby, (A) there has been no material adverse change in
the business, financial condition, operations, cash flow or business
prospects of
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the Company and its Subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its Subsidiaries, other than those described or
contemplated by the Registration Statement and the Prospectus or in the
ordinary course of business, which are material with respect to the
Company and its Subsidiaries considered as one enterprise, and (C)
other than the two-for-one stock split effected by the Company on May
31, 2001, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock
except for the payment of dividends on the Company's voting cumulative
preferred stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement, the Indenture, the Securities,
the Guarantees and each of the Refinancing Documents; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
Company (each a "Subsidiary" and collectively the "Subsidiaries") has
been duly organized and is validly existing as a corporation,
partnership or limited liability company, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
existence, has corporate or partnership power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation or partnership to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. Except as
otherwise disclosed in the Prospectus, all of the outstanding capital
stock or partnership interests of each Subsidiary have been duly
authorized and validly issued or created, are fully paid and
non-assessable and except as described in Schedule D are owned by the
Company, directly or through the Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity
except for pledges of such capital stock and partnership interests that
were granted under the Existing Credit Agreement (that will be released
upon repayment) and that will be granted under the New Credit Agreement
as described in the Prospectus; none of the outstanding shares of
capital stock or partnership interests of the Subsidiaries was issued
in violation of any preemptive or similar rights arising by operation
of law, or under the charter, by-laws or other charter documents of any
Subsidiary or under any agreement to which the Company or any
Subsidiary is a party. All of the Subsidiaries of the Company are
listed on Schedule D attached hereto.
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(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company and each of the
Guarantors.
(ix) Authorization and Description of the Indenture. The Base
Indenture has been duly authorized, executed and delivered by the
Company and each of the Guarantors and is duly qualified under the 1939
Act and constitutes a valid and binding agreement of the Company and
each of the Guarantors, enforceable against the Company and each of the
Guarantors in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law). The First Supplemental Indenture
has been duly authorized by the Company and each of the Guarantors and,
when duly executed and delivered by the Company and each of the
Guarantors, will constitute a valid and binding agreement of the
Company and each of the Guarantors, enforceable against the Company and
each of the Guarantors in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
The Indenture will conform in all material respects to the statements
relating thereto contained in the Prospectus.
(x) Authorization and Description of Securities and
Guarantees. The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, at the Closing Time, will
have been duly executed by the Company and, when authenticated, issued
and delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture. The Guarantees have been
duly authorized by the Guarantors and, when executed and delivered in
the manner provided for in the Indenture, will constitute valid and
binding obligations of the Guarantors, enforceable against the
Guarantors in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture. The
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Securities and the Guarantees will conform in all material respects to
the statements relating thereto contained in the Prospectus.
(xi) Authorization and Description of the Refinancing
Transactions. Each of the Company and its Subsidiaries have all
necessary corporate power and authority to enter into, to perform the
obligations to be performed by them under, and to consummate the
transactions contemplated by the Refinancing Transactions and the
Refinancing Documents to which it is a party. The New Credit Agreement
has been duly authorized by the Company and each of the Guarantors, and
as of the Closing Time, will have been duly executed and delivered by
the Company and each of the Guarantors, and will constitute the valid
and binding obligation of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with its terms
except as the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting creditors' rights generally, or the enforcement thereof is
subject to principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or in law). All actions and
proceedings required by law to be taken by the Company and the
Subsidiaries prior to the Closing Time in connection with the
Refinancing Transactions have been or prior to the Closing Time will
have been duly and validly taken. The Refinancing Documents will
conform in all material respects to the statements relating thereto
contained in the Prospectus. The Underwriters have received copies of
the most recently circulated draft of the New Credit Agreement as
currently negotiated on the date hereof.
(xii) Non-Guarantor Subsidiaries. Each Subsidiary that is a
guarantor under the New Credit Agreement is a Guarantor. All
Subsidiaries that are not Guarantors (other than Quest Diagnostics
Receivables Incorporated) did not collectively (a) own more than 10% of
the Company's consolidated assets at December 31, 2000 or (b) account
for more than 5% of the Company's consolidated revenues for the year
ended December 31, 2000.
(xiii) Absence of Defaults and Conflicts. Neither the Company
nor any of the Subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which any of them may be bound, or to which any of the
property or assets of the Company or any of the Subsidiaries is subject
(collectively, "Agreements and Instruments") or has violated or is in
violation of any of the laws, rules and regulations administered by the
United States Health Care Financing Administration (the "HCFA"), the
United States Food and Drug Administration (the "FDA"), the Substance
Abuse and Mental Health Services Administration (the "SAMHSA") and by
the Drug Enforcement Administration (the "DEA"), or any other
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of the
Subsidiaries or any of their assets or properties, except in each case
for such defaults or violations that have been disclosed or that would
not singly or in the aggregate result in a Material Adverse Effect.
Assuming the repayment and
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termination of the Company's and the Guarantors' obligations under the
Existing Credit Agreement, the execution, delivery and performance of
this Agreement, the Indenture, the Securities, the Guarantees, each of
the Refinancing Documents and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company or any of
the Guarantors in connection with the consummation of the transactions
contemplated by the Refinancing Transactions and this Agreement and in
the Registration Statement and the Prospectus (including each of the
Refinancing Transactions, the issuance and sale of the Securities and
the Guarantees, the use of the proceeds from the sale of the Securities
and the Guarantees as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Company and the Guarantors
with their respective obligations under this Agreement, the Indenture,
the Securities, the Guarantees and each of the Refinancing Documents
have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or a default
or a Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant
to, the Agreements and Instruments (except for such conflicts, breaches
or defaults or liens, charges or encumbrances that, singly or in the
aggregate, would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws of the Company or any of the Subsidiaries or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of the Subsidiaries or any
of their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any of the Subsidiaries.
(xiv) Absence of Labor Disputes. No labor dispute with the
employees of the Company or any of the Subsidiaries exists or, to the
knowledge of the Company and the Guarantors, is imminent, which may
reasonably be expected to result in a Material Adverse Effect.
(xv) Absence of Proceedings. Except as disclosed in the
Prospectus there is not pending or, to the knowledge of the Company or
any Guarantor, threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any Subsidiary is a party, or to
which the property of the Company or any Subsidiary is subject, before
or brought by any domestic or foreign court or governmental agency or
body, affecting (i) the possession by any of them of any Governmental
License (as defined herein) currently held by any them, (ii) the
accreditation of any of their respective laboratories with the College
of American Pathologists ("CAP"), (iii) any of their qualification to
perform services for and receive reimbursement from, Medicaid or
Medicare, (iv) any of their ability to conduct their clinical testing
business in any state or (v) any of them in any other way, which in the
case of any of the foregoing, might reasonably be expected to result in
a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets of the Company
and the Subsidiaries considered as one enterprise or the consummation
of the
- 9 -
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder or under the Indenture,
Securities, Guarantees or Refinancing Transactions. The aggregate of
all pending legal or governmental proceedings to which the Company or
any Subsidiary thereof is a party or of which any of their respective
property or assets is the subject which are not described in the
Prospectus, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material
Adverse Effect. All of the descriptions set forth in the Prospectus of
the legal and governmental proceedings by or before any court,
governmental agency or body are true and accurate in all material
respects.
(xvi) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectuses or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvii) Possession of Intellectual Property. The Company and
the Subsidiaries own, possess or license, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of the Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property (including Intellectual
Property which is licensed) or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of the Subsidiaries therein, and
which infringement or conflict or invalidity or inadequacy, singly or
in the aggregate, would reasonably be expected to result in a Material
Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required (i) for the performance by the Company
or any of the Guarantors of their respective obligations hereunder or
under any of the Refinancing Documents, (ii) in connection with the
offering, issuance or sale of the Securities and the Guarantees under
this Agreement or the consummation of the transactions contemplated by
this Agreement or by each of the Refinancing Transactions or (iii) for
the due execution, delivery or performance by the Company or any of the
Guarantors of this Agreement, the Indenture, the Securities, the
Guarantees, each of the Refinancing Documents or any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company or any of the Subsidiaries in connection with the
consummation of the Refinancing Transactions, the transactions
contemplated herein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the
use of proceeds from the sale of the Securities as described in the
Registration Statement under the caption "Use of Proceeds"), except
such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities
- 10 -
laws and except such where the failure to obtain would not result in a
Material Adverse Effect.
(xix) Possession of Licenses and Permits. The Company and the
Subsidiaries possess all governmental permits, licenses, approvals,
consents, certificates and other authorizations required (i) under the
federal Medicare program, (ii) under the Clinical Laboratories
Improvement Act of 1967, as amended (the "CLIA"), (iii) by the SAMHSA
and (iv) as otherwise necessary to conduct the business now operated by
them respectively, issued by the HCFA, the FDA, the SAMHSA and each
other appropriate federal, state, local or foreign regulatory agencies
or bodies including, but not limited to, any foreign regulatory
authorities performing functions similar to their respective functions
("Governmental Licenses") except where failure to obtain such
Governmental Licenses would not singly or in the aggregate, result in a
Material Adverse Effect; the Company and the Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses and with the rules and regulations of the regulatory
authorities and governing bodies having jurisdiction with respect
thereto, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses, nor are
there, to the knowledge of the Company or any Guarantor, pending or
threatened actions, suits, claims or proceedings against the Company or
any Subsidiary before any court, governmental agency or body including,
but not limited to, the HCFA, the FDA, and the SAMHSA or otherwise that
would reasonably be expected to limit, revoke, cancel, suspend or cause
not to be renewed any Governmental License, in each case, which, singly
or in the aggregate, would result in a Material Adverse Effect.
(xx) Licensing and Accreditation of Laboratories. All of the
regional laboratories of the Company and the Subsidiaries are eligible
for accreditation by CAP and are so accredited, and all of the
laboratories of the Company and the Subsidiaries are in compliance, in
all material respects, with the standards required by CLIA.
(xxi) Title to Property. The Company and the Subsidiaries have
valid title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus and reflected in the financial
statements included therein; (b) are granted or created under the
Existing Credit Agreement and that will be granted or created under the
New Credit Agreement or (c) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of the Subsidiaries; and all of the leases and subleases material
to the business of the Company and the Subsidiaries, considered as one
enterprise, and under which the Company or any of the Subsidiaries
holds properties described in the Prospectus, are in full force and
effect. Except as described in the
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Prospectus, neither the Company nor any of the Subsidiaries has any
notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of the Subsidiaries under
any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or any Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease, which, singly or in the aggregate, would result in a
Material Adverse Effect.
(xxii) Insurance. The Company and the Subsidiaries carry or
are entitled to the benefits of insurance, including, without
limitation, professional liability insurance, with financially sound
and reputable insurers, in such amounts, containing such deductibles
and covering such risks as is reasonable and prudent.
(xxiii) Solvency. The Company and each of the Guarantors are,
and immediately after the Closing will be, Solvent. As used herein, the
term "Solvent" means, with respect to the Company and each Guarantor,
as the case may be, on a particular date, that on such date (A) the
fair market value of the assets of the Company or such Guarantor is
greater than the total amount of liabilities (including, without
limitation, contingent liabilities) of the Company or such Guarantor,
(B) the present fair salable value of the assets of the Company or such
Guarantor is not less than the amount that will be required to pay the
probable liability of the Company or such Guarantor on its debts as
they become absolute and matured, (C) the Company or such Guarantor
does not intend to, and does not believe that it will, incur debts and
liabilities beyond the Company's or such Guarantor's ability to pay as
such debts and liabilities mature, (D) the Company or such Guarantor is
not engaged in a business or a transaction, and is not about to engage
in a business or a transaction, for which the Company's or such
Guarantor's assets would constitute unreasonably small capital.
(xxiv) Stabilization or Manipulation. Neither the Company nor
any Guarantor nor any of their respective officers, directors or
controlling persons has taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company or any
Guarantor in order to facilitate the sale or resale of the Securities
or the Guarantees. The Company and the Guarantors have not distributed
and, prior to the later to occur of (i) the Closing Time and (ii)
completion of the distribution of the Securities and the Guarantees,
will not distribute any offering material in connection with the
offering and sale of the Securities and the Guarantees other than the
Prospectus or other materials, if any, permitted by the 1933 Act and
approved by the Representatives.
(xxv) Environmental Laws. Except for such matters as would
not, singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any of the Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release
- 12 -
or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, medical specimens, petroleum or
petroleum products or nuclear or radioactive material (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and the
Subsidiaries have all permits, licenses, authorizations and approvals
currently required for their respective businesses under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of the
Subsidiaries and (D) there are no events, facts or circumstances that
might reasonably be expected to form the basis of any liability or
obligation of the Company or any of the Subsidiaries, including,
without limitation, any order, decree, plan or agreement requiring
clean-up or remediation, or any action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of the Subsidiaries relating to any Hazardous Materials
or Environmental Laws.
(xxvi) Registration Rights. Except as disclosed in the
Prospectus, there are no holders of securities (debt or equity) of the
Company, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company, who in connection with the issuance, sale and delivery of the
Securities and the Guarantees, and the execution, delivery and
performance of this Agreement, have the right to request the Company to
register securities held by them under the 1933 Act.
(xxvii) Accounting Controls. The Company and its consolidated
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (C) access to assets is permitted
only in accordance with management's general or specific authorization;
and (D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxviii) Investment Company Act. The Company and each of the
Guarantors are not, and will not be as a result of the sale of the
Securities and the Guarantees pursuant to this Agreement, an investment
company within the meaning of the Investment Company Act of 1940, as
amended.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries, as the case may be, delivered to the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company or any of the Subsidiaries to each
Underwriter as to the matters covered thereby.
- 13 -
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities and Guarantees. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Guarantors agree to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at the prices set forth in Schedule B, the
aggregate principal amount of Securities (including the Guarantees) set forth in
Schedule A opposite the name of such Underwriter, plus any additional principal
amount of Securities (including the Guarantees) which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022, or at such other place
as shall be agreed upon by the Representatives, the Company and the Guarantors
at 9:00 A.M. (New York Time) on June , 2001 (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Representatives, the Company
and the Guarantors (such time and date of payment and delivery being herein
called the "Closing Time").
Payment shall be made to the Company and the Guarantors by wire
transfer of immediately available funds to bank accounts designated by the
Company against delivery to the Representatives for the respective accounts of
the Underwriters of certificates for the Securities and the Guarantees to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Securities and the Guarantees which it
has agreed to purchase. Merrill Lynch, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Securities and the Guarantees to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities
(including the Guarantees), shall be in such denominations and registered in
such names as the Representatives may request in writing at least one full
business day before the Closing Time. The certificates for the Securities
(including the Guarantees), will be made available for examination by the
Representatives in The City of New York not later than 9:00 A.M. (New York Time)
on the business day prior to the Closing Time.
SECTION 3. Covenants of the Company and the Guarantors. The Company and
the Guarantors, jointly and severally, covenant with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company and the Guarantors, subject to Section 3(b), will comply with the
requirements of Rule 415, Rule 430A and/or Rule 434, as applicable, and will
notify the Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the
- 14 -
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities and the Guarantees for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company and the Guarantors will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as they deem necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not,
they will promptly file such prospectus. The Company and the Guarantors will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company and the Guarantors will give the
Representatives notice of their intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company and the Guarantors
have furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, one copy of the manually signed and as many
conformed copies as the Underwriters may reasonably request of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company and the Guarantors have
delivered to each Underwriter, without charge, as many copies of each
preliminary prospectus as such Underwriter reasonably requested, and the Company
and the Guarantors hereby consent to the use of such copies for purposes
permitted by the 1933 Act. The Company and the Guarantors will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
- 15 -
(e) Continued Compliance with Securities Laws. The Company and the
Guarantors will comply with the 1933 Act and the 1933 Act Regulations and the
1934 Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities and the Guarantees as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Securities and the
Guarantees, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company and the Guarantors, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Company and the Guarantors will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company and the Guarantors
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company and the Guarantors will use
their reasonable best efforts, in cooperation with the Underwriters, to qualify
the Securities and the Guarantees for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Representatives may designate and to maintain such qualifications in effect
as long as required for the sale of the Securities and the Guarantees; provided,
however, that the Company and the Guarantors shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which they are not so qualified
or to subject themselves to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company and the Guarantors will timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to their securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company and the Guarantors will use the net
proceeds received by them from the sale of the Securities and the Guarantees in
the manner specified in the Prospectus under "Use of Proceeds".
(i) Restriction on Sale of Securities. Except as otherwise contemplated
in the Prospectus, during the period commencing on the date of the Prospectus
and ending at the Closing Time, the Company and the Guarantors will not, without
the prior written consent of the Joint Book-Running Managers, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any debt securities or
guarantees of debt securities of the Company or any Guarantor or any securities
convertible into or exercisable or
- 16 -
exchangeable for any debt securities or guarantees of debt securities of the
Company or any Guarantor or file any registration statement under the 1933 Act
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any debt securities or
guarantees of debt securities of the Company or any Guarantor, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of any debt securities or guarantees of debt securities of the Company
or any Guarantor or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Securities and the Guarantees to be sold
hereunder.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(k) Interim Financial Statements. Prior to the Closing Time, the
Company and the Guarantors shall furnish to the Representatives copies of any
unaudited interim financial statements of the Company, promptly after they have
been completed, for any periods subsequent to the periods covered by the
financial statements appearing in the Prospectus.
(l) Rating of Securities. The Company and the Guarantors shall take all
reasonable action necessary to enable Standard & Poor's Corporation ("S&P") and
Moody's Investors Service, Inc. ("Moody's"), to provide their respective credit
ratings of the Securities and the Guarantees.
(m) DTC Clearance. The Company and the Guarantors will use all
reasonable efforts in cooperation with the Underwriters to permit the Securities
and the Guarantees to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
(n) Refinancing Documents. The Company will make available to the
Underwriters drafts of all Refinancing Documents in substantially final form a
reasonable period of time prior to the Closing Time and a complete set of
closing documents and opinions in connection with the Refinancing Transactions a
reasonable time after the consummation of the Refinancing Transactions.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and the Guarantors, jointly and severally,
will pay all expenses incident to the performance of their respective
obligations under this Agreement, including (i) the preparation, printing and
any filing of the Registration Statement (including financial statements and any
schedules or exhibits) and of each amendment or supplement thereto, including
the preliminary prospectus and the prospectus to be contained in the
Registration Statement, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale and delivery of the Securities and the Guarantees, (iii) the
preparation, issuance and delivery of the certificates for the Securities and
the Guarantees to the Underwriters, (iv) the fees and disbursements of the
Company's and the Guarantors' counsel, accountants and
- 17 -
other advisors, (v) the qualification of the Securities and the Guarantees under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Guarantees, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities
and the Guarantees, if any, and (x) any fees payable in connection with the
rating of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i), 9(a)(ii) or Section 11 hereof, the Company and the Guarantors, jointly
and severally, shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Guarantors contained in
Section 1 hereof or in certificates of any officer of the Company or any of the
Subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company and the Guarantors of their covenants and other obligations
hereunder and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company and the Guarantors have elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for the Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Shearman & Sterling, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letters for each of the other Underwriters
to the effect set forth in Exhibit A hereto.
- 18 -
(c) Opinion of Deputy General Counsel of the Company. At the Closing
Time, the Representatives shall have received the favorable opinion, dated as of
the Closing Time, of Leo C. Farrenkopf, Jr., Deputy General Counsel of the
Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letters for each
of the other Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for the Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the Subsidiaries
and certificates of public officials.
(e) Officers' Certificate. At the Closing Time, (i) the Prospectus, as
it may then be amended or supplemented, including the documents incorporated by
reference therein, shall not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; (ii) there
shall not have been, since the respective dates as of which information is given
in the Prospectus, any material adverse change in the business, financial
condition, operations, cash flow or business prospects of the Company and of the
Subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business; (iii) the Company and the Guarantors shall have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time; and (iv) the
representations and warranties of the Company and the Guarantors in Section 1(a)
shall be accurate and true and correct as though expressly made at and as of the
Closing Time. The Representatives shall have received a certificate of Robert A.
Hageman, Vice President and Chief Financial Officer of the Company and Joseph
Manory, Vice President and Treasurer of the Company, dated as of Closing Time,
to such effect and to the effect that no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Accountant's Comfort Letters and Consent. At the time of the
execution of this Agreement, the Representatives shall have received from
PricewaterhouseCoopers LLP letters with respect to the Company and with respect
to SmithKline Beecham Clinical Laboratories, Inc. dated such date, in form and
substance satisfactory to the Representatives or to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement.
(g) Bring-down Comfort Letters. At the Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP, letters
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letters furnished pursuant to subsection (f) of this Section,
- 19 -
except that the specified date referred to shall be a date not more than three
business days prior to the Closing Time.
(h) No Objection. The NASD has not raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
(i) Maintenance of Rating. At Closing Time, the Securities (including
the Guarantees) shall be rated at least Ba1 by Moody's and BBB- by S&P, and the
Company and the Guarantors shall have delivered to the Representatives a letter
dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Representatives, confirming that the Securities and the
Guarantees have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in, or withdrawal of, the rating assigned to the
Securities and the Guarantees or any of the Company's and the Guarantors' other
debt securities or debt instruments by any "nationally recognized statistical
rating agency," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of the Securities
and the Guarantees or any of the Company's and the Guarantors' other debt
securities or debt instruments.
(j) New Credit Agreement. At the Closing Time and upon consummation of
the transactions contemplated hereby, (i) the Company and the Guarantors shall
have duly authorized, executed and delivered the New Credit Agreement, (ii)
there shall be no default or event of default under the New Credit Agreement or
the existence of any event which with notice or lapse of time, or both, would
constitute a default under the New Credit Agreement and (iii) the Company and
the Guarantors shall have received all consents necessary to the issuance and
sale of the Securities and the Guarantees and the consummation of the
transactions contemplated hereby, in each case in a form and substance
satisfactory to the Representatives and counsel for the Underwriters. At the
Closing Time, all legal opinions delivered on behalf of the Company in
connection with entering into the New Credit Agreement shall have been addressed
and delivered to the Underwriters or shall state that the Underwriters may rely
upon such opinions as if they were addressed and delivered to them.
(k) Tender Offer. At the Closing Time, the Company shall have received
the Requisite Consents (as defined in the Offer to Purchase) and shall have not
received any indication that the Tender Offer will not be consummated by the
Payment Date (as defined in the Offer to Purchase).
(l) Additional Documents. At Closing Time counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require (including any consents under any agreements to which the
Company is a party) for the purpose of enabling them to pass upon the issuance
and sale of the Securities and the Guarantees as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Guarantors in connection with the issuance and sale
of the Securities and the Guarantees as herein contemplated shall be
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the
- 20 -
Representatives by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of the Underwriters. The Company and each of the
Guarantors, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
extent and in the manner set forth in clauses (i), (ii) and (iii) below, as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Joint
Book-Running Managers), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or the
Guarantors by any Underwriter through the Joint Book-Running Managers expressly
for use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided, further that the Company and the
- 21 -
Guarantors will not be liable to any Underwriter or any person controlling such
Underwriter with respect to any such untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus to
the extent that the Company and the Guarantors shall sustain the burden of
proving that any such loss, liability, claim, damage or expense resulted from
the fact that the Underwriter sold Securities and Guarantees to a person to whom
such Underwriter failed to send or give, at or prior to the written confirmation
of the sale of such Securities and Guarantees, a copy of the Prospectus (as
amended or supplemented) if the Company has previously furnished copies thereof
to the Underwriter (sufficiently in advance of the Closing Time to allow for
distribution of the Prospectus in a timely manner) and complied with their
obligations hereunder and the loss, liability, claim, damage or expense of the
Underwriter resulted from an untrue statement or omission or alleged untrue
statement or omission of a material fact contained in or omitted from such
preliminary prospectus (as amended or supplemented) which was corrected in the
Prospectus (as amended or supplemented).
The indemnified parties shall, however, be relieved of their
obligation to first demand payment from the Company and the Guarantors or to
wait such 30 calendar days if (i) the Company files a petition for relief under
the United States Bankruptcy Code (the "Bankruptcy Code"), (ii) an order for
relief is entered against the Company in an involuntary case under the
Bankruptcy Code, (iii) the Company makes an assignment for the benefit of its
creditors, or (iv) any court orders or approves the appointment of a receiver or
custodian for the Company or a substantial portion of its assets.
(b) Indemnification of Company, Guarantors, Directors and Officers.
Each Underwriter severally agrees to indemnify and hold harmless the Company,
the Guarantors, their directors, each of their officers who signed the
Registration Statement, and each person, if any, who controls the Company or any
Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company and the Guarantors by such
Underwriter through the Joint Book-Running Managers expressly for use in the
Registration Statement (or any amendment thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to such indemnified parties shall be selected by the Joint Book-Running
Managers, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to such indemnified parties shall be selected by the Company. An
indemnifying
- 22 -
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party for the indemnified party's reasonable fees and expenses of
counsel in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement effected without its consent if such
indemnifying party (A) reimburses such indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (B)
provides written notice to the indemnified party disputing the unpaid balance in
good faith and substantiating the unpaid balance as unreasonable, in each case
prior to the date of such settlement, subject to provision of notice by the
indemnified party in accordance with (i) and (ii) above.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Underwriters on the other hand from the
offering of the Securities and the Guarantees pursuant to this Agreement or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors on the one hand and of the Underwriters on the
- 23 -
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Guarantors on the
one hand and the Underwriters on the other hand in connection with the offering
of the Securities and the Guarantees pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities and the Guarantees pursuant to this Agreement (before
deducting expenses) received by the Company and the Guarantors and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial offering prices of the
Securities (including the Guarantees) as set forth on such cover.
The relative fault of the Company and the Guarantors on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Guarantors, or by the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities (including the Guarantees) underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, (a) each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
(b) each director of the Company and each Guarantor, and each person, if any,
who controls the Company and each Guarantor, as the case may be, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company and each Guarantor. The
Underwriters' respective obligations to
- 24 -
contribute pursuant to this Section 7 are several in proportion to the principal
amount of Securities (including the Guarantees) set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of the
Subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or any
Guarantor, and shall survive delivery of the Securities (including the
Guarantees) to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and the Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there shall have occurred a downgrading in the rating
assigned to the Securities or the Guarantees or any of the Company's or any
Guarantors' other debt securities by any nationally recognized securities rating
agency, or if such securities rating agency shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of the Securities, the Guarantees or any of the Company's or Guarantors'
other debt securities or guarantees of debt securities or (iii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Securities
and the Guarantees or to enforce contracts for the sale of the Securities and
the Guarantees, or (iv) if trading in any securities of the Company has been
suspended or limited by the Commission or the NASDAQ National Market System, or
if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the NASDAQ National Market System has been suspended or limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Securities
(including the Guarantees) which
- 25 -
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, but not the obligation,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities (including the Guarantees) to be
purchased hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective obligations hereunder bear to the obligations
of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities (including the Guarantees) to be purchased
hereunder, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriters from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either (i) the Representatives or (ii) the Company shall have
the right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by the Company and the Guarantors. If the Company
and the Guarantors shall fail at Closing Time to sell the number of Securities
(including the Guarantees) that they are obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party; provided, however, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company or the Guarantors from liability, if any,
in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at North Tower, World Financial
Center, New York, New York 10281-1201, attention of James Forbes, and CSFB at 11
Madison Avenue, 23rd Floor, New York, New York 10010, attention of both Harris
Hyman and the Transaction Advisory Group, with a copy to Fried, Frank, Harris,
Shriver & Jacobson, One New York Plaza, New York, New York 10004, attention of
Valerie Ford Jacob, Esq.; and notices to the Company shall be directed to it at
One Malcolm Avenue, Teterboro, New Jersey 07608, attention of General Counsel,
with a copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022, attention of Stephen T. Giove, Esq.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company and the Guarantors and their
respective successors. Nothing
- 26 -
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Company
and the Guarantors and their respective successors and the controlling persons
and officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Guarantors and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities and Guarantees from any
Underwriters shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY HEREIN REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
- 27 -
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Guarantors a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the
Guarantors in accordance with its terms.
Very Truly Yours,
QUEST DIAGNOSTICS INCORPORATED
By: /s/ Leo C. Farrenkopf, Jr.
-----------------------------------------------
Name: Leo C. Farrenkopf, Jr.
Title: Vice President, Secretary
and Deputy General Counsel
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED QUEST DIAGNOSTICS
CLINICAL LABORATORIES, INC. QUEST
DIAGNOSTICS INCORPORATED (CA) QUEST
DIAGNOSTICS INCORPORATED (MD) QUEST
DIAGNOSTICS LLC QUEST DIAGNOSTICS
INCORPORATED (MI) QUEST DIAGNOSTICS
INCORPORATED (CT) QUEST DIAGNOSTICS
INCORPORATED (MA) QUEST DIAGNOSTICS
OF PENNSYLVANIA INC. QUEST
DIAGNOSTICS INCORPORATED (OH)
METWEST INC.
NICHOLS INSTITUTE DIAGNOSTICS
DPD HOLDINGS, INC.
DIAGNOSTICS REFERENCE SERVICES INC.
LABORATORY HOLDINGS INCORPORATED
By: /s/ Leo C. Farrenkopf, Jr.
-----------------------------------------------
Name: Leo C. Farrenkopf, Jr.
Title: Vice President, Secretary
and Deputy General Counsel
- 28 -
PATHOLOGY BUILDING PARTNERSHIP,
a Delaware general partnership
By: Quest Diagnostics Incorporated, a Maryland
Corporation, its general partner
By /s/ Leo C. Farrenkopf, Jr.
------------------------------------------------
Name: Leo C. Farrenkopf, Jr.
Title: Vice President, Secretary
and Deputy General Counsel
QUEST DIAGNOSTICS INVESTMENTS INCORPORATED
a Delaware corporation
By: /s/ Peter C. Fulweiler
------------------------------------------------
Name: Peter C. Fulweiler
Title: President
QUEST DIAGNOSTICS FINANCE INCORPORATED
a Delaware corporation
By: /s/ Peter C. Fulweiler
------------------------------------------------
Name: Peter C. Fulweiler
Title: President
- 29 -
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Credit Suisse First Boston Corporation
Banc of America Securities LLC
UBS Warburg LLC
Wachovia Securities, Inc.
BNY Capital Markets, Inc.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/
---------------------------------------
Authorized Signatory
For itself and the other Underwriters
named in Schedule A hereto.
- 30 -
SCHEDULE A
Name of Underwriter Principal Amount Principal Amount
------------------- of 6 3/4% Senior Notes Due of 7 1/2% Senior Notes Due
2006 To Be Purchased 2011 To Be Purchased
Merrill Lynch, Pierce, Fenner & Smith Incorporated $106,564,000 $106,564,000
Credit Suisse First Boston Corporation 75,625,000 75,625,000
Banc of America Securities LLC 32,656,000 32,656,000
UBS Warburg LLC 30,937,000 30,937,000
Wachovia Securities, Inc. 17,187,000 17,187,000
BNY Capital Markets, Inc. 12,031,000 12,031,000
Total: $275,000,000 $275,000,000
- 1 -
SCHEDULE B-PRICING INFORMATION
QUEST DIAGNOSTICS INCORPORATED
$275,000,000 6 3/4% Senior Notes due 2006
1. The initial public offering price of the Securities, determined as
provided in said Section 2, shall be 99.432% of the principal amount thereof,
plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be 98.832% of the principal amount thereof.
3. The interest rate on the Securities shall be 6 3/4% per annum.
4. At any time and from time to time, the Securities shall be
redeemable, as a whole or in part, at the option of the Company, on at least 30
days, but not more than 60 days, prior notice, at a redemption price equal to
the greater of:
o 100% of principal amount of the Securities to be redeemed, and
o the sum of the present values of the remaining scheduled
payments discounted, on a semiannual basis, assuming a 360-day
year consisting of twelve 30-day months, at the treasury rate
plus 30 basis points,
plus, in each case, accrued interest to the date of redemption which has not
been paid.
$275,000,000 7 1/2% Senior Notes due 2011
1. The initial public offering price of the Securities, determined as
provided in said Section 2, shall be 99.598% of the principal amount thereof,
plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be 98.948% of the principal amount thereof.
3. The interest rate on the Securities shall be 7 1/2% per annum.
4. At any time and from time to time, the Securities shall be
redeemable, as a whole or in part, at the option of the Company, on at least 30
days, but not more than 60 days, prior notice, at a redemption price equal to
the greater of:
o 100% of principal amount of the Securities to be redeemed, and
o the sum of the present values of the remaining scheduled
payments discounted, on a semiannual basis, assuming a 360-day
year consisting of twelve 30-day months, at the treasury rate
plus 35 basis points,
plus, in each case, accrued interest to the date of redemption which has not
been paid.
SCHEDULE C - GUARANTORS
- -------------------------------------------------------------------------------------------------------------------
Guarantor Ownership Place of Incorporation or
Formation
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Holdings Quest Diagnostics Incorporated (DE) Delaware
Incorporated
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Clinical Quest Diagnostics Holdings Incorporated Delaware
Laboratories, Inc.
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (CA) Quest Holdings Incorporated (MI) (1) California
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MD) Quest Holdings Incorporated (MD) (2) Maryland
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics LLC Quest Diagnostics Incorporated (DE) Illinois
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MI) Quest Diagnostics Incorporated (DE) Michigan
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (CT) Laboratory Holdings Incorporated (MA) Connecticut
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (MA) Laboratory Holdings Incorporated (MA) Massachusetts
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics of Pennsylvania Inc. Quest Diagnostics Incorporated (DE) Delaware
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Incorporated (OH)1 Quest Diagnostics of Pennsylvania Inc. Ohio
(DE)
- -------------------------------------------------------------------------------------------------------------------
MetWest Inc. DPD Holdings, Inc. (DE) Delaware
- -------------------------------------------------------------------------------------------------------------------
Nichols Institute Diagnostics Quest Diagnostics Incorporated (DE) California
- -------------------------------------------------------------------------------------------------------------------
DPD Holdings, Inc. Quest Diagnostics Incorporated (DE) Delaware
- -------------------------------------------------------------------------------------------------------------------
Diagnostics Reference Services Inc. Quest Diagnostics Incorporated (MD) Maryland
- -------------------------------------------------------------------------------------------------------------------
Laboratory Holdings Incorporated Quest Diagnostics Incorporated (DE) Massachusetts
- -------------------------------------------------------------------------------------------------------------------
Pathology Building Partnership Diagnostic Reference Services Inc. (MD) Maryland
- 50%; Quest Diagnostics Incorporated
(MD) - 50%
- -------------------------------------------------------------------------------------------------------------------
- ----------
1 In the process of being merged into Quest Diagnostics of Pennsylvania Inc.
- -------------------------------------------------------------------------------------------------------------------
Guarantor Ownership Place of Incorporation or
Formation
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Investments Quest Diagnostics Incorporated (DE) Delaware
Incorporated
- -------------------------------------------------------------------------------------------------------------------
Quest Diagnostics Finance Incorporated Quest Diagnostics Investments Delaware
Incorporated (DE)
- -------------------------------------------------------------------------------------------------------------------
(1) This entity is a holding company that is being merged into its parent, Quest
Diagnostics Incorporated (DE). The merger is expected to be completed by or
shortly after the Closing Date.
(2) This entity is a holding company that is being merged into its parent, Quest
Diagnostics Incorporated (DE). The merger is expected to be completed by or
shortly after the Closing Date.
SCHEDULE D- SUBSIDIARIES 1
100% Quest Diagnostics Holdings Incorporated (f/k/a SBCL, Inc.) (DE)
100% Quest Diagnostics Clinical Laboratories, Inc. (f/k/a SmithKline
Beecham Clinical Laboratories, Inc.) (DE)
(100%) Quest Diagnostics LLC (AZ)
(Expected to merge into Quest Diagnostics Clinical
Laboratories in 2001)
(100%) Quest Diagnostics Clinical Laboratories of Missouri LLC
(MO)
(Expected to merge into Quest Diagnostics Clinical
Laboratories in 2001)
(33-l/3%) Compunet Clinical Laboratories (OH)
(44%) Mid America Clinical Laboratories (IN)
(51%) Diagnostic Laboratory of Oklahoma LLC (OK)
100% DPD Holdings, Inc. (DE)
100% MetWest Inc. (DE)
100% Quest Diagnostics of Arizona Incorporated (DE).fn
(Expected to merge into MetWest in 2001)
49% Sonora Quest Laboratories LLC (AZ)
100% Laboratory Holdings Incorporated (MA)
100% Quest Diagnostics Incorporated (CT)
100% Quest Diagnostics Incorporated (MA)
100% Quest Holdings Incorporated (MD) (Expected to merge into Quest Diagnostics
Incorporated (DE) in 2001)
100% Quest Diagnostics Incorporated (MD)
100% Diagnostic Reference Services Inc. (MD)
50% Pathology Building Partnership (MD) (gnl pshp)
100% Quest Holdings Incorporated (MI) (Expected to merge into Quest Diagnostics
Incorporated (DE) in 2001)
100% Quest Diagnostics Incorporated (CA)
100% Quest Diagnostics LLC (IL)
100% Quest Diagnostics Incorporated (MI)
100% Quest Diagnostics of Pennsylvania Inc. (DE)
100% Quest Diagnostics Incorporated (OH)(Expected to merge into Quest
Diagnostics of Pennsylvania Inc. in 2001)
100% Medical Management Systems Inc. (PA) (Expected to merge into Quest
Diagnostics of Pennsylvania Inc. in 2001)
51% Quest Diagnostics Venture LLC (PA)
53.5% Associated Clinical Laboratories (PA) (gen pshp)
50% Surgical Eye Enterprise L.P. (PA) (ltd. pshp)
50% Surgical Eye Institute L.P. (PA) (ltd. pshp)
100% Quest Holdings Incorporated (DE) (Expected to merge into Quest Diagnostics
Incorporated (DE) in 2001)
51% Quest Diagnostics of Missouri LLC (MO) (Expected to dissolve in
2001)
- ----------
1 Certain joint ventures and partnerships are included that may not meet the
definition of Subsidiary.
100% Quest MRL, Inc.(DE) (Expected to merge into MetWest in 2001)
100 % Quest Diagnostics Ventures LLC (DE) (Expected to merge into Quest
Diagnostics Incorporated (DE) in 2001)
100% Quest Diagnostics Receivables Inc. (DE)
100% Quest Diagnostics Investments Incorporated (DE)
100% Quest Diagnostics Finance Incorporated (DE)
100% Nichols Institute Diagnostics (CA)
100% Nichols Institute Sales Corporation (U.S.V.I.)
100% Nichols Institute Diagnostics Limited (U. K.)
100% Nichols Institute Diagnostics Trading S.A. (Switzerland)
100% Nichols Institute Diagnostika GMBH (Germany)
100% Nichols Institute Diagnostika GMBH (Austria)
100% Nichols Institute International Holding B.V. (Netherlands)
100% Nichols Institute Diagnostics B.V. (Netherlands)
100% Nichols Institute Diagnostics SARL (France)
100% Quest Diagnostics do Brasil Ltda. S.C. (Brazil)
100% Quest Diagnostics Limited (UK)
100% The Pathology Partnership plc
100% Nomad-Massachusetts, Inc. (MA)
100% Quest Diagnostics, S.A. de C.V. (Mexico).fn (Owns Juarez Business)
100% Analisis, S.A. (Mexico)
100% Laboratorios Clinicos de Mexico, S.A. de C.V. (Mexico).
100% Servicios de Laboratorio, S.A. de C.V. (Mexico)
100% Laboratorios de Frontera Polanco, S.A. de C.V. (Mexico)
100% Laboratorio de Analisis Biomedicos, S.A. (Mexico).
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL TO
BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and has
corporate power and authority to own, lease and operate its properties, and to
enter into and perform its obligations under the Purchase Agreement, the
Indenture, the Notes and the New Credit Agreement.
(ii) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or be in good standing would not, individually or in the
aggregate, have a Material Adverse Effect.
(iii) Each of the Delaware Guarantors has been duly incorporated or
organized and is validly existing as a corporation, partnership or limited
liability company in good standing under the laws of the jurisdiction of its
organization and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement, the
Indenture, the Guarantees issued by it and the New Credit Agreement.
(iv) Each Delaware Guarantor is duly qualified as a foreign
corporation, partnership or limited liability company for the transaction of
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not, individually or in the aggregate, have a
Material Adverse Effect.
(v) All of the issued and outstanding capital stock, partnership or
membership interests of each Guarantor has been duly authorized and validly
issued, is fully paid and non-assessable (other than general partnership
interest) and, to the best of my knowledge, except for directors' qualifying
shares and except as otherwise set forth in the Prospectus, is owned by the
Company, directly or through subsidiaries, free and clear of all liens,
encumbrances, equities or claims.
(vi) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of the Delaware Guarantors.
(vii) The Base Indenture has been duly authorized, executed and
delivered by the Company and each of the Delaware Guarantors.
(viii) The First Supplemental Indenture has been duly authorized,
executed and
delivered by the Company and each of the Delaware Guarantors.
(ix) The Notes have been duly authorized and executed by the Company.
(x) The Guarantees issued by each of the Delaware Guarantors have been
duly authorized and executed by each of the Delaware Guarantors.
(xi) The New Credit Agreement has been duly authorized, executed and
delivered by the Company and each of the Delaware Guarantors.
(xii) The statements in the Prospectus under "Risk Factors--If we fail
to comply with extensive laws and regulations we could suffer penalties or be
required to make significant changes to our operations," "Risk
Factors--Professional liability litigation could have an adverse impact on our
client base and reputation," "Business--Quality Assurance,"
"Business--Regulation of Clinical Laboratory Operations," "Business--Regulation
of Reimbursement for Clinical Laboratory Services" and "Business--Government
Investigations and Related Claims," insofar as they purport to describe the
provisions of the laws, legal proceedings and documents referred to therein,
fairly present the information disclosed therein in all material respects.
(xiii) To the best of my knowledge after due inquiry and except as
disclosed in the Prospectus, there is no action, suit or proceeding (including
qui tam proceedings) pending before or by any government, governmental or
regulatory instrumentality or agency or court or any suit, action or proceeding
(including qui tam proceedings) threatened against or affecting the Company or
any of its subsidiaries that could reasonably be expected to have a Material
Adverse Effect, or could reasonably be expected to materially adversely affect
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company or the Guarantors of their respective obligations
under the Purchase Agreement, the Indenture, the Notes, the Guarantees and New
Credit Agreement.
(xiv) None of the Company, any Guarantor, or any of their respective
subsidiaries is in violation of its certificate of incorporation or by-laws or
similar constituent documents and, to the best of my knowledge, no default by
the Company, any Guarantor or any of their respective subsidiaries exists in the
due performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Prospectus or any document incorporated by reference therein, in each case of
the foregoing, that singly or in the aggregate, have a Material Adverse Effect.
(xv) Each of the Guarantors is not, and will not be, as a result of the
sale of the Guarantees, pursuant to the Purchase Agreement, an investment
company within the meaning of the Investment Company Act of 1940, as amended.
(xvi) No authorization, approval, consent, license, order,
registration, qualification or decree of any state or U.S. federal court or
governmental authority or agency that regulates health care is necessary or
required and, in the case of the Delaware Guarantors only, no authorization,
approval, consent, license, order, registration, qualification or decree of any
U.S. federal court or governmental authority or agency (other than such as may
be required under applicable federal and state securities laws of the various
jurisdictions in which the Notes or the Guarantees issued by the Delaware
Guarantors, as the case may be, will be offered or sold, as to which I express
no opinion) is necessary or required (i) for the performance by the Company or
any of the Delaware Guarantors of their respective obligations under the
Purchase Agreement, the New Credit Agreement, or the Offer to Purchase and
Consent Solicitation Statement dated May 24, 2001 of the Company (the "Offer to
Purchase"), as the case may be, (ii) in connection with the offering, issuance
or sale of the Notes or the Guarantees issued by the Delaware Guarantors, as the
case may be, under the Purchase Agreement or (iii) for the due execution,
delivery or performance of and the consummation of the transactions contemplated
by the Purchase Agreement, the Indenture, the Notes, the Guarantees issued by
the Delaware Guarantors, the New Credit Agreement, or the Offer to Purchase, as
the case may be, except (A) such authorizations, approvals, consents, licenses,
orders, registrations, qualifications or decrees the failure so to obtain would
not, individually or in the aggregate, have a Material Adverse Effect, and (B)
such as have been made or can be made after the Closing Time without having a
Material Adverse Effect.
(xvii) Assuming the repayment and termination of the Company's and the
Guarantors' obligations under the Existing Credit Agreement, the execution,
delivery and performance of the Purchase Agreement, the Indenture, the Notes,
the Guarantees issued by the Delaware Guarantors, the New Credit Agreement and
the consummation of the transactions contemplated in the Purchase Agreement, and
compliance by each of the Company and the Delaware Guarantors with their
respective obligations under the Purchase Agreement, the Indenture, the Notes,
the Guarantees issued by the Delaware Guarantors and the New Credit Agreement do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or a Repayment
Event (as defined below) with respect to the Company or any of the Delaware
Guarantors under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, any Delaware Guarantor
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument known to me to which
the Company or any Delaware Guarantor is a party, nor will such action result in
any violation of the certificate of incorporation or by-laws of the Delaware
Guarantors or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any state or U.S. federal government, government
instrumentality or court having jurisdiction over the Company or any Delaware
Guarantor or any of their assets or properties except for (i) such conflicts,
breaches or liens, charges or encumbrances that singly or in the aggregate,
would not result in a Material Adverse Effect and (ii) any liens, charges or
encumbrances that are created pursuant to the New Credit Agreement. As used
herein, a "Repayment Event" means with respect to any person, any event or
condition that gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) issued by such
person the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by such person.
(xviii) To the best of my knowledge, no authorization, approval,
consent, license, order, registration, qualification or decree of any state or
U.S. federal court or governmental authority or agency that regulates health
care is necessary or required and no authorization,
approval, consent, license, order, registration, qualification or decree of any
U.S. federal court or governmental authority or agency (other than such as may
be required under applicable federal and state securities laws of the various
jurisdictions in which the Guarantees issued by the Non-Delaware Guarantors will
be offered or sold, as to which I express no opinion) is necessary or required
(i) for the performance by the Non-Delaware Guarantors of their respective
obligations under the Purchase Agreement, the New Credit Agreement or the Offer
to Purchase, as the case may be, (ii) in connection with the offering, issuance
or sale of the Guarantees issued by the Non-Delaware Guarantors under the
Purchase Agreement or (iii) for the due execution, delivery or performance by
the Non-Delaware Guarantors of and the consummation of the transactions
contemplated by the Purchase Agreement, the Indenture, the Guarantees issued by
the Non-Delaware Guarantors, the New Credit Agreement or the Offer to Purchase
except (A) such authorizations, approvals, consents, licenses, orders,
registrations or qualifications the failure so to obtain would not, individually
or in the aggregate, have a Material Adverse Effect and (B) such as have been
made or can be made after the Closing Time without having a Material Adverse
Effect.
(xix) To the best of my knowledge, assuming the repayment and
termination of the Company's and the Guarantors' obligations under the Existing
Credit Agreement, the execution, delivery and performance of the Purchase
Agreement, the Indenture, the Notes, the Guarantees issued by the Non-Delaware
Guarantors, the New Credit Agreement the consummation of the transactions
contemplated in the Purchase Agreement, and compliance by each of the
Non-Delaware Guarantors with their respective obligations under the Purchase
Agreement, the Indenture, the Notes, the Guarantees issued by the Non-Delaware
Guarantors and the New Credit Agreement do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event with respect to the
Non-Delaware Guarantors under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of any Non-Delaware
Guarantor pursuant to, any contract indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument known to me
to which any Non-Delaware Guarantor is a party, nor will such action result in
any violation of any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any state or U.S. federal government, government
instrumentality or court having jurisdiction over any Non-Delaware Guarantor or
any of its assets or properties except for (i) such conflicts, breaches or
liens, charges or encumbrances that singly or in the aggregate, would not result
in a Material Adverse Effect and (ii) any liens, charges or encumbrances that
are created pursuant to the New Credit Agreement.
Exhibit B
FORM OF OPINION OF DEPUTY GENERAL COUNSEL OF THE COMPANY TO
BE DELIVERED PURSUANT TO SECTION 5(c)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus, to enter into and perform
its obligations under the Purchase Agreement, the Indenture, the Notes and the
New Credit Agreement.
(ii) Each of the California Guarantors has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
State of California and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and to enter into and perform its respective obligations under the
Purchase Agreement, the Indenture, the Guarantees issued by it and the New
Credit Agreement.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and each of the California Guarantors.
(iv) The Base Indenture has been duly authorized, executed and
delivered by the Company and each of the California Guarantors, and assuming the
Non-California Guarantor Assumptions and the due authorization, execution and
delivery thereof by the Trustee, the Base Indenture constitutes a valid and
binding obligation of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, and the enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law). The Base Indenture has been
duly qualified under the Trust Indenture Act of 1939, as amended.
(v) The First Supplemental Indenture has been duly authorized, executed
and delivered by the Company and each of the California Guarantors, and assuming
the Non-California Guarantor Assumptions and the due authorization, execution
and delivery thereof by the Trustee, the First Supplemental Indenture
constitutes a valid and binding obligation of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, and the enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(vi) The Notes have been duly authorized and executed by the Company
and when authenticated by the Trustee in accordance with the provisions of the
Indenture and delivered by the Company to and paid for by you in accordance with
the terms of the Purchase Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, and the enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
entitled to the benefits of the Indenture.
(vii) The Guarantees issued by each of the California Guarantors have
been duly authorized and executed by each of the California Guarantors and
assuming the Non-California Guarantor Assumptions, the Guarantees issued by each
Guarantor, when authenticated by the Trustee in accordance with the provisions
of the Indenture and delivered by the Guarantors to and paid for by you in
accordance with the terms of the Purchase Agreement, will constitute valid and
binding obligations of the Guarantor which issued such Guarantees, enforceable
against such Guarantor in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally, or the enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture.
(viii) The statements in the Prospectus under "Description of the
Notes," and Description of Other Indebtedness," insofar as such statements
purport to constitute a summary of the legal matters and documents referred to
therein, fairly summarize in all material respects the matters and documents
referred to therein.
(ix) The statements in the Prospectus under "United States Federal
Income Tax Considerations," insofar as such section purports to summarize
provisions of federal law of the United States referred to thereunder, fairly
summarizes, subject to the limitations stated therein, such provisions in all
material respects.
(x) No authorization, approval, consent, license, order, registration,
qualification or decree of any U.S. federal court or governmental authority or
agency (other than such as may be required under the applicable federal and
state securities laws of the various jurisdictions in which the Notes will be
offered or sold, as to which we express no opinion) is necessary or required (i)
for the performance by the Company of its obligations under the Purchase
Agreement, or the Offer to Purchase and Consent Solicitation Statement dated May
24, 2001 of the Company (the "Offer to Purchase") (ii) in connection with the
offering, issuance or sale of the Notes under the Purchase Agreement or (iii)
for the due execution, delivery or performance of and the consummation of the
transactions contemplated by the Purchase Agreement, the Indenture, the Notes,
or the Offer to Purchase, except (A) such authorizations, approvals, consents,
licenses, orders, registrations or qualifications the failure so to obtain would
not,
individually or in the aggregate, have a Material Adverse Effect, and (B)
such as have been made or can be made after the Closing Time without having a
Material Adverse Effect, it being understood that we express no opinion with
respect to any law, rule or regulation relating to health care.
(xi) The execution, delivery and performance of the Purchase Agreement,
the Indenture, and the Notes, the consummation of the transactions contemplated
in the Purchase Agreement, and compliance by the Company with its obligations
under the Purchase Agreement, the Indenture, the Notes, do not and will not
result in any violation of the certificate of incorporation or by-laws of the
Company or, to our knowledge, any applicable law, statute, rule or regulation of
any federal or New York State government or government instrumentality having
jurisdiction over the Company or any of its assets or properties, it being
understood that we express no opinion with respect to the laws, statutes, rules
or regulations relating to health care.
(xii) The Company is not, and will not be, as a result of the sale of
the Notes pursuant to the Purchase Agreement, an investment company within the
meaning of the Investment Company Act of 1940, as amended.
(xiii) The Registration Statement and the Prospectus, as amended or
supplemented (except for Exhibit 12 to the Registration Statement and other than
the financial statements and other accounting information contained therein, or
omitted therefrom, and the Statement of Eligibility on form T-1 of the Trustee,
as to which we are not expressing an opinion), excluding the documents
incorporated or deemed incorporated by reference therein, as of their respective
effective or issue dates, appeared on their face to have been appropriately
responsive in all material respects to the requirements of the Securities Act
and the rules and regulations of the Commission thereunder.
(xiv) Each document filed pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated or deemed incorporated
by reference in the Registration Statement or the Prospectus, as amended or
supplemented (except for the financial statements and other accounting
information contained therein or incorporated or deemed incorporated by
reference therein, or omitted therefrom, as to which we are not expressing an
opinion), when so filed with the Commission, appeared on its face to have been
appropriately responsive in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder.