Exhibit 1
$150,000,000
RES-CARE, INC.
10 5/8% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
------------------
November 9, 2001
UBS Warburg LLC
Lehman Brothers Inc.
Banc One Capital Markets, Inc.
U.S. Bancorp Piper Jaffray Inc.
Jefferies & Company, Inc.
First Analysis Securities Corp.
As Representatives of the several
Initial Purchasers named in Schedule 1
c/o UBS Warburg LLC
299 Park Avenue
New York, NY 10171
Ladies and Gentlemen:
Res-Care, Inc., a Kentucky corporation (the "COMPANY"), proposes to
issue and sell (the "OFFERING") to the several Initial Purchasers named in
Schedule 1 hereto (the "INITIAL PURCHASERS") $150,000,000 in aggregate principal
amount of its 10 5/8% Senior Notes due 2008 (the "NOTES") guaranteed (the
"GUARANTEES") by the Company's subsidiaries named in Schedule 2 hereto
(collectively, the "GUARANTORS") pursuant to the terms of an indenture (the
"INDENTURE"), to be dated November 15, 2001, among the Company, the Guarantors
and National City Bank, as trustee (the "TRUSTEE"). Capitalized terms used but
not defined herein shall have the meanings specified therefor in the Offering
Memorandum (as defined below).
Notes issued in book-entry form will be issued in the name of Cede &
Co., as nominee of The Depositary Trust Company ("DTC"), pursuant to a DTC
Letter of Representations to be dated the date hereof (the "DTC LETTER OF
REPRESENTATIONS"), among the Company, DTC and the Trustee. The Notes will be
offered and sold to the Initial Purchasers pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended (the
"SECURITIES ACT"). The Company has prepared a preliminary offering memorandum,
dated October 30, 2001 (the "PRELIMINARY OFFERING MEMORANDUM") and will prepare
a final offering memorandum, to be dated November 9, 2001 (the "OFFERING
MEMORANDUM," and, together with the Preliminary Offering Memorandum, the
"OFFERING DOCUMENTS"), relating to the Company, the Notes and the Guarantees.
The Initial Purchasers may make offers of the Notes purchased hereunder
on the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to (i) persons whom the initial purchasers reasonably believe to be
"qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QUALIFIED INSTITUTIONAL BUYERS") and (ii)
outside the United States to persons other than U.S. Persons in offshore
transactions meeting the requirements of Regulation S under the Securities Act
("REGULATION S") (such persons specified in clauses (i) and (ii) being referred
to herein as the "ELIGIBLE PURCHASERS"). As used herein, the terms "offshore
transaction," "United States" and "U.S. Person" have the respective meanings
given to them in Regulation S. The Initial Purchasers represent that they intend
initially to offer the Notes to Eligible Purchasers at the price specified on
the cover page of the Offering Memorandum. Thereafter, the offering price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated November 15, 2001, among the
Company, the Guarantors, and UBS Warburg LLC and Lehman Brothers Inc. on behalf
of the Initial Purchasers, in the form of Annex A hereto, for so long as such
Notes constitute Transfer Restricted Securities (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein (i) a
registration statement under the Securities Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") relating to the Company's 10 5/8% Senior Notes due 2008
(the "EXCHANGE NOTES"), and guarantees thereof (the "EXCHANGE NOTE GUARANTEES")
by the Guarantors, to be offered in exchange for the Notes and the Guarantees
(such offer to exchange being referred to collectively as the "EXCHANGE OFFER")
and (ii) if required by the terms of the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "SHELF
REGISTRATION STATEMENT") relating to the resale by certain holders of the Notes,
and to use their best efforts to cause such Registration Statements to be
declared effective.
This Agreement, the Notes, the Exchange Notes, the Indenture, the
Registration Rights Agreement and the DTC Letter of Representations are
hereinafter referred to collectively as the "OPERATIVE DOCUMENTS." This is to
confirm the agreements concerning the purchase of the Notes from the Company by
the Initial Purchasers.
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company and each of the Guarantors, jointly and severally, represent and warrant
to, and agree with the Initial Purchasers that, as of the date hereof:
(a) Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof and with
the procedures set forth in Section 7 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the
Initial Purchasers and to each Eligible Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register
the Notes or the Guarantees under the Securities Act or, until such
time as the Exchange Notes and Exchange Note Guarantees are issued
pursuant to an effective registration statement, to qualify the
Indenture under the Trust Indenture Act of 1939 (the "TRUST INDENTURE
ACT," which term, as used herein, includes the rules and regulations of
the Commission promulgated thereunder).
(b) Neither the Company nor any Guarantor has, directly or
indirectly, solicited any offer to buy or offered to sell, or will,
directly or indirectly, solicit any offer
2
to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with
the sale of the Notes in a manner that would require the Notes and the
Guarantees to be registered under the Securities Act. None of the
Company, the Guarantors, their respective affiliates (as such term is
defined in Rule 501 under the Securities Act (each, an "AFFILIATE")),
or any person acting on any of their behalf (other than the Initial
Purchasers, as to whom the Company and Guarantors make no
representation or warranty) has engaged or will engage, in connection
with the offering of the Notes, in any form of general solicitation or
general advertising within the meaning of Rule 502 under the Securities
Act. With respect to those Notes sold in reliance upon Regulation S,
(i) none of the Company, the Guarantors, their respective Affiliates or
any person acting on any of their behalf (other than the Initial
Purchasers, as to whom the Company and Guarantors make no
representation or warranty) has engaged or will engage in any directed
selling efforts within the meaning of Regulation S and (ii) each of the
Company, the Guarantors and their respective Affiliates and any person
acting on any of their behalf (other than the Initial Purchasers, as to
whom the Company and the Guarantors make no representation or warranty)
has complied and will comply with the offering restrictions set forth
in Regulation S. The Company is a "reporting issuer" as defined in Rule
902 under the Securities Act.
(c) The Notes are eligible for resale pursuant to Rule 144A
and will not be, at the Closing Date, of the same class as securities
listed on a national securities exchange registered under Section 6 of
the Securities Exchange Act of 1934, as amended, or quoted in a U.S.
automated interdealer quotation system.
(d) The Preliminary Offering Memorandum as of its date did
not, and the Offering Memorandum at the date hereof, does not, and at
the Closing Date (as defined herein), will not, contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this Section 1(d) do not apply to
statements or omissions in the Offering Documents based upon
information furnished to the Company in writing by or on behalf of the
Initial Purchasers expressly for use therein. No order preventing the
use of any of the Offering Documents, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Securities Act or any state securities or blue sky
laws has been issued.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors and (assuming the
due authorization, execution and delivery thereof by the other parties
thereto) constitutes the legal, 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 where (i)
the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to rights of creditors and other
obligees generally, (ii) the remedy of specific performance and other
forms of equitable relief may be subject to certain equitable defenses
and principles and to the discretion of the court before which the
proceedings
3
may be brought and (iii) rights to indemnity and contribution hereunder
may be limited by applicable law and public policy.
(f) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors, and when duly executed and
delivered by the Company and each of the Guarantors (assuming due
execution and delivery by the Initial Purchasers), will constitute a
valid and legally 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 where (i) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to rights of creditors and other obligees
generally, (ii) the remedy of specific performance and other forms of
equitable relief may be subject to certain equitable defenses and
principles and to the discretion of the court before which the
proceedings may be brought and (iii) rights to indemnity and
contribution thereunder may be limited by applicable law and public
policy. Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Commission, under the circumstances set forth
therein, (i) an Exchange Offer Registration Statement and (ii) to the
extent required by the Registration Rights Agreement, a Shelf
Registration Statement, and in each case, to use its best efforts to
cause such registration statements to be declared effective as soon as
practicable and in any event by the date specified in the Registration
Rights Agreement.
(g) The DTC Letter of Representations has been duly authorized
by the Company, and when duly executed and delivered by the Company
(assuming due execution and delivery by other parties thereto), will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
where (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to rights of creditors
and other obligees generally, (ii) the remedy of specific performance
and other forms of equitable relief may be subject to certain equitable
defenses and principles and to the discretion of the court before which
the proceedings may be brought and (iii) rights to indemnity and
contribution thereunder may be limited by applicable law and public
policy.
(h) The Notes to be purchased by the Initial Purchasers from
the Company are in the form contemplated by the Indenture, have been
duly authorized for issuance and sale pursuant to this Agreement and
the Indenture and, at the Closing Date, will have been duly executed by
the Company and each of the Guarantors and, when authenticated in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor, will constitute valid and binding
agreements of the Company and each of the Guarantors, enforceable in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles and will be entitled to
the benefits of the Indenture. The Exchange Notes have been duly and
validly authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture, and issued
against surrender of the Notes as contemplated by the Registration
4
Rights Agreement and the Exchange Offer, 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, reorganization, moratorium, or
similar laws relating to or affecting enforcement of the rights and
remedies of creditors or by general principles of equity and will be
entitled to the benefits of the Indenture.
(i) The Guarantees have been duly and validly authorized by
each of the Guarantors and, upon execution and delivery of the
Indenture and the Notes, will constitute valid and binding agreements
of each of the Guarantors, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the
Indenture. The Exchange Note Guarantees have been duly and validly
authorized by each of the Guarantors and, when issued and authenticated
in accordance with the terms of the Indenture, will constitute valid
and binding agreements of each of the Guarantors, enforceable in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles and will be entitled to
the benefits of the Indenture.
(j) The Indenture has been duly authorized by the Company and
each of the Guarantors and, when duly executed by the proper officers
of the Company and each of the Guarantors (assuming due execution and
delivery by the Trustee) 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, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law); no
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended (the "TRUST INDENTURE ACT"), is required in connection with
the rules and regulations of the Commission, and the Indenture, when
executed and delivered, will conform in all material respects to the
description thereof contained in the Offering Memorandum.
(k) The Notes, the Exchange Notes, the Guarantees and the
Indenture will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum.
(l) The Company and each of the Guarantors have all requisite
corporate power and authority to enter into (i) the Credit and Security
Agreement, to be dated November 15, 2001, among the Company, the
Guarantors (collectively, the "CREDIT FACILITY GUARANTORS"), and
National City Bank, as agent for the lenders; and (ii) any and all
other agreements and instruments ancillary to or entered into in
connection with the transactions contemplated thereby (items (i) and
(ii) are referred to collectively as the "NEW CREDIT FACILITY").
5
(m) The New Credit Facility has been duly and validly
authorized, and on the Closing Date will have been executed and
delivered by the Company and the Credit Facility Guarantors and,
assuming due authorization, execution and delivery by the other parties
thereto, will constitute the valid and binding agreements of the
Company and each of the Credit Facility Guarantors, enforceable against
the Company and each of the Credit Facility Guarantors in accordance
with their respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law).
(n) KPMG LLP, who have expressed their opinions with respect
to the audited financial statements (which term as used in this
Agreement includes the related notes thereto) of the Company filed with
the Commission included in the Offering Memorandum are independent
public accountants with respect to the Company within the meaning of
Regulation S-X under the Securities Act and the Exchange Act.
(o) The financial statements, together with the related notes,
included in the Offering Memorandum present fairly the consolidated
financial position of the Company and its subsidiaries, as of and at
the dates indicated and the results of their operations and cash flows
for the periods specified thereby. Such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. The financial
data set forth in the Offering Memorandum under the captions
"Summary--Summary Historical Consolidated Financial and Other Data" and
"Selected Consolidated Financial and Other Data" fairly present the
information set forth therein on a basis consistent with that of the
audited and unaudited financial statements contained in the Offering
Memorandum. The pro forma consolidated condensed financial statements
of the Company and its subsidiaries and the related notes thereto
included under the caption "Summary--Summary Unaudited Pro Forma
Consolidated Financial Data" and "Unaudited Pro Forma Consolidated
Financial Data" and elsewhere in the Offering Memorandum present fairly
the information contained therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly presented on the bases
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.
(p) Subsequent to the respective dates as of which information
is given in the Offering Memorandum, (i) there has been no material
adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and each of its subsidiaries (as defined in
Section 14), considered as one entity; (ii) other than the Notes, the
Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any
6
kind declared, paid or made by the Company or, except for dividends
paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company
or any of its subsidiaries of any class of capital stock.
(q) The Company and each of its subsidiaries have been duly
organized and are validly existing as corporations or limited liability
companies, as the case may be, in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not
reasonably be expected to have a material adverse effect on the
condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in
the ordinary course of business, of the Company and each of its
subsidiaries (as defined in Section 14), considered as one entity(any
such effect is called a "MATERIAL ADVERSE EFFECT"), and each has all
power and authority necessary to own or hold its respective properties
and to conduct the businesses in which it is engaged, except where the
failure to have such power and authority would not reasonably be
expected to have a Material Adverse Effect.
(r) The Company has an authorized capitalization as set forth
in the Offering Memorandum (and on the Closing Date will have the
authorized capitalization so set forth in the Offering Memorandum as of
that date) and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and conform, in all material respects, to the
description thereof contained in the Offering Memorandum. All of the
issued shares of capital stock or limited liability company interests,
as the case may be, of each subsidiary of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, other than liens,
encumbrances, equities or claims: (i) contemplated by the Amended and
Restated Senior Secured Credit Agreement, among the Company, the
Guarantors, and PNC Bank, N.A., as agent for the lenders (the "EXISTING
CREDIT FACILITY"); (ii) that would be contemplated by the New Credit
Facility or (iii) otherwise described in the Offering Memorandum.
(s) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or is in default (or, with the
giving of notice or lapse of time, would be in default) ("DEFAULT")
under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject, including the Existing Credit Facility
and, when executed, the New Credit Facility (each, an "EXISTING
INSTRUMENT"), except for such Defaults as would not, individually or in
the aggregate, result in a Material Adverse Effect. The execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Letter of Representations and the Indenture by the
Company and the Guarantors, as the case may be, and the issuance and
delivery of the Notes or the Exchange Notes, and consummation of the
transactions
7
contemplated hereby and thereby and by the Offering Memorandum have
been duly authorized by all necessary corporate action and will not
result in any violation of the provisions of the charter or by-laws of
the Company or any Guarantor, (ii) will not conflict with or constitute
a breach of, or Default or a Debt Repayment Triggering 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 Guarantor pursuant to, or, except for the consent required under
Section 5(j) hereof, require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults,
liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Effect and (iii) will not
result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any
Guarantor. As used herein, a "Debt Repayment Triggering Event" means
any event or condition which gives, or with the giving of notice or
lapse of time would give, 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 Guarantor.
(t) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Letter of Representations or the Indenture,
or the issuance and delivery of the Notes, the Exchange Notes, the
Guarantees or the Exchange Note Guarantees, or consummation of the
transactions contemplated hereby and thereby and by the Offering
Memorandum, except such as have been obtained or made by the Company or
any Guarantor and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws and except such as
may be required by federal and state securities laws with respect to
the Company's obligations under the Registration Rights Agreement.
(u) Other than as set forth in the Offering Memorandum, there
are no legal or governmental actions, suits or proceedings pending or,
to the best of knowledge of the Company and the Guarantors, threatened
against or affecting the Company or any of its subsidiaries which, if
determined adversely to the Company or such subsidiary, could
reasonably be expected to result in a Material Adverse Effect or
adversely affect the consummation of the transactions contemplated by
this Agreement. No labor dispute with the employees of the Company or
any of its subsidiaries that could result in a Material Adverse Effect
exists or, to the best knowledge of the Company and the Guarantors, is
threatened or imminent.
(v) The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively,
"INTELLECTUAL PROPERTY RIGHTS") reasonably necessary to conduct their
businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has received
any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the
subject of an unfavorable decision, would result in a Material Adverse
Effect.
8
(w) The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct their respective businesses, and neither, except
as set forth in the Schedule of Conditions of Participations attached
hereto, the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Effect.
(x) Except as set forth in Schedule 1(x) attached hereto, the
Company and each of its subsidiaries has good title to all the
properties and assets reflected as owned in the financial statements
referred to in Section 1(o) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims
and other defects, except as would not reasonably be expected to result
in a Material Adverse Effect. The real property, improvements,
equipment and personal property held under lease by the Company and its
subsidiaries are held under valid and enforceable leases, except as
would not reasonably be expected to result in a Material Adverse
Effect.
(y) There are no material contracts or other documents that
would be required to be described in a prospectus included in a
registration statement on Form S-1 under the Securities Act or the
rules and regulations of the Commission thereunder relating to the
registration of the Notes and the Guarantees that have not been
described in the Offering Memorandum.
(z) No relationship, direct or indirect, exists between or
among the Company, the Guarantors or any other subsidiary of the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or its subsidiaries on the other
hand, that would be required to be described or included in a
prospectus included in a registration statement on Form S-1 under the
Securities Act or the rules and regulations of the Commission
thereunder relating to the registration of the Notes and the Guarantees
except as described or contemplated in the Offering Memorandum.
(aa) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have
paid all taxes required to be paid by any of them as reflected on such
returns, other than: (i) those currently payable without penalty or
interest; and (ii) those being contested in good faith, and, if due and
payable, any related or similar assessment, fine or penalty levied
against any of them. The Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in
Section 1 above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the
Company or any of its consolidated subsidiaries has not been finally
determined.
(bb) The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"). The Company is not, and after receipt of
payment for the Notes will not be, an "investment
9
company" within the meaning of Investment Company Act and will conduct
its business in a manner so that it will not become subject to the
Investment Company Act.
(cc) Each of the Company and its subsidiaries are insured by
recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as is
adequate and reasonable for the needs of the Company, including, but
not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes.
(dd) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Notes.
(ee) Each of the Company and each Guarantor is, and
immediately after the Closing Date will be, Solvent. As used herein,
the term "Solvent" means, with respect to the Company and each
Guarantor on a particular date, that on such date (i) the fair market
value of the assets of the Company or such Guarantor, as applicable, is
greater than the total amount of liabilities (including contingent
liabilities) of the Company or such Guarantor, as applicable, (ii) the
present fair salable value of the assets of the Company is greater than
the amount that will be required to pay the probable liabilities of the
Company or such Guarantor, as applicable, on its debts as they become
absolute and matured, (iii) the Company and each Guarantor is able to
realize upon its assets and pay its debts and other liabilities,
including contingent obligations, as they mature and (iv) neither the
Company nor any Guarantor has unreasonably small capital.
(ff) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(gg) Neither the Company nor any of its subsidiaries has
violated any safety or similar law applicable to its business, nor any
federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages
and hours laws, except for violations that, individually or in the
aggregate, would not result in a Material Adverse Effect. The Company
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA") except as would not result in a Material Adverse
Effect; no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) except for such
events that, individually or in the
10
aggregate, would not result in a Material Adverse Effect; the Company
has not incurred and does not expect to incur liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"), except as would not result in
a Material Adverse Effect; and each "pension plan" for which the
Company would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and
to the best of knowledge of the Company and the Guarantors, nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(hh) Except as would not be reasonably expected to result in a
Material Adverse Effect, all licenses and authorizations issued by
federal and state authorities governing healthcare matters (the
"LICENSES") required for the operation of the business of the Company
and its subsidiaries are in full force and effect and there are no
pending modifications, amendments or revocation proceedings which would
adversely affect the operation of any of the healthcare business
currently owned by the Company and its subsidiaries. All fees due and
payable to governmental authorities pursuant to the rules governing
Licenses have been paid, except those that would not be reasonably
expected to result in a Material Adverse Effect. No event has occurred
with respect to the Licenses held by the Company, or its respective
subsidiaries, which, with the giving of notice or the lapse of time or
both, would constitute grounds for revocation of any Licenses, except
as set forth in the Schedule of Conditions of Participations attached
hereto. Each of the Company and its subsidiaries is in compliance in
all material respects with the terms of the Licenses, except as set
forth in the Schedule of Conditions of Participations attached hereto,
as applicable, and there is no condition, event or occurrence existing,
nor is there any proceeding being conducted of which the Company has
received notice, nor, to the best knowledge of the Company and the
Guarantors, is there any proceeding threatened, by any governmental
authority, which would cause the termination, suspension, cancellation
or nonrenewal of any of the Licenses, or the imposition of any penalty
or fine (that is material to the Company and its subsidiaries, taken as
a whole) by any regulatory authority, except as set forth in the
Schedule of Conditions of Participations attached hereto. No
registrations, filings, applications, notices, transfers, consents,
approvals, audits, qualifications, waivers or other action of any kind
is required by virtue of the execution, delivery and performance of
this Agreement, and the issuance and delivery of the Notes and
Guarantees, to avoid the loss of any such License, permit, consent,
concession or other authorization or any asset, property or right
pursuant to the terms thereof, or the violation or breach of any
applicable law thereto.
(ii) The Company has all requisite corporate power and
authority to enter into the purchase agreements between the Company and
certain holders of its 5.9% convertible subordinated notes due 2005 and
its 6.0% convertible subordinated notes due 2004 (collectively, the
"CONVERTIBLE NOTES"), with respect to the repurchase by the Company of
the Convertible Notes (the "PURCHASE AGREEMENTS"), together with any
and all other agreements and instruments ancillary to or entered into
in connection with the transactions contemplated thereby.
11
(jj) The Purchase Agreements have been duly authorized,
executed and delivered by the Company.
The Company and the Guarantors understand that the Initial Purchasers and, for
purposes of the opinions to be delivered to you pursuant to Section 5 hereof,
counsel to the Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
SECTION 2. Purchase, Sale and Delivery of the Notes.
(a) The Notes. The Company agrees to issue and sell to the
Initial Purchasers, severally and not jointly, all of the Notes upon
the terms herein set forth. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but
subject to the conditions herein set forth, each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company the
aggregate principal amount of Notes set forth opposite its name on
SCHEDULE 1, at a purchase price of 97.25% of the principal amount
thereof payable on the Closing Date.
(b) The Closing Date. Delivery of certificates for the Notes
in definitive form to be purchased by the Initial Purchasers and
payment therefor shall be made at the offices of Weil, Gotshal & Manges
LLP, 767 Fifth Avenue, New York, New York 10153 (or such other place as
may be agreed to by the Company and the Initial Purchasers) at 9:00
a.m. New York City time, on November 15, 2001 or such other time and
date as the Initial Purchasers shall designate by notice to the Company
(the time and date of such closing are called the "CLOSING DATE"). The
Company hereby acknowledges that circumstances under which the Initial
Purchasers may provide notice to postpone the Closing Date as
originally scheduled include, but are in no way limited to, any
determination by the Company or the Initial Purchasers to recirculate
to investors copies of an amended or supplemented Offering Memorandum
or a delay as contemplated by the provisions of Section 3(b).
(c) Delivery of the Notes. The Company shall deliver, or cause
to be delivered, to UBS Warburg LLC for the accounts of the several
Initial Purchasers certificates for the Notes at the Closing Date
against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The
certificates for the Notes shall be in such denominations and
registered in the name of Cede & Co., as nominee of the Depository,
pursuant to the DTC Letter of Representations, and shall be made
available for inspection on the business day preceding the Closing Date
at a location in New York City, as the Initial Purchasers may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the
obligations of the Initial Purchasers.
(d) Delivery of Offering Memorandum to the Initial Purchasers.
Not later than 12:00 p.m. on the second business day following the date
of this Agreement, the Company shall deliver or cause to be delivered
copies of the Offering Memorandum in such quantities and at such places
as the Initial Purchasers shall reasonably request.
12
(e) Initial Purchasers as Qualified Institutional Buyers. Each
Initial Purchaser severally and not jointly represents and warrants to,
and agrees with, the Company that (i) it is a Qualified Institutional
Buyer and an "accredited investor" within the meaning of Rule 501 under
the Securities Act (an "ACCREDITED INVESTOR"); (ii) no form of general
solicitation or general advertising (within the meaning of Rule 502
under the Securities Act) has been or will be used by the Initial
Purchasers or any of their representatives in connection with the offer
and sale of any of the Notes; and (iii) it will otherwise act in
accordance with the terms and conditions set forth in this Agreement in
connection with the placement of the Notes contemplated hereby.
SECTION 3. Additional Covenants. The Company further covenants and
agrees with each Initial Purchaser as follows:
(a) Initial Purchasers' Review of Proposed Amendments and
Supplements. Prior to amending or supplementing the Offering
Memorandum, the Company shall furnish to the Initial Purchasers for
review a copy of each such proposed amendment or supplement, and the
Company shall not use any such proposed amendment or supplement to
which the Initial Purchasers reasonably object.
(b) Amendments and Supplements to the Offering Memorandum and
Other Securities Act Matters. If, prior to the completion of the
placement of the Notes by the Initial Purchasers with the Eligible
Purchasers, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Offering Memorandum in
order to make the statements therein, in the light of the circumstances
when the Offering Memorandum is delivered to a purchaser, not
misleading, or if in the opinion of the Initial Purchasers or counsel
for the Initial Purchasers it is otherwise necessary to amend or
supplement the Offering Memorandum to comply with law, the Company
agrees to promptly prepare (subject to Section 3 hereof), and furnish
at its own expense to the Initial Purchasers, amendments or supplements
to the Offering Memorandum so that the statements in the Offering
Memorandum as so amended or supplemented will not, in the light of the
circumstances when the Offering Memorandum is delivered to a purchaser,
be misleading or so that the Offering Memorandum, as amended or
supplemented, will comply with law.
Following the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement and for so
long as the Notes are outstanding if, in the reasonable judgment of the
Initial Purchasers, the Initial Purchasers or any of their affiliates
(as such term is defined in the rules and regulations under the
Securities Act) are required to deliver a prospectus in connection with
sales of, or market-making activities with respect to, such securities,
to periodically amend the applicable registration statement so that the
information contained therein complies with the requirements of Section
10 of the Securities Act, to amend the applicable registration
statement or supplement the related prospectus when necessary to
reflect any material changes in the information provided therein so
that the registration statement and the prospectus will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing as of the date the prospectus is so delivered,
not misleading and to provide the Initial Purchasers
13
with copies of each amendment or supplement filed as the Initial
Purchasers may reasonably request.
The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 3.
(c) Copies of the Offering Memorandum. The Company agrees to
furnish the Initial Purchasers, without charge, as many copies of the
Offering Memorandum and any amendments and supplements thereto as they
shall have reasonably requested.
(d) Blue Sky Compliance. The Company shall cooperate with the
Initial Purchasers and counsel for the Initial Purchasers to qualify or
register the Notes and the Guarantees for sale under (or obtain
exemptions from the application of) the Blue Sky or state securities
laws of those jurisdictions designated by the Initial Purchasers, shall
comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the
distribution of the Notes and the Guarantees. The Company shall not be
required to qualify as a foreign corporation or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Initial
Purchasers promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Notes and the
Guarantees for offering, sale or trading in any jurisdiction or any
initiation or threat of any proceeding for any such purpose, and in the
event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Notes sold by it in the manner described under the
caption "Use of Proceeds" in the Offering Memorandum.
(f) DTC. The Company will cooperate with the Initial
Purchasers and use its best efforts to permit the Notes to be eligible
for clearance and settlement through the facilities of DTC.
(g) Additional Issuer Information. During any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange Act,
for the benefit of holders and beneficial owners from time to time of
Notes, the Company shall furnish, at its expense, upon request, to
holders and beneficial owners of Notes and prospective purchasers of
Notes information ("ADDITIONAL ISSUER INFORMATION") satisfying the
requirements of subsection (d)(4)(i) of Rule 144A.
(h) Future Reports to the Initial Purchasers. For a period of
three (3) years from the date of this Agreement, the Company will
furnish to UBS Warburg LLC and Lehman Brothers Inc. as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the
14
close of such fiscal year and statements of income, stockholders'
equity and cash flows for the year then ended and the opinion thereon
of the Company's independent public or certified public accountants;
(ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the Company
with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company
mailed generally to holders of its capital stock or debt securities
(including the holders of the Notes).
(i) No Integration. The Company agrees that it will not and
will cause its Affiliates not to make any offer or sale of securities
of the Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid (for the purpose of the sale of the
Notes by the Company to the Initial Purchasers, (ii) the resale of the
Notes by the Initial Purchasers to Eligible Purchasers or (iii) the
resale of the Notes by such Eligible Purchasers to others) the
exemption from the registration requirements of the Securities Act
provided by Section 4 thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(j) Legended Notes. Each certificate for a Note will bear the
legend contained in "Notice to Investors" in the Offering Memorandum
for the time period and upon the other terms stated in the Offering
Memorandum.
(k) PORTAL. The Company will use its best efforts to cause the
Notes to be eligible for the National Association of Securities
Dealers, Inc. PORTAL market (the "PORTAL market").
UBS Warburg LLC and Lehman Brothers Inc. may, on behalf of the several
Initial Purchasers, in their sole discretion, waive in writing the performance
by the Company of any one or more of the foregoing covenants or extend the time
for their performance.
SECTION 4. Expenses. The Company agrees to pay (i) the costs incident
to the authorization, issuance, sale and delivery of the Notes and the
Guarantees and any taxes payable in that connection; (ii) the costs incident to
the preparation, printing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum and any amendments and exhibits thereto;
(iii) the fees, disbursements and expenses of the Company and its counsel and
accountants; (iv) all expenses and listing fees in connection with the
application for quotation of the Notes and the Guarantees in PORTAL; (v) all
fees and expenses (including fees and expenses of counsel) of the Company in
connection with approval of the Notes and the Guarantees by DTC for "book-entry"
transfer; (vi) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 4 and of
preparing, printing and distributing a Blue Sky Memorandum (including reasonable
related fees and expenses of counsel to the Initial Purchasers); (vii) any fees
charged by securities rating services for rating the Notes and the Guarantees;
(viii) the fees and expenses of the Trustee and the Trustee's counsel in
connection with the Indenture and the Notes; and (ix) all other costs and
expenses incident to the performance of the obligations of the Company and the
Guarantors under this Agreement; provided, however, that the Initial Purchasers
shall reimburse the Company for up to $135,000 of the Company's expenses
incurred in connection with the
15
Offering of the Notes; provided further that, except as provided in this Section
4 and in Section 6, the Initial Purchasers shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Notes and the Guarantees which they may sell and the expenses of
advertising any offering of the Notes and the Guarantees made by the Initial
Purchasers.
SECTION 5. Conditions of the Obligations of the Initial Purchasers. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company and the Guarantors contained herein, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the reasonable opinion of Weil,
Gotshal & Manges LLP, counsel for the Initial Purchasers, is material
or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(b) All of the representations and warranties of the Company
and the Guarantors contained in this Agreement shall have been true and
correct on the date hereof and shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date. The Company and each of the Guarantors shall have performed or
complied in all material respects with all of the agreements contained
herein and required to be performed or complied with by them at or
prior to the Closing Date.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Operative Documents, the Offering Documents, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchasers, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Each of the Initial Purchasers shall have received on the
Closing Date an opinion, in form and substance reasonably satisfactory
to the Initial Purchasers and counsel for the Initial Purchasers, dated
the Closing Date, from counsel for the Company and the Guarantors
substantially in the form attached hereto as Exhibit 5(d).
(e) Each of the Initial Purchasers shall have received on the
Closing Date an opinion, in form and substance reasonably satisfactory
to the Initial Purchasers and counsel for the Initial Purchasers, dated
the Closing Date, from David Waskey, general counsel to the Company and
the Guarantors substantially in the form attached hereto as Exhibit
5(e).
16
(f) The Initial Purchasers shall have received from Weil,
Gotshal & Manges LLP, counsel for the Initial Purchasers, such opinion
or opinions, dated such Closing Date, with respect to the issuance and
sale of the Notes and the Guarantees, the Offering Memorandum and other
related matters as the Initial Purchasers may reasonably require, and
the Company and the Guarantors shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(g) On the Closing Date, the Company, the Guarantors and the
Trustee shall have entered into the Indenture and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(h) On the Closing Date, the Company, the Guarantors and the
Initial Purchasers shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(i) On the Closing Date, each of the Company, the Trustee and
DTC shall have executed and delivered the DTC Letter of Representations
and the Initial Purchasers shall have received counterparts, conformed
as executed, thereof.
(j) On or before the Closing Date, each of the Company and the
Credit Facility Guarantors shall have entered into the New Credit
Facility and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof. There shall not exist at and as of the
Closing Date any conditions that would constitute a default (or an
event that with notice or the lapse of time, or both, would constitute
a default), after giving effect to the issuance of the Notes and
Guarantees, under the New Credit Facility and the commitments under the
Existing Credit Facility have been terminated.
(k) The Notes shall have been approved for trading in PORTAL.
(l) The Initial Purchasers shall have received from KPMG, LLP
a letter, in form and substance satisfactory to the Initial Purchasers,
addressed to the Initial Purchasers and dated the date hereof (i)
confirming that they are certified independent public accountants with
respect to the Company under Rule 101 of the AICPA's Code of
Professional Conduct and its interpretations and rulings and (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(m) With respect to the letter of KPMG, LLP referred to in the
preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "INITIAL
LETTER"), the Company shall have furnished to the Initial Purchasers a
letter (the "BRING-DOWN LETTER") of such accountants, addressed to the
Initial Purchasers and dated such Closing Date (i) stating, as of the
date of the bring-down letter
17
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Offering Memorandum, as of a date not more than five days
prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and
other matters covered by the initial letter and (ii) confirming in all
material respects the conclusions and findings set forth in the initial
letter.
(n) The Initial Purchasers shall have received (a) a
certificate from the Company, dated the Closing Date, signed by its
President and Chief Executive Officer and its Executive Vice President
and Chief Financial Officer and (b) a certificate from each Guarantor,
dated Closing Date, signed by its president stating, as applicable,
that:
(i) the representations, warranties and agreements of
the Company and the Guarantors in Section 1 are true and
correct as of such Closing Date; the Company and the
Guarantors have complied with all their agreements contained
herein; and the conditions set forth in Sections 5(q) and 5(r)
have been fulfilled; and
(ii) they have carefully examined the Preliminary
Offering Memorandum and the Offering Memorandum and, in their
opinion (A) the Preliminary Offering Memorandum and Offering
Memorandum, as of their respective dates, did not, and the
Offering Memorandum, as of the Closing Date, does not include
any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
(B) since the date of the Offering Memorandum, no event has
occurred which should have been set forth in a supplement or
amendment to Offering Memorandum.
(o) Weil, Gotshal & Manges LLP shall have been furnished with
such other documents and opinions, in addition to those set forth
above, as they may reasonably require for the purpose of enabling them
to review or pass upon the matters referred to in this Agreement and in
order to evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties or
conditions herein contained.
(p) (i) Other than as set forth in the Offering Memorandum,
neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, or (ii) since
such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Offering Memorandum, the
effect of which, in any such case described in clause (i) or (ii), is,
in the sole judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the offering
or the
18
delivery of the Notes and the Guarantees being delivered on the Closing
Date on the terms and in the manner contemplated in the Offering
Memorandum.
(q) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Notes
by any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) of the
rules and regulations of the Commission under the Securities Act and
(ii) such organization shall not have publicly announced, or privately
informed the Company, that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
(r) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the Nasdaq
National Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the sole judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering
or delivery of the Notes and the Guarantees being delivered on the
Closing Date on the terms and in the manner contemplated in the
Offering Memorandum.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
SECTION 6. Reimbursement of Initial Purchasers' Expenses. If the
Company and the Guarantors shall fail to tender the Notes and the Guarantees for
delivery to the Initial Purchasers by reason of any failure, refusal or
inability on the part of the Company and the Guarantors to perform any agreement
on its part to be performed, or because any other condition (other than a
condition with respect to Section 5(r) hereto) of the Initial Purchasers'
obligations hereunder required to be fulfilled by the Company and the Guarantors
is not fulfilled, the Company and the Guarantors will reimburse the Initial
Purchasers for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase of the Notes and the Guarantees, and
upon demand the Company and the Guarantors shall pay the full amount thereof to
the Representative. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Initial Purchasers, the Company and the
Guarantors shall not be obligated to reimburse any defaulting Initial Purchaser
on account of those expenses.
19
SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial
Purchasers and the Company hereby establish and agree to observe the following
procedures in connection with the offer and sale of the Notes:
(a) Offers and sales of the Notes will be made only by the
Initial Purchasers or Affiliates thereof qualified to do so in the
jurisdictions in which such offers or sales are made. Each such offer
or sale shall only be made to persons whom the offeror or seller
reasonably believes to be qualified institutional buyers (as defined in
Rule 144A under the Securities Act) or non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers
and sales of the Notes may be made in reliance upon Regulation S under
the Securities Act, upon the terms and conditions set forth in Section
7(D) hereof.
(b) The Notes will be offered by approaching prospective
Eligible Purchasers on an individual basis. No general solicitation or
general advertising (within the meaning of Rule 502 under the
Securities Act) will be used in the United States in connection with
the offering of the Notes.
(c) Upon original issuance by the Company, and until such time
as the same is no longer required under the applicable requirements of
the Securities Act, the Notes (and all securities issued in exchange
therefor or in substitution thereof, other than the Exchange Notes)
shall bear the following legend:
"THE NOTE (OR ITS PREDECESSORS) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF RES-CARE, INC. (THE "COMPANY") THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT), PURCHASING FOR ITS
OWN ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144 OF THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATIONS REQUIREMENTS OF THE
SECURITIES ACT PROVIDED THAT IN THE CASE OF A TRANSFER PURSUANT TO
CLAUSE (d) SUCH TRANSFER
20
IS SUBJECT TO THE RECEIPT BY THE REGISTRAR (AND THE COMPANY, IF IT SO
REQUESTS) OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF
COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND THE INDENTURE
GOVERNING THE NOTES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(d) With respect to Notes sold in reliance on Regulation S,
each Initial Purchaser agrees that it has not offered or sold and will
not offer or sell the Notes in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in
each case, as defined in Rule 902 under the Securities Act as part of
its distribution at any time and (ii) otherwise until 40 days after the
later of the commencement of the offering of the Notes pursuant hereto
and the Closing Date, other than in accordance with Regulation S of the
Securities Act or another exemption from the registration requirements
of the Securities Act. Such Initial Purchaser agrees that, during such
40-day distribution compliance period, it will not cause any
advertisement with respect to the Notes (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted
in any public place and will not issue any circular relating to the
Notes, except such advertisements as are permitted by and include the
statements required by Regulation S. Each Initial Purchaser agrees
that, at or prior to confirmation of a sale of Notes by it to any
distributor, dealer or person receiving a selling concession, fee or
other remuneration during the distribution compliance period referred
to in Rule 903 under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or
other remuneration a confirmation or notice to substantially the
following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"), and may
not be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons as part of your distribution at any
time or (ii) otherwise until 40 days after the later of the date the
Notes were first offered to persons other than "distributors" (as
defined in Regulation S) in reliance upon Regulation S and the Closing
Date, except in either case in accordance with Regulation S under the
Securities Act (or Rule 144A or in transactions that are exempt from
the registration requirements of the Securities Act), and in connection
with any subsequent sale by you of the Notes covered hereby in reliance
on Regulation S during the period referred to above to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing
effect. Terms used above have the meanings assigned to them in
Regulation S."
21
(e) Following the sale of the Notes by the Initial Purchasers
to Eligible Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for any
losses, damages or liabilities suffered or incurred by the Company,
including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of any Security.
SECTION 8. Indemnification and Contribution.
(a) The Company and the Guarantors, shall jointly and severally,
indemnify and hold harmless each Initial Purchaser, its directors, officers,
employees and affiliates, and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act (a "CONTROLLING PERSON"),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the Notes and the
Guarantees), to which that Initial Purchaser, director, officer, employee,
affiliate or Controlling Person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto, (B) in any Blue Sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Notes and the Guarantees under the securities
laws of any state or other jurisdiction (any such application, document or
information being hereinafter called a "BLUE SKY APPLICATION") or (C) in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Notes
("MARKETING MATERIALS"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Offering Memorandum,
the Offering Memorandum or in any amendment or supplement thereto, or in any
Blue Sky Application or Marketing Materials, any material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) any act or failure to act or any alleged act or failure to act by any
Initial Purchaser in connection with, or relating in any manner to, the Notes
and the Guarantees or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon matters covered by clause (i) or (ii) above (provided that
the Company and the Guarantors shall not be liable under this clause (iii) to
the extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Initial Purchaser through its gross negligence or willful misconduct),
and shall reimburse each Initial Purchaser and each such director, officer,
employee, affiliate or Controlling Person promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser, director, officer,
employee, affiliate or Controlling Person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Offering Memorandum, the Offering Memorandum or in any
such amendment or supplement, or in any Blue Sky Application in reliance upon
and in conformity with written
22
information concerning such Initial Purchaser furnished to the Company through
the Representative by or on behalf of any Initial Purchaser specifically for
inclusion therein which information consists solely of the information specified
in Section 8(e). The foregoing indemnity agreement is in addition to any
liability which the Company and the Guarantors may otherwise have to any Initial
Purchaser or to any director, officer, employee, affiliate or Controlling Person
of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, the Guarantors, their officers and employees,
each of their directors, and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company, the Guarantors or any such director, officer, employee,
affiliate or Controlling Person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Offering Memorandum, the Offering Memorandum or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning such Initial Purchaser furnished to the Company
through the Representative by or on behalf of that Initial Purchaser
specifically for inclusion therein, which information consists solely of the
information specified in Section 8(e), and shall reimburse the Company and any
such director, officer, employee, affiliate or Controlling Person for any legal
or other expenses reasonably incurred by the Company or any such director,
officer, employee, affiliate or Controlling Person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Initial Purchaser
may otherwise have to the Company, the Guarantors or any such director, officer,
employee, affiliate or Controlling Person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by
23
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, any indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel has been specifically authorized by the indemnifying party in
writing, or (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to one local counsel) at
any time for all such indemnified parties, which firm shall be designated in
writing by (x) UBS Warburg LLC if the indemnified parties under this Section 8
consist of the Initial Purchasers or any of their respective directors,
officers, employees, affiliates or Controlling Persons, or (y) by the Company,
if the indemnified parties under this Section 8 consist of any of the Company,
any of the Guarantors or any of their respective directors, officers, employees,
affiliates or Controlling Persons. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Initial Purchasers on the other from the offering of the
Notes and the Guarantees or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company, on the one hand, and the Initial Purchasers
on the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchasers on the other with
24
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes and the Guarantees purchased
under this Agreement (before deducting expenses) received by the Company, on the
one hand, and the total purchase discounts and commissions received by the
Initial Purchasers with respect to the Notes and the Guarantees purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Notes and the Guarantees under this Agreement, in each case as
set forth in this Agreement. The relative fault shall be determined by reference
to whether the 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 Initial Purchasers, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 8 were to be determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8 shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Notes purchased by it was resold to Eligible
Purchasers exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 8(d) are several in proportion to their respective
Purchase obligations and not joint.
(e) The Initial Purchasers severally confirm and the Company and the
Guarantors acknowledge that the first sentence in paragraph 4, the first
sentence in paragraph 6 and paragraphs 7 and 8 under the caption "Plan of
Distribution" in the Offering Memorandum constitute the only information
concerning the Initial Purchasers furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
SECTION 9. Defaulting Initial Purchasers.
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the Notes which
the defaulting Initial Purchaser agreed but failed to purchase on the Closing
Date in the respective proportions which the amount of the Notes set opposite
the name of each remaining non-defaulting Initial Purchaser in Schedule 1 hereto
bears to the total amount of Notes set opposite the names of all the remaining
non-defaulting Initial Purchasers in Schedule 1 hereto; provided, however, that
the remaining non-defaulting Initial Purchasers shall not be obligated to
purchase any of the Notes on the Closing Date if the total amount of the Notes
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase on such date exceeds 9.09% of the total amount of Notes to be
purchased on the
25
Closing Date, and any remaining non-defaulting Initial Purchaser shall not be
obligated to purchase more than 110% of the amount of Notes which it agreed to
purchase on the Closing Date pursuant to the terms of Section 3. If the
foregoing maximums are exceeded, the remaining non-defaulting Initial
Purchasers, or those other Initial Purchasers satisfactory to the Representative
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all of the Notes to be
purchased on the Closing Date. If the remaining Initial Purchasers or other
Initial Purchasers satisfactory to the Representative do not elect to purchase
the Notes which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase on the Closing Date, this Agreement shall terminate
without liability on the part of any non-defaulting Initial Purchaser or the
Company, except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 4 and 6. As used in this Agreement,
the term "Initial Purchaser" includes, for all purposes of this Agreement unless
the context requires otherwise, any party not listed in Schedule 1 hereto who,
pursuant to this Section 9, purchases the Notes which a defaulting Initial
Purchaser agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company and the Guarantors for damages
caused by its default. If other Initial Purchasers are obligated or agree to
purchase the Notes of a defaulting or withdrawing Initial Purchaser, either the
Representative or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for
the Company or counsel for the Initial Purchasers may be necessary in the
Offering Memorandum or in any other document or arrangement.
SECTION 10. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Representative by notice given to and
received by the Company prior to delivery of and payment for the Notes if, prior
to that time, any of the events described in Sections 5(p), 5(q) and 5(r) shall
have occurred or if the Initial Purchasers shall decline to purchase the Notes
for any reason permitted under this Agreement.
SECTION 11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to:
(i) UBS Warburg LLC, 677 Washington Blvd, Stamford,
Connecticut 06901, Attention: High Yield Capital Markets with
a copy, in the case of notice pursuant to Section 8(d), to UBS
Warburg LLC, 677 Washington Blvd, Stamford, Connecticut 06901,
Attention: Legal Affairs;
(ii) with a copy to Weil, Gotshal & Manges LLP, 767
Fifth Avenue, New York, New York 10153, Attention: Rod Miller,
Esq. (Fax: 212-310-8007); and
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to:
26
(i) the address of the Company set forth in the
Registration Statement, Attention: L. Bryan Shaul, Executive
Vice President and Chief Financial Officer/Dave Waskey,
General Counsel (Fax: 502-394-2206),
(ii) with a copy to Frost Brown Todd LLC, 400 West
Market Street, 32nd Floor, Louisville, KY 40202, Attention:
Alan K. MacDonald (Fax: 502-581-1087);
provided, however, that any notice to an Initial Purchaser pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Guarantors shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Initial Purchasers by UBS Warburg
LLC and Lehman Brothers Inc. on behalf of the Initial Purchasers.
SECTION 12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers and
each of its directors, officers, employees, affiliates and Controlling Persons,
the Company, the Guarantors and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Guarantors contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any Initial
Purchaser within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Company and
the Guarantors and any person controlling the Company within the meaning of
Section 15 of the Securities Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Section 12, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
SECTION 13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Guarantors and the Initial
Purchasers contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and the Guarantees and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
SECTION 14. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York, New York are generally authorized or obligated by law or executive
order to close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the
rules and regulations of the Commission under the Securities Act.
SECTION 15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of New York.
27
SECTION 16. Counterparts. This Agreement may be executed in two or more
counterparts and, if executed in two or more counterparts, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 17. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
28
If the foregoing correctly sets forth the agreement among the Company,
the Guarantors and the Initial Purchasers, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
RES-CARE, INC.
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President
Finance & Administration, CFO
ALTERNATIVE CHOICES, INC.
BALD EAGLE ENTERPRISES, INC.
CAPITAL TX INVESTMENTS, INC.
CATX PROPERTIES, INC.
CNC/ACCESS, INC.
COMMUNITY ADVANTAGE, INC.
COMMUNITY ALTERNATIVES ILLINOIS, INC.
COMMUNITY ALTERNATIVES INDIANA, INC.
COMMUNITY ALTERNATIVES KENTUCKY, INC.
COMMUNITY ALTERNATIVES MISSOURI, INC.
COMMUNITY ALTERNATIVES NEBRASKA, INC.
COMMUNITY ALTERNATIVES TEXAS PARTNER, INC.
COMMUNITY ALTERNATIVES VIRGINIA, INC.
EDUCARE COMMUNITY LIVING-TEXAS LIVING CENTERS, INC.
J. & J. CARE CENTERS, INC.
NORMAL LIFE, INC.
PEOPLESERVE, INC.
RAISE GEAUGA, INC.
RES-CARE ALABAMA, INC.
RES-CARE CALIFORNIA, INC. D/B/A RCCA SERVICES
RES-CARE ILLINOIS, INC.
RES-CARE KANSAS, INC.
RES-CARE NEW JERSEY, INC.
RES-CARE NEW MEXICO, INC.
RES-CARE OHIO, INC.
RES-CARE OKLAHOMA, INC.
RES-CARE OTHER OPTIONS, INC.
RES-CARE PREMIER, INC.
29
RES-CARE TENNESSEE, INC.
RES-CARE TRAINING TECHNOLOGIES, INC.
RES-CARE WASHINGTON, INC.
ROCKCREEK, INC.
RSCR CALIFORNIA, INC.
RSCR INLAND, INC.
RSCR WEST VIRGINIA, INC.
SOUTHERN HOME CARE SERVICES, INC.
TANGRAM REHABILITATION NETWORK, INC.
TEXAS HOME MANAGEMENT, INC.
THM HOMES, INC.
BRINKLEY GROUP HOMES, INC.
BAKER MANAGEMENT, INC.
BOLIVAR DEVELOPMENTAL TRAINING CENTER, INC.
BOLIVAR ESTATES, INC.
EBENEZER ESTATES, INC.
FORT MASON ESTATES, INC.
HILLSIDE ESTATES, INC.
HYDESBURG ESTATES, INC.
INDIVIDUALIZED SUPPORTED LIVING, INC.
MEADOW LANE ESTATES, INC.
MISSOURI PROGRESSIVE SERVICES, INC.
OAK WOOD SUITES OF BOLIVAR, INC.
OAKVIEW ESTATES OF BOLIVAR, INC.
PEBBLE CREEK ESTATES, INC.
RIVER BLUFF ESTATES, INC.
SHA-REE ESTATES, INC.
SKYVIEW ESTATES, INC.
UPWARD BOUND, INC.
WILLARD ESTATES, INC.
CAREERS IN PROGRESS, INC.
EDUCARE COMMUNITY LIVING-NORMAL LIFE, INC.
NORMAL LIFE OF CALIFORNIA, INC.
NORMAL LIFE OF CENTRAL INDIANA, INC.
NORMAL LIFE FAMILY SERVICES, INC.
NORMAL LIFE OF GEORGIA, INC.
NORMAL LIFE OF KENTUCKY, INC.
NORMAL LIFE OF LAFAYETTE, INC.
NORMAL LIFE OF LAKE CHARLES, INC.
NORMAL LIFE OF LOUISIANA, INC.
NORMAL LIFE OF SOUTHERN INDIANA, INC.
RES-CARE FLORIDA, INC.
EDUCARE COMMUNITY LIVING CORPORATION-AMERICA
PSI HOLDINGS, INC.
VOCA CORPORATION OF AMERICA
30
VOCA RESIDENTAL SERVICES, INC.
B.W. J. OPPORTUNITY CENTERS, INC.
THE CITADEL GROUP, INC.
EDUCARE COMMUNITY LIVING CORPORATION-GULF COAST
EDUCARE COMMUNITY LIVING CORPORATION-MISSOURI
EDUCARE COMMUNITY LIVING CORPORATION-NEVADA
EDUCARE COMMUNITY LIVING CORPORATION-NEW MEXICO
EDUCARE COMMUNITY LIVING CORPORATION-NORTH CAROLINA
EDUCARE COMMUNITY LIVING CORPORATION-TEXAS
VOCA CORP.
VOCA CORPORATION OF FLORIDA
VOCA CORPORATION OF INDIANA
VOCA CORPORATION OF MARYLAND
VOCA CORPORATION OF NEW JERSEY
VOCA CORPORATION OF NORTH CAROLINA
VOCA CORPORATION OF OHIO
VOCA CORPORATION OF WASHINGTON, D.C.
VOCA CORPORATION OF WEST VIRGINIA, INC.
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President Finance &
Administration & CFO
THE ACADEMY FOR INDIVIDUAL EXCELLENCE, INC.
ALTERNATIVE YOUTH SERVICES, INC.
RES-CARE AVIATION, INC.
GENERAL HEALTH CORPORATION
YOUTHTRACK, INC.
EMPLOY-ABILITY UNLIMITED, INC.
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President Finance &
Administration, CFO
31
EDUCARE COMMUNITY LIVING LIMITED PARTNERSHIP
By: Community Alternatives Texas Partner, Inc.
its General Partner
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President
Finance & Administration, CFO
NORMAL LIFE OF INDIANA
By: Normal Life of Central Indiana, Inc.
one of its General Partners
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President
Finance & Administration, CFO
and
By: Normal Life of Central Indiana, Inc.
the other General Partner
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaull
Title: Executive Vice President
Finance & Administration, CFO
VOCA OF INDIANA, LLC, a limited liability company
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President Finance &
Administration, CFO
32
CREATIVE NETWORKS, LLC
By: /s/ L. Bryan Shaul
Name: L. Bryan Shaul
Title: Executive Vice President Finance &
Administration, CFO
33
Accepted:
UBS WARBURG LLC
LEHMAN BROTHERS INC.
For themselves and as Representatives
of the several Initial Purchasers named
in Schedule 1 hereto
By UBS WARBURG LLC
By: /s/ Michael Leder
Name: Michael Leder
Title: Managing Director
By: /s/ Jed G. Cohen
Name: Jed Cohen
Title: Director
LEHMAN BROTHERS INC.
By: /s/ Brian McCarty
Name: Brian McCarty
Title: Managing Director
34
SCHEDULE 1
Initial Purchaser Principal Aggregate
- ----------------- -------------------
Amount of Notes
---------------
UBS Warburg LLC $66,000,000
Lehman Brothers Inc. $60,000,000
Banc One Capital Markets, Inc. $7,500,000
Firstar Capital Markets $7,500,000
Jefferies & Company, Inc. $4,500,000
First Analysis Securities Corp. $4,500,000
Total $150,000,000
============
35
SCHEDULE 2
Subsidiary Guarantors
ALTERNATIVE CHOICES, INC.
BALD EAGLE ENTERPRISES, INC.
CAPITAL TX INVESTMENTS, INC.
CATX PROPERTIES, INC.
CNC/ACCESS, INC.
COMMUNITY ADVANTAGE, INC.
COMMUNITY ALTERNATIVES ILLINOIS, INC.
COMMUNITY ALTERNATIVES INDIANA, INC.
COMMUNITY ALTERNATIVES KENTUCKY, INC.
COMMUNITY ALTERNATIVES MISSOURI, INC.
COMMUNITY ALTERNATIVES NEBRASKA, INC.
COMMUNITY ALTERNATIVES TEXAS PARTNER, INC.
COMMUNITY ALTERNATIVES VIRGINIA, INC.
EDUCARE COMMUNITY LIVING-TEXAS LIVING CENTERS, INC.
J. & J. CARE CENTERS, INC.
NORMAL LIFE, INC.
PEOPLESERVE, INC.
RAISE GEAUGA, INC.
RES-CARE ALABAMA, INC.
RES-CARE CALIFORNIA, INC. d/b/a RCCA SERVICES
RES-CARE ILLINOIS, INC.
RES-CARE KANSAS, INC.
RES-CARE NEW JERSEY, INC.
RES-CARE NEW MEXICO, INC.
RES-CARE OHIO, INC.
RES-CARE OKLAHOMA, INC.
RES-CARE OTHER OPTIONS, INC.
RES-CARE PREMIER, INC.
RES-CARE TENNESSEE, INC.
RES-CARE TRAINING TECHNOLOGIES, INC.
RES-CARE WASHINGTON, INC.
ROCKCREEK, INC.
RSCR CALIFORNIA, INC.
RSCR INLAND, INC.
RSCR WEST VIRGINIA, INC.
SOUTHERN HOME CARE SERVICES, INC.
TANGRAM REHABILITATION NETWORK, INC.
TEXAS HOME MANAGEMENT, INC.
THM HOMES, INC.
BRINKLEY GROUP HOMES, INC.
BAKER MANAGEMENT, INC.
BOLIVAR DEVELOPMENTAL TRAINING CENTER, INC.
BOLIVAR ESTATES, INC.
36
EBENEZER ESTATES, INC.
FORT MASON ESTATES, INC.
HILLSIDE ESTATES, INC.
HYDESBURG ESTATES, INC.
INDIVIDUALIZED SUPPORTED LIVING, INC.
MEADOW LANE ESTATES, INC.
MISSOURI PROGRESSIVE SERVICES, INC.
OAK WOOD SUITES OF BOLIVAR, INC.
OAKVIEW ESTATES OF BOLIVAR, INC.
PEBBLE CREEK ESTATES, INC.
RIVER BLUFF ESTATES, INC.
SHA-REE ESTATES, INC.
SKYVIEW ESTATES, INC.
UPWARD BOUND, INC.
WILLARD ESTATES, INC.
CAREERS IN PROGRESS, INC.
EDUCARE COMMUNITY LIVING-NORMAL LIFE, INC.
NORMAL LIFE OF CALIFORNIA, INC.
NORMAL LIFE OF CENTRAL INDIANA, INC.
NORMAL LIFE FAMILY SERVICES, INC.
NORMAL LIFE OF GEORGIA, INC.
NORMAL LIFE OF KENTUCKY, INC.
NORMAL LIFE OF LAFAYETTE, INC.
NORMAL LIFE OF LAKE CHARLES, INC.
NORMAL LIFE OF LOUISIANA, INC.
NORMAL LIFE OF SOUTHERN INDIANA, INC.
RES-CARE FLORIDA, INC.
EDUCARE COMMUNITY LIVING CORPORATION-AMERICA
PSI HOLDINGS, INC.
VOCA CORPORATION OF AMERICA
VOCA RESIDENTAL SERVICES, INC.
B.W.J. OPPORTUNITY CENTERS, INC.
THE CITADEL GROUP, INC.
EDUCARE COMMUNITY LIVING CORPORATION-GULF COAST
EDUCARE COMMUNITY LIVING CORPORATION-MISSOURI
EDUCARE COMMUNITY LIVING CORPORATION-NEVADA
EDUCARE COMMUNITY LIVING CORPORATION-NEW MEXICO
EDUCARECOMMUNITY LIVING CORPORATION-NORTH CAROLINA
EDUCARE COMMUNITY LIVING CORPORATION-TEXAS
VOCA CORP.
VOCA CORPORATION OF FLORIDA
VOCA CORPORATION OF INDIANA
VOCA CORPORATION OF MARYLAND
VOCA CORPORATION OF NEW JERSEY
VOCA CORPORATION OF NORTH CAROLINA
VOCA CORPORATION OF OHIO
37
VOCA CORPORATION OF WASHINGTON, D.C.
VOCA CORPORATION OF WEST VIRGINIA, INC.
THE ACADEMY FOR INDIVIDUAL EXCELLENCE, INC.
ALTERNATIVE YOUTH SERVICES, INC.
RES-CARE AVIATION, INC.
GENERAL HEALTH CORPORATION
YOUTHTRACK, INC.
EMPLOY-ABILITY UNLIMITED, INC.
EDUCARE COMMUNITY LIVING LIMITED PARTNERSHIP
NORMAL LIFE OF INDIANA
VOCA OF INDIANA, LLC, a limited liability company
CREATIVE NETWORKS, LLC
38