Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4 Registration of Securities Issued in a 203 1.24M
Business-Combination Transaction
2: EX-4.(A) Instrument Defining the Rights of Security Holders 141 469K
3: EX-4.(E) Instrument Defining the Rights of Security Holders 348 1.21M
4: EX-4.(F) Instrument Defining the Rights of Security Holders 104 328K
5: EX-4.(G) Instrument Defining the Rights of Security Holders 32 157K
6: EX-4.(H) Instrument Defining the Rights of Security Holders 30 89K
7: EX-4.(I) Instrument Defining the Rights of Security Holders 73 268K
8: EX-4.(J) Instrument Defining the Rights of Security Holders 28 87K
9: EX-4.(K) Instrument Defining the Rights of Security Holders 28 80K
10: EX-4.(L) Instrument Defining the Rights of Security Holders 20 65K
11: EX-4.(M) Instrument Defining the Rights of Security Holders 13 43K
12: EX-4.(N) Instrument Defining the Rights of Security Holders 31 85K
13: EX-4.(O) Instrument Defining the Rights of Security Holders 29 86K
14: EX-4.(P) Instrument Defining the Rights of Security Holders 11 40K
15: EX-4.(Q) Instrument Defining the Rights of Security Holders 14 45K
16: EX-4.(T) Instrument Defining the Rights of Security Holders 22 69K
18: EX-4.(V) Instrument Defining the Rights of Security Holders 17 63K
19: EX-5 Opinion re: Legality 2 15K
20: EX-8 Opinion re: Tax Matters 2 15K
21: EX-10.(H) Material Contract 9 36K
22: EX-10.(I) Material Contract 6 25K
23: EX-12 Statement re: Computation of Ratios 2± 21K
17: EX-14.(U) Exhibit 4(U) 57 197K
24: EX-21 Subsidiaries of the Registrant 6 43K
25: EX-23.(A) Consent of Experts or Counsel 1 10K
26: EX-23.(B) Consent of Experts or Counsel 1 11K
27: EX-24 Power of Attorney 57 162K
28: EX-25 Statement re: Eligibility of Trustee 40 219K
29: EX-99.(A) Miscellaneous Exhibit 13 73K
30: EX-99.(B) Miscellaneous Exhibit 4 19K
31: EX-99.(C) Miscellaneous Exhibit 2 14K
32: EX-99.(D) Miscellaneous Exhibit 9 39K
$375,000,000
CHARTER MEDICAL CORPORATION
11 1/4% Senior Subordinated Notes due 2004
PURCHASE AGREEMENT
April 22, 1994
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
BT Securities Corporation
130 Liberty Street, 30th Floor
New York, New York 10006
Ladies and Gentlemen:
Charter Medical Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to Bear, Stearns & Co. Inc. and BT Securities
Corporation (the "Initial Purchasers") upon the terms and subject to the
conditions hereinafter set forth, $375,000,000 aggregate principal amount of its
11 1/4% Senior Subordinated Notes due 2004 (the "Notes"). The Notes will be
issued pursuant to an indenture (the "Indenture") to be dated as of the Closing
Date (as hereinafter defined), between the Company, the guarantors party thereto
(the "Guarantors") and Marine Midland Bank, as trustee (the "Trustee"). The
Indenture and the Notes will be substantially in the forms previously furnished
to you and are more fully described in the Offering Memoranda referred to below.
All capitalized terms used and not defined herein have the respective meanings
ascribed to them in the Offering Memoranda.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to you as follows:
(a) The Company has prepared and furnished to you a preliminary
offering memorandum, dated April 5, 1994, with respect to the Notes that
is subject to completion, together with the Supplement, dated April
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16, 1994, to such preliminary memorandum (collectively, the "Preliminary
Memorandum") and also has prepared and proposes to furnish to you a final
offering memorandum, dated April 22, 1994, with respect to the Notes that
includes definitive information with respect to the rate of interest on
and the offering price of the Notes, the use by the Company of the net
proceeds from the sale thereof to you, and other data derived therefrom
(hereafter, the "Definitive Memorandum" and collectively with the
Preliminary Memorandum, the "Offering Memoranda"). The Preliminary
Memorandum and the Definitive Memorandum, at the respective dates thereof
and at all times subsequent thereto to and including the Closing Date do
not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, no representation or warranty is made in this
subsection (a) with respect to any information contained in or omitted
from the Definitive Memorandum or the Preliminary Memorandum in reliance
upon and in conformity with information with respect to you that has been
furnished in writing to the Company by you expressly for use in connection
with the preparation thereof.
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Definitive 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, other than as set forth in the Definitive Memorandum,
which loss or interference would, individually or in the aggregate, have a
"Material Adverse Effect" (as defined in subsection (e) below).
Subsequent to the respective dates as of which information is provided in
the Definitive Memorandum and except as set forth in the Definitive
Memorandum, there has not been any change in the capital stock (except for
the exercise by grantees of outstanding options to purchase shares of
Common Stock, $.25 par value, of the Company in accordance with the terms
of such options and the plans under which they were issued) or long-term
debt (except for scheduled principal payments, repayments and reductions
of indebtedness with the net proceeds from the sale of
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assets of the Company or its subsidiaries and excess cash from operations
and one principal prepayment in respect of the Company's presently
outstanding bank term loan) of the Company or any of its subsidiaries, any
material adverse change in the business, prospects, properties, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Change"), or any
development or event involving a prospective Material Adverse Change,
whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet included in the
Definitive Memorandum, neither the Company nor any of its subsidiaries has
incurred or undertaken any liabilities or obligations, direct or
contingent, that are material to the Company and its subsidiaries taken as
a whole, except for those that are fully disclosed in the Definitive
Memorandum.
(c) This Agreement, the New Credit Agreement (and the "Credit
Documents" as therein defined) and the Exchange and Registration Rights
Agreement being entered into concurrently herewith, which shall be
substantially in the form of Exhibit A hereto (the "Registration Rights
Agreement"), have been duly and validly authorized, executed and delivered
by the Company and each is a valid and binding agreement of the Company
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights and remedies generally,
and to general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and except
insofar as rights to indemnification and contribution contained therein
may be limited by federal or state securities laws or related public
policy. This Agreement, the Registration Rights Agreement and the New
Credit Agreement (and the Credit Documents) conform to the general
descriptions thereof set forth in the Offering Memoranda, which general
descriptions do not purport to describe all provisions of such documents.
(d) The execution, delivery, and performance by the Company and
the Guarantors of this Agreement, the Registration Rights Agreement, the
Indenture, the Notes and the New Credit Agreement (and the Credit
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Documents), in each case to the extent a party thereto, and the
consummation of the transactions contemplated hereby and thereby,
including, without limitation, the issuance, sale and delivery of the
Notes and the application of the net proceeds therefrom as set forth in
the Offering Memoranda under the caption "Use of Proceeds," will not (i)
conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event that with notice, lapse of time, or
both, would constitute a default) or require consent under, or result in
the creation (except for the liens expressly contemplated by and created
under the New Credit Agreement and the Credit Documents) or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries, pursuant to the terms of any agreement,
instrument, franchise, license or permit to or by which the Company or any
of its subsidiaries is a party or may be bound (other than those as to
which requisite waivers or consents have been obtained by the Company and
furnished to you, and other than the agreements and instruments identified
on Schedule 1(d) hereto relating to outstanding indebtedness of the
Company and/or its subsidiaries which indebtedness shall be paid or
redeemed in full or for which full provision for repayment in full shall
irrevocably have been made on or prior to the Closing Date, or (ii)
violate or conflict with any provision of the certificate of
incorporation, by-laws, or equivalent instruments, of the Company or any
of its subsidiaries (as amended and/or restated through the date hereof)
or any judgment, decree, order, law, rule or regulation of any court or
any public or governmental authority having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public or
governmental authority having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the New Credit Agreement (and the Credit
Documents), the Indenture or the Notes, except for such filings as may be
required by, and compliance with, federal and state securities laws in
connection with the performance of the Company's obligations under the
Registration Rights Agreement.
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(e) Each of the Company and its subsidiaries has been duly
organized, is validly existing as a corporation in good standing under the
laws of its respective jurisdiction of incorporation and has the requisite
corporate power and authority to conduct its business as described in the
Offering Memoranda and to own, lease and operate its properties, and each
is duly qualified and in good standing as a foreign corporation authorized
to conduct business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the business,
prospects, properties, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole or
adversely affect the validity or enforceability of the Notes (a "Material
Adverse Effect").
(f) All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable (except for assessments that may be
imposed by the laws of governmental authorities of the State of New York
with respect to back wages due to employees), and are owned directly or
indirectly by the Company (except that the subsidiaries of the Company
identified on Schedule 1(f) hereto may not be wholly owned, directly or
indirectly, by the Company because of applicable statutory requirements of
the jurisdictions set forth on such schedule), free and clear of any
security interest, claim, lien, or encumbrance, except for (i) those in
favor of a wholly owned domestic subsidiary or of a foreign subsidiary of
the Company, (ii) those created in connection with the acquisition of a
wholly owned domestic or a foreign subsidiary of the Company, the
obtaining of first mortgage financing and the issuance of municipal,
industrial development or similar tax exempt securities by certain
subsidiaries of the Company and (iii) those to be created or permitted
pursuant to the New Credit Agreement and the Credit Documents, and there
are no preemptive, subscription or other rights granted to or in favor of
any person other than the Company or one of its wholly owned subsidiaries
to acquire any such capital stock.
(g) The Company has an authorized capitalization as set forth in
the Offering Memoranda. At the Closing
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Date, all of the outstanding capital stock of the Company will have been
duly authorized and will be validly issued, fully paid and non-assessable
and will not have been issued in violation of any preemptive, subscription
or similar rights.
(h) The Notes have been duly and validly authorized for issuance
by all necessary corporate action on the part of the Company and, when
executed and delivered by the Company (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and the execution
and delivery of certificates of authentication by one of the Trustee's
duly authorized officers), will have been duly and validly executed,
authenticated, issued and delivered and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights and remedies
generally, and to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity). The
Notes, when issued, will conform in all material respects to the
description thereof set forth in the Offering Memoranda.
(i) The Indenture conforms in all material respects to the
description thereof set forth in the Offering Memoranda and conforms in
all material respects with the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), applicable to indentures to
be qualified thereunder. The Indenture has been duly and validly
authorized by all necessary corporate action by the Company and the
Guarantors and, when executed and delivered by the Company, the Guarantors
and the Trustee (assuming the due authorization, execution and delivery
thereof by the Trustee), will constitute a valid and binding agreement of
the Company and the Guarantors, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights and remedies generally, and to general principles of
equity, including principles of commercial
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reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(j) Neither the Company nor any of its subsidiaries is in
violation of its certificate of incorporation or by-laws (as amended
and/or restated and in effect through the date hereof) or is in default in
the performance of any obligation, agreement or condition contained in any
bond, mortgage, debenture, note, deed of trust or contained in any other
evidence of indebtedness or any other agreement, indenture or instrument
to which it is a party or by which it or any of its property is bound,
except for those defaults that, individually or in the aggregate, would
not have a Material Adverse Effect.
(k) Other than as set forth in the Definitive Memorandum, there
are no legal or governmental proceedings (including, without limitation,
proceedings relating to human health or the environment) pending to which
the Company or any of its subsidiaries is a party or of which any of their
respective properties or assets is the subject which, if determined
adversely to the Company or any of its subsidiaries would, individually or
in the aggregate, have a Material Adverse Effect, and, to the Company's
knowledge, no such proceedings are threatened or contemplated. There is
no contract, document, statute or regulation that is not described in the
Offering Memoranda which is of a character that would be required to be
described in the Offering Memoranda if the Offering Memoranda were a
prospectus included in a registration statement on Form S-1 under the Act.
(l) Each of the Company and its subsidiaries possesses all
necessary licenses, consents, authorizations, approvals, orders,
certificates and permits (including, without limitation, those relating to
human health and/or the environment) (collectively, "Licenses") of and
from, has made all declarations and filings with, and has satisfied all of
its material obligations, including, without limitation, eligibility and
other similar requirements imposed by, all federal, state, local and other
public and governmental authorities, all self-regulatory organizations,
including, without limitation, the Joint Commission on Accreditation of
Health Care Organizations, and all courts and other tribunals, in each
case as required
7
for the conduct of the business in which it is engaged, except where the
failure to obtain any such License, to make any such declaration or filing
or to satisfy any such requirement would not, individually or in the
aggregate, have a Material Adverse Effect. Each License is in full force
and effect, each of the Company and its subsidiaries is operating in
compliance with such Licenses, and there are no proceedings pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries which seek to cause any such License that is material to the
conduct and/or prospects of the business of the Company and its
subsidiaries to be revoked, withdrawn, canceled, suspended or not renewed,
except where the failure of such License to be in full force or effect or
the non-compliance with such License would not, individually or in the
aggregate, have a Material Adverse Effect. No event has occurred which
allows, or after notice or lapse of time, or both, would allow, revocation
or termination of any such License or result in any other material
impairment of the rights of the holder of any such License, except where
the revocation or termination of any such License or any such impairment
would not, individually or in the aggregate, have a Material Adverse
Effect.
(m) Each of the Company and its subsidiaries has conducted and
presently is conducting its business in compliance with all applicable
foreign, federal, state, and local laws, rules, regulations, codes and
ordinances relating to (i) zoning, land use, protection of the
environment, human health and safety, and hazardous or toxic substances,
wastes, pollutants or contaminants, (ii) employee or occupational safety,
employment discrimination, employee hours and wages and employee benefits,
and (iii) payments for services rendered (A) from private insurers or
federal, state or local payment or reimbursement programs or (B) directly
from patients for psychiatric, behavioral and general healthcare services
furnished to patients (whether treated on an inpatient or outpatient
basis), except for such noncompliance which would not, individually or in
the aggregate, have a Material Adverse Effect.
(n) Arthur Andersen & Co., whose reports are included in the
Offering Memoranda, are independent public accountants for the Company
under Rule 101 of the American Institute of Certified Public Accountants'
8
Code of Professional Conduct and its official interpretations and rulings.
(o) The financial statements of the Company and its subsidiaries
and related notes thereto included in the Offering Memoranda present
fairly, in all material respects, the consolidated financial position,
results of operations, cash flows and changes in stockholders' equity of
the Company and its subsidiaries or affiliates (as reflected in such
financial statements) in conformity with United States generally accepted
accounting principles ("GAAP") on the basis stated in the Offering
Memoranda at the respective dates and for the respective periods to which
they apply. Such financial statements and notes have been prepared in
accordance with GAAP consistently applied throughout the periods
presented, except as disclosed therein; and the other financial,
accounting and statistical information and data related to the Company set
forth in the Offering Memoranda present fairly, in all material respects,
the information purported to be shown thereby at the respective dates and
for the respective periods to which they apply and, in the case of
financial but not statistical information and data, have been prepared on
a basis consistent with such financial statements and the books and
records of the Company (which have been maintained in a manner consistent
with GAAP) and the other entities as to which such information is shown.
(p) Neither the Company nor any of its affiliates is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of, and is not registered or otherwise required to be
registered under, the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended (the
"Public Utility Act").
(q) The Notes, when issued, will not be of the same class (within
the meaning of Rule 144A under the Act) as other securities of the Company
that are listed on a national securities exchange registered under Section
6 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or quoted in a U.S. automated interdealer quotation system of a registered
national securities association.
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(r) Neither the Company nor, assuming the accuracy of your
representations contained in Section 3 hereof, any person acting on its
behalf has offered the Notes for sale by means of any general solicitation
or general advertising within the meaning of Rule 502(c) of Regulation D
under the Act or in any manner involving a public offering or distribution
of the Notes within the meaning of the Act.
(s) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act) thereof has directly, or indirectly
through any agent, within the six months next preceding the date hereof,
sold, offered for sale or solicited offers to buy any "security" (as
defined in the Act) of the same or a similar class as the Notes.
(t) Assuming the accuracy of your representations contained in
Section 3 hereof and your compliance with your covenants therein set
forth, it is not necessary, in connection with the sale and delivery of
the Notes to you and the offer and resale of the Notes by you, in each
case in the manner specified in this Agreement and as contemplated by the
Offering Memoranda, to register the Notes under the Act or to qualify the
Indenture under the Trust Indenture Act.
(u) Neither the Company nor any of its officers, directors or
employees has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders' fees in connection with the
issuance of the Notes.
(v) Each of the Company and its subsidiaries has filed all
material tax returns required to be filed by it and all such tax returns
are true and complete in all material respects. Each of the Company and
its subsidiaries has paid all taxes, assessments and other charges which
have become due, other than those not yet delinquent and except for those
contested in good faith by appropriate proceedings for which adequate
reserves in conformity with GAAP have been provided and other than those
which, individually or in the aggregate, would not have a Material Adverse
Effect. No tax liens have been filed (except with respect to real
property taxes not yet due) and no claims or assessments are being
asserted with respect to any such taxes, assessments or other charges,
other than liens, claims
10
or assessments which, individually or in the aggregate, would not have a
Material Adverse Effect.
(w) The description of the Company's liability insurance set forth
in the Offering Memorandum under the caption "Business--Liability
Insurance" is a fair and accurate description thereof. The Company
regularly accrues, and the financial statements of the Company reflect the
accrual of, adequate reserves against loss contingencies arising from
known and incurred claims against the Company and its subsidiaries.
Management of the Company believes that its insurance coverage limits are
adequate.
(x) No labor dispute by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, has been
threatened which would, individually or in the aggregate, have a Material
Adverse Effect. No collective bargaining agreement exists with respect to
any of the employees of the Company or its subsidiaries.
(y) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all material trademarks, service marks and trade
names owned or used by it or which are necessary for the conduct of its
business; the Company and its subsidiaries have not received any notice
of, and have no knowledge of, any infringement of or conflict with
asserted rights of others with respect to any such trademarks, service
marks or trade names which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(aa) Each of the Company and its subsidiaries has timely filed all
requisite cost reports and other reports required to be filed in
connection with federal Medicare and all applicable state Medicaid
programs due on or before the date hereof, all of which are true and
complete in all material respects. There are no claims, actions or
appeals pending (and the Company and its subsidiaries have not filed any
claims or reports that would result in any such claims, actions or
appeals) before any commission, board or agency, including, without
limitation, any intermediary or insurance carrier, the Provider
Reimbursement Review Board or the Administrator of the Health Care
Financing Administration, with respect to any state or federal
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Medicare or Medicaid cost reports or claims filed by the Company or any of
its subsidiaries on or before the date hereof, or with respect to any
disallowances by any commission, board or agency in connection with any
audit of such cost reports, which, if adversely determined, could have a
Material Adverse Effect. No validation review or program integrity review
related to the Company or any of its subsidiaries has been conducted by
any commission, board or agency in connection with state or federal
Medicare or Medicaid programs, and no such reviews are scheduled, pending
or, to the Company's best knowledge, threatened against or affecting the
Company or any of its subsidiaries. Each of the Company and its
subsidiaries has timely filed all material reports, data and other
information required by other regulatory agencies, including, without
limitation, the Florida Health Care Cost Containment Board. Except as
disclosed in the Offering Memoranda, each of the Company and its
subsidiaries is in compliance in all material respects with all rules,
regulations and requirements of such agencies, except where such
non-compliance would not have a Material Adverse Effect. Except as
disclosed in the Offering Memoranda, the conduct of the business of each
of the Company and its subsidiaries, including, without limitation, any
presently existing transactions and agreements with physicians, does not
violate the Medicare and Medicaid antifraud and abuse amendments codified
under Section 1128B(b) of the Social Security Act or the Stark
anti-referral provisions codified at 42 U.S.C. Section 1395nn, including
all amendments thereto to the extent effective on the date hereof, except
where such non-compliance would not have a Material Adverse Effect.
(bb) Each of the Company and its subsidiaries has good and
marketable fee simple title to or valid leasehold interests in all of its
material real property and good title to all of its other material
property (including, without limitation, all such real and other property
reflected in the consolidated balance sheet of the Company as of September
30, 1993, other than properties included within the classification "Net
Assets of Discontinued Operations" and other than properties disposed of
in the ordinary course of business since such balance sheet date and other
dispositions made in accordance with the Existing Credit Agreement, free
and clear of all security interests, charges, pledges, mortgages, liens,
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encumbrances, hypothecations, collateral assignments and similar
restrictions on and impairments and imperfections of title (collectively,
"Liens"), other than Liens permitted under the Existing Credit Agreement
and under outstanding industrial revenue bond obligations and hospital
facility mortgages.
(cc) The Company and its subsidiaries have not violated any
federal, state or local law relating to discrimination in employment nor
any applicable wage or hour laws, nor any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder ("ERISA"), nor has the Company or any
of its subsidiaries engaged in any unfair labor practice, which in each
case would result, singly or in the aggregate, in a Material Adverse
Effect. There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the best
knowledge of the Company and its subsidiaries, threatened against any of
them, before the National Labor Relations Board or any state or local
labor relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or any of its subsidiaries or,
to the best knowledge of the Company and its subsidiaries, threatened
against any of them, (ii) no significant strike, labor dispute, slowdown
or stoppage pending against the Company or any of its subsidiaries or, to
the best knowledge of the Company and its subsidiaries, threatened against
any of them and (iii) to the best knowledge of the Company and its
subsidiaries, no union representation question existing with respect to
the employees of the Company or any of its subsidiaries and, to the best
knowledge of the Company, no union organizing activities are taking place,
except (with respect to any matter specified in clause (i), (ii) or (iii)
above, singly or in the aggregate) such as would not have a Material
Adverse Effect.
2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) On the basis of your representations, warranties and
covenants set forth in Section 3 hereof, the Company agrees to sell to each of
you and, each of you, severally and not jointly, agrees to purchase from the
Company the principal amount of Notes set forth opposite
13
your name below at a purchase price equal to 97.5% of the principal amount
thereof; PROVIDED, HOWEVER, the Company shall not be obligated to sell the
Notes to either of you unless each of you purchases on the Closing Date the
respective principal amount of the Notes set forth opposite your name below.
Bear, Stearns & Co. Inc............................. $225,000,000
BT Securities Corporation........................... $150,000,000
(b) Delivery of the Notes against payment of the purchase price
therefor shall be made at the offices of Bear, Stearns & Co. Inc., located at
245 Park Avenue, New York, New York 10167, or such other location as may be
mutually acceptable to each of you and the Company. Such delivery and payment
shall be made at 9:30 a.m., New York time, on the fifth full business day next
following the date of this Agreement, or at such other time as shall be agreed
upon by each of you and the Company. The time and date of such delivery and
payment are herein called the "Closing Date." Certificates evidencing
beneficial interests in the Notes, in definitive form, without interest coupons,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), or in the name of such other eligible nominee of DTC identified by you
to the Company in writing at least three full business days prior to the Closing
Date, in the principal amounts corresponding to the aggregate principal amount
of the Notes sold to QIBs (as defined in Section 3 below) (the "Global Notes"),
and certificates evidencing one or more individually denominated Notes, each in
definitive form, without interest coupons, registered in such names and in such
denominations as you may request in writing at least three full business days
prior to the Closing Date, in the principal amounts corresponding to the
aggregate principal amount of the Notes sold to Accredited Institutions (as
defined in Section 3 below) who are not QIBs (the "Non-global Notes"), shall be
delivered to you by the Company, against payment by you of the aggregate
purchase price therefor by wire transfer of immediately available funds in
accordance with the instructions set forth in that certain letter agreement of
even date herewith between the Company and each of you. The Company shall
reimburse you for the incremental cost of such funds at the then prevailing
federal funds effective overnight rate, plus 150 basis points and the amount of
any applicable bank charges incurred by you.
14
(c) The Company will permit you to examine and package the Global
Notes and the Non-global Notes for delivery at least two full business days
prior to the Closing Date.
(d) It is understood that each certificate evidencing the Notes
shall bear a legend substantially to the following effect:
"This Note has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, may not be
offered or sold to, or for the account or benefit of, any person
except as set forth in the following sentence. By its acquisition
hereof, the holder (1) represents that (a) it is a "Qualified
Institutional Buyer" (as defined in Rule 144A under the Securities
Act) or (b) it is an "Accredited Investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is an
institution (an "Institutional Accredited Investor"), (2) agrees
that it will not prior to the date which is three years after the
later of the date of original issuance of this Note and the last
date on which the issuer or any affiliate of the issuer was the
owner of this Note (the "Resale Restriction Termination Date")
resell, pledge or otherwise transfer this Note, except (a) to the
issuer, (b) to a person whom the seller reasonably believes is a
Qualified Institutional Buyer purchasing for its own account or for
the account of another Qualified Institutional Buyer in compliance
with the resale provisions of Rule 144A under the Securities Act,
(c) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee a written certification
containing certain representations and agreements relating to the
restrictions on transfer of this Note (the form of which letter can
be obtained from the Trustee), (d) pursuant to the resale
limitations provided by Rule 144 under the Securities Act (if then
available), (e) pursuant to an effective registration statement
under the Securities Act, or (f) pursuant to any other available
exemption
15
from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the
disposition of such holder's property or the property of such
account at all times be within its control and to compliance with
applicable state securities laws, and (3) agrees that it will
deliver to each person to whom this Note is transferred a notice
substantially to the effect of this legend. If the proposed
transferee is an Institutional Accredited Investor, the holder must,
prior to any such transfer, furnish to each of the Trustee and the
issuer such certifications, legal opinions and other information as
either of them reasonably may require to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
The foregoing restrictions on resale shall not apply subsequent to
the resale Restriction Termination Date."
3. OFFERING AND RESALE OF THE NOTES. You have advised the
Company that it is your intention, as promptly as you deem appropriate after the
Company shall have furnished you with copies of the Definitive Memorandum (as
specified in Section 4(b) hereof), to resell the Notes pursuant to the
procedures and upon the terms and subject to the conditions set forth in the
Definitive Memorandum. Each of you hereby represents and warrants to the
Company that you are a Qualified Institutional Buyer and an Accredited Investor
(within the meaning of Rule 501(a) of Regulation D under the Act). In
connection therewith, you represent and warrant to and agree with the Company
that the Notes have been and will be offered for sale and will be sold by you
solely to (i) persons reasonably believed by you to be "Qualified Institutional
Buyers" purchasing for their own account or for the account of other Qualified
Institutional Buyers within the meaning of Rule 144A under the Act ("QIBs") and
(ii) a limited number of persons who are "Accredited Investors" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Act that are institutions
(each, an "Accredited Institution"), and who provide to you a letter in the form
of Exhibit A to the Offering Memorandum, that you have not and will not offer
the Notes for sale by means of any general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the
16
Act or in any manner involving a public distribution or offering of the Notes
within the meaning of the Act. You agree that, prior to or simultaneously with
the confirmation of sale by you to any purchaser of any of the Notes purchased
by you from the Company pursuant hereto, you shall furnish to that purchaser a
copy of the Definitive Memorandum (and any amendment thereof or supplement
thereto that the Company shall have furnished to you prior to the date of such
confirmation of sale).
4. AGREEMENTS OF THE COMPANY. The Company agrees with you as
follows:
(a) The Company will advise you promptly (and, if so requested by
you, will confirm such advice in writing) of the occurrence, during the
period referred to in paragraph (d) below, of any event of which the
Company has knowledge that makes any statement of a material fact made in
the Definitive Memorandum untrue or that requires the addition of any
statement of a material fact to, or other material change in, the
Definitive Memorandum in order to make the statements therein, in light of
the circumstances existing when it is delivered to a purchaser of the
Notes, not misleading.
(b) The Company will furnish to you and to those persons whom you
identify to the Company such number of copies of the Definitive
Memorandum, and any amendments of or supplements thereto, as you
reasonably may request.
(c) The Company will not make any amendment of or supplement to
the Offering Memoranda of which you shall not previously have been
consulted or use any such proposed amendment or supplement to which you
shall reasonably and in good faith object.
(d) If, during the period from the date of the Definitive
Memorandum through the Closing Date, and for so long thereafter as in the
opinion of your counsel the Definitive Memorandum is required to be
delivered in connection with resales of the Notes by you, any event shall
occur as a result of which it becomes necessary to amend or supplement the
Definitive Memorandum in order to make the statements therein, in light of
the circumstances existing when the Definitive Memorandum is delivered to
a purchaser, not misleading, or if it becomes necessary to amend or
supplement the
17
Definitive Memorandum to comply with any law, the Company promptly will
prepare an appropriate amendment of or supplement to the Definitive
Memorandum so that the statements in the Definitive Memorandum, as so
amended or supplemented, will not, in light of the circumstances existing
when it is so delivered, be misleading, or so that the Definitive
Memorandum will comply with law, and the Company will furnish to you such
number of copies thereof as you reasonably may request.
(e) The Company will cooperate with you and your counsel in
connection with the registration or qualification of the Notes under the
securities or "Blue Sky" laws of such jurisdictions as you may request,
will continue such qualification in effect for so long as required to
permit the continuance of sales of and dealings in the Notes within such
jurisdictions to complete the resale by you of all of the Notes as
specified in Section 3 hereof, and will file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; PROVIDED, HOWEVER, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file any general consent to service of process in any
jurisdiction in which it is not already so qualified or subject.
(f) For a period of three years following the date hereof and
thereafter for so long as you are making a market in the Notes, the
Company will furnish to you, upon request, a copy of each report mailed by
the Company to holders of the Notes and/or holders of the Company's
capital stock or filed by the Company with the Commission and such other
publicly available information concerning the Company and its subsidiaries
as you reasonably may request.
(g) For so long as and at any time that the Notes are outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under
the Act and the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company, upon request of any holder of the Notes, will
furnish to such holder, and to any prospective purchaser or purchasers of
Notes designated by such holder, information satisfying the requirements
of subsection (d)(4)(i) of Rule 144A under the Act.
18
(h) If you so request, the Company will use its best efforts, and
will cooperate with you, to cause the Notes to be eligible for inclusion
in the Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market of the National Association of Securities Dealers, Inc.
("NASD").
(i) The Company will not, and will not authorize or knowingly
permit any person acting on its behalf to, offer to buy or offer to sell
any of the Notes by means of any form of general solicitation or general
advertising within the meaning of Section 502(c) of Regulation D under the
Act or in any manner involving a public offering or distribution of the
Notes within the meaning of the Act.
(j) The Company shall not take any action or omit to take any
action (and shall cause its subsidiaries not to take any action or omit to
take any action) which taking or omission, as the case may be, would
result in the Company becoming an "investment company" or a company
controlled by an "investment company" within the meaning of, or require
the Company to register as an "investment company" under, the Investment
Company Act.
(k) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay all
costs, expenses and fees incident to (i) the preparation, printing, and
distribution (as applicable) of this Agreement, the Preliminary
Memorandum, the Definitive Memorandum and all amendments thereof and
supplements thereto, (ii) the reproduction and delivery of all other
agreements, instruments and documents printed and delivered in connection
with the offering and sale of the Notes, (iii) the registration or
qualification of the Notes under the securities or "Blue Sky" laws of the
several states (including, in each case, the reasonable fees and
disbursements of your counsel relating to such registration or
qualification and the preparation of a "Blue Sky" Memorandum relating
thereto), (iv) the inclusion of the Notes in the PORTAL market of the
NASD, (v) the engagement of the Trustee and its agents and the reasonable
fees and disbursements of counsel for such Trustee in connection with the
Indenture, (vi) the assignment to the Notes of an investment rating by all
statistical rating agencies, including, without limitation, Standard &
Poor's and Moody's Investors
19
Services, and (vii) the performance by the Company of its other
obligations under this Agreement.
(l) The Company will apply the net proceeds from the sale of the
Notes as set forth under the caption "Use of Proceeds" in the Definitive
Memorandum.
(m) The Company will use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Notes.
(n) The Company will not (and will direct its affiliates not to)
take, directly or indirectly, any action that is designed, or constitutes
or might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Notes.
(o) During the period beginning from the date hereof and continuing
to and including the date which is six months after the Closing Date,
neither the Company nor any Affiliate (as defined in Rule 501(b) under the
Act) thereof shall sell, offer for sale, solicit offers to buy or
otherwise negotiate in respect of the sale of any "security" (as defined
in Section 2(1) of the Act) of the same or a similar class as the Notes,
other than as contemplated by the Registration Rights Agreement.
(p) The Company will use its best efforts to cause the Exchange
Notes to be listed on a national securities exchange (registered as such
under Section 6 of the Exchange Act) as promptly as practicable after
consummation of the Exchange Offer.
5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless you and
each person, if any, who controls you within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, awards, liabilities and judgments ("Losses") arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memoranda or any amendments thereof or
20
supplements thereto (including, without limitation, the financial statements,
accounting and statistical data included therein and all schedules and the
related notes thereto) or by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such Losses arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or omission based
upon the information relating to you furnished by you in writing to the Company
expressly for use therein and used in conformity therewith; PROVIDED,
HOWEVER, that the indemnity obligations arising under this Section 5(a) shall
not inure to your benefit or that of any such controlling person if the person
asserting any such Losses purchased the Notes from you and if a copy of the
Definitive Memorandum was not sent or given by you or on your behalf to such
person at or prior to the written confirmation of the sale of the Notes to such
person, and if the Definitive Memorandum would have cured the defect giving rise
to such Losses.
(b) In case any action or proceeding (including any governmental
investigation or inquiry) shall be brought against you or any person controlling
you based upon the Offering Memoranda or any amendment thereof or supplement
thereto and with respect to which indemnity may be sought against the Company,
you shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel (reasonably
satisfactory to you) and the payment of all fees and expenses of such defense;
PROVIDED THAT your failure (or the failure by any person controlling you) so
to notify the Company shall not relieve the Company of its indemnification
obligations under Sections 5(a) and (b) hereof, except to the extent that the
Company is materially prejudiced or forfeits substantive rights and defenses by
reason of such failure. You or any such controlling person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be the responsibility
of you or of such controlling person, unless (i) the employment of such counsel
has been authorized in writing by the Company, (ii) the Company has failed
promptly to assume the defense and employ counsel (reasonably satisfactory to
you), or (iii) the named parties to any such action (including any impleaded
parties) include both you or such controlling person and the Company, and you or
such controlling person shall have been advised by such counsel that there may
be one or more legal defenses
21
available to you or such controlling person that are different from or
additional to those available to the Company (in all of which cases the Company
shall not have the right to assume the defense of such action on behalf of you
or such controlling person; it being understood, however, that the Company 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 any local
counsel) for you and all such controlling persons, which firm shall be
designated in writing by you and that all such fees and expenses shall be
reimbursed promptly as they are billed). The Company shall not be liable for
any settlement of any such action or proceeding effected without its written
consent (not to unreasonably be withheld) and if settled with its written
consent or if there is a final judgment for the plaintiff, the Company agrees to
indemnify and hold harmless you and each such controlling person from and
against any loss or liability by reason of such settlement or judgment. Without
limiting the generality of the foregoing, no indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
has been threatened to be made a party where indemnity could have been sought
hereunder by such indemnified party; PROVIDED, HOWEVER, that an indemnifying
party may effect such a settlement without the consent of the indemnified party
if such settlement includes an unconditional release of such indemnified party
from all liability for claims that are the subject matter of such proceeding or
the indemnifying party indemnifies the indemnified party in writing for an
amount equal to the maximum liability for all such claims as contemplated above.
(c) You agree, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and each person, if any,
controlling the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all Losses to the same extent
as the foregoing indemnity from the Company to you but only with respect to
information relating to you furnished in writing by you expressly for use in the
Offering Memoranda or any amendment thereof or supplement thereto and used in
conformity therewith. In case any action or proceeding shall be brought against
the Company, any of its directors, any such officer or any such controlling
person based on the Offering Memoranda or any
22
amendment or supplement thereto and in respect of which indemnity may be sought
against you, you shall have the same rights and duties as are given to the
Company by Section 5(b) hereof (except that if the Company shall have assumed
the defense thereof, you shall not be required to do so, and in such case you
may employ separate counsel therein and participate in the defense thereof but
the fees and expenses of such counsel shall be at your expense), and the
Company, its directors, each such officer and each such controlling person shall
have the same rights and duties as are given to you by Section 5(b) hereof.
(d) If the indemnification provided for in this Section 5 is
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any Losses, then each indemnifying party, in lieu of, or in
addition to, indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and you on the other hand from the offering of the Notes
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 and you in connection with the statements or omissions which
resulted in such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and you shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company, and the total discounts and
commissions received by you, bear to the total price of the Notes to investors,
in each case as set forth in the table on the cover page of the Definitive
Memorandum. The relative fault of the Company and you shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or you and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an
23
indemnified party as a result of Losses shall be deemed to include, subject to
the limitations set forth above, 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 5, neither of
you shall be required to contribute any amount in excess of the amount by which
the total price at which the Notes were offered by you to investors exceeds the
amount of any damages that you otherwise were required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Your obligations under this paragraph to
contribute are several in proportion to your respective purchase obligations and
not joint.
6. CONDITIONS OF YOUR OBLIGATIONS. Your obligations to purchase
and pay for the Notes shall be subject to (i) the accuracy of the
representations and warranties of the Company herein contained as of the date
hereof and as of the Closing Date, (ii) the presence in any certificates,
opinions, written statements or letters furnished pursuant to this Section 6 to
you or to your counsel, of any qualification or limitation not previously
approved by you, (iii) the performance by the Company of its obligations
hereunder required to be performed on or prior to the Closing Date, and (iv) the
following additional conditions:
(a) (i) Since the date of the latest balance sheet included in the
Offering Memoranda, there shall not have occurred any Material Adverse
Change, or any development involving a prospective Material Adverse
Change, whether or not arising in the ordinary course of business, or any
change in the capital stock or in the long-term debt of the Company or any
of its subsidiaries from that set forth in or contemplated by the Offering
Memoranda, (ii) neither the Company nor any of its subsidiaries shall have
incurred any liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries, taken as a whole, other than
those reflected in or contemplated by the Offering Memoranda, and (iii) on
the Closing Date, you shall have received a certificate dated the Closing
Date, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, and such other certificates of executive
officers of
24
the Company as you may specify in a memorandum of Closing to be delivered
to the Company prior to the Closing Date confirming the matters set forth
in the introduction to, and this paragraph (a) of, this Section 6.
(b) On the Closing Date, you shall have received the opinion of
King & Spalding, counsel to the Company, dated the Closing Date and
addressed to you, and in form and scope satisfactory to you, substantially
to the effect that:
(i) Each of the Company and its subsidiaries is duly
organized, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and is duly qualified
and is in good standing as a foreign corporation in the
jurisdictions identified in such opinion based on a review by such
counsel of corporate statutes set forth in official statutory
compilations. The Company has all requisite corporate power and
authority to own or lease and operate its properties and to conduct
the business in which it is engaged as described in the Offering
Memoranda.
(ii) As of the Closing Date, the authorized capital stock of
the Company consists of 80,000,000 shares of Common Stock, $.25 par
value. All of the outstanding shares of the Company's capital stock
have been duly authorized and validly issued, are fully paid and
non-assessable (except for assessments that may be imposed by the
laws of governmental authorities of the State of New York with
respect to back wages due to employees) and were not issued in
violation of or subject to any preemptive, subscription or other
similar rights. All of the outstanding shares of capital stock of
each subsidiary of the Company owned directly or indirectly of
record and, to the knowledge of such counsel, beneficially by the
Company (except that the subsidiaries of the Company identified on
Schedule 1(f) hereto may not be wholly owned directly or indirectly
by the Company because of applicable statutory requirements of the
jurisdictions set forth in such schedule) free and clear of all
liens, claims, limitations on voting rights, options, security
interests and other encumbrances except
25
for (i) those in favor of a wholly owned domestic or of a foreign
subsidiary of the Company, (ii) those created in connection with the
acquisition of a wholly owned domestic or a foreign subsidiary of
the Company, the obtaining of first mortgage financing and the
issuance of municipal, industrial development or similar tax exempt
securities by certain subsidiaries of the Company and (iii) those to
be created or permitted pursuant to the New Credit Agreement and the
Credit Documents. To the knowledge of such counsel, there are no
outstanding securities of any subsidiary convertible into or
evidencing the right to purchase or subscribe for any shares of
capital stock of such subsidiary, there are no outstanding or
authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating any
subsidiary to issue any shares of its capital stock or any
securities convertible into or evidencing the right to purchase or
subscribe for any shares of such capital stock, and there are no
agreements with respect to the voting, sale or transfer of any
shares of capital stock of any subsidiary to which such subsidiary
is a party.
(iii) The Indenture has been duly and validly authorized by
the Company and the Guarantors and, when executed and delivered by
the Company and the Guarantors (assuming the due authorization,
execution and delivery thereof by the Trustee), will constitute a
valid and binding agreement of the Company and the Guarantors,
enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and to general principles of equity,
including principles of commercial reasonableness, good faith and
fair dealing (whether enforcement is sought in a proceeding at law
or in equity), and except insofar as the usury waiver therein may be
deemed to be unenforceable. The Notes have been duly and validly
authorized for issuance and, when executed and delivered by the
Company (assuming the due authorization, execution and delivery of
the Indenture by the Trustee and the execution and delivery of
certificates of authentication by one of the Trustee's duly
26
authorized officers), will be duly and validly executed, issued,
authenticated and delivered and will constitute valid and binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (whether enforcement is
sought in a proceeding at law or in equity). The Indenture and the
Notes conform in all material respects to the descriptions thereof
contained in the Offering Memoranda.
(iv) This Agreement, the Registration Rights Agreement and
the New Credit Agreement (and the Credit Documents) have been duly
and validly authorized, executed and delivered by the Company, and
each is a valid and binding agreement of the Company enforceable
against it in accordance with its terms (except for certain
provisions of the New Credit Agreement), subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law
or in equity) and except to the extent that rights to
indemnification and contribution contained herein and therein may be
limited by federal or state securities laws or public policy
relating thereto.
(v) The execution, delivery and performance by the Company
and the Guarantors of this Agreement, the Registration Rights
Agreement, the New Credit Agreement (and the Credit Documents), the
Indenture and the Notes, in each case to the extent a party thereto,
and the consummation of the transactions contemplated hereby and
thereby, including the issuance, sale and delivery of the Notes,
will not (A) conflict with or result in a breach of any of the terms
and provisions of, or constitute a default (or an event which with
notice, lapse of time, or both, would constitute a
27
default) or require consent under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company pursuant to the terms of any agreement,
indenture or other instrument that has been specified to such
counsel in writing by an officer of the Company or of which they
otherwise are aware or (B) violate or conflict with any provision of
the certificate of incorporation or by-laws of the Company (as
amended and/or restated to date) or, to the knowledge of such
counsel, any judgment, decree, order, law, rule or regulation of any
court or any public or governmental authority having jurisdiction
over the Company or any of its subsidiaries or any of their
respective properties or assets.
(vi) Neither the Company nor any of its affiliates is (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of, and is not registered or otherwise
required to be registered under, the Investment Company Act, or (ii)
a "holding company" or an "affiliate" thereof within the meaning of
the Public Utility Act.
(vii) Assuming the accuracy of the representations and
warranties of the Company contained in paragraphs (r), (s) and (t)
of Section 1 of this Agreement and your representations and
warranties contained in Section 3 of this Agreement, assuming
compliance by the Company of its agreements in Section 4(i) of this
Agreement and compliance by each of you with your covenants
contained in Section 3 of this Agreement, and other than with
respect to the transactions contemplated by the Registration Rights
Agreement, the issuance and sale of the Notes to you and the
reoffering, resale and delivery of the Notes by you, in each case in
the manner contemplated in this Agreement and the Offering
Memoranda, are exempt from the registration requirements of the Act
and it is not necessary to qualify the Indenture under the Trust
Indenture Act.
(viii) The statements in the Offering Memoranda under the
caption "Description of the Notes", "Summary of New Credit
Agreement", and
28
"Exchange Offer; Registration Rights", insofar as they describe the
provisions of documents and instruments therein described,
constitute fair summaries thereof, accurate in all material
respects. The statements in the Offering Memoranda under the
captions "Notice to Investors", "Business - Sources of Revenue;
Regulation and Other Factors" and "Certain Federal Income Tax
Consequences of the Exchange Offer" insofar as they purport to
describe federal laws of the United States fairly present in all
material respects the information set forth therein.
(ix) No consent, approval, waiver, license or other
authorization by or filing with any public or governmental authority
of the federal government of the United States of America, or the
States of Delaware, Georgia, or New York is required for the issue
and sale of the Notes or the consummation by the Company and the
Guarantors of the transactions contemplated by this Agreement, the
Registration Rights Agreement, the New Credit Agreement (and the
Credit Documents), or the Indenture, except for such as may be
required by state securities or "Blue Sky" laws and by federal
securities laws in connection with performance of the Company's
obligations under the Registration Rights Agreement, and except for
those consents, approvals, waivers, licenses or authorizations which
heretofore have been obtained or made.
(x) To such counsel's knowledge, other than as disclosed in
the Offering Memoranda, there is no litigation or governmental
proceeding pending or overtly threatened against the Company or any
of its subsidiaries which if determined adversely to the Company or
any of its subsidiaries would, individually or in the aggregate,
have a material adverse effect on the business, properties,
condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent certified public accountants of the
29
Company and your representatives and counsel at which conferences the
contents of the Offering Memoranda and any amendment thereof or supplement
thereto and related matters were discussed and, although such counsel have
not undertaken to investigate or verify independently, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memoranda or any amendment thereof or
supplement thereto (except as to matters referred to in the last sentence
of clause (iii) and in clause (viii) above), no facts have come to the
attention of such counsel that would lead them to believe that the
Definitive Memorandum (or any amendment thereof or supplement thereto made
prior to the Closing Date), as of its date or as of the Closing Date,
contained an untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that no view need be expressed
by such counsel with respect to the financial statements and other
financial, accounting and related statistical data included in the
Definitive Memorandum or any amendment thereof or supplement thereto).
In furnishing the foregoing opinion, such counsel may rely (A) as to
matters involving the application of laws other than the federal laws of
the United States, the laws of the State of Georgia, the laws of the State
of New York, and the general corporation laws of the State of Delaware (to
the extent such counsel deems proper and to the extent specified in such
opinion, if at all), upon an opinion or opinions (in form and scope
satisfactory to your counsel) of other counsel qualified to opine with
respect to the applicable laws or upon a review of corporate statutes set
forth in official statutory compilations; and (B) as to matters of fact,
to the extent such counsel deems proper and to the extent specified in
such opinion, on certificates of responsible officers and other
representatives of the Company and the Guarantors, certificates of public
officials, and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company and its
subsidiaries, provided that copies of any such statements or certificates
shall be delivered to your counsel. The opinion of counsel for the
Company shall state that the opinion of any such other counsel is in
30
form and scope satisfactory to such counsel and, in such counsel's
opinion, you and your counsel are justified in relying thereon.
(c) On the Closing Date, you shall have received from your
counsel, Weil, Gotshal & Manges, an opinion, dated the Closing Date and
addressed to you, with respect to matters as you reasonably may require,
and the Company shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to opine upon
such matters. In furnishing the foregoing opinion, such counsel may rely
on opinions of other counsel and certificates in the same respect and to
the same extent as counsel in subsection (b) above.
(d) Concurrently with the execution and delivery of this
Agreement, and on the Closing Date you shall have received from Arthur
Andersen & Co., a letter addressed to you, dated the date of its delivery,
in form and substance satisfactory to you, to the effect set forth in
Annex I hereto.
(e) As of the Closing Date, the Company shall have performed and
complied in all material respects with each of its agreements herein
contained and required to be performed or complied with by the Company at
or prior to the Closing Date.
(f) Prior to or concurrently with the delivery of the Notes to you
(i) the Company and each lender that is party to the New Credit Agreement
(and the Credit Documents), shall have executed and delivered the
agreements governing the same (except Credit Documents not required to be
executed in connection with the Initial Loans), all conditions to any
borrowing by the Company thereunder on the Closing Date as contemplated by
the Definitive Memorandum shall have been satisfied or waived and the
lenders shall have advanced the funds contemplated to be borrowed by the
Company under the New Credit Agreement, on the Closing Date as described
in the Offering Memoranda and (ii) all conditions precedent requisite for
the defeasance and subsequent redemption (except the furnishing of notice
of redemption to holders which shall be mailed to holders of the 7 1/2%
Debentures on May 3, 1994) by the Company of its 7-1/2% Debentures and the
retirement of certain senior indebtedness as contemplated by the
Definitive Memorandum shall have been satisfied.
31
(g) On or prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as
you reasonably may request in a memorandum of Closing furnished to the
Company prior to the Closing Date.
(h) Concurrently with the execution and delivery of this Agreement
and on or prior to the Closing Date, you shall have received from KPMG
Peat, Marwick, a "comfort letter" addressed to you, with respect to the
Target Hospitals, in form and substance reasonably satisfactory to you.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, all of your obligations
hereunder may be canceled by you at, or at any time prior to, the Closing Date.
7. EFFECTIVE DATE OF AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective upon its execution.
(b) This Agreement may be terminated at any time prior to the
Closing Date by you upon notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is provided in
the Definitive Memorandum, any adverse change or development involving a
prospective adverse change in, or affecting particularly the condition
(financial or otherwise) of the Company, any of its subsidiaries, or the
earnings, affairs, or business prospects of the Company or any of its
subsidiaries, whether or not arising in the ordinary course of business, which
would, in your reasonable judgment, make it impracticable to market the Notes on
the terms and in the manner specified in the Offering Memoranda, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions, if the effect of such
outbreak, escalation, calamity, crisis or change on the financial markets of the
United States or elsewhere would, in your reasonable judgment, make it
impracticable to market the Notes on the terms and in the manner specified in
the Offering Memoranda, (iii) any suspension of trading in securities on the New
York Stock Exchange, Inc., the American Stock Exchange or the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
the imposition of any limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on any such
32
exchange or NASDAQ, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your reasonable judgment
materially and adversely affects, or will materially and adversely affect, the
business or operations of the Company and its subsidiaries, taken as a whole,
(v) the declaration of a banking moratorium by either federal or New York State
authorities, or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
reasonable judgment could have a material adverse effect on the financial
markets in the United States.
8. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement
shall be given by telex or facsimile transmission or by notice in writing hand
delivered or by certified mail, postage prepaid, return receipt requested. All
such notices shall be sent to the telex number, facsimile transmission number or
address (as the case may be) as follows: (i) if to the Company, to Charter
Medical Corporation, 577 Mulberry Street, Macon, Georgia 31298, Attention:
Chief Financial Officer (facsimile transmission no. (912) 751-2832), with a copy
to King & Spalding, 191 Peachtree Street, Atlanta, Georgia 30303-1763,
Attention: Philip A. Theodore, Esq. (facsimile transmission no. (404) 572-5145)
and (ii) if to you, to Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attention: Corporate Finance Department (facsimile transmission no.
(212) 272-3092), with copies to Weil, Gotshal & Manges, 767 Fifth Avenue, New
York, New York 10153, Attention: Clifford E. Neimeth, Esq. (facsimile
transmission no. (212) 310-8007); and to BT Securities Corporation, 130 Liberty
Street, 30th Floor, New York, New York 10006, Attention: Corporate Finance
Department (facsimile transmission no. (212) 250-7218).
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its officers
and directors and each of you set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive delivery
of and payment for the Notes, regardless of (i) any investigation, or statement
as to the results thereof, made by or on behalf of you or by or on behalf of the
officers or directors of the Company or any controlling person of the
33
Company, (ii) acceptance of the Notes and payment for them hereunder, and (iii)
termination of this Agreement.
(c) If this Agreement shall be terminated by you because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company shall reimburse you
for all out-of-pocket expenses (including the fees and disbursements of your
counsel) reasonably incurred by you.
(d) Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, you, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement and
the term "successors and assigns" shall not include a purchaser of any of the
Notes from you merely because of such purchase. Notwithstanding the foregoing,
it is expressly understood and agreed that each purchaser of the Notes from you
is intended to be a beneficiary of the Company's covenants contained in the
Registration Rights Agreement to the same extent as if the Notes were sold and
those covenants were made directly to such purchaser by the Company, and each
such purchaser shall have the right to take action against the Company to
enforce, and obtain monetary recovery for damages resulting from any breach of,
those covenants.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to instruments made
and performed wholly in such state and without regard to the choice of law
provisions of such state.
(f) This Agreement may be signed in counterparts, all of which
taken together shall constitute but one and the same original instrument.
34
Please confirm that the foregoing correctly sets forth the mutual
agreement and understanding between the Company and you as to the subject matter
herein set forth.
Very truly yours,
CHARTER MEDICAL CORPORATION
By: /s/ Lawrence W. Drinkard
-----------------------------------
Lawrence W. Drinkard
Executive Vice President
Accepted in New York, New York
April 22, 1994
BEAR, STEARNS & CO. INC.
By: /s/ Curtis S. Lane
-------------------------------------
Name: Curtis S. Lane
Title: Senior Managing Director
BT SECURITIES CORPORATION
By: /s/ Edmund H. Driggs
--------------------------------------
Name: Edmund H. Driggs
Title: Managing Director
35
SCHEDULE 1 (d) TO PURCHASE AGREEMENT
1. Indenture, dated as of July 21, 1992, among Charter Medical Corporation, as
Issuer of 7 1/2% Senior Subordinated Debentures due 2003, the parties named
therein, as Guarantors, and Society National Bank, as Trustee.
2. Amended and Restated Credit Agreement, dated July 21, 1992, among Charter
Medical Corporation and certain financial institutions.
3. Amended and Restated Credit Agreement, dated July 21, 1992, among certain
subsidiaries of Charter Medical Corporation and certain financial
institutions.
4. Mortgage, Deed of Trust, Trust Deed, Assignment, Security Agreement and
Fixture Filing, dated as of August 30, 1989, by Charter Hospital of
Sacramento, Inc. (subsequently Charter Behavioral Health System of Northern
California, Inc.) to Chicago Title Insurance Company, the trustee
thereunder to the extent that the Mortgage operates as a deed of trust or
trust deed to public trustee; and for the benefit of Citibank, N.A., as
agent (in such capacity, the "Agent") for the "Lenders" party to the Credit
Agreement (as such term is defined in the Mortgage) to the extent the
Mortgage operates as a mortgage and the beneficiary thereunder to the
extent the Mortgage operates as a deed of trust, trust deed or deed of
trust to public trustee (collectively, the "Mortgagee"); recorded in Series
No. 48463, filed in Placer County, California on August 31, 1989.
5. Mortgage, Deed of Trust, Trust Deed, Assignment, Security Agreement and
Fixture Filing, dated as of August 30, 1989, by Charter Hospital of San
Diego, Inc. (subsequently Charter San Diego Behavioral Health System, Inc.)
to the Mortgagee; recorded [as file No. 89-47153], filed in San Diego
County, California on August 31, 1989.
6. Mortgage, Deed of Trust, Trust Deed, Assignment, Security Agreement and
Fixture Filing, dated as of August 30, 1989, by Charter Medical-Vigo
County, Inc. (subsequently Charter Terre Haute Behavioral Health System,
Inc.) to the Mortgagee; recorded in Book X-19, page 360, filed in the
Recorder's Office of Vigo County, Indiana on August 31, 1989.
SCHEDULE 1(f) TO PURCHASE AGREEMENT
COUNTRY OF
NAME OF FOREIGN SUBSIDIARY INCORPORATION
-------------------------- -------------
Charter Medical (Cayman Islands) Ltd. Cayman Islands, BWI
Golden Isle Assurance Company Ltd. Bermuda
Plymouth Insurance Company, Ltd. Bermuda
Societe Anonyme de la Metairie Switzerland
ANNEX I
Pursuant to Section 6(d) of the Purchase Agreement, Arthur Andersen
& Co. shall furnish letters to the Representatives (as defined below) to the
effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of Rule 101 of the published
Rules of Conduct of the American Institute of Certified Public Accountants;
(ii) In their opinion, the financial statements (including, in the
footnotes thereto, the combined Subsidiary Guarantors and the combined
non-guarantor affiliates of the Company (collectively, the "SAB 53
Information")) and any supplementary financial information and schedules which
have been audited by them and included in the Offering Memoranda comply as to
form in all material respects with generally accepted accounting principles;
and, to the extent applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the unaudited consolidated interim financial statements of the Company
included in the Offering Memoranda;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Offering Memoranda agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Offering Memoranda, inquiries of officials of the Company and its
subsidiaries responsible for financial, internal audit and control and
accounting matters, and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets, consolidated statements of cash flows and consolidated
statement of stockholder equity included in the Offering Memoranda are not
in conformity with generally accepted accounting principles applied on a
basis consistent in all material respects with the basis for the audited
consolidated statements of income, consolidated balance sheets,
consolidated statements of cash flows and consolidated statements of
changes in equity included in the Offering Memoranda;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Memoranda do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited data
and items were not determined on a basis consistent in all material
respects with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Memoranda;
(C) the unaudited financial statements which were not included in
the Offering Memoranda but from which were derived any unaudited condensed
financial statements of the type referred to in clause (A) above and any
unaudited income statement data and balance sheet items included in the
Offering Memoranda and of the type referred to in clause (B) above were
not determined on a basis consistent in all material respects with the
basis for the audited consolidated financial statements included in the
Offering Memoranda;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Memoranda are not in conformity with
generally accepted accounting principles as described in the requirements
of Rule 11-02 of Regulation S-X or the pro forma adjustments with regard
to the Refinancing adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date disclosed in such letter, there have
been any changes in the consolidated capitalization (other than issuances
of capital stock upon the exercise of stock options and stock appreciation
rights, upon earn-outs of performance shares and upon conversions of
convertible securities,
in each case which were outstanding on the date of the latest financial
statements included in the Offering Memoranda) or any increase in the
consolidated long-term indebtedness of the Company and its subsidiaries,
or any decreases in consolidated net current assets or net assets or other
items specified by the Representatives or any increases in any items
specified by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Offering Memoranda,
except in each case for changes, increases or decreases which the Offering
Memoranda discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial statements
included in the Offering Memoranda to the specified date referred to in
clause (E) above there were any decreases in consolidated net revenues or
operating income or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except in each
case for decreases or increases which the Offering Memoranda discloses
have occurred or may occur or which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included in
the Offering Memoranda and the aforementioned limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (iii) and
(iv) above, they have carried out certain customary specified procedures, not
constituting an audit in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information specified
by the Representatives, which are derived from the general accounting books and
records of the Company and its subsidiaries, which appear in the Offering
Memoranda, or in exhibits and schedules thereto specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
EXHIBIT A
$375,000,000
CHARTER MEDICAL CORPORATION
11 1/4% Senior Subordinated Notes due 2004
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
April 22, 1994
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
BT Securities Corporation
130 Liberty Street
30th Floor
New York, New York 10006
Dear Sirs:
Charter Medical Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to Bear, Stearns & Co. Inc. and BT Securities
Corporation (the "Initial Purchasers"), upon the terms and subject to the
conditions set forth in the purchase agreement of even date and executed
concurrently herewith (the "Purchase Agreement"), $375,000,000 aggregate
principal amount of its 11 1/4% Senior Subordinated Notes due 2004 (the
"Notes"). The Notes will be issued pursuant to an indenture (the "Indenture") to
be dated as of the Closing Date, between the Company, the guarantors party
thereto (the "Guarantors") and Marine Midland Bank, as trustee (the "Trustee"),
in each case substantially in the form previously furnished to you. All
capitalized terms used and not defined herein have the respective meanings
ascribed thereto in the Purchase Agreement. As an inducement to you to enter
into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Company agrees with you, for the benefit of the
holders of the Notes (including you as the Initial Purchasers thereof), as
follows:
A-1
1. REGISTERED EXCHANGE OFFER.
(a) The Company shall prepare and, as soon as practicable after the
Closing Date, file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Exchange Registration Statement")
on an appropriate form under the Securities Act of 1933, as amended (the "Act"),
with respect to a proposed offer (the "Registered Exchange Offer") to the
holders of the Notes to issue and deliver to such holders, in exchange for the
Notes, a corresponding principal amount of senior subordinated debt securities
of the Company identical in all material respects (except with respect to
legends which restrict the transfer thereof) to the Notes (the "Exchange
Notes"), shall use its best efforts to cause the Exchange Registration Statement
to become effective under the Act no later than 90 days after the Closing Date
and, upon the effectiveness of such registration statement, shall commence the
Registered Exchange Offer and shall cause the same to remain open for acceptance
for not less than 20 business days (but in no event longer than 30 days after
the date the Exchange Registration Statement is declared effective subject to
any extensions required by applicable law), and to be conducted in accordance
with such procedures, as may be required by applicable provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including,
without limitation, the requirements of Rule 13e-4 (other than the filing
requirements of such Rule) and Regulation 14E under the Exchange Act; it being
the objective of such Registered Exchange Offer to enable each holder of Notes
electing to exchange its Notes for Exchange Notes (assuming that such holder is
not an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, acquires the Exchange Notes in the ordinary course of such
holder's business and has no arrangements with any person to participate in a
public distribution of the Exchange Notes within the meaning of the Act) to
trade in such Exchange Notes from and after their receipt without any
limitations or restrictions on transfer under the Act or the Exchange Act and
without material restrictions on transfer under the securities and "Blue Sky"
laws of a substantial proportion of the several states of the United States.
The Initial Purchasers acknowledge and agree that the foregoing statement of the
objective of the Registered Exchange Offer is based upon existing
interpretations of the staff of the Commission's Division of Corporation Finance
(the "Staff"), which interpretations are subject to change without notice.
A-2
(b) Subject to interpretations of the Staff then applicable, the
Company shall indicate in a "Plan of Distribution" section contained in the
final prospectus filed pursuant to Rule 424 under the Act and constituting a
part of the Exchange Registration Statement that any broker or dealer registered
as such under Section 15 of the Exchange Act (each a "Broker-Dealer") who holds
Notes that were acquired for its own account as a result of market-making or
other trading activities (other than Notes acquired directly from the Company),
may exchange such Notes for Exchange Notes pursuant to the Registered Exchange
Offer; PROVIDED, HOWEVER, that such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Act and, therefore, must deliver a
prospectus satisfying the requirements of the Act in connection with any resales
of the Exchange Notes received by it in the Registered Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the final prospectus contained in the Exchange Registration
Statement. Such "Plan of Distribution" section also shall state that the
delivery by a Broker-Dealer of the final prospectus relating to the Registered
Exchange Offer in connection with resales of Exchange Notes shall not be deemed
to be an admission by such Broker-Dealer that it is an "underwriter" within the
meaning of the Act, and shall contain all other information with respect to
resales of the Exchange Notes by Broker-Dealers that the Commission may require
in connection therewith, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the principal amount of Exchange Notes held by any
such Broker-Dealer, except to the extent required by the Staff as a result of a
change in its interpretations with respect thereto after the date of this
Agreement.
(c) In connection with the Registered Exchange Offer and the offer
and sale of Exchange Notes by Broker-Dealers as contemplated in Section 1(b)
above, the Company shall take all such other and further action, including
making appropriate filings under state securities and "Blue Sky" laws and
delivering such number of copies of the final prospectus relating to the
Registered Exchange Offer as any Broker-Dealer proposing to deliver the same in
connection with its resales of Exchange Notes reasonably may request, as may be
necessary to realize the foregoing objectives. The Company shall cause the
Exchange Registration Statement to remain current and continuously effective for
a period of 180 days from the date on which such registration statement is first
declared effective, and shall supplement or amend from time to time the
prospectus contained therein to the extent necessary to permit such prospectus
(as so
A-3
supplemented or amended) to be delivered by Broker-Dealers in connection with
their resales of Exchange Notes as aforesaid.
2. SHELF REGISTRATION.
In the event that applicable interpretations of the Staff do not permit
the Company to effect the Registered Exchange Offer or if for any other reason
the Registered Exchange Offer is not consummated within 120 days after the
Closing Date, or if the Initial Purchasers so request with respect to Notes not
eligible to be exchanged for Exchange Notes in the Registered Exchange Offer or
if any holder of Notes determines that it is not eligible to participate in the
Registered Exchange Offer or does not receive freely tradeable Exchange Notes in
the Registered Exchange Offer and so requests, the following provisions shall
apply:
(a) The Company shall promptly file with the Commission and
thereafter shall use its best efforts to cause to be declared effective a
registration statement on an appropriate form under the Act relating to the
offer and sale of the Notes by the holders thereof from time to time in
accordance with the methods of distribution set forth in such registration
statement and Rule 415 under the Act (hereafter, a "Subordinated Notes Shelf
Registration Statement").
(b) The Company agrees to use its best efforts to keep the
Subordinated Notes Shelf Registration Statement current and continuously
effective in order to permit the prospectus included therein to be usable by the
holders of the Notes for a period of three years from the date such registration
statement is declared effective by the Commission or such shorter period that
shall terminate when all the Notes covered by the Subordinated Notes Shelf
Registration Statement have been sold pursuant thereto; PROVIDED that the
Company shall be deemed not to have used its best efforts to keep the
Subordinated Notes Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in holders of the
Notes covered thereby not being able to offer and sell such Notes during that
period, unless such action is required by applicable law, and PROVIDED,
FURTHER, that the foregoing shall not apply to actions taken by the Company in
good faith and for valid business reasons (not including avoidance of the
Company's obligations hereunder), including, without limitation, the acquisition
or divestiture of a material portion of its assets, so long as the Company
promptly thereafter complies with the
A-4
requirements of Section 3(i) hereof, if applicable. Any such period during
which the Company fails to keep the Subordinated Notes Shelf Registration
Statement effective and usable for offers and sales of Notes is hereafter
referred to as a "Suspension Period." A Suspension Period shall commence on and
include the date on which the Company provides notice that the Subordinated
Notes Shelf Registration Statement is no longer effective or that the prospectus
included therein is no longer usable for offers and sales of Notes and shall end
on the date when each seller of Notes covered by the Subordinated Notes Shelf
Registration Statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 3(i) hereof or is advised in writing by the
Company that use of the prospectus may be resumed. If one or more Suspension
Periods occur, the three-year time period referenced above shall be extended by
a period which is not less than the aggregate number of days included in all
Suspension Periods.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Subordinated Notes Shelf Registration
Statement and the related prospectus and any amendment or supplement thereto, as
of the effective date of such registration statement, amendment or supplement,
(i) to comply in all material respects with the applicable requirements of the
Act and the rules and regulations of the Commission promulgated thereunder and
(ii) not to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
3. REGISTRATION PROCEDURES. In connection with any Subordinated
Notes Shelf Registration Statement to be filed pursuant to Section 2 hereof,
and, to the extent applicable, any Exchange Offer Registration Statement
pursuant to Section 1 hereof, the following provisions shall apply:
(a) The Company shall furnish to you, prior to the filing thereof
with the Commission, a copy of the applicable registration statement and each
amendment thereof and each supplement, if any, to the prospectus included
therein and shall use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as you reasonably may propose.
(b) The Company shall advise you and the holders of the Notes or
the Exchange Notes, and, if requested by you or any such holder, confirm such
advice in writing:
A-5
(i) when the registration statement and any amendment thereto
has been filed with the Commission and when the registration
statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus included
therein or for additional information (including schedules and
exhibits);
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes or the
Exchange Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the occurrence of any event that requires the making of
any changes in the registration statement or the prospectus
necessary in order to make the statements contained therein not
misleading (which advice shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have
been made).
(c) The Company shall use its best efforts to obtain the withdrawal
of any order suspending the effectiveness of the registration statement at the
earliest possible time.
(d) The Company shall furnish to each holder of the Notes or the
Exchange Notes included within the coverage of the Exchange Offer Registration
Statement or the Subordinated Notes Shelf Registration Statement, as the case
may be, without charge, at least one copy of the applicable registration
statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the holder so requests in writing, all
exhibits (including those incorporated by reference).
(e) The Company shall deliver to each holder of Notes or Exchange
Notes included within the coverage of the
A-6
Exchange Offer Registration Statement or the Subordinated Notes Shelf
Registration Statement, as the case may be, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the
registration statement and any amendment or supplement thereto as such persons
reasonably may request; the Company consents to the use of the prospectus or any
amendment or supplement thereto by each of the selling holders of the Notes or
the Exchange Notes in connection with the offering and sale of the Notes or the
Exchange Notes covered by the prospectus or any amendment or supplement thereto.
(f) Prior to any public distribution of the Notes or the Exchange
Notes pursuant to the Exchange Offer Registration Statement or the Subordinated
Notes Shelf Registration Statement, as the case may be, the Company shall
register or qualify or cooperate with the holders of the Notes or the Exchange
Notes included therein and their respective counsel in connection with the
registration or qualification of such Notes or Exchange Notes for offer and sale
under the securities or "Blue Sky" laws of such jurisdictions as any seller
reasonably requests in writing and shall do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of the
Notes or the Exchange Notes covered by the Registered Exchange Offer or the
Subordinated Notes Shelf Registration Statement, as the case may be; PROVIDED
that the Company shall not be required to qualify generally to conduct business
in any jurisdiction where it is not then so qualified or to post any bond or to
take any action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject.
(g) The Company shall make available at reasonable times for
inspection by (i) each of the selling holders of the Notes or the Exchange Notes
included within the coverage of the Registered Exchange Offer or the
Subordinated Notes Shelf Registration Statement, as the case may be, (ii) any
underwriter participating in any distribution pursuant to the Registered
Exchange Offer or the Subordinated Notes Shelf Registration Statement, as the
case may be, and (iii) any attorney or accountant retained by such holder or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and shall cause the Company's officers, directors and
employees to supply all information reasonably requested by any such holder,
underwriter, attorney or accountant in connection with the Registered Exchange
Offer or the Subordinated Notes Shelf Registration Statement, as the case
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may be, subsequent to the filing thereof and prior to its effectiveness.
(h) The Company shall cooperate with the holders of the Notes or
the Exchange Notes to facilitate the timely preparation and delivery of
certificates evidencing the Notes or the Exchange Notes free of any restrictive
legends thereon and in such denominations and registered in such names as the
holders may request prior to sales of the Notes or the Exchange Notes pursuant
to the Exchange Offer Registration Statement or the Subordinated Notes Shelf
Registration Statement, as the case may be.
(i) Upon the occurrence of any event contemplated by paragraph
3(b)(v) above, the Company promptly shall prepare a post-effective amendment to
the applicable registration statement or a supplement to the related prospectus
and/or file any other required document so that, as thereafter delivered to
purchasers of the Notes or the Exchange Notes, the prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading.
(j) Not later than the effective date of the applicable
registration statement, the Company shall have obtained and shall communicate to
you a CUSIP number for the Notes or the Exchange Notes, as the case may be, and
provide the Trustee with printed certificates for the Notes or Exchange Notes,
as the case may be, in a form eligible for deposit with CEDE & Co. or an
otherwise eligible securities custodian, and trading through The Depositary
Trust Company book-entry transfer and delivery system.
(k) The Company shall use its best efforts to comply with all
applicable rules and regulations of the Commission and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Act, no later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter next following the effective
date of each of the Exchange Registration Statement or the Subordinated Notes
Shelf Registration Statement, which statements shall cover such 12-month period.
The Company may, at its option, satisfy such requirement by complying with Rule
158 under the Act.
(l) The Company shall cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended.
A-8
(m) The Company may require each holder of Notes to be sold
pursuant to the Subordinated Notes Shelf Registration Statement to furnish to
the Company such information regarding the holder and the intended method of
distribution by such holder of such Notes as the Company may from time to time
reasonably require for inclusion in such registration statement. The Company
may also require each such holder to provide to the Company an undertaking
confirming the holder's obligations to the Company pursuant to this Section
3(m), Section 3(n), Section 3(o) and Section 5(b) hereof.
(n) In the case of a Shelf Registration Statement, each holder
agrees that, upon receipt of any notice from the Company of the occurrence of
any event of the kind described in Section 3(b)(v) hereof, such holder shall
promptly discontinue any resale of the Notes pursuant to the Shelf Registration
Statement until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Sections 3(d) and 3(e) hereof. If the
Company shall give any such notice to suspend any resale of Notes pursuant to
the Shelf Registration Statement, the Company shall extend the period during
which the Shelf Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date when the holder
shall have received copies of the supplemented or amended prospectus necessary
to resume such dispositions.
(o) In case of an Exchange Offer Registration Statement, each
holder agrees that, prior to its exchange of Notes for Exchange Notes, it shall
make certain representations to the Company, including (i) any Exchange Notes to
be received by it will be acquired in the ordinary course of its business, (ii)
it has no arrangement with any person to participate in a public distribution
(within the meaning of the Act) of the Exchange Notes, and (iii) it is not an
"affiliate", as defined in Rule 405 of the Act, of the Company, or if it is such
an affiliate, that it shall comply with the registration and prospectus delivery
requirements of the Act to the extent applicable to it. In addition, each
holder who is not a Broker-Dealer shall represent that it is not engaged in, and
does not intend to engage in, a public distribution of the Exchange Notes.
4. REGISTRATION EXPENSES. The Company shall bear all expenses
incurred in connection with the performance of its obligations under Sections 1
through 3 hereof and, in the event of a Subordinated Notes Shelf Registration
A-9
Statement, shall bear or reimburse the holders of the Notes for the reasonable
fees and disbursements of one firm of counsel designated by the holders of a
majority in principal amount of the Notes (outstanding within the meaning of the
Indenture) to act as counsel for all holders of the Notes in connection
therewith.
5. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of a
Subordinated Notes Shelf Registration Statement, the Company agrees to indemnify
and hold harmless each holder of Notes and in the case of the Registered
Exchange Offer, the Company agrees to indemnify and hold harmless each
Broker-Dealer who holds Exchange Notes acquired for its own account pursuant to
the Exchange Offer, and, in each such case, agrees to further indemnify and hold
harmless such holder's or Broker-Dealer's officers, directors, employees and
agents and each person who controls such holder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act (each such person being sometimes
hereafter referred to as an "Indemnified Holder") from and against any and all
losses, claims, damages, liabilities, awards and judgments (collectively,
"Losses") arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus or in any amendment thereof or supplement thereto or in any
preliminary prospectus relating to the Subordinated Notes Shelf Registration
Statement, the Registered Exchange Offer or the delivery by Broker-Dealers who
are required to do so of the final prospectus contained in the Exchange
Registration Statement in connection with their resales of the Exchange Notes,
as the case may be, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such Losses are caused
by any such untrue statement or omission based upon information relating to such
holder furnished in writing to the Company by such holder expressly for use
therein and used in conformity therewith; PROVIDED, HOWEVER, that the
indemnity obligations of the Company arising under this Section 5(a) with
respect to the Subordinated Notes Shelf Registration Statement and Registered
Exchange Offer, shall not inure to your benefit or that of any such controlling
person if the person asserting any such Losses purchased the Notes or the
Exchange Notes from you and if a copy of the final prospectus contained in the
Subordinated Notes Shelf Registration Statement or Exchange Offer Registration
A-10
Statement, as the case may be, was not sent or given by you or on your behalf to
such person at or prior to the written confirmation of the sale of the Notes or
the Exchange Notes to such person, and if such final prospectus would have cured
the defect giving rise to such Losses. This indemnity is and will be in
addition to any liability which the Company otherwise may have. The Company
also will indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each person who controls such persons (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the holders of
the Notes or the Exchange Notes, as the case may be, if so requested of the
Company.
In case any action shall be brought or asserted against an
Indemnified Holder in respect of which indemnity may be sought from the Company,
such Indemnified Holder shall promptly notify the Company in writing, and the
Company shall assume the defense thereof, including the employment of counsel
(reasonably satisfactory to such Indemnified Holder) and the payment of all fees
and expenses of such defense; PROVIDED, HOWEVER, that the failure to so
notify the Company shall not relieve the Company of its indemnification
obligations pursuant to this Section 5 except to the extent the Company is
materially prejudiced or forfeits substantive rights and defenses by reason of
such failure. Such Indemnified Holder shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Holder
unless (a) the employment of such counsel has been authorized in writing by the
Company or (b) the Company has failed promptly to assume the defense and to
employ counsel (reasonably satisfactory to such Indemnified Holder) or (c) the
named parties to any such action (including any impleaded parties) include both
such Indemnified Holder and the Company, and such Indemnified Holder shall have
been advised by such counsel that there may be one or more legal defenses
available to such Indemnified Holder which are different from or additional to
those available to the Company (in all of which cases the Company shall not have
the right to assume the defense of such action on behalf of such Indemnified
Holder; it being understood, however, that the Company 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
A-11
of attorneys (in addition to any local counsel) for such Indemnified Holder and
any other Indemnified Holders, which firm shall be designated in writing by such
Indemnified Holders and that all such fees and expenses shall be reimbursed as
they are billed). The Company shall not be liable for any settlement of any
such action effected without its written consent (not to be unreasonably
withheld) and if settled with its written consent, the Company agrees to
indemnify and hold harmless such Indemnified Holders from and against any loss
or liability by reason of such settlement. Without limiting the generality of
the foregoing, the Company shall not, without the prior written consent of the
Indemnified Holder, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Holder is a party where indemnity
could have been sought hereunder by such Indemnified Holder; PROVIDED,
HOWEVER, that the Company may effect such a settlement without the consent of
any Indemnified Holder if such settlement includes an unconditional release of
such Indemnified Holder from all liability for claims that are the subject
matter of such proceeding or the Company indemnifies the Indemnified Holder in
writing for an amount equal to the maximum liability for all such claims as
contemplated above.
(b) INDEMNIFICATION BY HOLDERS. In the event of a Subordinated
Notes Shelf Registration Statement, each holder of Notes agrees to indemnify and
hold harmless the Company, its directors and officers, employees and agents and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all Losses to the same extent as the foregoing indemnity from the Company to
such holder, but only with respect to information relating to such holder or the
plan of distribution furnished in writing by such holder expressly for use in
any registration statement or prospectus or any amendment or supplement thereto
or any preliminary prospectus relating to the Subordinated Notes Shelf
Registration Statement; PROVIDED, HOWEVER, that no such holder shall be
liable for any indemnity claims hereunder in excess of the amount of net
proceeds received by such holder from the sale of Notes pursuant to the
Subordinated Notes Shelf Registration Statement. In case any action shall be
brought against the Company or its directors, officers, employees or agents or
any such controlling person, in respect of which indemnity may be sought against
a holder of Notes, such holder shall have the rights and duties given to the
Company, and the Company or its directors, officers, employees or agents or such
controlling person shall have the same rights and
A-12
duties given to each holder by Section 5(a) hereof. The Company shall be
entitled to receive indemnification from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such persons specifically for inclusion in any
prospectus or registration statement or any amendment or supplement thereto or
any preliminary prospectus.
(c) CONTRIBUTION. If the indemnification provided for in this
Section 5 is unavailable or otherwise insufficient to hold harmless an
indemnified party under Section 5(a) or Section 5(b) hereof (other than by
reason of exceptions provided in those Sections) in respect of any Losses, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand, and the
Indemnified Holder on the other hand 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 and the Indemnified Holder in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The relative fault of the
Company and of the Indemnified Holder shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Indemnified Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and you, on behalf of the holders of the Notes and the
Exchange Notes, agree that it would not be just and equitable if contribution
pursuant to this Section 5(c) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by a party as a result of the Losses shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 5(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. No person
guilty of fraudulent misrepresentation (within the meaning
A-13
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
6. ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES; REMEDIES. In
the event that (i) the Exchange Registration Statement is not filed with the
Commission on or prior to June 30, 1994, or (ii) the Registered Exchange Offer
is not consummated pursuant to its terms or the Subordinated Notes Shelf
Registration Statement is not declared effective on or prior to August 31, 1994,
the interest rate borne by the Notes shall be increased by 50 basis points per
annum following such June 30, 1994 date in the case of clause (i) above, or such
August 31, 1994 date in the case of clause (ii) above. Such interest rate shall
increase by an additional 25 basis points per annum at the beginning of each
subsequent 30-day period in the case of clause (i) above (commencing with the
period beginning on July 1, 1994), or 60-day period in the case of clause (ii)
above (commencing with the period beginning on September 1, 1994), up to a
maximum aggregate increase of 150 basis points per annum. Upon (x) the filing
of the Exchange Offer Registration Statement in the case of clause (i) above,
or (y) the consummation of the Registered Exchange Offer or the effectiveness of
the Subordinated Notes Shelf Registration Statement in the case of clause (ii)
above, the interest rate borne by the Notes shall be reduced from and including
the date on which any of the events specified in clause (x) or (y) occur by the
amount of any increase in such rate (by reason of this Section 6) from the
interest rate of the Notes existing on the date of original issuance thereof.
For all purposes of this Section 6, interest on the Notes shall
accrue and be calculated on the basis of a 360-day year comprised of twelve,
30-day months.
7. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained the
written consent from the holders of a majority in outstanding principal amount
of the Notes (insofar as such matters relate to the Notes) or the Exchange Notes
(insofar as such matters relate to the Exchange Notes).
(b) NOTICES. All notices and other communications provided for
or permitted hereunder shall be
A-14
made in writing by hand-delivery, first-class mail, telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a holder of Notes or Exchange Notes, at the most
current address given by such holder to the Company in accordance
with the provisions of this Section 7(b), which address initially
is, with respect to each holder, the address of such holder to which
confirmation of the sale of Notes was first sent by you, with a copy
in like manner to you at your address first above written,
Attention: Corporate Finance Department, in the case of Bear,
Stearns & Co. Inc. and Attention: Corporate Finance Department, in
the case of BT Securities Corporation;
(ii) if to you, to your address first above written,
Attention: Corporate Finance Department, in the case of Bear,
Stearns & Co. Inc. and Attention: Corporate Finance Department, in
the case of BT Securities Corporation; and
(iii) if to the Company, initially at its address set forth
in the Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged by recipient's
telecopy operator, if telecopied; and on the day delivered, if sent by overnight
air courier guaranteeing next day delivery.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation, and without the need for an express
assignment, subsequent holders of the Notes.
(d) COUNTERPARTS. This agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
(e) HEADINGS. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
A-15
(f) GOVERNING LAW. This agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
instruments made and performed wholly in such state but without regard to the
conflicts of laws provisions thereof.
(g) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
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Please confirm that the foregoing correctly sets forth the mutual
agreement and understanding between the Company and you with respect to the
subject matter hereof.
Very truly yours,
CHARTER MEDICAL CORPORATION
By: /S/ Lawrence W. Drinkard
------------------------------------
Lawrence W. Drinkard
Executive Vice President
Accepted in New York, New York
April 22, 1994
BEAR, STEARNS & CO. INC.
By: /S/ Curtis S. Lane
-------------------------------
Name: Curtis S. Lane
Title: Senior Managing Director
BT SECURITIES CORPORATION
By: /S/ Edmund H. Driggs
-------------------------------
Name: Edmund H. Driggs
Title: Managing Director
Dates Referenced Herein and Documents Incorporated by Reference
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