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NOTE PURCHASE AGREEMENT

Note Purchase Agreement

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This Note Purchase Agreement involves

US ONCOLOGY INC

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Title: NOTE PURCHASE AGREEMENT
Governing Law: New York     Date: 3/16/2007

NOTE PURCHASE AGREEMENT, Parties: us oncology inc
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Exhibit 10.1

EXECUTION COPY

US ONCOLOGY HOLDINGS, INC.

$425,000,000 Senior Unsecured Floating Rate Toggle Notes Due 2012

Purchase Agreement

New York, New York

March 1, 2007

 

 

Citigroup Global Markets Inc.

Morgan Stanley & Co. Incorporated

Wachovia Capital Markets, LLC

As Representatives of the Initial Purchasers

 

c/o Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

US Oncology Holdings, Inc., a corporation organized under the laws of Delaware (the “ Issuer ”), which is the parent of US Oncology, Inc., a corporation organized under the laws of Delaware (the “ Company ”), proposes to issue and sell to the several parties named in Schedule I hereto (the “ Initial Purchasers ”), for whom you (the “ Representatives ”) are acting as representatives, $425,000,000 principal amount of its Senior Unsecured Floating Rate Toggle Notes Due 2012 (the “ Securities ”). The Securities are to be issued under an indenture (the “ Indenture ”), to be dated as of March 13, 2007, between the Issuer and LaSalle Bank National Association, as trustee (the “ Trustee ”). The Securities have the benefit of a Registration Rights Agreement (the “ Registration Rights Agreement ”), dated as of the date hereof, between the Issuer and the Initial Purchasers, pursuant to which the Issuer has agreed to register the Securities under the Act subject to the terms and conditions therein specified. To the extent there are no additional parties listed on Schedule I other than you, the term Representatives as used herein shall mean you as the Initial Purchasers, and the terms Representatives and Initial Purchasers shall mean either the singular or plural as the context requires. The use of the neuter in this Agreement shall include the feminine and masculine wherever appropriate. Certain terms used herein are defined in Section 17 hereof.

The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Act in reliance upon exemptions from the registration requirements of the Act.


In connection with the sale of the Securities, the Issuer has prepared a preliminary offering memorandum, dated March 1, 2007 (as amended or supplemented at the date thereof, including any and all exhibits thereto, the “ Preliminary Memorandum ”), and a final offering memorandum, dated March 1, 2007 (as amended or supplemented at the Execution Time, including any and all exhibits thereto, the “ Final Memorandum ”). Each of the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Issuer and its subsidiaries and the Securities. The Issuer hereby confirms that it has authorized the use of the Disclosure Package, the Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Securities by the Initial Purchasers. Any reference herein to the Preliminary Memorandum or the Final Memorandum shall be deemed to refer to and include the documents stated to be incorporated by reference therein which were filed under the Exchange Act on or before the issue date of the Preliminary Memorandum or the Final Memorandum, as the case may be; and any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Preliminary Memorandum or the Final Memorandum shall be deemed to refer to and include the filing of any document under the Exchange Act after the issue date of the Preliminary Memorandum or the Final Memorandum, as the case may be, deemed to be incorporated therein by reference.

1. Representations and Warranties . The Issuer represents and warrants to each Initial Purchaser as set forth below in this Section 1.

(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Execution Time and on the Closing Date (as defined in Section 3 hereof), the Final Memorandum did not, and will not (and any amendment or supplement thereto, at the date thereof and at the Closing Date, will not), contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Issuer makes no representation or warranty as to the information contained in or omitted from the Preliminary Memorandum or the Final Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Issuer by or on behalf of the Initial Purchasers through the Representatives specifically for inclusion therein, it being understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser consists of the information described as such in Section 8(b) hereof.

(b) The Disclosure Package, as of the Execution Time, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with information furnished in writing to the Issuer by any Initial Purchaser through the Representatives specifically for inclusion therein, it being

 

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understood and agreed that the only such information furnished by or on behalf of any Initial Purchaser consists of the information described as such in Section 8(b) hereof.

(c) None of the Issuer, its Affiliates, or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuers make no representation) has, directly or indirectly, made offers or sales of any security, or solicited offers to buy any security, under circumstances that would require the registration of the Securities under the Act.

(d) None of the Issuer, its Affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Issuers make no representation) has: (i) engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities or (ii) engaged in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities, and each of them has complied with the offering restrictions requirements of Regulation S.

(e) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Act.

(f) Neither the Issuer nor any of its subsidiaries is, and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Disclosure Package and the Final Memorandum, none of the foregoing will be, an “investment company” within the meaning of the Investment Company Act without taking account of any exemption arising out of the number of holders of the Issuer’s or any such subsidiary’s securities, as applicable.

(g) Neither the Issuer nor any of its subsidiaries has paid or agreed to pay to any person any compensation for soliciting another to purchase any securities of the Issuer or any of its subsidiaries, as applicable (except as contemplated in this Agreement).

(h) Neither the Issuer nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result, under the Exchange Act or otherwise, in the stabilization or manipulation of the price of any security of the Issuer or any of its subsidiaries to facilitate the sale or resale of the Securities.

(i) The information provided by the Issuer pursuant to Section 5(j) hereof will not, at the date thereof, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(j) The Issuer has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Final Memorandum, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction that requires such qualification.

 

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(k) The Issuer does not own any material assets or other property other than all of the capital stock of the Company and does not engage in any business other than activities incidental thereto.

(l) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Final Memorandum, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification. Each Subsidiary has been duly organized and is validly existing and in good standing under the laws of the jurisdiction in which it is organized with full power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the Final Memorandum, and except as would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Issuer and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a “ Material Adverse Effect ”) is duly qualified to do business and is in good standing under the laws of each jurisdiction that requires such qualification.

(m) All the outstanding shares of capital stock of the Company and each Subsidiary are duly authorized, validly issued and fully paid and nonassessable; all outstanding shares of capital stock of the Company and each Subsidiary are owned by the Issuer, either directly or through wholly-owned subsidiaries, free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances other than any of the foregoing to secure loans under the credit agreement, dated August 20, 2004 (the “ Existing Credit Facility ”), among the Issuer, the Company, the lenders party thereto, JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank), as administrative agent and collateral agent, Wachovia Bank, National Association, as syndication agent, and Citicorp North America, Inc., as documentation agent, as amended through the date hereof.

(n) The Issuer has all requisite, power and authority to execute and deliver each of this Agreement, the Registration Rights Agreement and the Indenture and to perform its respective obligations hereunder and thereunder, and all corporate action required to be taken by it for the due and proper authorization, execution and delivery of each of this Agreement, the Registration Rights Agreement and the Indenture, and the consummation of the transactions contemplated hereby and thereby, has been duly and validly taken.

(o) This Agreement has been duly authorized, executed and delivered by the Issuer; the Indenture has been duly authorized by the Issuer, and, assuming due authorization, execution and delivery thereof by the Trustee, when executed and

 

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delivered by the Issuer, will constitute a legal, valid and binding instrument enforceable against the Issuer, in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity); the Securities have been duly authorized by the Issuer, and, when executed and authenticated in accordance with the provisions of the Indenture, and delivered to and paid for by the Initial Purchasers, will have been duly executed and delivered by the Issuer and will constitute the legal, valid and binding obligations of the Issuer entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity); and the Registration Rights Agreement has been duly authorized by the Issuer and, when executed and delivered by the Issuer, will constitute a legal, valid and binding instrument enforceable against the Issuer, in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from time to time in effect and to general principles of equity), provided that no representation is made with respect to Section 6 thereof.

(p) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein or in the Indenture or the Registration Rights Agreement, except (i) such as have been obtained or will be obtained under the Act and the Trust Indenture Act in connection with the transactions contemplated by the Registration Rights Agreement and (ii) such as may be required under the blue sky or securities laws of any jurisdiction in connection with the transactions contemplated by this Agreement and the Registration Rights Agreement.

(q) Neither the Issuer nor any of its subsidiaries is in violation or default of (i) any provision of its charter or bylaws; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which any of its property is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to it of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over it or any of its properties, except in the case of clauses (ii) and (iii), for such violations and defaults as would not have a Material Adverse Effect.

(r) Neither the execution and delivery of the Indenture, this Agreement or the Registration Rights Agreement, the issuance and sale of the Securities, nor the consummation of any other of the transactions herein or therein contemplated, nor the fulfillment of the terms hereof or thereof will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Issuer or any of its subsidiaries pursuant to, (i) their respective charters or by-laws; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant

 

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or instrument to which any of them is a party or bound or to which any of their respective properties is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to any of them of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over any of them or any of their respective properties except, in the case of (ii) and (iii) above, for such conflicts, breaches, violations or impositions as would not have a Material Adverse Effect.

(s) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Issuer and the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements included in the Disclosure Package and the Final Memorandum, are independent public accountants with respect to the Issuer and the Company within the meaning of the Act and the applicable published rules and regulations thereunder.

(t) The consolidated historical financial statements of the Issuer and the Company and its consolidated subsidiaries included in the Disclosure Package and the Final Memorandum present fairly in all material respects the financial condition, results of operations and cash flows of the Issuer and the Company as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein); the financial information set forth under the captions “Offering Memorandum Summary—Summary of Historical Consolidated Financial Information” and “Capitalization” in the Preliminary Memorandum and the Final Memorandum fairly present in all material respects, on the basis stated in the Preliminary Memorandum and the Final Memorandum, the information included therein.

(u) The Issuer and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(v) Since the date of the most recent financial statements included in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto), there has been no material adverse change in the condition (financial or otherwise), prospects, earnings, business or properties of the Issuer and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated by the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

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(w) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer or any of its subsidiaries or any of their property is pending or, to the best knowledge of the Issuer, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement, the Indenture or the Registration Rights Agreement, or the consummation of any of the transactions contemplated hereby or thereby; or (ii) could reasonably be expected to have a Material Adverse Effect except in the case of clauses (i) and (ii) as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

(x) Each of the Issuer and its subsidiaries has filed all non-U.S., U.S. federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect, and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect and except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

(y) No labor problem or dispute with the employees of the Issuer or any of its subsidiaries exists or is threatened or imminent, and the Issuer is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except, in each case, as would not have a Material Adverse Effect and except, in each case, as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

(z) (i) The Issuer and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; (ii) all policies of insurance and fidelity or surety bonds insuring the Issuer or any of its subsidiaries, or any of their respective businesses, assets, employees, officers and directors are in full force and effect; (iii) the Issuer and each of its subsidiaries are in compliance with the terms of such policies and instruments, and there are no claims by any of the Issuer or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause, except in the case of clauses (i), (ii) and (iii), as would not have a Material Adverse Effect; neither the Issuer nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Issuer nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

 

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(aa) The Company is not prohibited, directly or indirectly, from paying any dividends to the Issuer, from making any other distribution on such subsidiary’s capital stock, from repaying to the Issuer any loans or advances to such subsidiary from the Issuer or from transferring any of such subsidiary’s property or assets to the Issuer, except as described in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

(bb) Except as would not have a Material Adverse Effect, the Issuer and each of its subsidiaries possess all licenses, certificates, permits and other authorizations issued by the appropriate U.S. federal, state or non-U.S. regulatory authorities necessary to conduct their respective businesses, and neither the Issuer nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto).

(cc) The Issuer and each of its subsidiaries are (i) in compliance with any and all applicable non-U.S., U.S. federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability under any Environmental Laws, except where such non-compliance with Environmental Laws, failure to receive or comply with required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in or contemplated in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto), neither the Issuer nor any of its subsidiaries has been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or similar state laws.

(dd) (i) The minimum funding standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (“ ERISA ”), has been satisfied by each “pension plan” (as defined in Section 3(2) of ERISA) which has been established or maintained by the Issuer and/or one or more of its subsidiaries, and the trust forming part of each such plan which is intended to be qualified under Section 401 of the Code is so qualified; (ii) the Issuer and each of its subsidiaries has fulfilled its obligations, if any, under Section 515 of ERISA; (iii) neither the Issuer nor any of its subsidiaries maintains or is required to contribute to a “welfare plan” (as defined in Section 3(1) of ERISA) which provides retiree or other post-employment welfare

 

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benefits or insurance coverage (other than “continuation coverage” (as defined in Section 602 of ERISA)); (iv) each pension plan and welfare plan established or maintained by the Issuer and/or one or more of its subsidiaries is in compliance in all material respects with the currently applicable provisions of ERISA; and (v) neither the Issuer nor any of its subsidiaries has incurred or could reasonably be expected to incur any withdrawal liability under Section 4201 of ERISA, any liability under Section 4062, 4063 or 4064 of ERISA, or any other liability under Title IV of ERISA except, in the case of clauses (i), (ii), (iii), (iv) and (v), as would not have a Material Adverse Effect.

(ee) The Issuer and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “ Intellectual Property ”) necessary for the conduct of the Issuer’s and its subsidiaries’ business as now conducted or as proposed in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto) to be conducted, except as would not have a Material Adverse Effect. Except as set forth in the Disclosure Package and the Final Memorandum (exclusive of any amendment or supplement thereto) and except as would not have a Material Adverse Effect, (i) to the knowledge of the Issuer, there are no rights of third parties to any such Intellectual Property; (ii) to the knowledge of the Issuer, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the knowledge of the Issuer, threatened action, suit, proceeding or claim by others challenging the Issuer’s or any of its subsidiaries’ rights in or to any such Intellectual Property, and the Issuer is unaware of any facts which would form a reasonable basis for any such claim; (iv) to the knowledge of the Issuer, there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Issuer is unaware of any facts which would form a reasonable basis for any such claim; and (v) there is no pending or, to the knowledge of the Issuer, threatened action, suit, proceeding or claim by others that the Issuer or any of its subsidiaries infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Issuer is unaware of any other fact which would form a reasonable basis for any such claim.

(ff) None of the proceeds of the sale of the Securities will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Securities to be considered a “purpose credit” within the meanings of Regulations T, U or X of the Board of Governors of the Federal Reserve System of the United States.

(gg) Neither the Issuer nor the Company has taken any action or omitted to take any action (such as issuing any press release relating to any Securities without an appropriate legend) which may result in the loss by any of the Initial Purchasers

 

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of the ability to rely on any stabilization safe harbor provided by the Financial Services Authority under the Financial Services and Markets Act 2000 (the “ FSMA ”). Each of the Issuer and the Company have been informed of the guidance relating to stabilization provided by the Financial Services Authority, in particular in Section MAR 2 Annex 2G of the Financial Services Handbook.

(hh) (i) None of the Issuer, its subsidiaries or, to the knowledge of the Issuer, any director, officer, agent, employee or Affiliate of the Issuer or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such Persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “ FCPA ”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and (ii) the Issuer, its subsidiaries and, to the knowledge of the Issuer, its Affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith, except in the case of clauses (i) and (ii), as would not have a Material Adverse Effect.

(ii) (i) The operations of the Issuer and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”); and (ii) no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Issuer, threatened, except in the case of clauses (i) and (ii), as would not have a Material Adverse Effect.

(jj) There is and has been no failure on the part of the Issuer, the Company and any of the Issuer’s or the Company’s directors or officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes Oxley Act of 2002 and any applicable rules and regulations promulgated in connection therewith (the “ Sarbanes Oxley Act ”).

(kk) None of the Issuer, any of its subsidiaries or, to the knowledge of the Issuer, any director, officer, agent, employee or Affiliate of the Issuer or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“ OFAC ”); and the Issuer will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any

 

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subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(ll) The Disclosure Package and the Final Memorandum, as of their respective dates, contain all of the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

(mm) Each of the Issuer and its subsidiaries has good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of real and personal property that are material to the business of the Issuer and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except (i) those provided in connection with the Existing Credit Facility, (ii) such as do not materially interfere with the use made and proposed to be made of such property by the Issuer or its subsidiaries or (iii) such as could not reasonably be expected to have a Material Adverse Effect.

(nn) The statements in the Preliminary Memorandum and the Final Memorandum under the headings “Description of Certain Other Indebtedness”, “Description of the Notes”, “Material Federal U.S. Income Tax Considerations” and “Government Regulation” fairly summarize the matters therein described.

(oo) Assuming the accuracy of the representations made by the Initial Purchasers herein, no registration under the Act of the Securities is required for the offer and sale of the Securities to or by the Initial Purchasers in the manner contemplated herein, in the Disclosure Package and in the Final Memorandum.

(pp) None of the Issuer, its subsidiaries nor any of their respective officers, directors, employees, or agents, acting alone or together, have: (a) received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any customer, governmental employee or other person with whom the Issuer or its subsidiaries do or will do business directly or indirectly, or (b) directly or indirectly, agreed to give any money, gift or similar benefit to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any government agency, governmental employee or other person who was, is or may be in a position to help or hinder the business (or assist the Issuer or any of its subsidiaries in connection with any actual or proposed transaction) that, in the case of either clause (a) or clause (b) above, might subject the Issuer or any of its subsidiaries to any damage or penalty in any civil, criminal or governmental litigation or proceeding, except as would not have a Material Adverse Effect.

(qq) None of the Issuer, its subsidiaries, nor any of their respective current or former officers, directors, employees or agents (in their capacity as such) and, to the knowledge of the Issuer, no persons who provide professional services under agreements with the Issuer or any of its subsidiaries have engaged in any activities

 

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which (i) are prohibited under the federal Medicare and Medicaid statutes (which include, but are not limited to, 42 U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b, 1395nn), the federal health plans administered by the Department of Defense, the Federal False Claims Act (31 U.S.C. § 3729) (including the regulations promulgated and advisory opinions and other guidance provided pursuant to such federal statutes), related state or local statutes or regulations or (ii) constitute material violations of or material deficiencies under the standards of any private accrediting organization from which the Issuer or any of its subsidiaries seeks accreditation, except in the case of clauses (i) and (ii), as would not have a Material Adverse Effect.

(rr) None of the Issuer, its subsidiaries nor any of their respective current or former officers or directors has (a) had any civil monetary penalty assessed against it under Section 1128(h) of the Social Security Act or any regulations promulgated thereunder; (b) been excluded from participation under the Medicare program or state health care program as defined in Section 1128(h) of the Social Security Act or any regulation thereunder or a federal health care program as defined in Section 1128B(f) of the Social Security Act; or (c) been convicted of any of the categories of offenses as described in Section 1128(a) and (b)(1), (2) and (3) of the Social Security Act or any regulations promulgated thereunder, except in the case of clauses (a), (b) or (c), as would not have a Material Adverse Effect.

(ss) Except as would not have a Material Adverse Effect, to the extent the Issuer or any of its subsidiaries is a “covered entity” within the meaning of the Health Insurance Portability and Accountability Act of 1996 (“ HIPAA ”) or the Issuer or any of its subsidiaries are subject to or covered by the so-called “Administrative Simplification” provisions of HIPAA, the Issuer and its subsidiaries are HIPAA Compliant. For purposes hereof, “HIPAA Compliant” shall mean that the Issuer or its subsidiaries, as the case may be, is or will be in compliance in all material respects with each of the applicable requirements of the so-called “Administrative Simplification” provisions of HIPAA on and as of each date that any part thereof, or any final rule or regulations thereunder, becomes effective in accordance with its or their terms, as the case may be.

(tt) Except as would not have a Material Adverse Effect, the Issuer and each of its subsidiaries that bills the Medicare program is in compliance with the conditions of participation imposed by the Social Security Act and the Secretary of Health and Human Services. Except as would not have a Material Adverse Effect, the Issuer and its subsidiaries, as the case may be, have a Medicare provider or supplier agreement and a Medicare provider or supplier number in force covering each location at which the Issuer and its subsidiaries, as the case may be, accepts Medicare patients. In addition, except as would not have a Material Adverse Effect, the Issuer and its subsidiaries have a Medicaid provider agreement and Medicaid provider number in force in each state in which the Issuer or its subsidiaries bills the Medicaid program.

Any certificate signed by any officer of the Issuer and delivered to the Representatives or counsel for the Initial Purchasers in connection with the offering of the Securities shall be deemed a representation and warranty by the Issuer, as to matters covered thereby, to each Initial Purchaser.

 

12


2. Purchase and Sale . Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Issuer agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Issuer, at a purchase price of 97.500% of the principal amount thereof, plus accrued interest, if any, from March 1, 2007 to the Closing Date, the principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule I hereto.

3. Delivery and Payment . Delivery of and payment for the Securities shall be made at 10:00 A.M., New York City time, on March 13, 2007, or at such time on such later date (not later than March 19, 2007) as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Issuer or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the “ Closing Date ”). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Initial Purchasers against payment by the several Initial Purchasers through the Representatives of the purchase price thereof to or upon the order of the Issuer by wire transfer payable in same-day funds to the account specified by the Issuer. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.

4. Offering by Initial Purchasers . (a) Each Initial Purchaser acknowledges that the Securities have not been and will not be registered under the Act and may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Act.

(b) Each Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Issuer that:

(i) it has not offered or sold, and will not offer or sell, any Securities (x) as part of their distribution at any time or (y) otherwise until 40 days after the later of the commencement of the offering and the date of closing of the offering except:

(A) to those it reasonably believes to be


 
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