$1,000,000,000 5.250% Senior
Notes Due 2012
$1,000,000,000 6.250%% Senior Notes Due 2014
$500,000,000 7.250% Senior Notes Due 2019
Credit Suisse Securities
(USA) LLC,
Eleven Madison
Avenue,
New York, N.Y.
10010-3629
J.P. Morgan Securities
Inc.,
270 Park
Avenue,
New York, N.Y.
10017
Citigroup Global Markets
Inc.,
388 Greenwich
Street,
New York, N.Y.
10013
As
representatives (the “ Representatives ”) of the
Several Underwriters
1.
Introductory. Express Scripts, Inc., a Delaware corporation
(the “ Company ”), agrees with the several
Underwriters named in Schedule A hereto (the “
Underwriters ”) to issue and sell to the several
Underwriters $1,000,000,000 aggregate principal amount of its
5.250% Senior Notes due 2012 (the “ 2012 Notes
”), $1,000,000,000 aggregate principal amount of its 6.250%
Senior Notes due 2014 (the “ 2014 Notes ”) and
$500,000,000 aggregate principal amount of its 7.250% Senior Notes
due 2019 (the “ 2019 Notes ” and, together with
the 2012 Notes and the 2014 Notes, the “ Offered
Securities ”). The Offered Securities will be
unconditionally guaranteed (the “ Guarantees ”)
by the subsidiaries of the Company listed on Schedule B hereto
(the “ Subsidiary Guarantors ”). The 2012 Notes
shall be issued under the first supplemental indenture dated as of
the Closing Date (the “ First Supplemental Indenture
”) to the indenture to be dated as of the Closing Date, among
the Company, the Subsidiary Guarantors and Union Bank, N.A., as
Trustee (the “ Base Indenture ”), the 2014 Notes
shall be issued under the second supplemental indenture to be dated
as of the Closing Date, to the Base Indenture (the “
Second Supplemental Indenture ”) and the 2019 Notes
shall be issued under a third supplemental indenture to be dated as
of the Closing Date, to the Base Indenture (the “ Third
Supplemental Indenture ” and, together with the First
Supplemental Indenture, the Second Supplemental Indenture and the
Base Indenture, the “ Indenture ”).
As part of the
transactions described under the heading “The
Acquisition” in the General Disclosure Package, pursuant to a
Stock and Interest Purchase Agreement (the “ Purchase
Agreement ”) dated as of April 9, 2009, between the
Company and WellPoint, Inc. (the “ Seller ”),
the Company intends to acquire (the “ Acquisition
”) from the Seller each of NextRx, LLC, an Ohio limited
liability company (“ NextRx LLC ”), NextRx,
Inc., a Delaware corporation (“ NextRx ”) and
NextRx Services, Inc., a New York corporation (“ NextRx
Services ”, and together with NextRx LLC and NextRx, the
“ Target Companies ”, each a “ Target
Company ”). Immediately following consummation of the
Acquisition, NextRx Sub I, LLC, NextRx Sub II, LLC and NextRx Sub
III, LLC (collectively, the “ NextRx Subs ”),
each of which is a Guarantor, will be merged with and into each of
the Target Companies, with the Target Companies to be the surviving
entities (the “ NextRx Mergers ”) and successor
guarantors of the Offered Securities.
2.
Representations and Warranties of the Company and the Subsidiary
Guarantors. The Company and each Subsidiary Guarantor jointly
and severally represent and warrant to, and agrees with, the
several Underwriters that:
(a)
Filing and Effectiveness of Registration Statement; Certain
Defined Terms . The Company has filed with the Commission a
registration statement on Form S-3 (No. 333-159654), including
a related prospectus or prospectuses, covering the registration of
the Offered Securities under the Act, which has become effective.
“ Registration Statement ” at any particular
time means such registration statement in the form then filed with
the Commission, including any amendment thereto, any document
incorporated by reference therein and all 430B Information and all
430C Information with respect to such registration statement, that
in any case has not been superseded or modified. “
Registration Statement ” without reference to a time
means the Registration Statement as of the Effective Time. For
purposes of this definition, 430B Information shall be considered
to be included in the Registration Statement as of the time
specified in Rule 430B.
For
purposes of this Agreement:
“
430B Information ” means information included in a
prospectus then deemed to be a part of the Registration Statement
pursuant to Rule 430B(e) or retroactively deemed to be a part
of the Registration Statement pursuant to
Rule 430B(f).
“
430C Information ” means information included in a
prospectus then deemed to be a part of the Registration Statement
pursuant to Rule 430C.
“
Act ” means the Securities Act of 1933, as
amended.
“
Applicable Time ” means 5:00 p.m. (Eastern time) on
the date of this Agreement.
“
Closing Date ” has the meaning defined in
Section 3 hereof.
“
Commission ” means the Securities and Exchange
Commission.
“
Effective Time ” of the Registration Statement
relating to the Offered Securities means the time of the first
contract of sale for the Offered Securities.
“
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
“
Final Prospectus ” means the Statutory Prospectus that
discloses the public offering price, other 430B Information and
other final terms of the Offered Securities and otherwise satisfies
Section 10(a) of the Act.
“
General Use Issuer Free Writing Prospectus ” means any
Issuer Free Writing Prospectus that is intended for general
distribution to prospective investors, as evidenced by its being so
specified in Schedule C to this Agreement.
“
Issuer Free Writing Prospectus ” means any
“issuer free writing prospectus,” as defined in
Rule 433, relating to the Offered Securities in the form filed
or required to be filed with the Commission or, if not required to
be filed, in the form retained in the Company’s records
pursuant to Rule 433(g).
“
Limited Use Issuer Free Writing Prospectus ” means any
Issuer Free Writing Prospectus that is not a General Use Issuer
Free Writing Prospectus.
“
Order ” means any judgment, order, injunction, decree,
writ, stipulation, ruling, determination, award, permit or license
of any governmental entity or any arbitrator.
2
“
PBM Contract ” means that certain Pharmacy Benefit
Management Services Agreement to be entered into between the Seller
and the Company on the date the Acquisition is
consummated.
“
Rules and Regulations ” means the rules and
regulations of the Commission.
“
Securities Laws ” means, collectively, the
Sarbanes-Oxley Act of 2002 (“ Sarbanes-Oxley ”),
the Act, the Exchange Act, the Trust Indenture Act, the Rules and
Regulations, the auditing principles, rules, standards and
practices applicable to auditors of “issuers” (as
defined in Sarbanes-Oxley) promulgated or approved by the Public
Company Accounting Oversight Board and, as applicable, the rules of
the NASDAQ Stock Market (“ Exchange Rules
”).
“
Statutory Prospectus ” with reference to any
particular time means the prospectus relating to the Offered
Securities that is included in the Registration Statement
immediately prior to that time, including all 430B Information
and all 430C Information with respect to the Registration
Statement. For purposes of the foregoing definition,
430B Information shall be considered to be included in the
Statutory Prospectus only as of the actual time that form of
prospectus (including a prospectus supplement) is filed with the
Commission pursuant to Rule 424(b) and not
retroactively.
“
Trust Indenture Act ” means the Trust Indenture Act of
1939.
Unless
otherwise specified, a reference to a “rule” is to the
indicated rule under the Act.
(b)
Compliance with Securities Act Requirements .
(i) (A) At the time the Registration Statement initially
became effective, (B) at the time of each amendment thereto
for the purposes of complying with Section 10(a)(3) of the Act
(whether by post effective amendment, incorporated report or form
of prospectus), (C) at the Effective Time relating to the
Offered Securities and (D) on the Closing Date, the
Registration Statement conformed and will conform in all material
respects to the requirements of the Act, the Trust Indenture Act
and the Rules and Regulations and did not and will not include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) (A) on its
date, (B) at the time of filing the Final Prospectus pursuant
to Rule 424(b) and (C) on the Closing Date, the Final
Prospectus will conform in all material respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and will not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. The preceding sentence does not apply to (i) that
part of the Registration Statement which will constitute the
Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee or (ii) statements in or
omissions from any such document based upon written information
furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information is that described as such
in Section 8(b) hereof.
(c)
Automatic Shelf Registration Statement . (i)
Well-Known Seasoned Issuer Status . (A) At the time of
initial filing of the Registration Statement, (B) at the time
of the most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the Exchange Act or form of
prospectus), and (C) at the time the Company or any person
acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Offered Securities
in reliance on the exemption of Rule 163, the Company was a
“well known seasoned issuer” as defined in Rule 405,
including not having been an “ineligible issuer” as
defined in Rule 405.
(ii)
Effectiveness of Automatic Shelf Registration Statement .
The Registration Statement is an “automatic shelf
registration statement,” as defined in Rule 405, that
initially became effective within three years of the date of this
Agreement.
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(iii)
Eligibility to Use Automatic Shelf Registration Form . The
Company has not received from the Commission any notice pursuant to
Rule 401(g)(2) objecting to use of the automatic shelf
registration statement form. If at any time when Offered Securities
remain unsold by the Underwriters the Company receives from the
Commission a notice pursuant to Rule 401(g)(2) or otherwise
ceases to be eligible to use the automatic shelf registration
statement form, the Company will (i) promptly notify the
Representatives, (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating
to the Offered Securities, in a form satisfactory to the
Representatives, (iii) use its best efforts to cause such
registration statement or post-effective amendment to be declared
effective as soon as practicable, and (iv) promptly notify the
Representatives of such effectiveness. The Company will take all
other action necessary or appropriate to permit the public offering
and sale of the Offered Securities to continue as contemplated in
the registration statement that was the subject of the
Rule 401(g)(2) notice or for which the Company has otherwise
become ineligible. References herein to the Registration Statement
shall include such new registration statement or post-effective
amendment, as the case may be.
(iv)
Filing Fees . The Company has paid or shall pay the required
Commission filing fees relating to the Offered Securities within
the time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and
457(r).
(d)
Ineligible Issuer Status . (i) At the earliest time
after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2)) of the Offered Securities and
(ii) at the date of this Agreement, the Company was not and is
not an “ineligible issuer,” as defined in
Rule 405.
(e)
General Disclosure Package . As of the Applicable Time,
neither (i) the General Use Issuer Free Writing Prospectus(es)
issued at or prior to the Applicable Time and the preliminary
prospectus supplement, dated June 4, 2009, including the base
prospectus, dated June 2, 2009 (which is the most recent
Statutory Prospectus distributed to investors generally), and the
other information, if any, stated in Schedule C to this
Agreement to be included in the General Disclosure Package, all
considered together (collectively, the “ General
Disclosure Package ”), nor (ii) any individual
Limited Use Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue
statement of a material fact or omitted 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 any Statutory Prospectus or any Issuer Free Writing Prospectus
in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any
Underwriter consists of the information described as such in
Section 8(b) hereof.
(f)
Issuer Free Writing Prospectuses . Each Issuer Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered
Securities or until any earlier date that the Company notified or
notifies the Representatives as described in the next sentence, did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information then contained in
the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information then
contained in the Registration Statement or as a result of which
such Issuer Free Writing Prospectus, if republished immediately
following such event or development, would include an untrue
statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, (i) the Company has promptly notified or will
promptly notify the Representatives and (ii) the Company has
promptly amended or will promptly amend or supplement such Issuer
Free Writing Prospectus to eliminate or correct
4
such conflict,
untrue statement or omission. The foregoing sentence does not apply
to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(g)
Good Standing of the Company. The Company (i) has been
duly incorporated and is existing and in good standing under the
laws of the State of Delaware, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the General Disclosure Package and (ii) is duly
qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such
qualification, except in the case of clause (ii) where the
failure to so qualify would not result in a material adverse change
in the condition, financial or otherwise, or in the earnings,
business, affairs or business prospects of either (x) the
Company and its subsidiaries considered as one enterprise, or
(y) the Company and its subsidiaries, taken as one enterprise,
after giving pro forma effect to the Acquisition, in each case,
whether or not arising in the ordinary course of business (a
“ Material Adverse Effect ”).
(h)
Subsidiary Guarantors . Each Subsidiary Guarantor
(i) has been duly organized and is existing and in good
standing under the laws of the jurisdiction of its organization,
with power and authority (corporate and other) to own its
properties and conduct its business as described in the General
Disclosure Package and (ii) is duly qualified to do business
as a foreign corporation, limited partnership, limited liability
company or other entity in good standing, where applicable, in all
other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except in
the case of clause (ii) where the failure to so qualify would
not have a Material Adverse Effect; and all of the issued and
outstanding capital stock of each Subsidiary Guarantor of the
Company has been duly authorized and validly issued and is fully
paid and nonassessable; and the capital stock of each Subsidiary
Guarantor owned by the Company, directly or through subsidiaries,
is owned free from liens, encumbrances and defects.
(i)
Target Companies . To the knowledge of the Company
(i) NextRx LLC is a limited liability company validly existing
and in good standing under the laws of the State of Ohio, with
limited liability company power and authority to own its properties
and conduct its business as described in the General Disclosure
Package; (ii) NextRx has been duly incorporated and is
existing and in good standing under the laws of the State of
Delaware, with the power and authority (corporate or other) to own
its properties and conduct its business as described in the General
Disclosure Package; (iii) NextRx Services has been duly
incorporated and is existing and in good standing under the laws of
the State of New York, with the power and authority (corporate or
other) to own its properties and conduct its business as described
in the General Disclosure Package; and (iv) each Target
Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such
qualification.
(j)
Execution and Delivery of Indenture; Guarantees; Offered
Securities . The Indenture has been duly authorized and has
been duly qualified under the Trust Indenture Act by the Company
and each Subsidiary Guarantor; the Guarantees have been duly
authorized by each Subsidiary Guarantor; the Offered Securities
have been duly authorized and, when the Offered Securities are
delivered and paid for pursuant to this Agreement on the Closing
Date, the Indenture will have been duly executed and delivered
(assuming that the Indenture has been duly authorized, executed and
delivered by the Trustee), such Offered Securities will have been
duly executed, authenticated, issued and delivered (assuming that
the Offered Securities have been authenticated in the manner
provided in the Indenture by the Trustee), will conform to the
information in the General Disclosure Package and to the
description of such Offered Securities contained in the Final
Prospectus and the Indenture and such Offered Securities and, in
the case of the Subsidiary Guarantors, such Guarantees, will
constitute valid and legally binding obligations of the Company and
each Subsidiary Guarantor, as applicable, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles.
5
(k)
Supplemental Guarantor Indenture. Immediately following
closing of the NextRx Mergers, the Supplemental Guarantor Indenture
will (i) be duly authorized by the Target Companies and duly
qualified under the Trust Indenture Act, (ii) have been duly
executed and delivered by the Target Companies and
(iii) assuming due authorization, execution and delivery by
the Trustee, constitute valid and legally binding agreements of the
Target Companies, enforceable against the Target Companies in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’
rights and to general equity principles.
(l)
Target Company Guarantees . Assuming the due authorization,
execution and delivery of the Indenture and the Supplemental
Guarantor Indenture and assuming the Offered Securities have been
delivered by the Company to the Underwriters against payment of the
requisite consideration therefor specified in this Agreement, the
Guarantees by the Target Companies will constitute valid and
legally binding obligations of the Target Companies, enforceable
against the Target Companies in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles.
(m)
Absence of Further Requirements. No consent, approval,
authorization, or order of, or filing or registration with, any
governmental agency or body or any court is necessary or required
for (i) the execution, delivery or performance by the Company,
the Subsidiary Guarantors or, to the knowledge of the Company, the
Target Companies of their obligations under this Agreement, the
Indenture, the Offered Securities, the Guarantees, or the
consummation by the Company, the Subsidiary Guarantors or, to the
knowledge of the Company, the Target Companies of the transactions
contemplated by this Agreement or the Indenture, except such as
have been obtained, or made and such as may be required under state
securities laws or (ii) the execution, delivery or performance
by the Company, the Subsidiary Guarantors or, to the knowledge of
the Company other than as set forth in Schedule 3.6 to the
Purchase Agreement, the Target Companies, as applicable, of the PBM
Contract or the consummation of the Acquisition, except, in each
case, as disclosed in the General Disclosure Package.
(n)
Title to Property . The Company, each Subsidiary Guarantor
and, to the knowledge of the Company other than as set forth in
Schedule 3.21 to the Purchase Agreement, each of the Target
Companies have good and marketable title to all of their respective
real properties and good title to their respective personal
properties, in each case free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right
except (A) as disclosed in the General Disclosure Package or
(B) as does not have a Material Adverse Effect and does not
interfere with the use made and proposed to be made of such
property by the Company, each Subsidiary Guarantor and each of the
Target Companies considered as one enterprise; and all of the
leases and subleases of the Company, each Subsidiary Guarantor and
each of the Target Companies considered as one enterprise, and
under which the Company, any Subsidiary Guarantor or, to the
knowledge of the Company other than as set forth in
Schedule 3.21 to the Purchase Agreement, any of the Target
Companies holds properties described in the General Disclosure
Package, are in full force and effect, except such failures to be
in full force and effect that would not, individually or in the
aggregate, result in a Material Adverse Effect.
(o)
Absence of Defaults and Conflicts Resulting from Transaction
. The execution, delivery and performance by the Company and each
of the Subsidiary Guarantors of the Indenture and this Agreement
and compliance with the terms and provisions thereof, the
consummation of the transactions herein and therein contemplated
(including the use of proceeds from the sale of the Offered
Securities, the Acquisition and the entry into the PBM Contract),
the issuance and sale of the Offered Securities, the issuance of
the Guarantees and the Supplemental Guarantor Indenture by the
Target Companies and compliance with the terms and provisions
thereof, will not result in a breach or violation of any of the
terms and provisions or result in the imposition of any lien,
charge or encumbrance upon any property or assets of the Company,
any Subsidiary Guarantor or, to the knowledge of the Company, any
of the Target Companies pursuant to, (i) the charter or
by-laws or similar organizational documents of the Company, any
Subsidiary Guarantor
6
or, to the
knowledge of the Company, any of the Target Companies,
(ii) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, any Subsidiary Guarantor or,
to the knowledge of the Company, any of the Target Companies or any
of their properties, or (iii) any agreement or instrument to
which the Company, any Subsidiary Guarantor or, to the knowledge of
the Company other than as set forth in Schedule 3.2(b) of the
Purchase Agreement, any of the Target Companies is a party or by
which the Company, any Subsidiary Guarantor or, to the knowledge of
the Company other than as set forth in Schedule 3.2(b) of the
Purchase Agreement, any of the Target Companies is bound or to
which any of the properties of the Company, any Subsidiary
Guarantor or, to the knowledge of the Company other than as set
forth in Schedule 3.2(b) of the Purchase Agreement, any of the
Target Companies is subject, except in the case of
clauses (ii) and (iii), for such breaches, defaults, liens,
charges or encumbrances that would not, individually or in the
aggregate, result in a Material Adverse Effect.
(p)
Absence of Existing Defaults and Conflicts . None of the
Company, any Subsidiary Guarantor or, to the knowledge of the
Company other than as set forth in Schedule 3.16 of the
Purchase Agreement, any of the Target Companies is in violation of
its respective organizational documents or in default (or with the
giving of notice or lapse of time would be in default) under any
existing obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement
or instrument to which any of them is a party or by which any of
them is bound or to which any of the properties of any of them is
subject, except such defaults that would not, individually or in
the aggregate, result in a Material Adverse Effect.
(q)
Authorization of Agreements . This Agreement has been duly
authorized, executed and delivered by the Company and each
Subsidiary Guarantor.
(r)
Possession of Licenses and Permits . The Company, the
Subsidiary Guarantors and, to the knowledge of the Company other
than as set forth in Schedule 3.9 to the Purchase Agreement,
the Target Companies (A) possess, and are in compliance with
the terms of, all adequate certificates, authorizations,
franchises, licenses and permits (including certificates of need,
licenses, pharmacy licenses, Medicare provider numbers,
accreditations and other similar documentation or approvals of any
local health departments or any governmental authority)
(collectively, “ Licenses ”) necessary or
material to the conduct of the business now conducted except where
the failure to possess any such License would not result in a
Material Adverse Effect and (B) have not received any notice
of proceedings relating to the revocation or modification of any
Licenses that, if determined adversely to the Company, any
Subsidiary Guarantor or any of the Target Companies, would
individually or in the aggregate, have a Material Adverse
Effect.
(s)
Accurate Disclosure . The statements in the General
Disclosure Package and the Final Prospectus under the headings
“Description of the Notes”, “The
Acquisition” and “Certain United States Federal Income
Tax Considerations to Non-U.S. Holders”, insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings and
present the information required to be shown.
(t)
Absence of Manipulation . The Company has not taken,
directly or indirectly, any action that is designed to or that has
constituted or that would 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 Offered
Securities.
(u)
Internal Controls and Compliance with the Sarbanes-Oxley Act
. Except as set forth in the General Disclosure Package, the
Company, its subsidiaries and the Company’s Board of
Directors (the “ Board ”) are in compliance in
all material respects with Sarbanes-Oxley. The Company maintains a
system of internal controls, including, but not limited to,
disclosure controls and procedures, internal controls over
accounting matters and financial reporting, an internal audit
function and legal and regulatory compliance controls
(collectively, “ Internal Controls ”) that
comply with the Securities Laws and are sufficient to provide
reasonable assurances that (i)
7
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 U.S. Generally Accepted Accounting Principles and
to maintain accountability for assets, (iii) access to assets
is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company’s Internal Control over financial
reporting is effective and the Company is not aware of any material
weakness in its Internal Control over financial reporting. Except
as disclosed in the Disclosure Package and the Final Prospectus,
since December 31, 2008, there has been no change in the
Company’s Internal Control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s Internal Control over financial reporting. The
Company maintains “disclosure controls and procedures”
(as such term is defined in Rule 13a-15(e) under the Exchange
Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure
that material information relating to the Company and its
subsidiaries is made known to the Company’s principal
executive officer and principal financial officer by others within
those entities; and such disclosure controls and procedures are
effective.
(v)
Litigation . Except as disclosed in the General Disclosure
Package, there are no pending actions, suits or proceedings
(including any inquiries or investigations by or before any court
or governmental agency or body, domestic or foreign), involving the
Company, any of its subsidiaries or, to the knowledge of the
Company other than as set forth in Schedule 3.10 to the
Purchase Agreement, any Target Company or any of their respective
properties that, if determined adversely to the Company, any
subsidiary or any Target Company, would individually or in the
aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company or any Subsidiary
Guarantor to perform its obligations under the Indenture (including
each Guarantee set forth therein) or this Agreement; and no such
actions, suits or proceedings (including any inquiries or
investigations by any court or governmental agency or body,
domestic or foreign) are, to the Company’s knowledge,
threatened.
(w)
Medicare; Medicaid . Except as disclosed in the General
Disclosure Package and the Final Prospectus, neither the Company
nor, to the knowledge of the Company other than as set forth in
Schedule 3.9 to the Purchase Agreement, any Target Company has
received written notice of any, and to the knowledge of any officer
or director of the Company there are no material Medicare,
Medicaid, or any other managed care recoupment or recoupments of
any third-party payor being sought, threatened, requested or
claimed against the Company, any Subsidiary Guarantor or, to the
knowledge of the Company, any Target Company.
(x)
Financial Statements . The financial statements included or
incorporated by reference in the Registration Statement and the
General Disclosure Package together with the related schedules and
notes present fairly in all material respects the financial
position of (i) the Company and its consolidated subsidiaries
and (ii) to the knowledge of the Company, the Target
Companies, in each case, as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis with respect to the Company and the Target
Companies, respectively, and the schedules included or incorporated
by reference in the Registration Statement present fairly the
information required to be stated therein, and the assumptions used
in preparing the pro forma financial statements included in the
Registration Statement and the General Disclosure Package provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(y)
Capitalization . The stockholder’s equity and
long-term
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