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Title:

Purchase Agreement

Entities:

Banc of America Securities LLC; BNY Capital Markets, Inc.; J.P. Morgan Securities Inc.; JPMorgan Chase Bank; Manor Care, Inc.; Mid Shore Physical Therapy Associates Inc; National City Bank; Suntrust Capital Markets, Inc.; UBS Warburg LLC; Bank of America, NA; Bank of New York; Epstein Becker & Green; Latham & Watkins; Reed Smith; Simpson Thacher & Bartlett

Date:

2003

Size:

Preview shows 6KB of 294KB total

Price:

$75

ID:

#2357107

 

 

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                                MANOR CARE, INC.


6.25% Senior Notes due 2013

Purchase Agreement

April 10, 2003

J.P. Morgan Securities Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
UBS Warburg LLC
Banc of America Securities LLC
BNY Capital Markets, Inc.
NatCity Investments, Inc.
SunTrust Capital Markets, Inc.
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

Manor Care, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell (the "Offering") $200,000,000 aggregate principal amount of its 6.25%
Senior Notes due 2013 (the "Securities"). The Securities will be issued pursuant
to an Indenture to be dated as of April 15, 2003 (the "Indenture") between the
Company, each of the subsidiaries of the Company listed on Schedule 1 hereto
(each a "Guarantor" and together, the "Guarantors") and National City Bank, as
trustee (the "Trustee"). The Securities will be guaranteed by guarantees (the
"Guarantees", and each a "Guarantee") of each of the Guarantors. The Company
hereby confirms its agreement with J.P. Morgan Securities Inc. ("JPMorgan"),
Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Warburg LLC, Bank of
America Securities LLC, BNY Capital Markets, Inc., NatCity Investments, Inc. and
SunTrust Capital Markets, Inc. (together with JPMorgan, the "Initial
Purchasers") concerning the purchase of the Securities from the Company by the
several Initial Purchasers.

The Securities will be offered and sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated April 9, 2003 (the "Preliminary Offering
Memorandum") and will prepare an offering memorandum dated the date hereof (the
"Offering


{PAGE}

Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to the
Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to
include all amendments and supplements thereto, unless otherwise noted. The
Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Securities by the Initial Purchasers in accordance with
Section 2.

Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") a registration statement under the Securities Act (the "Exchange
Offer Registration Statement") registering an issue of senior notes of the
Company and related guarantees of each of Guarantors (the "Exchange Securities")
which are identical in all material respects to the Securities (except that the
Exchange Securities will not contain terms with respect to transfer
restrictions) and the Guarantees and under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").

Concurrently with the consummation of the Offering, or shortly thereafter
the Company intends to (i) enter into a revolving credit facility with Bank of
America, N.A., as administrative agent, JPMorgan Chase Bank, as syndication
agent, Banc of America Securities LLC, as sole lead arranger and sole book
manager, the lenders named therein and the subsidiary guarantors named therein
for an aggregate borrowing of up to $200,000,000 (the "New Credit Facility"),
and (ii) issue and sell $90,000,000 aggregate principal amount of its
Convertible Senior Notes due 2023 (the "Convertible Notes"). The Convertible
Notes will be issued pursuant to an indenture to be dated as of April 15, 2003
(the "Convertible Notes Indenture") among the Company, the subsidiary guarantors
named therein and the Trustee. Assuming these transactions are consummated
concurrently, the proceeds from the sale of the Securities, together with
borrowings under the New Credit Facility and proceeds of the sale of the
Convertible Notes, will be used (i) to repay outstanding indebtedness of the
Company under its existing credit facility, (ii) purchase shares of the
Company's common stock (iii) to pay related fees and expenses and (iv) for
general corporate purposes, including additional repurchases of shares of the
Company's common stock.

Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Offering Memorandum.

1. Representations, Warranties and Agreements of the Company and each of
the Guarantors. The Company and the Guarantors jointly and severally represent
and warrant to, and agree with, the several Initial Purchasers on and as of the
date hereof and the Closing Date (as defined in Section 3) that:

 

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