Exhibit 10.1

 

OMEGA HEALTHCARE INVESTORS, INC.

 

$200,000,000

 

7% Senior Notes due 2014

 

PURCHASE AGREEMENT

 

March 15, 2004

 

DEUTSCHE BANK SECURITIES INC.

UBS SECURITIES LLC

BANC OF AMERICA SECURITIES LLC

c/o                               Deutsche Bank Securities Inc.
60 Wall Street
New York, New York  10005

 

Ladies and Gentlemen:

 

Omega Healthcare Investors, Inc., a Maryland corporation (the “Company”), and
the Company’s subsidiaries listed on the signature pages hereto (the “Subsidiary
Guarantors”), hereby confirm their agreement with you (the “Initial
Purchasers”), as set forth below.

 

SECTION 1.                                            THE SECURITIES.  SUBJECT
TO THE TERMS AND CONDITIONS HEREIN CONTAINED, THE COMPANY PROPOSES TO ISSUE AND
SELL TO THE INITIAL PURCHASERS $200,000,000 AGGREGATE PRINCIPAL AMOUNT OF ITS 7%
SENIOR NOTES DUE 2014 (THE “NOTES”).  THE NOTES WILL BE UNCONDITIONALLY
GUARANTEED (THE “GUARANTEES”) ON A SENIOR BASIS BY THE SUBSIDIARY GUARANTORS. 
THE NOTES AND THE GUARANTEES ARE COLLECTIVELY REFERRED TO HEREIN AS THE
“SECURITIES.”  THE SECURITIES ARE TO BE ISSUED UNDER AN INDENTURE (THE
“INDENTURE”) TO BE DATED AS OF MARCH 22, 2004 BY AND AMONG THE COMPANY, THE
SUBSIDIARY GUARANTORS AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE (THE
“TRUSTEE”).

 

The Securities will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the “Act”), in reliance
on exemptions therefrom.

 

In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum dated March 5, 2004 (the “Preliminary
Memorandum”) and a final offering memorandum dated March 15, 2004 (the “Final
Memorandum”; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a “Memorandum”) setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Company and any material developments relating to the Company
occurring after the date of the most recent historical financial statements
included

 

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therein.  Any reference herein to the Preliminary Memorandum or the Final
Memorandum shall be deemed to refer to and include the documents incorporated by
reference therein.

 

The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
“Registration Rights Agreement”), pursuant to which the Company and the
Subsidiary Guarantors have agreed, among other things, to use their best efforts
to file a registration statement (the “Registration Statement”) with the
Securities and Exchange Commission (the “Commission”) registering the Securities
or the Exchange Notes (as defined in the Registration Rights Agreement) under
the Act.

 

Concurrently with the purchase and sale of the Securities, the Company is
entering into a senior secured revolving credit facility in an aggregate
committed amount of $125 million (the “Senior Credit Facility”).  The Senior
Credit Facility will be guaranteed on a senior basis by each of the Guarantors
and will be secured by a lien on certain of the assets of the Company and
certain of the Subsidiaries.  The Senior Credit Facility will be governed by an
agreement dated as of the Closing Date by among the Company, the Guarantors, the
lenders party thereto and Bank of America, N.A., as administrative agent
(together with the related documents thereto, including, without limitation, any
guarantee agreements and security documents, the “Senior Credit Agreement”).

 

SECTION 2.                                            REPRESENTATIONS AND
WARRANTIES. THE COMPANY REPRESENTS AND WARRANTS TO AND AGREES WITH THE INITIAL
PURCHASERS WITH RESPECT TO ITSELF AND JOINTLY WITH EACH SUBSIDIARY GUARANTOR
WITH RESPECT TO SUCH SUBSIDIARY GUARANTOR AND EACH OF THE SUBSIDIARY GUARANTORS
REPRESENTS AND WARRANTS TO, SEVERALLY WITH RESPECT TO ITSELF, AND AGREES WITH
THE INITIAL PURCHASERS AS FOLLOWS:

 

(a)                                  Neither the Preliminary Memorandum as of
the date thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up to the
Closing Date (as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to (i) statements or
omissions made in reliance upon and in conformity with information relating to
the Initial Purchasers furnished to the Company in writing by the Initial
Purchasers expressly for use in the Final Memorandum and (ii) statements or
omissions made in the Preliminary Memorandum that are subsequently corrected in
the Final Memorandum or any amendment or supplement thereto.

 

(b)                                 Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in either the
Preliminary Memorandum or the Final Memorandum (or any amendment or supplement
thereto) complied or will comply

 

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when so filed in all material respects with the Exchange Act and the applicable
rules and regulations thereunder.

 

(c)                                  As of the date of this Agreement, the
Company has an authorized and outstanding capitalization as set forth in the
section of the Final Memorandum entitled “Capitalization” (subject to the
issuance of shares of Common Stock upon exercise of stock options and warrants
disclosed as outstanding in the Final Memorandum and the grant of options under
existing stock option plans described in the Final Memorandum).  All of the
issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right.

 

(d)                                 The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with full corporate power and authority to acquire, own, lease and
operate its properties, and to lease the same to others, and to conduct its
business as described in the Final Memorandum, to execute and deliver this
Agreement and to issue, sell and deliver the Notes as contemplated herein.  The
Company is in compliance in all respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions, except
where the failure to be in compliance would not, individually or in the
aggregate, either (i) have a material adverse effect on the business,
properties, financial condition, results of operation or prospects of the
Company and the Subsidiaries (as hereinafter defined) taken as a whole or (ii)
prevent consummation of the transactions contemplated hereby (the occurrence of
such effect or such prevention described in the foregoing clauses (i) and (ii)
being herein referred to as a “Material Adverse Effect”).

 

(e)                                  The Company is duly qualified to do
business as a foreign entity and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(f)                                    The Company has no subsidiaries (as
defined under the Act) other than those listed in Schedule 2 annexed hereto
(collectively, the “Subsidiaries”).  On the Closing Date, each Subsidiary will
issue its guarantee of the Notes; the Company owns, directly or indirectly, all
of the issued and outstanding capital stock of each of the Subsidiaries; other
than the capital stock of the Subsidiaries, the Company does not own, directly
or indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity.  Complete and correct
copies of the articles of incorporation and the bylaws of the Company and all
amendments thereto have

 

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been delivered to you, and no changes therein or to the articles of
incorporation and the bylaws of the Subsidiaries will be made on or after the
date hereof or on or before the Closing Date.  Each Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Final Memorandum.  Each Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect.  Each Subsidiary is in compliance in all respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions, except where the failure to be in compliance would not,
individually or in the aggregate, have a Material Adverse Effect.  All of the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and are owned
by the Company subject to no security interest, other material encumbrance or
adverse claims other than security interests, as disclosed in the Final
Memorandum, granted under the Company’s current senior credit facility.  No
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.  The Company has no
“significant subsidiary,” as that term is defined in Rule 1-02(w) of Regulation
S-X under the Act, other than those listed in Exhibit 21 to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2003.

 

(g)                                 The Company has all requisite corporate
power and authority to execute, deliver and perform each of its obligations
under the Notes, the Exchange Notes (as defined in the Registration Rights
Agreement) and the Private Exchange Notes (as defined in the Registration Rights
Agreement).  The Notes, when issued, will be in the form contemplated by the
Indenture.  The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company and, when executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, in each case
entitled to the benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.

 

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(h)                                 Each of the Subsidiary Guarantors has all
requisite power and authority to execute, deliver and perform each of its
obligations under the Guarantees and the guarantees of the Exchange Notes and
the Private Exchange Notes.  The Guarantees, and the guarantees of the Exchange
Notes, when issued, will be in the form contemplated by the Indenture.  The
Guarantees have been duly and validly authorized by each of the Subsidiary
Guarantors and, when the Guarantees are executed by each of the Subsidiary
Guarantors and the Notes are authenticated by the Trustee in accordance with the
provisions of the Indenture, will have been duly executed, issued and delivered
and will constitute valid and legally binding obligations of the Subsidiary
Guarantors, and the guarantees of the Exchange Notes and the Private Exchange
Notes, if any, have been duly and validly authorized by each of the Subsidiary
Guarantors and, when the guarantees of the Exchange Notes and the Private
Exchange Notes, if any, are executed by each of the Subsidiary Guarantors and
the Exchange Notes and the Private Exchange Notes, if any, are authenticated by
the Trustee in accordance with the provisions of the Indenture and issued in
exchange for the guarantees of the Notes in accordance with the Indenture, will
constitute valid and binding obligations of such Subsidiary Guarantor, in each
case entitled to the benefits of the Indenture and enforceable against such
Subsidiary Guarantor in accordance with their terms, subject to (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors’ rights generally and
(ii) general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.

 

(i)                                     The Company and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute, deliver
and perform its obligations under the Indenture.  The Indenture meets the
requirements for qualification under the Trust Indenture Act of 1939, as amended
(the “TIA”).  The Indenture has been duly and validly authorized by the Company
and each of the Subsidiary Guarantors and, when executed and delivered by the
Company and each of the Subsidiary Guarantors (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and legally
binding agreement of the Company and each of the Subsidiary Guarantors,
enforceable against the Company and each of the Subsidiary Guarantors in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors’ rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.

 

(j)                                     The Company and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute, deliver
and perform its obligations under the Registration Rights Agreement.  The
Registration Rights Agreement has been duly and validly authorized by the
Company and each of the Subsidiary Guarantors and, when executed and delivered
by the Company and each of the Subsidiary Guarantors

 

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(assuming the due authorization, execution and delivery by the Initial
Purchasers), will constitute a valid and legally binding agreement of the
Company enforceable against the Company and each of the Subsidiary Guarantors in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.

 

(k)                                  The Company and each of the Subsidiary
Guarantors has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.  This Agreement and the consummation by the
Company and each of the Subsidiary Guarantors of the transactions contemplated
hereby have been duly authorized by the Company and each of the Subsidiary
Guarantors.  This Agreement has been duly and validly executed and delivered by
the Company and each of the Subsidiary Guarantors.

 

(l)                                     Neither the Company nor any of the
Subsidiaries is in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any indebtedness
(or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under)
its (i) respective charter or bylaws, (ii) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected or (iii) any federal, state,
local or foreign law, regulation or rule, including, without limitation, the
rules and regulations of the New York Stock Exchange (the “NYSE”), or any
decree, judgment or order applicable to the Company or any of the Subsidiaries
or any of their respective properties, except in the case of clauses (ii) and
(iii) above, for such breaches, violations or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.  The
execution, delivery and performance of this Agreement, the issuance and sale of
the Securities and the consummation of the transactions contemplated hereby (A)
will neither conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of time or both
would result in any breach or violation of or constitute a default under or give
the holder of any indebtedness (or a person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (1) the charter or bylaws of the Company or any of the
Subsidiaries, (2) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract

 

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or other agreement or instrument to which the Company or any of the Subsidiaries
is a party or by which any of them or any of their respective properties may be
bound or affected, or (3) any federal, state or local law, regulation or rule,
including the rules and regulations of the NYSE or any decree, judgment or order
applicable to the Company or any of the Subsidiaries, except in the case of
clause (2) above, for such breaches, violations or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect, nor (B) result
in the creation or imposition of any lien, charge, claim or encumbrance upon any
of the properties (real and personal (including, without limitation, mortgage
loans and unsecured loans)) described in the Final Memorandum as being owned or
leased by the Company or any of the Subsidiaries (the “Properties”).

 

(m)                               No approval, authorization, consent or order
of or filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or of or with the NYSE,
or approval of the stockholders of the Company, is required in connection with
the issuance and sale of the Securities or the consummation by the Company or
any of the Subsidiary Guarantors of the transactions contemplated hereby other
than which has been effected and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Securities
are being offered by the Initial Purchasers.

 

(n)                                 Except as expressly set forth in the Final
Memorandum, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of common stock of the Company or
shares of any other capital stock or other equity interests of the Company and
(ii) no person has any preemptive rights, resale rights, rights of first refusal
or other rights to purchase any shares of common stock of the Company or shares
of any other capital stock of or other equity interests in the Company and
(iii) no person has the right to act as an initial purchaser or as a financial
advisor to the Company in connection with the offer and sale of the Securities,
whether as a result of the sale of the Securities as contemplated thereby or
otherwise.

 

(o)                                 Each of the Company and the Subsidiaries
(and, to the Company’s knowledge, each operator, lessee or sublessee of any
Property or portion thereof) (i) has all necessary licenses, authorizations,
consents and approvals, (ii) has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and (iii) has obtained
all necessary licenses, authorizations, consents and approvals from other
persons, in order to acquire and own, lease or sublease, lease to others and
conduct its respective business as described in the Final Memorandum, except in
the case of clauses (i), (ii) and (iii) above, where the failure to have such
items, make such filings or obtain such items would not, individually or in the
aggregate, have a Material Adverse Effect.  Neither the Company nor any of the
Subsidiaries (nor, to the knowledge of the Company or any of the Subsidiary
Guarantors, any such operator, lessee or sublessee) is in violation of, or in
default under, or has received notice of any

 

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proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or
any of the Subsidiaries, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(p)                                 All legal or governmental proceedings,
affiliate transactions, off-balance sheet transactions (including, without
limitation, transactions related to, and the existence of, “variable interest
entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), contracts, licenses, agreements, leases or documents of
a character required to be described in a Registration Statement on Form S-3
filed by the Company or to be filed as an exhibit to such a Registration
Statement or any Incorporated Document have been so described or filed as
required.

 

(q)                                 There are no actions, suits, claims,
investigations or proceedings pending or, to the knowledge of the Company or any
of the Subsidiary Guarantors, threatened or contemplated to which the Company or
any of the Subsidiaries or any of their respective directors or officers (or, to
the Company’s knowledge, any person from whom the Company or any Subsidiary
acquired any of the Properties (each, a “seller”), or any lessee, sublessee or
operator of any Property or any portion thereof) is or would be a party, or of
which any of the respective properties or assets of the Company and the
Subsidiaries, or any Property, is or would be subject at law or in equity,
before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, except any such action, suit,
claim, investigation or proceeding which would not result in a judgment, decree
or order having, individually or in the aggregate, a Material Adverse Effect.

 

(r)                                    Ernst & Young LLP, whose report on the
consolidated financial statements of the Company and the Subsidiaries is
incorporated by reference in the Final Memorandum, are independent public
accountants as required by the Act and by Rule 3600T of the Public Company
Accounting Oversight Board.

 

(s)                                  The financial statements of the Company and
the Subsidiaries included or incorporated by reference in the Final Memorandum,
together with the related notes, present fairly the consolidated financial
position of the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and the
Subsidiaries for the periods specified and have been prepared in compliance with
the requirements of the Act and the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved.   Any pro
forma financial statements or data included or incorporated by reference in the
Final Memorandum comply with the requirements of Regulation S-X of the Act and
the pro forma adjustments have been properly applied to the historical amounts
in

 

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the compilation of those statements and data.  The other financial and
statistical data set forth or incorporated by reference in the Final Memorandum
are accurately presented in all material respects and prepared on a basis
consistent with the financial statements and books and records of the Company. 
There are no financial statements (historical or pro forma) that are required to
be included or incorporated by reference in the Final Memorandum (including,
without limitation, as required by Rules 3-12 or 3-05 or Article 11 of
Regulation S-X under the Act) that are not included as required.  The Company
and the Subsidiaries do not have any material liabilities or obligations, direct
or contingent (including any off-balance sheet obligations or any “variable
interest entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), not disclosed in the Final Memorandum.  Other than with
respect to the financial data under the caption “Selected Pro Forma Financial
Data” in the section of the Final Memorandum captioned “Summary-Summary
Historical Financial Data,” all disclosures included in the Final Memorandum
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply in all material respects with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to
the extent applicable (as if such provisions were applicable to the Final
Memorandum).

 

(t)                                    Subsequent to the respective dates as of
which information is given in the Final Memorandum, there has not been (i) any
material adverse change, or any development which could have a reasonable
possibility of giving rise to a prospective material adverse change, in the
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, (ii) any transaction which
is material to the Company and the Subsidiaries taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet obligations),
incurred by the Company or any Subsidiary, which is material to the Company and
the Subsidiaries taken as a whole, (iv) any change in the capital stock (except
as the result of the exercise of rights by directors and employees under the
Company’s stock incentive plans described in the Final Memorandum) or
outstanding indebtedness of the Company or any Subsidiary (except up to $500,000
in the aggregate of indebtedness incurred in the ordinary course of business) or
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any Subsidiary.

 

(u)                                 Neither the Company nor any Subsidiary is
and, after giving effect to the offering and sale of the Securities, neither of
them will be an “investment company” or an entity “controlled” by an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”).

 

(v)                                 None of the Company, the Subsidiaries or any
agent acting on their behalf, other than the Initial Purchasers, has taken or
will take any action that might cause this Agreement or the sale of the Notes to
violate Regulation T, U or X of the

 

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Board of Governors of the Federal Reserve System, in each case as in effect, or
as the same may hereafter be in effect, on the Closing Date.

 

(w)                               The Company, and each of the Subsidiaries, has
insurable title, and, in the case of real property, in fee simple, to the
Properties, free and clear of all liens, claims, mortgages, deeds of trust,
restrictions, security interests and other encumbrances or defects (“Property
Encumbrances”), except for (x) the leasehold interests of lessees in the
Properties of the Company and the Subsidiaries held under lease (the “Leases”)
and (y) any other Property Encumbrances that would not, individually or in the
aggregate, have a Material Adverse Effect.  All Property Encumbrances on or
affecting the Properties which are required to be disclosed in the Final
Memorandum are disclosed therein as required.

 

(x)                                   Each of the Leases pertaining to the
Properties has been duly authorized by the Company or a Subsidiary, as
applicable, and is a valid, subsisting and enforceable agreement of the Company
or such Subsidiary, as applicable, and, to the knowledge of the Company, each
other party thereto, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting creditors’ rights generally or general equitable
principles.

 

(y)                                 No person other than the Company or a
Subsidiary has an option or right of first refusal to purchase all or part of
any Property owned by the Company or any interest therein, and to the Company’s
knowledge no such right exists with respect to any Property that the Company
leases (as lessee), except for such options or rights of first refusal which, if
refused, will not individually or in the aggregate have a Material Adverse
Effect.

 

(z)                                   To the knowledge of the Company or any of
the Subsidiary Guarantors, except as disclosed in the Final Memorandum, no
lessee of any portion of any of the Properties is in default under its
respective lease, and there is no event which, with notice, lapse of time or
both, would constitute a default under any such lease, except such defaults that
would not, individually or in the aggregate, have a Material Adverse Effect.

 

(aa)                            To the knowledge of the Company or any of the
Subsidiary Guarantors, except as disclosed in the Final Memorandum, no borrower
of a mortgage loan from the Company is in default under its respective mortgage
loan, and there is no event which, with notice, lapse of time or both, would
constitute a default under any such mortgage loan, except such defaults that
would not, individually or in the aggregate, have a Material Adverse Effect.

 

(bb)                          The Company and the Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents,

 

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trademarks (both registered and unregistered), trade names, service names,
copyrights, trade secrets and other proprietary information described in the
Final Memorandum as being owned or licensed by them or which are necessary for
the conduct of their respective businesses, except where the failure to own,
license or have such rights would not, individually or in the aggregate, have a
Material Adverse Effect.

 

(cc)                            Neither the Company nor any of the Subsidiaries
is engaged in any unfair labor practice, except as would not, individually or in
the aggregate, have a Material Adverse Effect.  There has been no violation of
any federal, state or local law relating to discrimination in the hiring,
promotion or pay of employees, any applicable wage or hour laws or any provision
of the Employee Retirement Income Security Act of 1974 (“ERISA”) or the rules
and regulations promulgated thereunder concerning the employees of the Company
or any of the Subsidiaries, except as would not, individually or in the
aggregate, have a Material Adverse Effect.

 

(dd)                          The Company and the Subsidiaries and their
properties, assets and operations (and, to the knowledge of the Company or any
of the Subsidiary Guarantors, each operator or lessee of any Property or portion
thereof) are in compliance with, and hold all permits, authorizations and
approvals required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect.  There are no past, present or, to the knowledge of the Company or any
of the Subsidiary Guarantors, reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that could
reasonably be expected to give rise to any material costs or liabilities to the
Company or any Subsidiary under, or to interfere with or prevent compliance by
the Company or any Subsidiary with, Environmental Laws, except as would not,
individually or in the aggregate, have a Material Adverse Effect.  Except as
would not, individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor any of the Subsidiaries, nor, to the knowledge of the
Company or any of the Subsidiary Guarantors, any seller, lessee, sublessee or
operator of any Property or portion thereof or any previous owner thereof, (i)
is the subject of any investigation, (ii) has received any notice or claim,
(iii) is a party to or affected by any pending or threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or (v) has entered
into any agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below).  Neither
the Company nor any of the Subsidiaries, nor, to the knowledge of the Company or
any of the Subsidiary Guarantors, any seller, lessee, sublessee or operator of
any Property or portion thereof or any previous owner thereof, has received from
any governmental authority notice of any violation, concerning the Properties,
of any municipal, state or federal law, rule or regulation or of any
Environmental Law, except for such violations as have heretofore been cured and
except for such violations as would not, individually or in the aggregate,

 

11

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have a Material Adverse Effect.  As used herein, “Environmental Law” means any
federal, state or local law, statute, ordinance, rule, regulation, order,
decree, judgment, injunction, permit, license, authorization or other binding
requirement, or common law, relating to health, safety or the protection,
cleanup or restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of
Hazardous Materials, and “Hazardous Materials” means any material (including,
without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any
Environmental Law.

 

(ee)                            The Company and the Subsidiaries have (A) all
licenses, certificates, permits, authorizations, approvals, franchises and other
rights from, and have made all declarations and filings with, all applicable
authorities, all self-regulatory authorities and all courts and other tribunals
(each, an “Authorization”) necessary to engage in the business conducted by them
in the manner described in the Final Memorandum, except as would not,
individually or in the aggregate, have a Material Adverse Effect, and (B) no
reason to believe that any governmental body or agency, domestic or foreign, is
considering limiting, suspending or revoking any such Authorization, except
where any such limitations, suspensions or revocations would not, individually
or in the aggregate, have a Material Adverse Effect.  All such Authorizations
are valid and in full force and effect and the Company and the Subsidiaries are
in compliance with the terms and conditions of all such Authorizations and with
the rules and regulations of the regulatory authorities having jurisdiction with
respect to such Authorizations, except for any invalidity, failure to be in full
force and effect or noncompliance with any Authorization that would not,
individually or in the aggregate, have a Material Adverse Effect.

 

(ff)                                Neither the Company nor any of the
Subsidiaries, nor, to the knowledge of the Company or any of the Subsidiary
Guarantors, any seller, lessee, sublessee or operator of any Property or portion
thereof, has received from any governmental authority any written notice of any
condemnation of, or zoning change affecting, the Properties or any portion
thereof, and the Company does not know of any such condemnation or zoning change
which is threatened, except for such condemnations or zoning changes that, if
consummated, would not, individually or in the aggregate, have a Material
Adverse Effect.  Each of the Properties, and the current and intended use and
occupancy thereof, complies with all applicable zoning laws, ordinances and
regulations, except where such failure does and will not, individually or in the
aggregate, have a Material Adverse Effect.

 

(gg)                          All tax returns required to be filed by the
Company or any of the Subsidiaries have been timely filed, and all taxes and
other assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to

 

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tax or penalties applicable thereto due or claimed to be due from such entities
have been timely paid, other than those being contested in good faith and for
which adequate reserves have been provide and which would not, individually or
in the aggregate, have a Material Adverse Effect.  To the knowledge of the
Company or any of the Subsidiary Guarantors, there is no tax deficiency which
has been asserted against the Company or any Subsidiary, except any tax
deficiency which would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(hh)                          There is no strike, labor dispute, slowdown or
work stoppage with the employees of the Company or any of the Subsidiaries that
is pending or, to the knowledge of the Company or any of the Subsidiary
Guarantors, threatened.

 

(ii)                                  Each of the Company and the Subsidiaries
is insured by insurers of recognized financial responsibility against such
losses and risks and in such amount as the Company reasonably deems to be
adequate and as are customary in the business in which they are engaged, except
as described in the Final Memorandum.  Except as would not, individually or in
the aggregate, have a Material Adverse Effect, all policies of insurance
insuring the Company and the Subsidiaries or any of their businesses, assets,
employees, officers, directors and trustees are in full force and effect, and
the Company and the Subsidiaries are in compliance with the terms of such
policies in all material respects.  Except as would not, individually or in the
aggregate, have a Material Adverse Effect, there are no claims by the Company or
any of the Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause.

 

(jj)                                  Neither the Company nor any of the
Subsidiaries has sustained since the date of the last audited financial
statements included or incorporated by reference in the Final Memorandum any
loss or interference with its respective 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, except for such loss or
interference as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(kk)                            Neither the Company nor any Subsidiary has sent
or received any communication regarding termination of, or intent not to renew,
any of the leases, contracts or agreements referred to or described in, or filed
as an exhibit to, any Incorporated Document, and no such termination or
non-renewal has been threatened by the Company or any Subsidiary or, to the
knowledge of the Company or any Subsidiary Guarantor after due inquiry, any
other party to any such contract or agreement, except for such termination or
non-renewal as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(ll)                                  The Company, and each of the Subsidiaries,
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that

 

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(i) transactions are executed in accordance with management’s general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

(mm)                      The Company has established and maintains and
evaluates “disclosure controls and procedures” (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) and “internal control over financial
reporting” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s auditors and the Audit Committee of the Board of
Directors of the Company have been advised of:  (i) any significant deficiencies
in the design or operation of internal controls which could adversely affect the
Company’s ability to record, process, summarize, and report financial data; and
(ii) any fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal controls.  Any material
weaknesses in internal controls have been identified for the Company’s
auditors.  Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses; the principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and any related rules and regulations promulgated by the Commission, and
the statements contained in any such certification are complete and correct. 
The Company and the Subsidiaries are in compliance in all material respects with
all applicable effective provisions of the Sarbanes-Oxley Act and the rules and
regulations of the Commission and the NYSE promulgated thereunder.

 

(nn)                          This Agreement, the Securities, the Indenture and
the Registration Rights Agreement will conform in all material respects to the
descriptions thereof in the Final Memorandum.

 

(oo)                          No holder of securities of the Company or any
Subsidiary will be entitled to have such securities registered under the
registration statements required to be filed by the Company pursuant to the
Registration Rights Agreement other than as expressly permitted thereby.

 

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(pp)                          Immediately after the consummation of the
transactions contemplated by this Agreement, the fair value and present fair
saleable value of the assets of each of the Company and the Subsidiaries (each
on a consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; none of the Company or the Subsidiaries (each
on a consolidated basis) is, nor will any of the Company or the Subsidiaries
(each on a consolidated basis) be, after giving effect to the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby, (a) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted, (b) unable to
pay its debts (contingent or otherwise) as they mature or (c) otherwise
insolvent.

 

(qq)                          None of the Company, the Subsidiaries or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Act) has directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any “security” (as defined
in the Act) that is or could be integrated with the sale of the Notes in a
manner that would require the registration under the Act of the Notes or
(ii) engaged in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) in connection with the
offering of the Securities or in any manner involving a public offering within
the meaning of Section 4(2) of the Act.  Assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8 hereof, it
is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Notes under the Act or to qualify the Indenture
under the TIA.

 

(rr)                                No securities of the Company or any
Subsidiary are of the same class (within the meaning of Rule 144A under the Act)
as the Securities and listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.

 

(ss)                            None of the Company, the Subsidiaries, any of
their respective Affiliates or any person acting on its or their behalf (other
than the Initial Purchasers) has engaged in any directed selling efforts (as
that term is defined in Regulation S under the Act (“Regulation S”)) with
respect to the Securities.  The Company, the Subsidiaries and their respective
Affiliates and any person acting on its or their behalf (other than the Initial
Purchasers) have complied with the offering restrictions requirement of
Regulation S.

 

(tt)                                The Company has provided you true, correct
and complete copies of all documentation pertaining to any extension of credit
in the form of a personal loan made, directly or indirectly, by the Company or
any Subsidiary to any director or executive officer of the Company, or to any
family member or affiliate of any director or executive officer of the Company. 
On or after July 30, 2002, the Company has not,

 

15

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directly or indirectly, including through any Subsidiary:  (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or executive officer of the Company, or to
or for any family member or affiliate of any director or executive officer of
the Company; or (ii) made any material modification, including any renewal
thereof, to any term of any personal loan to any director or executive officer
of the Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002.

 

(uu)                          All statistical or market-related data included or
incorporated by reference in the Final Memorandum are based on or derived from
sources that the Company believes to be reliable and accurate in all material
respects, and the Company has obtained the written consent to the use of such
data from such sources to the extent required.

 

(vv)                          Neither the Company nor any of the Subsidiaries
nor, to the knowledge of the Company and each of the Subsidiary Guarantors, any
employee or agent of the Company or any Subsidiary has made any payment of funds
of the Company or any Subsidiary or received or retained any funds in violation
of any law, rule or regulation, which payment, receipt or retention of funds is
of a character required to be disclosed in the Final Memorandum or any document
incorporated by reference therein.

 

(ww)                      Except pursuant to this Agreement, neither the Company
nor any of the Subsidiaries has incurred any liability for any finder’s or
broker’s fee or agent’s commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby or
by the Final Memorandum.

 

(xx)                              From and including the Company’s taxable year
ended 1992, the Company has continuously met, currently meets, and as of the
time of purchase or additional time of purchase, as the case may be, will meet,
the requirements for, and its proposed methods of operations as described in the
Final Memorandum will permit the Company to continue to meet the requirements
for, qualification and taxation as a real estate investment trust (“REIT”) under
the Internal Revenue Code of 1986 (the “Code”).  All statements in the Final
Memorandum regarding the Company’s qualification as a REIT are true, complete
and correct in all material respects.

 

(yy)                          Neither the Company nor any of the Subsidiaries
nor any of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.

 

(zz)                              Any certificate signed by any officer of the
Company or any Subsidiary Guarantor and delivered to any Initial Purchaser or to
counsel for the Initial Purchasers shall

 

16

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be deemed a joint and several representation and warranty by the Company and
each of the Subsidiary Guarantors to each Initial Purchaser as to the matters
covered thereby.

 

SECTION 3.                                            PURCHASE, SALE AND
DELIVERY OF THE NOTES.  ON THE BASIS OF THE REPRESENTATIONS, WARRANTIES,
AGREEMENTS AND COVENANTS HEREIN CONTAINED AND SUBJECT TO THE TERMS AND
CONDITIONS HEREIN SET FORTH, THE COMPANY AND THE SUBSIDIARY GUARANTORS AGREE TO
ISSUE AND SELL TO THE INITIAL PURCHASERS, AND THE INITIAL PURCHASERS, ACTING
SEVERALLY AND NOT JOINTLY, AGREE TO PURCHASE THE SECURITIES IN THE RESPECTIVE
AMOUNTS SET FORTH ON SCHEDULE 1 HERETO FROM THE COMPANY AND THE SUBSIDIARY
GUARANTORS AT 97.55% OF THEIR PRINCIPAL AMOUNT.  ONE OR MORE CERTIFICATES IN
DEFINITIVE FORM FOR THE SECURITIES THAT THE INITIAL PURCHASERS HAVE AGREED TO
PURCHASE HEREUNDER, AND IN SUCH DENOMINATION OR DENOMINATIONS AND REGISTERED IN
SUCH NAME OR NAMES AS THE INITIAL PURCHASERS REQUEST UPON NOTICE TO THE COMPANY
OF AT LEAST 48 HOURS PRIOR TO THE CLOSING DATE, SHALL BE DELIVERED BY OR ON
BEHALF OF THE COMPANY AND THE SUBSIDIARY GUARANTORS TO THE INITIAL PURCHASERS,
AGAINST PAYMENT BY OR ON BEHALF OF THE INITIAL PURCHASERS OF THE PURCHASE PRICE
THEREFOR BY WIRE TRANSFER (SAME DAY FUNDS), TO SUCH ACCOUNT OR ACCOUNTS AS THE
COMPANY SHALL SPECIFY IN WRITING PRIOR TO THE CLOSING DATE, OR BY SUCH MEANS AS
THE PARTIES HERETO SHALL AGREE PRIOR TO THE CLOSING DATE.  SUCH DELIVERY OF AND
PAYMENT FOR THE SECURITIES SHALL BE MADE AT THE OFFICES OF CAHILL GORDON &
REINDEL LLP, 80 PINE STREET, NEW YORK, NEW YORK AT 10:00 A.M., NEW YORK TIME, ON
MARCH 22, 2004, OR AT SUCH OTHER PLACE, TIME OR DATE AS THE INITIAL PURCHASERS,
ON THE ONE HAND, AND THE COMPANY, ON THE OTHER HAND, MAY AGREE UPON, SUCH TIME
AND DATE OF DELIVERY AGAINST PAYMENT BEING HEREIN REFERRED TO AS THE “CLOSING
DATE.”  THE COMPANY AND THE SUBSIDIARY GUARANTORS WILL MAKE SUCH CERTIFICATE OR
CERTIFICATES FOR THE SECURITIES AVAILABLE FOR CHECKING AND PACKAGING BY THE
INITIAL PURCHASERS AT THE OFFICES OF DEUTSCHE BANK SECURITIES INC. IN NEW YORK,
NEW YORK, OR AT SUCH OTHER PLACE AS DEUTSCHE BANK SECURITIES INC. MAY DESIGNATE,
AT LEAST 24 HOURS PRIOR TO THE CLOSING DATE.

 

SECTION 4.                                            OFFERING BY THE INITIAL
PURCHASERS.  THE INITIAL PURCHASERS PROPOSE TO MAKE AN OFFERING OF THE
SECURITIES AT THE PRICE AND UPON THE TERMS SET FORTH IN THE FINAL MEMORANDUM AS
SOON AS PRACTICABLE AFTER THIS AGREEMENT IS ENTERED INTO AND AS IN THE JUDGMENT
OF THE INITIAL PURCHASERS IS ADVISABLE.

 

SECTION 5.                                            COVENANTS OF THE COMPANY. 
EACH OF THE COMPANY AND THE SUBSIDIARY GUARANTORS, AS THE CASE MAY BE, JOINTLY
AND SEVERALLY, COVENANTS AND AGREES WITH THE INITIAL PURCHASERS AS FOLLOWS:

 

(a)                                  The Company will not amend or supplement
the Final Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy for a
reasonable period of time prior to the proposed amendment or supplement and as
to which the Initial Purchasers shall not have given their consent (which
consent shall not be unreasonably withheld).  The Company will promptly, upon
the reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary

 

17

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Memorandum or the Final Memorandum that may be necessary or advisable in
connection with the resale of the Securities by the Initial Purchasers.

 

(b)                                 The Company and each of the Subsidiary
Guarantors will cooperate with the Initial Purchasers, to arrange for the
qualification of the Securities for offering and sale under the securities or
“Blue Sky” laws of which jurisdictions as the Initial Purchasers may designate
and will continue such qualifications in effect for as long as may be necessary
to complete the resale of the Securities; provided, however, that in connection
therewith, neither the Company nor any Subsidiary Guarantor shall be required to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.

 

(c)                                  If, at any time prior to the completion of
the distribution by the Initial Purchasers of the Securities or the Private
Exchange Notes, any event occurs or information becomes known as a result of
which the Final Memorandum as then amended or supplemented would include any
untrue statement of a material fact, or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if for any other reason it is necessary at
any time to amend or supplement the Final Memorandum to comply with applicable
law, the Company will promptly notify the Initial Purchasers thereof and will
prepare, at the expense of the Company, an amendment or supplement to the Final
Memorandum that corrects such statement or omission or effects such compliance.

 

(d)                                 The Company will, without charge, provide to
the Initial Purchasers and to counsel for the Initial Purchasers as many copies
of the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.

 

(e)                                  The Company will apply the net proceeds
from the sale of the Notes as set forth under “Use of Proceeds” in the Final
Memorandum.

 

(f)                                    For so long as any of the Securities
remain outstanding, the Company will furnish to the Initial Purchasers copies of
all reports and other communications (financial or otherwise) furnished by the
Company to the Trustee or to the holders of the Securities and, as soon as
available, copies of any reports or financial statements furnished to or filed
by the Company with the Commission or any national securities exchange on which
any class of securities of the Company may be listed; provided that the
foregoing obligation will not apply to any reports or other communication made
available on the SEC’s EDGAR database.

 

(g)                                 Prior to the Closing Date, the Company will
furnish to the Initial Purchasers, as soon as they have been prepared, a copy of
any unaudited interim consolidated financial statements of the Company and the
Subsidiaries for any period subsequent

 

18

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to the period covered by the most recent financial statements appearing in the
Final Memorandum.

 

(h)                                 None of the Company, the Subsidiary
Guarantors or any of their Affiliates will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any “security” (as defined in
the Act) that could be integrated with the sale of the Securities in a manner
which would require the registration under the Act of the Securities.

 

(i)                                     The Company and the Subsidiary
Guarantors will not, and will not permit any of the other Subsidiaries to,
engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.

 

(j)                                     For so long as any of the Securities
remain outstanding, the Company will make available at its expense, upon
request, to any holder of such Securities and any prospective purchasers thereof
the information specified in Rule 144A(d)(4) under the Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.

 

(k)                                  The Company will use its best efforts to
(i) permit the Securities to be designated as PORTAL-eligible securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. (“NASD”) relating to trading in the NASD’s Portal
Market (the “Portal Market”) and (ii) permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.

 

(l)                                     In connection with Securities offered
and sold in an off shore transaction (as defined in Regulation S) the Company
will not register any transfer of such Notes not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Notes in the form of
definitive securities.

 

(m)                               None of the Company, the Subsidiary Guarantors
or any of their Affiliates will engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Securities.

 

(n)                                 For a period of two years (calculated in
accordance with paragraph (d) of Rule 144 under the Act) following the date of
original issuance of the Securities none of the Company, the Subsidiary
Guarantors or any of their respective Affiliates will re-sell any such
Securities which are restricted securities (as such term is defined under Rule
144(a)(3) under the Act).

 

19

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SECTION 6.                                            EXPENSES.  THE COMPANY AND
THE SUBSIDIARY GUARANTORS, JOINTLY AND SEVERALLY, AGREE TO PAY ALL COSTS AND
EXPENSES INCIDENT TO THE PERFORMANCE OF THEIR OBLIGATIONS UNDER THIS AGREEMENT,
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREIN ARE CONSUMMATED OR THIS
AGREEMENT IS TERMINATED PURSUANT TO SECTION 11 HEREOF, INCLUDING ALL COSTS AND
EXPENSES INCIDENT TO (I) THE PRINTING, WORD PROCESSING OR OTHER PRODUCTION OF
DOCUMENTS WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING ANY
COSTS OF PRINTING THE PRELIMINARY MEMORANDUM AND THE FINAL MEMORANDUM AND ANY
AMENDMENT OR SUPPLEMENT THERETO, AND ANY “BLUE SKY” MEMORANDA, (II) ALL
ARRANGEMENTS RELATING TO THE DELIVERY TO THE INITIAL PURCHASERS OF COPIES OF THE
FOREGOING DOCUMENTS, (III) THE FEES AND DISBURSEMENTS OF THE COUNSEL, THE
ACCOUNTANTS AND ANY OTHER EXPERTS OR ADVISORS RETAINED BY THE COMPANY,
(IV) PREPARATION (INCLUDING PRINTING), ISSUANCE AND DELIVERY TO THE INITIAL
PURCHASERS OF THE SECURITIES, (V) THE QUALIFICATION OF THE SECURITIES UNDER
STATE SECURITIES AND “BLUE SKY” LAWS, INCLUDING FILING FEES AND FEES AND
DISBURSEMENTS OF COUNSEL FOR THE INITIAL PURCHASERS RELATING THERETO,
(VI) EXPENSES IN CONNECTION WITH THE “ROADSHOW” AND ANY OTHER MEETINGS WITH
PROSPECTIVE INVESTORS IN THE SECURITIES, (VII) FEES AND EXPENSES OF THE TRUSTEE,
INCLUDING FEES AND EXPENSES OF COUNSEL, (VIII) ALL EXPENSES AND LISTING FEES
INCURRED IN CONNECTION WITH THE APPLICATION FOR QUOTATION OF THE SECURITIES ON
THE PORTAL MARKET AND (IX) ANY FEES CHARGED BY INVESTMENT RATING AGENCIES FOR
THE RATING OF THE SECURITIES.  IF THE SALE OF THE SECURITIES PROVIDED FOR HEREIN
IS NOT CONSUMMATED BECAUSE ANY CONDITION TO THE OBLIGATIONS OF THE INITIAL
PURCHASERS SET FORTH IN SECTION 7 HEREOF IS NOT SATISFIED, BECAUSE THIS
AGREEMENT IS TERMINATED OR BECAUSE OF ANY FAILURE, REFUSAL OR INABILITY ON THE
PART OF THE COMPANY OR THE SUBSIDIARY GUARANTORS TO PERFORM ALL OBLIGATIONS AND
SATISFY ALL CONDITIONS ON THEIR PART TO BE PERFORMED OR SATISFIED HEREUNDER
(OTHER THAN SOLELY BY REASON OF A DEFAULT BY THE INITIAL PURCHASERS OF THEIR
OBLIGATIONS HEREUNDER AFTER ALL CONDITIONS HEREUNDER HAVE BEEN SATISFIED IN
ACCORDANCE HEREWITH), THE COMPANY AND THE SUBSIDIARY GUARANTORS AGREE TO
PROMPTLY REIMBURSE THE INITIAL PURCHASERS UPON DEMAND FOR ALL REASONABLE AND
DOCUMENTED OUT-OF-POCKET EXPENSES (INCLUDING THE FEES, DISBURSEMENTS AND CHARGES
OF CAHILL GORDON & REINDEL LLP, COUNSEL FOR THE INITIAL PURCHASERS), THAT SHALL
HAVE BEEN INCURRED BY THE INITIAL PURCHASERS IN CONNECTION WITH THE PROPOSED
PURCHASE AND SALE OF THE SECURITIES.

 

SECTION 7.                                            CONDITIONS OF THE INITIAL
PURCHASERS’ OBLIGATIONS.  THE OBLIGATION OF THE INITIAL PURCHASERS TO PURCHASE
AND PAY FOR THE SECURITIES SHALL, IN THEIR SOLE DISCRETION, BE SUBJECT TO THE
SATISFACTION OR WAIVER OF THE FOLLOWING CONDITIONS ON OR PRIOR TO THE CLOSING
DATE:

 

(a)                                  On the Closing Date, the Initial Purchasers
shall have received the opinions, dated as of the Closing Date and addressed to
the Initial Purchasers, of (i) Powell, Goldstein, Frazer & Murphy LLP, counsel
for the Company and certain of the Subsidiary Guarantors, in form and substance
satisfactory to counsel for the Initial Purchasers, as set forth in Exhibit B-1
and Exhibit B-2 hereto and (ii) local counsel for certain of the Subsidiary
Guarantors, in form and substance satisfactory to counsel for the Initial
Purchasers, as set forth in Exhibit C hereto.  Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent

 

20

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they deem proper, upon certificates of officers of the Company and the
Subsidiary Guarantors and certificates of public officials, copies of which
shall have been provided to the Initial Purchasers.

 

(b)                                 On the Closing Date, the Initial Purchasers
shall have received the opinion, in form and substance satisfactory to the
Initial Purchasers, dated as of the Closing Date and addressed to the Initial
Purchasers, of Cahill Gordon & Reindel llp, counsel for the Initial Purchasers,
with respect to certain legal matters relating to this Agreement and such other
related matters as the Initial Purchasers may reasonably require.  Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and the Subsidiary Guarantors and certificates of public officials,
copies of which shall have been provided to the Initial Purchasers.

 

(c)                                  The Initial Purchasers shall have received
from the Independent Accountants a comfort letter or letters dated the date
hereof and the Closing Date, in form and substance satisfactory to counsel for
the Initial Purchasers.

 

(d)                                 The representations and warranties of the
Company and the Subsidiary Guarantors contained in this Agreement shall be true
and correct on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date; the statements of the Company’s and the
Subsidiary Guarantors’ officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct on and as of the
date made and on and as of the Closing Date; the Company and the Subsidiary
Guarantors shall have performed all covenants and agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior to
the Closing Date; and, except as described in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), subsequent to the
date of the most recent financial statements in such Final Memorandum, there
shall have been no event or development, and no information shall have become
known, that, individually or in the aggregate, has or would be reasonably likely
to have a Material Adverse Effect.

 

(e)                                  The sale of the Securities hereunder shall
not be enjoined (temporarily or permanently) on the Closing Date.

 

(f)                                    Subsequent to the date of the most recent
financial statements in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), none of the Company or any of the
Subsidiaries shall have sustained any loss or interference with respect to its
business or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute, slow
down or work stoppage or from any legal or governmental proceeding, order or
decree, which loss or interference, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect.

 

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(g)                                 The Initial Purchasers shall have received
certificates of the Company and each of the Subsidiary Guarantors, dated the
Closing Date, signed on behalf of the Company or the applicable Subsidiary
Guarantor by its Chairman of the Board, President or any Vice President and the
Chief Financial Officer, to the effect that

 

(i)                  the representations and warranties of the Company or the
applicable Subsidiary Guarantor contained in this Agreement are true and correct
on and as of the date hereof and on and as of the Closing Date, and the Company
or the applicable Subsidiary Guarantor has performed all covenants and
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;

 

(ii)               at the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known to the Company or
such Subsidiary Guarantor, that, individually or in the aggregate, has or would
be reasonably likely to have a Material Adverse Effect; and

 

(iii)            the sale of the Securities hereunder has not been enjoined
(temporarily or permanently).

 

(h)                                 On the Closing Date, the Initial Purchasers
shall have received the Registration Rights Agreement executed by the Company
and the Subsidiary Guarantors and such agreement shall be in full force and
effect.

 

(i)                                     On the Closing Date, the Initial
Purchasers shall have received the Indenture executed by the Company, each of
the Subsidiary Guarantors and the Trustee and such agreement shall be in full
force and effect.

 

(j)                                     On the Closing Date, the Company and the
Subsidiary Guarantors shall have delivered to the Initial Purchasers a fully
executed copy of the Senior Credit Agreement, in form and substance satisfactory
to counsel for the Initial Purchasers, and such agreement shall be in full force
and effect.

 

(k)                                  The Securities shall be eligible for
clearance and settlement through The Depository Trust Company.

 

(l)                                     The Securities shall be designated
PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.

 

On or before the Closing Date, the Initial Purchasers and counsel for the
Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the

 

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Company and the Subsidiaries as they shall have heretofore reasonably requested
from the Company.

 

All such documents, opinions, certificates, letters, schedules or instruments
delivered pursuant to this Agreement will comply with the provisions hereof only
if they are reasonably satisfactory in all material respects to the Initial
Purchasers and counsel for the Initial Purchasers.  The Company and the
Subsidiary Guarantors shall furnish to the Initial Purchasers such conformed
copies of such documents, opinions, certificates, letters, schedules and
instruments in such quantities as the Initial Purchasers shall reasonably
request.

 

SECTION 8.                                            OFFERING OF SECURITIES;
RESTRICTIONS ON TRANSFER.  (A)  EACH OF THE INITIAL PURCHASERS AGREES WITH THE
COMPANY AND THE SUBSIDIARY GUARANTORS THAT (I) IT HAS NOT AND WILL NOT SOLICIT
OFFERS FOR, OR OFFER OR SELL, THE SECURITIES BY ANY FORM OF GENERAL SOLICITATION
OR GENERAL ADVERTISING (AS THOSE TERMS ARE USED IN REGULATION D UNDER THE ACT)
OR IN ANY MANNER INVOLVING A PUBLIC OFFERING WITHIN THE MEANING OF SECTION 4(2)
OF THE ACT; AND (II) IT HAS AND WILL SOLICIT OFFERS FOR THE SECURITIES ONLY
FROM, AND WILL OFFER THE SECURITIES ONLY TO, (A) IN THE CASE OF OFFERS INSIDE
THE UNITED STATES, PERSONS WHOM THE INITIAL PURCHASERS REASONABLY BELIEVE TO BE
QIBS OR, IF ANY SUCH PERSON IS BUYING FOR ONE OR MORE INSTITUTIONAL ACCOUNTS FOR
WHICH SUCH PERSON IS ACTING AS FIDUCIARY OR AGENT, ONLY WHEN SUCH PERSON HAS
REPRESENTED TO THE INITIAL PURCHASERS THAT EACH SUCH ACCOUNT IS A QIB, TO WHOM
NOTICE HAS BEEN GIVEN THAT SUCH SALE OR DELIVERY IS BEING MADE IN RELIANCE ON
RULE 144A, AND, IN EACH CASE, IN TRANSACTIONS UNDER RULE 144A AND (B) IN THE
CASE OF OFFERS OUTSIDE THE UNITED STATES, TO PERSONS OTHER THAN U.S. PERSONS
(“NON-U.S. PURCHASERS,” WHICH TERM SHALL INCLUDE DEALERS OR OTHER PROFESSIONAL
FIDUCIARIES IN THE UNITED STATES ACTING ON A DISCRETIONARY BASIS FOR NON-U.S.
BENEFICIAL OWNERS (OTHER THAN AN ESTATE OR TRUST)); PROVIDED, HOWEVER, THAT, IN
THE CASE OF THIS CLAUSE (B), IN PURCHASING SUCH SECURITIES SUCH PERSONS ARE
DEEMED TO HAVE REPRESENTED AND AGREED AS PROVIDED UNDER THE CAPTION “NOTICE TO
INVESTORS” CONTAINED IN THE FINAL MEMORANDUM (OR, IF THE FINAL MEMORANDUM IS NOT
IN EXISTENCE, IN THE MOST RECENT MEMORANDUM).

 

(B)                                 EACH OF THE INITIAL PURCHASERS REPRESENTS
AND WARRANTS (AS TO ITSELF ONLY) WITH RESPECT TO OFFERS AND SALES OUTSIDE THE
UNITED STATES THAT (I) IT HAS AND WILL COMPLY WITH ALL APPLICABLE LAWS AND
REGULATIONS IN EACH JURISDICTION IN WHICH IT ACQUIRES, OFFERS, SELLS OR DELIVERS
NOTES OR HAS IN ITS POSSESSION OR DISTRIBUTES ANY MEMORANDUM OR ANY SUCH OTHER
MATERIAL, IN ALL CASES AT ITS OWN EXPENSE, (II) THE NOTES HAVE NOT BEEN AND WILL
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT IN ACCORDANCE WITH REGULATION S UNDER THE ACT OR
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
(III) IT HAS OFFERED THE NOTES AND WILL OFFER AND SELL THE NOTES (A) AS PART OF
ITS DISTRIBUTION AT ANY TIME AND (B) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF
THE COMMENCEMENT OF THE OFFERING AND THE CLOSING DATE, ONLY IN ACCORDANCE WITH
RULE 903 OF REGULATION S AND, ACCORDINGLY, NEITHER IT NOR ANY PERSONS ACTING ON
ITS BEHALF HAVE ENGAGED OR WILL ENGAGE IN ANY DIRECTED SELLING EFFORTS (WITHIN
THE MEANING OF REGULATION S) WITH RESPECT TO THE NOTES, AND ANY SUCH PERSONS
HAVE COMPLIED AND WILL COMPLY WITH THE OFFERING RESTRICTIONS REQUIREMENT OF
REGULATION S.

 

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Terms used in this Section 8 and not defined in this Agreement have the meanings
given to them in Regulation S.

 

SECTION 9.                                            INDEMNIFICATION AND
CONTRIBUTION.  (A)  THE COMPANY AND THE SUBSIDIARY GUARANTORS, JOINTLY AND
SEVERALLY, AGREE TO INDEMNIFY AND HOLD HARMLESS EACH INITIAL PURCHASER AND EACH
PERSON, IF ANY, WHO CONTROLS ANY INITIAL PURCHASER WITHIN THE MEANING OF
SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT AGAINST ANY LOSSES,
CLAIMS, DAMAGES OR LIABILITIES TO WHICH ANY INITIAL PURCHASER OR SUCH
CONTROLLING PERSON MAY BECOME SUBJECT UNDER THE ACT, THE EXCHANGE ACT OR
OTHERWISE, INSOFAR AS ANY SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR
ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON THE FOLLOWING:

 

(I)                  ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT MADE BY
THE COMPANY OR ANY SUBSIDIARY GUARANTOR IN SECTION 2 HEREOF;

 

(II)               ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY
MATERIAL FACT CONTAINED IN ANY MEMORANDUM OR ANY AMENDMENT OR SUPPLEMENT
THERETO; OR

 

(III)            THE OMISSION OR ALLEGED OMISSION TO STATE, IN ANY MEMORANDUM OR
ANY AMENDMENT OR SUPPLEMENT THERETO, A MATERIAL FACT REQUIRED TO BE STATED
THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING;

 

and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any reasonable legal or other documented expenses
incurred by the Initial Purchasers or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action; provided,
however, the Company and the Subsidiary Guarantors will not be liable in any
such case to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in any Memorandum or any amendment or
supplement thereto in reliance upon and in conformity with written information
concerning the Initial Purchasers furnished to the Company by the Initial
Purchasers through Deutsche Bank Securities Inc. specifically for use therein;
provided further, however, that the Company and the Subsidiary Guarantors will
not be liable to any Initial Purchaser or any person controlling such Initial
Purchaser with respect to any such untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement thereto) if
the person asserting any such loss, claim, damage or liability purchased
Securities from such Initial Purchaser but was not sent or given a copy of the
Final Memorandum (as amended or supplemented) in any case where such delivery of
the Final Memorandum (as amended or supplemented) was required by the Act,
unless such failure to deliver the Final Memorandum (as amended or supplemented)
was a result of noncompliance by the Company with Section 5 hereof.  The
indemnity provided for in this Section 9 will be in addition to any liability
that the Company and the Subsidiary Guarantors may otherwise have to the
indemnified parties.  The Company and the Subsidiary Guarantors shall not be
liable under

 

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this Section 9 for any settlement of any claim or action effected without their
prior written consent, which shall not be unreasonably withheld.

 

(B)                                 EACH INITIAL PURCHASER, SEVERALLY AND NOT
JOINTLY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY AND THE SUBSIDIARY
GUARANTORS, THEIR RESPECTIVE DIRECTORS, THEIR RESPECTIVE OFFICERS AND EACH
PERSON, IF ANY, WHO CONTROLS THE COMPANY AND THE SUBSIDIARY GUARANTORS WITHIN
THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT AGAINST
ANY LOSSES, CLAIMS, DAMAGES OR LIABILITIES TO WHICH THE COMPANY AND THE
SUBSIDIARY GUARANTORS OR ANY SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON MAY
BECOME SUBJECT UNDER THE ACT, THE EXCHANGE ACT OR OTHERWISE, INSOFAR AS SUCH
LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THEREOF) ARISE OUT
OF OR ARE BASED UPON (I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF ANY
MATERIAL FACT CONTAINED IN ANY MEMORANDUM OR ANY AMENDMENT OR SUPPLEMENT
THERETO, OR (II) THE OMISSION OR THE ALLEGED OMISSION TO STATE THEREIN A
MATERIAL FACT REQUIRED TO BE STATED IN ANY MEMORANDUM OR ANY AMENDMENT OR
SUPPLEMENT THERETO, OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING,
IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENT
OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE IN RELIANCE
UPON AND IN CONFORMITY WITH WRITTEN INFORMATION CONCERNING SUCH INITIAL
PURCHASER, FURNISHED TO THE COMPANY BY THE INITIAL PURCHASERS THROUGH DEUTSCHE
BANK SECURITIES INC. SPECIFICALLY FOR USE THEREIN; AND SUBJECT TO THE LIMITATION
SET FORTH IMMEDIATELY PRECEDING THIS CLAUSE, WILL REIMBURSE, AS INCURRED, ANY
REASONABLE LEGAL OR OTHER DOCUMENTED EXPENSES INCURRED BY THE COMPANY AND THE
SUBSIDIARY GUARANTORS OR ANY SUCH DIRECTOR, OFFICER OR CONTROLLING PERSON IN
CONNECTION WITH INVESTIGATING OR DEFENDING AGAINST OR APPEARING AS A THIRD PARTY
WITNESS IN CONNECTION WITH ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION IN
RESPECT THEREOF.  THE INDEMNITY PROVIDED FOR IN THIS SECTION 9 WILL BE IN
ADDITION TO ANY LIABILITY THAT THE INITIAL PURCHASERS MAY OTHERWISE HAVE TO THE
INDEMNIFIED PARTIES.  THE INITIAL PURCHASERS SHALL NOT BE LIABLE UNDER THIS
SECTION 9 FOR ANY SETTLEMENT OF ANY CLAIM OR ACTION EFFECTED WITHOUT THEIR
CONSENT, WHICH SHALL NOT BE UNREASONABLY WITHHELD.

 

(C)                                  PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED
PARTY UNDER THIS SECTION 9 OF NOTICE OF THE COMMENCEMENT OF ANY ACTION FOR WHICH
SUCH INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION UNDER THIS SECTION 9, SUCH
INDEMNIFIED PARTY WILL, IF A CLAIM IN RESPECT THEREOF IS TO BE MADE AGAINST THE
INDEMNIFYING PARTY UNDER THIS SECTION 9, NOTIFY THE INDEMNIFYING PARTY OF THE
COMMENCEMENT THEREOF IN WRITING; BUT THE OMISSION TO SO NOTIFY THE INDEMNIFYING
PARTY (I) WILL NOT RELIEVE IT FROM ANY LIABILITY UNDER PARAGRAPH (A) OR (B)
ABOVE UNLESS AND TO THE EXTENT SUCH FAILURE RESULTS IN THE FORFEITURE BY THE
INDEMNIFYING PARTY OF SUBSTANTIAL RIGHTS AND DEFENSES AND (II) WILL NOT, IN ANY
EVENT, RELIEVE THE INDEMNIFYING PARTY FROM ANY OBLIGATIONS TO ANY INDEMNIFIED
PARTY OTHER THAN THE INDEMNIFICATION OBLIGATION PROVIDED IN PARAGRAPHS (A) AND
(B) ABOVE.  IN CASE ANY SUCH ACTION IS BROUGHT AGAINST ANY INDEMNIFIED PARTY AND
IT NOTIFIES THE INDEMNIFYING PARTY OF THE COMMENCEMENT THEREOF, THE INDEMNIFYING
PARTY WILL BE ENTITLED TO PARTICIPATE THEREIN AND, TO THE EXTENT THAT IT MAY
WISH, JOINTLY WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTIFIED, TO ASSUME
THE DEFENSE THEREOF, WITH COUNSEL REASONABLY SATISFACTORY TO SUCH INDEMNIFIED
PARTY; PROVIDED, HOWEVER, THAT IF (I) THE USE OF COUNSEL CHOSEN BY THE
INDEMNIFYING PARTY TO REPRESENT THE INDEMNIFIED PARTY WOULD PRESENT SUCH COUNSEL
WITH A CONFLICT OF

 

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INTEREST, (II) THE DEFENDANTS IN ANY SUCH ACTION INCLUDE BOTH THE INDEMNIFIED
PARTY AND THE INDEMNIFYING PARTY AND THE INDEMNIFIED PARTY SHALL HAVE BEEN
ADVISED BY COUNSEL THAT THERE MAY BE ONE OR MORE LEGAL DEFENSES AVAILABLE TO IT
AND/OR OTHER INDEMNIFIED PARTIES THAT ARE DIFFERENT FROM OR ADDITIONAL TO THOSE
AVAILABLE TO THE INDEMNIFYING PARTY OR (III) THE INDEMNIFYING PARTY SHALL NOT
HAVE EMPLOYED COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY TO
REPRESENT THE INDEMNIFIED PARTY WITHIN A REASONABLE TIME AFTER RECEIPT BY THE
INDEMNIFYING PARTY OF NOTICE OF THE INSTITUTION OF SUCH ACTION, THEN, IN EACH
SUCH CASE, THE INDEMNIFYING PARTY SHALL NOT HAVE THE RIGHT TO DIRECT THE DEFENSE
OF SUCH ACTION ON BEHALF OF SUCH INDEMNIFIED PARTY OR PARTIES AND SUCH
INDEMNIFIED PARTY OR PARTIES SHALL HAVE THE RIGHT TO SELECT SEPARATE COUNSEL TO
DEFEND SUCH ACTION ON BEHALF OF SUCH INDEMNIFIED PARTY OR PARTIES.  AFTER NOTICE
FROM THE INDEMNIFYING PARTY TO SUCH INDEMNIFIED PARTY OF ITS ELECTION SO TO
ASSUME THE DEFENSE THEREOF AND APPROVAL BY SUCH INDEMNIFIED PARTY OF COUNSEL
APPOINTED TO DEFEND SUCH ACTION, THE INDEMNIFYING PARTY WILL NOT BE LIABLE TO
SUCH INDEMNIFIED PARTY UNDER THIS SECTION 9 FOR ANY LEGAL OR OTHER EXPENSES,
OTHER THAN REASONABLE COSTS OF INVESTIGATION, SUBSEQUENTLY INCURRED BY SUCH
INDEMNIFIED PARTY IN CONNECTION WITH THE DEFENSE THEREOF, UNLESS (I) THE
INDEMNIFIED PARTY SHALL HAVE EMPLOYED SEPARATE COUNSEL IN ACCORDANCE WITH THE
PROVISO TO THE IMMEDIATELY PRECEDING SENTENCE (IT BEING UNDERSTOOD, HOWEVER,
THAT IN CONNECTION WITH SUCH ACTION THE INDEMNIFYING PARTY SHALL NOT BE LIABLE
FOR THE EXPENSES OF MORE THAN ONE SEPARATE COUNSEL (IN ADDITION TO LOCAL
COUNSEL) IN ANY ONE ACTION OR SEPARATE BUT SUBSTANTIALLY SIMILAR ACTIONS IN THE
SAME JURISDICTION ARISING OUT OF THE SAME GENERAL ALLEGATIONS OR CIRCUMSTANCES,
DESIGNATED BY THE INITIAL PURCHASERS IN THE CASE OF PARAGRAPH (A) OF THIS
SECTION 9 OR THE COMPANY AND THE SUBSIDIARY GUARANTORS IN THE CASE OF
PARAGRAPH (B) OF THIS SECTION 9, REPRESENTING THE INDEMNIFIED PARTIES UNDER SUCH
PARAGRAPH (A) OR PARAGRAPH (B), AS THE CASE MAY BE, WHO ARE PARTIES TO SUCH
ACTION OR ACTIONS) OR (II) THE INDEMNIFYING PARTY HAS AUTHORIZED IN WRITING THE
EMPLOYMENT OF COUNSEL FOR THE INDEMNIFIED PARTY AT THE EXPENSE OF THE
INDEMNIFYING PARTY.  ALL FEES AND EXPENSES REIMBURSED PURSUANT TO THIS
PARAGRAPH (C) SHALL BE REIMBURSED AS THEY ARE INCURRED.  AFTER SUCH NOTICE FROM
THE INDEMNIFYING PARTY TO SUCH INDEMNIFIED PARTY, THE INDEMNIFYING PARTY WILL
NOT BE LIABLE FOR THE COSTS AND EXPENSES OF ANY SETTLEMENT OF SUCH ACTION
EFFECTED BY SUCH INDEMNIFIED PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE
INDEMNIFYING PARTY (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD), UNLESS
SUCH INDEMNIFIED PARTY WAIVED IN WRITING ITS RIGHTS UNDER THIS SECTION 9, IN
WHICH CASE THE INDEMNIFIED PARTY MAY EFFECT SUCH A SETTLEMENT WITHOUT SUCH
CONSENT.  NO INDEMNIFYING PARTY SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
INDEMNIFIED PARTY, EFFECT ANY SETTLEMENT OR COMPROMISE OF ANY PENDING OR
THREATENED PROCEEDING IN RESPECT OF WHICH ANY INDEMNIFIED PARTY IS OR COULD HAVE
BEEN A PARTY, OR INDEMNITY COULD HAVE BEEN SOUGHT HEREUNDER BY ANY INDEMNIFIED
PARTY, UNLESS SUCH SETTLEMENT (A) INCLUDES AN UNCONDITIONAL WRITTEN RELEASE OF
THE INDEMNIFIED PARTY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
INDEMNIFIED PARTY, FROM ALL LIABILITY ON CLAIMS THAT ARE THE SUBJECT MATTER OF
SUCH PROCEEDING AND (B) DOES NOT INCLUDE ANY STATEMENT AS TO AN ADMISSION OF
FAULT, CULPABILITY OR FAILURE TO ACT BY OR ON BEHALF OF ANY INDEMNIFIED PARTY.

 

(D)                                 IN CIRCUMSTANCES IN WHICH THE INDEMNITY
AGREEMENT PROVIDED FOR IN THE PRECEDING PARAGRAPHS OF THIS SECTION 9 IS
UNAVAILABLE TO, OR INSUFFICIENT TO HOLD HARMLESS, AN INDEMNIFIED PARTY IN
RESPECT OF ANY LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT

 

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THEREOF) REFERRED TO HEREIN, EACH INDEMNIFYING PARTY, IN ORDER TO PROVIDE FOR
JUST AND EQUITABLE CONTRIBUTION, SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE
BY SUCH INDEMNIFIED PARTY AS A RESULT OF SUCH LOSSES, CLAIMS, DAMAGES OR
LIABILITIES (OR ACTIONS IN RESPECT THEREOF) IN SUCH PROPORTION AS IS APPROPRIATE
TO REFLECT (I) THE RELATIVE BENEFITS RECEIVED BY THE INDEMNIFYING PARTY OR
PARTIES ON THE ONE HAND AND THE INDEMNIFIED PARTY ON THE OTHER FROM THE OFFERING
OF THE SECURITIES OR (II) IF THE ALLOCATION PROVIDED BY THE FOREGOING CLAUSE (I)
IS NOT PERMITTED BY APPLICABLE LAW, NOT ONLY SUCH RELATIVE BENEFITS BUT ALSO THE
RELATIVE FAULT OF THE INDEMNIFYING PARTY OR PARTIES ON THE ONE HAND AND THE
INDEMNIFIED PARTY ON THE OTHER IN CONNECTION WITH THE STATEMENTS OR OMISSIONS OR
ALLEGED STATEMENTS OR OMISSIONS THAT RESULTED IN SUCH LOSSES, CLAIMS, DAMAGES OR
LIABILITIES (OR ACTIONS IN RESPECT THEREOF).  THE RELATIVE BENEFITS RECEIVED BY
THE COMPANY AND THE SUBSIDIARY GUARANTORS ON THE ONE HAND AND ANY INITIAL
PURCHASER ON THE OTHER SHALL BE DEEMED TO BE IN THE SAME PROPORTION AS THE TOTAL
PROCEEDS FROM THE OFFERING (BEFORE DEDUCTING EXPENSES) RECEIVED BY THE COMPANY
BEAR TO THE TOTAL DISCOUNTS AND COMMISSIONS RECEIVED BY SUCH INITIAL PURCHASER. 
THE RELATIVE FAULT OF THE PARTIES 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 AND THE SUBSIDIARY GUARANTORS ON THE ONE
HAND, OR SUCH INITIAL PURCHASER ON THE OTHER, THE PARTIES’ RELATIVE INTENT,
KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR PREVENT SUCH
STATEMENT OR OMISSION OR ALLEGED STATEMENT OR OMISSION, AND ANY OTHER EQUITABLE
CONSIDERATIONS APPROPRIATE IN THE CIRCUMSTANCES.  THE COMPANY, THE SUBSIDIARY
GUARANTORS AND THE INITIAL PURCHASERS AGREE THAT IT WOULD NOT BE EQUITABLE IF
THE AMOUNT OF SUCH CONTRIBUTION WERE DETERMINED BY PRO RATA OR PER CAPITA
ALLOCATION OR BY ANY OTHER METHOD OF ALLOCATION THAT DOES NOT TAKE INTO ACCOUNT
THE EQUITABLE CONSIDERATIONS REFERRED TO IN THE FIRST SENTENCE OF THIS
PARAGRAPH (D).  NOTWITHSTANDING ANY OTHER PROVISION OF THIS PARAGRAPH (D), NO
INITIAL PURCHASER SHALL BE OBLIGATED TO MAKE CONTRIBUTIONS HEREUNDER THAT IN THE
AGGREGATE EXCEED THE TOTAL DISCOUNTS, COMMISSIONS AND OTHER COMPENSATION
RECEIVED BY SUCH INITIAL PURCHASER UNDER THIS AGREEMENT, LESS THE AGGREGATE
AMOUNT OF ANY DAMAGES THAT SUCH INITIAL PURCHASER HAS OTHERWISE BEEN REQUIRED TO
PAY BY REASON OF THE UNTRUE OR ALLEGED UNTRUE STATEMENTS OR THE OMISSIONS OR
ALLEGED OMISSIONS TO STATE A MATERIAL FACT, AND 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.  FOR PURPOSES OF THIS PARAGRAPH (D), EACH PERSON, IF ANY, WHO
CONTROLS AN INITIAL PURCHASER WITHIN THE MEANING OF SECTION 15 OF THE ACT OR
SECTION 20 OF THE EXCHANGE ACT SHALL HAVE THE SAME RIGHTS TO CONTRIBUTION AS THE
INITIAL PURCHASERS, AND EACH DIRECTOR OF THE COMPANY AND THE SUBSIDIARY
GUARANTORS, EACH OFFICER OF THE COMPANY AND THE SUBSIDIARY GUARANTORS AND EACH
PERSON, IF ANY, WHO CONTROLS THE COMPANY AND THE SUBSIDIARY GUARANTORS WITHIN
THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT SHALL
HAVE THE SAME RIGHTS TO CONTRIBUTION AS THE COMPANY.

 

SECTION 10.                                      SURVIVAL CLAUSE.  THE
RESPECTIVE REPRESENTATIONS, WARRANTIES, AGREEMENTS, COVENANTS, INDEMNITIES AND
OTHER STATEMENTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS, THEIR OFFICERS
AND THE INITIAL PURCHASERS SET FORTH IN THIS AGREEMENT OR MADE BY OR ON BEHALF
OF THEM PURSUANT TO THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT,
REGARDLESS

 

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OF (I) ANY INVESTIGATION MADE BY OR ON BEHALF OF THE COMPANY AND THE SUBSIDIARY
GUARANTORS, ANY OF THEIR OFFICERS OR DIRECTORS, THE INITIAL PURCHASERS OR ANY
CONTROLLING PERSON REFERRED TO IN SECTION 9 HEREOF AND (II) DELIVERY OF AND
PAYMENT FOR THE SECURITIES.  THE RESPECTIVE AGREEMENTS, COVENANTS, INDEMNITIES
AND OTHER STATEMENTS SET FORTH IN SECTIONS 6, 9, 10 AND 15 HEREOF SHALL REMAIN
IN FULL FORCE AND EFFECT, REGARDLESS OF ANY TERMINATION OR CANCELLATION OF THIS
AGREEMENT.

 

SECTION 11.                                      TERMINATION.  (A)  THIS
AGREEMENT MAY BE TERMINATED IN THE SOLE DISCRETION OF THE INITIAL PURCHASERS BY
NOTICE TO THE COMPANY AND THE SUBSIDIARY GUARANTORS GIVEN PRIOR TO THE CLOSING
DATE IN THE EVENT THAT THE COMPANY AND THE SUBSIDIARY GUARANTORS SHALL HAVE
FAILED, REFUSED OR BEEN UNABLE TO PERFORM ALL OBLIGATIONS AND SATISFY ALL
CONDITIONS ON THEIR PART TO BE PERFORMED OR SATISFIED HEREUNDER AT OR PRIOR
THERETO OR, IF AT OR PRIOR TO THE CLOSING DATE:

 

(I)                                     ANY OF THE COMPANY OR THE SUBSIDIARIES
SHALL HAVE SUSTAINED ANY LOSS OR INTERFERENCE WITH RESPECT TO ITS BUSINESSES OR
PROPERTIES FROM FIRE, FLOOD, HURRICANE, ACCIDENT OR OTHER CALAMITY, WHETHER OR
NOT COVERED BY INSURANCE, OR FROM ANY STRIKE, LABOR DISPUTE, SLOW DOWN OR WORK
STOPPAGE OR ANY LEGAL OR GOVERNMENTAL PROCEEDING, WHICH LOSS OR INTERFERENCE, IN
THE SOLE JUDGMENT OF THE INITIAL PURCHASERS, HAS HAD OR HAS A MATERIAL ADVERSE
EFFECT, OR THERE SHALL HAVE BEEN, IN THE SOLE JUDGMENT OF THE INITIAL
PURCHASERS, ANY EVENT OR DEVELOPMENT THAT, INDIVIDUALLY OR IN THE AGGREGATE, HAS
OR COULD BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT (INCLUDING
WITHOUT LIMITATION A CHANGE IN CONTROL OF THE COMPANY OR THE SUBSIDIARIES),
EXCEPT AS DESCRIBED IN THE FINAL MEMORANDUM (EXCLUSIVE OF ANY AMENDMENT OR
SUPPLEMENT THERETO);

 

(II)                                  TRADING IN SECURITIES OF THE COMPANY
GENERALLY ON THE NYSE, AMERICAN STOCK EXCHANGE OR THE NASDAQ NATIONAL MARKET
SHALL HAVE BEEN SUSPENDED OR MATERIALLY LIMITED OR MINIMUM OR MAXIMUM PRICES
SHALL HAVE BEEN ESTABLISHED ON ANY SUCH EXCHANGE OR MARKET;

 

(III)                               A BANKING MORATORIUM SHALL HAVE BEEN
DECLARED BY NEW YORK OR UNITED STATES AUTHORITIES OR A MATERIAL DISRUPTION IN
COMMERCIAL BANKING OR SECURITIES SETTLEMENT OR CLEARANCE SERVICES IN THE UNITED
STATES;

 

(IV)                              THERE SHALL HAVE BEEN (A) AN OUTBREAK OR
ESCALATION OF HOSTILITIES BETWEEN THE UNITED STATES AND ANY FOREIGN POWER,
(B) AN OUTBREAK OR ESCALATION OF ANY OTHER INSURRECTION OR ARMED CONFLICT
INVOLVING THE UNITED STATES OR ANY OTHER NATIONAL OR INTERNATIONAL CALAMITY OR
EMERGENCY OR (C) ANY MATERIAL CHANGE IN THE FINANCIAL MARKETS OF THE UNITED
STATES WHICH, IN THE CASE OF (A), (B) OR (C) ABOVE AND IN THE SOLE JUDGMENT OF
THE INITIAL PURCHASERS, MAKES IT IMPRACTICABLE OR INADVISABLE TO PROCEED WITH
THE OFFERING OR THE DELIVERY OF THE SECURITIES AS CONTEMPLATED BY THE FINAL
MEMORANDUM; OR

 

28

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(V)                                 ANY SECURITIES OF THE COMPANY SHALL HAVE
BEEN DOWNGRADED BY ANY NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION OR
ANY SUCH ORGANIZATION SHALL HAVE PUBLICLY ANNOUNCED THAT IT HAS UNDER
SURVEILLANCE OR REVIEW, OR HAS CHANGED ITS OUTLOOK WITH RESPECT TO, ITS RATINGS
OF ANY SECURITIES OF THE COMPANY (OTHER THAN AN ANNOUNCEMENT WITH POSITIVE
IMPLICATIONS OF A POSSIBLE UPGRADING).

 

(B)                                 TERMINATION OF THIS AGREEMENT PURSUANT TO
THIS SECTION 11 SHALL BE WITHOUT LIABILITY OF ANY PARTY TO ANY OTHER PARTY
EXCEPT AS PROVIDED IN SECTION 10 HEREOF.

 

SECTION 12.                                      INFORMATION SUPPLIED BY THE
INITIAL PURCHASERS.  THE STATEMENTS SET FORTH IN THE LAST PARAGRAPH ON THE FRONT
COVER PAGE AND IN THE FIRST AND THIRD SENTENCES OF THE THIRD PARAGRAPH AND THE
THIRD SENTENCE OF THE FIFTH PARAGRAPH UNDER THE HEADING “PRIVATE PLACEMENT” IN
THE FINAL MEMORANDUM (TO THE EXTENT SUCH STATEMENTS RELATE TO THE INITIAL
PURCHASERS) CONSTITUTE THE ONLY INFORMATION FURNISHED BY THE INITIAL PURCHASERS
TO THE COMPANY FOR THE PURPOSES OF SECTIONS 2(A) AND 9 HEREOF.

 

SECTION 13.                                      NOTICES.  ALL COMMUNICATIONS
HEREUNDER SHALL BE IN WRITING AND, IF SENT TO THE INITIAL PURCHASERS, SHALL BE
MAILED OR DELIVERED TO (I) DEUTSCHE BANK SECURITIES INC., 60 WALL STREET, NEW
YORK, NEW YORK 10005, ATTENTION:  CORPORATE FINANCE DEPARTMENT; IF SENT TO THE
COMPANY, SHALL BE MAILED OR DELIVERED TO THE COMPANY AT 9690 DEERECO ROAD, SUITE
100, TIMONIUM, MARYLAND 21093, ATTENTION:  ROBERT O. STEPHENSON; WITH A COPY TO
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP, SIXTEENTH FLOOR, 191 PEACHTREE STREET,
N.E., ATLANTA, GEORGIA 30303, ATTENTION:  RICHARD H. MILLER.

 

All such notices and communications shall be deemed to have been duly given: 
when delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; and one business day after
being timely delivered to a next-day air courier.

 

SECTION 14.                                      SUCCESSORS.  THIS AGREEMENT
SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON THE INITIAL PURCHASERS, THE
COMPANY, THE SUBSIDIARY GUARANTORS AND THEIR RESPECTIVE SUCCESSORS AND LEGAL
REPRESENTATIVES, AND NOTHING EXPRESSED OR MENTIONED IN THIS AGREEMENT IS
INTENDED OR SHALL BE CONSTRUED TO GIVE ANY OTHER PERSON ANY LEGAL OR EQUITABLE
RIGHT, REMEDY OR CLAIM UNDER OR IN RESPECT OF THIS AGREEMENT, OR ANY PROVISIONS
HEREIN CONTAINED; THIS AGREEMENT AND ALL CONDITIONS AND PROVISIONS HEREOF BEING
INTENDED TO BE AND BEING FOR THE SOLE AND EXCLUSIVE BENEFIT OF SUCH PERSONS AND
FOR THE BENEFIT OF NO OTHER PERSON EXCEPT THAT (I) THE INDEMNITIES OF THE
COMPANY AND THE SUBSIDIARY GUARANTORS CONTAINED IN SECTION 9 OF THIS AGREEMENT
SHALL ALSO BE FOR THE BENEFIT OF ANY PERSON OR PERSONS WHO CONTROL THE INITIAL
PURCHASERS WITHIN THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE
EXCHANGE ACT AND (II) THE INDEMNITIES OF THE INITIAL PURCHASERS CONTAINED IN
SECTION 9 OF THIS AGREEMENT SHALL ALSO BE FOR THE BENEFIT OF THE DIRECTORS OF
THE COMPANY AND THE SUBSIDIARY GUARANTORS, THEIR OFFICERS AND ANY PERSON OR
PERSONS WHO CONTROL THE COMPANY AND THE SUBSIDIARY GUARANTORS WITHIN THE MEANING
OF SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT.  NO PURCHASER

 

29

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OF SECURITIES FROM THE INITIAL PURCHASERS WILL BE DEEMED A SUCCESSOR BECAUSE OF
SUCH PURCHASE.

 

SECTION 15.                                      APPLICABLE LAW.  THE VALIDITY
AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS
OF LAW.

 

SECTION 16.                                      COUNTERPARTS.  THIS AGREEMENT
MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN
ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME
INSTRUMENT.

 

30

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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between the Company, the Subsidiary
Guarantors and the Initial Purchasers.

 

 

Very truly yours,

 

 

 

 

 

OMEGA HEALTHCARE INVESTORS, INC.,

 

as Issuer

 

 

 

 

 

By:

/s/ Robert O. Stephenson

 

 

 

Name: Robert O. Stephenson

 

 

Title:   Chief Financial Officer

 

 

 

 

 

 

 

BAYSIDE ALABAMA HEALTHCARE
SECOND, INC.

 

BAYSIDE ARIZONA HEALTHCARE
ASSOCIATES, INC.

 

BAYSIDE ARIZONA HEALTHCARE
SECOND, INC.

 

BAYSIDE COLORADO HEALTHCARE
ASSOCIATES, INC.

 

BAYSIDE COLORADO HEALTHCARE
SECOND, INC.

 

OHI (CONNECTICUT), INC.

 

BAYSIDE STREET II, INC.

 

OHI ASSET (CA), LLC

 

OHI ASSET (FL) TARPON SPRINGS,
PINELLAS PARK & GAINESVILLE, LLC

 

OHI ASSET (FL), LLC

 

OHI ASSET (ID), LLC

 

OHI ASSET (IN), LLC

 

OHI ASSET (LA), LLC

 

as Subsidiary Guarantors

 

 

 

By:

/s/ Robert O. Stephenson

 

 

 

Name:

Robert O. Stephenson

 

 

Title:

Chief Financial Officer and
Treasurer

 

--------------------------------------------------------------------------------

 

 

OHI ASSET (MI/NC), LLC

 

OHI ASSET (MO), LLC

 

OHI ASSET (OH), LLC

 

OHI ASSET (TX), LLC

 

OHI ASSET II (CA), LLC

 

OHI ASSET, LLC

 

OMEGA ACQUISITION FACILITY I, LLC

 

OHI (FLORIDA), INC.

 

OHI SUNSHINE, INC.

 

LONG TERM CARE ASSOCIATES –
ILLINOIS, INC.

 

OHI (ILLINOIS), INC.

 

SKILLED NURSING - HERRIN, INC.

 

SKILLED NURSING - PARIS, INC.

 

BAYSIDE INDIANA HEALTHCARE
ASSOCIATES, INC.

 

LONG TERM CARE ASSOCIATES –
INDIANA, INC.

 

OHI (INDIANA), INC.

 

SKILLED NURSING - GASTON, INC.

 

OHI (IOWA), INC.

 

OHI (KANSAS), INC.

 

OMEGA (KANSAS), INC.

 

NRS VENTURES, LLC

 

OS LEASING COMPANY

 

STERLING ACQUISITION CORP.

 

STERLING ACQUISITION CORP. II

 

ARIZONA LESSOR - INFINIA, INC.

 

BAYSIDE STREET, INC.

 

COLORADO LESSOR - CONIFER, INC.

 

DELTA INVESTORS I, LLC

 

DELTA INVESTORS II, LLC

 

FLORIDA LESSOR - CRYSTAL SPRINGS,
INC.

 

as Subsidiary Guarantors

 

 

 

By:

/s/ Robert O. Stephenson

 

 

 

Name:

Robert O. Stephenson

 

 

Title:

Chief Financial Officer and
Treasurer

 

--------------------------------------------------------------------------------

 

 

FLORIDA LESSOR - EMERALD, INC.

 

FLORIDA LESSOR - FIVE FACILITIES, INC.

 

FLORIDA LESSOR - LAKELAND, INC.

 

FLORIDA LESSOR - MEADOWVIEW, INC.

 

FLORIDA LESSOR - WEST PALM BEACH
AND SOUTHPOINT, INC.

 

GEORGIA LESSOR -
BONTERRA/PARKVIEW, INC.

 

INDIANA LESSOR - JEFFERSONVILLE,
INC.

 

INDIANA LESSOR - WELLINGTON
MANOR, INC.

 

JEFFERSON CLARK, INC.

 

OHI LESSOR WATERFORD &
CRESTWOOD, INC.

 

OHI OF KENTUCKY, INC.

 

OHI OF TEXAS, INC.

 

OMEGA TRS I, INC.

 

TEXAS LESSOR - STONEGATE GP, INC.

 

TEXAS LESSOR - STONEGATE LIMITED,
INC.

 

TEXAS LESSOR - STONEGATE, L.P.

 

TEXAS LESSOR - TREEMONT, INC.

 

WASHINGTON LESSOR - SILVERDALE,
INC.

 

OHIMA, INC.

 

LONG TERM CARE – MICHIGAN, INC.

 

LONG TERM CARE – NORTH CAROLINA,
INC.

 

OHI (CLEMMONS), INC.

 

OHI (GREENSBORO), INC.

 

SKILLED NURSING - HICKSVILLE, INC.

 

CENTER HEALTHCARE ASSOCIATES, INC.

 

CHERRY STREET - SKILLED NURSING,
INC.

 

as Subsidiary Guarantors

 

 

 

By:

/s/ Robert O. Stephenson

 

 

 

Name:

Robert O. Stephenson

 

 

Title:

Chief Financial Officer and
Treasurer

 

--------------------------------------------------------------------------------

 

 

DALLAS SKILLED NURSING, INC.

 

HERITAGE TEXARKANA HEALTHCARE
ASSOCIATES, INC.

 

LAKE PARK SKILLED NURSING, INC.

 

LONG TERM CARE ASSOCIATES - TEXAS,
INC.

 

PARKVIEW - SKILLED NURSING, INC.

 

PINE TEXARKANA HEALTHCARE
ASSOCIATES, INC.

 

REUNION TEXARKANA HEALTHCARE
ASSOCIATES, INC.

 

SAN AUGUSTINE HEALTHCARE
ASSOCIATES, INC.

 

SOUTH ATHENS HEALTHCARE
ASSOCIATES, INC.

 

WAXAHACHIE HEALTHCARE
ASSOCIATES, INC.

 

WEST ATHENS HEALTHCARE
ASSOCIATES, INC.

 

CARE HOLDINGS, INC.

 

as Subsidiary Guarantors

 

 

 

By:

/s/ Robert O. Stephenson

 

 

 

Name:

Robert O. Stephenson

 

 

Title:

Chief Financial Officer and
Treasurer

 

--------------------------------------------------------------------------------

 

The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.

 

DEUTSCHE BANK SECURITIES INC.

 

 

By:

  /s/

 

 

Name:

 

Title:

 

 

By:

  /s/

 

 

Name:

 

Title:

 

 

UBS SECURITIES LLC

 

 

By:

/s/ Michael F. Newcomb II

 

 

Name: Michael F. Newcomb II

 

Title: Executive Director, High Yield Capital Markets

 

 

 

 

By:

/s/ John C. Duggan

 

 

Name: John C. Duggan

 

Title: Executive Director, High Yield Capital Markets

 

 

BANC OF AMERICA SECURITIES LLC

 

 

By:

/s/ Bruce Thompson

 

 

Name: Bruce Thompson

 

Title: Managing Director

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

Initial Purchasers

 

Principal Amount of Notes

 

 

 

 

 

Deutsche Bank Securities Inc.

 

$

80,000,000

 

UBS Securities LLC.

 

$

80,000,000

 

Banc of America Securities LLC

 

$

40,000,000

 

Total

 

$

200,000,000

 

 

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