[EXECUTION COPY]
Coram (Cerberus to Xxxxxxx)
[$20,000,000]
RISK PARTICIPATION AGREEMENT
RISK PARTICIPATION AGREEMENT, dated as of April 22, 1997 by and between
Cerberus Partners, L.P. ("Seller") and Xxxxxxx Sachs Credit Partners L.P. ("Risk
Participant").
WITNESSETH:
WHEREAS, Seller is party to that certain Assignment Agreement dated as
of the date hereof (the "Assignment Agreement") among Coram Funding, Inc.
("Initial Purchaser"), Seller and Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc. ("DLJ")
under which Seller acquired the Assigned Rights (as defined in the Assignment
Agreement), a copy of which is attached as Exhibit A hereto.
WHEREAS, Seller desires to sell to Risk Participant, and Risk
Participant desires to purchase from Seller the Risk Participation (as defined
herein).
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. As used herein, capitalized terms have the
following meanings (and capitalized terms used but not otherwise defined herein
have the meanings stated in the Assignment Agreement):
Risk Participant's Percentage: The percentage set forth on Schedule A,
Item I attached hereto.
Proceeds: All proceeds of any kind of the Risk Participation.
Seller's Interest: All of Seller's right, title and interest, in to and
under the Assigned Rights and the Assignment Agreement.
Section 2. Funding Amount; Effective Time.
(a) Risk Participation. The Risk Participant agrees that, upon
receiving by facsimile a copy of this Agreement duly executed by the Seller, the
Risk Participant will fund the Funding Amount set forth on Schedule B to the
Seller (in immediately available funds by wire transfer to the account set forth
in Schedule A, Item II). The time at which the Seller receives such payment is
referred to herein as the "Effective Time". The Risk Participant's interest
granted hereunder in the Risk Participant's Percentage of the Seller's Interest
is hereinafter referred to as the "Risk Participation".
(b) Conditions.
(i) Risk Participant's obligations in Section 2(a) are subject to the
Seller's representations, warranties and covenants shall be true and complied
with, in all material respects.
(ii) Seller's obligations in Section 2(a) are subject to the following
conditions: (A) Risk Participant's representations, warranties and covenants
shall be true and complied with, in all material respects; (B) the consummation
of the purchase by Seller from Initial Purchaser of the Assigned Rights under
the Assignment Agreement; and (C) Risk Participant shall have paid to Seller the
Funding Amount set forth in Section 2(a).
Section 3. Seller's Representations. Seller hereby represents and
warrants to Risk Participant as of the date hereof and the Effective Time that:
(a) Seller has full power and authority to sell and assign the
Risk Participation and to enter into and perform this Agreement, and
such transaction and this Agreement and the documents to be executed
and delivered by Seller in connection herewith (i) have been duly
authorized by Seller, (ii) are legal, valid and binding and enforceable
against Seller in accordance with their terms, and (iii) are not in
contravention of any law, order or agreement by which Seller is bound.
(b) Seller has made no prior assignment or sale of the Risk
Participation or of any interest therein.
(c) Except for those consents, notices, filings, approvals or
authorizations already obtained or received or required to be obtained
under the Assignment Agreement or the Transaction Documents, to
Seller's actual knowledge, without independent investigation, no
consents, notices, filings, approvals or authorizations are required to
be made to or with any person, entity or governmental body for the
consummation of the transactions contemplated by this Agreement.
(d) To the extent Seller received the same from Initial Purchaser,
Seller is the sole legal and beneficial owner of the Seller's Interest
and has good title thereto, free and clear of all liens, claims and
encumbrances of any kind and will transfer the Risk Participation to
Risk Participant free and clear of any liens or encumbrances of any
kind.
(e) Based solely on Initial Purchaser's representations and
warranties in the Assignment Agreement, as of March 31, 1997, the
portion of the Risk Participation constituting (i) the Bridge Notes
and/or the Rollover Note is in the total outstanding amount of
$20,000,000 as broken down on Schedule C hereto; (ii) the Warrants
equal to not less than 368,596 Warrants (or 10.2274027% of the Warrants
purchased by Seller from Initial Purchaser under the Assignment
Agreement); and (iii) any interest thereon as of the date hereof, which
has not been paid and continues to be accruing and owing.
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(f) Except as set forth in the Assignment Agreement, no
proceedings relating to the Risk Participation are pending against
Seller or to Seller's actual knowledge, without independent
investigation, threatened against Seller before any court, arbitrator
or administrative or governmental body which, in the aggregate, would
have a material adverse effect on the Risk Participation or Risk
Participant's rights and remedies hereunder or in respect thereof.
(g) To Seller's actual knowledge, without independent
investigation, Seller has not received any written notice, claim or
demand from or on behalf of Initial Purchaser, Coram, Holdings or any
other person or entity that the Risk Participation or any portion
thereof is void or voidable or subject to any defense, right of set-off
or recoupment, counterclaim, claim or impairment of any kind (including
but not limited to for disallowance, expungement, reduction,
subordination or otherwise).
(h) Seller has not engaged in any act, conduct or omission that
would result in the Risk Participation or any portion thereof being
void or voidable or subject to any defense, right of set-off,
recoupment, counterclaim, claim or impairment of any kind (including,
but not limited to, for disallowance, expungement, reduction,
subordination or otherwise).
(i) There are no fees, commissions or compensation payable by Risk
Participant to any party engaged or retained by, through or on behalf
of Seller in connection with the transactions contemplated hereby.
(j) Seller is a sophisticated seller with respect to the Risk
Participation, has adequate information concerning the business and
financial condition of Coram and Holdings to make an informed decision
regarding the sale of the Risk Participation, and has independently,
without reliance upon Risk Participant and based on such information as
it deemed appropriate, made its own analysis and decision to enter into
this Agreement.
(k) Seller has provided Risk Participant complete and accurate
copies of the Assignment Agreement and the Transaction Documents in the
forms and to the extent delivered to Seller by Initial Purchaser.
(l) Seller has not breached any of its obligations under the
Assignment Agreement or the Transaction Documents and no amounts are
owing thereunder by Seller.
(m) Seller is not (i) an "insider" within the meaning of Section
101(31) of Title 11 of the United States Bankruptcy Code; or (ii) an
affiliate of Coram or Holdings or any of Coram's or Holdings'
affiliates.
(n) Seller acknowledges that Risk Participant may have access to
or possess material non-public information not known to Seller
regarding or relating to Coram, Holdings or the Risk Participation
("Risk Participant Excluded Information") and Seller acknowledges that
it has not requested the Risk Participant Excluded Information and
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agrees that Risk Participant shall have no liability whatsoever (and
Seller hereby waives and releases all claims which it would otherwise
have) with respect to the non-disclosure of Risk Participant Excluded
Information, either before or after the date hereof.
(o) None of the Seller Excluded Information contradicts or is
inconsistent with any representation or warranty made by Seller in this
Agreement.
(p) The Seller has not made any offers to sell, or solicitations
of offers to buy, any portion of the Risk Participation in violation of
the Securities Act of 1933, as amended (the "Securities Act").
Seller makes only the representations and warranties set forth above. Seller (i)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties, or representations made by any person other than
Seller in or in connection with the Assignment Agreement or the Transaction
Documents or the execution, legality, validity, or enforceability (with respect
to any person other than Seller) of the Assignment Agreement or the Transaction
Documents or any collateral purported to be granted thereunder and (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition, creditworthiness, properties, affairs, status or nature of
Coram or Holdings or the performance or observance by Coram or Holdings of any
of their respective obligations under the Assignment Agreement or the
Transaction Documents or any other instrument or document.
Section 4. Risk Participant's Representations. Risk Participant hereby
represents and warrants to Seller as of the date hereof and the Effective Time
that:
(a) Risk Participant has full power and authority to enter into
and perform this Agreement and such transaction and this Agreement and
the documents to be executed and delivered in connection herewith (i)
have been duly authorized by Risk Participant, (ii) are legal, valid
and binding and enforceable against Risk Participant in accordance with
their terms and (iii) are not in contravention of any law, order or
agreement by which Risk Participant is bound.
(b) Except for those consents, notices, filings, approvals or
authorizations required by the Transaction Documents or hereunder or
already obtained or received, to Risk Participant's actual knowledge,
without independent investigation, no consents, notices, filings,
approvals or authorizations are required to be made to or with any
person, entity or governmental body for the consummation of the
transactions contemplated by this Agreement.
(c) No proceedings are pending or to Risk Participant's actual
knowledge, without independent investigation, threatened against Risk
Participant before any court, arbitrator or administrative or
governmental body which, in the aggregate, would have a material
adverse effect on any action taken or to be taken by Risk Participant
under this Agreement.
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(d) There are no fees, commissions or compensation payable by
Seller to any party engaged or retained by, through or on behalf of
Risk Participant in connection with the transactions contemplated
hereby.
(e) Risk Participant agrees and acknowledges that (A) it is a
sophisticated Risk Participant with respect to the Risk Participation,
has adequate information concerning the business and financial
condition of Coram and Holdings to make an informed decision regarding
the purchase of the Risk Participation, and has independently, without
reliance upon Seller and based on such information as it deemed
appropriate, made its own analysis and decision to enter into this
Agreement; (B) it has made its credit determination and analysis based
upon such information as it deemed sufficient to enter into this
Agreement and not based on any statements or representations by Seller
except as expressly set forth herein; (C) it is purchasing the Risk
Participation and not with a view to or for resale in connection with,
any distribution or public offering of all or any part thereof or of
any interest therein or in a manner which would violate applicable
securities laws; (D) it is able to bear the economic risk associated
with the purchase of the Risk Participation; (E) it has such knowledge
and experience and has made investments of a similar nature so as to be
aware of the risks and uncertainties inherent in purchases of the type
contemplated herein; (F) except as provided in this Agreement, it will
not rely upon Seller to furnish or make available any documents or
other information regarding the credit, affairs, financial condition or
business of, or any other matter concerning Coram, Holdings or any of
their respective affiliates; (G) it is not an agent for Seller; (H) it
is a "qualified institutional Risk Participant" as defined in Rule 144A
of the Securities Act; (I) Seller has not given any investment advice,
credit information or rendered any opinion as to whether the purchase
of the Risk Participation is prudent; and (J) other than by virtue of
Risk Participant's status as a creditor of Coram or Holdings, it is not
affiliated, directly or indirectly, with Coram, Holdings, or any of
their respective subsidiaries, affiliates or employees.
(f) Risk Participant is entitled to receive all payments and
distributions to be made to it hereunder without the withholding of any
tax and will furnish to Seller such forms, certifications, statements
and other documents as Seller may request from time to time to evidence
Risk Participant's exemption from the withholding of any tax imposed by
any jurisdiction or to enable Seller to comply with any applicable laws
or regulations relating thereto.
(g) Risk Participant is not purchasing the Risk Participation or
any interest therein with funds which directly or indirectly constitute
"plan assets" as defined in the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
(h) Risk Participant acknowledges that it has received copies of
the Assignment Agreement and the Transaction Documents and that it has
otherwise been provided an opportunity to obtain copies of such other
documents and information as it has deemed appropriate in making its
own evaluation of the Risk Participation and Risk Participant is
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assuming all risk with respect to the completeness, accuracy or
sufficiency of such documents and information.
(i) Risk Participant acknowledges that Seller may have access to
or possess material non-public information not known to Risk
Participant regarding or relating to Coram, Holdings or the Risk
Participation ("Seller Excluded Information") and Risk Participant
acknowledges that it has not requested the Seller Excluded Information
and agrees that Seller shall have no liability whatsoever (and Risk
Participant hereby waives and releases all claims which it would
otherwise have) with respect to the non-disclosure of Seller Excluded
Information, either before or after the date hereof.
(j) None of the Risk Participant Excluded Information contradicts
or is inconsistent with any representation or warranty made by Risk
Participant in this Agreement.
(k) As required by Section 8 of the Assignment Agreement, Risk
Participant makes to Seller each of the representations and warranties
made by Seller to Initial Purchaser under the Assignment Agreement
(mutatis, mutandis) and agrees to be bound by the terms of the
Assignment Agreement and the Transaction Documents.
Section 5. Acknowledgments. Seller and Risk Participant acknowledge and
represent and warrant to each other that (i) neither party has made any
representation or warranty, whether express or implied, of any kind or character
except as expressly set forth in this Agreement; (ii) the assignment and
transfer of the Risk Participation by Seller to Risk Participant is irrevocable,
and Seller shall have no recourse to the Risk Participation; and (iii) either
party may have engaged and may engage in any other relationships with or
concerning Initial Purchaser, Coram, Holdings and their respective affiliates
without any obligation or liability of any kind to the other party.
Section 6. Payment and Delivery Instructions.
(a) Upon receipt by the Seller of any cash Proceeds or other cash
distributions made under or in respect of the Seller's Interest, the
Seller shall promptly (but in no event later than 2 business days after
receipt of immediately available funds or after funds become available
for distribution after deposit of a check, draft or other instrument),
pay to the Risk Participant an amount equivalent to Risk Participant's
Percentage of such payment or, subject to paragraph (b) of this Section
6, distribute Risk Participant's Percentage of such property to the
Risk Participant in the form in which the same was received by the
Seller, with endorsements (without recourse, representation or
warranty) where necessary.
(b) Upon receipt by the Seller of any securities issued pursuant
to or in connection with the Seller's Interest, the Seller shall, upon
receipt of any such securities, hold the Risk Participant's Percentage
of such securities. In the event that the Seller shall, in its
reasonable good faith business judgment decide to sell, exercise,
transfer or otherwise take any action (an "Action") with respect to
similar securities held by Seller, Seller shall give Risk Participant
notice of any such Action 6 business days prior to taking such Action.
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Seller agrees to take an identical Action with respect to the Risk
Participant's Percentage of such securities. In the event that the
Action results in any proceeds, Seller shall pay to Risk Participant
promptly (but in no event later than 2 business days after receipt of
such proceeds) an amount of cash equal to the Risk Participant's
Percentage of such proceeds.
Section 7. Further Assignments. Risk Participant shall have the right
to sell, assign, grant participations and subparticipations in, and otherwise
transfer (each a "transfer") the Risk Participation and this Agreement to any
person or entity (each direct or indirect transferee is called a "transferee")
with the consent of Seller (which consent shall not be unreasonably withheld or
delayed)); provided that any such transfer shall not violate any of the terms
and conditions of the Assignment Agreement, any Transaction Document or any law,
rule, regulation, order, writ, judgment, injunction or decree, and provided
further that, unless such transferee and such transferee assumes all of Risk
Participant's obligations under this Agreement, then (a) the obligations of Risk
Participant and Seller under this Agreement shall remain in full force and
effect, and (b) Seller shall continue to deal solely and directly with Risk
Participant in connection with Risk Participant's obligations under this
Agreement.
Section 8. Indemnities.
(a) By Seller. Seller agrees to indemnify, defend and hold Risk
Participant and its officers, directors, employees, agents, partners and
controlling persons (collectively, the "Risk Participant Indemnitees") harmless
from and against any and all expenses, losses, claims, damages and liabilities
which are incurred by or threatened against the Risk Participant Indemnitees or
any of them, including without limitation reasonable attorneys' fees and
expenses, caused by, or in any way resulting from or relating to: (i) Seller's
breach of any of the representations, warranties, covenants or agreements of
Seller set forth in this Agreement; or (ii) Seller's failure to duly and timely
pay and perform the Excluded Obligations.
(b) By Risk Participant. Risk Participant agrees to indemnify, defend
and hold each of Seller and its officers, directors, employees, agents, partners
and controlling persons (collec tively, the "Seller Indemnitees") harmless from
and against any and all expenses, losses, claims, damages and liabilities which
are incurred by or threatened against the Seller Indemnitees or any of them,
including without limitation reasonable attorneys' fees and expenses, caused by,
or in any way resulting from or relating to (i) Risk Participant's breach of any
of the representations, warranties, covenants or agreement of Risk Participant
set forth in this Agreement; (ii) Risk Participant's failure to duly and timely
pay and perform the Assumed Obligations; or (iii) any further sale, assignment,
participation, subparticipation or transfer of the Risk Participation, this
Agreement or any portion thereof in violation of the Assignment Agreement, any
Transaction Document or applicable law, rule, order or judgment.
Section 9. Costs and Fees. Risk Participant shall reimburse Seller for
Risk Participant's Percentage of Seller's costs and expenses, including but not
limited to attorneys' fees and expenses and transfer fees, in connection with
closing the transactions contemplated by the Assignment Agreement. Except as
otherwise expressly provided for herein, Risk Participant shall bear all
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costs and expenses, including but not limited to attorneys' fees and expenses,
and any transfer fees in connection with the closing of the transactions
contemplated hereby.
Section 10. Further Assurances.
(a) Upon the written request of either the Seller or the Risk
Participant, the parties shall use reasonable best efforts to convert the
participation to an outright assignment as contemplated by this Agreement,
including, without limitation, the execution and delivery of all notices,
documents, opinions and certificates necessary to effectuate (i) the outright
assignment of the Rollover Note, the Warrants and the Risk Participation
hereunder and (ii) the registration of new Rollover Notes and Warrants in the
appropriate names and denominations. Notwithstanding any provision contained
herein, if the transfer of the Risk Participation is prohibited by, or if all of
the requirements are not or have not been satisfied under, the Transaction
Documents, then Seller shall be deemed not to have sold or assumed the Risk
Participation, but Seller shall, upon receipt of any payment with respect to the
Risk Participation, forward such payment to Risk Participant so as to place Risk
Participant in the same position as if Risk Participant had received the Risk
Participation.
(b) Each of the parties hereto agrees, at its own cost and expense, to
execute and deliver, or to cause to be executed and delivered, all such
instruments (including all necessary endorsements) and to take all such action
as the other party may reasonably request in order to effectuate the intent and
purposes of, and to carry out the terms of this Agreement.
Section 11. Payments. If any payments or distributions made by Seller
to Risk Participant hereunder are thereafter required to be returned or
disgorged by Seller, Risk Participant shall promptly return such payments or
distributions to Seller together with all interest and charges thereon and the
claim relating thereto shall be for the account of Risk Participant.
Section 12. Integration. This Agreement constitutes the complete
agreement of the parties hereto with respect to the subject matters referred to
herein and supersede all prior or contemporaneous negotiations, promises,
covenants, agreements or representations of every nature whatsoever with respect
thereto, all of which have become merged and finally integrated therein
(including, without limitation, the Confirmation Letter between Seller and Risk
Participant). This Agreement cannot be amended, modified or supplemented except
by an instrument in writing executed by both parties hereto.
Section 13. Notices, Payments and Deliveries. Notices shall be given by
telecopy, certified or registered mail or personally or by courier at the
addresses set forth on Schedule A, Item II. Payments and deliveries of Proceeds
shall be made as set forth on Schedule A, Item II.
Section 14. No Relationship; No Assignment; No Participation. Nothing
contained in this Agreement shall (i) establish any agency, fiduciary,
partnership, joint venture or similar relationship between or among the parties,
(ii) operate as an assignment to the Risk Participant of any of any legal,
beneficial or participation interest in the Seller's rights under the
Transaction
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Documents, or (iii) be construed to grant the Risk Participant any rights to
deal directly with, make payments to, or receive payments from any party (other
than the Seller) under the Transaction Documents.
Section 15. Miscellaneous. The terms of this Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns. All representations and warranties made herein shall
survive the execution and delivery of this Agreement. This Agreement may be
executed in counterparts, each of which when so executed shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to any conflicts of laws
provisions thereof. Each party to this Agreement hereby irrevocably consents to
the jurisdiction of the United States Court for the Southern District of New
York and the courts of the State of New York located in the State and City of
New York in any action to enforce, interpret or construe any provision of this
Agreement or of any other agreement or document delivered in connection with
this Agreement, and also hereby irrevocably waives any defense of improper
venue, forum non conveniens or lack of personal jurisdiction to any such action
brought in those Courts. Each party further irrevocably agrees that any action
to enforce, interpret or construe any provision of this Agreement will be
brought only in one of those Courts. Each party hereby irrevocably consents to
the service by certified or registered mail, return receipt requested, to be
sent to its address set forth on the signature pages of this Agreement or to
such other address as it may designate from time to time by notice given in the
manner provided above, of any process in any action to enforce, interpret or
construe any provision of this Agreement.
Section 16. Interest. If any payment hereunder is not paid by either
party to the other when due hereunder, then interest shall accrue, and be
payable immediately, on all such amounts at a per annum rate equal to the
Federal Funds Rate from time to time in effect plus 2%.
Section 17. Confidentiality. Each party agrees that except as provided
herein or as may be compelled by legal process, by an order, judgment or decree
or a court or other governmental authority of competent jurisdiction, it shall
not disclose to any person the terms or conditions of this Agreement or any
document executed or delivered in connection herewith (including, without
limitation, the Purchase Price), unless any of the foregoing shall have entered
the public domain by no breach of such party hereunder; provided, however, that
each party may disclose this Agreement (other than the Purchase Price) and the
documents executed in connection herewith to Coram and Holdings and Risk
Participant may disclose this Agreement and the documents executed or delivered
in connection herewith (other than the Purchase Price) to any prospective
purchaser, transferee or participant and shall require that such prospective
purchasers, transferees or participants abide by confidentiality provisions
substantially the same as those set forth in Section 17 of the Assignment
Agreement.
Section 18. Telecopies. Transmission by telecopier of an executed
counterpart of this Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart, provided
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that the parties hereby agree to deliver to each other an original of such
counterpart promptly after delivery of the facsimile.
Section 19. Severability. If any provision of this Agreement or any
other agreement or document delivered in connection with this Agreement, if any,
is partially or completely invalid or unenforceable in any jurisdiction, then
that provision shall be ineffective in that jurisdiction to the extent of its
invalidity or unenforceability, but the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision
of this Agreement, all of which shall be construed and enforced as if that
invalid or unenforceable provision were omitted, nor shall the invalidity or
unenforceability of that provision in one jurisdiction affect its validity or
enforceability in any other jurisdiction.
Section 20. No Recourse Against Partners; Several Liability.
Notwithstanding anything contained in this Agreement to the contrary, the
parties agree that (i) no general or limited partner of Seller shall be
personally liable for any obligation or liability of Seller under this
Agreement; and (ii) all obligations and liabilities of Seller under this
Agreement are enforceable solely against Seller and Seller's assets and not
against any assets of any general or limited partner of Seller.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement of the date first stated above.
CERBERUS PARTNERS, L.P.
By: Its General Partner
Cerberus Associates L.P.
By:
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Name:
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By:
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Name:
Title:
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