EXHIBIT 10.1
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PHYSICIANS QUALITY CARE, INC.
CLASS L COMMON STOCK PURCHASE AGREEMENT
As of July 10, 1998
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TABLE OF CONTENTS
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1. Authorization and Purchase of Class L Common Stock............................................. 1
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1.1 Authorization of Class L Common Stock............................................... 1
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1.2 Purchase and Sale of the Class L Common Stock....................................... 1
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1.3 The Closings........................................................................ 1
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2. Representations and Warranties of the Company.................................................. 2
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2.1 Organization and Corporate Power.................................................... 2
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2.2 Authorization....................................................................... 2
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2.3 Capitalization...................................................................... 3
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2.4 Subsidiaries........................................................................ 5
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2.5 Financial Statements................................................................ 6
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2.6 Absence of Undisclosed Liabilities.................................................. 6
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2.7 Absence of Certain Developments..................................................... 7
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2.8 Title to Properties................................................................. 8
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2.9 Tax Matters......................................................................... 8
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2.10 Contracts and Commitments........................................................... 9
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2.11 No Defaults......................................................................... 9
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2.12 Intellectual Property............................................................... 9
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2.13 Effect of Transactions.............................................................. 10
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2.14 No Consent or Approval Required..................................................... 10
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2.15 Litigation.......................................................................... 11
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2.16 Securities Laws..................................................................... 11
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2.17 Business............................................................................ 11
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2.18 Brokerage........................................................................... 11
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2.19 Employees........................................................................... 12
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2.20 Insurance........................................................................... 12
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2.21 Environmental and Safety Laws....................................................... 13
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2.22 Benefit Plans....................................................................... 16
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2.23 Transactions with Affiliates........................................................ 17
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2.24 Books and Records................................................................... 17
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2.25 Regulatory Matters.................................................................. 18
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2.26 Shareholder Disclosures............................................................. 19
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2.27 Material Facts...................................................................... 19
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3. Representations and Warranties and other Agreements of the Investors........................... 19
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3.1 Representations and Warranties...................................................... 19
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3.2 Further Limitations on Disposition.................................................. 21
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3.3 Legends............................................................................. 22
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4. Conditions to the Investors' Obligations....................................................... 22
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4.1 Representations and Warranties...................................................... 22
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4.2 Performance......................................................................... 22
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4.3 Compliance Certificate.............................................................. 23
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4.4 Restated Certificate of Incorporation............................................... 23
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4.5 Qualifications; Consents............................................................ 23
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4.6 Proceedings and Documents........................................................... 23
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4.9 Opinion of Company Counsel.......................................................... 24
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4.10 Secretary's Certificate............................................................. 24
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4.11 Material Adverse Change............................................................. 24
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4.12 MCP and Flagship Agreements......................................................... 24
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4.13 Amendment to By-Laws................................................................ 24
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4.14 Capital Certificate................................................................. 24
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5. Conditions of the Company's Obligations at the Closing......................................... 24
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5.1 Representations and Warranties...................................................... 24
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5.2 Payment of Purchase Price........................................................... 25
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5.3 Qualifications; Consents............................................................ 25
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6. Covenants and Agreements....................................................................... 25
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6.1 Financial and Other Information..................................................... 25
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6.2 Confidentiality..................................................................... 27
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6.3 Insurance........................................................................... 28
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6.4 Use of Proceeds..................................................................... 28
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6.5 Payment of Taxes; Corporate Existence, Regulatory Compliance........................ 28
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6.6 Dealings with Affiliates and Others................................................. 29
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Best Efforts to Obtain Financing............................................................... 29
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6.8 Payment of Expenses................................................................. 30
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6.9 Cooperation and Access.............................................................. 30
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6.10 Conduct of Business................................................................. 30
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6.11 Reservation of Shares............................................................... 31
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6.12 Future Financings................................................................... 31
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6.13 Period.............................................................................. 33
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6.14 Disclosure of Investment............................................................ 33
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6.16 Investor Agreement With Respect to Additional Financing............................. 34
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6.17 Waiver of Anti-Dilution Protection.................................................. 34
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7. Negative Covenants............................................................................. 34
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8. Definitions.................................................................................... 34
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8.1 Certain Defined Terms............................................................... 34
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8.2 Certain Matters of Construction..................................................... 38
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9. Miscellaneous.................................................................................. 38
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9.1 Survival of Covenants; Assignability of Rights...................................... 38
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9.2 Incorporation by Reference.......................................................... 39
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9.3 Parties in Interest................................................................. 39
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9.4 Amendments and Waivers.............................................................. 39
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9.5 Governing Law....................................................................... 39
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9.6 Effect of Investigations............................................................ 39
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9.7 Notices............................................................................. 39
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9.8 Effect of Headings.................................................................. 41
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9.9 Entire Agreement.................................................................... 41
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9.10 Severability........................................................................ 41
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9.11 Counterparts........................................................................ 41
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iii
PHYSICIANS QUALITY CARE, INC.
CLASS L COMMON STOCK PURCHASE AGREEMENT
This CLASS L COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made as
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of this 10th day of July, 1998 by and among PHYSICIANS QUALITY CARE, INC., a
Delaware corporation (the "Company") and each of XXXX CAPITAL FUND V, L.P., a
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Delaware limited partnership, XXXX CAPITAL FUND V-B, L.P., a Delaware limited
partnership, BCIP ASSOCIATES, a Delaware partnership, and BCIP TRUST ASSOCIATES,
L.P., a Delaware limited partnership (each of whom individually is referred to
herein as a "Bain Investor" and collectively they are referred to as the "Bain
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Investors") and ABS CAPITAL PARTNERS II, L.P., a Delaware limited partnership
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("Capital") and each of the persons set forth on Annex I hereto (each of whom
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individually is referred to herein as a "Capital Investor" and, together with
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Capital, the "Capital Investors"), and each of GS Capital Partners II, L.P., a
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Delaware limited partnership, Xxxxxxx, Xxxxx & Co., Verwaltungs GmbH, GS Capital
Partners II Offshore, L.P., Bridge Street Fund 1997, L.P., a Delaware limited
partnership, and Stone Street Fund 1997, L.P., a Delaware limited partnership
(each of whom individually is referred to herein as a "Goldman Investor," and
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collectively, they are referred to as the "Goldman Investors" and, together with
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the Capital Investors and the Bain Investors, the "Investors").
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THE PARTIES HERETO AGREE AS FOLLOWS:
1. Authorization and Purchase of Class L Common Stock.
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1.1 Authorization of Class L Common Stock. The Company has authorized the
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issuance and sale of 2,461,538 shares of Class L Common Stock, $.01 par value
per share (the "Class L Common Stock") to be issued under this Agreement. The
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rights, privileges, and preferences of the Class L Common Stock are set forth in
the Restated Certificate of Incorporation, as amended and restated in the form
attached to this Agreement as Exhibit B (the "Restated Certificate").
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1.2 Purchase and Sale of the Class L Common Stock. Subject to the terms
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and conditions of this Agreement and on the basis of the representations and
warranties set forth herein, the Company agrees to sell to the Investors and
each such Investor, severally and not jointly, agrees to purchase from the
Company in accordance with Section 1.3 the number of shares of Class L Common
Stock (the "Class L Shares") set forth opposite such Investor's name on Exhibit
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A hereto under the heading "Class L Shares." The purchase price for each share
of Class L Common Stock is $3.25. The Class L Shares shall be referred to
collectively as the "Shares."
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1.3 The Closings. The purchase and sale of the Class L Shares shall take
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place at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx on July 10, 1998 or at such other place as the parties shall
mutually agree (the "Closings"). At the Closing, the Company will deliver to
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each of the Investors a certificate or certificates, registered in such
Investor's name, representing the number of Class L Shares to be acquired by
such Investor at the Closing, upon receipt from the Investors of payment in an
amount equal to the amount set forth opposite such Investor's name on Exhibit A
hereto in lawful money of the United States of America by wire transfer of
immediately available funds to the Company.
2. Representations and Warranties of the Company.
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In order to induce the Investors to purchase the Class L Shares hereunder,
the Company hereby represents and warrants to each Investor with respect to the
Class L Shares being purchased by them hereunder as of the date hereof and as of
the date of the Closing:
2.1 Organization and Corporate Power. Each of the Company, Medical Care
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Partners, P.C., a professional corporation organized under the laws of The
Commonwealth of Massachusetts ("MCP"), Flagship Health, PA, a professional
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association organized under the laws of the State of Maryland ("Flagship"), and
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Flagship Health II, P.A., a professional association organized under the laws of
the State of Maryland ("Flagship II"), is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is qualified to do business as a foreign corporation in each
jurisdiction where such qualification is required. Each of the Company, MCP,
Flagship and Flagship II has all required corporate power and authority to own
its property, to carry on its business as presently conducted or contemplated to
be conducted and to carry out the transactions contemplated hereby. The copies
of the Amended and Restated Certificate of Incorporation and By-laws of the
Company, the Articles of Organization and By-laws of MCP, and the Articles of
Incorporation and By-laws of Flagship and Flagship II each as amended to date,
which have been furnished to the counsel for the Investors by the Company, are
correct and complete.
2.2 Authorization. This Agreement, the Stockholders Agreement as amended
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by Amendment No. 3 to the Stockholders Agreement to be delivered pursuant to
Section 4.7 among the Company, the Stockholders named therein and the Investors
(as so amended the "Stockholders Agreement"), and any other agreements,
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instruments, or documents entered into by the Company pursuant to this Agreement
or the Stockholders Agreement (the "Transaction Agreements"), have been duly
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executed and delivered by the Company and are the legal, valid and, assuming due
execution and delivery by the other parties hereto and thereto, binding
obligations of the Company, enforceable in accordance with their terms. The
execution, delivery and performance of this Agreement, the Stockholders
Agreement and the Transaction Agreements and the issuance of the Shares and the
Conversion Shares have been duly authorized by all necessary corporate action of
the Company.
2.3 Capitalization. (a) Upon the filing of the Restated Certificate but
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prior to the issuance of the Class L Shares to the Investors hereunder, the
entire authorized capital stock of the Company will consist of (i) 10,000,000
shares of Preferred Stock, $.01 par value per share, of which no shares are
outstanding, and (ii) 176,168,847 shares of Common Stock, $.01 par value
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per(the "Common Stock"), of which (A) 135,000,000 shares of the Common Stock
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are designated as Class A Common Stock, of which 26,176,762 shares are issued
and outstanding; (B) 6,727,043 shares are designated as Class B-1 Common Stock,
of which 2,809,296 shares are issued and outstanding; (C) 4,287,957 shares of
the Common Stock are designated as Class B-2 Common Stock, of which 1,790,704
shares are issued and outstanding; (D) 27,692,309 shares of the Common Stock are
designated as Class C Common Stock, of which 7,692,309 shares are issued and
outstanding; and (E) 2,461,538 shares of Common Stock are designated as Class L
Common Stock, of which no shares are issued and outstanding on the date of this
Agreement. The Company has reserved (i) 3,659,216 shares of Class A Common
Stock for issuance to certain employees upon exercise by such employees of
options granted or to be granted pursuant to the Company's Equity Incentive
Plan, which plan is described in Schedule 2.3A attached hereto, (ii) up to
3,917,747 shares of Class B-1 Common Stock, 2,497,253 shares of Class B-2 Common
Stock and 7,692,309 shares of Class C Common Stock as Reserved Shares for
issuance upon exercise of outstanding warrants and (iii) 31,332,694 shares of
Class A Common Stock for issuance upon conversion of the Class B Common Stock,
Class C Common Stock and Class L Common Stock in accordance with the terms of
the Restated Certificate (the "Conversion Shares"). When issued in accordance
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with the terms of this Agreement, the Class L Shares will be duly authorized,
validly issued and outstanding, fully paid and nonassessable, and Conversion
Shares will, each upon issuance in accordance with the terms of the Company's
Restated Certificate, be duly authorized, validly issued and outstanding, fully
paid and nonassessable and free and clear of all liens, charges or encumbrances
of any kind. All outstanding capital stock of the Company has been duly
authorized, validly paid and is nonassessable. Schedule 2.3A hereto contains a
list of (i) all holders of record of capital stock of the Company, including the
number of shares of capital stock held by each such holder, and (ii) all
outstanding warrants, options, agreements, securities, (including notes and debt
securities) or other commitments convertible, exercisable or exchangeable into
shares of capital stock or other equity securities of the Company or pursuant to
which the Company is or may become obligated to issue any shares of the capital
stock or other equity securities of the Company, which names all persons
entitled of record to receive such shares or other securities and the shares of
capital stock or other securities required to be issued thereunder as of the
date hereof. Except as set forth in Schedule 2.3A, there are no outstanding
warrants, options or other rights to purchase or subscribe for or acquire from
the Company, or exchangeable for or convertible into, any shares of capital
stock or any call, commitment or claim relating to capital stock, or stock
appreciation, phantom stock, profit participation or similar rights. Except as
provided herein or as set forth in Schedule 2.3A or in the Stockholders
Agreement, there are no preemptive rights with respect to the issuance or sale
by the Company of the Shares or the Conversion Shares. Except as provided in
the Stockholders Agreement, or as set forth on Schedule 2.3A or as imposed by
applicable securities laws, upon the Closing there are no agreements or
restrictions with respect to the transfer, purchase or voting of any shares of
the Company's capital stock or the capital stock of MCP, Flagship or Flagship
II. Other than as set forth in the Stockholders' Agreement or as set forth in
Schedule 2.3A, there are no existing rights with respect to registration under
the Securities Act of 1933, as amended (the "Securities Act"), of any of the
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Company's capital stock.
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(b) The entire authorized capital stock of MCP consists of 10,000 shares of
Common Stock, $.01 par value per share, of which 1,000 shares are issued and
outstanding and owned of record by Xxx Xxxxx, M.D. (the "MCP Sole Stockholder")
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and no other shares are issued and outstanding. MCP holds no shares of Common
Stock in its treasury. All capital stock of MCP has been duly authorized, and
are validly issued and outstanding, fully paid and nonassessable and free and
clear of all liens, charges or encumbrances of any kind. Other than as set
forth in the MCP Designation Agreement or as set forth in Schedule 2.3B, there
are no outstanding warrants, options or other rights to purchase or acquire from
MCP, or exchangeable for or convertible into, any shares of the capital stock of
MCP or any call, commitment or claim relating to capital stock, or stock
appreciation, phantom stock, profit participation or similar rights. There are
no preemptive rights with respect to the issuance or sale by MCP of any shares
of its capital stock. There are no existing rights with respect to registration
under the Securities Act of any of the capital stock of MCP. MCP has not
violated the Securities Act or any state Blue Sky or securities laws in
connection with the issuance of any of its securities. The MCP Sole
Stockholder, MCP and the Company have executed and delivered that certain
Shareholder Designation and Stock Transfer Agreement (the "MCP Designation
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Agreement"), dated as of August 9, 1996, a true and complete copy of which has
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been provided to the Investors' counsel. The Company and MCP have executed and
delivered that certain amended and restated Services Agreement (the "MCP
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Services Agreement") dated as of August 30, 1996, a true and complete copy of
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which has been provided to the Investors' counsel. The MCP Designation
Agreement and the MCP Services Agreement are collectively referred to herein as
the "MCP Agreements". Each of the MCP Agreements is the legal, valid and
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binding obligation of the parties thereto, enforceable in accordance with its
terms. No breach or default by any party to any of the MCP Agreements has
occurred and is continuing, and no event has occurred which with notice or lapse
of time or both would constitute a breach or default.
(c) The entire authorized capital stock of each of Flagship and Flagship II
consists of 1,000 shares of Common Stock $5.00 par value per share, of which
1,000 shares of each are issued and outstanding and owned of record by Xxxxx
Xxxxxxx M.D. (the "Flagship Sole Stockholder") and no other shares are issued
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and outstanding. Neither Flagship nor Flagship II holds any shares of its
Common Stock in its treasury. All capital stock of Flagship and Flagship II has
been duly authorized, and are validly issued and outstanding, fully paid and
nonassessable and free and clear of all liens, charges or encumbrances of any
kind. Other than as set forth in the Flagship Designation Agreements or as set
forth in Schedule 2.3C, there are no outstanding warrants, options or other
rights to purchase or acquire from Flagship or Flagship II, or exchangeable for
or convertible into, any shares of the capital stock of Flagship or Flagship II
or any call, commitment or claim relating to capital stock, or stock
appreciation, phantom stock, profit participation or similar rights. There are
no preemptive rights with respect to the issuance or sale by Flagship or
Flagship II of any shares of their respective capital stock. There are no
existing rights with respect to registration under the Securities Act of any of
the capital stock of Flagship or Flagship II. Neither Flagship nor Flagship II
has violated the Securities Act or any state Blue Sky or securities laws in
connection with the issuance of any of their respective securities. The
Flagship Sole Stockholder, Flagship and the Company have executed and
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delivered that certain Shareholder Designation and Stock Transfer Agreement
dated December 11, 1996 (the "Flagship I Designation Agreement"), a true and
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complete copy of which has been provided to the Investors' counsel. The Flagship
Sole Stockholder, Flagship II and the Company have executed and delivered that
certain Stockholder Designation and Stock Transfer Agreement, dated as of
December 2, 1997 (the "Flagship II Designation Agreement"), a true and complete
copy of which has been provided to Investors' counsel. The Company, Flagship
and Flagship II have executed and delivered that certain Amended and Restated
Services Agreement (the "Flagship Services Agreement") dated as of December 11,
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1996, as amended December 2, 1997, a true and complete copy of which has been
provided to the Investors' counsel. The Flagship I Designation Agreement, the
Flagship II Designation Agreement and the Flagship Services Agreement are
collectively referred to herein as the "Flagship Agreements". Each of the
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Flagship Agreements is the legal, valid and binding obligation of the parties
thereto, enforceable in accordance with its terms. No breach or default by any
party to any of the Flagship Agreements has occurred and is continuing, and no
event has occurred which with notice or lapse of time or both would constitute a
breach or default.
2.4 Subsidiaries. Except for (i) the Subsidiaries of the Company listed
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on Schedule 2.4, (ii) MCP, (iii) Flagship and (iv) Flagship II, the Company has
no Subsidiaries and has no investments in, or affiliations with, any other
corporation or business organization. All capital stock of each Subsidiary has
been duly authorized and is validly issued, fully paid, nonassessable and free
and clear of all liens. All such stock was issued in compliance with all
applicable state and federal laws concerning the issuance of securities. Each
of MCP, Flagship, Flagship II and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation as set forth in Schedule 2.4 and is duly qualified to do business
as a foreign corporation in each jurisdiction where such qualification is
required except where the failure to so qualify would not have a material
adverse effect on the business, assets, condition (financial or otherwise)
Company and the Consolidated Entities (as defined in Section 6.15) taken as a
whole. Each of the Subsidiaries has all required corporate power and authority
to own its property and to carry on its business as presently conducted or
contemplated to be conducted. None of the Subsidiaries currently conducts or in
the past has conducted any operations.
2.5 Financial Statements.
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2.5.1 Attached hereto as Schedule 2.5A are the Company's (i) audited
consolidated balance sheet as of December 31, 1997 and the related
consolidated statements of income and cash flows for the fiscal year then
ended (the "1997 Financials") and (ii) the Company's unaudited consolidated
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balance sheet as of March 31, 1998, and the related unaudited consolidated
statements of income and cash flows for the Company for the three-month
period then ended (the "1998 Financials," and together with the 1997
Financials, the "Financials"). The Financials are complete and correct in
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all material respects, have been prepared in accordance with GAAP, and
fairly present, in all material respects, the financial position of the
Company on a consolidated basis as of
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each such date and the results of operations for each such period then
ended subject, in the case of the 1998 Financials, to normal year-end
adjustments which, in the aggregate, will not be material. Attached hereto
as Schedule 2.5B are unaudited statements of income and cash flow for the
one month period ended April 30, 1998 and a balance sheet as of April 30,
1998 (the "Monthly Statements"). The Monthly Statements have been derived
from the Company's accounting records and fairly present, in all material
respects, the financial position of the Company on a consolidated basis as
of April 30, 1998 and the results of operations for the one month period
then ended subject to normal adjustments which, in the aggregate, are not
expected by the Company to be material.
2.5.2 The financial projections for 1998 - 2000 of the Company in the
form previously delivered to the Investors were prepared in good faith on
the basis of the assumptions stated therein, and the Company has no reason
to believe that such assumptions are not reasonable.
2.6 Absence of Undisclosed Liabilities. Except as and to the extent
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reflected or reserved against in the Financials or as set forth on Schedule 2.6,
neither the Company nor any of its Consolidated Entities has incurred any
accrued or contingent liability arising out of any transaction, event or state
of facts existing on or prior to the date hereof, which liability exists on the
date hereof, except for liabilities which have arisen after the date of the
Financials in the ordinary course of business and which do not result from,
arise out of, relate to, is in the nature of or was caused by any breach of
contract, breach of warranty, tort, infringement or violation of law.
2.7 Absence of Certain Developments. Since December 31, 1997, except as
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reflected in the 1998 Financials or on Schedule 2.7, there has been no material
adverse change and no event which could reasonably be expected to create a
material adverse change in the condition, financial or otherwise, of the Company
and its Consolidated Entities, taken as a whole or in the assets, liabilities,
properties, business or prospects of the Company and its Consolidated Entities,
taken as a whole. Without limiting the generality of the foregoing, since that
date there has been no:
(1) declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Company or
any Consolidated Entity;
(2) loss, destruction or damage to any property of the Company or any
of its Consolidated Entities, whether or not insured, which loss
would have a material adverse affect on the Company and its
Consolidated Entities taken as a whole;
(3) (x) labor trouble involving the Company or any of its
Consolidated Entities or (y) any material change in any of their
respective personnel or
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the terms and conditions of employment of such personnel with
respect to clause (y);
(4) waiver of any valuable right by the Company or any of its
Consolidated Entities;
(5) loan or extension of credit to any officer or employee of the
Company or any of its Consolidated Entities;
(6) disposition of any material assets (or any contract or
arrangement therefor) by the Company or any of its Consolidated
Entities other than for fair value in the ordinary course of
business;
(7) merger, consolidation, amalgamation, liquidation, winding up, or
dissolution of the Company or any of its Consolidated Entities;
(8) investment in, acquisition of, or affiliation with any business
or assets of, (other than the purchase of supplies, equipment and
similar assets by physician practice groups in the ordinary
course of business) any Person by the Company or any of its
Consolidated Entities;
(9) material change in the nature of the business conducted by the
Company or any of its Consolidated Entities;
(10) commencement or settlement of any action, suit, investigation or
proceeding before any court or governmental department,
commission, board, agency or instrumentality, domestic or
foreign, affecting the Company or any of its Consolidated
Entities;
(11) incurrence of Indebtedness by the Company or any of its
Consolidated Entities; or
(12) any commitment with respect to any of the foregoing.
2.8 Title to Properties. Except as disclosed in Schedule 2.8, each of the
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Company and, to the Knowledge of the Company, each of its Consolidated Entities
has good and marketable title or valid leasehold interest to all material
properties and assets used in the business of the Company and its Consolidated
Entities, taken as a whole, as presently conducted and as proposed to be
conducted and to all of its material properties and assets, free and clear of
all mortgages, security interests, liens, restrictions or encumbrances other
than Permitted Liens. All material personal property included in such
properties which is used in the business of the Company and its Consolidated
Entities taken as a whole is in good condition and repair except for reasonable
wear and tear, and all leases of real or personal property to which the Company
or
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any of its Consolidated Entities is a party and which are material to the
business of the Company and its Consolidated Entities taken as a whole are fully
effective and afford the Company or such Consolidated Entity, as the case may
be, peaceful and undisturbed possession of the subject matter of the lease.
Neither the Company nor to the Knowledge of the Company any Consolidated Entity
is in material violation of any zoning, building or safety ordinance, regulation
or requirement or other law or regulation applicable to the operation of owned
or leased properties likely to impede the normal operation of the business of
the Company and its Consolidated Entities, taken as a whole, and neither the
Company nor to the Knowledge of the Company any Consolidated Entity has received
any written notice of violation with which such recipient has not complied.
2.9 Tax Matters. There are no material federal, state, county or local
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Taxes due and payable by the Company or any Consolidated Entity which have not
been paid. The provisions for taxes in the Financial Statements are sufficient
for the payment of all accrued and unpaid federal, state, county and local Taxes
of the Company and each Consolidated Entity, whether or not assessed or disputed
as of the date of each such balance sheet. There have been no examinations or
audits of any Tax Returns or reports by any applicable federal, state or local
governmental agency. The Company and each Consolidated Entity have duly and
timely filed all federal, state, county and local Tax Returns required to have
been filed by them for any period ending on or before the date hereof, all such
returns are accurate in all material respects and there are in effect no waivers
of applicable statutes of limitations with respect to Taxes for any year.
2.10 Contracts and Commitments. Except for the contracts described in
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Schedule 2.10 (the "Contracts"), true and complete copies of which have been
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made available to counsel for the Investors, neither the Company nor any
Consolidated Entity has any contract, obligation or commitment which involves by
its terms a commitment in excess of $50,000 or any employment or noncompetition
contracts (including contracts with any common law employee, agent or
independent contractor), stock redemption, designation or purchase agreements,
financing agreements, managed care contracts and other contracts with third-
party payors, distribution right agreements, royalty agreements, licenses under
which either the Company or any Consolidated Entity is licensee or licensor,
leases of real property, pension, profit-sharing, retirement or stock option
plans or any other Contract material to the Company. Each of the Contracts is
the legal, valid and binding obligation of the Company or the Consolidated
Entity party thereto, enforceable against the Company or the Consolidated Entity
in accordance with its terms. No breach or default under any Contract by the
Company or the Consolidated Entity that is a party thereto or, to the Knowledge
of the Company, by any other party thereto, has occurred and is continuing, and
no event has occurred which with notice or lapse of time or both would
constitute a breach or default thereunder except, in each case, for breaches or
defaults which would not have a material adverse effect upon the Company and its
Consolidated Entities, taken as a whole.
2.11 No Defaults. Neither the Company nor any Consolidated Entity is in
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default under, or in violation of, (a) its organizational documents or its By-
Laws, (b) any note, indenture,
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mortgage, lease, agreement, contract, purchase order or other instrument,
document or agreement to which it is a party or by which it or any of its
property is bound or affected or (c) any order, writ, statute, law, rule,
regulation, injunction or decree of any court or any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign except, in the case of clause (b) and
violations of statutes, laws, rules and regulations, for defaults which would
not, individually or in the aggregate have a material adverse effect upon the
Company and its Consolidated Entities, taken as a whole and except as provided
in Schedule 2.25. To the Knowledge of the Company, there exists no condition,
event or act which after notice, lapse of time, or both, could constitute a
default by the Company or any Consolidated Entity under any of the foregoing
except, in each case, for breaches or defaults which, individually or in the
aggregate would not have a material adverse effect upon the Company and its
Consolidated Entities, taken as a whole.
2.12 Intellectual Property. Schedule 2.12 contains a list of all patents,
---------------------
trademarks, trade names, brand names and copyrights (in each case, whether
issued or pending), and all licenses or rights with respect to any of the
foregoing, owned or possessed by the Company or any Consolidated Entity on the
date of this Agreement, all of which are in good standing and are free and clear
of all liens and encumbrances of any nature, except as set forth on Schedule
2.12. To the knowledge of the Company, (i) neither the Company nor, any
Consolidated Entity infringes any patent, copyright, trademark or other
intellectual property rights of others and (ii) no third party is infringing on
the patent, copyright, trademark or other intellectual property rights of the
Company or any Consolidated Entity. All trade secrets, know how, technical
processes and procedures developed and belonging to the Company or, to the
Knowledge of the Company, any Consolidated Entity which are material to the
business of the Company or its Consolidated Entities taken as a whole and which
have not been patented have been kept confidential. The Company and, to the
Knowledge of the Company, each Consolidated Entity has the right to use, free
and clear of claims or rights of others, all trade secrets, customer lists,
processes, computer software, patents, copyrights and trademarks required for,
incident to or included in its products and its proposed products.
2.13 Effect of Transactions. The execution, delivery and performance of
----------------------
this Agreement and the Stockholders Agreement, compliance with the provisions
hereof and thereof by the Company, and the issuance, sale and delivery of the
Shares and the Conversion Shares, do not and will not, with or without the
passage of time or the giving of notice or both, (a) violate any provision of
law, statute, rule or regulation or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other governmental
body applicable to the Company or its Consolidated Entities or (b) conflict with
or result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or
those of any Consolidated Entity under its respective organizational documents
or Bylaws or under any material note, indenture, mortgage, lease, agreement,
contract, purchase order or other instrument, document or agreement to which the
Company or any Consolidated Entity is a party
-9-
or by which any of them or any of their property is bound or affected, including
without limitation, the MCP Agreements, the Flagship Agreements and the
Contracts.
2.14 No Consent or Approval Required. Based in part on the representations
-------------------------------
made by the Investors in Section 3 of this Agreement, other than federal or
state securities law filings and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act, as amended (the "HSR Act"), which will be made in a timely
manner after each Closing and other than the filing of the Company's Restated
Certificate which, as of the Closing, will have been filed, no authorization,
consent, approval or other order of, declaration to, or filing with, any
governmental agency or body or any third party is required for or in connection
with the valid and lawful authorization, execution, delivery and performance by
the Company of this Agreement, the Stockholders Agreement, the Transaction
Agreements, the MCP Agreements or the Flagship Agreements or for or in
connection with the valid and lawful authorization, issuance, sale and delivery
of the Shares or for or in connection with the valid and lawful authorization,
reservation, issuance, sale and delivery of the Conversion Shares.
2.15 Litigation. Except as set forth on Schedule 2.15, there is no action,
----------
suit, proceeding or investigation pending against the Company, or any
Consolidated Entity, or, to the Knowledge of the Company, threatened against the
Company or any Consolidated Entity including without limitation any action,
suit, proceeding or investigation which questions the validity of this
Agreement, the Stockholders Agreement, the MCP Agreements, the Flagship
Agreements or the right of the Company, MCP, Flagship or Flagship II to enter
into them or to consummate the transactions contemplated hereby or thereby, or
which seeks a material amount of damages, fines or penalties or which might
result, either individually or in the aggregate, in any material adverse change
in the business, assets, conditions, operations, affairs, or prospects of the
Company and its Consolidated Entities taken as a whole, financial or otherwise,
or any change in the current equity ownership of the Company or of any
Consolidated Entity, nor is the Company aware that there is any basis for any
such litigation or other proceeding. None of the Company or any of its officers
or directors or any Consolidated Entity or, to the Knowledge of the Company, any
of its officers or directors, is a party to, or subject to the provisions of,
any judgment or decree of any court. There is no action, suit or proceeding by
the Company or any Consolidated Entity currently pending or which the Company or
any Consolidated Entity presently intends to initiate.
2.16 Securities Laws. Assuming that the Investors' representations and
---------------
warranties contained in Section 3 of this Agreement are true and correct, the
offer, issuance and sale by the Company to the Investors of the Class L Shares
and the Conversion Shares are, and will be as of the Closing, exempt from the
registration and prospectus delivery requirements of the Securities Act, and
have been, or will be as of the Closing, registered or qualified (or are, or
will be as of the Closing, exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state Blue
Sky and securities laws.
-10-
2.17 Business. Each of the Company and each Consolidated Entity has all
--------
their material franchises, permits, licenses and other rights and privileges
necessary to permit them to own their property and to conduct their present
business taken as a whole. The operations of the Company and the Consolidated
Entities comply with all applicable laws are, and they have been conducted, in
compliance in all material respects, except as set forth on Schedule 2.25 with
all applicable federal, state, local and foreign laws, rules, regulations and
other requirements of all governmental authorities and of all states,
municipalities and agencies thereof having jurisdiction.
2.18 Brokerage. Except as disclosed on Schedule 2.18, there are no claims
---------
for brokerage commissions or finder's fees or similar compensation in connection
with the transactions contemplated by this Agreement based on any arrangement
made by or on behalf of the Company or any Consolidated Entity, and the Company
agrees to pay any such brokerage commissions, finder's fees or similar
compensation whether or not listed on Schedule 2.18 and to indemnify and hold
the Investors harmless against any damages incurred as a result of any such
claim.
2.19 Employees. There are no controversies or labor troubles pending, or
---------
to the best knowledge of the Company, threatened between it and its employees
or, to the Knowledge of the Company, the employees of any Consolidated Entity
and the Company's employees or the employees of any Consolidated Entity. To the
Knowledge of the Company: (a) no employee of the Company or any Consolidated
Entity is in violation of any term of any employment contract, patent or other
proprietary information disclosure agreement or any other contract or agreement
relating to the right of any such employee to be employed by the Company or such
Consolidated Entity because of the nature of the business conducted or proposed
to be conducted by the Company or such Consolidated Entity or for any other
reason, and the continued employment by the Company or each Consolidated Entity
of its respective present employees will not result in any such violation; (b)
no officer or key employee of the Company or, to the Knowledge of the Company,
any Consolidated Entity has any present intention of terminating his employment
therewith nor does the Company or, to the Knowledge of the Company, any
Consolidated Entity have any present intention of terminating any such
employment; and (c) the Company and each Consolidated Entity has complied in all
material respects with all applicable state and federal laws and regulations
respecting employment and employment practices, terms and conditions of
employment, wages and hours and other laws related to employment, and there are
no arrears in the payments of wages, withholding or social security taxes,
unemployment insurance premiums or other similar obligations. Except as set
forth in Schedule 2.10, and for such agreements entered into in connection with
any affiliation transaction approved by the Investors after the date of this
Agreement neither the Company nor, to the Knowledge of the Company, any
Consolidated Entity is a party to any agreement with any of its respective
officers or employees with respect to such person's employment.
2.20 Insurance. Schedule 2.20 contains a complete and accurate list of all
---------
policies or binders of fire, liability, title, worker's compensation,
malpractice, professional liability and other
-11-
forms of insurance (showing as to each policy or binder the carrier, policy
number, coverage limits, expiration dates, annual premiums and a general
description of the type of coverage provided) to be in effect with respect to
the Company or any Consolidated Entity on the date of the Closing. Such
insurance provides coverage to the extent and in the manner (a) to the extent
applicable, customary for a medical practice and (b) as may be required by
applicable law and by any and all Contracts to which the Company or any
Consolidated Entity and any physician employed by any Consolidated Entity is a
party. Neither the Company nor any Consolidated Entity is in default under any
of such policies or binders, and neither the Company nor any Consolidated Entity
has failed to give any notice or to present any claim under any such policy or
binder in a due and timely fashion except, in each case, for such failure or
defaults that do not have a material adverse effect on the Company and its
Consolidated Entities taken as a whole. No insurer has advised the Company or
any Consolidated Entity, or to the Knowledge of the Company, any physician
employed by any Consolidated Entity that it intends to reduce coverage, increase
premiums or fail to renew an existing policy or binder. There are no outstanding
unpaid claims under any such policies or binders. All policies and binders
provide sufficient coverage for the risks insured against and are in full force
and effect.
2.21 Environmental and Safety Laws.
-----------------------------
(1) As used in this Agreement, the terms "Removal," "Remedial Action,"
"Release," "Hazardous Substance" and "National Priorities List" shall have
the same meaning as those terms are given in the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA") and its
------
implementing regulations, and the terms "Hazardous Waste" and "Solid Waste"
shall have the same meaning as those terms are given in the Resource
Conservation and Recovery Act, as amended ("RCRA") and its implementing
regulations.
(2) The ownership, use and operation by the Company or, to the
Knowledge of the Company, any Consolidated Entity of each facility used in
its business has been and, to the Knowledge of the Company, all ownership,
use and operation of each such facility by any Person has been, in
compliance in all material respects with all Federal, state and local
environmental, safety and anti-pollution laws, including without limitation
RCRA, its implementing regulations and all applicable state hazardous waste
laws; the Clean Water Act, as amended, its implementing regulations and all
applicable state and local effluent discharge laws; the Clean Air Act, as
amended, its implementing regulations and all applicable state and local
air emission laws; the Toxic Substances Control Act, as amended, its
implementing regulations and all applicable state and local toxic substance
laws; CERCLA, its implementing regulations and all applicable state and
local environmental response, compensation and liability laws; the National
Environmental Policy Act of 1969 and its implementing regulations; the
Occupational Safety and Health Act, its implementing regulations and all
applicable state and local worker safety and health laws; and all such laws
concerning particulate emissions, hazard communication, surface water
pollution, groundwater pollution, air pollution, solid
-12-
wastes, hazardous wastes, hazardous substances, medical wastes, toxic
substances, storage, handling, treatment, transportation, spills or other
releases, and disposal of any Hazardous Substances, and exposure to or
notification regarding any Hazardous Substances, and neither the Company
nor, to the Knowledge of the Company, any Consolidated Entity has reason to
believe that any claim, action, lawsuit, proceeding, complaint or charge
exists or may be brought for violation of any such laws.
(3) Neither the Company nor, to the Knowledge of the Company, any
Consolidated Entity has any liability arising out of its own actions or
inactions or, to the Knowledge of the Company, any other liability, whether
fixed, unliquidated, absolute, contingent or otherwise, under any federal,
state or local environmental, safety or anti-pollution laws, including any
liability, responsibility or obligation for investigation, removal,
Remedial Action or any fines, penalties, costs or expenses to effect
compliance with or discharge any duty, obligation or claim under any such
laws except for liabilities which would not have a material adverse effect
upon the Company and its Consolidated Entities, taken as a whole, and
neither the Company nor, to the Knowledge of the Company, any Consolidated
Entity has reason to believe that any claims, actions, suits, proceedings
or investigations under such laws exist or may be brought or threatened.
(4) There has not been, and is not occurring, at any facility owned or
operated or previously owned or operated by the Company or, to the
Knowledge of the Company, any Consolidated Entity any Release or threatened
Release of any Hazardous Substance, Hazardous Waste, Solid Waste or
petroleum, including crude oil or any fraction thereof, nor has the Company
or, to the Knowledge of the Company, any Consolidated Entity any reason to
believe such a Release either is occurring or has occurred at any time in
the past. Neither the Company nor, to the Knowledge of the Company, any
Consolidated Entity has applied or disposed of any Hazardous Substance,
Hazardous Waste, Solid Waste or petroleum, including crude oil or any
fraction thereof, in any manner which may form the basis for any present or
future claim, demand or action seeking investigation, Removal, or Remedial
Action at any facility, site, location or body of water, surface or
subsurface, including groundwater or any costs or expenses related thereto.
(5) Neither the Company nor, to the Knowledge of the Company, any
Consolidated Entity has sent, arranged for disposal or treatment, arranged
with a transporter for transport for disposal or treatment, transported, or
accepted for transport any Hazardous Substance, Hazardous Waste, Solid
Waste or petroleum, including crude oil or any fraction thereof, to a
facility, site or location, which, pursuant to CERCLA or any similar state
or local law, (a) has been placed or is proposed to be placed, on the
National Priorities List or its state equivalent or (b) which is subject to
a claim, administrative order or other request to take clean up action,
Removal or Remedial Action by any person or entity (including any
governmental entity) or which is subject to a claim for damages by any
person or entity (including any governmental entity).
-13-
(6) Neither the Company nor, to the Knowledge of the Company, any
Consolidated Entity stores, generates or produces any Hazardous Substance,
Hazardous Waste, or petroleum in any material respect in violation of any
law. There has not been any contamination of groundwater, surface waters,
soils or sediments, as a result of the manufacture, storage, processing,
loss, leak, escape, spillage, disposal or other handling or disposition by
or on behalf of the Company or by or on behalf of, to the Knowledge of the
Company, any Consolidated Entity of any product or substance on or prior to
the Closing. All Hazardous Substances, Hazardous Wastes and petroleum
stored by or on behalf of the Company by or on behalf of, to the Knowledge
of the Company, any Consolidated Entity have been stored in all material
respects in compliance with all Federal, state and local environmental,
safety and anti-pollution laws.
(7) All facilities located on owned or leased real estate of the
Company, and those of, to the Knowledge of the Company, any Consolidated
Entity have been approved by all necessary governmental authorities, and
each of the Company and each Consolidated Entity has obtained and is in
possession of all environmental and safety permits and licenses necessary
for its business including permits required by local zoning laws. There
have not been any environmental audits or assessments or occupational
health studies undertaken by or on behalf of the Company by or on behalf
of, to the Knowledge of the Company, any Consolidated Entity or
governmental agencies with respect to the Company or, to the Knowledge of
the Company, any Consolidated Entity or the Company's or, to the Knowledge
of the Company, any such Consolidated Entity's assets, employees,
facilities or properties, the results of groundwater and soil testing, the
results of underground fuel, waste or waste tank tests and soil samples,
written communications with Federal, state or local governments on
environmental, safety or anti-pollution matters, and Occupational Safety
and Health Administration citations.
2.21.2 There have been no Hazardous Substances, Hazardous Wastes,
Solid Wastes, petroleum, tanks, containers, cylinders, drums, bottles or
cans buried, stored or deposited in or on any real property currently or
formerly owned or operated by the Company or, to the Knowledge of the
Company, any Consolidated Entity while owned or operated by the Company or,
to the Knowledge of the Company, any Consolidated Entity, or to the
Knowledge of the Company, before owned or operated by the Company or any
Consolidated Entity.
2.22 Benefit Plans.
-------------
(1) Except as set forth in Schedule 2.22, neither the Company nor, to
the Knowledge of the Company, any Consolidated Entity is a party to any
written or unwritten (i) "employee benefit plan" (as that term is described
in Section 3(3) of the Employment Retirement Income Security Act of 1974,
as amended ("ERISA"), including but not limited to any pension, retirement,
profit sharing, savings, bonus, incentive, deferred compensation, group
health insurance or group life insurance plan or obligation,
-14-
or (ii) any "fringe benefit" plan or vacation pay or policy. The Company
does not have any obligations to provide to its active employees or current
retirees any post-retirement non-pension benefits. Any or all of the plans
listed on Schedule 2.22 may be terminated by the Company or the
Consolidated Entity, as the case may be, without restriction or limitation.
(2) Except as set forth in Schedule 2.22, no employee has any claims
threatened or pending against the Company or, to the Knowledge of the
Company, any Consolidated Entity (whether under any law, any employment
agreement or otherwise) on account of or for (i) overtime pay, other than
overtime pay for the current payroll period or with respect to which
accruals or reserves are reflected in the Financials, or, with respect to
the Company after the date of such Financials and with respect to any
Consolidated Entity, on the books and records thereof, (ii) wages or salary
(excluding bonuses and amounts accruing under pension and profit sharing
plans) for any period other than the current payroll period or with respect
to which accruals or other reserves are reflected in the Financials, or,
after the date of such Financials and with respect to any Consolidated
Entity on the books and records of thereof, (iii) vacation, time off or pay
in lieu of vacation or time off, other than that earned in respect of the
current fiscal year or with respect to which accruals or reserves are
reflected in the Financials, or, with respect to the Company after the date
of such Financials and with respect to any Consolidated Entity, on the
books and records, (iv) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work or (v) ERISA.
(3) All plans listed on Schedule 2.22 that are intended to qualify
(the "Qualified Plans") under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code") have been determined by the Internal
Revenue Service to be so qualified, and copies of such determination
letters are included as part of Schedule 2.22. No such plan has incurred an
accumulated funding deficiency, as defined in Section 412(a) of the Code
and Section 302(1) of ERISA, and the Company has not incurred any resulting
liability for excise tax or penalty due to the Internal Revenue Service nor
any liability to the Pension Benefit Guaranty Corporation. There has been
no termination, partial termination or discontinuance of any contributions
to any such Qualified Plan without notice to and approval by the Internal
Revenue Service.
(4) With respect to all Employee Benefit Plans for which any employee
is or was eligible to participate in, the Company or, to the Knowledge of
the Company, any Consolidated Entity or any entity which, within the last
six (6) years, has been under common control or affiliated with the Company
or, to the Knowledge of the Company, any Consolidated Entity (an "ERISA
-----
Affiliate") within the meaning of Section 414(b), (c) or (m) of the Code,
---------
is in compliance in all material respects with the requirements prescribed
by any and all statutes, orders or governmental rules or regulations
currently in effect, including, but not limited to, ERISA and the Code,
applicable to such employee benefit plans and each of the Company and each
Consolidated Entity is in compliance in
-15-
all material respects with its obligations under the terms of such plans.
Except as disclosed on Schedule 2.22, all reports and other documents
required by law or contract to be filed with any governmental agency or
distributed to plan participants have been timely filed or distributed.
None of the employee benefit plans are subject to Title IV of ERISA.
Neither the Company nor any ERISA Affiliate has ever been obligated to
contribute to any "multi-employer plan" as such term is defined in Section
111(37) of ERISA. No employee benefit plan of the Company or any ERISA
Affiliate has engaged in any prohibited transaction as such term is defined
in Section 4975 of the Code or Section 406 of ERISA.
2.23 Transactions with Affiliates. Except as disclosed in Schedule 2.23,
----------------------------
no stockholder, officer or director of the Company or those of any Consolidated
Entity nor any "affiliate" or "associate" of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act)
(herein, a "Related Party") is a party to any transaction in an amount greater
-------------
than $10,000 with the Company or any Consolidated Entity, including, without
limitation, any contract, agreement or other arrangement providing for the
rental of real or personal property from, or otherwise requiring payments to,
any Related Party. Except as set forth in Schedule 2.23, no employee of the
Company or, to the Knowledge of the Company, of any Consolidated Entity nor any
Related Party is indebted in an amount greater than $1,000 to the Company or any
Consolidated Entity and neither the Company nor, to the Knowledge of the
Company, any Consolidated Entity is indebted to any such employee or Related
Party other than reimbursement in the ordinary course of business and travel
expenses not exceeding, in the aggregate, $5,000 and accrued and unpaid salary
and vacation from the most recent regularly scheduled payroll period.
2.24 Books and Records. The minute books of the Company and those of each
-----------------
of the Consolidated Entities contain complete and accurate records of all
meetings and other corporate actions of each of their respective stockholders,
Boards of Directors and all committees, if any, appointed by their respective
Boards of Directors. The stock ledger of the Company and that of each of the
Consolidated Entities are complete and correct and reflect all issuances,
transfers, repurchases and cancellations of shares of capital stock of each of
the Company and such Consolidated Entities.
2.25 Regulatory Matters.
------------------
(1) The Company and each of the Consolidated Entities and, to the
Knowledge of the Company, all physicians employed by such Consolidated
Entities have all licenses, permits, franchises, approvals, authorizations,
consents or orders of, or filings with ("Permits") any federal, state,
-------
local, foreign or other governmental agency, instrumentality, commission,
authority, board or any other Person, necessary or desirable to conduct
their business as now being conducted except where the failure to have any
such Permit does not have a material adverse effect on the Company or its
Consolidated
-16-
Entities, taken as a whole. All Permits of the Company and the Consolidated
Entities and, to the Knowledge of the Company, all physicians employed by
the Consolidated Entities are valid and in full force and effect except
where the failure to have any such Permit does not have a material adverse
effect on the Company and its Consolidated Entities, taken as a whole. No
notice to, declaration, filing or registration with, or Permit or consent
from, any governmental or regulatory body or authority, or any other Person
or entity, is required to be made or obtained by the Company or any
Consolidated Entity in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated hereby.
(2) Neither the Company nor any of the Consolidated Entities, nor any
other persons or, to the Knowledge of the Company, entities providing
professional services for the Consolidated Entities, have engaged in any
activities which are prohibited under 42 U.S.C. (S)1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related
state or local statutes or regulations, or any federal or state self-
referral laws, or which are prohibited by rules of professional conduct,
including but not limited to the following: (i) knowingly and willfully
making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly
and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any
benefit or payment; (iii) failure to disclose knowledge by a claimant of
the occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with intent
to fraudulently secure such benefit of payment; and (iv) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in cash or
in kind or offering to pay or receive such remuneration (a) in return for
referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or
in part by Medicare or Medicaid, or (b) in return for purchasing, leasing,
or ordering or arranging for or recommending purchasing, leasing, or
ordering any good, facility, service, or item for which payment may be made
in whole or in part by Medicare or Medicaid.
(3) The representations and warranties contained in this Section 2.25
are hereby qualified by Schedule 2.25.
2.26 Shareholder Disclosures. None of the document, dated June 26, 1998,
-----------------------
soliciting shareholders to consent to the Restated Certificate and Amendment No.
3 to the Stockholders Agreement, the Company Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 (the "Form 10-K") as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
Securities and Exchange Commission ("SEC") and the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1998 (the "Form 10-Q), as filed
under the Exchange Act with the Commission, as of their respective dates or
filing dates, contained any untrue statement of a material fact or omitted to
state any material fact required to
-17-
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The Form 10-K
and the Form 10-Q complied, when filed, in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder. The Company is not required to amend the Form 10-K or Form 10-Q.
2.27 Material Facts. This Agreement, the Schedules hereto and furnished
--------------
contemporaneously herewith, and each other agreement, document, certificate or
written statement furnished or to be furnished to the Investors through the
Closing by or on behalf of the Company or any Consolidated Entity in connection
with the transactions contemplated hereby, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein or herein in light of the circumstances
in which they were made not misleading. To the Knowledge of the Company, there
is no fact which has not been disclosed herein or otherwise by the Company to
the Investors and which may materially adversely affect the business,
properties, assets or condition, financial or otherwise, of the Company or of
any Consolidated Entity.
3. Representations and Warranties and other Agreements of the Investors.
--------------------------------------------------------------------
3.1 Representations and Warranties. Each Investor severally and not
------------------------------
jointly hereby represents and warrants that:
(1) Authorization. Such Investor has full power and authority to
-------------
execute, deliver and perform this Agreement, the Stockholders' Agreement
and the Transaction Agreements to which it is a party and to acquire the
Shares and, each of this Agreement, the Stockholders Agreement and the
Transaction Agreements constitute the valid and legally binding obligation
of such Investor, enforceable against such Investor in accordance with
their respective terms.
(2) Purchase Entirely for Own Account. The Class L Shares to be
---------------------------------
received by such Investor and the Conversion Shares received upon
conversion of the Shares (collectively, the "Securities") will be acquired
----------
for investment for such Investor's own account, not as a nominee or agent
and not with a view to the distribution of any part thereof. Such Investor
has no present intention of selling, granting any participation in, or
otherwise distributing the same. Such Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participations to such person or to any third person, with respect to
any of the Securities.
(3) Restricted Securities. Such Investor understands that the
---------------------
Securities may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act, or an exemption therefrom, and that
in the absence of an effective registration statement covering the Class L
Shares or the Conversion Shares or an available exemption from registration
under the Securities Act, the Securities must be held
-18-
indefinitely. In the absence of an effective registration statement
covering the Securities, such Investor will sell, transfer, or otherwise
dispose of the Securities only in a manner consistent with its
representations and agreements set forth herein and the terms and
conditions set forth in the Stockholders Agreement.
(4) Formation. Such Investor represents that it was not organized for
---------
the purpose of making an investment in the Company.
(5) Suitability. Such Investor is an Accredited Investor as such term
-----------
is defined in Rule 501(a) promulgated pursuant to the Securities Act.
(6) Financial Condition. Such Investor's financial condition is such
-------------------
that it is able to bear the risk of holding the Shares for an indefinite
period of time and can bear the loss of its entire investment in its
Shares.
(7) Experience. Such Investor has such knowledge and experience in
----------
financial and business matters and in making high risk investments of this
type that it is capable of evaluating the merits and risks of the purchase
of the Shares.
(8) Brokerage. There are no claims for brokerage commissions or
---------
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made
by or on behalf of such Investor, and such Investor agrees to indemnify and
hold the Company and the other Investors harmless against any damages
incurred as a result of any such claims.
(9) Massachusetts. Each of the Investors which was within the
-------------
jurisdiction of The Commonwealth of Massachusetts at the time it received
the offer to purchase the Shares and/or consummated the sale of the Shares,
represents and warrants that (i) it is a corporation or other entity not
formed for the purpose of acquiring the Shares being purchased by it, (ii)
it has total assets in excess of $5,000,000, (iii) a substantial part of
its business activities consists of investing, purchasing, selling or
trading in securities issued by others and (iv) its investment decisions
are made by persons who have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Shares.
3.2 Further Limitations on Disposition.
----------------------------------
(1) Each Investor further agrees not to make any disposition of all or
any portion of the Class L Shares or the Conversion Shares unless and
until:
(1) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such
disposition is made in
-19-
accordance with such registration statement and all applicable
state securities laws; or
(2) (A) Such Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement
of the circumstances surrounding the proposed disposition, and
(B) such Investor shall have furnished the Company with a
reasonably satisfactory opinion from counsel, reasonably
satisfactory to the Company, that such disposition will not
require registration of such shares under the Securities Act and
that all requisite action has been or will, on a timely basis, be
taken under any applicable state securities laws in connection
with such disposition.
(2) Notwithstanding the provisions of paragraphs (i) and (ii) above,
no such registration statement or opinion of counsel shall be necessary for
a transfer by any Investor pursuant to Rule 144A or Rule 144 promulgated
under the Securities Act or a transfer in compliance with the Securities
Act by an Investor to a partner, subsidiary, shareholder or affiliate of
such Investor or to an Affiliated Fund or to any director, officer or
employee of the Company, MCP, Flagship or Flagship II, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as
if such transferee were an original Investor hereunder.
3.3 Legends. It is understood that the certificates evidencing the Class
-------
L Shares (and the certificates evidencing the Conversion Shares) may bear
substantially the following legends:
(1) "These securities have not been registered under the Securities
Act of 1933. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or
unless sold pursuant to Rule 144A or Rule 144 of such Act."
(2) Any legend required by the Stockholders Agreement or the laws of
any other applicable jurisdiction.
Upon the consummation of any event requiring the removal of a legend hereunder,
the Company, upon the surrender of certificates containing such legend and
receipt of evidence to the Company's reasonable satisfaction of the occurrence
of such events from the Investors, shall at its own expense deliver to the
holder of any such shares as to which the requirement for such legend shall have
terminated one or more new certificates evidencing such shares not bearing such
legend.
4. Conditions to the Investors' Obligations.
----------------------------------------
-20-
The obligations of the Investors under Section 1.3 of this Agreement to
purchase the Class L Shares are subject to the fulfillment on or before the
Closing of each of the following conditions unless waived by the Investors in
accordance with Section 9.5 hereof:
4.1 Representations and Warranties. The representations and warranties of
------------------------------
the Company contained in Section 2 (i) that contain a materiality qualification
shall be true and correct, and (ii) that do not contain a materiality
qualification shall be true and correct in all material respects on and as of
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of Closing.
4.2 Performance. The Company shall have performed and complied with all
-----------
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The Chief Executive Officer of the Company
----------------------
shall deliver to the Investors at the Closing a certificate certifying that the
conditions specified in Sections 4.1, 4.2, 4.4, 4.5, 4.7, 4.8, 4.11, 4.12 and
4.13 have been fulfilled and stating that except as disclosed on Schedule 2.7
there has been no material adverse change in the business affairs, operations,
properties, assets, or condition or prospects of the Company and its
Consolidated Entities, taken as a whole since March 31, 1998.
4.4 Restated Certificate of Incorporation. The Company shall have filed
-------------------------------------
with the Secretary of State of Delaware the Restated Certificate which is
attached hereto as Exhibit B.
4.5 Qualifications; Consents. All consents, authorizations, approvals, or
------------------------
Permits, if any, of any governmental authority or regulatory body of the United
States or of any state or of any third party that are required to be obtained by
the Company in connection with the consummation of the transactions contemplated
hereby and the lawful issuance and sale of the Shares to the Investors pursuant
to this Agreement shall have been duly obtained and shall be effective on and as
of such Closing other than those which are not required to be obtained before
such Closing.
4.6 Proceedings and Documents. All corporate and other proceedings in
-------------------------
connection with the transactions contemplated at such Closing and all documents
incident thereto shall be satisfactory in form and substance to the Investors
and the Investors' counsel, and they shall have received all such counterpart
original and certified or other copies of such documents as they may request.
4.7 Stockholders Agreement. Amendment No. 3 to the Stockholders Agreement
----------------------
substantially in the form of Exhibit D attached hereto shall have each been
executed and delivered by the parties (other than the Investors) thereto.
-21-
4.8 Amendment of Outstanding Warrants. The Company shall have with the
---------------------------------
consent of each warrantholder (i) amended each outstanding warrant to purchase
Class B Common Stock to reduce the Initial Warrant Price (as defined therein) by
$2.00 per share and (ii) amended each outstanding warrant to purchase Class C
Common Stock held by the Investors to reduce the Initial Warrant Price (as
defined therein) by $2.00 per share. The holders of Class C Common Stock and
Warrants to purchase Class B or Class C Common Stock shall have waived any
adjustment to the conversion or exercise price arising out of the transactions
contemplated by this Agreement and agreed to amend the outstanding warrants in
the form of Exhibits I-1 and I-2 hereto.
4.9 Opinion of Company Counsel. The Investors shall have received from
--------------------------
Xxxx and Xxxx, counsel for the Company, an opinion dated as of the Closing in
substantially the form attached hereto as Exhibit E.
4.10 Secretary's Certificate. The Secretary of the Company shall deliver
-----------------------
to the Investors at the Closing a Certificate, dated as of the Closing,
certifying: (a) that attached thereto is a true and complete copy of the By-Laws
of the Company as in effect on the date of such certification; (b) that attached
thereto is a true and complete copy of all resolutions adopted by the Board of
Directors and the stockholders of the Company authorizing the execution,
delivery and performance of this Agreement and the Stockholders Agreement, the
issuance, sale and delivery of the Shares and reservation, issuance and delivery
of the Conversion Shares, and that all such resolutions are in full force in
effect and are all the resolutions adopted in connection with the transactions
contemplated by this Agreement and the Stockholders Agreement; (c) that attached
thereto is a true and complete copy of the Restated Certificate as in effect on
the date of such certification; and (d) to the incumbency and specimen signature
of certain officers of the Company.
4.11 Material Adverse Change. Since March 31, 1998 there shall have been,
-----------------------
in the judgment of the Investors, no material adverse change in the business
affairs, operations, properties, assets or condition or prospects of the
Company, Flagship, Flagship II or MCP.
4.12 MCP and Flagship Agreements. The MCP and Flagship Agreements shall be
---------------------------
in full force and effect and no amendments to or waivers thereunder shall have
occurred.
4.13 Amendment to By-Laws. The Company's By-laws shall be amended
--------------------
substantially in the form attached to Exhibit F hereto.
4.14 Capital Certificate. The Company shall deliver to Capital a
-------------------
certificate substantially in the form attached hereto as Exhibit G.
5. Conditions of the Company's Obligations at the Closing.
------------------------------------------------------
-22-
The obligations of the Company under Sections 1 of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions:
5.1 Representations and Warranties. The representations and warranties
------------------------------
of the Investors contained in Section 3 shall be true and correct on and as of
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
5.2 Payment of Purchase Price. The Investors shall have delivered payment
-------------------------
of the applicable aggregate purchase price of the Class L Shares to be purchased
by them at the Closing as set forth in Section 1.3.
5.3 Qualifications; Consents. All consents, authorizations, approvals, or
------------------------
Permits, if any, of any governmental authority or regulatory body of the United
States or of any state or of any third party that are necessary in connection
with the consummation of the transactions contemplated hereby and the lawful
issuance and sale of the Shares to the Investors pursuant to this Agreement
shall have been duly obtained and shall be effective on and as of the Closing
other than those which are not required to be obtained before the Closing.
5.4 Waiver of Anti-Dilution Rights. The holder of Class C Common Stock
------------------------------
and Warrants to purchase Class B or Class C Common Stock shall have waived any
adjustment to the conversion or exercise price arising out of the transactions
contemplated by the Agreement and agreed to amend the outstanding warrants in
the form of Exhibits I-1 and I-2 hereto.
5.5 Waiver of Management Fee. Xxxx Capital Partners V, L.P. shall have
-------------------------
waived, in a form satisfactory to the Company, (i) any fee payable to Xxxx
Capital Partners V, L.P. in connection with the transactions contemplated by
this Agreement under the Management Agreement, dated August 30, 1996, as
amended, between the Company and Xxxx Capital Partners V, L.P. and (ii) any fee
payable to Xxxx Capital Partners V, L.P. which shall accrue after June 30, 1998.
The Company has not paid the entire fee that has accrued under the Management
Agreement for the period prior to July 1, 1998. The Company agrees to paid such
accrued but unpaid fees for the period prior to July 1, 1998 upon the occurrence
of any Realization Event (as defined in the Restated Certificate).
6. Covenants and Agreements.
------------------------
6.1 Financial and Other Information.
-------------------------------
(1) Accounts and Reports. The Company will maintain a standard system
--------------------
of accounts in accordance with generally accepted accounting principles
consistently applied.
-23-
(2) Annual and Quarterly Financial Statements. The Company will
-----------------------------------------
deliver to each Investor: (i) within ninety (90) days after the end of
each fiscal year a copy of the consolidated balance sheet of the Company
and the Consolidated Entities as of the end of such year, together with
consolidated and consolidating statements of income and of cash flows of
the Company and the Consolidated Entities for such year, all in reasonable
detail, prepared in accordance with generally accepted accounting
principles, consistently applied, and certified in an audit report by
independent public accountants of national standing selected by the Board
of Directors of the Company, and (ii) copies of all financial statements
and reports which the Company and each Consolidated Entity shall send to
its stockholders or file with the Securities and Exchange Commission or any
stock exchange on which any securities of the Company or any Consolidated
Entity may be listed. The Company shall also deliver to each Investor,
within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, a copy of the consolidated balance sheet of
the Company and each Consolidated Entity as of the end of such quarter and
consolidated statements of income and of cash flows of the Company and each
Consolidated Entity for the fiscal quarter and for the portion of the
fiscal year ending on the last day of such quarter, each of the foregoing
balance sheets and statements to set forth in comparative form the
corresponding figures for the same period of the prior fiscal year, and
actual versus budgeted amounts, to be in reasonable detail provided,
--------
however, such financials are subject to year-end adjustments and may not
-------
contain all footnotes required under generally accepted accounting
principles and to be certified, subject to normal year-end audit
adjustments, by the principal financial officer of the Company that they
are true and accurate in all material respects as of their dates.
(3) Monthly Financial Statements and Budgets. The Company will
----------------------------------------
furnish to each Investor: within thirty (30) days after the end of, each
month, other than the last month of any fiscal quarter or of the fiscal
year of the Company and each Consolidated Entity, a copy of the
consolidated balance sheet of each of the Company and the Consolidated
Entities as of the end of such month and consolidated statements of income
and of cash flows of each of the Company and the Consolidated Entities for
such month, each of the foregoing balance sheets and statements to set
forth in comparative form the corresponding figures for the prior fiscal
period, to be in reasonable detail, to be prepared in accordance with
generally accepted accounting principles, consistently applied, and to be
certified, subject to normal year-end audit adjustments, by the principal
financial officer of the Company that they are true and accurate in all
material respects as of their dates; and, to the extent provided to the
Board of Directors, as soon as possible, but in any event at least thirty
(30) days prior to the beginning of each fiscal year, a budget, prepared on
a period by period basis with each period including four or five weeks, and
operating plan for such fiscal year, each approved by the Company's Board
of Directors, including projected balance sheets and statements of income
and changes in financial condition of the Company and the Consolidated
Entities for such months.
-24-
(4) Visits and Discussions. The Company will permit each Investor and
----------------------
the authorized representatives of each such Investor, at all reasonable
times during normal business hours upon reasonable notice and as often as
reasonably requested, to visit and inspect, at the expense of such
Investor, any of the properties of the Company and any Consolidated Entity,
including their respective books and records and, subject to reasonable
arrangements with any transfer agents of the Company and any Consolidated
Entity, lists of security holders, and to make extracts therefrom and to
discuss the affairs, finances, and accounts of the Company and each
Consolidated Entity with their respective officers; provided, however, that
-------- -------
the Investors agree to use reasonable efforts to coordinate their visits
and inspections to minimize disruptions to the Company's operations.
(5) Adverse Change; Litigation. The Company will promptly advise each
--------------------------
Investor in writing of each suit or proceeding commenced or threatened
against the Company or any Consolidated Entity which seeks a material
amount of damages or, if adversely determined, would result in a material
adverse change in the condition or business, financial or otherwise, of the
Company and its Consolidated Entities taken as a whole and of any facts
that come to the Company's attention which question in any material respect
the accuracy or completeness of the representations and warranties
contained herein when made.
(6) Other Information. The Company will also furnish to each Investor
-----------------
with reasonable promptness, such other information and data with respect to
the Company or any Consolidated Entity as such Investor may from time to
time reasonably request.
6.2 Confidentiality. Each of the Investors further covenants and agrees
---------------
that any person or entity receiving information under Section 6.1 or exercising
rights of visitation or inspection granted hereunder shall maintain the
confidentiality of all financial, confidential and proprietary information of
the Company or any Consolidated Entity acquired by them in exercising such
rights. Notwithstanding the preceding sentence, each Investor may (1) disclose
such information when required by law or governmental order or regulation, or
when required by a subpoena or other process, (2) disclose such information to
the extent necessary to enforce this Agreement, (3) disclose such information to
its attorneys, accountants, consultants and other professionals to the extent
necessary to obtain their services in connection with its investment in the
Company, provided that the Investor informs such attorney, accountant,
consultant or other professional of the confidential nature of such information,
or (4) disclose such information as may be required by any prospective purchaser
of any Class L Shares or Conversion Shares from such Investor, provided that
such prospective purchaser agrees in writing to be bound by the provisions of
this subsection. An Investor may also disclose such information to any
affiliate, partner, shareholder or subsidiary of such Investor provided the
Investor informs such persons of the confidential nature of such information.
-25-
6.3 Insurance. Each of the Company and each Consolidated Entity will
---------
maintain a commercially reasonable amount of insurance with respect to all its
insurable properties against loss or damage by fire and other risks; maintain
public liability insurance against claims for personal injury, death or property
damage suffered by others upon or in or about any premises occupied by it or
arising from equipment owned by the Company or any Consolidated Entity and
leased to and located upon or in or about any premises occupied by any other
person; maintain all such worker's compensation or similar insurance as may be
required under the laws of any state or jurisdiction in which it may be engaged
in business; and maintain malpractice, professional liability, stop-loss
insurance relating to capitated contracts, and all such other insurance as is
usually maintained by persons engaged in the same or similar business as is the
Company and the Consolidated Entities. All such insurance shall be maintained
against such risks and in at least such amounts as such insurance is usually
carried by persons engaged in the same or similar businesses, and all insurance
herein provided for shall be effected and maintained in force under a policy or
policies issued by insurers of recognized responsibility, except that the
Company and the Consolidated Entities may effect worker's compensation or
similar insurance in respect of operations in any state or other jurisdiction
either through an insurance fund operated by such state or other jurisdiction or
by causing to be maintained a system or systems of self-insurance which is in
accord with applicable laws.
6.4 Use of Proceeds. The Company will use the proceeds of the sale of the
---------------
Class L Shares in the Closing in order to finance the acquisitions approved by
the Board of Directors and, for working capital, including the funding of
operating losses and capital expenditures.
6.5 Payment of Taxes; Corporate Existence, Regulatory Compliance. Each of
------------------------------------------------------------
the Company and each Consolidated Entity (unless the Company has no ownership or
management responsibility for or liability in respect of Taxes for such
Consolidated Entity) will:
(1) pay and discharge promptly, or cause to be paid and discharged
promptly, when due and payable, all Taxes, assessments and governmental
charges or levies imposed upon it or upon its income or upon any of its
property, real, personal and mixed, or upon any part thereof, as well as
all claims of any kind (including claims for labor, materials and supplies)
which, if unpaid might by law become a lien or charge upon its property;
provided, however, that neither the Company nor any Consolidated Entity
-------- -------
shall be required to pay any Tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in
good faith by appropriate proceedings and if the Company or any
Consolidated Entity, as the case may be, shall have set aside on its books
reserves (classified to the extent required by generally accepted
accounting principles) deemed by it adequate with respect thereto; and
provided further, that neither the Company nor any Consolidated Entity
shall have any obligation to make any payments under this paragraph (a)
with respect to property subject to leases pursuant to the terms of which
the lessees thereof have undertaken to make such payments;
-26-
(2) do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises,
provided, however, that nothing in this paragraph (b) shall (i) prevent the
abandonment or termination of the Company's or any Consolidated Entity's
authorization to do business in any foreign state or jurisdiction if, in
the opinion of its Board of Directors, such abandonment or termination is
in the interest of the Company and not disadvantageous in any material
respect to the holders of the Shares or (ii) require compliance with any
law so long as the validity or applicability thereof shall be disputed or
contested in good faith;
(3) maintain and keep, or cause to be maintained and kept, its
properties in good repair, working order and condition in all material
respects, and from time to time make, or cause to be made, all repairs,
renewals and replacements which in the opinion of the Company are necessary
and proper so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; and
(4) comply in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies in respect of the conduct of the business conducted by
the Company and the Consolidated Entities.
6.6 Dealings with Affiliates and Others. Other than with respect to the
-----------------------------------
Management Agreement, neither the Company nor any Consolidated Entity shall
enter into any transaction, including, without limitation, any loans or
extensions of credit or royalty agreements, with any officers or directors of
the Company or any Consolidated Entity, nor shall it enter into any transaction,
on terms less favorable to the Company or any Consolidated Entity than the
Company or any Consolidated Entity would be able to obtain in a transaction with
a person or entity unaffiliated with the Company or any Consolidated Entity,
with a holder of at least one percent (1 %) or more of the capital stock of the
Company or any Consolidated Entity, or any member of their respective families
or any Affiliate thereof.
6.7 Best Efforts to Obtain Financing. The Company shall use its best
--------------------------------
commercially reasonable efforts to obtain at least $8 million of senior bank or
debt financing on terms satisfactory to the Investors as soon as practicable
after the Closing; provided, however, that the Investors acknowledge that this
covenant shall not obligate the Company to have such financing available by any
specific date.
6.8 Payment of Expenses. The Company shall pay at the Closing, the costs
-------------------
incurred to such Closing Date by the Investors in connection with the
transactions contemplated hereby, including filing fees under the HSR Act, which
shall be an adjustment to purchase price.
6.9 Cooperation and Access. The Company shall, and shall cause each
----------------------
Consolidated Entity to (a) use its reasonable best efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all filings
with and to give all notices to governmental or regulatory authorities or any
other third party required to consummate the transactions
-27-
contemplated hereby including, without limitation, the expiration or earlier
termination of all applicable waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act, as amended, and (b) provide such other information
and communications to such governmental or regulatory authorities or other third
parties as such governmental or regulatory authorities or other third parties
may reasonably request in connection therewith. The Company and the Investors
shall cooperate with each other to satisfy the conditions to each of the Closing
contained in this Agreement and neither of them shall take, nor will the Company
permit any Consolidated Entity to take any action (other than an action required
by any law) that could reasonably be expected to result in the nonfulfillment of
any such condition. The Company shall, and shall cause each Consolidated Entity
to, provide the Investors and their respective officers, employees, counsel,
accountants, financial advisors, consultants, environmental engineers and other
representatives (together, "Representatives") with full access, upon 24 hours'
---------------
prior notice and during normal business hours, to all officers, employees,
agents and accountants of the Company and each Consolidated Entity and to its
assets and properties and its books and records, including without limitation
any documents or properties related to any potential acquisition or affiliation
by the Company or any Consolidated Entity with any physician practice group. No
investigation by the Investors or their Representatives shall limit or otherwise
affect the Company's representations and warranties hereunder.
6.10 Conduct of Business. Prior to the Closing, except as otherwise
-------------------
contemplated by this Agreement, the Company shall cause each Consolidated Entity
to carry on its business in the usual and ordinary course. Without limiting the
foregoing, except as otherwise contemplated by this Agreement, the Company shall
not and shall cause or not permit any Consolidated Entity, other than in the
ordinary course of business, to incur any capital expenditures, issue stock,
declare dividends, adopt benefit plans, change accounting methods, sell or
purchase material assets or incur liabilities or do any other thing that could
have the effect of rendering the representations and warranties contained herein
to become untrue or incomplete in any respect.
6.11 Reservation of Shares. The Company shall at all times reserve and
---------------------
make available sufficient Conversion Shares for issuance upon conversion of the
Shares.
6.12 Future Financings.
-----------------
6.12.1 Exclusivity. Until the Closing, the Company hereby agrees that
-----------
it will not, and it will cause the Consolidated Entities and each of their
respective affiliates, directors, officers, employees, representatives and
agents not to, directly or indirectly, solicit or initiate or enter into
discussions, agreements or transactions with, or encourage, or provide any
information to, any corporation, partnership or other entity or group
(other than the Investors and their designees) concerning any debt or
equity investment in the Company or any Consolidated Entity other than the
investments contemplated hereby (subject to the terms and conditions
hereto) by the Investors.
-28-
6.12.2 Participation Rights. The Company agrees that neither the
--------------------
Company nor any Consolidated Entity shall issue or sell any of their
respective equity and debt securities (including but not limited to capital
stock or securities convertible into, exchangeable for, or options,
warrants, or other rights to purchase such capital stock and indebtedness
for money borrowed, promissory notes, demand notes, bonds, debentures,
letters of credit, or similar instruments and guarantees of the foregoing
obligations) (collectively, the "Future Securities") to any person without
-----------------
first providing each Investor the right to subscribe for such Future
Securities at a price and on such other terms (including the method of
purchase; provided, however, that each Investor shall have the option of
-------- -------
purchasing Future Securities with cash, regardless of the method of
purchase offered to such Person) which are no less favorable as shall be
offered to such third party and which shall have been specified by the
Company in a writing delivered to each Investor (the "Proposal"). The
--------
Proposal by its terms shall remain open and irrevocable for a period of 20
days from the date it is delivered by the Company to each Investor (the
"Future Securities Exercise Period"). The Proposal shall also certify that
---------------------------------
the Company intends in good faith to make an offering of its securities at
the price and on the terms set forth in such certification.
6.12.3 Notice. Notice of an Investor's intention to accept, in
------
whole or in part, the Proposal made pursuant to Section 6.13.2 shall be
made in writing signed by the Investor and delivered to the Company prior
to the end of the Future Shares Exercise Period, setting forth that portion
of the Future Shares, which the Investor elects to purchase (the "Notice of
---------
Purchase"). If the total number of Future Securities is sufficient to
--------
satisfy the elections of Investors contained in the Notices to Purchase
such Future Securities shall be allocated in accordance with their
elections; if not the available Future Securities shall be allocated among
the Investors in proportion to their election, provided, however, such
allocation shall be adjusted if necessary so that no Investor is allocated
more Future Securities than it has elected to purchase.
6.12.4 Sale to Third Parties. In the event that the Investors elect
---------------------
not to purchase all (or any part) of the Future Securities, the Company
shall have 120 days from the expiration of the Future Securities Exercise
Period to offer and sell all or any part of such Future Securities not
purchased by the Investors (the "Refused Future Securities") to any other
-------------------------
Person(s), but only upon terms and conditions in all respects (including,
without limitation, unit price and interest rates) which are no more
favorable to such other Person(s) or less favorable to the Company than
those set forth in the Proposal; provided that such Sale be to the same
--------
Person(s) or their affiliates identified in the Proposal, if so identified
pursuant to Section 6.13.2. In the event that the Company so sells the
Refused Future Securities to such other Person(s), the sale to each
Investor of the Future Securities in respect of which a Notice of Purchase
was delivered to the Company by such Investor shall occur upon the closing
of the sale to such other Person(s) of Refused Future Securities (which
closing shall include full payment to the Company). If there are no Refused
Future Securities, the sale to such Investor of such Future Securities
shall occur
-29-
within 20 days of the expiration of the Future Securities Exercise Period.
If such offering or sale of Refused Future Securities shall be terminated,
the Company shall promptly give such Investor written notice of such
termination and such Investor may, but shall not be required to, purchase
such Future Securities, in which case such purchase shall occur within 30
days of the date of such termination. In any event, the sale to such
Investor of such Future Securities shall be on the terms specified in the
Proposal. Any Refused Future Securities not purchased by such other
Person(s) within such 120-day period shall remain subject to this Section
6.
6.12.5 Exceptions. Notwithstanding anything to the contrary stated
----------
above, the provisions of, and the rights of the Investors under, this
Section 6.13 shall not apply to (i) Future Securities issued in connection
with stock splits or other stock dividends, issued on a pro rata basis to
the holders of all shares of Common Stock outstanding and securities
convertible into or exercisable for shares of Common Stock, in accordance
with the number of shares of Common Stock and held by such holder or
issuable upon conversion or otherwise, as applicable, (ii) any sale of
Future Securities pursuant to a Public Offering, (iii) any sale or grant of
Future Securities by the Company to its employees, consultants, advisory
committee members or directors (or employees of any Consolidated Entity
eligible to participate in such plan), pursuant to a bona fide employee
stock purchase, option or similar benefit plan or other arrangement
approved by the Company's Board of Directors, (iv) Future Securities issued
upon exchange or exercise of warrants outstanding as of the date of this
Agreement, (v) Future Securities issued in connection' with an acquisition
of assets or other business combination permitted under the terms of the
Purchase Agreement, and (vi) Future Securities issued to lender which is a
bank under the Bank Holding Company Act which has an interest rate payable
in cash at such lender's rate charged generally for corporate loans and
which does not have any equity securities or securities convertible or
exchangeable or exercisable for equity securities of the Company or any
Consolidated Entity issued in connection therewith or any commitments to
issue the foregoing.
6.13 Period. The foregoing provisions of this Section 6 (other than
------
Sections 6.1, 6.10, and 6.12) shall terminate on a Qualified Public Offering.
6.14 Disclosure of Investment. The Company shall not permit any of its
------------------------
subsidiaries to (i) except as may be necessary or desirable in connection with a
request by or a filing with a governmental agency, regulatory or supervisory
authority or court or as required by law, disclose the transactions contemplated
by this Agreement or any of the Transaction Agreements or any of the terms
thereof without the prior consent of the Investors, (ii) use in advertising or
publicity the name of any Investor, or any partner or employee of such Investor
or any of its respective affiliates, or any trade name, trademark, trade device,
service xxxx, symbol or any abbreviation, contraction or simulation thereof
owned by any Investor or any of its respective affiliates, in either case
without the prior written consent of such Investor or (iii) represent, directly
or indirectly, any product or any service provided by any or any of its
subsidiaries has been
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approved or endorsed by any Investor without the prior written consent of the
Investor; provided, however, the Company may orally disclose: (i) that the
-------- -------
Investors are stockholders of the Company, (ii) the aggregate purchase price
paid by each Investor in connection with the investment contemplated by this
Agreement and (iii) the percentage of the outstanding shares of capital stock of
the Company held by each Investor.
6.15 Consolidation. The Company agrees that it will use its reasonable
-------------
best efforts, in consultation with the Board of Directors of the Company, to
take such action as is reasonably necessary, including, amending the governance
provisions of the organizational documents of the Joint Policy Board and, to the
extent necessary, the MCP Agreements and Flagship Agreements, to cause each of
MCP, Flagship and each physician practice group acquired by or affiliated with
(whether by management agreement or stockholder transfer or designation or
similar agreement or otherwise) the Company or any of its Affiliates, (unless
consented to by the Investors) to be consolidated in the financial statements of
the Company in accordance with GAAP, including without limitation consensuses as
in effect or expressed on the date hereof with respect to Issue No. 97-2 of the
Emerging Issues Task Force of the Financial Accounting Standards Board, and in
accordance with rules, regulations and views of the Securities and Exchange
Commission as in effect or expressed on the date hereof. For purposes of this
Agreement, each consolidated entity referred to in the foregoing sentence shall
be a "Consolidated Entity" and collectively, the "Consolidated Entities".
------------------- ---------------------
6.16 Investor Agreement With Respect to Additional Financing. The
-------------------------------------------------------
Investors agree that from time to time, until the initial underwritten public
offering of the Company's securities, upon the request of the Company to use
commercially reasonable efforts to assist the Company in obtaining additional
debt or equity financing.
6.17 Waiver of Anti-Dilution Protection. By executing this Agreement,
-----------------------------------
each of the Investors who are a party hereto hereby waives any anti-dilution
protection applicable to any shares of capital stock of the Company or warrant
to acquire capital stock of the Company held by the Investor and triggered by
the issuance of Class L shares or the terms thereof or the reduction of the
exercise price of the warrants to purchase Class B Common Stock and Class C
Common Stock as contemplated by Section 4.8 hereof.
7. Negative Covenants.
------------------
So long as the Investors hold in the aggregate at least 30% of the
aggregate number of shares of Class B Common Stock, Class C Common Stock and
Class L Common Stock (together the "Investors Stock") then issued and
outstanding collectively, neither the Company nor any Consolidated Entity will,
at any time, without the prior written consent of the Investors holding in the
aggregate at least two-thirds of the aggregate number of shares of Class B
Common Stock, Class C Common Stock and Class L Common Stock, voting together as
a single class (a "Supermajority") take any Restricted Action or permit any
Restricted Action to be taken. The obligations under this Section 7 shall
terminate on a Qualified Public Offering.
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8. Definitions.
-----------
8.1 Certain Defined Terms. As used in this Agreement, the following terms
---------------------
have the following definitions:
8.1.1 "Affiliate" shall mean, with respect to any Person, any other
---------
Person directly or indirectly controlling, controlled by or under common
control with such Person, including effective control by virtue of a
contractual relationship such as a management agreement or stockholder
transfer or designation or similar agreement. Notwithstanding the
foregoing, with respect to the definition of Restricted Action, no Investor
shall be deemed to be an Affiliate of the Company and no Person who is an
Affiliate of an Investor for reasons unrelated to the Company or any
Consolidated Entity shall be deemed to be an Affiliate of the Company.
8.1.2 "Affiliated Fund" shall mean any limited partnership or other
---------------
Person formed for the purpose of investing in other companies or businesses
and for which (a) any general partner of any Investor or any of its
Affiliates has the right to direct the voting of shares of corporations in
which such limited partnership or other Person invests or (b) any general
partner of an Investor or any of their respective Affiliates provides
management services.
8.1.3 "Employee Benefit Plan" shall mean any (a) nonqualified
---------------------
deferred compensation or retirement plan or arrangement, (b) qualified
defined contribution retirement plan or arrangement, (c) qualified defined
benefit retirement plan or arrangement or (d) "employee welfare benefit
plan" (as such term is defined in Section 3(1) of ERISA) or material fringe
benefit plan or program.
8.1.4 "GAAP" shall mean the generally accepted accounting
----
principles as in effect in the United States of America as of the Closing
Date.
8.1.5 "Knowledge" shall mean with respect to any Person if (a) such
---------
Person is actually aware of such fact or other matter; or (b) a reasonable
Person would be expected to discover or otherwise become aware of such fact
or other matter m the course of conducting a reasonable investigation. The
Company will be deemed to have "Knowledge" of a particular fact or matter
if any individual who is serving as a senior member of management of the
Company (or in any similar capacity) has Knowledge of such fact or other
matter.
8.1.6 "Indebtedness" shall mean all (i) indebtedness for borrowed
------------
money, (ii) obligations evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of assets or services
(other than trade payables and accruals therefor incurred in the ordinary
course of business), (iv) capitalized lease obligations, (v)
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letters of credit, and (vi) in the nature of guarantees of the obligations
described in (i) through (v) above.
8.1.7 "Permitted Liens" shall mean such of the following as to
---------------
which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) liens for taxes, assessments and
governmental charges or levies to the extent required to be paid and for
which adequate reserves are reflected on the Financials; (b) liens imposed
by law, such as materialmen's mechanics', carriers', workmen's and
repairmen's liens and other similar liens arising in the ordinary course of
business securing obligations that (i) are not overdue and (ii) either
individuals or when aggregated with all other Permitted Liens outstanding
on any date of determination, do not materially affect the use or value of
the property to which they relate; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations; (d) easements, rights of way and
other encumbrances on title to real property that do not render title to
the property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes; and (e) liens existing
on acquired physician practices approved by the Board of Directors in
accordance with the Restated Certificate, or if applicable, Section 7 of
this Agreement.
8.1.8 "Person" shall mean any individual, partnership, corporation,
------
association, trust, joint venture, unincorporated organization or other
entity.
8.1.9 "Qualified Public Offering" shall mean the closing of a Public
-------------------------
Offering with (i) the net proceeds of the sale of such Shares by the
Company and any stockholder of the Company to equal or exceed $50,000,000
provided that (A) the Investors shall have sold or shall be permitted to
sell fifty percent of the capital stock into which the Class B Common
Stock, the Class C Common Stock and Class L Common Stock is convertible and
(B) the net proceeds of the sale of such shares or the net proceeds of the
sale of such shares which would be permitted to be sold in such offering by
(1) the Capital Investors equal or exceed seventy-five percent of the total
amount invested in capital stock of the Company by the Capital Investors up
to $19,500,000, (2) the net proceeds of the sale thereof by the Bain
Investors shall equal or exceed seventy-five percent of the total amount
invested in capital stock of the Company by the Xxxx Capital Investors up
to $17,000,000 and (3) the Goldman Investors equal or exceed seventy-five
percent of the total amount invested in capital stock of the Company by the
Goldman Investors up to $16,500,000 and (ii) subject to a firm commitment
underwriting conducted by a nationally recognized underwriter acceptable to
a majority of the Class B, Class C and Class L Directors, voting together
as a single class.
8.1.10 "Restricted Action" shall mean any of the following:
-----------------
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(1) A merger, consolidation amalgamation, liquidation, winding up, or
dissolution of the Company or any Consolidated Entity thereof with any
Person other than a merger or consolidation of a Subsidiary with the
Company or any other Subsidiary of the Company provided that, in the case
of any such merger or consolidation, the person formed by such merger or
consolidation shall be a wholly-owned Subsidiary of the Company.
(2) A sale, lease, transfer or other disposition of or grant or any
option or other right to purchase, lease or otherwise acquire all or a
material part of the assets of the Company, the Subsidiaries or any
Affiliates (other than pursuant to an agreement in effect on the Closing
Date); or
(3) Any agreement, contract, commitment or understanding with any
Person for the acquisition or affiliation entered into by the Company, or
any of its Consolidated Entities of any business or assets including,
without limitation any management agreement, and the terms of any
securities or other consideration to be issued in connection therein or
acquired any business or assets other than acquisitions not in excess of
$1,000,000 in any 12 month period.
(4) Any dividends, distributions, repurchase, redemption, retirement,
defeasance or similar transaction for capital stock or any warrants, rights
or options to acquire such capital stock, now or hereafter outstanding,
return any capital to its stockholders as such, make any distribution of
assets, capital stock, warrants, rights, options, obligations or securities
to its stockholders as such, or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit the
Company, its Subsidiaries or any Consolidated Entity to do any of the
foregoing.
(5) Any material change in the nature of its business of this Company
and its Consolidated Entities, taken as a whole, as carried on at the date
hereof and reasonable extensions thereof.
(6) Any amendment or restatement of organizational documents
(including the Certificate of Incorporation) or Bylaws of the Company or
any Consolidated Entity.
(7) Retain or dismiss the services of the Chief Operating Officer or
the Chief Financial Officer of the Company; or grant any increase in
compensation to its employees as a class, or to its officers or directors,
except in accordance with past practice and as required by law; effect any
change in retirement benefits to any class of employees or officers other
than in connection with affiliations with physician practice groups
approved by the Class B, Class C and the Class L Directors, except as may
be required by law, or enter into any benefit plans or similar agreements
or arrangements;
-34-
(8) Adopt or approve an annual operating budget for the Company and
the Consolidated Entities, including the budget for capital expenditures;
(9) Any transaction between the Company and its Consolidated
Entities between an officer, director, or holder of more than 5% of the
outstanding capital stock of the Corporation which is not in all material
respects upon terms consistent with an arms-length transaction between
unaffiliated parties.
(10) The commencement, management, defense, prosecution or
settlement of any material action, suit, investigation or proceeding before
any court or governmental department, commission, board, agency or
instrumentality, domestic or foreign, affecting the Company, the
Subsidiaries or any Affiliate thereof other than any such action, suit or
proceeding initiated and instituted by the holders of Class B Common Stock,
the holders of Class C Common Stock and the Class L Common Stock against
the Company.
8.1.11 "Subsidiary" shall mean any corporation with respect to which a
---------
specified Person (or a Subsidiary thereof) owns a majority of the capital
stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors.
8.1.12 "Taxes" shall mean all federal, state, county, local, foreign
-----
and other taxes (including, without limitation, income, gross income,
profits, premium, estimated, excise, sales, services, use, occupancy, gross
receipts, franchise, license, ad valorem, severance, capital levy,
production, stamp, transfer, withholding, employment, unemployment, social
security, payroll and property taxes, customs duties and other governmental
charges and assessments), together with any interest, additions to tax or
penalties.
8.1.13 "Tax Returns" shall mean all returns, amended returns,
-----------
declarations, reports, estimates, information returns and statements
required or permitted to be filed in respect of Taxes.
8.2 Certain Matters of Construction. In addition to the definitions
-------------------------------
referred to as set forth in Section 9.1:
(1) The words "hereof", "herein", "hereunder" and words of similar
import shall refer to this Agreement as a whole and not to any particular
Section or provision of this Agreement, and reference to a particular
Section of this Agreement shall include all subsections thereof;
(2) Definitions shall be equally applicable to both the singular and
plural forms of the terms defined; and
(3) The masculine, feminine and neuter genders shall each include the
other.
-35-
9. Miscellaneous.
-------------
9.1 Survival of Covenants; Assignability of Rights. All covenants,
----------------------------------------------
agreements, representations and warranties of the Company made herein and in the
certificates, lists, exhibits, schedules or other written information delivered
or furnished to any Investor in connection herewith shall be deemed material and
to have been relied upon by such Investor, and shall survive the delivery of the
Shares , and shall bind the Company's successors and assigns, whether so
expressed or not, and, except as provided otherwise in this Agreement, all such
covenants, agreements, representations and warranties shall inure to the benefit
of the Investors' successors and assigns and to transferees of the Shares and
the Warrants, whether so expressed or not.
9.2 Incorporation by Reference. All exhibits and schedules appended to
--------------------------
this Agreement are herein incorporated by reference and made a part hereof.
9.3 Parties in Interest. All covenants, agreements, representations,
-------------------
warranties and undertakings in this Agreement made by and on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not.
9.4 Amendments and Waivers. Except as set forth in this Agreement,
----------------------
changes in or additions to this Agreement may be made, or compliance with any
term, covenant, agreement, condition or provision set forth herein may be
omitted or waived (either generally or in a particular instance and either
retroactively or prospectively), or representatives to act on behalf of the
holders of all of the Shares may be designated, upon the written consent of the
Company and a majority of the voting power of the Shares.
9.5 Governing Law. This Agreement shall be deemed a contract made under
-------------
the laws of The Commonwealth of Massachusetts and, together with the rights of
obligations of the parties hereunder, shall be construed under and governed by
the laws of such Commonwealth.
9.6 Effect of Investigations. No investigation by the parties hereto made
------------------------
heretofore or hereafter, whether pursuant to this Agreement or otherwise, shall
affect the representation and warranties of the parties which are contained
herein and each such representation and warranty shall survive such
investigation.
9.7 Notices. All notices, requests, consents and demands shall be in
-------
writing and shall be personally delivered, mailed, postage prepaid, telecopied
or telegraphed, to the Company at:
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Physicians Quality Care, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
with a copy to:
Xxxxx Xxxxxx, Esq.
Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
or to each Bain Investor at its address set out on Exhibit A-1 hereto
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
or to the Capital Investors at:
ABS Capital Partners
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxx X. Silver, Esq.
Xxxxx & Xxxxxxx, L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
or to the Goldman Investors at:
GS Capital Partners
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
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with a copy to:
Xxxxxx X. Xxxx, Esq.
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
or such other address as may be furnished in writing to the other parties
hereto. All such notices, requests, demands and other communication shall, when
mailed (registered or certified mail, return receipt requested, postage
prepaid), personally delivered, or telegraphed, be effective four days after
deposit in the mails, when personally delivered, or when delivered to the
telegraph company, respectively, addressed as aforesaid, unless otherwise
provided herein and, when telecopied, shall be effective upon actual receipt.
9.8 Effect of Headings. The section and paragraph headings herein are for
------------------
convenience only and shall not affect the construction hereof.
9.9 Entire Agreement. This Agreement and the Exhibits and Schedules
----------------
hereto together with the Stockholders Agreement and the Transaction Agreements
constitute the entire agreement among the Company and the Investors with respect
to the subject matter hereof. The Amended and Restated Class B and Class C
Common Stock and Warrant Purchase Agreement, dated as of June 20, 1997 (the
"Prior Agreement"), shall survive this Agreement, provided that the obligations
of the Company under Section 7 of this Agreement shall supersede the Company's
obligations under Section 8 of the Prior Agreement.
9.10 Severability. The invalidity or unenforceability of any provision
------------
hereof shall in no way affect the validity or enforceability of any other
provision.
9.11 Counterparts. This Agreement may be executed in counterparts, all of
------------
which together shall constitute one and the same instrument.
[The rest of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement
(or caused this Agreement to be executed on its behalf by its officer or
representative thereunto duly authorized) under seal as of the date first above
written.
PHYSICIANS QUALITY CARE, INC.
______________________________________
By:
Title:
ABS CAPITAL PARTNERS II, L.P.
______________________________________
By:
ABS Partners II, L.L.C.,
its general partner
______________________________________
By:
Xxxxxxx X. Xxxxxxxx, Managing Member
_________________________________________
Xxxxxxx Xxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
__________________________________________
Xxxx Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
__________________________________________
Xxxxxx Xxxxx IV
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
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______________________________________
Xxxx Xxxxxxxx
0000 Xxxxxxx Xxxxxx Xxx
Xxxxxx, XX 00000
______________________________________
Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
______________________________________
Xxxxxx Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
______________________________________
Xxxx Xxxxxxx
00 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx X00 0XX
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P.
Its General Partner
By: GS Advisors, Inc.
Its General Partner
By:_________________________________
Title:
XXXXXXX, SACHS & CO.,
VERWALTUNGS GMBH
By:__________________________________
Managing Director
-40-
By:__________________________________
Managing Director or
Registered Agent
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisers II (Cayman), L.P., its
General Partner
By: GS Advisers II, Inc., its General Partner
By:___________________________________
Managing Director
BRIDGE STREET FUND 1997, L.P.
By: Stone Street Asset Corp., its Managing
General Partner
By:______________________________________
Title:
XXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street Asset Corp., its Managing
General Partner
By:______________________________________
Title____________________________________
XXXX CAPITAL FUND V, L.P.
By: Xxxx Capital Partners V, L.P., a
Delaware limited partnership,
its general partner
By: Xxxx Capital Investors V, Inc., its
general partner
By:
Title: Managing Director
-00-
XXXX XXXXXXX XXXX X-X, X.X.
By: Xxxx Capital Partners V, L.P., a
Delaware limited partnrship,
its general partner
By: Xxxx Capital Investors V, Inc.,
its general partner
By:_____________________________________
Title: Managing Director
BCIP Associates
By:_______________________________________
Title: a general partner
BCIP Trust Associates, L.P.
By:___________________________________
Title: a general partner
-42-
List of Exhibits and Schedules
------------------------------
Exhibits
--------
A. List of Purchasers of Class L Shares and Warrants
B. Form of the Company's Restated Certificate of Incorporation
C. Form of Class C Warrant
D. Form of Amendment No. 3 to Stockholders Agreement
E. Form of Opinion of Company Counsel
F. Form of the Company's Amended By-Laws
G. Form of Capital Certificate
H. Criteria for Additional Financing
I. Form of Amended Warrants for Class B Common Stock and
Class C Common Stock
Schedules
---------
2.3. Outstanding Warrants and Options and Other Rights
2.4. Subsidiaries and Affiliates
2.5. Financial Statements
2.6 Undisclosed Liabilities
2.7 Absence of Material Changes
2.8. Properties
2.10. Contracts
2.12. Intellectual Property
2.18. Brokerage Commissions
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2.20. Insurance
2.22. Employee Benefit Plans
2.23. Transactions With Affiliates
2.26 Compliance with All Laws
-44-
