Exhibit 10.1
THIRD WAIVER AND AMENDMENT AGREEMENT
THIS THIRD WAIVER AND AMENDMENT AGREEMENT (this "AGREEMENT") is
entered into as of August 6, 1999 among Medical Resources, Inc. (the "COMPANY")
and the institutional investors party hereto (the "Purchasers"). The Purchasers
are collectively the holders of not less than a majority of the $52,000,000 in
aggregate principal amount originally outstanding of the Company's 7.77% Senior
Notes due February 20, 2005 (the "7.77% NOTES") issued pursuant to a Note
Purchase Agreement dated as of February 20, 1997 (the "FEBRUARY NOTE AGREEMENT")
and not less than a majority of the $20,000,000 in aggregate principal amount
originally outstanding of the Company's 8.10% Senior Notes due February 20, 2005
(the "8.10% NOTES") and the $6,000,000 in aggregate principal amount originally
outstanding of the Company's 8.01% Senior Notes due February 20, 2005 (the
"8.01% NOTES" and together with the 7.77% Notes and the 8.10% Notes, the
"NOTES") issued pursuant to a Note Purchase Agreement dated as of June 26, 1997
(the "JUNE NOTE AGREEMENT" and together with the February Note Agreement, each
as amended by the First Waiver Agreement and the Second Waiver Agreement
(defined below) the "NOTE AGREEMENTS"). Capitalized terms not otherwise defined
in this Agreement have the meanings given therefor in the Note Agreements.
WHEREAS, the Note Agreements have previously been amended by a Waiver
and Amendment Agreement dated September 23, 1998 (the "FIRST WAIVER AGREEMENT")
and a Second Waiver and Amendment Agreement dated March 15, 1999 (the "SECOND
WAIVER AGREEMENT"); and
WHEREAS, the Company has advised the Purchasers that it is not
currently in compliance with its covenant set forth in paragraph 6A(2) of the
Note Agreements as of June 30, 1999 and has requested that the Purchasers waive
any Default or Event of Default arising therefrom; and
WHEREAS, the Purchasers are willing to do so on the terms and
conditions of this Agreement.
NOW, THEREFORE, the parties agree:
1. AMENDMENT TO NOTE AGREEMENTS.
(a) The definitions of Restricted Payments in the Note Agreements is
clarified to add the inadvertently omitted closing parenthesis in the fifth line
thereof as follows:
"RESTRICTED PAYMENTS" means the declaration, payment or
making, directly or indirectly, of any dividend, payment or other
distribution on or in respect of any Equity Interest of the Company
or any Restricted Subsidiary (other than the payment of a dividend,
payment or other distribution to the Company or Wholly-Owned
Restricted Subsidiary) or the setting apart of any funds or property
therefor, ...."
(b) Clause (x) of paragraph 5A of each Note Agreement is amended and
restated in its entirety:
"(x) promptly, but not later than 20 days following the end
of each calendar month, a cash flow and accounts receivable aging
report for such month on a weekly basis accompanied by a
reconciliation of the actual versus projected cash flows and
promptly, but not later than August 13, 1999 and on the seventh day
following the end of each second week thereafter, projected weekly
cash flows for the next following three month period."
2. WAIVER. The Purchasers hereby waive any Default or Event of
Default arising under paragraph 6A(2) of each Note Agreement as a result of the
Company's ratio of (a) Consolidated EBITA to (b) Consolidated Interest Expense
for the four fiscal quarters ended June 30, 1999, taken as a single accounting
period, being less than 1.92 to 1.0.
3. REPRESENTATIONS AND WARRANTIES.
(a) Subject to the disclosure schedules attached to the June Note
Agreement and the updated disclosure schedules attached to the Second Waiver
Agreement, each of the representations and warranties set forth in paragraph 8
of each Note Agreement is true and correct in all material respects on and as if
made as of the date hereof and after giving effect to the transactions
contemplated by this Agreement.
(b) The Company has furnished the Purchasers with the unaudited
balance sheets of the Consolidated Group dated as of June 30, 1999 and March 31,
1999 and the related statements of operations, cash flows and stockholders'
equity for the six and three months, respectively ended on such dates. The
unaudited financial statements fairly present in all material respects the
financial condition of the Consolidated Group and the results of its operations
and cash flows for the respective periods specified thereby. The audited
financial statements have been prepared in accordance with GAAP, consistently
applied throughout the periods involved except as set forth in the notes
thereto. Since June 30, 1999, there have been no developments or changes
affecting the business, assets, liabilities, condition (financial or otherwise)
of the Company or any Restricted Subsidiary which has had or is reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
(c) As of the date hereof, the Company has no direct or indirect
equity or beneficial ownership in any Unrestricted Subsidiary.
(d) As of the date hereof, no demand for or any other action to
obtain payment of (whether in cash or in stock) the September 1998 Penalty has
been made or taken and the obligations of the Company thereunder are not
represented by a note or other instrument.
4. CONDITIONS. The effectiveness of the waiver granted in Section 2
will be revoked, automatically and without further action on the part of the
Purchasers and this Agreement shall be of no force and effect, if on or before
August 16, 1999 the following conditions have not been satisfied:
(a) ACTUAL JUNE 30, 1999 RATIO. The ratio of the Company's (a)
Consolidated EBITA to (b) Consolidated Interest Expense for the four fiscal
quarters ended June 30, 1999 taken as a single accounting period shall not have
been less than 1.70 to 1.0.
(b) SETTLEMENT APPROVAL. The Class Action Settlement Agreement in the
form attached as Exhibit I to the Second Waiver Agreement shall have been
approved by the United States District Court for the District of New Jersey and
the Settlement Notes issued in connection therewith shall contain the
subordination provisions set forth in Exhibit I attached and shall otherwise be
in form and substance satisfactory to the Required Holders.
(c) WARRANT EXERCISE PRICE. The Company shall have delivered to each
Purchaser an amendment to the Warrants resetting the exercise price therefor to
a price equal to the lesser of (a) $2.75 per share or (b) the conversion price
set forth in the Settlement Note.
(d) PRINCIPAL PREPAYMENT. The Company, by wire transfer of
immediately available funds in accordance with the instructions set forth on
Exhibit A to the Note Agreements, shall have prepaid the Notes, with Make Whole
Amount, in the aggregate principal amount of $1,000,000 together with all
interest accrued on the principal amount being prepaid through the date of
prepayment. Additionally, at such time as the Company's three month weekly cash
flow forecast reflects ending available cash for each weekly period of at least
$7,000,000 (whether as a result of improved revenues, collections, reduced
expenses or proceeds of the sale of assets or otherwise), the Company, by wire
transfer of immediately available funds in accordance with the instructions set
forth on Exhibit A to the Note Agreements, shall have prepaid the Notes, with
Make Whole Amount, in the aggregate principal amount of $1,000,000 together with
all interest accrued on the principal amount being prepaid through the date of
prepayment. Each prepayment of principal pursuant to this Section 4(d) is to be
allocated among the Purchasers in proportion to the aggregate principal amount
of the Notes held by each and shall otherwise be applied in accordance with
paragraph 4D of each Note Agreement.
(e) OPINION OF COUNSEL. The Company shall have delivered an opinion
of Willkie, Xxxx & Xxxxxxxxx as to (i) the legal existence and corporate power
and authority of the Company, (ii) the due authorization, execution, delivery
and enforceability of this Agreement and the amendments to the Warrants required
by subparagraph (c) above, (iii) the absence of conflicts with or creation of
liens under applicable law in connection herewith or therewith and (iv) the
absence of any required governmental consents in connection herewith or
therewith, in form and substance satisfactory to the Purchasers.
(f) PAYMENT OF EXPENSES. All Expenses, including those of Special
Counsel, as set forth in invoices delivered to the Company prior to the date
hereof shall have been paid in full by the Company.
5. NO OTHER WAIVERS. Except as expressly set forth herein or as
previously amended, the Note Agreements shall continue in full force and effect
without alteration or amendment and except as expressly set forth herein no
other waiver of any Default or Event of Default is hereby granted.
6. GOVERNING LAW. THIS AGREEMENT IS TO BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY LAWS OR RULES RELATING TO
CONFLICTS OF LAWS THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK).
7. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
[Signatures Follow]
This Agreement is executed under seal as of the date first above written.
MEDICAL RESOURCES, INC.
By: /s/ Xxxxxxxxxxx X.Xxxxx
Title: Senior Vice President
Purchasers under the February
Note Agreement:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name:
Title: Vice President
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name:
Title: Vice President
INVESTORS PARTNER LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name:
Title: Vice President
MELLON BANK, N.A., solely
in its capacity as Trustee
for The Long Term
Investment Trust, (as
directed by Xxxx Xxxxxxx
Mutual Life Insurance
Company), and not in its
individual capacity
By:
--------------------------------
Name:
Title:
AUSA LIFE INSURANCE COMPANY, INC.
By:
--------------------------------
Name:
Title:
LIFE INVESTORS INSURANCE COMPANY
OF AMERICA
By:
--------------------------------
Name:
Title:
GREAT AMERICAN LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxxx
Name:
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
(f/k/a Great Northern Insured Annuity
Corporation)
By: /s/ Xxxxxx X. Xxxxxx
Name:
Title: Investment Officer
AMERICAN BANKERS INSURANCE COMPANY
OF FLORIDA
By:
--------------------------------
Name:
Title:
COVA FINANCIAL SERVICES LIFE INSURANCE
COMPANY
By: CONNING ASSET MANAGEMENT COMPANY
By: /s/ Xxxxx Car
Name:
Title:
HARE & CO. (with respect to Senior
Note No. 12 as nominee of Lincoln
National Life Insurance Company)
By: /s/ Xxxxxxx X. Xxxx
Name:
Title: Authorized officer
Purchasers under the June Note Agreement:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:
--------------------------------
Name:
Title:
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By:
--------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
(f/k/a Great Northern Insured Annuity
Corporation)
By: /s/ Xxxxxx X. Xxxxxx
Name:
Title: Investment Officer
OCCIDENTAL LIFE INSURANCE
COMPANY OF NORTH CAROLINA
By: CONNING ASSET MANAGEMENT COMPANY
By: /s/ X. Xxxx
Name:
Title:
PENINSULAR LIFE INSURANCE CO.
By: CONNING ASSET MANAGEMENT
COMPANY
By:
--------------------------------
Name:
Title:
EXECUTIVE RISK INDEMNITY INC.
By: CONNING ASSET MANAGEMENT
COMPANY
By:
--------------------------------
Name:
Title:
EXHIBIT I
SETTLEMENT NOTE SUBORDINATION PROVISIONS
