SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
MARINER POST ACUTE NETWORK INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
698940103
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(CUSIP Number)
William W. Chandler
Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010-3629
(212) 325-2911
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 20, 1999
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
(Continued on following pages)
(Page 1 of 7 Pages)
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Schedule 13D
CUSIP No. 698940103 13D Page 2 of 7 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Credit Suisse First Boston, on behalf of the Credit Suisse First Boston
business unit
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|X|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e). |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
NUMBER OF 7 SOLE VOTING POWER 13,774,998 shares of Common Stock,
SHARES par value $0.01
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER 0
EACH
REPORTING 9 SOLE DISPOSITIVE POWER 13,774,998 shares of Common Stock,
PERSON WITH par value $0.01
10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,774,998 shares of Common Stock, par value $0.01
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.69%
14 TYPE OF REPORTING PERSON
BK, HC, OO
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Item 1. Security and Company.
This statement on Schedule 13D relates to the common stock, $0.01 par value
(the "Common Stock"), of Mariner Post Acute Network Inc. ("Mariner" or the
"Company"). The principal executive office of Mariner is located at One Ravinia
Drive, Suite 1500, Atlanta, Georgia 30346.
Item 2. Identity and Background.
(a-c, f) This Schedule 13D is being filed by Credit Suisse First Boston
(the "Bank"), a Swiss bank, on behalf of itself and its consolidated
subsidiaries, to the extent that they constitute part of the Credit Suisse First
Boston business unit (the "CSFB business unit" or the "Reporting Person"). The
CSFB business unit is engaged in the corporate and investment banking, trading
(equity, fixed income and foreign exchange), private equity investment and
derivatives businesses on a worldwide basis. The Bank's registered head office
is located at Uetlibergstrasse 231, P.O. Box 900, CH-8045 Zurich, Switzerland.
The Bank and its consolidated subsidiaries engage in other separately managed
activities, most of which constitute the independently operated Credit Suisse
Asset Management business unit; the Credit Suisse Asset Management business unit
provides asset management and investment advisory services to institutional
investors worldwide.
Credit Suisse First Boston Management Corporation ("CSFBM"), a Delaware
corporation and an indirect majority-owned subsidiary of the Bank, beneficially
owns the securities reported herein. The principal business office of CSFBM is
11 Madison Avenue, New York, New York 10010. CSFBM is a majority-owned
subsidiary of Credit Suisse First Boston, Inc., a Delaware corporation that is,
in turn, a majority-owned subsidiary of the Bank. The ultimate parent company of
the Bank is Credit Suisse Group ("CSG"), a corporation formed under the laws of
Switzerland. The principal business of CSG is acting as a holding company for a
global financial services group with five distinct specialized business units
that are independently operated. In addition to the two business units referred
to above, CSG and its consolidated subsidiaries (other than the Bank and its
subsidiaries) are comprised of (a) the Credit Suisse Private Banking business
unit that engages in global private banking business, (b) the Credit Suisse
business unit that engages in the Swiss domestic banking business and (c) the
Winterthur business unit that engages in the global insurance business. CSG's
business address is: Nuschelerstrasse 1, CH-8070, Zurich, Switzerland.
CSG, for purposes of certain federal securities laws, may be deemed
ultimately to control the Bank and the CSFB business unit. CSG, its executive
officers and directors, and its direct and indirect subsidiaries (including all
of the business units except the CSFB business unit), may beneficially own
shares of Common Stock, and such shares are not reported in this statement on
Schedule 13D. Due to the separate management and independent operation of its
business units, CSG disclaims beneficial ownership of shares of Common Stock
beneficially owned by its direct and indirect subsidiaries, including the
Reporting Person. The Reporting Person disclaims beneficial ownership of shares
of Common Stock beneficially owned by CSG and any of CSG's and the Bank's other
business units.
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The name, citizenship, residence or business address and present principal
occupation or employment, and the name, principal business and address of any
corporation or other organization in which such employment is conducted, of each
executive officer and director of the CSFB business unit, and of CSFBM, are set
forth on Schedules I and II, respectively, each of which is incorporated herein
by reference.
(d-e) None of the Reporting Person, the Bank, CSFBM or any of the executive
officers or directors of such persons listed on Schedules I or II during the
last five years (a) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (b) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, U.S. Federal or State securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The beneficial ownership interest in Common Stock reported in this
statement on Schedule 13D was acquired in connection with a Transfer Agreement
among CSFBM and Apollo Investment Fund III, L.P.("Fund III"), Apollo UK Partners
III, L.P. ("UK Partners"), Apollo Overseas Partners III, L.P. ("Overseas
Partners") (collectively, the "Apollo Stockholders"), Apollo Management, L.P.,
and Apollo Advisors II, L.P. dated December 20 , 1999 (the "Transfer
Agreement"). The acquisition of the Common Stock was made in exchange for (i)
payment of aggregate cash consideration of $2,000,000; (ii) the issuance of an
aggregate of 80,000 shares of 9.75% Redeemable Preferred Stock of CSFBM, par
value $1.00 per share (the "Preferred Stock"); and (iii) a "put option" granted
to the Apollo Stockholders requiring the New York Branch of the Bank to purchase
the Preferred Stock under certain circumstances. The cash consideration came
from CSFBM's working capital.
Item 4. Purpose of Transaction.
The Common Stock was acquired for general investment purposes including
capital appreciation and other financial benefits.
The Apollo Stockholders entered into a Stockholders Agreement with the
Company and Chase Equity Associates, L.P., Healthcare Equity Partners, L.P.,
Healthcare Equity QP Partners, Key Capital Corporation, Key Equity Partners 97,
Drax Holdings, L.P., Walnut Growth Partners Limited Partnership and Keith B.
Rims (collectively, the "Other Stockholders"), dated as of November 4, 1997,
amended as of April 13, 1998 and amended and restated as of November 25, 1998.
Pursuant to the Transfer Agreement, CSFBM has offered to purchase any shares of
Common Stock held by the Other Stockholders (i) for the same consideration per
share of Common Stock as received by the Apollo Stockholders and (ii) under
substantially similar terms and conditions as were provided for under the
Transfer Agreement.
The Reporting Person and CSFBM may, from time to time, reserve the right to
change their plans or intentions and to take any and all actions that they deem
appropriate to maximize the value of their investments, including, among other
things, from time to time, acquiring additional securities of the Company,
disposing of any securities of the Company owned by them or
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formulating other plans or proposals regarding the Company or its securities to
the extent deemed advisable by the Reporting Person or CSFBM in light of their
general investment policies, market conditions, subsequent developments
affecting the Company, the general business and future prospects of the Company
or other factors.
Except as set forth above, neither the Reporting Person nor CSFBM has any
current intention, plan or proposal with respect to: (a) the acquisition by any
person of additional securities of the Company, or the disposition of securities
of the Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present board of directors or management
of the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Company by any
person; (h) causing a class of securities of the Company to be delisted from a
national securities exchange, if any, or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association; (i) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or (j) any action similar to any of those enumerated
above.
Item 5. Interest in Securities of the Issuer.
(a-b) On December 20, 1999, CSFBM acquired an aggregate of 13,774,998 of
the shares of Common Stock, representing 18.69% of the shares of Common Stock
outstanding and CSFBM and the Reporting Person may be deemed to beneficially own
and have sole voting power over such shares of Common Stock
(c) Except as described in Item 3 and Item 4 above, none of the Reporting
Person or, to the best knowledge of the Reporting Person, the Bank, CSFBM or any
of the persons listed on Schedules I or II hereto effected any transactions in
Securities during the last 60 days.
(d-e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Except as described in Item 3 and Item 4 above, none of the Reporting
Person, or, to the best knowledge of the Reporting Person, the Bank, CSFBM or
any of the persons listed on Schedules I or II hereto has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to securities of the Company.
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<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit Description
A Transfer Agreement, dated as of December 20, 1999, by and among CSFBM,
Apollo Investment Fund III, L.P., Apollo UK Partners III, L.P., Apollo
Overseas Partners III, L.P., Apollo Advisors II, L.P. and Apollo
Management, L.P.
6
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 29, 1999
CREDIT SUISSE FIRST BOSTON,
acting solely on behalf of the Credit
Suisse First Boston business unit
By: /s/ William W. Chandler
------------------------------------
Name: William W. Chandler
Title: Director
7
<PAGE>
SCHEDULE I
Executive Board Members of the Reporting Person
<TABLE>
<CAPTION>
Name and Title Business Address Principal Occupation Citizenship
- -------------- ---------------- -------------------- -----------
<S> <C> <C> <C>
Allen D. Wheat 11 Madison Avenue Chief Executive USA
Chairman New York, NY 10010 Officer, Credit Suisse
First Boston
and member of the
Executive Board,
Credit Suisse Group
Brady W. Dougan 11 Madison Avenue Managing Director, USA
Board Member New York, NY 10010 Head of Equity, Credit
Suisse First Boston
Christopher A. 11 Madison Avenue Managing Director, USA
Goekjian New York, NY 10010 Co-Head of Fixed
Board Member Income & Derivatives,
Credit Suisse First
Boston
Stephen A.M. Hester 11 Madison Avenue Managing Director, United Kingdom
Board Member New York, NY 10010 Chief Financial
Officer, Credit Suisse
First Boston
Marc Hotimsky 11 Madison Avenue Managing Director, United Kingdom
Board Member New York, NY 10010 Co-Head of Fixed
Income & Derivatives,
Credit Suisse First
Boston
Joseph T. 11 Madison Avenue Executive Vice USA
McLaughlin New York, NY 10010 President, Legal &
Board Member Regulatory Affairs,
Credit Suisse First
Boston
David C. Mulford One Cabot Square Chairman United Kingdom
Board Member London, E14 40J International, Credit
U.K. Suisse First Boston
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Title Business Address Principal Occupation Citizenship
- -------------- ---------------- -------------------- -----------
<S> <C> <C> <C>
John Nelson One Cabot Square Chairman Europe, USA
Board Member London, E14 40J Credit Suisse First
U.K. Boston
Stephen E. Stonefield Uetlibergstrasse 231 Chairman Asia/Pacific, USA
Board Member P.O. Box 900, CH-8045 Credit Suisse First
Zurich, Switzerland Boston
Richard E. 11 Madison Avenue Vice Chairman, Credit USA
Thornburgh New York, NY 10010 Suisse First Boston
Board Member
Charles G. Ward III 11 Madison Avenue Managing Director, USA
Board Member New York, NY 10010 Head of Corporate and
Investment Banking,
Credit Suisse First
Boston
</TABLE>
<PAGE>
SCHEDULE II
Executive Officers and Directors of Credit Suisse First Boston
Management Corporation
<TABLE>
<CAPTION>
Name and Title Business Address Principal Occupation Citizenship
- -------------- ---------------- -------------------- -----------
<S> <C> <C> <C>
Brady W. Dougan 11 Madison Avenue Managing Director, USA
Board Member New York, NY 10010 Head of Equity, Credit
Suisse First Boston
Stephen A.M. Hester 11 Madison Avenue Managing Director, United Kingdom
Board Member New York, NY 10010 Chief Financial
Officer, Credit Suisse
First Boston
Jeremy Marshall 11 Madison Avenue Managing Director, United Kingdom
Board Member New York, NY 10010 Credit Suisse First
Boston
Richard E. 11 Madison Avenue Vice Chairman, Credit USA
Thornburgh New York, NY 10010 Suisse First Boston
Board Member
Carlos Onis 11 Madison Avenue Managing Director, USA
Board Member and New York, NY 10010 Deputy Chief
Vice President Operating Officer of
Fixed Income and
Derivatives, Credit
Suisse First Boston
Charles G. Ward III 11 Madison Avenue Managing Director, USA
Board Member New York, NY 10010 Head of Corporate and
Investment Banking,
Credit Suisse First
Boston
Mark Patterson 11 Madison Avenue Managing Director, USA
President New York, NY 10010 Credit Suisse First
Boston
Donna Alderman 11 Madison Avenue Director, Credit Suisse USA
Vice President New York, NY 10010 First Boston
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Title Business Address Principal Occupation Citizenship
- -------------- ---------------- -------------------- -----------
<S> <C> <C> <C>
Benjamin H. Cohen 11 Madison Avenue Managing Director, USA
Vice President New York, NY 10010 Credit Suisse First
Boston
Michael A. Criscito 11 Madison Avenue Vice President, Credit USA
Vice President New York, NY 10010 Suisse First Boston
Salvatore Favia 11 Madison Avenue Director, Credit Suisse USA
Vice President New York, NY 10010 First Boston
David Matlin 11 Madison Avenue Managing Director, USA
Vice President New York, NY 10010 Credit Suisse First
Boston
Peter J. Murray 11 Madison Avenue Managing Director, USA
Vice President New York, NY 10010 Credit Suisse First
Boston
Steven Simonte 11 Madison Avenue Director, Credit Suisse USA
Vice President New York, NY 10010 First Boston
Lori M. Russo 11 Madison Avenue Vice President & USA
Secretary New York, NY 10010 Secretary, Credit
Suisse First Boston
Lewis H. Wirshba 11 Madison Avenue Managing Director & USA
Treasurer New York, NY 10010 Treasurer, Credit
Suisse First Boston
David Fisher 11 Madison Avenue Managing Director & USA
Controller New York, NY 10010 Controller, Credit
Suisse First Boston
Thomas A. 11 Madison Avenue Director & Director of USA
DeGennaro New York, NY 10010 Taxes, Credit Suisse
Director of Taxes First Boston
</TABLE>
<PAGE>
Exhibit A
TRANSFER AGREEMENT
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CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION
Dated as of December 20, 1999
CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION, a Delaware
corporation ("CSFBM"), hereby agrees with each transferor named on the signature
pages hereof (such transferors being referred to individually as a "Transferor"
and collectively as the "Transferors") and Apollo Management, L.P. and Apollo
Advisors II, L.P., the manager and general partner, respectively, of each of the
Transferors ("Apollo" and, together with the Transferors, the "Apollo Entities")
as follows with respect to the transfer of certain interests, rights and
obligations described in Section 1.1 below:
1. The Shares.
1.1 The Shares. Each Transferor is the owner of the number of
shares of common stock, par value $0.01 per share, of Mariner Post Acute Network
Inc. (the "Common Stock"), a Delaware corporation (the "Company"), set forth
below its name on the signature pages hereto (all such Common Stock hereinafter
referred to as the "Shares").
1.2 The Transferors. Each of the Transferors hereby agrees,
severally and not jointly, to transfer to CSFBM all of the Shares set forth
below its name on the signature pages hereto. CSFBM shall not be obligated to
accept the transfer of any of the Shares unless the Transferors shall have
delivered all of the Shares to be transferred hereunder.
2. Closing. The closing (the "Closing") of the transactions
contemplated by this Transfer Agreement shall take place as follows:
2.1 Transfer of the Shares.
(a) On the basis of the representations and warranties
hereinafter set forth, each of the Transferors hereby shall, at the Closing,
transfer to CSFBM, and CSFBM shall accept the transfer from each of the
Transferors of, the Shares set forth below the respective names of the
Transferors on the signature pages hereto, for aggregate consideration (the
"Consideration") consisting of (i) $2,000,000 (the "Cash Consideration"); (ii)
80,000 shares of 9.75% Redeemable Preferred Stock of CSFBM, par value $1.00 per
share (the "Preferred Stock"), to be issued under and entitled to the benefits
of a Certificate of Designation, a copy of which has heretofore been delivered
to Transferor (the "Certificate"); and (iii) a put option on the terms described
in the Put Option Agreement dated as of December 20, 1999 by and between the New
York Branch of Credit Suisse
<PAGE>
First Boston and the Transferors (the "Put Option"). The consideration for the
Shares set forth below the name of each Transferor on the signature pages hereto
is the aggregate consideration for all of the Shares transferred by each
respective Transferor.
(b) At the Closing, in order that the Shares be transferred to
CSFBM, each of the Transferors will deliver to the Company certificates
representing such Transferor's Shares, appropriate stock powers and any
instruments required by the terms of the Shares as necessary to effect the valid
transfer of ownership of the Shares against receipt by such Transferor of its
respective portion of (i) the Cash Consideration in federal (same day) funds by
wire transfer to an account at a bank designated by such Transferor, (ii)
certificates representing the Preferred Stock and (iii) the Put Option. The
Closing will take place at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, at 9:00 a.m., New York time, simultaneously
with the execution of this Transfer Agreement (the "Closing Date"). As promptly
as practicable after the Closing Date, CSFBM shall request that the transfer
agent and registrar for the Company issue (x) a certificate in the name of CSFBM
for the Shares transferred to CSFBM pursuant hereto and (y) certificates in the
names of the Transferors for the balance of any Shares covered by each stock
certificate delivered to CSFBM on the Closing Date.
3. Common Representations and Warranties. CSFBM and the
Transferors, severally and not jointly, represent, warrant and covenant to the
other party hereto as follows:
3.1 Organization. CSFBM, on its behalf, represents that it is
a corporation duly incorporated under the laws of the State of Delaware, and
each of the Transferors, on its behalf, represents that it is a duly formed
partnership under the laws of its respective jurisdiction of formation, and each
of CSFBM and the Transferors (i) is validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, as the case may
be; (ii) has the necessary power and authority, either corporate or partnership,
as the case may be, for the conduct of its business as presently conducted; and
(iii) is duly qualified to transact business and is in good standing in each
jurisdiction in which the nature of the business transacted or property owned or
leased by it requires such qualification, except, in the case of (ii) or (iii)
above, for such power and authority, either corporate or partnership, as the
case may be, the absence of which, or such jurisdictions where the failure to so
qualify, would not have a material adverse effect on its consolidated business,
assets, results of operations or condition, financial or otherwise (a "Material
Adverse Effect").
3.2 Authorization; Valid and Binding Agreements. Each has the
requisite power and authority, either corporate or partnership, as the case may
be, to enter into, execute or deliver this Transfer Agreement and the other
agreements, instruments, documents and other materials to which it is a party to
be entered into, executed or delivered in connection herewith (collectively, the
"Implementing Agreements") and to transfer the Shares or to issue and sell the
shares of Preferred Stock and to deliver the Cash Consideration, as the case may
be, all as contemplated herein and to consummate the transactions contemplated
hereby and thereby (collectively, the "Transactions") and
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to perform all of its respective obligations and undertakings hereunder and
thereunder. The execution, delivery and performance of each of the Implementing
Agreements has been duly authorized and each of the Implementing Agreements will
constitute, upon execution and delivery, a valid and legally binding obligation
of such party enforceable against it in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
3.3 No Violation. Neither the execution and delivery by it of
the Implementing Agreements, nor the performance of its obligations under the
Implementing Agreements, nor the consummation of the Transactions, will (i)
violate any provision of its constitutional documents; (ii) violate any material
statute or law or any judgment, decree, order, regulation or rule of any court
or governmental authority to which it or any of its properties may be subject;
(iii) cause the acceleration of the maturity of any material debt or obligation
of it; or (iv) (with or without the giving of notice or lapse of time, or both)
violate, or be in conflict with, or constitute a default under, or permit the
termination of, or require the prior approval or consent of (or filing with) any
governmental authority or person under, or result in the creation of any lien
upon any of its property under, any material agreement to which it is a party or
by which it is bound, subject, in the case of the Transferors, to the notice and
tag-along rights as contemplated in Section 7(c) hereof and the Chase Warrant
(as defined in Section 4.1 hereof).
3.4 Private Offering. No securities of the same class as the
Shares or shares of Preferred Stock have been issued and sold by it within the
six-month period immediately prior to the date hereof. Each party hereto agrees
that neither it nor anyone acting on its behalf, has or will offer the Shares or
shares of Preferred Stock, as the case may be, so as to bring the transfer or
the issuance and sale thereof, as the case may be, within the provisions of
Section 5 of the Securities Act of 1933, as amended (the "Securities Act").
3.5 Investment Representations. Each party hereto represents
that it is receiving the transfer of all of the Shares or is acquiring the
shares of Preferred Stock, as the case may be, pursuant to the terms hereof for
its own account. Each party hereto further represents that (i) it has authority
to make the representations contained in this Article 3; (ii) it is an
"accredited investor" within the meaning of Rule 501 under the Securities Act;
(iii) it is acquiring all of the Shares or shares of Preferred Stock, as the
case may be, to be transferred or sold to it hereunder for investment purposes
and with no view or intention to offer for sale or to make distributions of any
of the Shares or shares of Preferred Stock, as the case may be, in a manner
which would violate federal or state securities laws; (iv) it acknowledges and
understands that the Shares or shares of Preferred Stock, as the case may be, to
be transferred or sold to it pursuant to this Transfer Agreement (x) will not be
registered under the Securities Act or qualified under state securities laws and
that no party has any obligation whatsoever to register or qualify the Shares or
shares of Preferred Stock, as the case may be, now or at any time in the future,
(y) are being transferred to it in reliance on its representations and
warranties contained in this Section 3.5 pursuant to a transaction that is
exempt from the registration requirements of the Securities Act, and (z) cannot
be offered, sold or otherwise transferred except pursuant to an exemption from
the registration requirements of the Securities Act
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<PAGE>
or pursuant to an effective registration statement under the Securities Act; and
(v) it has conducted its own investigation and/or appraisal and in connection
therewith has received such financial and other information about the Company or
CSFBM, as the case may be, as it has deemed necessary in connection with its
execution and delivery of this Transfer Agreement and the transfer to or
acquisition by it of the Shares or shares of Preferred Stock, as the case may
be.
3.6 Other Acknowledgments. Each party represents, acknowledges
and confirms as of the date of this Transfer Agreement with respect to the
Transactions or when agreeing to any other matter with such party (or any
affiliate thereof) that it has not (i) entered into any agreement, contract,
binding commitment or understanding to offer, sell, transfer or otherwise
dispose of any of the shares of the Preferred Stock either currently or after
the passage of a fixed or determinable period of time or upon the occurrence or
non-occurrence of any predetermined event or circumstance or (ii) offered for
sale or entered into any negotiations or discussions for the sale or transfer of
any of such shares of Preferred Stock.
3.7 Independent Parties. There is no agency or partnership
between CSFBM, on the one hand, and any of the Apollo Entities, on the other
hand, and each has a valid business purpose independent of the other to enter
into transactions contemplated hereby.
4. Additional Representations by the Transferors. Each
Transferor, severally and not jointly, represents, warrants and covenants to
CSFBM as to itself as follows:
4.1 Documentation; Title to Shares; Encumbrances. Such
Transferor has provided to CSFBM copies of such documents and other material and
information as has been requested by CSFBM and all such documents, materials and
the information contained therein are true and correct in all material respects.
Such Transferor has good and valid title to all of the Shares to be transferred
by it pursuant hereto. Upon the transfer of such Shares to CSFBM in accordance
with the terms hereof, such Transferor will transfer to CSFBM good and valid
title to the Shares, free and clear of all liens, claims and encumbrances
created by the Transferor, subject only to the matters contemplated in Section
7(c) hereof and the warrant held by Chase Equity Associates, L.P. for an
aggregate of 592,593 Shares (the "Chase Warrant").
4.2 Investment with "Plan Assets". Such Transferor is not
acquiring the shares of Preferred Stock to be acquired by it hereunder
directly or indirectly with "plan assets" within the meaning of
Department of Labor Regulation 29 C.F.R. Section 2510.3-101.
5. Additional Representations by CSFBM. CSFBM hereby
represents, warrants and covenants to the Transferors as follows:
5.1 Preferred Stock. The shares of Preferred Stock to be
issued to the Transferors pursuant to this Agreement will be duly authorized,
executed and delivered by CSFBM pursuant to the Certificate of Designations
therefor and as filed with the Secretary of State of the State of Delaware and
when paid for through the exchange of Shares as contemplated herein, will be
validly
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<PAGE>
issued, fully paid and non-assessable and not subject to any pre-emptive rights
and, when issued and paid for as contemplated herein, will be free and clear of
all liens, claims and encumbrances created by CSFBM. CSFBM is a Delaware
corporation and pursuant to Delaware law the Transferors will not become subject
to any liability of CSFBM solely by reason of their acquiring shares of
Preferred Stock as contemplated herein, nor as a result of such acquisition
alone, will the Transferors be deemed to be an affiliate of CSFBM as defined in
Rule 144 under the Securities Act.
5.2 Documentation. CSFBM has provided to the Transferors
copies of such documents and other material and information as has been
requested by the Transferors and all such documents and the information
contained therein are true and correct in all material respects.
6. Deliveries. Simultaneously with the Closing, the following
additional documents will be delivered by or on behalf of the parties.
6.1 Existing Stockholder Arrangements; Etc. CSFBM shall have
received evidence in form and substance reasonably satisfactory to it that the
existing shareholders' agreement and other agreements or arrangements in place
among the Transferors and other persons or entities holding shares of Common
Stock either (i) have been terminated and no longer are in effect with respect
to the Shares or (ii) shall not be applicable to the Shares being acquired by
CSFBM (which shall be deemed to be satisfied either by delivery of releases from
all parties to such shareholders' agreement or an opinion of counsel to the
Transferors to the effect of (i) above, in each case in form and substance
reasonably satisfactory to CSFBM), subject in either case to fulfillment of
CSFBM's obligations as contemplated by Section 7(c) hereof.
7. Acknowledgments; Covenants.
(a) CSFBM hereby acknowledges that the Transferors or their
affiliates by reason of their relationship to the Company have had access to
certain information (the "Information") which may be material regarding the
Company, its financial condition, results of operations, management, projections
and businesses. CSFBM acknowledges that the Transferors have offered the
Information to CSFBM and that CSFBM has refused that offer and therefore agrees
that the Transferors shall have no obligation to disclose to CSFBM any of the
Information. CSFBM further acknowledges that it has conducted its own
investigation, to the extent that it has determined necessary or desirable
regarding the Company and the transaction contemplated hereby, and that CSFBM
has determined to enter into and complete this transaction based on, among other
things, such investigation. In connection with the foregoing, and to the fullest
extent permitted by law, CSFBM hereby waives and releases any and all claims it
may have against the Transferors or their affiliates and their respective
officers, directors and employees by reason of such nondisclosure of the
Information.
(b) Each of the Apollo Entities hereby repeats the
acknowledgment appearing in (a) above, mutatis mutandis, with respect to certain
information known to CSFBM, which may be
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material regarding CSFBM, its financial condition, results of operations,
management, projections and businesses.
(c) CSFBM hereby acknowledges that the Transferors are subject
to the tag-along rights of various other shareholders of the Company under that
certain Shareholders' Agreement to which each of the Transferors is a party.
CSFBM shall offer to purchase any Shares held by such other shareholders (i) for
the same consideration per Share as is received by the Transferors and (ii)
under substantially similar terms and conditions as are provided for under this
Transfer Agreement.
8. Consent to Transfers; Minimum Number of Shares, Notice of
Proposed Transfers. The shares of Preferred Stock issued hereunder may be
transferred only with the consent of CSFBM, which consent shall be deemed to
have been given if not objected to within five business days; provided, however,
that no such consent shall be required (i) in the case of any transfer of such
shares from one of the Transferors (or any of their respective affiliates) to an
affiliate of such Transferor or (ii) in the case of any transfer of such shares
of Preferred Stock from a Transferor (but not any subsequent transferor of such
shares) to a person that is an institutional "accredited investor" (as defined
in Regulation D under the Securities Act) in a transaction that is exempt from
the registration requirements thereunder and, prior to such transfer, CSFBM
shall have received an opinion of counsel confirming the availability of such
exemption. CSFBM shall respond as promptly as reasonably practicable to any
request for such consent hereunder. Any attempted transfer of shares of
Preferred Stock in violation of the other terms of this Section 8 shall be null
and void. In addition, any transfer of such shares issued hereunder shall
involve the transfer of at least the lesser of (i) 20,000 shares of Preferred
Stock and (ii) all such shares of Preferred Stock held by the particular
transferor, as the case may be. As used in this Section 8, (i) the term
"transfer" encompasses (x) any offer, pledge, sale, contract to sell, the sale
of any option or contract to purchase, the purchase of any option or contract to
sell, the grant of any option, right or warrant to purchase, transfer, or other
disposition of any securities referred to herein or any securities convertible
into or exercisable or exchangeable for the securities referred to herein and
(y) entering into any swap or other arrangement that transfers all or a portion
of the economic consequences associated with the ownership of any of the
securities referred to herein (regardless of whether any transaction described
in clause (x) or (y) is to be settled by the delivery of the securities referred
to herein, or such other securities, in cash or otherwise) and (ii) the term
"affiliate" shall have the meaning ascribed to it in Rule 144 under the
Securities Act.
9. Expenses, Etc. All fees and expenses incurred by the
Transferors and CSFBM in connection with this Transfer Agreement, the
Implementing Agreements and the transactions contemplated hereby and thereby
shall be paid by CSFBM; provided, however, that if such fees and expenses
incurred by the Transferors in connection herewith (i) exceed $275,000, the
Transferors shall provide detailed support therefor (including lawyers involved,
hours billed, rates, etc.) and (ii) appear reasonably likely to exceed $400,000,
the Transferors must give written notice to CSFBM to this effect prior to
incurring expenses in excess of such amount. The agreement of the parties in
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<PAGE>
this Section 9 shall survive the payment for or transfer of any of the Shares or
shares of Preferred Stock.
10. Indemnification.
(a) CSFBM agrees to indemnify, defend, protect and hold
harmless each of the Apollo Entities and each of their (and their affiliates')
respective officers, directors, employees, agents and representatives from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other out-of-pocket expenses reasonably incurred in
connection therewith) arising out of or caused by or resulting from, any breach
or violation by CSFBM of any of its representations, warranties or covenants
contained in the Implementing Agreements, except insofar as such losses, claims,
damages or liabilities are caused by any breach or violation by any of the
Transferors of any of their respective representations, warranties or covenants
contained in this Transfer Agreement.
(b) Each Transferor agrees, severally and not jointly, to
indemnify and hold harmless CSFBM and each of its (and each of its affiliates')
officers, directors, employees, agents and representatives from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other out-of-pocket expenses reasonably incurred in connection
therewith) arising out of or caused by or resulting from, any breach or
violation by such Transferor of any of its representations, warranties or
covenants contained in Article 3 of this Transfer Agreement, except insofar as
such losses, claims, damages or liabilities are caused by any breach or
violation by CSFBM of any of its representations, warranties or covenants
contained in or made in connection with this Transfer Agreement; provided,
however, that the Transferors' maximum liability under this indemnity shall not
exceed the aggregate Cash Consideration.
11. Counterparts. This Transfer Agreement may be executed in
two or more counterparts, but all such counterparts shall constitute but one and
the same instrument.
12. Survival of Covenants. All covenants, agreements,
representations and warranties made by the parties in the Implementing
Agreements shall survive indefinitely any investigation made by, or on behalf
of, CSFBM, the Transferors or any person controlling any of them or acting on
their behalf, and the Closing of the transactions contemplated hereby and
thereby.
13. Law Governing. THIS TRANSFER AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
14. Integration and Severability. The Implementing Agreements
embody the entire agreement and understanding between the Transferors and CSFBM
with respect to the subject matter hereof, and supersedes all prior agreements
and understandings relating to the subject matter hereof. In case any one or
more of the provisions contained in this Transfer Agreement or in any
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<PAGE>
instrument contemplated hereby, or any application thereof, shall be invalid,
illegal or unenforceable in any respect, under the laws of any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein and therein, and any other application thereof, shall not in any way be
affected or impaired thereby or under the laws of any other jurisdiction.
15. Binding Effect; Assignment; Third Party Beneficiaries.
This Transfer Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, assigns, heirs, executors,
administrators and other legal representatives. At any time or from time to time
following the Closing, CSFBM shall be permitted to assign any and all of its
rights and obligations hereunder to any affiliate of CSFBM; provided, however,
that, at the time of any such assignment, the overall financial condition and
prospects of such affiliate shall be at least comparable to that of CSFBM;
provided, further, however, that such affiliate shall assume in writing all of
the obligations and duties of CSFBM hereunder), and thereafter any and all
references herein to CSFBM shall refer to such affiliate. Except as set forth in
the preceding sentence, no party shall assign any of its rights or delegate any
of its duties under this Transfer Agreement (by operation of law or otherwise)
without the prior written consent of CSFBM or holders of a majority of the
shares of Preferred Stock outstanding and acquired hereunder at the time of such
proposed assignment, as applicable. Any assignment of rights or delegation of
duties under this Transfer Agreement by a party without the prior written
consent of the other party or parties, if such consent is required hereby, shall
be void.
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If the foregoing is in accordance with your understanding,
please sign and complete the enclosed copy of this letter on the signature page
provided and return it to CSFBM, whereupon this letter shall then become a
binding agreement in accordance with its terms.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
MANAGEMENT CORPORATION
By: /s/ Chung W. Choy
-------------------------------------
Name: Chung W. Choy
Title: Attorney-in-fact
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<PAGE>
TRANSFER AGREEMENT SIGNATURE PAGE
---------------------------------
The undersigned hereby agrees to transfer the Shares as set
forth below and agrees to the manner of payment specified below:
TRANSFEROR: APOLLO INVESTMENT FUND III, L.P.
By its General Partner,
APOLLO ADVISORS II, L.P.
By: /s/ Michael D. Weiner
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
Address: c/o Apollo Advisors II, L.P.
Two Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 694-8032
SHARES TO BE TRANSFERRED: 8,373,362 shares (Certificates No. PHN 0414)
4,186,681 shares (Certificate No. PHN 0361)
CONSIDERATION:
Cash Consideration: $1,823,609
Shares of Preferred Stock: 72,944
MANNER OF PAYMENT:
The Chase Manhattan Bank, NA
ABA: 021000021
A/C#: 900-9-002206
BBK: Chase Manhattan Bank, NA
A/C#: 89922144
ATTN: Mike Mooney (212) 623-2357
Ref:
10
<PAGE>
TRANSFER AGREEMENT SIGNATURE PAGE
---------------------------------
The undersigned hereby agrees to transfer the Shares as set
forth below and agrees to the manner of payment specified below:
TRANSFEROR: APOLLO (UK) PARTNERS III, L.P.
By its General Partner,
APOLLO ADVISORS II, L.P.
By: /s/ Michael D. Weiner
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
Address: c/o Apollo Advisors II, L.P.
Two Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 694-8032
SHARES TO BE TRANSFERRED: 309,545 shares (Certificates No. PHN 0412)
154,672 shares (Certificate No. PHN 0359)
CONSIDERATION:
Cash Consideration: $67,390.60
Shares of Preferred Stock: 2,696
MANNER OF PAYMENT:
The Chase Manhattan Bank, NA
ABA: 021000021
A/C#: 900-9-002206
BBK: Chase Manhattan Bank, NA
A/C#: 89922146
ATTN: Mike Mooney (212) 623-2357
Ref:
11
<PAGE>
TRANSFER AGREEMENT SIGNATURE PAGE
---------------------------------
The undersigned hereby agrees to transfer the Shares as set
forth below and agrees to the manner of payment specified below:
TRANSFEROR: APOLLO OVERSEAS PARTNERS III, L.P.
By its General Partner,
APOLLO ADVISORS II, L.P.
By: /s/ Michael D. Weiner
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
Address: c/o Apollo Advisors II, L.P.
Two Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 694-8032
SHARES TO BE TRANSFERRED: 500,492 shares (Certificates No. PHN 0413)
250,246 shares (Certificate No. PHN 0360)
CONSIDERATION:
Cash Consideration: $109,000.40
Shares of Preferred Stock: 4,360
MANNER OF PAYMENT:
The Chase Manhattan Bank, NA
ABA: 021000021
A/C#: 900-9-002206
BBK: Chase Manhattan Bank, NA
A/C#: 89922145
ATTN: Mike Mooney (212) 623-2357
Ref:
12
<PAGE>
APOLLO ADVISORS II, L.P.
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
13
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APOLLO MANAGEMENT, L.P.
By: /s/ Michael D. Weiner
------------------------------------
Name: Michael D. Weiner
Title: Vice President
14
