<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 26, 1997
MEDICAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-20440 13-3584552
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(State or other (Commission (I.R.S. Employer
jurisdiction) File Number) Identification No.)
155 State Street, Hackensack, New Jersey 07601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 488-6230
N/A
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(Former name and former address, if changed since last report)
99539<PAGE>
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Item 5. Other Events.
On June 26, 1997, Medical Resources, Inc. (the "Company")
consummated a $26,000,000 private placement of Senior Notes to a
group of insurance companies led by John Hancock Mutual Life
Insurance Company. Dillon, Read & Co. Inc. acted as agent in
connection with the placement.
The Notes bear interest at an annual rates of either 8.01% or
8.10%, as applicable, are subject to equal annual sinking fund
payments commencing in February 2001 and have a final maturity in
February 2005. The Company will use the proceeds from the
placement to fund acquisitions and for general corporate purposes.
The terms of the agreement pursuant to which the Notes were
issued contain, among other provisions, certain financial
covenants, including net worth and debt covenants and certain
dividend limitations. In addition, the Notes are (i) guaranteed by
certain of the Company's wholly-owned subsidiaries and (ii) secured
by a pledge of equity interests in certain of the Company's non-
wholly owned subsidiaries.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
99(a) Note Purchase Agreement dated as of June 26, 1997,
between the Company and the Purchasers listed on
Exhibit A thereto.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
MEDICAL RESOURCES, INC.
Registrant
By: /s/ John P. O'Malley III
-------------------------------
Name: John P. O'Malley III
Title: Executive Vice President - Finance
Date: July 1, 1997
99539<PAGE>
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MEDICAL RESOURCES, INC.
$20,000,000 8.10% SENIOR NOTES DUE FEBRUARY 20, 2005
PPN: 58467* AC 8
AND
$6,000,000 8.01% SENIOR NOTES DUE FEBRUARY 20, 2005
PPN: 58467* AD 6
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NOTE PURCHASE AGREEMENT
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Dated as of June 26, 1997
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TABLE OF CONTENTS
Paragraph Page
1. AUTHORIZATION; RANKING 1
1A. Authorization of Issue of the Notes 1
1B. Ranking 1
2. PURCHASE AND SALE OF THE NOTES; CLOSING 1
2A. Purchase and Sale of the Notes 1
2B. Closing 2
3. CONDITIONS OF CLOSING 2
3A. Opinion of Company Counsel 2
3B. Opinion of Purchasers' Special Counsel 2
3C. Representations and Warranties; Compliance and
Certificates. 2
3D. Purchase Permitted by Applicable Laws 2
3E. Private Placement Numbers 3
3F. [Intentionally Omitted] 3
3G. Sale of all Notes 3
3H. Charter and Proceedings 3
3I. Consent of Other Persons 3
3J. Payment of Special Counsel Fees 3
3K. Changes in Corporate Structure 3
3L. Restricted Subsidiaries' Guaranty 3
3M. Pledge of Equity Interest 3
4. PREPAYMENT, REPAYMENT AND REDEMPTION 3
4A. Optional Prepayment of Notes at Any Time. 3
4B. Notice of Optional Prepayment 4
4C. Scheduled Repayment of Notes 4
4D. Payments Pro Rata; Application of Payments 4
4E. Retirement of Notes 4
4F. Make Whole Amount 4
5. AFFIRMATIVE COVENANTS 5
5A. Financial and Other Reporting by the Company 5
5B. Information Required by Rule 144A 7
5C. Inspection of Property 7
5D. Corporate Existence, Etc. 7
5E. Payment of Taxes and Claims 7
5F. Compliance with Laws, Etc. 8
5G. Maintenance of Properties and Leases 8
5H. Insurance 8
5I. Scope of Business 8
5J. Use of Proceeds 8
5K. Environmental Compliance 8
5L. Maintenance of Books and Records 9<PAGE>
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6. NEGATIVE COVENANTS 10
6A. Financial Covenants 10
6A(1). Consolidated Net Worth. 10
6A(2). Interest Expense Coverage 10
6A(3). Limitation on Consolidated Total Debt 10
6A(4). Limitation on Priority Debt 10
6B. Restricted Payments and Restricted Investment 11
6C. Liens and Other Restrictions 11
6C(1). Liens 11
6C(2). Sale of Stock 12
6C(3). Merger and Sale of Assets 13
6C(4). Subsidiary Dividend and Other Restrictions 14
6C(5). Transactions with Affiliates 14
6D. Compliance with ERISA 14
7. EVENTS OF DEFAULT 15
7A. Acceleration 15
7B. Rescission of Acceleration 18
7C. Notice of Acceleration or Rescission 18
7D. Other Remedies, No Waivers or Election of Remedies 18
8. REPRESENTATIONS AND WARRANTIES 18
8A. Organization, Etc. 18
8B. Stock Ownership 19
8C. Financial Statements 19
8D. Actions Pending 20
8E. Title to Properties 20
8F. Affiliates and Investments in Others 20
8G. Tax Returns and Payments 20
8H. Conflicting Agreements and Other Matters 21
8I. Offering of Notes 21
8J. Regulation G, Etc. 21
8K. ERISA 21
8L. Governmental and Other Consents 22
8M. Environmental Matters 22
8N. Labor Relations 23
8O. Financial Condition 23
8P. Disclosure 23
8Q. Status Under Certain Federal Statutes 24
8R. Existing Indebtedness; Future Liens 24
8S. Compliance with Laws, Etc. 24
9. REPRESENTATIONS OF THE PURCHASERS 24
10. DEFINITIONS 25
10A. Prepayment and Make Whole Amount Terms 25
10B. Other Terms 26
11. MISCELLANEOUS 36
11A. Payments 36
11A(1). Payments in Respect of Notes 36
11A(2). No Deduction or Set-off 36
11B. Expenses 36<PAGE>
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11C. Consent to Amendments 37
11D. Persons Deemed Owners; Participations 37
11E. Survival of Representations and Warranties;
Entire Agreement 37
11F. Successors and Assigns 37
11G. Confidential Information 37
11H. Notices 38
11I. Descriptive Headings 38
11J. Solicitation of Holders 38
11K. Reproduction of Documents 39
11L. Governing Law 39
11M. Consent to Jurisdiction and Service and
Waiver of Trial by Jury 39
11N. Counterparts 40
11O. Registration, Transfer, Exchange and
Replacement of Notes 40
11O(1). Registration 40
11O(2). Transfer and Exchange 40
11O(3). Replacement 40
11P. Compliance by Subsidiaries 40
11Q. Severability 40
11R. Termination 41
11S. Construction 41
11T. Substitution of Purchaser 41
Signature Page 42
SCHEDULES AND EXHIBITS
EXHIBIT A Purchasers
EXHIBIT B Form of the 8.10% Note
EXHIBIT C Form of the 8.01% Note
EXHIBIT D Form of Opinion of Counsel to the Company
EXHIBIT E Form of Officers' Certificate
EXHIBIT F Form of Clerk's Certificate
EXHIBIT G Form of Restricted Subsidiaries' Guaranty
EXHIBIT H Form of Pledge Agreement
SCHEDULE 2B Wiring Instructions
SCHEDULE 3L Pledged Restricted Subsidiaries
SCHEDULE 5H Insurance Matters
SCHEDULE 5J Use of Proceeds<PAGE>
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SCHEDULE 6B Existing Investments
SCHEDULE 6C(1) Existing Liens
SCHEDULE 6C(5) Transactions with Affiliates
SCHEDULE 8A Organization; Foreign Qualifications; Etc.
SCHEDULE 8B Ownership of Stock
SCHEDULE 8F Affiliates and Investments in Others
SCHEDULE 8M Environmental Matters
SCHEDULE 8R Existing Debt
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MEDICAL RESOURCES, INC.
155 State Street
Hackensack, New Jersey 07601
As of June 26, 1997
To: The Purchasers Listed
on Exhibit A
Gentlemen:
The undersigned, Medical Resources, Inc., a Delaware
corporation, (together with any surviving or acquiring entity in
any merger or consolidation with the Company permitted by paragraph
6C(3), the "Company") agrees with you as follows:
1. AUTHORIZATION; RANKING.
1.1A Authorization of Issue of the Notes. The Company will
authorize the issue and sale of (i) its 8.10% Senior Notes in the
aggregate principal amount of $20,000,000, to be dated the date of
issue, to mature February 20, 2005, to bear interest on the unpaid
principal balance from the date of issue until the principal shall
have become due and payable at the rate of 8.10% per annum
(computed on the basis of a 360-day year of twelve 30-day months),
payable semi-annually in arrears, and to bear interest on overdue
principal, overdue Make Whole Amount and, to the extent permitted
by law, overdue interest at the rate of 10.10% per annum payable on
demand, which notes shall be in the form of Exhibit B (together
with all notes issued in substitution, replacement or exchange
therefor in accordance with the terms of this Agreement, the
("8.10% Notes"); and (ii) its 8.01% Senior Notes in the aggregate
principal amount of $6,000,000, to be dated the date of issue, to
mature February 20, 2005, to bear interest on the unpaid principal
balance from the date of issue until the principal shall have
become due and payable at the rate of 8.01% per annum (computed on
the basis of a 360-day year of twelve 30-day months), payable semi-
annually in arrears, and to bear interest on overdue principal,
overdue Make Whole Amount and, to the extent permitted by law,
overdue interest at the rate of 10.01% per annum payable on demand,
which notes shall be in the form of Exhibit C (together with all
notes issued in substitution, replacement or exchange therefor in
accordance with the terms of this Agreement, the "8.01% Notes").
The 8.10% Notes and the 8.01% Notes are collectively referred to as
the "Notes". Certain capitalized terms used in this Agreement are
defined in paragraph 10; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
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1.1B Ranking. The 8.10% Notes and the 8.01% Notes shall rank
pari passu with each other, will constitute the direct senior
obligations of the Company and will rank not less than pari passu
in priority of payment with all other outstanding Debt of the
Company, present or future, except for Debt which is preferred as
a result of being secured (but only to the extent such security is
not prohibited by paragraph 6C(1) and then only to the extent of
such security).
2. PURCHASE AND SALE OF THE NOTES; CLOSING.
2.1A. Purchase and Sale of the Notes. Subject to the
terms and conditions of this Agreement, the Company shall sell to
each of you (individually a "Purchaser" and collectively, the
"Purchasers"), and each Purchaser shall purchase from the Company,
Notes of the class and principal amount specified below such
Purchaser's name in Exhibit A, at a price equal to 100% of such
principal amount, registered in such Purchaser's name or that of
the Purchasers' nominee or nominees as specified in Exhibit A.
Notwithstanding the foregoing, each Purchaser's obligations under
this Agreement are several and not joint obligations and no
Purchaser shall have any obligation or liability for the
performance or non-performance by any other Purchaser of such other
Purchaser's obligations under this Agreement.
2.1B. Closing. The purchase and sale of the Notes shall
take place at the offices of Sullivan & Worcester LLP, One Post
Office Square, Boston, Massachusetts 02109, at a closing (the
"Closing") to be held on June 26, 1997 or on such other Business
Day as the Purchasers and the Company may agree (the "Closing
Date"). At the Closing, the Company will deliver to each
Purchaser, the Notes to be purchased by it, against payment of the
purchase price therefor by transfer of immediately available funds
to the Company in accordance with the wiring instructions set forth
on Schedule 2B. If at the Closing, the Company fails to tender any
Notes to any Purchaser as provided in this paragraph 2B, or if any
of the conditions specified in paragraph 3 shall not have been
fulfilled to a Purchaser's satisfaction or waived by such
Purchaser, such Purchaser may, at its election, be relieved of all
further obligations under this Agreement, without thereby waiving
any rights such Purchaser may have by reason of such failure or
non-fulfillment for reimbursement of its expenses or actual
damages.
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to
purchase and pay for its Notes is subject to the fulfillment to its
satisfaction or its written waiver, on or before the Closing Date,
of the following conditions:
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3.1A. Opinion of Company Counsel. The Purchasers shall
have received an opinion, dated the Closing Date and addressed to
them, from Werbel & Carnelutti, counsel to the Company, covering
the matters set forth in Exhibit D and such other matters as any
Purchaser or Special Counsel may reasonably request. To the extent
that the opinion referred to in this paragraph 3A is rendered in
reliance upon the opinion of any other counsel, the Purchasers
shall have received a copy of the opinion of such other counsel,
dated the Closing Date and addressed to them, or a letter from such
other counsel, dated the Closing Date and addressed to them,
authorizing them to rely on such other counsel's opinion. The
opinions of counsel to the Company and any such other counsel shall
be in form and substance reasonably satisfactory to the Purchasers
and Special Counsel.
3.1B. Opinion of Purchasers' Special Counsel. The
Purchasers shall have received from Special Counsel an opinion
satisfactory to them as to such matters incident to the
transactions contemplated by this Agreement as they may reasonably
request.
3.1C. Representations and Warranties; Compliance and
Certificates. (i) The representations and warranties contained in
paragraph 8 shall be true on and as of the Closing Date after
giving effect to the issue and sale of the Notes (and application
of the proceeds as contemplated by Schedule 5J); no Default or
Event of Default shall have occurred or be continuing; and the
Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or
complied with by it at or prior to the Closing. Neither the
Company nor any Restricted Subsidiary shall have entered into any
transaction since the date of the most recent of the Financial
Statements that would have been prohibited by paragraphs 6B or
6C(5) had this Agreement been in effect since such date; and the
Company shall have delivered to the Purchasers an Officers'
Certificate in the form of Exhibit E, dated the Closing Date,
certifying that the conditions in this paragraph 3C have been met
and as to the matters set forth therein.
(ii) The Company and its Material Restricted Subsidiaries
shall have each delivered to the Purchasers a certificate from its
Secretary in the form of Exhibit F certifying as to its corporate
organizational documentation and the resolutions and other
corporate proceedings relating to the authorization, execution and
delivery of the Transaction Documents to which it is a party.
3.1D. Purchase Permitted by Applicable Laws. The
offering, issuance, purchase and sale of and payment for, the Notes
on the Closing Date on the terms and conditions of this Agreement
(including the use of the proceeds of such sale) shall be permitted
by the laws and regulations of each jurisdiction to which a
Purchaser is subject, without recourse to provisions (such as<PAGE>
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Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by life insurance companies without restriction
as to the character of the particular investment, shall not violate
any applicable law or governmental regulation (including, without
limitation, section 5 of the Securities Act or Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System) and
shall not subject any Purchaser to any tax, penalty, liability or
other condition adverse to it under or pursuant to any applicable
law or governmental regulation, and the Purchasers shall have
received such certificates or other evidence as to matters of fact
as they may reasonably request to enable them to determine whether
such purchase is so permitted.
3.1E. Private Placement Numbers. A Private Placement
Number shall have been assigned to each class of Notes by Standard
& Poor's CUSIP Service Bureau.
3.1F. [Intentionally Omitted]
3.1G. Sale of all Notes. The Company shall have sold to
each other Purchaser, and each other Purchaser shall have
purchased, the Notes to be purchased by it as set forth in Exhibit
A.
3.1H. Charter and Proceedings. All corporate and other
proceedings taken or to be taken in connection with the
transactions contemplated by this Agreement and all documents and
transactions incident thereto shall be satisfactory in substance
and form to the Purchasers, and the Purchasers shall have received
all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
3.1I. Consent of Other Persons. The Company shall have
received the written consent of all Persons whose consent is
necessary for the transactions contemplated by this Agreement
satisfactory in form and substance to the Purchasers.
3.1J. Payment of Special Counsel Fees. Without limiting
the provisions of paragraph 11B, the Company shall have paid the
reasonable fees, charges and disbursements of Special Counsel
(which may include a reasonable reserve for anticipated fees and
expenses) to the extent reflected in a statement of Special Counsel
rendered to the Company at or before the Closing.
3.1K. Changes in Corporate Structure. The Company shall
not have changed its jurisdiction of incorporation or shall have
been a party to any merger or consolidation or shall have succeeded
to all or any substantial part of the liabilities of any other
Person, at any time after the date of the most recent of the
Financial Statements.
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3.1L. Restricted Subsidiaries' Guaranty. Each Restricted
Subsidiary other than the Pledged Restricted Subsidiaries shall
have executed and delivered to the Purchasers the Guaranty in the
form of Exhibit G (the "Restricted Subsidiaries' Guaranty") and
such Guaranty shall be in full force and effect and the Purchasers
shall have received such confirmation thereof (which may include an
opinion of counsel) as they may reasonably request.
3.1M. Pledge of Equity Interest. The Company and any
Restricted Subsidiary owning Equity Interests in any Pledged
Restricted Subsidiary shall have pledged such Equity Interest for
the benefit of the Holders pursuant to the Pledge Agreement and the
Pledge Agreement shall be in full force and effect and the
Purchasers shall have received such confirmation thereof (which may
include an opinion of counsel) as they may reasonably request.
4. PREPAYMENT, REPAYMENT AND REDEMPTION. The Notes may be
prepaid only under the circumstances set forth in paragraph 4A and
shall be repaid in accordance with paragraph 4C and upon any
acceleration of final maturity as provided in paragraph 7A.
4.1A. Optional Prepayment of Notes at Any Time. The
Company may prepay the Notes in full at any time or in part from
time to time (provided that any partial prepayment shall be of at
least $1,000,000 in aggregate principal amount or a larger
principal amount which is an integral multiple of $500,000), at
100% of the principal amount so prepaid, plus interest accrued
thereon to the Settlement Date and the Make Whole Amount.
4.1B. Notice of Optional Prepayment. The Company shall
give each Holder irrevocable written notice of any prepayment to be
made pursuant to paragraph 4A at least 30 days, and not more than
60 days, prior to the Settlement Date, (i) specifying the
Settlement Date and the Called Principal of the Notes held by each
such Holder, (ii) stating that such prepayment is to be made
pursuant to paragraph 4A and (iii) providing an estimate of the
Make Whole Amount payable on the Called Principal of such Holder's
Notes (calculated as if the date of such notice were the date of
prepayment) and setting forth the details of such computation.
Upon the giving of such notice, the Called Principal of the Notes,
together with interest accrued thereon to the Settlement Date and
the Make Whole Amount, shall become due and payable on the
Settlement Date. Not later than the close of business on the
second Business Day prior to the Settlement Date, the Company shall
deliver to the Holder of each Note being prepaid, an Officers'
Certificate setting forth in detail the calculations used in
determining whether a Make Whole Amount is payable on such
prepayment and the amount of such Make Whole Amount.
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4.1C. Scheduled Repayment of Notes. The Company shall (i)
on each February 20th beginning February 20, 2001, repay
$4,000,000 of the aggregate unpaid principal amount of the 8.10%
Notes and on February 20, 2005, shall repay in full all unpaid
principal of the 8.10% Notes, and (ii) on each February 20th
beginning February 20, 2001, repay $1,200,000 of the aggregate
unpaid principal amount of the 8.01% Notes and on February 20,
2005, shall repay in full all unpaid principal of the 8.01% Notes;
in each case at 100% of the principal amount so repaid.
4.1D. Payments Pro Rata; Application of Payments. Upon
any partial prepayment of a class of the Notes pursuant to
paragraph 4A and any scheduled repayment of a class of the Notes
pursuant to paragraph 4C, the principal amount so prepaid or repaid
plus the interest accrued thereon and the Make Whole Amount shall
be allocated to the class of Notes to which such prepayment or
repayment applies, and within such class, among the Holders of the
Notes of such class in proportion to the respective outstanding
principal amounts of the Notes of such class held by them. All
partial prepayments of a class of Notes shall be applied to the
obligations of the Company to make the scheduled payments on such
class of Notes required by paragraph 4C, by reducing each
subsequently required repayment of principal of Notes of such class
in the same proportion as the aggregate unpaid principal amount of
the Notes of such class is reduced as a result of such prepayment.
4.1E. Retirement of Notes. The Company shall not, and
shall not permit any of its Affiliates to, prepay or otherwise
retire any Note in whole or in part, prior to its stated maturity
(other than by prepayment pursuant to paragraph 4A, scheduled
repayment pursuant to paragraph 4C or upon acceleration of final
maturity pursuant to paragraph 7A), or purchase or otherwise
acquire, directly or indirectly, any Note held by any Holder unless
the Company or such Affiliate shall have offered to prepay or
otherwise retire, purchase, redeem or otherwise acquire, as the
case may be, the same proportion of the aggregate outstanding
principal amount of Notes held by each other Holder at the time
outstanding upon the same terms and conditions. Any such offer
shall provide each Holder with sufficient information to enable it
to make an informed decision with respect to such offer, and shall
remain open for at least 5 Business Days. If the Required Holders
accept such offer, the Company shall promptly notify the remaining
Holders of such fact and the expiration date for the acceptance by
Holders of such offer shall be extended by the number of days
necessary to give each such Holder at least 5 Business Days from
its receipt of such notice to accept such offer. No Notes so
prepaid or otherwise retired or purchased or otherwise acquired by
the Company or any of its Affiliates shall thereafter be reissued
or deemed to be outstanding for any purpose under this Agreement.
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4.1F. Make Whole Amount. The Company acknowledges that
the Make Whole Amount due at any optional or required prepayment of
Notes (including any prepayment required pursuant to any provision
of this paragraph 4 or paragraph 7A) has been negotiated with the
Purchasers to provide a bargained for rate of return on the
Purchasers' investment in the Notes and is not a penalty.
5. AFFIRMATIVE COVENANTS.
5.1A. Financial and Other Reporting by the Company. The
Company will deliver to each Holder:
(i) as soon as practicable, and in any event not more
than 60 days after the end of each quarter (except the fourth
quarter), the unaudited consolidated and consolidating balance
sheet of the Consolidated Group as at the end of such quarterly
period and the related unaudited consolidated and consolidating
statements of operations, cash flows and stockholders' equity of
the Consolidated Group for such period and for the fiscal year to
date, setting forth, in each case in comparative form, figures for
the corresponding period(s) in the preceding fiscal year, all in
reasonable detail and in accordance with GAAP (except that the
consolidating statements may be presented for the Restricted
Subsidiaries and the Unrestricted Subsidiaries as two groups rather
than individually for each Subsidiary), and certified by the chief
accounting officer or chief financial officer of the Company as
fairly presenting the financial condition of the Consolidated Group
as at the dates indicated and the results of its operations and
cash flows, in each case for the periods indicated, in conformity
with GAAP (except as disclosed in such certificate) with any
changes in accounting policies discussed in reasonable detail,
subject to changes resulting from normal year-end adjustments;
(ii) as soon as practicable, and in any event not more
than 120 days, after the end of each fiscal year of the Company,
the consolidated and consolidating balance sheet of the
Consolidated Group as of the end of such year and the related
consolidated and consolidating statements of operations, cash flows
and stockholders' equity of the Consolidated Group for such year,
and setting forth in each case in comparative form, corresponding
figures for the preceding fiscal year, all in reasonable detail and
in accordance with GAAP (except that the consolidating statements
may be presented for the Restricted Subsidiaries and the
Unrestricted Subsidiaries as two groups rather than individually
for each Subsidiary), and accompanied by an opinion thereon of the
Approved Auditor, which opinion shall be without limitation as to
the scope of the audit and shall state that such financial
statements present fairly in all material respects the consolidated
financial condition of the Consolidated Group as at the dates
indicated and the results of their consolidated operations and cash
flows for the periods indicated in conformity with GAAP (except as
otherwise specified in such report) and that the audit by such<PAGE>
<PAGE>
accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards and
provides a reasonable basis for such opinion;
(iii) together with each delivery of financial
statements of the Consolidated Group pursuant to subparagraphs (i)
and (ii) of this paragraph 5A, a certificate of the chief financial
officer of the Company (a) stating that the signer has reviewed the
terms of the Transaction Documents and has made, or caused to be
made under the signer's supervision, a review in reasonable detail
of the transactions and condition of the Consolidated Group during
the fiscal period covered by such financial statements and that
such review has not disclosed the existence during or at the end of
such fiscal period, and that after reasonable investigation the
signer has no knowledge of the existence as at the date of such
certificate, of any condition or event which constitutes a Default
or Event of Default or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and
what action the Company has taken or is taking or proposes to take
with respect thereto and (b) demonstrating (if applicable, with
computations in reasonable detail) compliance by the Company with
the provisions of paragraphs 6A, 6B and 6C(3)(v), and (c) if not
specified in the accompanying financial statements, specifying the
aggregate amount of interest paid or accrued by the Consolidated
Group and the aggregate amount of depreciation, depletion and
amortization charged on the books of the Consolidated Group and (d)
identifying the names of each Subsidiary of the Company included in
such financial information, whether each such Subsidiary is a
Restricted Subsidiary or an Unrestricted Subsidiary and whether
each such Subsidiary is a Material Subsidiary;
(iv) promptly after receipt thereof by the Company,
copies of all material reports submitted to the Company by
independent public accountants or consultants in connection with
each annual, interim or special audit of the books of the
Consolidated Group;
(v) promptly after any Senior Officer obtains actual
knowledge (a) that a condition or event exists that constitutes a
Default or Event of Default, (b) that any Holder has given notice
to the Company or taken any other action with respect to a claimed
Default or Event of Default under this Agreement, (c) of any
condition or event peculiar to the Company or any Restricted
Subsidiary which is reasonably expected to have a Material Adverse
Effect, or (d) that any Person has given any notice to the Company
or any Restricted Subsidiary or taken any other action with respect
to a claimed default or event or condition of the type referred to
in subparagraph (iii) of paragraph 7A, an Officers' Certificate
specifying the nature and period of existence of any such condition
or event, or specifying the notice given or action taken by such<PAGE>
<PAGE>
Holder or Person and the nature of such claimed Default, Event of
Default, event or condition, and what action the Company has taken,
is taking or proposes to take with respect thereto;
(vi) promptly, and in any event within 5 days after any
Senior Officer obtains knowledge of any of the following, a written
notice setting forth the nature thereof and the action, if any,
that the Company or any ERISA Affiliate proposes to take with
respect thereto:
(a) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived pursuant
to such regulations as in effect on the date hereof; or
(b) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt by
the Company or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or
(c) any event, transaction or condition that could
result in the incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty
or excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions,
if such liability or Lien, taken together with any other such
liabilities or Liens then existing, is reasonably expected to have
a Material Adverse Effect;
(vii) if at any time the Company or any Restricted
Subsidiary shall have public stockholders or debtholders, (a)
promptly after transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as the Company or
such Restricted Subsidiary shall send or make available to such
stockholders or debtholders and copies of all registration
statements (with exhibits), prospectuses and all periodic reports
which it files with the SEC or any stock exchange and of all press
releases and other statements made available generally by the
Company or any Restricted Subsidiary to the public concerning
material developments and (b) promptly after receipt thereof,
copies of any reports, statements and notices the Company or such
Restricted Subsidiary may receive in accordance with Section 13(d)
or 14(d) of the Exchange Act or the rules and regulations of any
stock exchange;
<PAGE>
<PAGE>
(viii) promptly after transmission thereof, copies of
all such financial statements, notices, certificates and reports as
the Company or any Restricted Subsidiary shall send to any other
lender or group of lenders, if the aggregate amount of Debt
outstanding by the Consolidated Group to such lender or group of
lenders exceeds $5,000,000; and
(ix) with reasonable promptness, such other information
and data with respect to the Consolidated Group or the Company or
any Restricted Subsidiary or relating to the ability of the Company
or such Restricted Subsidiary to perform its obligations under the
Transaction Documents as may from time to time be reasonably
requested by any Holder.
5.1B. Information Required by Rule 144A. The Company
will, upon the request of any Holder, provide to such Holder, and
any Qualified Institutional Buyer designated by such Holder, such
financial and other information as such Holder may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A in connection with a resale
or proposed resale of any Note.
5.1C. Inspection of Property. The Company and each
Restricted Subsidiary will permit any Holder who is an
Institutional Investor and any person designated by such Holder, at
any time at such Holder's expense (unless such inspection shall be
made during the continuance of a Default or after the occurrence of
an Event of Default, in which event the reasonable expense of such
inspection shall be borne by the Company), during normal business
hours and upon reasonable prior notice to the Company to visit and
inspect any of its properties, to examine its corporate books and
financial records and make copies thereof or extracts therefrom and
to discuss its affairs, finances and accounts with any Senior
Officer and (prior to the occurrence and continuation of a Default
or Event of Default, upon consent of the Company (which consent
shall not be unreasonably withheld), and during the continuation of
a Default or after the occurrence of an Event of Default without
the consent of the Company), its independent public accountants
(and by this provision the Company authorizes such accountants to
discuss with any Person so designated its and its Subsidiaries'
affairs, finances and accounts).
5.1D. Corporate Existence, Etc. Except as otherwise
specifically permitted by this Agreement, the Company and each
Material Restricted Subsidiary will at all times preserve and keep
in full force and effect its corporate existence, and rights and
franchises material to its business, and qualify and maintain its
qualification to do business and good standing in any jurisdiction
where the failure to do so individually or in the aggregate would
have a Material Adverse Effect.
<PAGE>
<PAGE>
5.1E. Payment of Taxes and Claims. (i) The Company and
each Restricted Subsidiary will file all Tax returns required to be
filed in any jurisdiction and pay all Taxes shown to be due and
payable on such returns and all other Taxes imposed upon it or any
of its properties or assets or in respect of any of its franchises,
business, income, sales and services, or profits when the same
become due and payable, but in any event before any penalty or
interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for
sums which have become due and payable and which have or might
become a Lien upon any of its properties or assets, provided, that
no such Tax or claim need be paid if (a) it is being contested in
good faith by appropriate proceedings promptly initiated and
diligently conducted and if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been
made therefor, and (b) the failure to pay such Tax or claim is not
reasonably expected, if such contest were adversely determined, to
have a Material Adverse Effect.
(ii) Neither the Company nor any Restricted Subsidiary
will consent to or permit the filing of or be a party to any
consolidated income tax return on its behalf with any Person (other
than a consolidated return that includes solely the Consolidated
Group).
5.1F. Compliance with Laws, Etc. The Company and each
Restricted Subsidiary will comply with the requirements of all
applicable laws, rules, regulations and orders of any Governmental
Authority (including, without limitation, the Occupational Safety
and Health Act of 1970, as amended, ERISA and any Environmental
Laws), and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its properties or to
the conduct of its businesses, in each case to the extent necessary
to reasonably ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failure to obtain or
maintain in effect such licenses, permits, franchises and other
governmental authorizations do not, and are not reasonably expected
to, individually and in the aggregate, have a Material Adverse
Effect.
5.1G. Maintenance of Properties and Leases. The Company
and each Restricted Subsidiary will (i) maintain, in good repair
and working order and condition (other than ordinary wear and tear)
all their properties so that the business carried on in connection
therewith may be properly conducted at all times and from time to
time make or cause to be made all appropriate repairs, renewals,
replacements, additions and improvements thereof as needed,
provided that this paragraph 5G shall not prevent the Company or
any Restricted Subsidiary from discontinuing the operation or
maintenance of any of its properties if such discontinuance is<PAGE>
<PAGE>
desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect, and (ii) comply in all material respects with the
provisions of all leases or licenses under which it leases or
licenses any such properties to the extent necessary to reasonably
ensure that any such non-compliance with such leases or licenses
will not have a Material Adverse Effect.
5.1H. Insurance. Except as set forth on Schedule 5H, the
Company and each Restricted Subsidiary will maintain, with
financially sound and reputable insurers, rated at least A or A+ by
A.M. Best, insurance with respect to its properties and business of
such types and in such forms and amounts (including deductibles,
co-insurance and self-insurance if adequate reserves are maintained
with respect thereto) and against such risks as is reasonable and
prudent in the circumstances and as are customarily insured against
by Persons of established reputation engaged in the same or similar
business and similarly situated. Within thirty (30) days after the
date of this Agreement, all insurance maintained by the Company and
each Restricted Subsidiary will be maintained with financially
sound and reputable insurers rated A or A+ by A.M. Best.
5.1I. Scope of Business. Neither the Company nor any
Restricted Subsidiary will engage to a substantial extent in any
business other than the diagnostic imaging business described in
the Memorandum and businesses reasonably related thereto or in
furtherance thereof.
5.1J. Use of Proceeds. The Company will use the proceeds
of the sale of the Notes only as designated on Schedule 5J and not
for any purpose which would violate any applicable law or
governmental regulation or which is otherwise prohibited under
paragraph 8J.
5.1K. Environmental Compliance. The Company and each
Restricted Subsidiary will (i) obtain and maintain all permits,
licenses, and other authorizations that are required of it under
all Environmental Laws other than those which the failure to obtain
or maintain individually or in the aggregate do not have, and are
not reasonably expected to have in the future, a Material Adverse
Effect, and (ii) comply with all terms and conditions of all such
permits, licenses, and authorizations and with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in
all Environmental Laws or in any regulation, ordinance or code
applicable to the Company or such Restricted Subsidiary and any,
plan, order, decree, judgment, injunction, notice, or demand letter
issued, entered, promulgated, or approved thereunder directly
applicable to the Company or such Restricted Subsidiary, except to
the extent of any noncompliance which, individually or in the<PAGE>
<PAGE>
aggregate, does not, and is not reasonably expected to, have a
Material Adverse Effect, and (iii) operate all property owned or
leased by it such that no claim or obligation, including a clean-up
obligation, which individually and in the aggregate with all such
other obligations has, or is reasonably expected to have, a
Material Adverse Effect, shall arise under any Environmental Law,
and if any claim is made against it or any such obligation shall
arise under any Environmental Law, it shall at its own cost and
expense, timely satisfy such claim or obligation, provided no such
claim or obligation need be satisfied for so long as (a) it is
being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and (b) such reserves or other
appropriate provision, if any, as shall be required by GAAP shall
have been made therefor.
5.1L Maintenance of Books and Records. The Company and each
Restricted Subsidiary will: (i) keep proper records and books of
account with respect to its business activities in which proper
entries are made in the ordinary course of all dealings or
transactions of or in relation to its business and affairs; (ii)
set up on its books adequate reserves with respect to all Taxes,
assessments, charges, levies and claims; and (iii) set up on its
books reserves against doubtful accounts receivable, advances and
all other proper reserves (including reserves for depreciation,
obsolescence or amortization of its property). All determinations
pursuant to this paragraph 5L shall be made in accordance with, or
as required by, GAAP in order to fairly reflect all of the
Consolidated Group's financial transactions. Notwithstanding the
foregoing, the Company and its Restricted Subsidiaries may make
adjustments and changes in the manner in which their books and
records are kept, provided, that:
(i) all such adjustments and changes shall be
required or permitted by GAAP, but need not conform with the prior
accounting practice of the Company or such Restricted Subsidiary or
its predecessor;
(ii) each Holder shall be given written notice of
all such changes or adjustments together with the financial
statements required by paragraph 5A(i) for the quarter in which
such change occurred, and together with the financial statements
required by paragraph 5A(ii), a year-end listing and description of
all such changes and adjustments and the effect thereof by the
chief financial officer of the Company; and
(iii) the financial covenants and ratios set
forth in paragraph 6A shall continue to be calculated without
regard to such adjustments or changes unless and until the Required
Holders have consented thereto, which consent shall not be
unreasonably withheld or delayed and which shall be deemed granted
if not objected to in writing by the Required Holders within 30<PAGE>
<PAGE>
days notice is given by the Company with respect to such change
pursuant to subparagraph (ii) above.
5.1M. Delivery of Guaranty and Pledge. Promptly upon, and
in any event within 10 Business Days of, the Company acquiring any
Restricted Subsidiary, such Restricted Subsidiary shall become a
party to the Restricted Subsidiaries' Guaranty; provided, if the
Company acquires a Restricted Subsidiary which is not a Wholly-
Owned Subsidiary, the Company may, in lieu of such Restricted
Subsidiary becoming a party to the Restricted Subsidiaries'
Guaranty, pledge, or caused to be pledged, any Equity Interest it
or any of its other Restricted Subsidiaries has in such Subsidiary
for the benefit of the Holders pursuant to the terms of the Pledge
Agreement. Promptly, upon and in any event within 10 Business Days
of, any Pledged Restricted Subsidiary becoming a Wholly-Owned
Restricted Subsidiary, it shall also become a party to the
Restricted Subsidiaries' Guaranty. In either case, the Company
shall provide to the Holders evidence satisfactory to the Required
Holders (which, upon the request of the Required Holders, shall
include an opinion of counsel) that the Restricted Subsidiaries'
Guaranty and/or the Pledge Agreement remains in full force and
effect and is enforceable against such Restricted Subsidiary in
accordance with its terms. Upon delivery of such evidence in the
case of a Pledged Restricted Subsidiary becoming a party to the
Restricted Subsidiaries' Guaranty, each Holder shall promptly
deliver to the Collateral Agent under the Pledge Agreement, its
written consent to the release from the Pledge Agreement of the
Equity Interest of such Restricted Subsidiary.
6. NEGATIVE COVENANTS.
6.1A. Financial Covenants.
6.1A.(1) Consolidated Net Worth. Consolidated Net Worth
shall not, as of the last day of any fiscal quarter ending on or
after the Closing Date, be less than $75,000,000 plus an amount
equal to the sum of 50% of Consolidated Net Income for each fiscal
year ended on or after the Closing Date (other than any fiscal year
in which Consolidated Net Income for such year was a loss).
6.1A(2) Interest Expense Coverage. As of the last day
of any fiscal quarter ending on or after the Closing Date, the
ratio of (a) Consolidated EBITA to (b) Consolidated Interest
Expense, for the four most recently ended fiscal quarters taken as
a single accounting period, shall not be less than 2.50 to 1.00.
6.1A.(3) Limitation on Consolidated Total Debt. The
Company and the Restricted Subsidiaries shall not incur, create,
issue, assume, guarantee or otherwise become liable in respect of
any Debt after the Closing Date unless (i) no Default or Event of
Default exists immediately before or immediately after the
incurrence of such Debt or would otherwise reasonably be expected<PAGE>
<PAGE>
to result therefrom; and (ii) immediately after the incurrence of
such Debt, Total Debt does not exceed 52.5% of Consolidated Total
Capitalization determined as of the most recent fiscal quarter end
or, if such Debt is Acquisition Debt, determined by reference to
the Pro Forma Financial Statements delivered in connection with the
relevant Acquisition.
For the purposes of this paragraph 6A(3): (i) the
outstanding Debt of any Person who becomes a Restricted Subsidiary
after the Closing Date shall be deemed to have been incurred at the
time it becomes a Restricted Subsidiary; (ii) if any outstanding
Debt of the Company owned by a Restricted Subsidiary or any
outstanding Debt of a Restricted Subsidiary owned by the Company or
another Restricted Subsidiary is sold or otherwise transferred to
a Person who is not the Company or a Restricted Subsidiary, such
Debt shall be deemed to have been incurred on the date of such sale
or transfer; and (iii) any Debt which is extended, renewed or
refunded after the Closing Date shall be deemed incurred on the
date of such extension, renewal or refunding.
6.1A.(4) Limitation on Priority Debt. The Company and
the Restricted Subsidiaries shall not incur, create, issue, assume,
guarantee or otherwise become liable in respect of any Priority
Debt after the Closing Date unless (i) no Default or Event of
Default exists immediately before or immediately after the
incurrence of such Priority Debt or would otherwise reasonably be
anticipated to result therefrom; and (ii) immediately after the
incurrence of such Priority Debt, the aggregate amount of Priority
Debt of the Company and its Restricted Subsidiaries, does not,
prior to June 30, 1998, exceed 24.5% of Consolidated Net Worth as of
the most recent fiscal quarter end, from June 30, 1998 to
February 1, 1999, exceed 22% of Consolidated Net Worth as of the
most recent fiscal quarter end and, thereafter, exceed 20% of
Consolidated Net Worth, as of the then most recent fiscal quarter
end or, if such Priority Debt is Acquisition Debt, determined by
reference to the Pro Forma Financial Statements delivered in
connection with the relevant Acquisition.
For the purposes of this paragraph 6A(4): (i) the
outstanding Priority Debt of any Person who becomes a Restricted
Subsidiary after the Closing Date shall be deemed to have been
incurred at the time it becomes a Restricted Subsidiary; (ii) if
any outstanding Priority Debt of the Company owned by a Restricted
Subsidiary or any outstanding Priority Debt of a Restricted
Subsidiary owned by the Company or another Restricted Subsidiary is
sold or otherwise transferred to a Person who is not the Company or
a Restricted Subsidiary, such Priority Debt shall be deemed to have
been incurred on the date of such sale or transfer; and (iii) any
Priority Debt which is extended, renewed or refunded after the
Closing Date shall be deemed incurred on the date of such
extension, renewal or refunding.
<PAGE>
<PAGE>
6.1B. Restricted Payments and Restricted Investment. The
Company and the Restricted Subsidiaries shall not make, declare or
incur any liability to make any Restricted Payments or any
Restricted Investment after the Closing Date other than (i)
Restricted Investments in Unrestricted Subsidiaries not exceeding
$2,500,000 in the aggregate, and (ii) any other Restricted Payment
or Restricted Investment if immediately after giving effect
thereto, the aggregate amount of all Restricted Payments made or
declared by the Company and its Restricted Subsidiaries since
December 31, 1995 plus the aggregate value of all Restricted
Investments at such time (including those made pursuant to clause
(i) above) does not exceed the sum of (a) $10,000,000 plus (b) 50%
of Consolidated Net Income for each full fiscal year ended after
December 31, 1995 (or if Consolidated Net Income for any such year
is a loss, then 100% of Consolidated Net Income for such year,
expressed as a negative number) plus (c) the Net Proceeds of
Eligible Capital Stock received by the Company after December 31,
1996; provided, in either case, no Event of Default or Default
exists immediately before or immediately after making or declaring
such Restricted Payment or Restricted Investment or would otherwise
be reasonably expected to result therefrom.
For the purpose of this paragraph 6B, the value of a
Restricted Investment which constitutes a liability (contingent or
otherwise) shall be the maximum amount of such liability.
6.1C. Liens and Other Restrictions. The Company and the
Restricted Subsidiaries shall not:
6.1C.(1) Liens. Create, assume or suffer to exist any
Lien on its properties or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom or proceeds of
dispositions thereof, or transfer any property for the purpose of
subjecting the same to the payment of obligations in priority to
the payment of its general creditors without equally and ratably
securing the Notes, except for:
(i) Liens, and other charges incidental to the
conduct of its business, or the ownership of its property
(including charges for Taxes or otherwise arising by operation of
law, mechanics', carriers', workers', repairmen's, warehousers' or
other similar Liens), which are not incurred in connection with the
borrowing of money or the securing of Debt, provided that, in each
case, the obligation secured is not overdue or is being contested
in good faith by appropriate actions or procedures promptly
instituted and diligently conducted and such reserves as shall be
required by GAAP shall have been made therefor, but only so long as
no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto (unless the same shall have been
fully bonded or otherwise effectively stayed);
<PAGE>
<PAGE>
(ii) Liens arising as a result of any judicial
proceedings with respect to which the Company or such Restricted
Subsidiary shall then, in good faith and by appropriate actions and
procedures promptly instituted and diligently conducted, be
prosecuting appeal or other proceedings for review and Liens
arising from judgments or decrees not constituting a Default or
Event of Default unless, in either case, such Lien remains
undischarged, unstayed pending appeal, unbonded or undismissed for
a period of 60 consecutive days and provided, in either case, such
reserves as shall be required by GAAP shall have been made therefor
and such Liens in the aggregate do not have a Material Adverse
Effect;
(iii) deposits or pledges to secure worker's
compensation, unemployment insurance, old age benefits or other
social security obligations or retirement benefits;
(iv) Liens arising out of deposits in connection
with, or given to secure the performance of, bids, tenders, trade
contracts not for the payment of money, or leases, or to secure
statutory obligations or surety or appeal bonds, performance bonds
or other pledges or deposits for purposes of like nature in the
ordinary course of business but only so long as no foreclosure,
distraint, sale or similar proceedings have been commenced with
respect thereto (unless the same shall have been fully bonded or
otherwise effectively stayed);
(v) minor survey exceptions or encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, which are necessary
for the conduct of its activities or which customarily exist on
properties of Persons engaged in similar activities and similarly
situated and which do not in the aggregate have a Material Adverse
Effect or materially impair the use of such real properties in the
operation of its business;
(vi) Liens on any properties or assets of a
Restricted Subsidiary in favor of the Company or a Wholly-Owned
Restricted Subsidiary and Liens, if any, securing the Notes;
(vii) Liens existing as of the Closing and set forth
on Schedule 6C(1);
(viii) Liens securing Priority Debt incurred after
the Closing Date if the Priority Debt secured thereby is not
otherwise prohibited by paragraph 6A(4);
(ix) Liens on property acquired, constructed or
improved by it after the Closing Date; provided, that each such
Lien (a) is confined solely to the property so acquired,
improvements thereto and proceeds thereof, (b) secures only the<PAGE>
<PAGE>
purchase price for, or cost of construction or improvements of,
such property and the Debt secured by such Lien does not exceed the
lesser of the fair market value or the purchase price or cost of
construction or improvement, (c) the Debt secured by such Lien is
incurred at the time of the acquisition, construction or
improvement or within 180 days following such date, (d) no Event of
Default or Default exists immediately before or immediately after
the creation of such Lien or would otherwise reasonably be
anticipated to result therefrom and (e) after giving effect
thereto, the financial tests set forth in paragraph 6A, calculated
on the basis of the most recently available financial information,
would be satisfied;
(x) Liens on the assets of any Person (other than
the Company or an existing Subsidiary) existing at the time such
assets are acquired by it whether by merger, consolidation,
purchase of assets or otherwise so long as such (a) Liens are not
created, incurred or assumed in contemplation of such assets being
acquired by it; (b) no Default or Event of Default exists
immediately before or immediately after the incurrence of such
Liens or could reasonably be anticipated to result therefrom; (c)
after giving effect to such acquisition and the Debt secured by
such Lien, the financial tests set forth in paragraph 6A,
calculated on the basis of the most recently available financial
information, would be satisfied, and (d) such Liens do not extend
to any other assets of the Consolidated Group;
(xi) any Lien resulting from renewing, extending or
refinancing any Liens permitted by clauses (vi), (vii), (ix)or (x)
above, provided that (a) the principal amount of the Debt secured
thereby is not increased or the maturity thereof accelerated, (b)
such Lien does not extend to any other property, and (c)
immediately after such extension, renewal or refunding, no Default
or Event of Default would exist or would be reasonably anticipated
to result therefrom; and
(xii) Liens securing other Debt of the Company if
(a) such Debt is pari passu with the Notes, (b) such Debt is not
otherwise prohibited by paragraph 6A(3), and (c) the Notes are
ratably secured thereby.
6.1C.(2) Sale of Stock. No Restricted Subsidiary shall
issue, sell or otherwise dispose of, or part with control of, any
of its own Equity Interest (other than directors' qualifying
shares) either directly or indirectly by the issuance of rights,
options for securities convertible into or exchangeable for its
Equity Interest and neither the Company nor any Restricted
Subsidiary shall sell, transfer or otherwise dispose of any
outstanding Equity Interest of another Restricted Subsidiary other
than: (i) to the Company or a Wholly-Owned Restricted Subsidiary;
or (ii) if in connection with such sale, transfer or other<PAGE>
<PAGE>
disposition, the entire Investment (whether represented by Equity
Interest, Debt, claims or otherwise) of the Company and its
Restricted Subsidiaries in such Restricted Subsidiary is sold,
transferred or otherwise disposed of to a Person other than another
Member or an Affiliate, and the Restricted Subsidiary being
disposed of has no continuing Investment in any other Restricted
Subsidiary not being simultaneously disposed of or in the Company.
6.1C.(3) Merger and Sale of Assets. Merge or consolidate
with any other Person or sell, lease or transfer or otherwise
dispose of its respective assets to any Person or Persons, except
that:
(i) any Restricted Subsidiary may merge or
consolidate with or sell, lease, transfer or otherwise dispose of
all or any of its assets to the Company or a Wholly-Owned
Restricted Subsidiary (provided, that the Company or such Wholly-
Owned Restricted Subsidiary shall be the continuing or surviving
corporation in the case of a merger or consolidation and, in any
case, the acquiring or surviving entity is a corporation organized
under the laws of, and having its principal place of business in,
a state of the United States of America or the District of
Columbia) and upon any such sale, transfer or other disposition,
such Restricted Subsidiary may liquidate and dissolve;
(ii) the Company may merge or consolidate with any
other corporation or limited partnership; provided, that (a) the
Company shall be the continuing or surviving corporation or limited
partnership, or (b) the successor or acquiring corporation (1)
shall be a solvent corporation or limited partnership organized
under the laws of any state of the United States of America or the
District of Columbia; (2) shall expressly assume in writing all of
the obligations and covenants of the Company under the Transaction
Documents; and (3) shall provide the Holders the written opinion of
counsel satisfactory in form and substance to the Holders
confirming that the assumption of such obligations by such
corporation or limited partnership is duly authorized and
constitutes the legal, valid and binding obligation of such
corporation or limited partnership, enforceable (subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity regardless of whether enforcement is
sought in a proceeding in equity or at law) against such
corporation or limited partnership in accordance with its terms,
provided, that in either case, immediately after and giving effect
thereto, on a pro forma basis, based on the most recently available
financial information, the financial tests set forth in paragraph
6A would be satisfied;
(iii) the Company and any Restricted Subsidiary may
sell or lease, as lessor, inventory in the ordinary course of its
business;<PAGE>
<PAGE>
(iv) the Company and any Restricted Subsidiary may
dispose of equipment or other assets which have become obsolete or
otherwise no longer useful or required for the conduct of its
business, provided such dispositions do not, individually or in the
aggregate, constitute a liquidation of all or substantially all of
the Company's or any Material Restricted Subsidiary's assets; and
(v) in addition to the matters set forth in
subparagraph (iii) and subparagraph (iv) above, the Company and any
Restricted Subsidiary may sell, transfer or otherwise dispose of
some or all of its respective properties or assets in a transaction
not otherwise permitted pursuant to this paragraph 6C(3) for fair
and adequate consideration (a "Disposition") and if such
Disposition is a Disposition of all or substantially all of the
assets of a Restricted Subsidiary, such Restricted Subsidiary may
thereafter liquidate and dissolve; provided, that immediately after
and giving effect to any such Disposition, the greater of (a)
aggregate book value of each property and asset so sold (each an
"Asset Sold" and collectively, the "Assets Sold"), as reflected on
the most recent consolidated balance sheet of the Consolidated
Group furnished to the Holders pursuant to paragraph 5A prior to
the date of Disposition of such Asset Sold, or (b) the aggregate
net proceeds (with any non-cash proceeds being valued at its fair
market value) of the Assets Sold (1) during the immediately
preceding twelve months, less the aggregate amount of Qualifying
Reinvestments, did not exceed more than 15% of Consolidated Total
Assets as reflected on the most recent consolidated balance sheet
of the Consolidated Group delivered to the Holders pursuant to
paragraph 5A or (2) since the Closing Date, less the aggregate
amount of Qualifying Reinvestments, did not exceed more than 30% of
Consolidated Total Assets as reflected on the most recent
consolidated balance sheet of the Consolidated Group delivered to
the Holders pursuant to paragraph 5A;
provided, that, in each case other than the sale or lease of
inventory pursuant to subparagraph (iii) above or disposition of
assets pursuant to subparagraph (iv) above, no Default or Event of
Default exists immediately before or immediately after giving
effect to such sale, transfer or disposition of properties or
assets or such merger or consolidation nor would any Default or
Event of Default reasonably be expected to result therefrom and in
the case of a sale, transfer or other disposition of outstanding
Equity Interest of a Restricted Subsidiary pursuant to subparagraph
(v) above, such sale, transfer or other disposition otherwise
satisfies the requirements of paragraph 6C(2).
For purposes of subparagraph (v) of this paragraph 6C(3), a
"Qualifying Reinvestment" is the use of the proceeds, or of funds
expended in anticipation of the proceeds, of Assets Sold not more
than twelve months after the date of a Disposition, to (a) purchase
(x) assets usable in any business permitted to be conducted by
paragraph 5I, or (y) either (1) all of the outstanding capital<PAGE>
<PAGE>
stock or other equity interests of a Person which, immediately
after such purchase, is a Wholly-Owned Restricted Subsidiary of the
Company and is engaged in a business permitted to be conducted by
paragraph 5I, or (2) all or substantially all of the assets and
business of a Person which is engaged in any business permitted to
be conducted by paragraph 5I; provided, that if the Assets Sold are
subject to a Lien securing the Notes at the time of sale or other
disposition, the assets, equipment, real property, improvements,
capital stock or other equity interests purchased with the proceeds
of such Assets Sold shall not constitute Qualifying Reinvestments
unless promptly made subject to a Lien securing the Notes with the
same priority and otherwise substantially the same terms and
conditions as the Liens on the Assets Sold or (b) to make an
optional prepayment of the Notes pursuant to paragraph 4A(1) or to
prepay any other Debt ranking at least pari passu with the Notes.
6.1C.(4) Subsidiary Dividend and Other Restrictions.
Except for this Agreement, enter into, or be otherwise subject to,
any contract or agreement (including its charter) which limits the
amount of, or otherwise imposes restrictions on the payment of,
dividends by, or distributions on any securities of, any Subsidiary
of the Company.
6.1C.(5) Transactions with Affiliates. Except as set
forth on Schedule 6C(6), directly or indirectly, engage in any
transaction or group of transactions (including, without limita-
tion, the purchase, sale or exchange of assets or the payment of
salary, bonuses and other compensation for services rendered) with
any Affiliate, except in the ordinary course of business pursuant
to the reasonable requirements of its business and upon
commercially reasonable terms which are no less favorable to it
than those which might be obtained at arms' length with a Person
not an Affiliate.
6.1D. Compliance with ERISA. The Company, the Restricted
Subsidiaries and any ERISA Affiliate shall not:
(i) engage in any transaction in connection with which
the Company or any Restricted Subsidiary or any ERISA Affiliate
could be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Code, terminate or withdraw from any Plan (other than a
Multiemployer Plan) in a manner, or take any other action with
respect to any such Plan (including, without limitation, a
substantial cessation of business operations or an amendment of a
Plan within the meaning of Section 4041(e) of ERISA, which could
result in any liability to the PBGC, to a Plan, to a Plan
participant, to the Department of Labor or to a trustee appointed
under Section 4042(b) or (c) of ERISA), incur any liability to the
PBGC or a Plan on account of a withdrawal from or a termination of
a Plan under Section 4063 or 4064 of ERISA, incur any liability for<PAGE>
<PAGE>
post-retirement benefits under any and all welfare benefit plans
(as defined in Section 3(1) of ERISA), fail to make full payment
when due of all amounts which, under the provisions of any Plan or
applicable law, it is required to pay as contributions thereto, or
permit to exist any accumulated funding deficiency, whether or not
waived, with respect to any Plan (other than a Multiemployer Plan)
other than such penalties, taxes, liabilities, failures or
deficiencies which individually and in the aggregate do not, and
are not reasonably expected to have in the future, a Material
Adverse Effect;
(ii) at any time permit the termination of any
defined benefit pension plan intended to be qualified under Section
401(a) and Section 501(a) of the Code unless such plan is funded so
that the value of all benefit liabilities upon the termination date
does not exceed the then current value of all assets in such plan
by an amount the payment of which would have a Material Adverse
Effect; or
(iii) at any time permit the aggregate complete or
partial withdrawal liability under Title IV of ERISA with respect
to Multiemployer Plans incurred by the Consolidated Group and any
ERISA Affiliate, or the aggregate liability under Title IV of ERISA
incurred by the Consolidated Group and any ERISA Affiliate, to
exceed an amount the payment of which would have a Material Adverse
Effect.
For the purposes of subparagraph (iii) of this paragraph 6D, the
amount of the withdrawal liability of the Consolidated Group and
ERISA Affiliates at any date shall be the aggregate present value
of the amounts claimed to have been incurred less any portion
thereof as to which the Company reasonably believes, after
appropriate consideration of possible adjustments arising under
subtitle E of Title IV of ERISA, that neither the Company nor any
Restricted Subsidiary or ERISA Affiliate will have any liability,
provided, that the Company shall promptly obtain written advice
from independent actuarial consultants supporting such determina-
tion. The Company will (x) once in each calendar year, beginning
in 1997, request and obtain a current statement of withdrawal
liability from each Multiemployer Plan to which the Company or any
Restricted Subsidiary or any ERISA Affiliate is or has been
obligated to contribute and (y) transmit a copy of such statement
to each Holder, within 15 days after the Company receives the same.
As used in this paragraph 6D, the term "accumulated funding
deficiency" has the meaning specified in section 302 of ERISA and
section 412 of the Code, the terms "present value" and "current
value" have the meanings specified in section 3 of ERISA, the term
"benefit liabilities" has the meaning specified in section
4001(a)(16) of ERISA and the term "amount of unfunded liabilities"
has the meaning specified in section 4001(18) of ERISA.
<PAGE>
<PAGE>
7. EVENTS OF DEFAULT.
7.1A. Acceleration. If any of the following events shall
occur or conditions shall exist and be continuing for any reason
whatsoever, and whether such occurrence or condition shall be
voluntary or involuntary or come about or be effected by operation
of law or otherwise, such occurrence or condition and continuance
shall constitute an "Event of Default":
(i) the Company defaults in the payment of any
principal of any Note or Make Whole Amount when the same shall
become due and payable, whether by the terms thereof or otherwise
as provided by the terms of this Agreement; or
(ii) the Company defaults in the payment of interest
on any Note, whether by the terms thereof or otherwise as provided
by the terms of this Agreement and such default shall continue for
5 days after the same shall become due and payable; or
(iii) with respect to any Debt, other than the Debt
represented by the Notes, the Company or any Restricted Subsidiary
(a) defaults (whether as primary obligor or guarantor or surety) in
any payment of principal of, premium, if any, or interest on any
such Debt, the outstanding principal amount of which exceeds
$5,000,000 in the aggregate, beyond any period of grace provided
with respect thereto, or (b) fails to perform or observe any other
agreement, term or condition contained in any agreement under which
such Debt is created (or if any other event thereunder or under any
such agreement shall occur and be continuing) and the effect of
such default or other event is to cause, or to permit the holder or
holders of such Debt (or a trustee on behalf of such holder or
holders) to cause, such Debt to become due or to be required to be
redeemed or repurchased prior to any stated maturity or regularly
scheduled dates of payment, or (c) as a consequence of the
occurrence or continuation of any event or condition (other than
the passage of time or the right of the holder of Debt to convert
such Debt into equity interests), (x) the Company or any Restricted
Subsidiary has become obligated to purchase or repay or redeem an
aggregate outstanding principal amount of $5,000,000 or more of
Debt before its regular maturity or before its regularly scheduled
dates of payment or redemption, or (y) one or more Persons have the
right to require the Company or any Restricted Subsidiary so to
purchase or repay such Debt (other than the right to demand
repayment of any Debt payable by its terms on demand);
(iv) any representation or warranty made by the
Company or any Restricted Subsidiary in any Transaction Document or
in any writing furnished pursuant to a Transaction Document shall
be false, incorrect or misleading in any material respect on the
date as of which made; or
<PAGE>
<PAGE>
(v) the Company or any Restricted Subsidiary fails
to perform or observe any covenant contained in paragraph 5D, 5J,
6A, 6B or 6C and such failure shall not be remedied within 10
Business Days; or
(vi) the Company or any Restricted Subsidiary fails
to perform or observe any other agreement, term or condition of any
of the Transaction Documents applicable to it and such failure
shall not be remedied within 30 days (a) the date on which a Senior
Officer of the Company first obtains knowledge of such default, or
(b) the date on which written notice thereof is given to the
Company by any Holder; or
(vii) the Company voluntarily or involuntarily
suspends or discontinues operation or liquidates all or
substantially all of its assets; or
(viii) the Company or any Material Subsidiary or any
Material Subsidiary Group is generally not paying, or admits in
writing that it is not able to pay, its debts as such debts become
due or otherwise becomes insolvent; or files, or consents by answer
or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction; or makes an assignment for the
benefit of its creditors; or consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its
property; or takes corporate action for the purpose of any of the
foregoing; or
(ix) a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation,
dissolution or winding up of the Company or any Material Subsidiary
or for the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to
any substantial part of its property to take advantage of any
bankruptcy or insolvency law of any jurisdiction (each a
"Bankruptcy Petition") is filed against the Company or any Material
Subsidiary without the consent or other acquiescence of the Company
or such Material Subsidiary and such Bankruptcy Petition is not
dismissed within 60 days or if at any time Bankruptcy Petitions
against Subsidiaries of the Company constituting a Material
Subsidiary Group are filed without the consent of such Subsidiaries
and are not dismissed within 60 days or any holder or holders of a
Lien or Liens on all or substantially all of the assets of the
Company, any Material Subsidiary or any Material Subsidiary Group,
takes or take any action to foreclose on such Lien and such action
remains unstayed and in effect for 60 days; or
<PAGE>
<PAGE>
(x) a Governmental Authority enters an order
appointing a custodian, receiver, trustee or other officer with
similar powers with respect to the Company or any Material
Subsidiary or Subsidiaries of the Company constituting a Material
Subsidiary Group or with respect to any substantial part of the
property of the Company or any Material Subsidiary or Subsidiaries
of the Company constituting a Material Subsidiary Group, or
constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any Material Subsidiary or
Subsidiaries of the Company constituting a Material Subsidiary
Group without the consent of the Company or such Subsidiary and
such order remains unstayed and in effect for 60 days; or
(xi) a final judgment or judgments for the payment
of money aggregating in excess of $5,000,000 is rendered against
the Company or any Restricted Subsidiary and within 60 days thereof
such judgment or judgments are not bonded or discharged or
execution thereof stayed pending appeal, or within 60 days after
the expiration of any such stay, such judgment or judgments are not
discharged; or
(xii) if (a) any Plan shall fail to satisfy the
minimum funding standards of ERISA or the Code for any year or part
thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the
Code, (b) a notice of intent to terminate (other than a notice of
a "standard termination" as defined in Section 4041(b) of ERISA)
any Plan shall have been or is reasonably expected to be filed with
the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings,
(c) the aggregate "amount of unfunded benefit liabilities" (within
the meaning of section 4001(a)(18) of ERISA) under all Plans,
determined in accordance with Title IV of ERISA, shall exceed
$100,000, (d) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans, (e) the Company or
any ERISA Affiliate withdraws from any Multiemployer Plan, or (f)
the Company or any Restricted Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the
Company or such Restricted Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
results in a Material Adverse Effect. As used in this clause<PAGE>
<PAGE>
(xii), the terms "employee benefit plan" and "employee welfare
benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA; or
(xiii) the Restricted Subsidiaries' Guaranty shall, at
any time or for any reason, not be valid, binding and enforceable
in any material respect on any Restricted Subsidiary (other than as
a result of a liquidation and dissolution of such Restricted
Subsidiary otherwise permitted under the terms of this Agreement)
or any Restricted Subsidiary shall contest or deny the validity or
enforceability of the Restricted Subsidiaries' Guaranty or shall
disaffirm or repudiate any of its obligations thereunder;
and (a) upon the occurrence of an Event of Default specified in
subparagraph (viii), (ix) or (x) of this paragraph 7A, each Note at
the time outstanding shall automatically become due and payable at
100% of the principal amount thereof together with all interest
accrued thereon and the Make Whole Amount, without presentment,
demand, protest or notice of any kind, all of which are expressly
waived by the Company; (b) upon the occurrence of any other Event
of Default, the Required Holders may at their option declare each
Note to be, and each Note shall thereupon be immediately due and
payable at 100% of the principal amount thereof together with all
interest accrued thereon and the Make Whole Amount, without
presentment, demand, protest or notice of any kind, all of which
are expressly waived by the Company; and (c) upon the occurrence of
an Event of Default specified in subparagraphs (i) or (ii) of this
paragraph 7A, at the option of any Holder, whether or not the
Required Holders have declared each Note to be due and payable
pursuant to the immediately preceding clause (b), each Note held by
such Holder at the time outstanding shall become immediately due
and payable at 100% of the principal amount thereof together with
interest accrued thereon and Make Whole Amount, without
presentment, demand, protest or notice of any kind, all of which
are expressly waived by the Company.
7.1B. Rescission of Acceleration. At any time after any
Note shall have been declared immediately due and payable pursuant
to clause (b) or (c) of paragraph 7A, the Required Holders may, by
written notice to the Company, rescind and annul any such
declaration with respect to the Notes if (i) the Company shall have
paid all interest, principal and Make Whole Amount payable with
respect to any Note which have become due otherwise than by reason
of such declaration, including any interest on any such overdue
interest, principal and the Make Whole Amount, at the amount
specified therein or otherwise in this Agreement, (ii) the Company
shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or
waived pursuant to paragraph 11C, and (iv) no judgment or decree<PAGE>
<PAGE>
shall have been entered for the payment of any amounts due pursuant
to the Transaction Documents solely by reason of such declaration.
No such rescission or annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right arising
therefrom.
7.1C. Notice of Acceleration or Rescission. Whenever any
Note shall be declared immediately due and payable pursuant to
clause (b) or (c) of paragraph 7A, or any such declaration under
paragraph 7A shall be rescinded and annulled pursuant to paragraph
7B, the Company shall forthwith give written notice thereof to each
other Holder at the time outstanding, provided, the failure to give
such notice shall not affect the validity of any such declaration,
rescission or annulment.
7.1D. Other Remedies, No Waivers or Election of Remedies.
If any one or more Events of Default shall occur and be continuing,
irrespective of whether any Notes have become or have been declared
immediately due and payable, any Holder may proceed to protect and
enforce its rights under the Transaction Documents by exercising
such remedies as are available to such Holder in respect thereof
under applicable law, either by suit in equity or by action at law
or by any other appropriate proceeding, whether for specific
performance of any covenant or other agreement contained in any
Transaction Document or in aid of the exercise of any power granted
in a Transaction Document, in such order as the Holder may
determine in its sole discretion. No remedy conferred in a
Transaction Document upon any Holder is intended to be exclusive of
any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by
statute or otherwise. No course of dealing or failure or delay by
any Holder in exercising any right, power or remedy under a
Transaction Document or any other document executed in connection
therewith shall operate as a waiver thereof or otherwise prejudice
such Holder's rights, powers or remedies, nor shall any single or
partial exercise of any such right or remedy preclude any other
right or remedy hereunder or thereunder.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants that:
8.1A. Organization, Etc. (i) The Company and each Restricted
Subsidiary is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and is
qualified and in good standing in each jurisdiction in which it is
required to be qualified to do business (other than those
jurisdictions in which the failure to be so qualified, individually
and in aggregate, could not reasonably be expected to have a
Material Adverse Effect) and has all requisite corporate and other
power and authority to own, operate and lease its property and to<PAGE>
<PAGE>
carry on its business as now being conducted and which it proposes
to conduct. The Company has all requisite power and authority to
execute, deliver and perform each Transaction Document and to issue
and sell the Notes. Each Restricted Subsidiary has all requisite
power and authority to execute, deliver and perform each
Transaction Document to which it is a party. Schedule 8A correctly
identifies the correct legal name, the jurisdiction of
organization, the jurisdictions in which qualified to do business
and the officers and directors of each Restricted Subsidiary.
(ii) Each Transaction Document to which the Company
is a party has been duly authorized by all necessary corporate
action on the part of the Company and has been (or will have been
as of the Closing Date) duly executed and delivered by an
authorized officer of the Company and constitutes (or will
constitute upon execution thereof by the Company) the legal, valid
and binding obligation of the Company, enforceable in accordance
with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in
equity or at law).
(iii) Each Transaction Document to which a
Restricted Subsidiary is a party has been duly authorized by all
necessary corporate action on the part of each such Restricted
Subsidiary, has been (or will have been as of the Closing Date)
duly executed and delivered by an authorized officer of each such
Restricted Subsidiary and constitutes (or will constitute upon
execution thereof by each such Restricted Subsidiary) the legal,
valid and binding obligation of such Restricted Subsidiary,
enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law).
8.1B. Stock Ownership. (i) All of the outstanding
capital stock, or other equity interest, of each Restricted
Subsidiary is validly issued, fully paid and non-assessable and is
now owned and will be owned immediately prior to the Closing, of
record and beneficially, in the amounts and by the Persons as set
forth in Schedule 8B, free and clear of any Lien of any kind.
(ii) No Restricted Subsidiary is a party to, or
otherwise subject to any legal restriction or any agreement (other
than this Agreement and customary limitations imposed by corporate
law statutes) restricting the ability of such Restricted Subsidiary
to pay dividends out of profits or make any other similar
distributions of profits to the Company or to any other Subsidiary
of the Company.
<PAGE>
<PAGE>
(iii) Except as set forth in Schedule 8B, no Restricted
Subsidiary has any outstanding rights, options, warrants or other
agreements which would require it to issue any additional shares of
its capital stock after the Closing Date.
8.1C. Financial Statements. The Company has furnished the
Purchasers with the audited balance sheets of the Consolidated
Group dated as of December 31, 1995 and the related statements of
operations, cash flows and stockholders' equity for the 12 months
ended on such dates and the unaudited balance sheet of the Company
as of September 30, 1996 and the related statement of operations,
cash flows and stockholders' equity for the nine months ended on
such date, which collectively are referred to in this Agreement as
the "Financial Statements". The audited 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 and the
unaudited Financial Statement fairly presents in all material
respects the assets and liabilities of the Company as of the date
thereof. The Financial Statements have been prepared in accordance
with GAAP, consistently applied throughout the periods involved
except as set forth in the notes thereto. Since September 30,
1996, 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.
8.1D. Actions Pending. There are no actions, suits,
investigations or proceedings pending, or to the knowledge of the
Company threatened, against the Company or any Restricted
Subsidiary, or any of their properties or rights, by or before any
court, arbitrator or administrative body or other Governmental
Authority other than those which individually and in the aggregate
do not and are not reasonably expected to have a Material Adverse
Effect.
8.1E. Title to Properties. (i) Each Member has good and
marketable title to the real estate of which it is the record owner
and a Member has good title to all of the properties and assets
reflected in the most recent balance sheet for the Consolidated
Group included in the Financial Statements or purported to have
been acquired by a Member after such date (other than properties
and assets disposed of since such date in the ordinary course of
business), subject, in the case of the Company and its Restricted
Subsidiaries, to no Lien of any kind except Liens permitted by
paragraph 6C(1);
<PAGE>
<PAGE>
(ii) The Company and each Restricted Subsidiary
enjoys peaceful and undisturbed possession under all leases
necessary in any material respect for the conduct of its businesses
and all such leases are valid and subsisting and are in full force
and effect; and
(iii) The Company and each Restricted Subsidiary
owns or has the right to use (under agreements or licenses which
are in full force and effect) all Intellectual Property necessary
for it to conduct its business as currently conducted, without any
known conflict with the rights of others. To the knowledge of the
Company, no product of the Company or any Restricted Subsidiary
infringes in any material respect upon any Intellectual Property
owned by any other Person and there is no material violation by any
Person of any right of the Company or any Restricted Subsidiary
with respect to any Intellectual Property owned or used by the
Company or any Restricted Subsidiary.
8.1F. Affiliates and Investments in Others. Except as set
forth on Schedule 8F, and with respect to the Company, to the best
of its knowledge, neither the Company nor any Restricted Subsidiary
has any Affiliates controlling, controlled by, or under common
control with the Company or such Restricted Subsidiary or
beneficially owning or holding 10% or more of the equity interest
or class of Voting Stock of the Company or such Restricted
Subsidiary nor does the Company or any Restricted Subsidiary own
any stock or securities or has any beneficial or equity interest in
any Person other than the ownership of stock or securities of, or
a beneficial or equity interest in, another Member or a Person
which belongs to a class that is listed for trading on a national
securities exchange or quoted on NASDAQ and which represents not
more than 10% of the total combined voting power of all classes of
Voting Stock of, or more than 10% of the beneficial or equity
interest in, such Person.
8.1G. Tax Returns and Payments. The Company and each
Restricted Subsidiary has filed all Federal, State, local and
foreign income tax returns, franchise tax returns, real and
personal property tax returns and other tax returns required by law
to be filed by or on its behalf, or with respect to its properties
or assets, and all Taxes, assessments and other governmental
charges imposed upon the Company and any Restricted Subsidiary and
the Company's or any Restricted Subsidiary's properties, assets,
income or franchises which are due and payable have been paid,
other than those presently payable without penalty or interest,
those presently being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as may be required by GAAP
have been made and those the non-payment or non-filing of which,
individually and in the aggregate, do not, and are not reasonably
expected to, have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Consolidated Group in respect of<PAGE>
<PAGE>
Taxes for all fiscal periods are adequate and the Company knows of
no unpaid assessment on the Company or any Restricted Subsidiary
for additional Taxes for any period or any basis for any such
assessment that individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect. No charges or Taxes
will be imposed by any Governmental Authority on the Company or any
Restricted Subsidiary on the execution, delivery or enforcement of
the Transaction Documents and the issue and sale of the Notes.
8.1H. Conflicting Agreements and Other Matters. Neither
the Company nor any Restricted Subsidiary is in violation of any
term of its charter or by-laws or other organizational documents,
or in violation or breach of any term of any agreement (including
any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation (including any
Environmental Law) to which it is a party or to which it is subject
which default or violation, individually or in the aggregate, has
or is reasonably expected to have, a Material Adverse Effect. The
execution and delivery of the Transaction Documents and the
offering, issuance and sale of the Notes and fulfillment of and
compliance with the terms and provisions of the Transaction
Documents do not and will not conflict with the provisions of, or
constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or
assets of the Company or any Restricted Subsidiary pursuant to its
charter or by-laws or other organizational documents, any award of
any arbitrator or any agreement (including any agreement with
stockholders or other equity holders), instrument, order, judgment,
decree, statute, law, rule or regulation to which it is subject,
except for defaults under, conflicts with, or violations of, any
such awards, agreements, instruments, orders, judgements, decrees,
laws, rules or regulations which are not material in nature and
which individually and in the aggregate do not, and are not
reasonably expected to, have a Material Adverse Effect. Neither
the Company nor any Restricted Subsidiary is a party to, or
otherwise subject to any provision contained in, any instrument
evidencing Debt, any agreement relating thereto or any other
contract or agreement (including its charter) which limits the
amount of, or otherwise imposes restrictions on the incurring of,
any Debt of the Company to be evidenced by the Notes.
8.1I. Offering of Notes. Neither the Company nor any
agent acting on its behalf has, directly or indirectly, offered the
Notes for sale to, or solicited any offers to buy any of the Notes
from, or otherwise approached or negotiated with respect thereto
with, any Person other than the Purchasers, each of which has been
offered the Notes at a private sale for investment. Neither the
Company nor any agent acting on its behalf has taken or will take
any action which would subject the issuance or sale of the Notes to
the provisions of Section 5 of the Securities Act or to the
registration provisions of any securities or Blue Sky law of any<PAGE>
<PAGE>
applicable jurisdiction. As of the Closing Date, the Notes will
not be of the same class as securities of the Company listed on a
national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system, within the meaning of Rule 144A.
8.1J. Regulation G, Etc. None of the proceeds of the sale
of the Notes will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR Part 207) or for
the purpose of maintaining, reducing or retiring any indebtedness
which was originally incurred to purchase or carry any stock that
is currently a margin stock or for any other purpose which
constitutes this transaction a "purpose credit" within the meaning
of such Regulation G or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve
the Company in a violation of Regulation X of such Board (12 CFR
224) or to involve any broker or dealer in a violation of
Regulation T of such Board (12 CFR 220). Margin stock does not
constitute more than 10% of the value of the assets of the
Consolidated Group or of the Company and the Company has no present
intention that margin stock will constitute more than 10% of the
value of its or the Consolidated Group's assets. As used in this
paragraph 8J, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said
Regulation G.
8.1K. ERISA.
(i) The Company and each Restricted Subsidiary and each ERISA
Affiliate has operated and administered each Plan operated and
administered by it in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and are
not reasonably expected to result in a Material Adverse Effect.
Neither the Company nor any Restricted Subsidiary and no ERISA
Affiliate has incurred any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating
to employee benefit plans (as defined in Section 3 of ERISA), and
no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any
such liability by the Company or any Restricted Subsidiary or any
ERISA Affiliate, or in the imposition of any Lien on any of the
rights, properties or assets of the Company or any Restricted
Subsidiary or any ERISA Affiliate, in either case pursuant to Title
I or IV of ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such liabilities
or Liens as individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
<PAGE>
<PAGE>
(ii) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA and
the terms "current value" and "present value" have the meaning
specified in Section 3 of ERISA.
(iii) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect.
(iv) The expected postretirement benefit obligation
(determined as of the last day of the Company's most recently ended
fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 498B of the Code) of the
Consolidated Group could not reasonably be expected to have a
Material Adverse Effect.
(v) The execution and delivery of the Transaction Documents,
the issuance and sale of the Notes and the consummation of the
transactions contemplated by the Agreement will not result in a
"prohibited transaction" which is subject to the prohibitions of
Section 406 of ERISA or in connection with which a Tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The
representation in the preceding sentence is made in reliance upon
and subject to the accuracy of the Purchasers' representations in
paragraph 9(ii) as to the source of the funds to be used to pay the
purchase price of the Notes.
8.1L. Governmental and Other Consents. Neither the nature
of the Company or any Restricted Subsidiary, nor the Company's or
any Restricted Subsidiary's businesses or properties, nor any
relationship between the Company or any Restricted Subsidiary and
any other Person, nor any circumstance in connection with the
execution and delivery of any Transaction Document or the offering,
issuance, sale or delivery of the Notes is such as to require any
authorization, consent, approval, exemption or any action by or
notice to or filing with any Governmental Authority or any other
Person in connection with the execution and delivery of the
Transaction Documents or the offering, issuance, sale or delivery
of the Notes or fulfillment of or compliance with the terms and
provisions of the Transaction Documents.
<PAGE>
<PAGE>
8.1M. Environmental Matters. To the knowledge of the
Company, there are no claims and the Company has not received any
notice of any claim, and no proceeding has been instituted raising
any claim, against the Company or any Restricted Subsidiary or any
real properties now or formerly owned, leased or operated by the
Company or any Restricted Subsidiary or other assets, alleging any
damage to the environment or violation of any Environment Laws,
except, in each case, such as could not reasonably be expected to
result in a Material Adverse Effect. Except as otherwise disclosed
in Schedule 8M:
(i) to the knowledge of the Company, there are no facts
which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or
formerly owned, leased or operated by the Company or any Restricted
Subsidiary or relating to the Company's or any Restricted
Subsidiary's other assets or their use, except, in each case, such
as could not reasonably be expected to result in a Material Adverse
Effect;
(ii) neither the Company nor any Restricted Subsidiary
has stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by the Company or any Restricted
Subsidiary and has not disposed of any Hazardous Materials in
violation of any Environmental Laws, except in each case such as is
not expected to result in a Material Adverse Effect;
(iii) all buildings on all real properties now owned,
leased or operated by the Company or any Restricted Subsidiary are
in compliance with applicable Environmental Laws, except where
failure to comply is not reasonably expected to result in a
Material Adverse Effect; and
(iv) the Company and each Restricted Subsidiary have
obtained all permits, licenses and other authorizations and has
made all filings, registrations and other submittals which are
required of it under all Environmental Laws (except to the extent
failure to have any such permits, licenses or authorizations or to
have made any such filings, registrations or submittals
individually and in the aggregate does not, and is not reasonably
expected to, result in a Material Adverse Effect) and the Company
and each Restricted Subsidiary are in compliance with all
Environmental Laws and with the terms and conditions of all such
permits, licenses, authorizations, filings, registrations and
submittals and in compliance with all applicable orders, decrees,
judgments and injunctions, issued, entered, promulgated or approved
under any Environmental Law (except to the extent failures to
comply, individually and in the aggregate do not, and are not
reasonably expected in the future, to result in a Material Adverse
Effect).
<PAGE>
<PAGE>
8.1N. Labor Relations. There is not now pending, or to
the knowledge of the Company, threatened, any strike, work
stoppage, work slow down, or material grievance or other material
dispute between the Company or any Material Subsidiary and any
bargaining unit or significant number of the Company's or such
Material Subsidiary's employees.
8.1O. Financial Condition. After giving effect to the
transactions contemplated hereby, (i) the aggregate present fair
saleable value of the assets of the Company will be greater than
the amount that will be required to pay the probable liabilities of
the Company on its debts, including contingent liabilities, as they
become absolute and mature; (ii) the Company has (and has no reason
to believe that it will not have) sufficient capital for the
conduct of its business; and (iii) the Company does not intend to
incur, or believe it has incurred, debts beyond its ability to pay
as they mature.
8.1P. Disclosure. The Transaction Documents, the
Financial Statements and the other documents, certificates and
statements furnished to the Purchasers by or on behalf of the
Company or any Restricted Subsidiary in connection herewith do not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
herein and therein, in light of the circumstances under which they
were made, not misleading. To the knowledge of the Company, there
is no fact with respect to its business which is reasonably
expected to have a Material Adverse Effect and which has not been
described in this Agreement or otherwise disclosed in writing to
the Purchasers by the Company.
8.1Q. Status Under Certain Federal Statutes. Neither the
Company nor any Restricted Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the Interstate
Commerce Act, as amended, or the Federal Power Act, as amended.
Neither the sale of the Notes hereunder nor the use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
8.1R. Existing Indebtedness; Future Liens. Schedule 8R
sets forth a complete and correct list of all outstanding Debt of
the Company and each Restricted Subsidiary as of the date of this
Agreement. Neither the Company nor any Restricted Subsidiary is in
default and no waiver of default is currently in effect, in the
payment of any principal or interest on any such Debt of the
Company and each Restricted Subsidiary and no event or condition
exists with respect to any such Debt of the Company and each
Restricted Subsidiary that would permit (or that with notice or the<PAGE>
<PAGE>
lapse of time, or both, would permit) one or more Persons to cause
such Debt to become due and payable before its stated maturity or
before its regularly scheduled dates of payment. Neither the
Company nor any Restricted Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by paragraph 6C(1).
As of the Closing Date, after the application of the proceeds of
the Notes as set forth in paragraph 5J, the ratio of Total Debt to
Consolidated Total Capitalization and the ratio of Priority Debt to
Consolidated Net Worth will not exceed the ratios set forth
therefor, respectively, in paragraphs 6A(3) and 6A(4).
8.1S. Compliance with Laws, Etc. The Company and each
Restricted Subsidiary are in compliance with the requirements of
all applicable laws, rules, regulations and orders of any
Governmental Authority (including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and
any Environmental Laws), and has in effect all licenses,
certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its properties or to
the conduct of its businesses, in each case to the extent necessary
to reasonably ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failure to have in effect
such licenses, permits, franchises and other governmental
authorizations do not, and are not reasonably expected to,
individually and in the aggregate, have a Material Adverse Effect.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents
that:
(i) It is purchasing its Notes for its own account or
for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds, in each case for
investment and not with a view to the distribution thereof or with
any present intention of distributing or selling any of its Notes,
provided that the disposition of such Purchaser's property shall at
all times be within its control, subject to compliance with
applicable law. The Company acknowledges that a Purchaser's sale
of all or a portion of its Notes to one or more Qualified
Institutional Buyers in compliance with Rule 144A would not be a
breach of this representation.
(ii) With respect to each source of funds to be used by
it to pay the purchase price of its Notes (respectively, the
"Source"), at least one of the following statements is accurate as
of the Closing Date:
(a) The Source is an "insurance company general
account", as such term is defined in Section V(e) of PTE 95-60
(issued July 12, 1995) and the purchase is exempt under the
provisions of PTE 95-60);<PAGE>
<PAGE>
(b) The Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
(c) The Source is either (i) an insurance company pooled
separate account and the purchase is exempt in accordance with PTE
90-1 (issued January 29, 1990), or (ii) a bank collective
investment fund, in which case the purchase is exempt in accordance
with PTE 91-38 (issued July 21, 1991);
(d) The Source is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in
Part V of PTE 84-14, issued March 13, 1984) which QPAM has been
identified in writing, and the purchase is exempt under PTE 84-14,
provided that no other party to the transactions described in this
Agreement and no "affiliate" of such other party (as defined in
Section V(c) of PTE 84-14) has at this time, and has not exercised
at any time during the immediately preceding year, the authority to
appoint or terminate said QPAM as manager of the assets of any plan
identified in writing pursuant to this paragraph (d) or to
negotiate the terms of said QPAM's management agreement on behalf
of any such identified plans; or
(e) The Source is one or more plans or a separate
account or trust fund comprised of one or more plans each of which
has been identified in writing pursuant to this paragraph (e).
As used in this paragraph 9, the terms "plan" and "plans" have the
meaning assigned to such terms in Title I, Section 3(3) of ERISA.
10. DEFINITIONS. For the purposes of this Agreement, the
following terms shall have the respective meanings specified with
respect thereto:
10.1A. Prepayment and Make Whole Amount Terms.
"Average Remaining Life" means the number of years (calculated
to the nearest one-twelfth year) obtained by dividing (a) the sum
of the products obtained by multiplying (i) the principal component
of each Remaining Scheduled Payment with respect to such Called
Principal by (ii) the number of years (calculated to the nearest
one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment by (b) the Called Principal.
"Called Principal" means, as the context requires, with
respect to any Note the principal of such Note which is to be
prepaid pursuant to paragraph 4A or is declared to be immediately
due and payable pursuant to paragraph 7A.
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining
Scheduled Payments from their respective scheduled due dates, in<PAGE>
<PAGE>
accordance with accepted financial practice and at a discount
factor (applied on a semi-annual basis) equal to the Discount Rate
with respect to such Called Principal.
"Discount Rate" means, with respect to the Called Principal of
any Note, the yield to maturity of the Called Principal implied by
(a) (i) the yield reported as of 9:00 A.M. (Chicago, Illinois time)
on the date which is two Business Days prior to the Settlement Date
with respect to such Called Principal, on page "USD" of the
Bloomberg Financial Markets Services Screen (or, if not available,
any other nationally recognized trading screen reporting on-line
intra day trading in actively traded marketable United States
Treasury fixed interest rate securities selected by the Company and
acceptable to the Required Holders) for actively traded U.S.
Treasury fixed interest rate securities having a maturity equal to
the Average Remaining Life of such Called Principal as of such
Settlement Date, or (ii) if such yields shall not be reported as of
such time or the yields reported as of such time shall not be
ascertainable, the Treasury Constant Maturity Series Yields
reported for the latest day for which such yields shall have been
so reported as of the Business Day next preceding the Settlement
Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having
a constant maturity equal to the Average Remaining Life of such
Called Principal as of such Settlement Date plus 50 basis points.
Such implied yield shall be determined, if necessary, by (x)
converting U.S. Treasury securities quotations to bond-equivalent
yields in accordance with accepted financial practice and (y)
interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and greater than the
Average Remaining Life and (2) the actively traded U.S. Treasury
security with the duration closest to and less than the Average
Remaining Life.
"Make Whole Amount" means with respect to any Note, the amount
equal to the excess, if any, of (x) the Discounted Value over (y)
the sum of (i) such Called Principal plus (ii) interest accrued and
unpaid thereon, as of and due on the Settlement Date with respect
to such Called Principal. The Make Whole Amount shall in no event
be less than zero.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called Principal
and interest that would be due or dividends that would accrue
thereon, as the case may be, after the Settlement Date with respect
to such Called Principal, if no payment of Called Principal were
made prior to its scheduled due date, provided, that if such
Settlement Date is not a date on which interest payments are
scheduled to be made, then the amount of the next succeeding<PAGE>
<PAGE>
scheduled interest payment will be reduced by the amount of
interest accrued or dividend accrued to such Settlement Date and
required to be paid on such Settlement Date.
"Settlement Date" means, with respect to any Note, the date on
which such Note is to be prepaid pursuant to paragraph 4A or is
declared to be immediately due and payable pursuant to paragraph
7A.
10.1B. Other Terms.
"8.01% Notes" has the meaning specified in paragraph 1A.
"8.10% Notes" has the meaning specified in paragraph 1A.
"Acquired Person" means any Person (i) who is not then a
Member; (ii) who is engaged in a business permitted to be conducted
by paragraph 5I; and (iii) for whom financial statements meeting
the requirements of Regulation S-X under the Exchange Act are
available for its then most recently ended fiscal year and any
subsequent interim periods and for such other periods as would be
required to be provided by the Company for such Acquired Person by
Rule 3-05(b) of Regulation S-X under the Exchange Act.
"Acquisition" means any acquisition by the Company or a
Restricted Subsidiary, whether by purchase, exchange, merger,
consolidation or otherwise, of all or substantially all of the
assets or Equity Interest of an Acquired Person, provided, if such
Acquisition is the acquisition of the Equity Interest of the
Acquired Person, the Acquired Person shall have become a Wholly-
Owned Restricted Subsidiary concurrently with such Acquisition.
"Acquisition Debt" means any Debt incurred or assumed by the
Company or a Restricted Subsidiary in connection with an
Acquisition and, if such Acquisition is the acquisition of the
Equity Interest of the Acquired Person, any Debt of the Acquired
Person which is in existence as of the date of such Acquisition if
not less than 5, nor more than 20, days prior to the incurrence of
such Debt, the Company shall have provided to each Holder Pro Forma
Financial Statements reflecting such Acquisition certified by the
chief accounting officer or chief financial officer of the Company
as meeting the requirements of the definition of Pro Forma
Financial Statements and, subject to such requirements, as fairly
presenting the pro forma financial condition of the Consolidated
Group after taking into account the Acquisition.
"Affiliate" means, at any time and as to any Person, any other
Person (including in the case of a Member, another Member) directly
or indirectly (i) controlling, controlled by, or under common
control with, such Person or (ii) beneficially owning or holding
10% or more of the equity interest or class of Voting Stock of such<PAGE>
<PAGE>
Person, as well as, in the case of an individual, such individual's
spouse, issue, parents, siblings and issue of siblings (in each
case by blood, adoption or marriage). A Person shall be deemed to
control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"After-Acquired Pledged Subsidiary" means as of any date, any
then Pledged Restricted Subsidiary the Equity Interest of which was
acquired after February 20, 1997.
"Agreement" means this Note Purchase Agreement as it may from
time to time be amended in accordance with paragraph 11C.
"Approved Auditor" means Deloitte & Touche, Arthur Anderson &
Co., Coopers & Lybrand, Ernst & Young, KPMG, Peat Marwick or Price
Waterhouse.
"Asset Sold" or "Assets Sold" has the meaning specified in
paragraph 6C(3)(v).
"Bankruptcy Petition" has the meaning specified in paragraph
7A.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which commercial banks in Boston, Massachusetts are
required or authorized to be closed.
"Capitalized Lease" means any lease of property (whether real,
personal or mixed), as to which the lessee is required, in
accordance with GAAP, to recognize, concurrently, the acquisition
of an asset and the incurrence of a liability.
"Capitalized Lease Obligation" means any rental obligation
under a Capitalized Lease, taken at the amount thereof that is ac-
counted for as indebtedness (net of interest expense) in accordance
with GAAP.
"Closing" and "Closing Date" have the meanings specified in
paragraph 2B.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time and the rules and regulations promulgated
thereunder as from time to time in effect.
"Company" has the meaning specified in the first paragraph of
this Agreement.
"Confidential Information" has the meaning specified in
paragraph 11G.
<PAGE>
<PAGE>
"Consolidated EBITA" means for any period the amount of which
is to be determined, (i) Consolidated Net Income for such period
plus (ii) (but only to the extent such amounts were deducted in the
computation of Consolidated Net Income) Consolidated Interest
Expense, plus (iii) income tax expense (including deferred income
tax expense in each case), plus (iv) amortization expense of the
Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Company and each of its
Subsidiaries and if the context so requires, the Company and its
Subsidiaries, taken as a whole.
"Consolidated Interest Expense" means for any period the
amount of which is to be determined, the aggregate interest charges
of the Company and its Restricted Subsidiaries (including without
limitation that portion of any obligation under Capitalized Leases
allocable to interest expense) on any Debt for such period (without
regard to any limitation on the payment thereof) as determined in
accordance with GAAP.
"Consolidated Net Income" means for any period the amount of
which is to be determined, the Net Income of the Company and its
Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth" means as of any date, the amount of
which is to be determined, (i) Consolidated Total Assets minus (ii)
consolidated total liabilities of the Company and its Restricted
Subsidiaries, as determined in accordance with GAAP.
"Consolidated Total Assets" means, as of any date the amount
of which is to be determined, the total assets of the Company and
its Restricted Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"Consolidated Total Capitalization" means, as of any date as
the amount of which is to be determined, Consolidated Net Worth
plus (but only to the extent such amount was deducted in the
computation of Consolidated Net Worth) Consolidated Total Debt for
such period.
"Consolidated Total Debt" means, as of any date the amount of
which is to be determined, all Debt of the Company and its
Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Debt" means, as applied to any Person without duplication,
(i) obligations of such Person for borrowed money, (ii) obligations
of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations of such Person to pay the<PAGE>
<PAGE>
deferred purchase price of property or services (other than current
Trade Payables to be paid in accordance with customary practices),
(iv) Capitalized Lease Obligations of such Person, (v) obligations
of such Person to purchase securities or other property that arise
out of or in connection with the sale of the same or substantially
similar securities or property, (vi) obligations of such Person to
reimburse any other Person in respect of amounts paid under a
letter of credit or similar instrument, (vii) obligations with
respect to interest rate and currency swaps and similar obligations
requiring such Person to make payments, whether periodically or
upon the happening of a contingency, except that if any agreement
relating to such obligations provides for the netting of amounts
payable by and to such Person thereunder, or if any such agreement
provides for the simultaneous payment of amounts by and to such
Person, then, in each such case, the amount of such obligations
shall be the net amount thereof, (viii) any obligations secured by
(or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) a Lien on any asset of
such Person, whether or not such obligation is assumed by such
Person, the amount of such obligation being deemed to be the lesser
of the fair market value of such asset or the amount of the
obligation so secured, (ix) any recourse obligations of such Person
in connection with a sale of receivables, (x) Guaranties by such
Person of Debt of others, (xi) any outstanding Preferred Stock of
a Subsidiary of such Person (other than Preferred Stock owned
beneficially and of record by such Person or a Wholly-Owned
Subsidiary of such Person) and any outstanding Redeemable Preferred
Stock of such Person, and (xii) any other items (excluding Trade
Payables, items of contingency reserves or reserves for deferred
income Taxes or other reserves, to the extent that such reserves do
not represent an obligation) which in accordance with GAAP would be
shown on the liabilities side of the balance sheet of such Person.
"Default" means any occurrence or condition which with the
giving of notice or the passage of time, or both, and remaining
uncured after the expiration of any applicable grace period would
be an Event of Default.
"Disposition" has the meaning specified in paragraph 6C(3)(v).
"Environmental Laws" means any and all Federal, state and
local statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of
any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.
"Equity Interest" means as to any Person, the capital stock or
other equity or beneficial interest in such Person.
<PAGE>
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder, as from time to time, in effect.
"ERISA Affiliate", for Plan purposes, means, with respect to
any Person, any trade or business, whether or not incorporated,
which, is treated as a single employer together with such Person
under section 414 of the Code.
"Event of Default" has the meaning specified in paragraph 7A.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time and the rules and regulations promulgated
thereunder, as from time to time in effect.
"Expenses" has the meaning specified in paragraph 11B.
"Financial Statements" has the meaning specified in paragraph
8C.
"Foreign Taxes" has the meaning specified in paragraph 11A.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States.
"Governmental Authority" means (a) the governments of (i) the
United States of America and its states and political subdivisions,
and (ii) any other jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of the Company or
any Restricted Subsidiary, and (b) any entity exercising executive,
legislative, judicial, regulatory or administrative functions of,
or pertaining to, any such government or jurisdiction.
"Guaranty", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of such Person with
respect to any Debt of another, including, without limitation, any
such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in
respect of which such Person is otherwise directly or indirectly
liable, including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement (contingent
or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to advance to or provide
funds for the payment or discharge of such obligation (whether in
the form of loans, advances, stock purchases, capital contributions
or otherwise), or to maintain the working capital, equity capital,
net worth, solvency or any balance sheet or other financial
condition of the obligor of such obligation, or to make payment for
any securities, products, materials or supplies or for any<PAGE>
<PAGE>
transportation or services without regard to the non-delivery or
nonfurnishing thereof, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be
protected against loss in respect thereof. The amount of any
Guaranty shall be deemed to be equal to the lower of (a) the amount
of the obligation guaranteed and (b) the maximum amount for which
such Person may be contingently liable pursuant to the terms of the
instrument evidencing such Guaranty, unless such guaranteed
obligation and the amount for which such Person may be liable are
not stated or determinable, in which case the amount of such
Guaranty shall be the maximum reasonably anticipated liability for
which such Person is contingently liable in respect thereof as
determined by such Person in good faith (but in any event not less
than the amount which is, or would otherwise be required, in
accordance with GAAP, to be reflected in such Person's balance
sheet or the notes thereto) as the amount of such obligation.
"Hazardous Materials", at any time, shall mean any substance:
the presence of which at such time requires notification,
investigation, monitoring or remediation under any Environmental
Law; which at such time is defined as a "hazardous waste",
"hazardous material", "hazardous substance", "toxic substance",
"pollutant" or "contaminant" under any Environmental Law,
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Section 9601 et
seq.) and any applicable local statutes and the regulations
promulgated thereunder; or without limitation, which contains
gasoline, diesel fuel or other petroleum products, asbestos or
polychlorinated biphenyls.
"Holder" means any Person at the time shown as the holder of
a Note on the register referred to in paragraph 110.
"Intangibles" means all Intellectual Property, goodwill and
all other assets or property classified as intangibles in
accordance with GAAP.
"Intellectual Property" means all patents, copyrights,
trademarks, trade names, service marks or other intellectual or
industrial property rights.
"Interest Rate Agreement" means, with respect to any Person,
any one or more of the following agreements entered into by such
Person with one or more financial institutions: interest rate
protection agreement interest rate swaps and/or other types of
interest rate hedging agreements obligating such Person to make
payments, whether periodically or upon the happening of a
contingency. The amount of the obligation under any Interest Rate
Agreement shall be the amount determined in respect thereof as of
the end of the then most recently ended fiscal quarter of such
Person, based on the assumption that such Interest Rate Agreement<PAGE>
<PAGE>
had terminated at the end of such fiscal quarter, and in making
such determination, if any agreement relating to such Interest Rate
Agreement provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each
such case, the amount of such obligation shall be the net amount so
determined.
"Institutional Investor" means any bank, savings institution,
trust company, insurance company, investment company, pension or
profit sharing trust or other financial institution or
institutional buyer, regardless of legal form.
"Investment" means as to any Person (the "Investor"), (i) any
loan or advance or extension of credit by the Investor to or for
the benefit of another Person; (ii) the incurrence, assumption or
guarantee by the Investor of, or grant of credit support by the
Investor for, any financial obligation of another Person to the
extent such financial obligation does not otherwise constitute Debt
of the Investor; or (iii) the ownership, purchase or acquisition
or other investment by the Investor in any stock, obligations or
securities of, or any other Equity Interest in (including without
limitation any Equity Interest in any partnership, association,
joint venture or other organization, whether or not a legal entity)
any other Person, or (iv) any capital contribution by the Investor
to any other Person.
"knowledge of the Company" means the actual knowledge of any
Senior Officer of the Company.
"Liabilities" means, with respect to any Person, all
obligations of such Person which, in accordance with GAAP, would be
shown on the liabilities side of the balance sheet of such Person,
including without limitation, all Trade Payables.
"Lien" means any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law,
statute, court decision or contract, and including, without
limitation, any mortgage, pledge, security interest, lease,
encumbrance, lien, purchase option, call or right, or charge of any
kind (including any agreement to give or permit any of the
foregoing), any conditional sale or other title retention
agreement, any Capitalized Lease, and the filing of, or agreement
to give or permit the filing on its behalf, of any financing
statement under the Uniform Commercial Code or personal property
security legislation of any jurisdiction.
"Material Adverse Effect" means, (i) any material adverse
effect on the Company's business, assets, liabilities, financial
condition or results of operations, (ii) any material adverse
effect on the Company's and the Restricted Subsidiaries' business,<PAGE>
<PAGE>
assets, liabilities, financial condition or results of operations
taken as a whole or where appropriate, on a consolidated basis in
accordance with GAAP, and (iii) any adverse effect, WHETHER OR NOT
MATERIAL, on the binding nature, validity or enforceability of any
Transaction Document as the obligation of any party thereto and
(iv) any material adverse effect on the ability of the Company to
perform its obligations under any Transaction Document applicable
to it or on the ability of any Material Restricted Subsidiary to
perform its obligations under its Restricted Subsidiaries'
Guaranty.
"Material Restricted Subsidiary" means any Restricted
Subsidiary which is a Material Subsidiary.
"Material Subsidiary" means each Subsidiary of the Company of
which its earnings before interest expense, taxes and amortization
(calculated by reference to the components included in the
definition of Consolidated EBITA), or if such Subsidiary has
Subsidiaries of its own, of which its consolidated earnings before
interest expense, taxes and amortization of such Subsidiary and its
Subsidiaries, determined in either case, for the most recently
completed four fiscal quarters equals or exceeds 5% of Consolidated
EBITA or of which the total assets, or if such Subsidiary has
Subsidiaries of its own, of which the consolidated total assets of
such Subsidiary and its Subsidiaries, determined of the most recent
fiscal quarter end, equals or exceeds 5% of Consolidated Total
Assets.
"Material Subsidiary Group" means any group of Subsidiaries of
which, on a consolidated basis, its earnings before interest
expense, taxes and amortization (calculated by reference to the
components included in the definition of Consolidated EBITA), for
the most recently completed four fiscal quarters equals or exceeds
5% of Consolidated EBITA or of which the total assets, determined
of the most recent fiscal quarter end, equals or exceeds 5% of
Consolidated Total Assets.
"Member" means any Person included in the Consolidated Group.
"Multiemployer Plan" means any plan which is a "multiemployer
plan" as such term is defined in section 4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance
Commissioners.
"Net Income" means as to any Person, for any period for which
the amount thereof is to be determined, gross revenues of such
Person less all operating and non-operating expenses of such Person
including all charges of a proper character (including current and
deferred Taxes on income, provision for Taxes on unremitted foreign
earnings which are included in gross revenues, amortization,<PAGE>
<PAGE>
depreciation and current additions to reserves), but not including
in gross revenues any gains (net of expenses and Taxes applicable
thereto) in excess of losses resulting from the sale, conversion or
other disposition of assets (other than inventory in the ordinary
course of such Person's business), any earnings or losses
attributable to any other Person, any gains arising from
transactions of a non-recurring and material nature, any gains
arising from the sale or discontinuation of operations, any gains
resulting from the write-up of assets, any equity of such Person in
the unremitted earnings of any other corporation or any earnings of
any other Person acquired by such Person through purchase, merger
or consolidation or otherwise, earned prior to acquisition, all
determined in accordance with GAAP.
"Net Proceeds of Eligible Capital Stock" means the net cash
proceeds (net of all costs and out-of-pocket expenses including
underwriting and brokerage fees and expenses) from sales, after
December 31, 1996 of (i) any class or series of the Equity Interest
of the Company other than Redeemable Preferred Stock; (ii) any
warrants, options or similar rights (other than any Debt) to
purchase or convertible into shares of Equity Interest of the
Company other than Redeemable Preferred Stock; and (iii) Debt
(including Redeemable Preferred Stock) convertible into any class
or series of Equity Interest of the Company other than Redeemable
Preferred Stock if such Debt has then been so converted, provided,
the net cash proceeds from the sale of such Debt shall be increased
by any amount paid to the Company to convert such Debt and reduced
by the aggregate amount of interest or dividends paid on such Debt
through the date of conversion.
"Notes" has the meaning specified in paragraph 1A.
"Officers' Certificate" means a certificate signed in the name
of the Company by any two Senior Officers.
"PBGC" means the Pension Benefit Guaranty Corporation or any
other Governmental Authority succeeding to any of its functions.
"Person" means and includes an individual, a partnership, a
joint venture, a corporation, a limited liability company, a trust
and any other form of business organization (whether or not a legal
entity), or any Governmental Authorities.
"Plan" means an "employee pension benefit plan" (as defined in
Section 3 of ERISA) which is or within the preceding five years has
been established or maintained, or to which contributions are or
have been made, by the Company or any Restricted Subsidiary or any
ERISA Affiliate, or for which the Consolidated Group or any ERISA
Affiliate may have any liability.
<PAGE>
<PAGE>
"Pledged Restricted Subsidiaries" means those Restricted
Subsidiaries listed on Schedule 3L and such other Restricted
Subsidiaries acquired after the date of this Agreement and with
respect to which the Company and/or its other Restricted
Subsidiaries have pledged their Equity Interests to the Holders
pursuant to paragraph 5M; provided, upon any Pledged Restricted
Subsidiary becoming a party to the Restricted Subsidiaries'
Guaranty, it shall cease to be a Pledged Restricted Subsidiary.
"Pledge Agreement" means the Amended and Restated Pledge of
Partnership Interest and Collateral Agency Agreement dated June 26,
1997 by and among the Company, the Subsidiaries of the Company from
time to time a party thereto, Bankers Trust Company, as Collateral
Agent, the Required Purchasers and the other Institutional
Investors from time to time a party thereto.
"Preferred Stock" means as to any Person, any Redeemable
Preferred Stock and any other class or series of Equity Interest of
such Person that has a priority as to the payment of any dividends
or distributions over the holders of the most junior class of
Equity Interest of such Person.
"Priority Debt" means, without duplication, (i) all Debt of
the Company secured by any Lien (other than Liens granted pursuant
to the Pledge Agreement or otherwise permitted pursuant to
paragraph 6C(1)(xii)) on any property owned by the Company or any
of its Restricted Subsidiaries, (ii) all Debt of the Restricted
Subsidiaries (other than the Restricted Subsidiaries' Guaranty and
Debt owed solely to the Company or a Wholly-Owned Restricted
Subsidiary) and (iii) all Liabilities of any After-Acquired Pledged
Restricted Subsidiary (other than Liabilities owed solely to the
Company or a Wholly-Owned Restricted Subsidiary).
"Pro Forma Financial Statements" means in connection with any
Acquisition, pro forma financial statements reflecting such
Acquisition prepared in accordance with Rule 11-02 of Regulation S-
X of the Exchange Act provided, the pro forma balance sheet
included therein shall be adjusted to take into account any other
Debt of the Company and the Restricted Subsidiaries incurred or
assumed, and any Net Proceeds of Eligible Capital Stock received,
since the date for which the pro forma consolidated balance sheet
is required to be presented under Rule 11-02.
"Purchaser" and "Purchasers" have the meaning specified in
paragraph 2A.
"QPAM Exemption" means Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"Qualified Institutional Buyer"means a qualified institutional
buyer, as defined in Rule 144A.
<PAGE>
<PAGE>
"Redeemable Preferred Stock" means any class or series of
Equity Interest which has fixed payment or redemption obligations
due and payable prior to the final scheduled due date for the
repayment of principal of the Notes or is redeemable at the option
of the holder, unless such fixed payment obligations or repurchase
obligations on exercise of such redemption option can be satisfied,
at the election of the issuer, through the issuance of shares of
its most junior class of Equity Interest.
"Required Holders" means the Holder or Holders of more than
50% of the aggregate principal amount of the Notes at the time
outstanding.
"Restricted Investments" means any Investment other than:
(i) prime commercial paper maturing not more than 270
days from the date of issuance, having as at the date of
acquisition a rating or at least A-1 (or the existing equivalent)
from Standard & Poor's Ratings Group or at least P-1 (or then
existing equivalent) from Moody's Investors Service, Inc. and
issued by a corporation organized in any state of the United States
of America, Canada, any European economic community country or
Japan;
(ii) securities issued or directly and fully and
unconditionally guaranteed or insured by the United States of
America or any agency thereof backed by the full faith and credit
of the United States of America and maturing within one year from
the date of acquisition other than derivative securities such as
mortgage-backed "IOS" or "POS" and mortgage pass-through
certificates and similar investments;
(iii) time deposits, or certificates of deposit
denominated in United States dollars maturing within one year from
the date of acquisition issued by commercial banks which are (a)
members of the Federal Reserve System and chartered under the laws
of the United States of America or any state or the District of
Columbia, whose long-term certificates of deposit and long-term
unsecured debt is rated at least A (or then existing equivalent) by
Standard & Poor's Ratings Group and at least A-2 (or then existing
equivalent) by Moody's Investors Service, Inc. and having capital
and surplus in excess of $1,000,000,000 or (b) organized under the
laws of Canada, any European Economic Community country or Japan
whose commercial paper is rated an A-1 or better by Standard &
Poor's Ratings Group or P-1 or better by Moody's Investors Service,
Inc. or whose long term debt is rated AA or better by Standard &
Poor's Ratings Group or Aa2 or better by Moody's Investors Service,
Inc. and has capital, surplus and undivided profits aggregating at
least $1,000,000,000;
(iv) Investments in master note or deposit arrangements
with securities of the types described in (i) through (iii) above;
<PAGE>
<PAGE>
(v) Investments in money market programs of investment
companies registered as such with the Securities and Exchange
Commission which, at the time of acquisition, is rated, or if such
money market programs are not rated, the substantial majority of
the underlying investments of such investment company are rated A-1
or better by Standard & Poor's Ratings Group or P-1 or better by
Moody's Investors Service, Inc. or provided that such money market
programs invest only in Investments of the types described in (i)
through (iii) above;
(vi) Investments in repurchase agreements having terms of
not more than 365 days, with a bank, trust company or other
financial institution whose long-term unsecured debt, at the time
of acquisition of such Investment, is rated A or better by Standard
& Poor's Ratings Group, Duff & Phelps Credit Rating Co. or Fitch,
or A2 or better by Moody's Investors Service, Inc.;
(vii) Investments in (a) Interest Rate Agreements
designed to protect the Company or any Restricted Subsidiary
against fluctuations in interest rates in respect of Debt incurred
or to be incurred by the Company or any Restricted Subsidiaries,
which obligations do not exceed the aggregate principal amount of
such Debt, or (ii) Interest Rate Agreements to protect the Company
or any Restricted Subsidiary against fluctuations in the value of
Investments in fixed-income securities which were acquired in the
ordinary course of business provided in either case (a) the long-
term senior unsecured Debt of the counterparty thereto is rated A-
or better by Standard & Poor's Ratings Group or A3 or better by
Moody's Investors Service, Inc. at the time the Investment is made
and (b) the underlying Debt or Investment being so protected is
otherwise not prohibited by this Agreement;
(viii) Investments in existence on the Closing Date and
set forth on Schedule 6B;
(ix) Investments in joint ventures or minority equity
positions of Person engaged in the same business of the Company and
its Restricted Subsidiaries provided if after giving effect
thereto, the aggregate amount so invested by the Company and its
Restricted Subsidiaries in such Investments after the Closing Date
does not exceed at any time, in the aggregate, $15,000,000;
(x) endorsement of negotiable instruments for collection
and ownership of accounts receivable acquired in the ordinary
course of business;
(xi) demand deposits in banks in the ordinary course of
business (not for investment purposes);
(xii) Investments in the Company or a Restricted
Subsidiary which at the time is a Wholly-Owned Restricted
Subsidiary; and<PAGE>
<PAGE>
(xiii) Investments in any Person that concurrently with
such Investment becomes a Wholly-Owned Restricted Subsidiary
provided no Default or Event of Default exists immediately before
or immediately after such Investment or would reasonably be
expected to result therefrom.
"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, or the making of any payment on account of the purchase,
redemption, retirement or other acquisition, direct or indirect, of
any Equity Interest of the Company or any Restricted Subsidiary
(other than any such Equity Interest owned by the Company or a
Wholly-Owned Restricted Subsidiary) including without limitation,
the forgiveness or foreclosure by the issuer of any Debt secured by
a pledge of such capital stock or any purchase, redemption or other
acquisition or retirement for value prior to any scheduled
maturity, any scheduled prepayment of principal or any scheduled
sinking fund payment or, in any event, during the continuance of
any Default, or Event of Default of any Debt that is subordinated
in right of payment to the Notes.
"Restricted Subsidiary" means all of the Company's
Subsidiaries other than any Unrestricted Subsidiary.
"Restricted Subsidiaries' Guaranty" has the meaning specified
in paragraph 3L.
"Rule 144A" means Rule 144A promulgated under the Securities
Act and including any successor rule thereto, as such rule may be
amended from time to time.
"SEC" means the United States Securities and Exchange
Commission, or any Governmental Authority succeeding to the
functions of such Commission in the administration of the
Securities Act and/or the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated
thereunder, as from time to time in effect.
"Senior Officer" means the Chairman of the Board, the
President, Chief Executive Officer, any Senior Vice President,
Chief Financial Officer, Treasurer or principal Accounting Officer
of the Company or any other individual, whether or not an officer,
who performs similar functions, on behalf of the Company.
<PAGE>
<PAGE>
"Special Counsel" means the law firm of Sullivan & Worcester
or such other firm of legal counsel as the Purchasers may from time
to time designate as their Special Counsel for the purposes of this
Agreement or any matters related hereto.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person and/or
one or more of its Subsidiaries collectively owns sufficient equity
or voting interests to enable it or them (as a group) ordinarily,
in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity,
and any partnership or joint venture if more than a 50% interest in
the profits or capital thereof is collectively owned by such Person
and/or one or more of its Subsidiaries (unless such partnership can
and does ordinarily take major business actions without the prior
approval of such Person and/or one or more of its Subsidiaries).
Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Taxes" means any and all present or future taxes,
assessments, stamps, duties, fees, levies, imposts, deductions,
withholdings or other governmental charges of any nature whatsoever
and any liabilities with respect thereto, including any surcharge,
penalties, additions to tax, fines or interest thereon, now or
hereafter imposed, levied, collected, withheld or assessed by any
government or taxing authority of any country or political
subdivision of any country, or any international taxing authority.
"Trade Payables" means amounts payable to suppliers of goods
and services in the ordinary course of a Person's business.
"Transaction Documents" means this Agreement, the Notes, the
Restricted Subsidiaries' Guaranty and the Pledge Agreement.
"Transferee" means any direct or indirect transferee of all or
any part of the Notes.
"Unrestricted Subsidiary" means Diagnostic Networks of Texas,
Incorporated and Austin MRI Partners, L.P. and MRI StarMed, Inc.,
StarMed Staffing, Inc., StarMed Health Personnel, Inc., Allied
Healthcare, Inc., Nurse Care Plus, Inc. and StarMed Staffing of
Michigan, Inc. and any other Subsidiary formed or acquired
hereafter and engaged to a substantial extent in the temporary
staffing business or a business substantially related thereto.
"Voting Stock" means any securities of any class of a Person
whose holders are entitled under ordinary circumstances to vote for
the election of directors of such Person (or Persons performing
similar functions) (irrespective of whether at the time securities
of any other class or classes shall have or might have voting power
by reason of the happening of any contingency).
<PAGE>
<PAGE>
"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the voting power of all classes of the Voting
Stock and all of the beneficial ownership of which is owned
directly or indirectly through one or more other Wholly-Owned
Restricted Subsidiaries.
11. MISCELLANEOUS.
11.1A. Payments.
11.1A(1) Payments in Respect of Notes. The Company
agrees that, so long as a Purchaser shall hold any Notes, all
payments in respect of such Notes, required by the terms thereof or
otherwise by this Agreement, will be made in compliance with the
applicable terms thereof or hereof and by wire transfer to such
Purchaser of immediately available funds for credit to the account
or accounts as specified in the Exhibit A for such Purchaser, or
such other account or accounts in the United States as a Purchaser
may designate in writing, notwithstanding any contrary provision in
this Agreement or the Notes, with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will
make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made and of the date to which
interest has been paid. The Company agrees to afford the benefits
of this paragraph 11A to any Holder which shall have made the same
agreement in writing as the Purchasers have made in this paragraph
11A.
11.1A.(2) No Deduction or Set-off. The obligation of the
Company to pay principal, interest, dividends, Make Whole Amounts
and any other amounts under the Transaction Documents owed by the
Company shall be absolute and unconditional and shall not be
affected by any circumstances, including without limitation any
set-off, counterclaim, recoupment, defense or other right which the
Company may have against a Purchaser or any Transferee for any
reason whatsoever.
11.1B. Expenses. Whether or not the transactions provided
for hereby shall be consummated, the Company will pay on demand and
save each Purchaser and its Transferees harmless against liability
for the payment of, all out-of-pocket expenses arising in
connection with such transactions and in connection with any
subsequent modification of, or consent under, the Transaction
Documents, whether or not such transactions are consummated or
modification shall be effected or consent granted ("Expenses"),
including (i) the reasonable fees and expenses of Special Counsel
and its agents and of any other special or local counsel or other
special advisers engaged and reasonably required by the Purchasers
in connection with the transactions contemplated by this Agreement;
provided the Company shall not be liable for the fees and expenses
of more than one Special Counsel in any single matter, (ii) the
costs of obtaining the private placement number from Standard &<PAGE>
<PAGE>
Poor's Ratings Group for the Notes and (iii) the costs and
expenses, including reasonable attorneys' fees and the fees of any
other special or financial advisers, incurred in enforcing, and
during the continuance of a Default or after the occurrence of an
Event of Default, monitoring or evaluating any rights under the
Transaction Documents (including, without limitation, any costs,
expenses or fees incurred in connection with perfecting or
maintaining perfection of any Lien hereafter existing in favor of
the Purchasers or any of their Transferees as security for the
obligations of the Company or any Restricted Subsidiary under the
Transaction Documents or maintaining or protecting the collateral
which is the subject of such Lien) or in responding to any subpoena
or other legal process issued in connection with the Transaction
Documents or the transactions provided for hereby or thereby or by
reason of a Purchaser or any Transferee having acquired any of its
Notes, including, without limitation, costs and expenses incurred
in connection with any bankruptcy or insolvency of the Company or
any Restricted Subsidiary or in connection with any workout or
restructuring of any of the transactions contemplated by the
Transaction Documents. The Company will pay and will save each
Purchaser and its Transferees from all claims in respect of any
fees, costs or expenses, if any, of any brokers and finders not
retained by such Purchaser or Transferee. The obligations of the
Company under this paragraph 11B shall survive the transfer of any
of its Notes or any interest therein by a Purchaser or any
Transferee and the payment of any Notes.
11.1C. Consent to Amendments. No Transaction Document may
be amended, and the Company may not take any action herein
prohibited, or omit to perform any act herein required to be
performed by it, without the written consent of the Required
Holders, except that no decrease in the interest rate of, or Make
Whole Amount payable on, the Notes or change to the mandatory
repayment of the Notes as provided in paragraph 4C or any change to
this paragraph 11C shall be made without the written consent of all
Holders. Each Holder at the time or thereafter shall be bound by
any amendment or waiver authorized by the Required Holders in
accordance with this paragraph 11C whether or not its Notes are
marked to reflect such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. No course of
dealing between the Company or any Restricted Subsidiary and any
Holder nor any delay in exercising any rights under any Transaction
Document shall operate as a waiver of any rights of any Holder.
11.1D. Persons Deemed Owners; Participations. The Company
may treat the Person at the time shown on the register referenced
in paragraph 11O in whose name any Note, is issued as the owner and
holder of such Note for the purpose of receiving payment on or in
respect of such Note and for all other purposes whatsoever, and the<PAGE>
<PAGE>
Company shall not be affected by notice to the contrary. Subject
to the preceding sentence, a Holder may from time to time grant
participations in all or any part of its Notes to any Person on
such terms and conditions as may be determined by such Holder in
its sole and absolute discretion; provided that the Company shall
not be obligated to make payments other than as directed by a
Holder pursuant to paragraph 11A.
11.1E. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained in any
Transaction Document or made in any other writing by or on behalf
of the Company in connection herewith shall survive the execution
and delivery of such Transaction Document or other writing, the
transfer by a Purchaser of any Notes or portion thereof or interest
therein and the payment of any Notes and may be relied upon by any
Transferee as having been true when made, regardless of any
investigation made at any time by or on behalf of the Purchasers or
any Transferee. All statements contained in any certificate or
other instrument delivered by or on behalf of a Member pursuant to
any Transaction Document shall be deemed representations and
warranties of the Company under this Agreement and not of the
individuals executing such certificates or other instruments on
behalf of the Company. Subject to the preceding sentence, the
Transaction Documents embody the entire agreement and understanding
between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof
and thereof.
11.1F. Successors and Assigns. All covenants and other
agreements in this Agreement contained by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of such party (including, without
limitation, any Transferee) whether so expressed or not; provided
except as expressly permitted by this Agreement, the Company may
not delegate the performance of any of its obligations hereunder.
11.1G. Confidential Information. For the purposes of this
paragraph, "Confidential Information" means information delivered
to a Purchaser by or on behalf of the Company or a Restricted
Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement, whether in the past, present
or future, that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received
by the Purchaser as being confidential information of the Company
or a Restricted Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known
to the Purchaser prior to the time of such disclosure or (b)
subsequently becomes publicly known through no act or omission by
the Purchaser. Each Purchaser will maintain the confidentiality of
such Confidential Information in accordance with the procedures
adopted by it in good faith to protect confidential information of<PAGE>
<PAGE>
third parties delivered to it. Notwithstanding the foregoing, a
Purchaser may deliver copies of any Confidential Information to
such Purchaser's and its Subsidiaries' directors, officers,
employees, and to its agents and professional consultants who in
the ordinary course performance of their duties to or for the
benefit of the Purchaser have a need to have access to such
information, any other Purchaser, any Person to whom such
Purchaser offers to sell any of its Notes or any part thereof or to
whom such Purchaser sells or offers to sell a participation in all
or any part of its Notes (provided such Person has entered into a
confidentiality agreement with respect to such information
substantially on the terms of the first two sentences of this
paragraph 11G), any federal or state regulatory authority having
jurisdiction over such Purchaser, any Person from which a
Purchaser offers to purchase any security of a Member (provided
such Person has entered into a confidentiality agreement with
respect to such information substantially on the terms of the first
two sentences of this paragraph 11G), the NAIC or any regulatory
agency which generally require access to information about a
Purchaser's investment portfolio or any similar organization,
Standard & Poor's Ratings Group (but only to the extent required to
obtain private placement numbers for the Notes) or any other
Person to which such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or
order applicable to such Purchaser, (b) in response to any subpoena
or other legal process, (c) in connection with any litigation to
which such Purchaser is a party relating to the transactions
contemplated by this Agreement, or (d) if an Event of Default has
occurred and is continuing, to the extent that such Purchaser
determines disclosure is necessary or appropriate in the
enforcement of or for the protection of its rights and remedies
under the Transaction Documents; provided in the case of (b), the
Purchaser shall give the Company prompt written notice of any such
subpoena or legal process and, to the extent and for so long as it
lawfully may do so, the Purchaser shall refrain from making any
disclosure of Confidential Information in response thereto if the
Purchaser receives, prior to its compliance with such subpoena or
legal process, written notice from the Company that it intends to
seek an appropriate protective order for such Confidential
Information or injunction against such disclosure. Each Holder, by
its acceptance thereof, will be deemed to have agreed to be bound
by and to be entitled to the benefits of this paragraph 11G as
though it were a party to this Agreement.
11.1H. Notices. All notices and other written
communications provided for hereunder shall be given in writing and
delivered in person or sent by recognized overnight delivery
service (with charges prepaid) or by facsimile transmission, if the
original of such facsimile transmission is sent on the same day by
a recognized overnight delivery service (with charges prepaid) and
(i) if to a Purchaser or its nominee, addressed to such Person at<PAGE>
<PAGE>
the address or fax number specified for such communications to such
Purchaser in Exhibit A, or at such other address or fax number as
such Person shall have specified to the Company in writing, (ii) if
to any other Holder, addressed to such other Holder at such address
or fax number as is specified for such Holder in the Note register
referenced in paragraph 11O and (iii) if to the Company, addressed
to it at 155 State Street, Hackensack, New Jersey 07601, Attention:
President, Fax No.: (201) 488-8455, with a copy to Werbel &
Carnelutti, 711 Fifth Avenue, New York, New York 10022, Attention:
Stephen M. Davis, Esq., or at such other address or fax number as
the Company shall have specified to each Holder in writing given in
accordance with this paragraph 11H. Notice given in accordance
with this paragraph 11H shall be effective upon the earlier of the
date of delivery or the second Business Day at the place of
delivery after dispatch.
11.1I. Descriptive Headings. The descriptive headings of
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
11.1J. Solicitation of Holders. The Company will provide
each Holder with sufficient information, sufficiently far in
advance of the date a decision is required, to enable such Holder
to make an informed and considered decision with respect to any
proposed amendment, waiver or consent requested under any
Transaction Document. The Company will deliver executed or true
and correct copies of each such amendment, waiver or consent
effected to each Holder promptly following the date on which it is
executed and delivered by, or receives the consent or approval of,
the Required Holders. Neither the Company nor any Restricted
Subsidiary will directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee, expense (other than such Holder's Expenses) or
otherwise, to any Holder for or in connection with any consent by
such Holder in its capacity as a Holder to any waiver or amendment
of any of the terms of the Transaction Documents unless such
remuneration is concurrently paid, on the same terms, ratably to
all Holders whether or not such Holder consented to the waiver or
amendment.
11.1K. Reproduction of Documents. Any Transaction Document
and all related documents, including (a) consents, waivers and
modifications which may subsequently be executed, (b) documents
received by the Purchasers on the purchase of the Notes (except the
Notes) and (c) financial statements, certificates and other
information previously or subsequently furnished to the Purchasers,
may be reproduced by the Purchasers by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process and the Purchasers may destroy any original
document so reproduced. The Company agrees and stipulates that any
such reproduction shall, to the extent permitted by applicable law,<PAGE>
<PAGE>
be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in
existence and whether or not the reproduction was made by a
Purchaser in the regular course of business, and to the extent not
prohibited by applicable law, that any enlargement, facsimile or
further reproduction of the reproduction shall likewise be
admissible in evidence. This paragraph 11K shall not prohibit the
Company or any Holder from contesting any such reproduction to the
same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
11.1L. 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).
11.1M. Consent to Jurisdiction and Service and Waiver of
Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY HEREBY ABSOLUTELY AND IRREVOCABLY CONSENTS AND SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF ANY FEDERAL COURT LOCATED IN SAID JURISDICTION IN CONNECTION
WITH ANY ACTIONS OR PROCEEDINGS BROUGHT AGAINST IT BY ANY HOLDER
ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION DOCUMENTS AND
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT.
THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT IN ANY SUCH
ACTION OR PROCEEDING, IN EACH CASE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (A) IT IS NOT PERSON-
ALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, (B) IT IS IM-
MUNE FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO IT OR ITS PROPERTY, (C) ANY
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, OR (D) SUCH TRANSACTION DOCUMENT MAY NOT BE ENFORCED IN OR
BY ANY SUCH COURT. IN ANY SUCH ACTION OR PROCEEDING, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY HEREBY
ABSOLUTELY AND IRREVOCABLY WAIVES TRIAL BY JURY AND PERSONAL IN
HAND SERVICE OF ANY SUMMONS, COMPLAINT, DECLARATION OR OTHER
PROCESS AND HEREBY ABSOLUTELY AND IRREVOCABLY AGREES THAT THE
SERVICE MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO IT AT ITS ADDRESS SET FORTH IN OR FURNISHED
PURSUANT TO THE PROVISIONS OF THIS AGREEMENT, OR BY ANY OTHER
MANNER PROVIDED BY LAW. ANYTHING HEREINBEFORE TO THE CONTRARY
NOTWITHSTANDING, ANY HOLDER MAY SUE THE COMPANY IN ANY OTHER
APPROPRIATE JURISDICTION AND ANY PARTY MAY SUE ANY OTHER PARTY ON
A JUDGMENT RENDERED BY ANY COURT PURSUANT TO THE PROVISIONS OF THE
FIRST SENTENCE OF THIS PARAGRAPH 11M IN THE COURTS OF ANY COUNTRY,
STATE OF THE UNITED STATES OR PLACE WHERE SUCH OTHER PARTY OR ANY
OF ITS PROPERTY OR ASSETS MAY BE FOUND OR IN ANY OTHER APPROPRIATE
JURISDICTION.<PAGE>
<PAGE>
11.1N. 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.
11.1O. Registration, Transfer, Exchange and Replacement of
Notes.
11.10(1) Registration. The Notes are to be issued and
are transferable in whole or in part as registered Notes without
coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any remaining principal amount less than
$1,000,000 and may be exchanged for one or more Notes of any
authorized denomination and like class and like aggregate
outstanding principal amount. The Company shall keep at the
principal executive office of the Company a register in which the
Company shall record the registrations of the Notes and the names
and addresses of the Holders from time to time and all transfers
thereof. The Company shall provide any Holder, promptly upon
request, a complete and correct copy of the names and addresses of
the then Holders.
11.1O.(2) Transfer and Exchange. Upon surrender of a
Note to the Company for registration of transfer or exchange
endorsed or accompanied by a written instrument of transfer duly
executed by the registered Holder or its attorney duly authorized
in writing and accompanied by the address for notices, the Company
shall at its expense (except as provided below), execute and
deliver one or more replacement Notes of like class and tenor and
of a like aggregate amount, registered in the name of such
Transferee or Transferees. Each new Note will bear interest from
the date to which interest shall have been paid on the surrendered
Note or the date of surrender if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of
any such transfer.
11.1O.(3) Replacement. Upon receipt of written notice
from a Holder of the loss, theft, destruction or mutilation of a
Note and, in the case of any such loss, theft or destruction, upon
receipt of an indemnification agreement of such Holder (and, in the
case of a Holder which is not a Qualified Institutional Buyer, with
such security as may be reasonably requested by the Company)
satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, at its expense, of like class and tenor, in
lieu of the lost, stolen, destroyed or mutilated Note, and each new
Note will bear interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or if
no interest has been paid thereon, the date of such lost, stolen,
destroyed or mutilated Note.<PAGE>
<PAGE>
11.1P. Compliance by Subsidiaries. The Company, as the
shareholder of its Subsidiaries, shall cause such meetings to be
held, votes to be cast, resolutions to be passed, by-laws to be
made and confirmed, documents to be executed and all other things
and acts to be done to ensure that, at all times, the provisions of
this Agreement relating to its Subsidiaries are complied with.
11.1Q. Severability. If any provision of this Agreement
shall be held or deemed to be, or shall in fact be, invalid,
inoperative, illegal or unenforceable as applied to any particular
case in any jurisdiction because of the conflict of such provision
with any constitution or statute or rule of public policy or for
any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid,
inoperative, illegal or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative,
illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such
invalid, inoperative, illegal or unenforceable provision had never
been contained herein and such provision reformed so that it would
be valid, operative and enforceable to the maximum extent permitted
in such jurisdiction or in such case.
11.1R. Termination. This Agreement and the rights of the
Holders and the obligations of the Company hereunder shall not
terminate until each of the Notes, including all principal,
interest, including interest on overdue interest and Make Whole
Amount has been indefeasibly paid in full and all Expenses and all
other amounts owed to any Purchaser or any Holder pursuant to the
terms of any Transaction Document has been indefeasibly paid in
full.
11.1S. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly
or indirectly by such Person.
11.1T. Substitution of Purchaser. Each Purchaser has the
right to substitute any one of its Affiliates as the purchaser of
the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by such
Purchaser and its Affiliate, shall contain such Affiliate's
agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it<PAGE>
<PAGE>
of the representations set forth in paragraph 9. In the event that
such Affiliate is so substituted as a Purchaser hereunder and such
Affiliate thereafter transfers to the original Purchaser all of the
Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, such Purchaser shall have all the rights
of a Holder.
[SIGNATURES FOLLOW ON PAGE 42]
<PAGE>
<PAGE>
If you are in agreement with the foregoing, please sign the
form of acceptance on the enclosed counterpart of this letter and
return the same to the Company, whereupon this letter shall become
a binding agreement, executed under seal between you and the
Company.
Very truly yours,
MEDICAL RESOURCES, INC.
By:
-------------------------------
Name:
Title:
The foregoing Agreement is hereby
accepted as of the date first above written.
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
- - -------------------------------------
Name:
Title:
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
By:
- - -------------------------------------
Name:
Title:
GREAT NORTHERN INSURED ANNUITY
CORPORATION
By:
- - -------------------------------------
Name:
Title:
<PAGE>
<PAGE>
OCCIDENTAL LIFE INSURANCE COMPANY
OF NORTH CAROLINA
By: CONNING ASSET MANAGEMENT
By:
----------------------------
Name:
Title:
PENINSULAR LIFE INSURANCE CO.
By: CONNING ASSET MANAGEMENT
By:
---------------------------------
Name:
Title:
EXECUTIVE RISK INDEMNITY INC.
By: CONNING ASSET MANAGEMENT
By:
-----------------------------------
Name:
Title:
99539
