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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):
February 20, 1997
MEDICAL RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20440 13-3584552
(State or other (Commission (I.R.S.Employer
jurisdiction) File Number) Identification No.)
155 State Street, Hackensack, New Jersey 07601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(201) 488-6230
N/A
(Former name and former address, if changed since last report)
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Item 5. Other Events
On February 20, 1997, Medical Resources, Inc. (the
"Company") completed a $52,000,000 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 rate of 7.77%, 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 retire approximately
$14,000,000 of existing equipment debt, 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 debit covenants, and certain
dividend limitations. In addition, the Notes are secured by
certain of the Company's subsidiaries.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
20. Note Purchase Agreement dated as of February 20, 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:
-------------------------
Secretary
Date: March 4, 1997
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<EX. 20>
MEDICAL RESOURCES, INC.
7.77% SENIOR NOTES DUE FEBRUARY 20, 2005
PPN: 58467* AB O
NOTE PURCHASE AGREEMENT
Dated as of February 20, 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 1
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 2
3F. Rating 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 3
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 4
5A. Financial and Other Reporting
by the Company 4
5B. Information Required by Rule 144A 6
5C. Inspection of Property 7
5D. Corporate Existence, Etc. 7
5E. Payment of Taxes and Claims 7
5F. Compliance with Laws, Etc. 7
5G. Maintenance of Properties and Leases 7
5H. Insurance 8
5I. Scope of Business 8
5J. Use of Proceeds 8
5K. Environmental Compliance 8
5L. Maintenance of Books and Records 8
5M. Delivery of Guaranty 9
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6. NEGATIVE COVENANTS 9
6A. Financial Covenants 9
6A(1).Consolidated Net Worth. 9
6A(2).Interest Expense Coverage 9
6A(3).Limitation on Consolidated
Total Debt 9
6A(4).Limitation on Priority Debt 10
6B. Restricted Payments and Restricted
Investment 10
6C. Liens and Other Restrictions 10
6C(1).Liens 10
6C(2)Sale of Stock 12
6C(3).Merger and Sale of Assets 12
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 17
7C. Notice of Acceleration or Rescission 17
7D. Other Remedies, No Waivers or
Election of Remedies 18
8. REPRESENTATIONS AND WARRANTIES 18
8A. Organization, Etc. 18
8B. Stock Ownership 18
8C. Financial Statements 19
8D. Actions Pending 19
8E. Title to Properties 19
8F. Affiliates and Investments in Others 19
8G. Tax Returns and Payments 20
8H. Conflicting Agreements and Other Matters 20
8I. Offering of Notes 20
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 23
8R. Existing Indebtedness; Future Liens 23
8S. Compliance with Laws, Etc. 23
9. REPRESENTATIONS OF THE PURCHASERS 24
10. DEFINITIONS 24
10A. Prepayment and Make Whole Amount Terms 24
10B. Other Terms 25<PAGE>
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11. MISCELLANEOUS 35
11A. Payments 35
11A(1)Payments in Respect of Notes 35
11A(2)No Deduction or Set-off 35
11B. Expenses 35
11C. Consent to Amendments 36
11D. Persons Deemed Owners; Participations 36
11E. Survival of Representations and Warranties;
Entire Agreement 36
11F. Successors and Assigns 36
11G. Confidential Information 36
11H. Notices 37
11I. Descriptive Headings 37
11J. Solicitation of Holders 37
11K. Reproduction of Documents 38
11L. Governing Law 38
11M. Consent to Jurisdiction and Service
and Waiver of Trial by Jury 38
11N. Counterparts 39
11O. Registration, Transfer, Exchange
and Replacement of Notes 39
11O(1)Registration 39
11O(2)Transfer and Exchange 39
11O(3)Replacement 39
11P. Compliance by Subsidiaries 39
11Q. Severability 39
11R. Termination 40
11S. Construction 40
11T. Substitution of Purchaser 40
Signature Page 41
12. SCHEDULES AND EXHIBITS
EXHIBIT A - Purchasers
EXHIBIT B - Form of Class A Note
EXHIBIT C - Form of Opinion of Counsel to the Company
EXHIBIT D - Form of Officer's Certificate
EXHIBIT E - Form of Clerk's Certificate
EXHIBIT F - Form of Restricted Subsidiaries' Guaranty
EXHIBIT G - Form of Pledge Agreement
SCHEDULE 2B - Wiring Instructions
SCHEDULE 3L - Limited Partnership Restricted Subsidiaries<PAGE>
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SCHEDULE 5H - Insurance Matters
SCHEDULE 5J - Use of Proceeds
SCHEDULE 6B - Existing Investments
SCHEDULE 6C(1)- Existing Liens
SCHEDULE 6C(6)- 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 February 20, 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(4), the "Company") agrees with you as follows:
1. AUTHORIZATION; RANKING.
1A. Authorization of Issue of the Notes. The Company will
authorize the issue and sale of its 7.77% Senior Notes in the
aggregate principal amount of $52,000,000, 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 7.77%
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
9.77% 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 "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.
1B. Ranking. The 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).
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2. PURCHASE AND SALE OF THE NOTES; CLOSING.
2A. 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.
2B. Closing. The purchase and sale of the Notes shall take
place at the offices of Sullivan & Worcester, One Post Office
Square, Boston, Massachusetts 02109, at a closing (the
"Closing") to be held on February 20, 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:
3A. 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 C 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<PAGE>
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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.
3B. 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.
3C. 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 D, 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 E
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.
3D. 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 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<PAGE>
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may reasonably request to enable them to determine whether such
purchase is so permitted.
3E. Private Placement Numbers. A Private Placement Number
shall have been assigned to each class of Notes by Standard &
Poor's CUSIP Service Bureau.
3F. Rating. The Notes shall have been rated "2" by the
NAIC and Purchasers shall have received such confirmation thereof
as they may reasonably request.
3G. 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.
3H. 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.
3I. 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.
3J. 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.
3K. 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.
3L. Restricted Subsidiaries' Guaranty. Each Restricted
Subsidiary other than those listed on Schedule 3L (the "Limited
Partnership Restricted Subsidiaries") shall have executed and
delivered to the Purchasers the Guaranty in the form of Exhibit F
(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.
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3M. Pledge of Equity Interest. The Company and any
Restricted Subsidiary owning Equity Interest in any Limited
Partnership Restricted Subsidiary shall have pledged such Equity
Interest to the Holders pursuant to a Pledge Agreement in the
form of Exhibit G (the "Pledge Agreement") and such 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.
4A. 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.
4B. 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.
4C. Scheduled Repayment of Notes. The Company shall on
each February 20th beginning 2001, repay $10,400,000 of the
aggregate unpaid principal amount of the Notes and on
February 20, 2005, shall repay in full all unpaid principal of
the Notes, in each case at 100% of the principal amount so
repaid.
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4D. Payments Pro Rata; Application of Payments. Upon any
partial prepayment of the Notes pursuant to paragraph 4A and any
scheduled repayment 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 among the
Holders in proportion to the respective outstanding principal
amounts of the Notes held by them. All partial prepayments of
the Notes shall be applied to the obligations of the Company to
make the scheduled payments required by paragraph 4C on in
inverse order of maturity.
4E. 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.
4F. 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.
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5. AFFIRMATIVE COVENANTS.
5A. 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 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;
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(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 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;
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(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;
(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
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(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.
5B. 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.
5C. 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).
5D. 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.
5E. 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,<PAGE>
<PAGE>
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).
5F. 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.
5G. 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 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.<PAGE>
<PAGE>
5H. 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.
5I. 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.
5J. 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.
5K. 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 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<PAGE>
<PAGE>
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.
5L. 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 days
notice is given by the Company with respect to such change
pursuant to subparagraph (b) above.
5M. Delivery of Guaranty. Promptly upon the Company
acquiring any Restricted Subsidiary or any Limited Partnership
Restricted Subsidiary becoming a Wholly-Owned Restricted
Subsidiary, such Restricted Subsidiary shall become a party to
the Restricted Subsidiaries' Guaranty, and shall provide to the
Holders evidence satisfactory to the Required Holders<PAGE>
<PAGE>
(which, upon the request of the Required Holders, shall include
an opinion of counsel) that the Restricted Subsidiaries' Guaranty
remains in full force and effect and is enforceable against such
Restricted Subsidiary in accordance with its terms.
6. NEGATIVE COVENANTS.
6A. Financial Covenants.
6A(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).
6A(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.
6A(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
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. <PAGE>
<PAGE>
6A(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 (a) 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 (b) 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 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 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 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.
6B. 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
$2,5000,000 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.
<PAGE>
<PAGE>
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.
6C. Liens and Other Restrictions. The Company and the
Restricted Subsidiaries shall not:
6C(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);
(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<PAGE>
<PAGE>
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
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<PAGE>
<PAGE>
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; and
(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.
6C(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 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.
6C(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;
<PAGE>
<PAGE>
(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;
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
(iv) 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<PAGE>
<PAGE>
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 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.
<PAGE>
<PAGE>
6C(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.
6C(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.
6D. 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 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<PAGE>
<PAGE>
(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.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall oc-
cur 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<PAGE>
<PAGE>
(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
(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
<PAGE>
<PAGE>
(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
(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
<PAGE>
<PAGE>
(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 (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<PAGE>
<PAGE>
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.
7B. 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 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.
7C. 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.
7D. 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<PAGE>
<PAGE>
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:
8A. 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 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<PAGE>
<PAGE>
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).
8B. 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.
(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.
8C. 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<PAGE>
<PAGE>
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.
8D. 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.
8E. 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);
(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.
<PAGE>
<PAGE>
8F. 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.
8G. 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 Subsidiarys
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 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.
8H. 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<PAGE>
<PAGE>
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, judgments, 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.
8I. 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 and 50 other
Institutional Investors, 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
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.
8J. 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"<PAGE>
<PAGE>
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.
8K. 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.
(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.
<PAGE>
<PAGE>
(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.
8L. 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.
8M. 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:
<PAGE>
<PAGE>
(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).
8N. 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.
8O. 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<PAGE>
<PAGE>
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.
8P. Disclosure. The Transaction Documents, the Memorandum,
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.
8Q. 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.
8R. 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 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).<PAGE>
<PAGE>
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).
8S. 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);
(b) The Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
<PAGE>
<PAGE>
(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:
10A. 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.
<PAGE>
<PAGE>
"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 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 intraday 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<PAGE>
<PAGE>
payments are scheduled to be made, then the amount of the next
succeeding 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.
10B. Other Terms.
"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 Person, as well as, in the case of an individual,
such individual's spouse, issue, parents, siblings and issue of<PAGE>
<PAGE>
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.
"Agreement" means this 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
accounted for as indebtedness (net of interest expense) in ac-
cordance 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.
"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<PAGE>
<PAGE>
(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 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<PAGE>
<PAGE>
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(4)(iv).
"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<PAGE>
<PAGE>
obligation, or to make payment for any securities, products,
materials or supplies or for any 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 sub-
stance: the presence of which at such time requires notifica-
tion, investigation, monitoring or remediation under any Environ-
mental Law; which at such time is defined as a "hazardous
waste", "hazardous material", "hazardous substance", "toxic sub-
stance", "pollutant" or "contaminant" under any Environmental
Law, including, without limitation, the Comprehensive Environmen-
tal Response, Compensation and Liability Act (42 U.S.C. Section
9601 et seq.) and any applicable local statutes and the regula-
tions promulgated thereunder; or without limitation, which
contains gasoline, diesel fuel or other petroleum products, as-
bestos 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<PAGE>
<PAGE>
such Person, based on the assumption that such Interest Rate
Agreement 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.
"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.
"Limited Partnership Restricted Subsidiaries" has the
meaning specified in paragraph 3L.
"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'<PAGE>
<PAGE>
business, 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.
"Memorandum" means the Confidential Private Placement
Memorandum dated December, 1996 (including the Exhibits thereto)
prepared by Dillon, Read & Co. Inc. on the basis of information
provided by the Company.
"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.
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"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, 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.
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"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.
"Pledge Agreement" has the meaning specified in paragraph
3M.
"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 on any property owned by the
Company or any of its Restricted Subsidiaries and (ii) all Debt
of the Restricted Subsidiaries (other than Debt owed solely by
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.
"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.
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"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;
(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
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<PAGE>
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
(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.
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"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 3K.
"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.
"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.
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<PAGE>
"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).
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"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.
11A. Payments.
11A(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.
11A(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.
11B. 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<PAGE>
<PAGE>
from Standard & 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.
11C. 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.
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11D. 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 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.
11E. 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.
11F. Successors and Assigns. All covenants and other agree-
ments in this Agreement contained by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respec-
tive 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.
11G. 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<PAGE>
<PAGE>
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 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 organiza-
tion, 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.
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11H. 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
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.
11I. 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.
11J. 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.
11K. 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<PAGE>
<PAGE>
(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, 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.
11L. 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).
11M. 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<PAGE>
<PAGE>
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.
11N. 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.
11O. Registration, Transfer, Exchange and Replacement of
Notes.
11O(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.
11O(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.
11O(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 <PAGE>
<PAGE>
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.
11P. 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.
11Q. 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.
11R. 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.
11S. 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.<PAGE>
<PAGE>
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.
11T. 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
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 41]
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:<PAGE>
<PAGE>
JOHN HANCOCK LIFE INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
MELLON BANK, N.A., AS TRUSTEE UNDER
THE LONG-TERM INVESTMENT TRUST
By:
Name:
Title:
AUSA LIFE INSURANCE COMPANY, INC.
By:
Name:
Title:
LIFE INVESTORS INSURANCE COMPANY
OF AMERICA
By:
Name:
Title:
GREAT AMERICAN LIFE INSURANCE
COMPANY
By:
Name:
Title:
GREAT NORTHERN INSURED ANNUITY
CORPORATION
By:
Name:
Title:
AMERICAN BANKERS INSURANCE
COMPANY OF FLORIDA
By:
Name:
Title:
<PAGE>
<PAGE>
COVA FINANCIAL SERVICES LIFE
INSURANCE COMPANY
By: CONNING ASSET MANAGEMENT
COMPANY
By:
Name:
Title:
PIERCE NATIONAL LIFE INSURANCE COMPANY
By:
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(General Account)
$10,000,000 SENIOR NOTE NO. 1
1.All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
The First National Bank of Boston
ABA No. 011000390
100 Federal Street
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Medical Resources, Inc.
PPN: 58467* AB O
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank (or trustee) from which wire transfer was sent,
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
4. All other communications which shall include, but not be
limited to, financial statements and certificates of compliance
with financial covenants, shall be delivered or mailed to:
<PAGE>
<PAGE>
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond & Corporate Finance Department, T-57
Fax No.: (617) 572-1605
5. All Notes purchased by the above shall be registered in the
name of John Hancock Mutual Life Insurance Company.
6. Tax I.D. No. 04-1414660.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(GBSA)
$5,000,000 SENIOR NOTE NO. 2
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
The First National Bank of Boston
ABA No. 011000390
100 Federal Street
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Medical Resources, Inc.
PPN: 58467* AB O
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank (or trustee) from which wire transfer was sent,
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
4. All other communications which shall include, but not be
limited to, financial statements and certificates of compliance
with financial covenants, shall be delivered or mailed to:
<PAGE>
<PAGE>
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond & Corporate Finance Department, T-57
Fax No.: (617) 572-1605
5. All Notes purchased by the above shall be registered in the
name of John Hancock Mutual Life Insurance Company.
6. Tax I.D. No. 04-1414660.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
JOHN HANCOCK LIFE INSURANCE COMPANY OF AMERICA
$1,000,000 SENIOR NOTE NO. 3
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
The First National Bank of Boston
ABA No. 011000390
100 Federal Street
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Medical Resources, Inc.
PPN: 58467* AB O
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank (or trustee) from which wire transfer was sent,
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
4. All other communications which shall include, but not be
limited to, financial statements and certificates of compliance
with financial covenants, shall be delivered or mailed to:
<PAGE>
<PAGE>
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond & Corporate Finance Department, T-57
Fax No.: (617) 572-1605
5. All Notes purchased by the above shall be registered in the
name of John Hancock Life Insurance Company of America.
6. Tax I.D. No. 13-3072894.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
$1,000,000 SENIOR NOTE NO. 4
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
The First National Bank of Boston
ABA No. 011000390
100 Federal Street
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Medical Resources, Inc.
PPN: 58467* AB O
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank (or trustee) from which wire transfer was sent,
shall be delivered or mailed to:
John Hancock Mutual Life
Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Securities Accounting Division T-10
4. All other communications which shall include, but not be
limited to, financial statements and certificates of compliance
with financial covenants, shall be delivered or mailed to:
<PAGE>
<PAGE>
John Hancock Mutual Life
Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
Attention: Bond and Corporate Finance Department T-57
Fax No: 617-572-1605
5. All securities shall be registered in the name of John
Hancock Variable Life Insurance Company.
6. Tax I.D. No. 04-2664016.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
MELLON BANK, N.A., AS TRUSTEE FOR THE
LONG-TERM INVESTMENT TRUST
$3,000,000 SENIOR NOTE NO. 5
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit & Trust Company
ABA #: 011001234
DDA: 125261
Ref: ATTF 179168
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank (or trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Mellon Bank, N.A.
Three Mellon Bank Center
Room 153-3610
Attn: Principal & Interest Unit
Pittsburgh, PA 15259-0001
3. All other communications shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Stephen A. MacLean, Bond and Corporate
Finance Dept., T-57
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 151-1935
Pittsburgh, PA 15258
Attention: Bernadette Rist
4. All securities acquired for the Long-Term Investment Trust
shall be registered in the name of MELLON BANK, N.A., TRUSTEE
UNDER THE LONG-TERM INVESTMENT TRUST dated October 1, 1996.
<PAGE>
<PAGE>
5. A copy of the foregoing notices relating to changes in
issuer's name, address or principal place of business or location
of collateral and a copy of any legal opinions shall be delivered
or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Investment Law Division, T-50
6. Tax I.D. No. 13-3187026.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
LIFE INVESTORS INSURANCE COMPANY OF AMERICA
$6,000,000 SENIOR NOTE NO. 6
1. All payments on account of the Notes described above or
other obligations in accordance with the provisions thereof shall
be made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
Citibank, N.A.
111 Wall Street
New York, NY 10043
ABA # 021000089
DDA # 36112805
for further credit to the Life Investors Insurance Company
of America Custody Account No. 847658, proving sufficient
information like description, cusip, principal, and interest with
such wire transfer to identify the source and application of
funds.
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
AEGON USA Investment Management, Inc.
Attn: Michael Meese
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-5112
3. All other communications with respect to the Note described
above, which shall include, but not be limited to, financial
statements and certificates of compliance with financial
covenants, shall be delivered or mailed to:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-5335
Fax No.: 319-369-2666
4. All Notes purchased by the above shall be registered in the
name of AUSA Life Insurance Company, Inc.
5. Tax I.D. No. 42-0191090.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
AUSA LIFE INSURANCE COMPANY, INC.
$3,500,000 SENIOR NOTE NO. 7
1. All payments on account of the Notes described above or
other obligations in accordance with the provisions thereof shall
be made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
Citibank, N.A.
111 Wall Street
New York, NY 10043
ABA # 021000089
DDA # 36112805
for credit to the account of AUSA Life Insurance Company,
Inc., Account No. 98604 providing sufficient information like
description, cusip, principal and interest with such wire
transfer to identify the source and application of funds.
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
AEGON USA Investment Management, Inc.
Attn: Michael Meese
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-5112
3. All other communications with respect to the Note described
above, which shall include, but not be limited to, financial
statements and certificates of compliance with financial
covenants, shall be delivered or mailed to:
AEGON USA Investment Management, Inc.
Attn: Director of Private Placements
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-5335
Fax No.: 319-369-2666
4. All Notes purchased by the above shall be registered in the
name of AUSA Life Insurance Company, Inc.
5. Tax I.D. No. 36-6071399.
<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
GREAT AMERICAN LIFE INSURANCE COMPANY
$6,500,000 SENIOR NOTE NO. 8
1. All payments on account of the Notes described above or
other obligations in accordance with the provisions thereof shall
be made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
ABA No. 02000018
Bk of NYC/CTR/BBK
I0C 556- P&I
Great American Life Insurance Company 141001
Attention: Alex DeBorjia
Reference: Medical Resources, Inc. 7.77%, 2005
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
Bank of New York
One Wall Street, 14th Floor
New York, New York 10286
Attention: Alex DeBorjia
With a copy to:
Great American Life Insurance Company
c/o American Money Management Corporation
One East Fourth Street
Cincinnati, Ohio 45202
3. All other communications with respect to the Note described
above, which shall include, but not be limited to, financial
statements and certificates of compliance with financial
covenants, shall be delivered or mailed to:
Great American Life Insurance Company
c/o American Money Management Corporation
One East Fourth Street, 3rd Floor
Cincinnati, Ohio 45202
Attention: Bill Effler, Senior Vice President
4. All Notes purchased by the above shall be registered in the
name of Hare & Co.
5. Tax I.D. Nos.: Great American Life Insurance Company: 13-
1935920
Hare & Co.: 13-6062916<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
GREAT NORTHERN INSURED ANNUITY CORPORATION
$5,000,000 SENIOR NOTE NO. 9
1. All payments on account of the Notes described above or
other obligations in accordance with the provisions thereof shall
be made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
Bankers Trust Company
16 Wall Street
New York, New York 10015
ABA 021001033
Attention: 99-911-145
Account No.: 97835
Reference: Medical Resources, Inc. 7.77% due 2005
PPN: 584670* AB O
[Identify principal or interest]
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
Great Northern Insured Annuity Corporation
c/o GNA Corporation
Two Union Square, 601 Union Street
Seattle, Washington 98101
Attention: Investment Accounting, 14th Floor
Telephone: 206-516-2871
Fax: 206-516-4740
3. All other communications with respect to the Note described
above, which shall include, but not be limited to, financial
statements and certificates of compliance with financial
covenants, shall be delivered or mailed to:
Great Northern Insured Annuity Corporation
c/o GNA Corporation
Two Union Square, 601 Union Street
Seattle, WA 98101
Attention: Investment Department, Glen Vanic
Telephone: 206-516-4591
Fax: 206-516-4863
4. All Notes purchased by the above shall be registered in the
name of SALKELD & CO.
5. Tax I.D. No. 91-1127115.<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY
$5,000,000 SENIOR NOTE NO. 10
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
NORTHERN CHGO/Trust
ABA #071000152
Credit wire account #51860410000
Account 26-02881/COVA Financial
Services Life Insurance Company
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
General American Life Insurance Company
Attention: Investment Accounting
P.O. Box 418
St. Louis, MO 63166
and
COVA Financial Services Life Insurance Co.
c/o The Northern Trust Company
P.O. Box 92996
Chicago, IL 60675
3. All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
General American Life Insurance Company
Attention: Investment Accounting
P.O. Box 418
St. Louis, MO 63166
and
COVA Financial Services Life Insurance Co.
c/o The Northern Trust Company
P.O. Box 92996
Chicago, IL 60675<PAGE>
<PAGE>
4. All other communications which shall include, but not be
limited to, financial statements and certificates of compliance
with financial covenants, shall be delivered or mailed to:
General American Life Insurance Company
Attention: Securities Division
P.O. Box 396
St. Louis, MO 63166
and
COVA Financial Life Insurance Co.
c/o The Northern Trust Company
P.O. Box 92996
Chicago, IL 60675
5. All Notes purchased by the above shall be registered in the
name of COVA Financial Services Life Insurance Company.
6. Tax I.D. No. 43-1236042.
<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA
$3,000,000 SENIOR NOTE NO. 11
1. All payments on account of the Notes described above or
other obligations in accordance with the provisions thereof shall
be made by bank wire transfer of immediately available funds for
credit, not later than 12 noon, Boston time, to:
American Bankers Insurance Company
Chase Manhattan Bank
ABA # 021000021
Account: 144056388
Attn: Investment Department
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
American Bankers Insurance Group
Attn: Investment Department
P. O. Box 979004
Miami, FL 33197-9004
3. All other communications with respect to the Note described
above, which shall include, but not be limited to, financial
statements and certificates of compliance with financial
covenants, shall be delivered or mailed to:
American Bankers Insurance Group
Attn: Investment Department
P. O. Box 979004
Miami, FL 33197-9004
4. All Notes purchased by the above shall be registered in the
name of American Bankers Insurance Company of Florida.
5. Tax I.D. No. 59-0593886.
<PAGE>
<PAGE>
EXHIBIT A - PURCHASERS
PIERCE NATIONAL LIFE INSURANCE COMPANY
$3,000,000 SENIOR NOTE NO. 12
1. All payments on account of the Note described above or other
obligations in accordance with the provisions thereof shall be
made by bank wire transfer of immediately available funds,
identifying the full name and private placement number of the
Notes and providing sufficient information to identify the source
of the transfer, and the name of interest and/or principal, Make
Whole Amount, if any, and any special payment to:
The Bank of New York
BNF IOC 566
ABA #021000018
Attn: P&I Dept.
Acct. Name:
Account No. 288431
2. Contemporaneous with the above wire transfer, advice setting
forth (1) the full name, interest rate and maturity date of the
Note or other obligations; (2) allocation of payment between
principal and interest and any special payment; and (3) name and
address of bank from which wire transfer was sent, shall be
delivered or mailed to:
Liberty Investment Group
Post Office Box 789
Greenville, South Carolina 29602
Attention: Barbara Stegall
and
Liberty Capital Advisors
Post Office Box 789
Greenville, South Carolina 29602
Attention: Pat Holbert
3. All other communications with respect to the Note described
above shall be delivered or mailed to:
Pierre National Life Insurance Company
c/o Liberty Capital Advisors
Post Office Box 789
Greenville, South Carolina 29062
Attention: Pete Dodd
4. All Notes purchased by the above shall be registered in the
name of HARE & CO.
5. Tax I.D. No. 95-0862040.
<PAGE>
<PAGE>
EXHIBIT B
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, OR (B) IF SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER AND ANY APPLICABLE STATE
SECURITIES LAWS.
MEDICAL RESOURCES, INC.
7.77% Senior Note
due February , 2005
PPN 58467* AB O
No. February , 1997
$
FOR VALUE RECEIVED, the undersigned, Medical Resources,
Inc., a Delaware corporation (the "Company") hereby promises to
pay to , or its
registered assigns (the "Holder"), the principal sum of
Dollars ($ ), with interest
(computed on the basis of a 360-day year of twelve 30-day months)
on the principal amount from time to time unpaid and not yet due
at the rate of 7.77% per annum from the date hereof and due and
payable semi-annually in arrears on each February and
August of each calendar year, beginning August , 1997.
Installments of principal, each in an amount equal to ($
), shall be due and payable on each February of each
calendar year commencing February , 2001 through February
, 2005. All unpaid principal and interest hereon shall be due and
payable in any event on February , 2005. Any overdue
principal, overdue Make Whole Amount and, to the extent permitted
by applicable law, overdue interest, shall bear interest at the
rate of 9.77% per annum, whether overdue by acceleration or
otherwise.
This note (this "Note") is one of the 7.77% Senior Notes
issued by the Company (the "Notes") pursuant to, and is subject
to, a Note Purchase Agreement dated as of February , 1997
between the Company and John Hancock Mutual Life Insurance
Company, John Hancock Life Insurance Company of America, John
Hancock Variable Life Insurance Company, Mellon Bank, N.A., as<PAGE>
<PAGE>
Trustee under the Long-Term Investment Trust, Life Investors
Insurance Company of America, AUSA Life Insurance Company, Inc.,
Great American Life Insurance Company, COVA Financial Life
Insurance Company, Great Northern Insured Annuity Corporation,
American Bankers Insurance Company of Florida and Pierce National
Life Insurance Company, as amended from time to time (the
"Agreement"). Capitalized terms used in this Note and not
defined herein have the meanings given therefor in the Agreement.
The Holder is entitled, equally and ratably with the other
holders of the Notes issued by the Company pursuant to the
Agreement, to the benefits of the Agreement.
All dollar amounts in this Note refer to United States
dollars. Payments of principal, Make Whole Amount and interest
are to be made at the place and in the manner specified by the
Purchaser of this Note in Exhibit A to the Agreement or at such
other place or manner as the Holder shall designate to the
Company in writing in accordance with the Agreement, in lawful
money of the United States of America. If any payment of
principal, Make Whole Amount or interest on or in respect of this
Note becomes due and payable on any day which is not a Business
Day, the payment shall be due and payable on the next succeeding
Business Day.
This Note is a registered note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer in accordance with the Agreement, a new Note for a like
principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company
shall not be affected by any notice to the contrary.
This Note may be declared or may otherwise become due and
payable prior to its expressed maturity in the events, on the
terms, with the Make Whole Amount and in the manner and amounts
as provided in the Agreement.
This Note is not subject to prepayment or redemption at the
option of the Company prior to its expressed maturity except on
the terms, with the Make Whole Amount and in the manner and
amounts as provided in the Agreement.
The Company and every maker, endorser and guarantor hereof
or of the debt evidenced by this Note waive presentment, demand,
notice protest, and all other demands, notices of intention to
accelerate the maturity of this Note and notice of acceleration
and all other notices (other than notices expressly required by
the Agreement) and suretyship defenses generally, in connection
with the delivery, acceptance, performance, default or
enforcement of or under this Note.<PAGE>
<PAGE>
THIS NOTE 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).
WITNESS: COMPANY:
MEDICAL RESOURCES, INC.
- ---------------------
By:----------------------------
Title:
<PAGE>
<PAGE>
EXHIBIT C
COVERAGE OF OPINION LETTER OF
COMPANY COUNSEL
1. The opinion is to be addressed to each Purchaser.
2. The opinion rendered is to be subject only to customary
qualifications and those otherwise acceptable to the Purchasers
and Special Counsel.
3. To the extent any portion of the opinion is given in
reliance on local counsel, the following language is to be used:
"The opinions set forth in paragraphs below, to the
extent that law applies, are based solely on
reliance on the opinion of , dated the date
hereof, an executed copy of which, addressed to you, is being
delivered to you simultaneously herewith. We have reviewed the
opinion of and advise you that such opinion is
satisfactory in form and scope to us and we believe that you and
we are justified in relying on such opinion.
4. The opinion is to cover the following substantive matters:
(a). That (i) the Company and each Restricted Subsidiary is
a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
with all requisite power and authority under such laws and under
its charter to own and operate its properties and to conduct its
business as currently conducted; (ii) the Company has all
requisite power and authority to execute and deliver, and to
perform its obligations under, the Transaction Documents to which
it is a party and to issue and deliver the Notes under the
Agreement; and (iii) each Restricted Subsidiary has all requisite
power and authority to execute and deliver, and to perform its
obligations under the Restricted Subsidiary Guaranty to which it
is a party.
(b). That (i) the Company and each Restricted Subsidiary is
duly qualified and in good standing as a foreign corporation in
all jurisdictions in addition to that of its incorporation in
which it is required by law so to qualify, except jurisdictions
wherein the failure so to qualify would not, individually or in
the aggregate, have a Material Adverse Effect and (ii) the
Company and each Restricted Subsidiary possesses all governmental
licenses, permits, approvals and other authorizations required
for the conduct of its business as currently conducted.
<PAGE>
<PAGE>
(c). That (i) the execution, delivery and performance of
each of the Transaction Documents and the issue of the Notes
under the Agreement have been duly authorized by all requisite
corporate action on the part of the Company and (ii) each of the
Transaction Documents has been duly executed and delivered by the
duly authorized officers of the Company and each constitutes its
valid and binding obligation, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of
general application affecting the rights and remedies of
creditors and the obligations of debtors, and by equitable
principles of general application (regardless of whether such
equitable principles are considered in an action at law or in
equity).
(d). That (i) the execution, delivery and performance of
each Restricted Subsidiary Guaranty has been duly authorized by
all requisite corporate action on the part of the Restricted
Subsidiary a party thereto and (ii) each Restricted Subsidiary
Guaranty has been duly executed and delivered by the duly
authorized officers of the Restricted Subsidiary a party thereto
and each constitutes such Restricted Subsidiary's valid and
binding obligation, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of
general application affecting the rights and remedies of
creditors and the obligations of debtors, and by equitable
principles of general application (regardless of whether such
equitable principles are considered in an action at law or in
equity).
(e). That to counsel's knowledge after due inquiry, (i)
there are no judgments presently outstanding and unsatisfied
against the Company or any Restricted Subsidiary, and (ii) no
action, suit, investigation or proceeding is pending or
threatened against the Company or any Restricted Subsidiary or
any of their properties, which if adversely determined would
reasonably be expected to have a Material Adverse Effect.
(f). That (i) the execution, delivery or performance of each
of the Transaction Documents by the Company, the offer and issue
of the Notes by the Company under the Agreement, the compliance
by the Members with the terms of the Agreement and the execution,
delivery and performance by each Restricted Subsidiary of the
Restricted Subsidiary Guaranty to which it is a party will not
result in (a) any breach of any of the terms, conditions or
provisions of, or conflict with or constitute a default in, or
result in the creation of any lien, charge or encumbrance upon
any properties or assets of (x) the Company or any Restricted
Subsidiary, to counsel's knowledge after due inquiry, under any
contract, agreement, indenture, mortgage, deed of trust or other
instrument or (y) the Company's or any Restricted Subsidiary's<PAGE>
<PAGE>
charter or by-laws and (ii) neither the Company nor any
Restricted Subsidiary is now in violation of (x) its charter or
bylaws or (y) any such contract, agreement, indenture, mortgage,
deed of trust or other instrument, where such default does, or is
reasonably expected to have in the future, a Material Adverse
Effect.
(g). That no consent, approval or authorization of, or
declaration or filing with, or notice to, any governmental
agency, authority, commission or council or any Person which is a
party to any contract, agreement, lease, indenture, mortgage,
deed of trust or instrument to which the Company or any
Restricted Subsidiary is a party or by which the Company or any
Restricted Subsidiary or the Company or any Restricted
Subsidiary's assets are bound, or pursuant to the charter or
by-laws of the Company or any Restricted Subsidiary (other than
the approval of the board of directors of the Company or such
Restricted Subsidiary, which has been obtained), is or was
required in connection with the valid execution, delivery and
performance of each of the Transaction Documents by the Company,
the offer and issue of the Notes under the Agreement and
compliance by the Members with the terms of the Agreement and the
execution, delivery and performance by each Restricted Subsidiary
of the Restricted Subsidiary Guaranty to which it is a party.
(h). That the execution, delivery and performance of each of
the Transaction Documents by the Company, the offer and issue of
the Notes under the Agreement, the compliance by the Members with
the terms of the Agreement and the execution, delivery and
performance by each Restricted Subsidiary of the Restricted
Subsidiary Guaranty to which it is a party, will not violate any
laws, rules, regulations, orders, writs, injunctions, judgments
or decrees, or any administrative orders applicable to the
Company or any Restricted Subsidiary.
(i). That none of the Company and its Restricted
Subsidiaries is subject to Regulation under the Investment
Company Act of 1940, the Public Utility Holding Company Act, the
Interstate Commerce Act or the Federal Power Act.
(j). That the offer, issue and sale of the Notes by the
Company under the Agreement constitute transactions exempt from
the registration provisions of the Securities Act of 1933, as now
in effect, and neither the registration thereunder of the Notes
nor the qualification of the Agreement or an indenture under the
Trust Indenture Act of 1939, as now in effect, is required.
(k). That the offer, issue and sale of the Notes under the
Agreement do not violate Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, and it is not necessary
for the Purchasers to obtain a statement in conformity with the<PAGE>
<PAGE>
requirements of Federal Reserve Form G-3 under Regulation G in
connection with the issue and sale of the Notes.
(l). That neither the execution and delivery of any
Transaction Document nor the issue of the Notes under the
Agreement will constitute a 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 of the Code.
(m). That the choice of the law of the State of New York to
govern the Transaction Documents and the submission by the
Company and the Restricted Subsidiaries to the jurisdiction of
the courts of the State of New York will be given effect by the
courts of the state of organization of the Company and each
Restricted Subsidiary and the principal place of business of the
Company and each Restricted Subsidiary.
<PAGE>
<PAGE>
EXHIBIT D
MEDICAL RESOURCES, INC.
Officers' Certificate
We, the undersigned, officers of Medical Resources, Inc., a
corporation (the "Company"), DO HEREBY
CERTIFY to John Hancock Mutual Life Insurance Company, John
Hancock Life Insurance Company of America, John Hancock Variable
Life Insurance Company, Mellon Bank, N.A., as Trustee under the
Long-Term Investment Trust, AUSA Life Insurance Company, Inc.,
Life Investors Insurance Company of America, Great American Life
Insurance Company, Great Northern Insured Annuity Corporation,
COVA Financial Services Life Insurance Company, American Bankers
Life Insurance Company of Florida and Pierce National Life
Insurance Company (the "Purchasers"):
1. This Certificate is furnished pursuant to paragraph
3C(1) of the Note Purchase Agreement dated as of February ,
1997 between the Company and the Purchasers (the "Note
Agreement"). Unless otherwise defined herein, capitalized terms
used herein have the meaning set forth in the Note Agreement.
2. No proceedings looking toward the merger,
consolidation, sale of all or substantially all of the assets and
business, or liquidation or dissolution of the Company or any of
its Subsidiaries have been taken or are pending, nor have the
directors or the shareholders of the Company or any of its
Subsidiaries authorized any such actions to be instituted.
3. On the date hereof, the representations and warranties
contained in paragraph 8 of the Note Agreement are true and
correct on and as of the date hereof, both immediately prior and
after giving effect to the consummation of the transactions
contemplated by the Transaction Documents; no Default or Event of
Default exists as of the date hereof, both immediately prior and
after giving effect to the consummation of the transactions
contemplated by the Transaction Documents; and each Member has
performed and complied with all agreements and covenants
contained in any Transaction Document required to be performed or
complied with by it on or prior to the Closing.
4. The Company has not, since September 30, 1996, entered
into any transaction that would have been prohibited by
paragraphs 6B or 6C(5) of the Note Agreement had such paragraphs
been in effect since such date.
IN WITNESS WHEREOF, we have set our respective hands as of
this day of February, 1997.
Name: Name:
Title: Title:
<PAGE>
<PAGE>
EXHIBIT E
MEDICAL RESOURCES, INC.
Secretary's Certificate
I, the undersigned, secretary of Medical Resources, Inc., a
Delaware corporation (the "Company"), DO HEREBY CERTIFY to John
Hancock Mutual Life Insurance Company, John Hancock Life
Insurance Company of America, John Hancock Variable Life
Insurance Company, Melon Bank, N.A., as Trustee under the Long-
Term Investment Trust, AUSA Life Insurance Company, Inc., Life
Investors Insurance Company of America, Great American Life
Insurance Company, Great Northern Insured Annuity Corporation,
Cova Financial Services Life Insurance Company, American Bankers
Insurance Company of Florida, and Pierce National Life Insurance
Company (the "Purchasers"):
1. This Certificate is furnished pursuant to paragraph 3C(2) of
the Note Purchase Agreement dated as of February , 1997 between
the Company and the Purchasers (the "Note Agreement"). Unless
otherwise defined herein, capitalized terms used herein have the
meaning set forth in the Note Agreement.
2. Attached as Exhibit A is a true, correct and complete copy
of the Certificate of Incorporation of the Company and each
Material Restricted Subsidiary, together with all amendments
thereto, which Certificate of Incorporation is in full force and
effect on the date hereof.
3. Attached as Exhibit B is a true, correct and complete copy
of the By-Laws of the Company and each Material Restricted
Subsidiary, as in effect on the date hereof.
4. Attached as Exhibit C is a true, correct and complete copy
of the resolutions by the Board of Directors of the Company
authorizing the execution, delivery and performance by it of each
of the Transaction Documents to which it is a party, and the
issuance of the Notes pursuant to the Transaction Documents, and
by the Board of Directors of each Restricted Subsidiary
authorizing the execution, delivery and performance by it of each
Transaction Document to which it is a party, which resolutions
have not been revoked, modified, amended or rescinded and are
still in full force and effect.
5. The following persons named below are the duly appointed,
qualified and acting officers of the Company, holding the
respective offices set forth opposite their names, who have been
duly authorized to execute and deliver on behalf of the Company
the Transaction Documents to which it is a party and the
signatures set forth opposite their names are their genuine
signatures.
<PAGE>
<PAGE>
Name Office Signature
- ---------------- ---------------- -------------------
- ---------------- ---------------- -------------------
IN WITNESS WHEREOF, I have set my hand as of this day of
February, 1997.
---------------------------
Name:
Title: Secretary
The undersigned, in my capacity as President of the Company,
DO HEREBY CERTIFY to the Purchasers that ------------------------
is the duly elected, qualified and acting Secretary of the
Company and that the signature set forth above is his true and
correct signature.
----------------------------
Name:
Title: President
<PAGE>
<PAGE>
EXHIBIT F
RESTRICTED SUBSIDIARIES' GUARANTY
THIS GUARANTY AGREEMENT (this "Agreement"), dated as of
February 20, 1997, is by the Subsidiaries of Medical Resources,
Inc., a Delaware corporation ("Medical Resources") from time to
time a party hereto (each an "Obligor"), in favor of each Holder
of the Notes (as defined below).
RECITAL:
Medical Resources has entered into a Note Purchase Agreement
of even date (the "Note Agreement") with the several
institutional investors signatory thereto (each, a "Purchaser"
and collectively, the "Purchasers"), pursuant to which Medical
Resources has issued and sold to the Purchasers $52,000,000 in
aggregate principal amount of its 7.77% Senior Notes due February
20, 2005 (the "Notes"). Each Obligor is a Restricted Subsidiary
of Medical Resources as such term is defined in the Note
Agreement.
Medical Resources will apply the net proceeds from the issue
and sale of the Notes as designated in Schedule 5J to the Note
Agreement, and, consequently, the purchase of the Notes by the
Purchasers will directly or indirectly inure to the benefit of
each Obligor, is in each Obligor's best interest and in
furtherance of each Obligor's business and is necessary and
convenient to the conduct of such business.
In order to induce the Purchasers to purchase the Notes from
Medical Resources pursuant to the Note Agreement, and in
consideration thereof, each Obligor has agreed to enter into this
Agreement.
NOW, THEREFORE, each Obligor agrees as follows:
1. DEFINED TERMS.
Except for terms defined in this Agreement (whether below or
elsewhere), capitalized terms which are used herein without
definition, but which are defined in the Note Agreement, are used
with the meanings ascribed to them in the Note Agreement. In
addition, the following term has the following meaning:
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978 (11
U.S.C. Sections 101-1330), as amended or supplemented from time
to time, and any successor statute, and any and all rules issued
or promulgated in connection therewith.
<PAGE>
<PAGE>
2. GUARANTY. Each Obligor unconditionally guaranties to
the Holders the full and punctual payment and performance of all
obligations, indebtedness or liabilities of any kind or character
of Medical Resources to the Holders in respect of the Notes or
under or in respect of the Transaction Documents, whether now
existing or hereafter incurred or created, joint or several,
direct or indirect, absolute or contingent, due or to become due,
matured or unmatured, liquidated or unliquidated, arising by
contract, operation of law or otherwise, including (a) all
principal of and Make Whole Amount and interest (including any
interest on the Notes which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of Medical Resources or would have
accrued but for the application of provisions of the Bankruptcy
Code); (b) all fees, costs, expenses (including attorney's fees
and expenses) payable by Medical Resources under the Note
Agreement or any other Transaction Document; and (c) any
renewals, refinancings or extension of any of the foregoing
(collectively, the "Obligations"), in each case when and at the
place specified therefor. This guaranty by each Obligor is an
absolute, unconditional and continuing guaranty of the full and
punctual payment and performance by Medical Resources of the
Obligations and not of their collectibility only and is in no way
conditioned upon any requirement that any Holder first attempt to
collect any of the Obligations from Medical Resources or resort
to any security or other means of obtaining payment of any of the
Obligations which any Holder now has or may acquire after the
date hereof, or upon any other contingency whatsoever, and the
obligations of such Obligor hereunder shall not be subject to any
counterclaim, setoff, recoupment or defense based upon any claim
such Obligor may have against such Holder or any other Obligor or
any Additional Obligor (defined in Section 4) or any other
Holder. Upon any default by Medical Resources in the full and
punctual payment and performance of the Obligations or any part
thereof, each Obligor will promptly pay or cause to be paid to
the Holders, ratably in accordance with the amount owed to each,
the amount of such Obligations which is then due and payable
without demand or notice of any nature, each of which are
expressly waived by each Obligor. Payments by an Obligor
hereunder may be required to be made on any number of occasions.
3. OBLIGOR'S FURTHER AGREEMENTS TO PAY. Each Obligor further
agrees, as principal obligor and not as guarantor only, to pay to
any Holder forthwith upon demand, in lawful currency of the
United States of America and in funds immediately available to
such Holder, all costs and expenses (including court costs and
legal expenses) incurred or expended by such Holder in connection
with the enforcement of this Agreement, together with interest on
amounts recoverable under this Agreement from the time such
amounts become due until payment at the interest rate then in
effect under the Notes.<PAGE>
<PAGE>
4. FREEDOM TO DEAL WITH MEDICAL RESOURCES AND OTHER PARTIES.
The Holders shall be at liberty, without giving notice to or
obtaining the assent of any Obligor and without relieving any
Obligor of any liability hereunder, to deal with Medical
Resources, with any other Obligor and with each other party who
is now or after the date hereof becomes liable in any manner for
the payment of the Obligations (an "Additional Obligor"), in such
manner as any Holder in its sole discretion deems fit, and to
this end each Obligor gives to each Holder full authority in its
sole discretion to do any or all of the following things: a.
vary the terms and grant extensions or renewals or waivers or
other indulgences in respect of or consent to the amendment of
any of the terms of the Obligations, vary, release, exchange or
discharge, wholly or partially, or delay in or abstain from
perfecting and enforcing any security or guaranty or other means
of obtaining payment of any of the Obligations which any Holder
now has or acquires after the date hereof, accept partial
payments from Medical Resources, release or discharge wholly or
partially, any other Obligor or any Additional Obligor, and
compromise or make any settlement or other arrangement with
Medical Resources, any other Obligor or any Additional Obligor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST MEDICAL RESOURCES.
If for any reason Medical Resources has no legal existence or is
under no legal obligation to discharge any of the Obligations, or
if any of the moneys payable on the Obligations have become
irrecoverable from Medical Resources or any other Obligor or any
Additional Obligor, by operation of law or for any other reason,
this Agreement shall nevertheless be binding on each Obligor.
This Guaranty shall be in addition to any other guaranty or other
security for the Obligations, and it shall not be prejudiced or
rendered unenforceable by the invalidity of any such other
guaranty or security.
6. WAIVERS BY OBLIGOR. Each Obligor waives notice of acceptance
hereof, notice of any action taken or omitted by any Holder in
reliance hereon, and any requirement that any Holder be diligent
or prompt in making demands hereunder, giving notice of any
default by Medical Resources, or asserting any other right of a
Holder hereunder. Each Obligor also irrevocably waives, to the
fullest extent permitted by law, all defenses which at any time
may be available in respect of its obligations under this
Agreement whether by virtue of any statute of limitations,
valuation, stay, moratorium law or other similar law now or
hereafter in effect or otherwise.
7. NO CONTEST; SUBORDINATION. So long as any Obligations remain
unpaid or undischarged, and notwithstanding any other provision
of this Agreement, no Obligor will, by paying any sum hereunder
(whether or not demanded by a Holder) or by any means or on any
other ground, claim any setoff or counterclaim or contribution<PAGE>
<PAGE>
against Medical Resources, or, in proceedings under the
Bankruptcy Code or insolvency proceedings, or of any nature,
prove in competition with the Holders in respect of any payment
or be entitled to have the benefit of any counterclaim or proof
of claim or dividend or payment by or on behalf of Medical
Resources, or the benefit of any other security for any
obligation of Medical Resources which, now or hereafter, such
Obligor may hold or in which it may have a share.
Each Obligor hereby agrees with the Holders that all
liabilities, obligations, and indebtedness now or hereafter owed
by Medical Resources to such Obligor and that all security and
mortgage interests which secure such liabilities, obligations,
and indebtedness, and all rights, remedies, powers, privileges
and discretions of such Obligor in and to any collateral security
now or hereafter granted by Medical Resources to secure such
liabilities, obligations, and indebtedness are and shall be
subject and subordinate to the Obligations to the Holders and to
the rights, remedies, powers, privileges and discretions of the
Holders.
8. PREFERENCES; REVIVAL. The Holders shall have the continuing
and exclusive right to apply or reverse and re-apply any and all
payments to any portion of the Obligations. To the extent that
any payment on or proceeds applied to the Obligations is
subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent
of such payment or proceeds received, the obligations of the
Obligors under this Agreement which would otherwise have been
satisfied thereby shall be revived and continue in full force and
effect as if such payment or proceeds had never been received.
The provisions of this Section 8 shall survive the termination of
this Agreement.
9. AMENDMENTS, WAIVERS, ETC. No provision of this Agreement can
be changed, waived, discharged, or terminated except by an
instrument in writing signed by the Required Holders expressly
referring to the provision of this Agreement to which such
instrument relates; and no such waiver shall extend to, affect or
impair any right with respect to any obligation of an Obligor
under this Agreement which is not expressly dealt with therein.
No course of dealing or delay or omission on the part of any
Holder in exercising any right shall operate as a waiver thereof
or otherwise be prejudicial thereto. Notes directly or
indirectly held by an Obligor, or any Subsidiary or Affiliate of
an Obligor, shall not be deemed to be "outstanding" for purposes
of determining whether any amendment or waiver has been effected
in accordance with this Section 9, and no consent or waiver given
by the Holder of such Notes shall be taken in consideration for
any such purpose.<PAGE>
<PAGE>
10. REPRESENTATIONS AND WARRANTIES. Each Obligor represents and
warrants that:
(a). Corporate Existence. Such Obligor is a corporation duly
incorporated and validly existing under the laws of the
jurisdiction of its incorporation with all requisite power and
authority to enter into and perform this Agreement.
(b). No Violation. The execution, delivery and performance
of this Agreement will not contravene any provision of law,
statute, rule or regulation to which such Obligor or any of its
Subsidiaries is subject or any judgment, decree, franchise, order
or permit applicable to such Obligor or any of its Subsidiaries,
or will conflict or be inconsistent with or result in any breach
of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien
upon any of the property or assets of such Obligor or any of its
Subsidiaries pursuant to the terms of any contractual obligation
of such Obligor or any of its Subsidiaries, or violate any
provision of the corporate charter or by-laws of such Obligor or
any of its Subsidiaries.
(c). Corporate Authority and Power. The execution, delivery
and performance of this Agreement is within the corporate powers
of such Obligor and has been duly authorized by all necessary
corporate action.
(d). Enforceability. This Agreement constitutes a valid and
binding obligation of such Obligor enforceable against such
Obligor in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and except as
enforceability may be subject to general principles of equity,
whether such principles are applied in a court of equity or at
law.
(e). Governmental Approvals. No order, permission, consent,
approval, license, authorization, registration or validation of,
or filing with, or exemption by, any Governmental Authority is
required to authorize, or is required in connection with, the
execution, delivery and performance of this Agreement by such
Obligor, or the taking of any action contemplated hereby or
thereby by such Obligor.
<PAGE>
<PAGE>
11. MISCELLANEOUS.
(a). Termination, Etc. This Agreement shall continue in
effect, and the obligations of the Obligors hereunder shall not
terminate or be released, until each of the following shall have
occurred: (i) the Holders have received, and been allowed to
retain, payment in full, all amounts due on the Obligations, and
(ii) there shall have lapsed or been released by the passage of
time or otherwise, any right of Medical Resources, any Obligor or
any other Person to rescind, set aside or void any such payment
for any reason.
(b). Successors and Assigns. All covenants and other agree-
ments herein by or on behalf of an Obligor shall bind its
successors and assigns, whether so expressed or not, and all such
covenants and agreements, and all other rights of the Holders
shall inure to the benefit of their successors and assigns,
provided no Obligor shall have any right to assign its
obligations under this Agreement.
(c). 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.
(d). Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW).
(e). Consent to Jurisdiction and Service and Waiver of Trial
by Jury. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OBLIGOR
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 THIS AGREEMENT AND HEREBY IR-
REVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH
OBLIGOR 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 PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, (B) IT IS IMMUNE 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, EACH OBLIGOR 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<PAGE>
<PAGE>
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 MEDICAL RESOURCES 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 11E 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.
(f). 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 conflicting of
any 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.
(g). Remedies Cumulative. The rights and remedies of the
Holders herein provided or provided under any other agreement or
instrument, or otherwise available, are cumulative, and are in
addition to and not exclusive of, any rights and remedies
provided by law.
(h). Specific Performance. Each Obligor agrees that its
obligations and the rights of the Holders hereunder may be
enforced by specific performance hereof and thereof and by
temporary, preliminary and/or final injunctive relief relating
hereto and thereto, without necessity for proof by any Holder
that it would otherwise suffer irreparable harm, and each Obligor
hereby consents to the issuance of such specific and injunctive
relief.<PAGE>
<PAGE>
IN WITNESS WHEREOF, each Obligor has caused this Agreement to
be executed under seal as of the date first above written.
DIAGNOSTIC IMAGING RESOURCES, INC.
By:
Title:
NETWORK MANAGEMENT SERVICES, INC.
By:
Title:
BROOKLYN RESOURCES, INC.
By:
Title:
MRI-BROOKLYN L.P.
By:
, General Partner
By:
Title:
ESSEX-PASSAIC RESOURCES, INC.
By:
Title:
EAST BERGEN RESOURCES, INC.
By:
Title:
FORT MYERS RESOURCES, INC.
By:
Title:
SOUTH HUDSON RESOURCES, INC.
By:
Title:
CENTRAL FORT MYERS RESOURCES, INC.
By:
Title:
<PAGE>
<PAGE>
COLLIER RESOURCES, INC.
By:
Title:
MRI-SOUTH UMBERTON, INC.
By:
Title:
CENTEREACH RESOURCES, INC.
By:
Title:
NORTH BRONX RESOURCES, INC.
By:
Title:
WEST ESSEX RESOURCES, INC.
By:
Title:
WEST ESSEX SPEC RESOURCES, INC.
By:
Title:
MRI-BBC, INC.
By:
Title:
<PAGE>
<PAGE>
49TH STREET IMAGING ASSOC.
By:
, General Partner
By:
Title:
TAMPA BAY RESOURCES, INC.
By:
Title:
HACKENSACK RESOURCES, INC.
By:
Title:
SMITH GARDEN RESOURCES, INC.
By:
Title:
NEWARK RESOURCES, INC.
By:
Title:
CLEARWATER RESOURCES, INC.
By:
Title:
DIAGNOSTIC IMAGING SERVICES OF
NEW YORK, INC.
By:
Title:
MELBOURNE RESOURCES INC.
By:
Title:
SAN CLEMENTE RESOURCES, INC.
By:
Title:
<PAGE>
<PAGE>
LONG BEACH RESOURCES INC.
By:
Title:
MRI SUB, INC.
By:
Title:
C.D. ACQUISITION, INC.
By:
Title:
OAK LAWN MAGNETIC RESONANCE
IMAGING CENTER, INC.
By:
Title:
OAK LAWN IMAGING CENTER, INC.
By:
Title:
MORGAN MEDICAL HOLDINGS INC.
By:
Title:
DNI OF TEXAS, INC.
By:
Title:
<PAGE>
<PAGE>
IMAGING NETWORKS, INC.
By:
Title:
MORGAN MEDICAL CORP.
By:
Title:
<PAGE>
<PAGE>
EXHIBIT G
PLEDGE OF PARTNERSHIP INTERESTS
This Pledge Agreement (this "Agreement"), dated February 20,
1997 is by and among the Subsidiaries of Medical Resources, Inc.,
a Delaware corporation ("Medical Resources") signatory hereto
(each a "Pledgor") and John Hancock Mutual Life Insurance
Company, John Hancock Variable Life Insurance Company, John
Hancock Life Insurance Company of America, Mellon Bank, N.A., as
Trustee under the Long-Term Investment Trust, AUSA Life Insurance
Company, Inc., Life Investors Insurance Company of America, Great
American Life Insurance Company, Great Northern Insured Annuity
Corporation, American Bankers Insurance Company of Florida, COVA
Financial Services Life Insurance Company and Pierce National
Life Insurance Company (the "Purchasers").
RECITALS:
Medical Resources and the Purchasers are parties to a Note
Purchase Agreement dated as of February 20, 1997 (the "Note
Agreement"), pursuant to which Medical Resources is selling to
the Purchasers $52,000,000 in aggregate principal amount of its
7.77% Senior Notes due February 20, 2005 (the "Notes").
Pursuant to a Restricted Subsidiaries' Guaranty of even date
(the "Guaranty"), each of the Pledgors has guaranteed all of the
obligations of Medical Resources under and in respect of the Note
Agreement and under the Notes.
In order to induce the Purchasers to purchase the Notes from
Medical Resources, the Pledgors have also agreed to enter into
this Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Definitions
Except for terms defined in this Agreement (whether below or
elsewhere), capitalized terms which are used herein without
definition, but which are defined in the Note Agreement, are used
herein with the meanings ascribed to them in the Note Agreement.
In addition, the following terms shall have the following
meanings:
"Event of Default" means the occurrence of any one of the
following events: (i) any Pledgor (A) shall fail to observe or
perform any covenant or agreement of such Pledgor contained in
this Agreement or the Restricted Subsidiaries' Guaranty and such
failure shall not be remedied within 30 days after the earlier of<PAGE>
<PAGE>
(1) a Senior Officer first obtains knowledge of such failure or
(2) such Pledgor receives written notice of such failure from any
Holder; or (ii) any Event of Default under the Note Agreement
shall occur.
"Obligations" means the "Obligations" as defined in the
Guaranty as well as all other obligations of the Pledgors under
the Guaranty and this Agreement.
"Partnership Agreements" means the agreements of limited
partnership of the Limited Partnership Restricted Subsidiaries as
amended through the date hereof.
"UCC" means the Uniform Commercial Code in effect on the date
hereof in the State of New York; provided that if by reason of
law, the perfection or effect of perfection or non-perfection of
the Security Interests in any Collateral is governed by the
Uniform Commercial Code in effect in a jurisdiction other than
the State of New York, "UCC" means the Uniform Commercial Code in
effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 2. Pledge.
Each Pledgor hereby pledges, grants a security interest in,
mortgages, assigns, transfers, delivers, sets over and confirms
unto the Holders all of the right, title and interest of the
Pledgor in and to all of the following property now owned or
existing or at any time hereafter arising or acquired by the
Pledgor or in which such Pledgor now has or at any time in the
future may acquire any right, title or interest (collectively,
the "Collateral"), as security for the full and prompt payment
and performance of all of the Obligations: (i) all of the
Pledgor's right, title and interest as a general partner and as a
limited partner in each of the Limited Partnership Restricted
Subsidiaries and all of the Pledgor's right, title and interest
under each of the Partnership Agreements; (ii) all of the
Pledgor's interest, whether as a general or a limited partner, in
the profits and losses of each Limited Partnership Restricted
Subsidiary; (iii) any and all distributions of any nature
whatsoever by any Limited Partnership Restricted Subsidiary to
the Pledgor and all proceeds thereof; and (iv) all rights
appurtenant to any of the items described in the foregoing
clauses (i) through (iii), including, without limitation, any
voting rights.
Each Pledgor shall, upon request of any Holder, promptly
make, execute and deliver to the Holders such financing
statements, instruments, documents and certificates, and perform
such other and further acts and assurances, as such Holder may
request to perfect, to maintain the priority of, or from time to<PAGE>
<PAGE>
time to renew, such security interests, to confirm or more fully
perfect the rights granted hereby, or in any way to assure to the
Holders all their rights hereunder. The Pledgors shall pay the
costs of all filings and recordings in public offices or records,
and shall, upon request of the Required Holders, make, execute
and deliver such other and further instruments, and take such
other and further actions, as the Required Holders may deem
necessary or appropriate to enable the Holders to realize upon
the Collateral, to exercise fully their rights hereunder, and to
ratify and confirm any sale hereunder. No Holder shall have any
duty or liability with respect to the Collateral other than to
use reasonable care in the custody of any certificate
representing the Collateral while in its possession, and shall
not be liable for any failure to take action necessary to
preserve rights against prior parties on any instrument
constituting Collateral.
If a Pledgor shall fail to comply with any written request
pursuant to this Section 2 within 20 days after such request is
made, the Required Holders or their designee may make, execute,
record, file, re-record or refile any and all such amendments,
assignments, instruments, certificates and documents for and in
the name of such Pledgor, and each Pledgor hereby appoints the
Required Holders and any such designee as its attorney-in-fact,
with full power of substitution, to take such actions (on such
Pledgor's behalf and in its name) as the Required Holders may
reasonably request in order to effectuate the intent of this
Section 2. The power of attorney conferred on the Required
Holders pursuant to the provisions of this Section 2, being
coupled with an interest, shall be irrevocable until all of the
Obligations are fully and indefeasibly paid and performed.
SECTION 3. No Assignee Liability re: Partnership;
Indemnification.
The pledge and security interest granted hereby is for
security purposes only, and no Holder shall, either by virtue
hereof or by the retention of partnership distributions to which
a Pledgor would otherwise be entitled, or by virtue of its
receipt of distributions from a Limited Partnership Restricted
Subsidiary, or by the exercise of any of its rights hereunder, be
deemed to be a partner of any Limited Partnership Restricted
Subsidiary or to have any liability for the debts, obligations or
liabilities of any Limited Partnership Restricted Subsidiary, the
Pledgors or any other participant in any Limited Partnership
Restricted Subsidiary or to have any obligation to make capital
contributions to any Limited Partnership Restricted Subsidiary.
<PAGE>
<PAGE>
Each Pledgor agrees to indemnify and hold harmless each
Holder from and against any and all liability, loss or damage
which it may suffer or incur and which arises out of or results
from:
(a). a Pledgor being a general partner of a Limited
Partnership Restricted Subsidiary or acting in such capacity;
(b). this Agreement or any Holder's receipt of
partnership distributions or the good faith exercise by the
Required Holders or any Holder of any rights or powers hereunder;
and
(c). any claimed or any alleged obligation, liability or
duty on the part of a Holder to perform or discharge any of the
obligations of any of the Pledgors or any agreement or document
obligating or binding, or purporting to obligate or bind, any
Limited Partnership Restricted Subsidiary or any partner thereof,
or any liability or obligation of any Limited Partnership
Restricted Subsidiary;
together, in each instance, with all costs and expenses
(including, without limitation, court costs and reasonable
attorneys' fees) paid or incurred in connection therewith.
Notwithstanding the foregoing, no Pledgor shall be obligated to
indemnify a Holder hereunder for any liability, loss or damage
which a Holder may suffer or incur as a result of its own gross
negligence or willful misconduct. A Pledgor shall reimburse each
Holder upon demand for the full amount of any indemnity to which
such Holder may be entitled hereunder, and the full amount of
each Pledgor's indemnity obligation shall be considered to be an
Obligation and shall be secured hereby.
SECTION 4. Certificates.
If at any time any of the Collateral shall be represented by
one or more certificates or any documents which are instruments
or certificated securities (as defined in the UCC), then the
Pledgors shall promptly deliver or cause to be delivered the same
to an agent designated by the Required Holders, accompanied by
transfer powers endorsed in blank respecting such certificates or
documents, duly executed, with signatures guaranteed and proper
evidence of due authority to deliver such instruments and endorse
such powers.
SECTION 5. Representations and Warranties.
Each Pledgor represents and warrants (which representations
and warranties shall continue to be true and correct at all times
during the term of this Agreement with the same force and effect
as though made on a continuing basis and not merely as of the
date hereof) that:<PAGE>
<PAGE>
(a). Such Pledgor is a corporation duly organized,
validly existing and in good standing under the laws of its
incorporation with the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder
and to act as a general or limited partner in each Limited
Partnership Restricted Subsidiary in which it holds a partnership
interest.
(b). Each Limited Partnership Restricted Subsidiary is
duly formed and validly existing under the laws of its
organization and each Partnership Agreement is in full force and
effect.
(c). The interests of such Pledgor in any Limited
Partnership Restricted Subsidiary is not currently represented or
evidenced by any form of certificate or other document which is
an instrument or a certificated security (as defined in the UCC).
(d). The Collateral is not subject to any restriction
which would prohibit or restrict the granting of the security
interest and pledge granted pursuant hereto, or any restriction
which would prohibit or restrict the sale or other disposition of
the Collateral upon an Event of Default except for consent
requirements set forth in each Partnership Agreement for any
Holder to become a substitute General Partner or substitute
Limited Partner upon exercise of the rights and remedies granted
in this Agreement
(e). Attached hereto as Exhibit A is a true and correct
list of the percentage ownership interest (identified by general
and limited partnership interest) in each Limited Partnership
Restricted Subsidiary held by each Pledgor as of the date of this
Agreement as well as the aggregate number of other limited
partners in each Limited Partnership Restricted Subsidiary. True
and complete copies of each of the Partnership Agreements have
been delivered to the Purchasers.
(f). The chief executive office of such Pledgor is as
set forth in Exhibit B. All books and records of such Pledgor
relating to the Collateral are located at that address.
(g). This Agreement (together with the filing of Uniform
Commercial Code Financing Statements in the locations set forth
in Exhibit B for such Pledgor) creates a duly perfected first and
prior security interest in the Collateral under Article 8 of the
UCC, to the extent the Collateral consists of uncertificated
securities, and otherwise under Article 9 of the UCC, in the
Holders' favor; and no financing statement, notice, mortgage or
security agreement in favor of any other Person covering any of
the Collateral is on file in any public office.
<PAGE>
<PAGE>
(h). This Agreement represents the legal, valid and
binding obligations of such Pledgor, enforceable against such
Pledgor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(i). The execution and delivery of this Agreement, and
the performance of this Agreement and the enforcement of the
security interest and pledge granted hereby, will not result in
any violation of or be in conflict with or constitute a default
under any term of any agreement or instrument, or any judgment,
decree, order, law, statute, rule or governmental regulation
applicable to such Pledgor or the Collateral, or result in the
creation of any mortgage, lien, charge or encumbrance upon the
Collateral or any other of the properties or assets of such
Pledgor (except pursuant hereto).
(j). Such Pledgor is the sole record and beneficial
owner of the Collateral relating to its partnership interests in
the Limited Partnership Restricted Subsidiaries, and neither the
Collateral nor the proceeds thereof are subject to any pledge,
lien, security interest, charge or encumbrance except the lien
created pursuant to this Agreement.
SECTION 6. Covenants.
Each Pledgor covenants and agrees that until such time as the
Obligations have been fully paid and performed:
(a). such Pledgor will not (except as otherwise
expressly permitted by the Note Agreement) sell, assign,
exchange, convey, alienate, gift, devise or otherwise transfer
any of the Collateral or any of the Pledgor's rights therein,
directly or indirectly, whether voluntarily or by operation of
law, nor will such Pledgor create or suffer to exist any lien,
security interest or other charge or encumbrance against, in or
with respect to any of the Collateral, directly or indirectly,
whether voluntarily or by operation of law, except for the pledge
hereunder and the security interest created hereby;
(b). such Pledgor will warrant and defend the title to
the Collateral and the pledge and security interest created by
this Agreement against the claims of all Persons;
(c). such Pledgor will pay or cause to be paid, when
due, all taxes and any other charges which may form the basis of
a lien or claim upon or in connection with the Collateral or any
interest therein;<PAGE>
<PAGE>
(d). without limiting the covenants set forth above in
clause (a) of this Section 6, such Pledgor will provide written
notice to the Holders of all encumbrances of any kind or nature
hereafter placed on the Collateral, such notice to be delivered
to the Holders within five (5) days of the occurrence of any such
encumbrance;
(e). such Pledgor will not move its chief executive
office from the address set forth in Exhibit B, nor will it move
any of its books and records relating to the Collateral from such
address, nor will it change its corporate name or corporate
structure, without, in each case, giving the Holders not less
than 30 days' prior written notice of each such event and
providing to the Holders all such documentation as any Holder may
reasonably request in order to protect, confirm and/or perfect
the pledge and the security interest created by this Agreement;
(f). none of the Collateral will become represented by
any instrument or certificated security without the prior consent
of the Required Holders;
(g). such Pledgor shall not enter into any amendment to
any Partnership Agreement without the prior written consent of
the Required Holders; and
(h). such Pledgor shall remain liable for the
performance of all of its obligations under each Partnership
Agreement.
SECTION 7. Events of Default.
(a). If an Event of Default shall have occurred, and
whether or not any Holder or the Required Holders shall have
declared any of the Obligations to be immediately due and payable
as provided in the Note Agreement, then and in such event:
(i) The Required Holders may, at their election,
direct each Limited Partnership Restricted Subsidiary to pay all
distributions on the Collateral to the Holders to be applied to
the Obligations in accordance with the Note Agreement; and
(ii) The Required Holders may take possession of
the Collateral for the benefit of the Holders and may exclude the
Pledgors, and all persons claiming by, through or under a
Pledgor, from possession thereof, and may assign the Collateral
to a nominee or a third party (it being understood that, in
connection therewith, the Required Holders or any third party
assignee or nominee designated by the Required Holders shall have
the right (but not the obligation) to exercise, in the name of
the Holders, the Holders' rights and powers as a partner of such
Limited Partnership Restricted Subsidiary); and
<PAGE>
<PAGE>
(iii) The Holders shall have all rights and
remedies of a secured party available under the UCC and any other
rights and remedies available under this Agreement or at law or
in equity.
(b). In addition to (but in no way limiting) the
foregoing remedies, in the event of the taking possession of the
Collateral, a Holder or any third party assignee or nominee of
such Holder, shall have the right (but in no event shall any
Holder be obligated) to become a partner in each Limited
Partnership Restricted Subsidiary, subject to the applicable
provisions of the UCC and the relevant Partnership Agreement.
(c). More specifically, but in no way in limitation of
the rights and remedies of any Holder, the Required Holders may,
for the benefit of the Holders, upon ten (10) days' notice (which
notice shall be deemed to satisfy any requirement of reasonable
notification) to the Pledgors of the time, place and
circumstances of sale, and without liability for any diminution
in price which may have occurred, sell or otherwise dispose of
all or any part of the Collateral. Such sale or other
disposition may be by public or private proceedings and may be
made by way of one or more contracts, as a unit or in portions,
at such time and place, by such method, and in such manner and on
such terms, as the Required Holders may determine. At any public
sale, any Holder shall be free to purchase all or any part of the
Collateral. The Pledgors recognize that the fact that the
Collateral is not registered under the Securities Act of 1933 and
is unlikely to be registered in the future may necessitate a
private sale, which is likely to result in a lower price than
would a public sale, and hereby consent to such a private sale
and agree that the same is commercially reasonable.
(d). The proceeds of any sale or other disposition of or
collection of or other realization upon all or any part of the
Collateral (together with any cash held as Collateral hereunder),
shall be applied in the following order of priority:
first, to pay the costs and expenses of
collection, custody, sale or other disposition or delivery
(including, without limitation, reasonable legal costs and
attorneys' fees) and all other charges incurred by any Holder
with respect to the Collateral;
second, to the payment of the Obligations with
payments being made to the Holders in accordance with the Note
Agreement; and
third, to pay any surplus to the Pledgors or
to any person or party lawfully entitled thereto, or as a court
of competent jurisdiction may direct.<PAGE>
<PAGE>
(e). A receipt given by the Required Holders for the
purchase money paid at any sale shall be a sufficient discharge
therefor to any purchaser of all or any part of the Collateral
sold. No such purchaser, after paying such purchase money and
receiving such receipt, shall be bound to see to the application
of such purchase money or any part thereof, or in any manner be
answerable for any loss, misapplication or nonapplication of any
such purchase money, or any part thereof, or be bound to inquire
as to the authorization, necessity, expediency or regularity of
any such sale. If so requested by the Required Holders, the
Pledgor shall ratify and confirm any sale or sales by executing
and delivering to the Required Holders or to such purchaser or
purchasers all such instruments as may be reasonably requested by
the Required Holders for such purpose.
(f). The Pledgors agree that the Pledgors' obligations
and the rights of the Holders and the Required Holders under the
Obligations may be enforced by specific performance thereof and
temporary, preliminary and/or final injunctive relief relating
hereto and thereto, without necessity for proof that the Holders
would otherwise suffer irreparable harm, and the Pledgors hereby
consent to the issuance of such specific injunctive relief.
(g). In aid of the rights and remedies set forth above
in this Section 7, contemporaneously with the execution and
delivery of this Agreement, each Pledgor shall execute and
deliver to the Required Holders or their nominee, undated
Assignments of the Collateral in the forms attached hereto as
Exhibit C (the "Assignments"). The Assignments will be held by a
designee of the Required Holders in escrow and will not be filed
or recorded or otherwise used or effective until an Event of
Default shall have occurred and the Required Holders shall have
exercised their rights to foreclose on the pledge and security
interest granted hereunder. Upon the occurrence of an Event of
Default and the exercise of such rights, the Required Holders, or
their designee, may (i) complete the date of the Assignment(s)
with the date the Required Holders shall have so exercised their
rights hereunder and fill in the name of the assignee thereunder
with the name of the Holders, any agent or nominee of the Holders
or any purchaser at foreclosure sale, (ii) deliver from escrow
for the use by the Holders each Assignment as to which
foreclosure rights have been exercised, and (iii) record or file
the same in such office or offices as the Required Holders may
deem appropriate. In aid of the foregoing, upon request of the
Required Holders, such Pledgor shall also obtain and deliver to
the Holders consents in form and substance satisfactory to the
Required Holders, executed by the general partner of each Limited
Partnership Restricted Subsidiary, consenting to the admission,
as a substitute limited partner, or a substitute general partner
of such Limited Partnership in the place of such Pledgor, of any
purchaser at foreclosure sale or other Person or Persons
designated by the Required Holders.<PAGE>
<PAGE>
SECTION 8. Release of Collateral.
One hundred and eighty days following the date of payment and
performance in full of the Obligations in accordance with their
terms and the performance by the Pledgors of all of their
covenants and agreements hereunder, this Agreement shall
terminate, and the Pledgors shall be entitled to the return, at
the Pledgors' expense, of such of the Collateral in the
possession or control of the Holders as has not therefore been
disposed of pursuant to the provision hereof, together with any
moneys and other property at the time held by the Holders
hereunder; provided, if at any time any payment made in respect
of the Obligations shall be recovered or rescinded or must be
otherwise restored or returned, whether upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Medical
Resources or any Restricted Subsidiary, or as a result of the
appointment of a receiver, conservator of or trustee or similar
officer for Medical Resources or any Restricted Subsidiary or any
substantial part of their property, any other act of bankruptcy,
or otherwise, the Pledgors' obligations under this Agreement
shall be reinstated and continue as though such payment had not
been made.
SECTION 9. Attorney in-Fact.
The Required Holders are hereby appointed the
attorney-in-fact, with full power of substitution, of the
Pledgors for the purpose of carrying out the provisions hereof
and taking any action and executing any instruments, including,
without limitation, financing or continuation statements,
conveyances, assignments and transfers which are required to be
taken or executed by any Pledgor under this Agreement, on behalf
of and in the name of the any Pledgor, and including any
documents required to be signed by a Pledger to designate the
Holders or their nominee or third party assignee, or the
purchaser of all or part of the Collateral, as a substitute
partner in a Limited Partnership Restricted Subsidiary in the
event of foreclosure, which the Required Holders may deem
necessary or advisable to accomplish the purposes hereof, which
appointment as attorney-in-fact is coupled with an interest and
is irrevocable.
SECTION 10. Waivers, etc.
Except for the notice provided for in paragraph (c) of
Section 7 hereof, and to the extent permitted by law, each
Pledgor hereby waives any right it may have to notice or to a
judicial hearing prior to the exercise of any right or remedy
provided hereby to any Holder or the Required Holders and waives
its rights, if any, to set aside or invalidate any sale duly
consummated in accordance with the provisions hereof on the
grounds (if such be the case) that the sale was consummated<PAGE>
<PAGE>
without a prior judicial hearing. Each Pledgor's waivers under
this Section 10 has been made voluntarily, intelligently and
knowingly, and after such Pledgor has been apprised and counseled
by its attorneys as to the nature thereof and its possible
alternative rights. No delay or omission on the part of any
Holder or the Required Holders in exercising any right hereunder
shall operate as a waiver of such right or of any other right
hereunder. Any waiver of any such right on any one occasion
shall not be construed as a bar to or waiver of any such right on
any such future occasion. No course of dealing between any
Pledgor and any Holder or the Required Holders nor any failure to
exercise, nor any delay in exercising, on the part of any Holder
or the Required Holders, any right, power or privilege hereunder
or under any of the Obligations, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege.
It is expressly understood and agreed that the Holders and
the Required Holders may exercise any of their rights under this
Agreement upon the occurrence of an Event of Default without
regard to the adequacy of any other security the Holders may hold
or any other rights or remedies the Holders may have, at law or
in equity. To that end, each Pledgor hereby waives any right to
require the Holders or the Required Holders to: (a) proceed
against any person, including, without limitation, any Pledgor or
any guarantor; (b) proceed against or exhaust any other security
held from the Pledgors, guarantor or any other person; (c) pursue
any other remedy in the Holders' power; or (d) make any
presentments or demands for performance or give any notices of
nonperformance, protests, notices of protests or notices of
dishonor in connection with the Obligations.
SECTION 11. Notices.
All notices and other written communications provided for
hereunder shall be given in writing and sent by overnight
delivery service (with charges prepaid) or by facsimile
transmission with the original of such transmission being sent by
overnight delivery service (with charges prepaid) by the next
succeeding Business Day and (i) if to a Holder or its nominee,
addressed to it at the address or fax number specified for such
communications to it in Exhibit A to the Note Agreement, or at
such other address or fax number as such Holder shall have
specified to Medical Resources in writing in accordance with
paragraph 11H of the Note Agreement, and (ii) if to a Pledgor,
addressed to it at c/o Medical Resources, Inc., 155 State Street,
Hackensack, New Jersey 07601, Attention: President, Fax No.
(201) 488-3546, or at such other addresses or fax numbers as
Medical Resources shall have specified to the Holders in writing
given in accordance with paragraph 11H of the Note Agreement. <PAGE>
<PAGE>
Notice given in accordance with this Section 11 shall be
effective upon the earlier of the date of delivery or the second
Business Day at the place of delivery after dispatch.
SECTION 12. Non-Exclusive Remedies.
The rights and remedies of the Holders and the Required
Holders in this Agreement are cumulative with and are not
exclusive of any other remedies available to the Holders and the
Required Holders, whether by law, contract or otherwise,
including, without limitation, the rights and remedies of a
secured party under the UCC.
SECTION 13. Successors and Assigns.
This Agreement is for the benefit of the Holders and their
successors and assigns. This Agreement shall be binding on the
Pledgors and their successors and assigns but may not be assigned
by Pledgors without the prior written consent of the Required
Holders.
SECTION 14. Changes in Writing.
Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only in
writing signed by the Pledgors and the Required Holders.
SECTION 15. 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).
SECTION 16. Consent to Jurisdiction and Service and Waiver of
Trial By Jury.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PLEDGOR
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 THIS AGREEMENT AND HEREBY IR-
REVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH
PLEDGOR 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 PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, (B) IT IS IMMUNE FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT<PAGE>
<PAGE>
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, EACH PLEDGOR 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 EACH PLEDGOR 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 SECTION 16 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.
SECTION 17. Severability.
If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, A.
the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of
the Holders in order to carry out the intentions of the parties
hereto as nearly as may be possible; and the invalidity or
unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision
in any other jurisdiction.
SECTION 18. Counterparts.
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agree-
ment by signing any such counterpart.
[SIGNATURES APPEAR ON THE NEXT PAGE]
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
PLEDGORS: MRI SOUTH UMBERTON, INC.
By:
Name:
Its:
NORTH BRONX RESOURCES, INC.
By:
Name:
Its:
IMAGING NETWORKS, INC.
By
Name:
Title:
DNI OF TEXAS, INC.
By
Name:
Title:
PURCHASERS: JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By:
Name:
Title:
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
By:
Name:
Title:
<PAGE>
<PAGE>
JOHN HANCOCK LIFE INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
MELLON BANK, N.A., AS TRUSTEE
UNDER THE LONG-TERM INVESTMENT
TRUST
By:
Name:
Title:
AUSA LIFE INSURANCE COMPANY,
INC.
By:
Name:
Title:
LIFE INVESTORS INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
GREAT AMERICAN LIFE INSURANCE
COMPANY
By:
Name:
Title:
GREAT NORTHERN INSURED ANNUITY
CORPORATION
By:
Name:
Title:
AMERICAN BANKERS INSURANCE
COMPANY OF FLORIDA
By:
Name:
Title:
<PAGE>
<PAGE>
COVA FINANCIAL SERVICES LIFE
INSURANCE COMPANY
By:CONNING ASSET MANAGEMENT
COMPANY
By:
Name:
Title:
PIERCE NATIONAL LIFE INSURANCE
COMPANY
By:
Name:
Title:
<PAGE>
<PAGE>
SCHEDULE 3L
LIMITED PARTNERSHIP RESTRICTED SUBSIDIARIES
NAME AND
ADDRESS PARTNERS PERCENTAGE
South Umberton Asset
Management Assoc., L.P.
North Bronx Services, L.P.
Austin MRI Partners, L.P.
Hartford County Imaging
Partners, L.P.
MR Assoc. of Allentown, L.P.
MR Assoc. I, L.P.
MR Assoc. of Morristown, L.P.
NMR Assoc. I, L.P.
Garden State Imaging
Partners, L.P.
MR Assoc. of Chicago, L.P.
Golf MRI Center, L.P.
Diagnostic Imaging
Center, L.P.
Accessible MRI, L.P.
MR Partners of Greenbelt, L.P.
<PAGE>
<PAGE>
PLEDGORS CHIEF EXECUTIVE OFFICE LOCATIONS
OF UCC FILINGS
MRI SOUTH UMBERTON,
INC.
NORTH BRONX RESOURCES,
INC.
IMAGING NETWORKS, INC.
DNI OF TEXAS, INC.
<PAGE>
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned, ,
a corporation (the "Assignor"), hereby
assigns, transfers and sets over to
(the "Assignee"), all right, title and interest of the Assignor
as a limited partner now held or hereafter arising or acquired
in:
----------------------------------------------
[Name of Limited Partnership]
(the "Limited Partnership"). The Assignor hereby appoints the
Assignee its true and lawful agent and attorney-in-fact (with
full power of substitution and resubstitution to execute and
deliver all documents and to take all such other actions, in the
name and on behalf of the Assignor, as the Assignee may deem
necessary or desirable to give effect to the Assignment herein.
Without limitation of the foregoing, the Assignor hereby resigns
and withdraws as a partner in the Limited Partnership and grants
to the Assignee its power of attorney to execute and file any
amendment to the Certificate of Limited Partnership of the
Limited Partnership as the Assignee may so deem necessary or
desirable, including, without limitation, an amendment deleting
the name of the Assignor as partner and substituting in its
stead the name of the Assignee or its designee. The appointment
made hereby and the powers hereby granted are coupled with an
interest, and therefore, are irrevocable.
Executed as an instrument under seal as of the day of
.
[Name of Assignor]
By:
Name:
Title:
By:
Name:
Title:
