EXHIBIT 3A
AMENDMENT NO. 3 AND FORBEARANCE
IN RESPECT OF THE
SECURITIES EXCHANGE AGREEMENT
AMONG
CORAM, INC.
CORAM HEALTHCARE CORPORATION
AND
CERBERUS PARTNERS, L.P.
GOLDMAN SACHS CREDIT PARTNERS L.P.
FOOTHILL CAPITAL CORPORATION
AS NOTEHOLDERS
DATED: NOVEMBER 15, 1999
<PAGE>
Amendment No. 3 and Forbearance (this "Agreement"), dated as of
November 15, 1999, in respect of the Securities Exchange Agreement dated as of
May 6, 1998, as heretofore amended (said Securities Exchange Agreement, as so
amended, being the "Securities Exchange Agreement", and the terms defined
therein being used herein as therein defined unless otherwise defined herein)
among CORAM, INC., a Delaware corporation (the "Company"), CORAM HEALTHCARE
CORPORATION, a Delaware corporation ("Holdings"), CERBERUS PARTNERS, L.P.
("Cerberus"), GOLDMAN SACHS CREDIT PARTNERS L.P. ("GSCP") and FOOTHILL CAPITAL
CORPORATION ("Foothill") (each a "Noteholder" and, together with any other
holders from time to time of interests in the Series A Notes or Series B Notes,
collectively, the "Noteholders).
W I T N E S S E T H :
WHEREAS, the Original Noteholders, the Company and Holdings entered
into the Securities Exchange Agreement, pursuant to which the Original
Noteholders received, among other things, Series A Notes and Series B Notes, as
the case may be, in exchange for the Original Noteholders' interests in the
Subordinated Rollover Notes and the Warrants; and
WHEREAS, as of the date hereof, the Original Noteholders own in the
aggregate 100% of the outstanding principal amount of the Series A Notes and
Series B Notes; and
WHEREAS, the Company and Holdings have requested and the Noteholders
have agreed (i) to reduce the interest rate applicable to the Series A and the
Series B Notes to zero for a period of six months from November 15, 1999 to the
earlier of (A) May 15, 2000 and (B) the Aetna Settlement Date and (ii) to
forbear from exercising certain rights and remedies available to the Noteholders
following a Specified Event of Default (as hereinafter defined); and
WHEREAS, the Company, Holdings and the Noteholders have agreed to amend
the Securities Exchange Agreement and to enter into this Agreement upon the
terms and subject to the conditions contained herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments to the Securities Exchange Agreement. Upon the
satisfaction of the conditions in Section 4 of this Agreement relating to the
effectiveness of Section 1, the Securities Exchange Agreement is hereby amended
as follows:
(a) Section 1 is hereby amended by adding the definitions of "Aetna
Settlement Date", "Applicable Series B Rate", "Interest Restart Date" and "Net
Cash Proceeds" as follows:
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"Aetna Settlement Date" shall mean the date of any final
settlement of all claims in the litigation between Aetna U.S.
Healthcare Inc. and its affiliates and Coram Healthcare Corporation
and the other Coram parties.
"Applicable Series B Rate" shall mean (i) from the Effective Date
to November 15, 1999, 8.00% per annum, (ii) from November 15, 1999 to
the Interest Restart Date, 0.00% per annum and (iii) thereafter, 8.00%
per annum.
"Interest Restart Date" shall mean the earlier of (i) May 15,
2000 and (ii) the Aetna Settlement Date.
(b) The definition of "Applicable Series A Rate" set forth in Section 1
of the Securities Exchange Agreement is hereby deleted in its entirety and
replaced with the following:
"Applicable Series A Rate" shall mean (i) from the Effective Date
to the Amendment Date, 9-7/8% per annum, (ii) from the Amendment Date
to November 15, 1999, 11-1/2% per annum, (iii) from November 15, 1999
to the Interest Restart Date, 0.00% per annum, and (iv) thereafter,
11-1/2% per annum.
(c) Section 2.5(b) of the Securities Exchange Agreement is hereby
deleted in its entirety and replaced with the following:
(b) The Company will pay interest, accruing from and after the
Effective Date, on the Series B Notes to each Noteholder quarterly in
arrears on January 15, April 15, July 15 and October 15 of each year,
commencing July 15, 1998 (each an "Interest Payment Date") at the
Applicable Series B Rate.
SECTION 2. Representations and Warranties of the Company and Holdings.
Each of the Company and Holdings hereby represents and warrants as to itself and
the Coram Parties that (a) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of such Coram Party and this Agreement and the Securities Exchange
Agreement amended hereby each constitutes a legal, valid and binding obligation
of such Coram Party, enforceable against it in accordance with its terms, (b) no
event has occurred and is continuing on the date hereof that constitutes a
Default or Event of Default or would constitute a Default or Event of Default
after giving effect to this Agreement, and (c) the representations and
warranties of Holdings and the Company contained in Section 4 of the Securities
Exchange Agreement are true and correct both before and after giving effect to
this Agreement, except to the extent such representations and warranties are
stated to be true only as of a particular date, in which case such
representations and warranties were correct on and as of such date.
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<PAGE>
SECTION 3. Representations and Warranties of the Noteholders. Each of
the Noteholders hereby represents and warrants as to itself that the execution,
delivery and performance of this Agreement have been duly authorized by all
necessary corporate or partnership action on the part of such Noteholder.
SECTION 4. Forbearance. Each of the Noteholders hereby agrees that,
with effect from the date hereof until May 15, 2000 (the "Forbearance
Termination Date") (such period being the "Forbearance Period"), it will not
exercise any of the rights or remedies available to it (whether now existing or
hereafter arising) following the occurrence and during the continuance of a
Specified Event of Default (as hereinafter defined). For the purposes of this
Section 4, "Specified Event of Default" shall mean an Event of Default under
Section 8.1(f)(ii) of the Securities Exchange Agreement which results solely
from the failure by Holdings and its Consolidated Subsidiaries to comply with
the financial covenants set forth in Section 7.12 of the Senior Loan Agreement
for the periods ended September 30, 1999 and December 31, 1999. Subject to this
Section 4, the Noteholders may exercise any right or remedy available to them
pursuant to the Note Documents or by applicable law or in equity during the
Forbearance Period, including, without limitation, as a result of a Default or
Event of Default other than the Specified Event of Default, and nothing herein
shall restrict, inhibit or prohibit the Noteholders from exercising any such
right or remedy or from the prosecution or continued prosecution of any action
or proceeding in furtherance of the foregoing.
SECTION 5. Conditions to Effectiveness. The amendments in Section 1 of
this Agreement and the forbearance in Section 4 of this Agreement shall become
effective on the date when (a) counterparts hereof shall have been executed by
each of the Noteholders, Holdings and the Company and (b) Holdings and each
Subsidiary Guarantor listed on Annex A shall have executed a consent and
confirmation of guaranty in the form attached hereto as Exhibit A.
SECTION 6. Effect on the Securities Exchange Agreement. Except as
amended hereby, the Securities Exchange Agreement and the other Note Documents
shall remain in full force and effect. Except as set forth herein, nothing in
this Agreement shall be deemed to (i) constitute a forbearance or waiver of
compliance by any of the Coram Parties of any term, provision or condition of
the Securities Exchange Agreement or any other instrument or agreement referred
to therein or under the Note Documents or (ii) prejudice any right or remedy
that any Noteholder may now have or may have in the future under or in
connection with the Securities Exchange Agreement or any other Note Document.
SECTION 7. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together constitute one and the same agreement.
SECTION 8. Governing Law. The validity, interpretation and enforcement
of this Agreement shall be governed by, and construed in accordance with,
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<PAGE>
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
SECTION 9. Headings. Section headings in this Agreement are included
herein for the convenience of reference only and shall not constitute part of
this Agreement for any other purpose.
SECTION 10. References. References herein and in the other Note
Documents to the "Securities Exchange Agreement", "this Agreement", "hereunder",
"hereof", or words of like import referring to the Securities Exchange
Agreement, shall mean and be a reference to the Securities Exchange Agreement as
amended hereby.
[Signatures on following page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date set forth above.
CORAM, INC.
By:
---------------------------------
Name:
Title:
CORAM HEALTHCARE CORPORATION
By:
---------------------------------
Name:
Title:
CERBERUS PARTNERS, L.P.
By:
---------------------------------
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.
By:
---------------------------------
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:
---------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
CONSENT
Dated as of November 15,1999
Each of the undersigned, in its capacity as a Guarantor under the
Securities Exchange Agreement referred to in the foregoing Agreement, hereby
consents to the said Agreement and hereby confirms and agrees that its guaranty
of the Guaranteed Obligations (as such term is defined in the Guarantee
Agreements) is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that, upon the effectiveness of,
and on and after the date of, the said Agreement, each reference in each
Guarantee Agreement to "this Agreement", "hereunder", "thereunder", "thereof" or
words of like import shall mean and be a reference to the Securities Exchange
Agreement as amended by said Agreement.
This Consent may be executed in any number of counterparts each of
which, when executed and delivered, shall constitute an original, but all
executed counterparts together shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Consent by
telecopier shall be effective as delivery of a manually executed counterpart of
this Consent.
CORAM HEALTHCARE CORPORATION
By:
---------------------------------
Name:
Title:
FOR EACH OF THE SUBSIDIARY
GUARANTORS LISTED ON ANNEX A
HERETO
By:
---------------------------------
Name:
Title:
c/o Coram Healthcare Corporation
1125 Seventeenth Street, Suite 1500
Denver, CO 80202
<PAGE>
ANNEX A
Subsidiaries
Coram International Holdings Ltd.
Coram Healthcare Limited
Coram Physician Services, Inc.
Fairfax Hematology Oncology Associates, Inc.
Healthinfusion, Inc.
H.M.S.S., Inc.
Coram Homecare of Texas, Inc.
Infusion Affiliates of Dallas, Inc.
Medisys, Inc.
Coram Homecare of Illinois, Inc.
T2 Medical, Inc.
Columbia Home Therapeutics, Inc.
Coram Healthcare Corporation of Alabama
Coram Healthcare Corporation of Colorado
Coram Healthcare Corporation of Connecticut
Coram Healthcare Corporation of Delaware
Coram Healthcare Corporation of Florida
Coram Healthcare Corporation of Greater D.C.
Coram Healthcare Corporation of Greater New York
Coram Healthcare Corporation of Illinois
Coram Healthcare Corporation of Indiana
Coram Healthcare Corporation of Iowa
Coram Healthcare Corporation of Kansas
Coram Healthcare Corporation of Kentucky
Coram Healthcare Corporation of Louisiana
Coram Healthcare Corporation of Michigan
Coram Healthcare Corporation of Minnesota
Coram Healthcare Corporation of Missouri
Coram Healthcare Corporation of Mississippi
Coram Healthcare Corporation of Nebraska
Coram Healthcare Corporation of Nevada
Coram Healthcare Corporation of New Hampshire
Coram Healthcare Corporation of New Jersey
Coram Healthcare Corporation of New Mexico
Coram Healthcare Corporation of North Carolina
Coram Healthcare Corporation of Northern California
Coram Healthcare Corporation of Ohio
Coram Healthcare Corporation of Oklahoma
<PAGE>
Coram Healthcare Corporation of Oregon
Coram Healthcare Corporation of Pennsylvania
Coram Healthcare Corporation of Rhode Island
Coram Healthcare Corporation of South Carolina
Coram Healthcare Corporation of Southern California
Coram Healthcare Corporation of Southern Florida
Coram Healthcare Corporation of Tennessee
Coram Healthcare Corporation of Texas
Coram Healthcare Corporation of Virginia
Coram Healthcare Corporation of Washington
Coram Healthcare Corporation of West Virginia
Coram Healthcare Corporation of Wisconsin
Coram Homecare of Arizona, Inc.
Coram Homecare of Kansas, Inc.
Coram Homecare of Michigan, Inc.
Coram Homecare of Minnesota, Inc.
Coram Homecare of Nebraska, Inc.
Coram Homecare of Northern California, Inc.
Coram Homecare of Ohio, Inc.
Coram Homecare of South Carolina, Inc.
Coram Homecare of South Carolina, L.L.C.
Coram Homecare of Virginia, Inc.
Coram Homecare of Wisconsin, Inc.
Coram Management of Hawaii, Inc.
Coram Service Corporation
Curaflex Health Services, Inc.
Caremark Pharmacy Services, Inc.
Comprehensive Pharmacy Home IV Services, Inc.
Coram Alternative Site Services, Inc.
Coram Healthcare Corporation of Massachusetts
Clinical Homecare Corporation
Coram Healthcare Corporation of New York
Coram Healthcare Corporation of North Texas
Coram Healthcare Corporation of Utah
Coram Healthcare of Wyoming, L.L.C.
Stratogen of Rhode Island, Inc.
Dallas Home Therapeutics, Inc.
Extendacare Health Systems, Inc.
Intracare Holdings Corporation
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