<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)*
Transworld Home HealthCare, Inc.
-----------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value per share
-----------------------------------------------------------------------
(Title of Class of Securities)
894081 10 8
-------------------------------
(CUSIP Number)
Scott A. Shay, Hyperion Partners II L.P., 50 Charles Lindbergh Blvd., Suite 500,
- --------------------------------------------------------------------------------
Uniondale, NY 11553 (516) 745-6644
----------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 29, 1996
--------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box. [_]
Check the following box if a fee is being paid with the statement. [x] (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that Section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
<PAGE>
================================================================================
CUSIP No. 894081 10 8 13D Page 2 of 87 Pages
----------- ----- ------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyperion Partners II L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
BK, OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -607,525- (1)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
-607,525- (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-607,525-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Power is exercised through its sole general partner, Hyperion Ventures II
L.P.
<PAGE>
================================================================================
CUSIP No. 894081 10 8 13D Page 3 of 87 Pages
----------- ----- ------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyperion Ventures II L.P.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -607,525- (1)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
-607,525- (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-607,525- (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Solely in its capacity as the general partner of Hyperion Partners II L.P.
<PAGE>
================================================================================
CUSIP No. 894081 10 8 13D Page 4 of 87 Pages
----------- ----- ------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Hyperion Funding II Corp.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -607,525- (1)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
-607,525- (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-607,525- (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Solely in its capacity as the sole general partner of Hyperion Ventures II
L.P., which is the sole general partner of Hyperion Partners II L.P.
<PAGE>
================================================================================
CUSIP No. 894081 10 8 13D Page 5 of 87 Pages
----------- ----- ------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lewis S. Ranieri
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -607,525- (1)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
-607,525- (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-607,525- (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Solely in his capacity as Chairman and President, director and shareholder
of Hyperion Funding II Corp., which is the sole general partner of Hyperion
Ventures II L.P., which is the sole general partner of Hyperion Partners II L.P.
<PAGE>
================================================================================
CUSIP No. 894081 10 8 13D Page 6 of 87 Pages
----------- ----- ------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Scott A. Shay
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -607,525- (1)
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
-607,525- (1)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-607,525- (1)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(1) Solely in his capacity as Executive Vice President and Assistant Secretary,
director and shareholder of Hyperion Funding II Corp., which is the sole general
partner of Hyperion Partners II L.P.
<PAGE>
CUSIP NO. 894081 10 8 Page 7 of 87
----------- ---- ----
SCHEDULE 13D
------------
ITEM 1. SECURITY AND ISSUER.
-------------------
The class of securities to which this statement relates is the common
stock, par value $.01 per share (the "Common Stock"), of Transworld Home
HealthCare, Inc. ("Transworld"). Transworld is a New York corporation with
principal executive offices at 11 Skyline Drive, Hawthorne, New York 10532.
ITEM 2. IDENTITY AND BACKGROUND.
-----------------------
This statement is being filed by Hyperion Partners II L.P. (the
"Fund"), Hyperion Ventures II L.P. (the "General Partner"), Hyperion Funding II
Corp. ("Funding"), Lewis S. Ranieri and Scott A. Shay (individually, a
"Reporting Person" and collectively, the "Reporting Persons") with respect to
shares of Common Stock beneficially owned by the Reporting Persons.
Pursuant to a Unit Purchase Agreement made as of the 20th day of
November, 1995 by and between Transworld and the Fund, as amended (the "Unit
Purchase Agreement"), the Fund agreed, upon satisfaction of the conditions set
forth therein, to acquire from Transworld up to an aggregate of 4,400,000 units
(the "Units"), consisting of Equity Units (as hereinafter defined) and Debt
Units (as hereinafter defined), at a price of $9.00 per Unit for up to an
aggregate purchase price of $39,600,000. Each equity unit (the "Equity Units")
consists of (i) one share of Common Stock and (ii) 0.6818 of a warrant (expiring
five years from date of issuance), with each whole warrant entitling the holder
thereof to purchase one share of Common Stock at an initial exercise price of
$12.45 per share (each, a "Warrant" and collectively, the "Warrants"). Each
debt unit (the "Debt Units") consists of (i) $9.00 in principal amount of a
subordinated convertible debenture of the Company convertible into one share of
Common Stock (each a "Convertible Debenture" and collectively, the "Convertible
Debentures"), and (ii) 0.6818 of a Warrant.
On January 10, 1996, the Fund purchased from Transworld a $10,000,000
principal amount 20% Subordinated Note (the "Subordinated Note") of Transworld
for $10,000,000 pursuant to a Subordinated Note Purchase Agreement, dated as of
January 10, 1996, by and between Transworld and the Fund (the "Note Purchase
Agreement"). On May 29, 1996, the interest rate on the Subordinated Note was
reduced to 12%.
<PAGE>
CUSIP NO. 894081 10 8 Page 8 of 87
----------- ---- ----
On May 29, 1996, pursuant to the Unit Purchase Agreement, the Fund
purchased from Transworld 600,000 Equity Units. Pursuant to the Unit Purchase
Agreement, the Fund has agreed, subject to the satisfaction of a number of
conditions, to purchase from Transworld up to an additional 3,800,000 Units (the
"Additional Units"), which may consist of Debt Units or Equity Units. The
agreement to purchase the Additional Units is subject to the satisfaction of a
number of conditions, including the consent of Transworld's senior lenders,
which consent has not been obtained, and, in the case of additional Equity
Units, the approval of the New York State Department of Health (the "DOH
Approval"). The exercise of the Warrants included in the 600,000 Units
purchased on May 29, 1996, also is subject to the receipt of DOH approval to the
extent that, as a result of such exercise, the Fund would own a number of shares
of Common Stock in excess of 9.9% of the then outstanding shares of Common
Stock. Pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as
amended (the "Act"), the Fund expressly disclaims beneficial ownership of the
shares of Common Stock included in the Additional Units (or underlying the
Warrants and Convertible Debentures included in the Additional Units) and (to
the extent it would result in the Fund owning more than 9.9% of the outstanding
Common Stock) the shares of Common Stock underlying the Warrants included in the
600,000 Units purchased on May 29, 1996 and, accordingly, such shares are not
reported below.
On May 14, 1996, the Fund agreed to loan to Joseph J. Raymond,
directly or through a subsidiary of the Fund, $1,100,000, secured by a security
interest in and pledge of 150,000 shares of Common Stock.
The Fund is a Delaware private investment limited partnership that
invests directly or indirectly through its subsidiaries in equity and debt
securities for its own account. Its principal business and office address is 50
Charles Lindbergh Boulevard, Suite 500, Uniondale, New York 11553. The General
partner is the sole general partner of the Fund and Funding is the sole general
partner of the General Partner. Lewis S. Ranieri and Scott A. Shay constitute
all the shareholders and directors of Funding and together with David M. Golush
and Robert A. Perro constitute all the executive officers of Funding.
The General Partner is a Delaware limited partnership whose principal
business and activity is to act as general partner of the Fund. Its principal
business and office address is 50 Charles Lindbergh Boulevard, Suite 500,
Uniondale, New York 11553.
Funding is a Delaware corporation whose principal business and
activity is to act as general partner of the General
<PAGE>
CUSIP NO. 894081 10 8 Page 9 of 87
----------- ---- ----
Partner. Its principal business and office address is 50 Charles Lindbergh
Boulevard, Suite 500, Uniondale, New York 11553.
Lewis S. Ranieri is Chairman and President, director and a shareholder
of Funding. He also is the Chairman and Chief Executive Officer of Ranieri &
Co., Inc., a registered broker dealer, and Chairman and President, director and
shareholder of Hyperion Funding Corp. and LSR Hyperion Corp., general partners
of the sole general partner of Hyperion Partners L.P., a Delaware private
investment limited partnership. His principal business and office address is 50
Charles Lindbergh Boulevard, Suite 500, Uniondale, New York 11553. He is a
citizen of the United States of America.
Scott A. Shay is Executive Vice President and Assistant Secretary,
director and a shareholder of Funding. He also is a Managing Director of
Ranieri & Co., Inc., a registered broker dealer, and President, director and
shareholder of SAS Hyperion Corp. and Chairman and President, director and
shareholder of SAS Hyperion Corp., general partners of the sole general partner
of Hyperion Partners L.P., a Delaware private investment limited partnership.
His principal business and office address is 50 Charles Lindbergh Boulevard,
Suite 500, Uniondale, New York 11553. He is a citizen of the United States of
America.
David M. Golush is Vice President and Assistant Secretary of Funding.
He also is a Managing Director of Ranieri & Co., Inc., a registered broker
dealer. His principal business and office address is 50 Charles Lindbergh
Boulevard, Suite 500, Uniondale, New York 11553. He is a citizen of the United
States of America.
Robert A. Perro is Vice President and Secretary of Funding. His
principal business and office address is 50 Charles Lindbergh Boulevard, Suite
500, Uniondale, New York 11553. He is a citizen of the United States of
America.
None of the Reporting Persons nor, to the best of each Reporting
Person's knowledge, David M. Golush or Robert A. Perro, has during the last five
years been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
<PAGE>
CUSIP NO. 894081 10 8 Page 10 of 87
----------- ---- ----
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------
Prior to May 29, 1996, none of the Reporting Persons beneficially
owned any shares of Common Stock. On May 29, 1996, pursuant to the Unit
Purchase Agreement, the Fund purchased from Transworld 600,000 Equity Units at a
price of $9.00 per Unit, for an aggregate purchase price of $5,400,000. From
time to time in the ordinary course of its business, the Fund calls capital from
its partners and borrows money under a $12,500,000 secured credit facility
maintained by the Fund with The Bank of New York to fund working capital needs
and to make investments. The funds for the purchase of such Units were obtained
from such sources and by offsetting amounts owed to the Fund under the
Subordinated Note and otherwise.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
The shares of Common Stock were acquired by the Fund for the purpose
of investment.
Pursuant to the Unit Purchase Agreement, the Fund has agreed to
purchase the Additional Units from Transworld. The agreement to purchase the
Additional Units is subject to the satisfaction of a number of conditions,
including the consent of Transworld's senior lenders, which consent has not been
obtained and, in the case of additional Equity Units, receipt of DOH Approval.
Pursuant to the Unit Purchase Agreement, the Fund has agreed that
prior to receipt of DOH Approval, it will not exercise the Warrants to the
extent that, after giving effect to such exercise, the Fund would own a number
of shares of Common Stock in excess of 9.9% of the then outstanding shares of
Common Stock.
The shares of Common Stock acquired by the Fund may be disposed of at
any time or from time to time, in whole or in part. In addition, the Reporting
Persons and their affiliates may in the future acquire additional Units or
shares of Common Stock, pursuant to the Unit Purchase Agreement and otherwise.
Pursuant to the Unit Purchase Agreement, for a five-year period
commencing on the closing of the Fund's purchase from Transworld of the
Additional Units, the Fund will be entitled to designate to the Board of
Directors of Transworld the greater of (i) three directors and (ii) 40% of the
number of Directors constituting the entire Board of Directors. In connection
with the Fund's purchase of the Subordinated Note, the Fund designated Scott A.
Shay as a Director of Transworld. It is anticipated
<PAGE>
CUSIP NO. 894081 10 8 Page 11 of 87
----------- ---- ----
that upon the closing of the purchase by the Fund of the Additional Units, the
Fund will designate two additional directors to fill the two vacancies currently
existing on Transworld's Board of Directors. Pursuant to the Unit Purchase
Agreement, certain executives of the Company have agreed to vote all shares of
Common Stock owned by them for the Fund's designees as directors of Transworld.
Although the Reporting Persons and such executives may be deemed a "group"
within the meaning of Section 13(d)(3) of the Act and Rule 13d-5 promulgated
thereunder because of such agreement, the Reporting Persons expressly disclaim
beneficial ownership of the shares of Common Stock owned by such executives,
and, accordingly, the holdings of such executives are not included in this
filing. Neither the fact of this filing nor anything contained herein shall be
deemed to be an admission by the Reporting Persons that such a group exists.
Pursuant to the Unit Purchase Agreement Transworld has agreed that
before the closing of the purchase and sale of the Additional Units it will not,
and pursuant to the Note Purchase Agreement Transworld has agreed that until
repayment of the Subordinated Note it will not, (i) make any change in or
amendment to its Certificate of Incorporation or By-Laws; (ii) issue, sell or
deliver, or agree to issue, sell or deliver, any shares of capital stock of
Transworld or any of its subsidiaries (or any security convertible into such
shares or other rights to acquire such shares); (iii) acquire control of any
other business entity or a substantial portion of the assets of any other
business entity; (iv) solicit, entertain, or enter into any agreement or
understanding with respect to an offer from a third party to purchase more than
5% of the outstanding shares of any class of capital stock of Transworld or any
of its subsidiaries, to make a tender or exchange offer for any shares of Common
Stock, to acquire all or a substantial portion of the assets of Transworld or
any of its subsidiaries, or to merge, consolidate or combine with Transworld or
any of its subsidiaries; or (v) enter into, or agree to enter into, any material
transaction, except in the ordinary course of business.
Except as set forth herein, none of the Reporting Persons has any
plans or proposals of the type described in (a) through (j) of Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
(a) The Fund owns 600,000 shares of Common Stock, constituting
approximately 9.8% of the outstanding Common Stock (on the basis of 6,129,094
shares outstanding as of May 29, 1996). In addition, the Fund owns 409,080
Warrants. Each Warrant entitles the holder thereof to purchase one share of
<PAGE>
CUSIP NO. 894081 10 8 Page 12 of 87
----------- ---- ----
Common Stock at an initial exercise price of $12.45 per share, but prior to
receipt of DOH Approval the Fund may not exercise the Warrants to the extent
that, after giving effect to such exercise, the Fund would own a number of
shares of Common Stock in excess of 9.9% of the then outstanding shares of
Common Stock.
As a result of its right to acquire Common Stock upon exercise of
Warrants, the Fund may be deemed under Rule 13d-3(d)(1)(i)(B) under the Act, to
own beneficially that number of shares of Common Stock that, when added to the
shares of Common Stock owned by the Fund, would result in the Fund owning 9.9%
of the outstanding shares of Common Stock, which is the maximum number of shares
that the Fund would be permitted to own under the Unit Purchase Agreement prior
to receipt of DOH Approval. The application of this rule may result in the Fund
being deemed to be the beneficial owner of 607,525 shares of Common Stock.
On May 14, 1996, the Fund agreed to loan to Joseph J. Raymond,
directly or through a subsidiary of the Fund, $1,100,000, secured by a security
interest in and pledge of 150,000 shares of Common Stock. It is anticipated
that when such loan is made, neither the Fund nor any of its affiliates will
have or share, by reason of the security interest in and pledge of such 150,000
shares, the power to vote or direct the vote, or to dispose or direct the
disposition, of such shares, unless such loan is in default (and in no event
would the Fund have the power to purchase or vote such shares prior to receipt
of DOH approval if, as a result, the Fund would own or have the power to vote
more than 9.9% of the then outstanding Common Stock). Each of the Reporting
Persons expressly disclaims beneficial ownership of such shares and such shares
are not included in the number of shares reported herein as beneficially owned
by the Reporting Persons.
The General Partner may by reason of its status as the sole general
partner of the Fund, be deemed to own beneficially (as that term is defined in
Rule 13d-3 under the Act) the shares of Transworld of which the Fund possesses
beneficial ownership.
Funding may, by reason of its status as the sole general partner of
the General Partner, be deemed to own beneficially (as that term is defined in
Rule 13d-3 under the Act) the shares of Transworld of which the Fund possesses
beneficial ownership.
Lewis S. Ranieri may, by reason of his status as a control person of
Funding, which is the general partner of the General Partner, be deemed to own
beneficially (as that term is defined in Rule 13d-3 under the Act) the shares of
Transworld of which the Fund possesses beneficial ownership.
<PAGE>
CUSIP NO. 894081 10 8 Page 13 of 87
----------- ---- ----
Scott A. Shay may, by reason of his status as a control person of
Funding, which is the general partner of the General Partner, be deemed to own
beneficially (as that term is defined in Rule 13d-3 under the Act) the shares of
Transworld of which the Fund possesses beneficial ownership.
(b) Lewis S. Ranieri, Scott A. Shay, Funding and the General Partner
share with the Fund the power to vote and to dispose of the shares of Common
Stock beneficially owned directly by the Fund.
(c) Except as described in Item 3, none of the Reporting Persons nor,
to the best knowledge of the Reporting Persons, David M. Golush or Robert A.
Perro, has, during the past 60 days, engaged in any transactions in the Common
Stock.
(d) No person other than the Reporting Persons is known to have the
right to receive or the power to direct the receipt of dividends from, and the
proceeds from the sale of, the shares of Common Stock to be acquired by the Fund
pursuant to the Unit Purchase Agreement.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
---------------------------------------------------------------------
TO SECURITIES OF THE ISSUER.
---------------------------
The description of the Unit Purchase Agreement set forth in Items 2
and 4 hereof is hereby incorporated by reference.
Pursuant to the Unit Purchase Agreement, the Fund has agreed that
until the earliest of (x) May 29, 2001, (y) the date on which certain executives
of Transworld beneficially own less than 415,000 shares of the Common Stock
beneficially owned by them as of the date of the Unit Purchase Agreement and (z)
the date on which a person, entity or "group" (within the meaning of Section
13(d) and 14(d) of the Act) unaffiliated with the Fund becomes the beneficial
owner of 25% or more of the then outstanding capital stock of Transworld, it
will vote all shares of Common Stock held by it in the same proportions as the
votes cast by other holders of Common Stock that are represented at each meeting
of shareholders. Notwithstanding the foregoing, the Fund may vote in any way it
may choose on: (i) the election of the Fund's designees to the Board of
Directors of Transworld (described above in Item 4); (ii) amendments or changes
to the Certificate of Incorporation or By-Laws of Transworld; (iii) any merger
or consolidation, and any sale, lease, exchange or other disposition of assets
of Transworld; (iv) any authorization,
<PAGE>
CUSIP NO. 894081 10 8 Page 14 of 87
----------- ---- ----
issuance or transfer of securities of Transworld or its subsidiaries; (v) any
reclassification or recapitalization; (vi) any liquidation or dissolution; and
(vii) any affiliated party transaction.
On November 20, 1995, in connection with the execution of the Unit
Purchase Agreement, Transworld, the Fund and certain shareholders of Transworld
(the "Shareholders") entered into a Stock Restriction Agreement, pursuant to
which each of the Shareholders agreed that for a period of five years he would
not transfer shares of Common Stock, or options, warrants or other rights to
purchase Common Stock, if such transfer would result in his owning less than (i)
75% of the shares of Common Stock held by him (or shares of Common Stock
issuable upon exercise or conversion of any warrant or convertible or derivative
security held by him) on the date thereof, or (ii) if less, the percentage of
the shares of Common Stock purchased by the Fund, or which the Fund has the
right to purchase (or Common Stock issuable upon exercise or conversion of any
warrant or convertible or derivative security purchased by it, or which it has
the right to purchase) pursuant to the Unit Purchase Agreement that is owned by
the Fund on the date of such proposed transfer. Although the Reporting Persons
and such Shareholders may be deemed a "group" within the meaning of Section
13(d)(3) of the Act and Rule 13d-5 promulgated thereunder because of such
agreement, the Reporting Persons expressly disclaim beneficial ownership of the
shares of Common Stock owned by such Shareholders, and, accordingly, the
holdings of such Shareholders are not included in this filing. Neither the fact
of this filing nor anything contained herein shall be deemed to be an admission
by the Reporting Persons that such a group exists.
The Note Purchase Agreement provides that until the Subordinated Note
has been paid in full, the Fund will be entitled to designate one director to
the Board of Directors of the Company. In connection with the Fund's purchase
of the Subordinated Note, the Fund designated Scott A. Shay as a Director of
Transworld. Pursuant to the Unit Purchase Agreement, for a five-year period
commencing on the closing of the Fund's purchase from Transworld of the
Additional Units, the Fund will be entitled to designate to the Board of
Directors of Transworld the greater of (i) three directors and (ii) 40% of the
number of Directors constituting the entire Board of Directors. It is
anticipated that upon the closing of the purchase by the Fund of the Additional
Units, the Fund will designate two additional directors to fill the two
vacancies currently existing on Transworld's Board of Directors.
In connection with closing of the purchase and sale of 600,000 Equity
Units on May 29, 1996, Transworld and the Fund
<PAGE>
CUSIP NO. 894081 10 8 Page 15 of 87
----------- ---- ----
entered into a Registration Rights Agreement, pursuant to which Transworld is
obligated, at the request of the Fund, to file a registration statement covering
the sale of the shares of Common Stock owned by the Fund (or issued upon
exercise of Warrants or conversion of Convertible Debentures purchased by the
Fund). The agreement provides that the Fund may make up to three such requests
(or, if Form S-3 or a similar "short form" registration statement is available,
an unlimited number of requests), and that in each case Transworld must use its
best efforts to cause the registration to become effective as soon as
practicable after the receipt of such request. In addition, the agreement
provides that if Transworld proposes to register any of its stock or other
securities, it will use its best efforts to cause all shares of Common Stock
requested by the Fund to be included in such registration to be covered by such
registration. The agreement further provides that Transworld is responsible for
the payment of registration fees and other expenses incurred in connection with
the registration statement, other than underwriting discounts and commissions.
The foregoing descriptions of the Unit Purchase Agreement, Stock
Restriction Agreement, Note Purchase Agreement, and the Registration Rights
Agreement are not, and do not purport to be, complete, and are qualified in
their entirety by reference to the forms of such agreements included as Exhibits
hereto, which forms are incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
1. Exhibit I - Agreement pursuant to Rule 13d-
1(f)(1)(iii), filed herewith
2. Exhibit II - Power of Attorney of Lewis S.
Ranieri, filed herewith
3. Exhibit III - Unit Purchase Agreement,
incorporated by reference from Exhibit No. 10.56
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
4. Exhibit IV - Note Purchase Agreement,
incorporated by reference from Exhibit No. 10.57
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
<PAGE>
CUSIP NO. 894081 10 8 Page 16 of 87
----------- ---- ----
5. Exhibit V - Stock Restriction Agreement, filed
herewith
6. Exhibit VI - Registration Rights Agreement,
incorporated by reference from Exhibit No. 10.56
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
7. Exhibit VII - Secured Credit Agreement dated as
of August 15, 1995, filed herewith
8. Exhibit VIII - Form of Security Agreement dated
as of August 15, 1995, filed herewith
<PAGE>
CUSIP NO. 894081 10 8 Page 17 of 87
----------- ---- ----
SIGNATURE
- ---------
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: June 6, 1996
HYPERION PARTNERS II L.P.
By: Hyperion Ventures II L.P.,
its general partner
By: Hyperion Funding II Corp.,
its general partner
By:/s/Scott A. Shay
-----------------------
Name: Scott A. Shay
------------------
Title: Executive Vice
-----------------
President
-----------------
HYPERION VENTURES II L.P.
By: Hyperion Funding II Corp.,
its general partner
By: /s/Scott A. Shay
---------------------------
Name: Scott A. Shay
----------------------
Title: Executive Vice
---------------------
President
---------------------
HYPERION FUNDING II CORP.
By: /s/Scott A. Shay
--------------------------
Name: Scott A. Shay
---------------------
Title: Executive Vice
--------------------
President
--------------------
/s/Lewis S. Ranieri
------------------------------
Lewis S. Ranieri
/s/Scott A. Shay
------------------------------
Scott A. Shay
<PAGE>
CUSIP NO. 894081 10 8 Page 18 of 87
----------- ---- ----
EXHIBIT INDEX
1. Exhibit I - Agreement pursuant to Rule 13d-
1(f)(1)(iii), filed herewith
2. Exhibit II - Power of Attorney of Lewis S.
Ranieri, filed herewith
3. Exhibit III - Unit Purchase Agreement,
incorporated by reference from Exhibit No. 10.56
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
4. Exhibit IV - Note Purchase Agreement,
incorporated by reference from Exhibit No. 10.57
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
5. Exhibit V - Stock Restriction Agreement, filed
herewith
6. Exhibit VI - Registration Rights Agreement,
incorporated by reference from Exhibit No. 10.56
to Annual Report on Form 10-K for the fiscal year
ended October 31, 1995, filed by Transworld
7. Exhibit VII - Secured Credit Agreement dated as
of August 15, 1995, filed herewith
8. Exhibit VIII - Form of Security Agreement dated
as of August 15, 1995, filed herewith
<PAGE>
CUSIP NO. 894081 10 8 Page 19 of 87
----------- ---- ----
EXHIBIT I
Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the General Rules
and Regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, the undersigned agree that the statement to
which this Exhibit is attached is filed on behalf of each of them in the
capacities set forth below.
HYPERION PARTNERS II L.P.
By: Hyperion Ventures II L.P.,
its general partner
By: Hyperion Funding II Corp.,
its general partner
By:/s/Scott A. Shay
-----------------------
Name: Scott A. Shay
Title: Executive Vice
President
HYPERION VENTURES II L.P.
By: Hyperion Funding II Corp.,
its general partner
By: /s/Scott A. Shay
---------------------------
Name: Scott A. Shay
Title: Executive Vice
President
HYPERION FUNDING II CORP.
By: /s/Scott A. Shay
--------------------------
Name: Scott A. Shay
Title: Executive Vice
President
/s/Lewis S. Ranieri
------------------------------
Lewis S. Ranieri, individually
/s/Scott A. Shay
------------------------------
Scott A. Shay, individually
<PAGE>
CUSIP NO. 894081 10 8 Page 20 of 87
----------- ---- ----
EXHIBIT II
POWER OF ATTORNEY
-----------------
The undersigned, Lewis S. Ranieri, hereby irrevocably constitutes and
appoints Scott A. Shay, whose address is c/o Hyperion Partners II L.P., 50
Charles Lindbergh Blvd., Suite 500, Uniondale, New York 11553, as my true and
lawful attorney, with full power and authority, in my name, place and stead, as
fully as could I if personally present and acting:
(a) to act on my behalf with respect to all matters relating to any
Statement on Schedule 13D (including amendments thereto) with respect to the
Common Stock of Transworld Home HealthCare, Inc.; and
(b) generally to execute, deliver and file all certificates, documents
and filings, and to do all things and to take or forego any action which he may
deem necessary or desirable in connection with or to effectuate the foregoing.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 6th day of June, 1996.
/s/Lewis S. Ranieri
---------------------------------
Lewis S. Ranieri
<PAGE>
CUSIP NO. 894081 10 8 Page 21 of 87
----------- ---- ----
EXHIBIT V
CONFORMED COPY
STOCK RESTRICTION AGREEMENT
---------------------------
This STOCK RESTRICTION AGREEMENT (this "Agreement") is made as of
November 20, 1995 among Transworld Home HealthCare, Inc., a New York corporation
(the "Company"), Hyperion Partners II L.P., a Delaware limited partnership
("HPII") and the persons listed as "Shareholders" on the signature page to this
Agreement.
RECITALS
--------
A. HPII has agreed to purchase from the Company "Equity Units"
(each Equity Unit consisting of one (1) share of common stock of the Company and
0.6818 warrants initially exercisable for one (1) share of common stock of the
Company) and "Debt Units" (each Debt Unit consisting of $9.00 in principal
amount of Subordinated Convertible Debenture and 0.6818 warrants initially
exercisable for one (1) share of common stock of the Company) pursuant to the
terms and conditions of the Unit Purchase Agreement dated November 20, 1995 (the
"Purchase Agreement").
B. The Shareholders are presently the legal or beneficial owners
of shares of common stock, options to acquire common stock and/or warrants
exercisable for common stock of the Company.
C. The Company and the Shareholders have agreed to enter into
this Agreement as a further inducement to HPII to enter into the Purchase
Agreement and to purchase Units thereunder.
NOW, THEREFORE, in consideration of the foregoing, the parties agree
as follows:
1. Definitions. For purposes of this Agreement:
-----------
(a) "Common Equivalents" means Common Shares outstanding, Common
------------------
Shares directly or indirectly issuable upon exercise of any warrant or
option and Common Shares directly or indirectly issuable upon conversion of
any convertible or derivative security.
(b) "Common Shares" means shares of common stock of the Company.
-------------
<PAGE>
CUSIP NO. 894081 10 8 Page 22 of 87
----------- ---- ----
(c) "HPII Percentage" means a fraction, the denominator of which
---------------
is the number of Common Equivalents purchased by HPII, or which HPII has the
right to purchase, pursuant to the Purchase Agreement, without regard to any
restriction on the exercise of warrants or conversion of convertible
securities that may be applicable to HPII (the "HPII Equivalents"), and the
numerator of which is the HPII Equivalents less the number of Common
Equivalents Transferred by HPII on or after the date of the Purchase
Agreement (giving effect to all stock splits and combinations of Common
Shares, all adjustments to warrants or other convertible securities as a
result of antidilution provisions or otherwise and all other similar
adjustments to such Common Equivalents as if they had occurred on the date
of the Purchase Agreement).
(d) "Related Person" means a Shareholder's spouse, siblings,
--------------
parents, lineal descendants or trusts for the benefit of such Shareholder or
such Shareholder's spouse, siblings, parents or lineal descendants.
(e) "Shareholder Percentage" means, with respect to a
----------------------
Shareholder, a fraction, the denominator of which is the number of Common
Equivalents that such Shareholder and his Related Persons own or have the
right to acquire on the date of the Purchase Agreement ("Shareholder's
Equivalents"), and the numerator of which is the Shareholder's Equivalents
less the number of Common Equivalents Transferred by such Shareholder and
his Related Persons after the date of the Purchase Agreement (giving effect
to all stock splits and combinations of Common Shares, all adjustments to
warrants or other convertible securities as a result of antidilution
provisions or otherwise and all other similar adjustments to such Common
Equivalents as if they had occurred on the date of the Purchase Agreement).
(f) "Transfer" means to directly or indirectly sell, transfer,
--------
pledge, encumber or otherwise dispose of.
2. Restriction on Transfer. Subject to Section 3 below, and
-----------------------
except as HPII may otherwise consent in writing, no Shareholder shall Transfer
any Common Equivalents, or any warrant, option, convertible security or other
right to purchase Common Equivalents, or any interest in any of the foregoing,
if at the time of such Transfer, or after giving effect thereto, the Shareholder
Percentage of such Shareholder is (or as a result of such Transfer would be)
less than the lesser of (the "Minimum Shareholder Percentage") (i) 0.75 and (ii)
the HPII Percentage. Notwithstanding the foregoing, at any time when the
Shareholder Percentage of Joseph A. Raymond or Robert W. Fine exceeds his
Minimum Shareholder Percentage, he may, by notice to HPII,
<PAGE>
CUSIP NO. 894081 10 8 Page 23 of 87
----------- ---- ----
designate a number of his Common Equivalents, up to the number that would cause
his Shareholder Percentage to equal his Minimum Shareholder Percentage, as
available for Transfer by Gene Berger or Wayne Palladino, and upon such
designation, Mr. Berger and/or Mr. Palladino, as applicable, may Transfer a
number of Common Equivalents equal to the number so designated by Mr. Raymond or
Mr. Fine, and such Transfer shall be deemed for all purposes of this Agreement
to be a Transfer by Mr. Raymond or Mr. Fine, as applicable, rather than a
Transfer by Mr. Berger or Mr. Palladino, as applicable.
3. Exemption from Transfer Restriction. The following Transfers
-----------------------------------
shall not be subject to the restriction provided in Section 2 above:
(a) Transfers by a Shareholder to a Related Person of such
Shareholder, provided that any such transferee shall agree in writing to
take subject to and to comply with the restrictions contained in this
Agreement (including without limitation Section 2) on an aggregate basis
with the applicable Shareholder;
(b) In the case a Shareholder's employment with the Company and
its subsidiaries is terminated by such Shareholder, such Shareholder
thereafter may pledge Common Shares to a broker or institutional lender to
the extent (and only to the extent) necessary to enable such Shareholder to
obtain sufficient funds to exercise outstanding stock options that expire
within ninety (90) days after such termination of employment; and
(c) In the case a Shareholder's employment with the Company and
its subsidiaries is terminated by the Company (or its subsidiary, as
applicable) without "cause" (as defined in any employment agreement between
such Shareholder and the Company or, in the absence of such an employment
agreement, as determined by the Board of Directors of the Company in its
good faith discretion), then (i) in the cases of Mr. Raymond and Mr. Fine,
such Shareholder thereafter may pledge his Common Shares as described in,
and to the extent permitted by, Section 3(b) above and (ii) in the cases of
Mr. Berger and Mr. Palladino, such Shareholder thereafter may pledge Common
Shares to a broker or institutional lender or enter into bona fide hedging
transactions with respect to his Common Shares.
4. Stock Certificate Legend; Transfer Limitations. Each
----------------------------------------------
certificate or agreement representing Common Equivalents now or hereafter owned
by the Shareholders shall be endorsed with the following legend until
termination of the terms of this Agreement:
<PAGE>
CUSIP NO. 894081 10 8 Page 24 of 87
----------- ---- ----
"THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE [OR AGREEMENT] IS SUBJECT TO THE TERMS AND CONDITIONS OF A
STOCK RESTRICTION AGREEMENT BY AND AMONG THE HOLDER OF THESE SECURITIES,
CERTAIN INVESTORS IN THE COMMON STOCK OF THE COMPANY AND THE COMPANY. A
COPY OF SUCH AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY."
The Company shall not record on its books any Transfer of Common Equivalents
made by a Shareholder in violation of this Agreement, and any such Transfer
shall be void. The Company shall issue appropriate stop transfer restrictions
to its transfer agent with respect to any Common Equivalents held by the
Shareholders.
5. Termination. This Agreement shall terminate on the fifth
-----------
anniversary of the date hereof; provided, however, that (a) if a Shareholder
-------- -------
shall cease to be employed by the Company and its subsidiaries as a result of
(i) the resignation by such Shareholder or (ii) the termination of such
Shareholder's employment without "cause" (either (i) or (ii), a "Termination"),
this Agreement shall cease to apply to the Common Equivalents held by such
Shareholder and his Related Persons on the first anniversary of the date of the
Termination of such Shareholder and (b) this Agreement shall cease to apply to
the Common Equivalents held by a Shareholder and his Related Persons upon such
Shareholder's death. A Shareholder that ceases to be employed by the Company as
a result of a termination for cause shall continue to be bound by the terms of
this Agreement until the fifth anniversary of the date hereof.
6. Amendment; Waiver. This Agreement may be amended only by a
-----------------
written instrument signed by (i) HPII and (ii) Shareholders holding a majority
of the Common Equivalents held by all the Shareholders. The observance of any
provision of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
signed by the party against whom enforcement of such waiver is sought, provided
that Shareholders holding a majority of the Common Equivalents held by all the
Shareholders may act on behalf of all the Shareholders. Any amendment or waiver
effected in accordance with this Section shall be binding upon each party to
this Agreement and its successors and assigns.
7. Ownership of Common Equivalents. Each Shareholder represents and
-------------------------------
warrants that the number of its Shareholder's Equivalents is accurately set
forth opposite such Shareholder's name on the signature page hereto. Each
Shareholder covenants and agrees that it will notify the Company and HPII if at
any time or from time to time it, or any of its Related Persons, acquires or
Transfers any Common Equivalents.
<PAGE>
CUSIP NO. 894081 10 8 Page 25 of 87
----------- ---- ----
8. Other Agreements. Each Shareholder represents, warrants and
----------------
agrees that it has not entered into, and shall not enter into, any agreements,
arrangements or understandings of any kind with any person or entity with
respect to the Common Equivalents held by such Shareholder on terms inconsistent
with the provisions of this Agreement, including, without limitation,
agreements, arrangements or understandings with respect to the holding,
acquisition or disposition of Common Equivalents.
9. Changes in Common Shares or Common Equivalents. If, and as often
----------------------------------------------
as, there are any changes in any Common Equivalents by way of stock split, stock
dividend, combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the restrictions provided in Section 2 above shall continue
with respect to the resulting securities held by the Shareholders, as so
changed.
10. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement constitutes the full and
----------------
entire understanding and agreement among the parties with regard to the
subject matter hereof. Nothing in this Agreement, express or implied, is
intended to confer upon any person or entity, other than the parties hereto
and their respective successors and assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided herein.
(b) GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL
--------------------------------------
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AS SUCH LAWS ARE APPLIED TO
AGREEMENTS BETWEEN NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED
ENTIRELY WITHIN NEW YORK, WHETHER OR NOT ALL PARTIES HERETO ARE RESIDENTS OF
NEW YORK. ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR
CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH OR ALLEGED
BREACH OF THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT LOCATED IN THE
COUNTY, CITY AND STATE OF NEW YORK AND EACH OF THE PARTIES HERETO (I)
UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS AND ANY
RELATED APPELLATE COURT AND IRREVOCABLE AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY AND (II) IRREVOCABLY WAIVES ANY OBJECTION SUCH PARTY MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE PARTIES
HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY
ARE PARTIES.
<PAGE>
CUSIP NO. 894081 10 8 Page 26 of 87
----------- ---- ----
(c) Successors and Assigns. The provisions hereof shall inure to
----------------------
the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
(d) Notices. Any notice required or permitted under this
-------
Agreement shall be given in writing and shall be deemed effectively given
upon receipt by the party to be notified or five (5) days after deposit with
the United States Post Office, by registered or certified mail, postage
prepaid and addressed to the party to be notified at such party's address
set forth at the end of this Agreement or at such other address as such
party shall have furnished the other parties to this Agreement in writing.
(e) Severability. Any invalidity, illegality or limitation on the
------------
enforceability of the Agreement or any part thereof, by any party whether
arising by reason of the law of the respective party's domicile or
otherwise, shall in no way affect or impair the validity, legality or
enforceability of this Agreement with respect to other parties. If any
provision of this Agreement shall be judicially determined to be invalid,
illegal or unenforceable, such provision shall be construed and enforced as
if it had been more narrowly drawn so as not to be invalid, illegal or
unenforceable, and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(f) Titles and Subtitles. The titles of the Sections and
--------------------
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
(g) Delays or Omissions; Remedies Cumulative. No delay or
----------------------------------------
omission to exercise any right, power or remedy accruing to HPII upon any
breach or default of any other party to this Agreement shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind
or character by HPII of any breach or default under this Agreement, or any
waiver by HPII of any provisions or conditions of this Agreement must be in
writing. All remedies under this Agreement or otherwise afforded to HPII by
law, shall be cumulative and not alternative.
<PAGE>
CUSIP NO. 894081 10 8 Page 27 of 87
----------- ---- ----
(h) Equitable Remedies. In addition to all other remedies
------------------
afforded to HPII under law, including without limitation the right to sue
for monetary damages, HPII shall be entitled to enforce this Agreement
specifically (without posting a bond or other security). The parties hereto
agree and acknowledge that money damages will not be an adequate remedy for
any breach of the provisions of this Agreement and that HPII may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent
any violation of the provisions of this Agreement.
(i) Attorneys' Fees. If any action at law or in equity is
---------------
necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party
may be entitled.
(j) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
SIGNATURE PAGE IMMEDIATELY FOLLOWS THIS PAGE
<PAGE>
CUSIP NO. 894081 10 8 Page 28 of 87
----------- ---- ----
SIGNATURE PAGE TO
STOCK RESTRICTION AGREEMENT
The undersigned hereby execute the Stock Restriction Agreement as of
November 20, 1995 and authorize this signature page to be attached to a
counterpart of said Agreement.
TRANSWORLD HOME HEALTHCARE, INC.
Address:
- -------
11 Skyline Drive By:/s/Joseph J. Raymond
----------------------------
Hawthorne, New York 10053 Name: Joseph J. Raymond
Title: Chairman
HYPERION PARTNERS II L.P.
Address:
- -------
Suite 500 By: HYPERION VENTURES II L.P.,
50 Charles Lindbergh its General Partner
Boulevard
Uniondale, NY 11553-3600 By: Hyperion Funding II Corp.,
its General Partner
By:/s/Scott A. Shay
----------------------
Name: Scott A. Shay
Title: Executive Vice
President
"SHAREHOLDERS"
NUMBER OF
SHAREHOLDER'S
EQUIVALENTS AS OF
NOVEMBER 20, 1995
-----------------
/s/Joseph J. Raymond 713,800
- -----------------------
Joseph J. Raymond Address:
/s/Robert W. Fine 105,287
- -----------------------
Robert W. Fine Address:
/s/H. Gene Berger 145,182
- -----------------------
H. Gene Berger Address:
/s/Wayne A. Palladino 142,882
- -----------------------
Wayne A. Palladino Address:
<PAGE>
CUSIP NO. 894081 10 8 Page 29 of 87
----------- ---- ----
EXHIBIT VII
CONFORMED COPY
_______________________________________________________________
$12,500,000
SECURED CREDIT AGREEMENT
Dated as of August 15, 1995
Between
HYPERION PARTNERS II L.P.
and
THE BANK OF NEW YORK
_______________________________________________________________
<PAGE>
CUSIP NO. 894081 10 8 Page 30 of 87
----------- ---- ----
SECURED CREDIT AGREEMENT
Dated as of August 15, 1995
HYPERION PARTNERS II L.P., a Delaware limited partnership, and THE
BANK OF NEW YORK agree as follows (with certain terms used herein being defined
in Article 9):
ARTICLE 1
CREDIT FACILITY
---------------
Section 1.01. Commitment to Lend. Upon the terms and subject to the
------------------
conditions of this Agreement, the Bank agrees to make, from time to time during
the period from the Agreement Date through the Termination Date, one or more
Loans of one or more Types to the Borrower in an aggregate unpaid principal
amount not exceeding at any time the Commitment at such time. The Commitment on
the Agreement Date is $12,500,000.
Section 1.02. Manner of Borrowing. The Borrower shall give the Bank
-------------------
notice (which shall be irrevocable) no later than 10:00 a.m. (New York time) on,
(x) in the case of Domestic Rate Loans, the Business Day of , and, in the case
of Eurodollar Rate Loans, the second Eurodollar Business Day before, the
requested date for the making of such Loan. Each such notice shall be in the
form of Schedule 1.02 and shall specify (a) the requested date for the making of
-------------
the requested Loan or Loans, which shall be a Business Day and, in the case of a
Eurodollar Rate Loan, a Eurodollar Business Day, (b) the amount of each such
Loan, which amount shall be, in the case of each such Loan, not less than
$250,000 or more than the unused Commitment and (c) the Type or Types of Loans
requested. Each Loan so requested shall be disbursed by the Bank not later than
12:00 noon (New York time) on the requested date therefor in Dollars in funds
immediately available to the Borrower by credit to an account of the Borrower at
the Bank's Office or in such other manner as may have been specified in the
applicable notice and as shall be acceptable to the Bank.
Section 1.03. Interest. (a) Rates. Unless an Event of Default is
-------- -----
continuing,
<PAGE>
CUSIP NO. 894081 10 8 Page 31 of 87
----------- ---- ----
(i) each Loan shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to:
(A) so long as it is a Eurodollar Rate Loan, the applicable
Adjusted Eurodollar Rate plus 2.0%;
(B) so long as it is a Federal Funds Rate Loan (x) with
respect to so much of the principal amount of such Federal Funds Rate
Loan as on any day exceeds the applicable Balance Funded Amount on
such day, the Federal Funds Rate plus 2.0% and (y) with respect to so
much of the principal amount of such Federal Funds Rate Loan as on
such day does not exceed the Balance Funded Amount on such day, the
Balance Funded Rate; and
(C) so long as it is a Base Rate Loan (x) with respect to so
much of the principal amount of such Base Rate Loan as on any day
exceeds the applicable Balance Funded Amount on such day, the
Alternate Base Rate and (y) with respect to so much of the principal
amount of such Base Rate Loan as on such day does not exceed such
Balance Funded Amount on such day, the Balance Funded Rate; and
(ii) each other amount due and payable under the Loan Documents
shall, to the maximum extent permitted by Applicable Law, bear interest at
a rate per annum equal to the Base Rate as in effect from time to time.
During an Event of Default (and whether before or after judgment), each
Loan (whether or not due) and, to the maximum extent permitted by
Applicable Law, each other amount due and payable under the Loan Documents
shall bear interest at a rate per annum equal to the applicable Post-
Default Rate.
(b) Payment. Interest shall be payable in arrears,
-------
(i) in the case of Domestic Rate Loans, on each Interest Payment Date, (ii) in
the case of Eurodollar Rate Loans, on the last day of each applicable Interest
Period (and, in the case of a Eurodollar Rate Loan having an Interest Period
longer than one month, at intervals of one month after the first day of such
Interest Period), (iii) in the case of any Loan, when such Loan shall be due
(whether at maturity, by reason of notice of prepayment or acceleration or
otherwise) or converted, but only to the extent then accrued on the amount then
so due or converted, and (iv) in the case of all other amounts due and payable
under the Loan Documents, on demand. Interest at the Post-Default Rate shall be
payable on demand.
<PAGE>
CUSIP NO. 894081 10 8 Page 32 of 87
----------- ---- ----
(c) Conversion and Continuation. (i) All or any part of the principal
---------------------------
amount of Loans of any Type may, on any Business Day, be converted into any
other Type or Types of Loans, except that (A) Eurodollar Rate Loans may be
converted only on the last day of an applicable Interest Period and (B) Domestic
Rate Loans may be converted into Eurodollar Rate Loans only on a Eurodollar
Business Day.
(ii) Base Rate Loans shall continue as Base Rate Loans unless and
until such Loans are converted into Loans of another Type. Eurodollar Rate
Loans of any Type shall continue as Loans of such Type until the end of the then
current Interest Period therefor, at which time they shall be automatically
converted into Base Rate Loans unless the Borrower shall have given the Bank
notice in accordance with Section 1.03(c)(iv) requesting either that such Loans
continue as Loans of such Type for another Interest Period or that such Loans be
converted into Loans of another Type at the end of such Interest Period.
(iii) Notwithstanding anything to the contrary contained
in Section 1.03(c)(i) or (ii), during an Event of Default, the Bank may notify
the Borrower that Loans may only be converted into or continued as Loans of
certain specified Types and, thereafter, until no Event of Default shall
continue to exist, Loans may not be converted into or continued as Loans of any
Type other than one or more of such specified Types.
(iv) The Borrower shall give the Bank notice (which shall be
irrevocable) of each conversion of Loans or continuation of Eurodollar Rate
Loans no later than 10:00 a.m. (New York time) on, in the case of a conversion
into or a continuation of Domestic Rate Loans, the Business Day of, and, in the
case of a conversion into or continuation of Eurodollar Rate Loans, the second
Eurodollar Business Day before, the requested date of such conversion or
continuation. Each notice of conversion or continuation shall be in the form of
Schedule 1.03(c)(iv) and shall specify (A) the requested date of such conversion
- --------------------
or continuation, (B) the amount and Type and, in the case of Eurodollar Rate
Loans, the last day of the applicable Interest Period of the Loans to be
converted or continued and (C) the amount and Type or Types of Loans into which
such Loans are to be converted or as of which such Loans are to be continued.
(d) Limitation on Types of Loans. Notwithstanding anything to the
----------------------------
contrary contained in this Agreement, the Borrower shall borrow, prepay, convert
and continue Loans in a manner such that (a) the aggregate principal amount of
Eurodollar Rate Loans of the same Type and having the same Interest Period shall
at all times be not less than $1,000,000, (b) there shall
<PAGE>
CUSIP NO. 894081 10 8 Page 33 of 87
----------- ---- ----
not be, at any one time, more than five Interest Periods in effect with respect
to Eurodollar Rate Loans of all Types.
(e) Maximum Interest Rate. Nothing contained in the Loan Documents
---------------------
shall require the Borrower at any time to pay interest at a rate exceeding the
Maximum Permissible Rate. If interest payable by the Borrower on any date would
exceed the maximum amount permitted by the Maximum Permissible Rate, such
interest payment shall automatically be reduced to such maximum permitted
amount, and interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Maximum Permissible Rate, shall
be increased by the unpaid amount of such reduction. Any interest actually
received for any period in excess of such maximum allowable amount for such
period shall be deemed to have been applied as a prepayment of the Loans.
Section 1.04. Repayment. The Loans shall mature and become due
---------
and payable, and shall be repaid by the Borrower, on the Termination Date.
Section 1.05. Prepayments. The Borrower may, at any time and
-----------
from time to time, prepay the Loans in whole or in part, without premium or
penalty, but, in the case of Eurodollar Rate Loans, subject to Section 7.04,
except that any partial prepayment shall be in an aggregate principal amount of
at least $1,000,000. The Borrower shall give the Bank notice of each prepayment
pursuant to this Section 1.05 no later than 10:00 a.m. (New York time) on (x) in
the case of Domestic Rate Loans, the Business Day of, and, in the case of
Eurodollar Rate Loans, the second Business Day before, the date of such
prepayment. Each such notice of prepayment shall be in the form of Schedule
--------
1.05 and shall specify (i) the date such prepayment is to be made and (ii) the
- ----
Type, amount and, in the case of Eurodollar Rate Loans, the last day of the
applicable Interest Period of the Loans to be prepaid. Amounts to be prepaid
pursuant to this Section 1.05 shall irrevocably be due and payable on the date
specified in the applicable notice of prepayment.
Section 1.06. Commitment Fee; Reduction of Commitment. (a)
---------------------------------------
Commitment Fee. The Borrower shall pay to the Bank a commitment fee on the
- --------------
daily unused amount of the Commitment for each day from the Agreement Date
through the Termination Date at a rate per annum of 1/4%, payable quarterly in
arrears on the first Business Day of October, 1995, and of each succeeding third
month, on the Termination Date and on the date of any reduction of the
Commitment (to the extent accrued and unpaid on the amount of the reduction)
and, after an Event of Default, on demand.
<PAGE>
CUSIP NO. 894081 10 8 Page 34 of 87
----------- ---- ----
(b) Optional Reductions. The Borrower may reduce the Commitment by
-------------------
giving the Bank written notice (which shall be irrevocable) thereof no later
than 10:00 a.m. (New York time) on the third Business Day before the requested
date of such reduction.
Section 1.07. Computation of Interest and Fees. Interest on
--------------------------------
Domestic Rate Loans and the commitment fee shall be computed by the "exact
method", that is, by multiplying the applicable rate by the average daily
principal balance outstanding (or, in the case of the commitment fee, the
average daily unused portion of the Commitment) divided by 365, multiplied by
the actual number of days elapsed. Interest on Eurodollar Rate Loans shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed. Interest for any period shall be calculated from and including
the first day thereof to but excluding the last day thereof.
Section 1.08. Payments by the Borrower. (a) Time, Place and
------------------------ ---------------
Manner. All payments due to the Bank under the Loan Documents shall be made to
- ------
the Bank, or to such other Person as the Bank may designate, at the Bank's
Office or at such other address as the Bank may designate. A payment shall not
be deemed to have been made on any day unless such payment has been received by
the required Person, at the required place of payment, in Dollars in funds
immediately available to such Person, no later than 12:00 noon (New York time)
on such day.
(b) No Reductions. All payments due to the Bank under the Loan
-------------
Documents, and all other terms, conditions, covenants and agreements to be
observed and performed by the Borrower thereunder, shall be made, observed or
performed by the Borrower without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment, counterclaim
(whether sounding in tort, contract or otherwise) or Tax.
(c) Authorization to Charge Accounts. The Borrower hereby authorizes
--------------------------------
the Bank, if and to the extent any amount payable by the Borrower or any other
Loan Party under the Loan Documents is not otherwise paid when due, to charge
such amount against any or all of the accounts of the Borrower with the Bank or
any of its Affiliates (whether maintained at a branch or office located within
or without the United States), with the Borrower remaining liable for any
deficiency.
(d) Extension of Payment Dates. Whenever any payment to the Bank
--------------------------
under the Loan Documents shall be due (otherwise than by reason of acceleration)
on a day that is not a Business Day, the date of payment thereof shall be
extended to the next succeeding Business Day. If the date for any payment under
the
<PAGE>
CUSIP NO. 894081 10 8 Page 35 of 87
----------- ---- ----
Loan Documents is extended (whether by operation of any Loan Document,
Applicable Law or otherwise), such payment shall bear interest for such extended
time at the rate of interest applicable hereunder.
Section 1.09. Evidence of Indebtedness. The Loans and the
------------------------
Borrower's obligation to repay the Loans with interest in accordance with the
terms of this Agreement shall be evidenced by this Agreement, the records of the
Bank and a single Note. The records of the Bank shall be prima facie evidence
of the Loans and accrued interest thereon and all payments made in respect
thereof.
Section 1.10. Closing Fees; Closing Expenses. The Borrower
------------------------------
shall pay to the Bank a "Closing Fee", in the unrefundable amount of $25,000
simultaneously with the execution of this Agreement, and shall also pay,
simultaneously with the execution of this Agreement and upon presentation of a
statement therefor all reasonable legal costs and expenses billed by Messrs.
Winthrop, Stimson, Putnam & Roberts as of the Agreement Date (the "Legal Bill")
which are reimbursable under Section 8.02, by check payable to Messrs. Winthrop,
Stimson, Putnam & Roberts.
ARTICLE 2
CONDITIONS TO ENTERING INTO THIS AGREEMENT
------------------------------------------
Section 2.01. Conditions to Entering into This Agreement. The
------------------------------------------
obligation of the Bank to enter into this Agreement is subject to its receipt of
each of the following, in form and substance and, in the case of the materials
referred to in clauses (a), (c), (d) and (e), certified in a manner satisfactory
to the Bank (and any Secretary of State certificate to be of recent date):
(a) a certificate of any officer of the general partner of the General
Partner of the Borrower, dated the Agreement Date, substantially in the form of
Schedule 2.01(a), and the resolutions, incorporation documents and partnership
- ----------------
agreements referred to in such certificate;
(b) an opinion of counsel for the Borrower, dated the Agreement Date,
in the form of Schedule 2.01(b);
----------------
(c) a negotiating representative's certificate in the form of Schedule
--------
2.01(c) of the negotiating representative of the general partner of the General
- -------
Partner of the Borrower;
<PAGE>
CUSIP NO. 894081 10 8 Page 36 of 87
----------- ---- ----
(d) a copy of each Governmental Approval and other consent or approval
listed on Schedule 3.03;
-------------
(e) a certificate in the form of Schedule 2.01(e) of any officer of
----------------
the general partner of the General Partner of the Borrower, dated the Agreement
Date, setting forth the manner and degree of detail in which the Borrower will
make the calculations required to establish compliance with Section 4.04;
(f) this Agreement, the Note, the Security Agreement and the
Assignment of Certificate of Deposit, each duly executed by every Loan Party
thereto;
(g) either (i) such duly executed UCC-1 financing statements and other
documents as the Bank may request, the filing or recordation of which is
necessary or appropriate in the Bank's determination to create or perfect a
security interest in the Collateral under Applicable Law, or (ii) evidence of
the filing or recordation of the same in such offices as the Bank shall have
specified;
(h) such instruments and other documents as the Bank may request, the
possession of which is necessary or appropriate in the Bank's determination to
create or perfect the Security Interest in the Collateral under Applicable Law;
(i) payment of the Closing Fee and Legal Bill referred to at Section
1.10; and
(j) a "Capital Call Notice" in the form of Schedule C to the Security
----------
Agreement, duly executed in blank with respect to each of the Pledged Capital
Commitments.
Section 2.02. Conditions to Each Loan. The obligation of the
-----------------------
Bank to make each Loan, including the Initial Loan, is subject to the
determination of the Bank, in its reasonable discretion, that each of the
following conditions have been fulfilled:
(a) except in the case of the Initial Loan, the Bank shall have
received a notice of borrowing with respect to such Loan complying with the
requirements of Section 1.02;
(b) the Bank shall have received (x) the Certificate of Deposit and
(y) such other Eligible Pledged Instrument, in each case in the amounts set
forth on Schedule 3.08;
-------------
(c) each Loan Document Representation and Warranty shall be true and
correct in all material respects, at and as of the time such Loan is to be made,
both with and without giving
<PAGE>
CUSIP NO. 894081 10 8 Page 37 of 87
----------- ---- ----
effect to such Loan and all other Loans to be made at such time and to the
application of the proceeds thereof;
(d) no Default shall have occurred and be continuing at the time such
Loan is to be made or would result from the making of such Loan and all other
Loans to be made at such time or from the application of the proceeds thereof;
(e) the Bank shall have received such materials as it may have
requested pursuant to Section 5.01(d);
(f) such Loan will not contravene any Applicable Law applicable
to the Bank; and
(g) all legal matters incident to such Loan and the other transactions
contemplated by the Loan Documents shall be reasonably satisfactory to Messrs.
Winthrop, Stimson, Putnam Roberts, counsel for the Bank.
Each notice of borrowing shall constitute a Representation and
Warranty by the Borrower made as of the time of the making of the requested
Loans that the conditions specified in clauses (b) and (c) have been fulfilled
as of such time, except, in the case of clause (c), for Defaults of which the
Borrower shall have notified the Bank prior to 5:00 p.m. (New York time) on the
Business Day before the requested date for the making of such Loans.
ARTICLE 3
CERTAIN REPRESENTATIONS AND WARRANTIES
--------------------------------------
In order to induce the Bank to enter into this Agreement and to make
each Loan, the Borrower represents and warrants as follows:
Section 3.01. Organization; Power; Qualification. Each of the
----------------------------------
Borrower and the General Partner is a limited partnership and the general
partner of the General Partner and each Significant Subsidiary is a corporation,
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization or incorporation, and each such Person
has the partnership or corporate power and authority to own its respective
properties and to carry on its respective businesses as now being and hereafter
proposed to be conducted and is duly qualified and in good standing as a foreign
partnership or corporation, and is authorized to do business, in all
jurisdictions in which the character of its respective
<PAGE>
CUSIP NO. 894081 10 8 Page 38 of 87
----------- ---- ----
properties or the nature of its respective businesses requires such
qualification or authorization, except for qualifications and authorizations the
lack of which, singly or in the aggregate, has not had and will not have a
Materially Adverse Effect on (a) the Borrower and its Subsidiaries taken as a
whole, (b) the Loan Documents or (c) the Collateral.
Section 3.02. Organization Chart. As of the Agreement Date, and
------------------
thereafter subject only to changes as to which the Bank shall have received
written notice (except that no notice of changes of the general partner of the
General Partner shall be required):
(a) Schedule 3.02(a) fully and accurately sets forth, in the form of
----------------
an organizational chart,
(i) the controlling equityholders (each a "Controlling Owner") of
each of the following (each a "Controlled Person"):
(A) the general partner of the General Partner;
(B) the General Partner;
(C) the Borrower; and
(D) if any, each other Significant Subsidiary of the Borrower;
(ii) the organizational form and jurisdiction of each Controlled
Person and Controlling Owner;
(iii) the percentage of the various classes of Capital
Securities of each Controlled Person (other than Hyperion Funding II Corp.
and the General Partner) owned by each Controlling Owner or any other
Affiliate of the Borrower; and
(iv) the general partner of the General Partner.
(b) The Borrower has the unrestricted right to vote, and (subject to
limitations imposed by Applicable Law) to receive dividends and distributions
on, all Capital Securities of Controlled Persons owned by the Borrower.
(c) All Capital Securities of the Controlled Persons owned by any
Controlling Owner have been duly authorized and issued and are fully paid and
nonassessable, except (i) for amounts required to be contributed upon a future
capital call by the Borrower or the General Partner under its respective
<PAGE>
CUSIP NO. 894081 10 8 Page 39 of 87
----------- ---- ----
partnership agreement, or (ii) as otherwise set forth in Schedule 3.02(a).
----------------
Section 3.03. Authorization; Enforceability; Required Consents;
-------------------------------------------------
Absence of Conflicts. Each Loan Party and, as applicable, the General Partner,
- --------------------
has the power, and has taken all necessary action (including, any necessary
partnership or stockholder action) to authorize each Loan Party to execute,
deliver and perform in accordance with their respective terms, the Loan
Documents to which such Loan Party is a party and, in the case of the Borrower,
to borrow hereunder in the unused amount of the Commitment. This Agreement has
been duly executed and delivered by or on behalf of the Borrower and is, and
each of the other Loan Documents to which any Loan Party is a party, when
executed and delivered to the Bank by or on behalf of such Loan Party, will be,
a legal, valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its terms. The execution, delivery and
performance in accordance with their respective terms by or on behalf of the
Loan Parties of the Loan Documents to which they are parties, and each borrowing
hereunder do not and (absent any change in any Applicable Law or applicable
Contract) will not (a) require any Governmental Approval or any other consent or
approval, including any consent or approval of any Subsidiary or any consent or
approval of the partners or stockholders, as the case may be, of the Borrower or
any Affiliate, other than Governmental Approvals and other consents and
approvals either (i) that have been obtained, are final and not subject to
review on appeal or to collateral attack, are in full force and effect and, in
the case of any such required under any Applicable Law or Contract as in effect
on the Agreement Date, are listed on Schedule 3.03, or (ii) the absence of which
-------------
is not reasonably expected to have, singly or in the aggregate, a Material
Adverse Effect on (x) the Loan Documents, (y) the Borrower and its Subsidiaries
taken as a whole or (z) the Collateral, or (b) violate or conflict with, result
in a breach of, constitute a default under, or result in or require the creation
of any Lien (other than the Security Interest) upon any assets of the Borrower
or any Subsidiary under, (i) any Contract to which the Borrower or any
Subsidiary is a party or by which any of them or any of their respective
properties may be bound or (ii) any Applicable Law.
Section 3.04. Litigation. Except as set forth on Schedule 3.04,
---------- -------------
there are not, in any court or before any arbitrator of any kind or before or by
any governmental or nongovernmental body, any actions, suits or proceedings,
pending or, to the knowledge of the Borrower after due inquiry, threatened
against or affecting (a) the Borrower or any Subsidiary or any of their
respective businesses or properties or, (b) any Loan Document or (c) the
Collateral, except actions, suits or
<PAGE>
CUSIP NO. 894081 10 8 Page 40 of 87
----------- ---- ----
proceedings, that are not reasonably expected to have, singly or in the
aggregate, a Materially Adverse Effect on (x) the Borrower and its Subsidiaries
taken as a whole, (y) any Loan Document or (z) the Collateral.
Section 3.05. Burdensome Provisions. Neither the Borrower nor any
---------------------
Subsidiary is a party to or bound by any Contract or Applicable Law, compliance
with which is reasonably expected to have a Materially Adverse Effect on (a) the
Borrower and its Subsidiaries taken as a whole, (b) any Loan Document or (c) the
Collateral.
Section 3.06. No Adverse Change or Event. Since the Agreement Date,
--------------------------
no change in the business, assets, liabilities, financial condition, results of
operations or business prospects of the Borrower or any Subsidiary has occurred,
and no event has occurred or failed to occur, that has had or is reasonably
expected to have, either alone or in conjunction with all other such changes,
events and failures, a Materially Adverse Effect on (a) the Borrower and its
Subsidiaries taken as a whole, (b) any Loan Document or (c) the Collateral.
Such an adverse change may have occurred, and such an event may have occurred or
failed to occur, at any particular time notwithstanding the fact that at such
time no Default shall have occurred and be continuing.
Section 3.07. Additional Adverse Facts. Except for facts and
------------------------
circumstances disclosed on Schedule 3.04 or Schedule 3.07, no fact or
------------- -------------
circumstance is known to the Borrower, as of the Agreement Date, that, either
alone or in conjunction with all other such facts and circumstances, has had or
is reasonably expected to have (so far as the Borrower and its Subsidiaries can
foresee) a Materially Adverse Effect on (a) the Borrower and its Subsidiaries
taken as a whole, (b) any Loan Document or (c) the Collateral. If a fact or
circumstance disclosed on such Schedules or in such notes should in the future
have a Materially Adverse Effect on (x) the Borrower and its Subsidiaries taken
as a whole, (y) any Loan Document or (z) the Collateral, such Materially Adverse
Effect shall be a change or event subject to Section 3.06 notwithstanding such
disclosure.
Section 3.08. Capital Commitments. Subject to Permitted Partnership
-------------------
Transfers and Permitted Partnership Admissions occurring after the Agreement
Date, set forth in Schedule 3.08 is (a) the complete and correct list of the
-------------
general and limited partners of the Borrower; (b) the full and correct amount of
each such partner's Capital Commitment, Unused Capital Commitment (as of the
Agreement Date) and Pledged Capital Commitment; and (c) the full and correct
aggregate of all such partners' Capital Commitments, Unused Capital Commitments
(as of the Agreement Date) and Pledged Capital Commitments.
<PAGE>
CUSIP NO. 894081 10 8 Page 41 of 87
----------- ---- ----
ARTICLE 4
CERTAIN COVENANTS
-----------------
From the Agreement Date and until the Repayment Date,
A. The Borrower shall and shall cause each Subsidiary to:
-----------------------------------------------------
Section 4.01. Preservation of Existence and Properties, Scope of
--------------------------------------------------
Business, Compliance with Law, Payment of Taxes and Claims, Preservation of
- ---------------------------------------------------------------------------
Enforceability. (a) Preserve and maintain its partnership or corporate
- --------------
existence, as the case may be, and all of its other franchises, licenses, rights
and privileges, (b) preserve, protect and obtain all Intellectual Property, and
preserve and maintain in good repair, working order and condition all other
properties, required for the conduct of its business, (c) engage only in
businesses contemplated by paragraph 2.4 of the Borrower's Partnership
Agreement, (d) comply with Applicable Law, (e) pay or discharge when due all
Taxes that might become a Lien on any of its properties and (f) take all action
and obtain all consents and Governmental Approvals required so that its
obligations under the Loan Documents will at all times be legal, valid and
binding and enforceable in accordance with their respective terms, provided that
this Section 4.01 (other than clauses (a), in so far as it requires any Loan
Party to preserve its partnership or corporate existence, (c) and (f)) shall not
apply in any circumstance where noncompliance, together with all other
noncompliances with this Section 4.01, will not have a Materially Adverse Effect
on (i) the Borrower and its Subsidiaries taken as a whole, (ii) any Loan
Document or (iii) the Collateral.
Section 4.02. Use of Proceeds. Use the proceeds of the Loans only
---------------
for the purposes set forth in Paragraph 2.4 of the Borrower's Partnership
Agreement. None of the proceeds of any of the Loans shall be used to purchase
or carry, or to reduce or retire or refinance any credit incurred to purchase or
carry, any margin stock (within the meaning of Regulations U and X of the Board
of Governors of the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying any margin stock.
B. The Borrower shall not, and shall not permit any Subsidiary to,
---------------------------------------------------------------
directly or indirectly:
- ----------------------
Section 4.03. Liens. Fail to keep free from any Liens (other than
-----
the Lien of the Security Interest) the Borrower's right, title or interest to or
in an amount of the Unused Capital Commitment equal to at least two hundred
percent (200%) of the
<PAGE>
CUSIP NO. 894081 10 8 Page 42 of 87
----------- ---- ----
Commitment, provided, however, that if, notwithstanding this Section 4.03, any
-------- -------
Lien in violation of this Section shall be created or arise, the obligations and
liabilities of the Loan Parties under the Loan Documents shall, to the extent
such Lien attaches to any asset that does not constitute Collateral or to any
asset with respect to which such Lien would be prior to the Security Interest,
automatically be secured by such Lien equally and ratably with the other
obligations and liabilities secured thereby, and the holder of such other
obligations and liabilities, by accepting such Lien, shall be deemed to have
agreed thereto and to share with the Bank, on that basis, the proceeds of such
Lien, whether or not the Bank's security interest shall be perfected, provided,
--------
further, however, that notwithstanding such equal and ratable securing and
- ------- -------
sharing, the existence of such Lien shall constitute a default by the Borrower
in the performance or observance of this Section 4.03.
C. The Borrower shall not at any time:
----------------------------------
Section 4.04. Net Worth to Total Debt Ratio. Permit the ratio of Net
-----------------------------
Worth to Total Debt to be less than 2.0 to 1.0; provided that this Section 4.04
shall not apply at any time on or prior to December 31, 1995 so long as (x) the
aggregate amount of the Unused Capital Commitments, the Borrower's right, title
and interest in which are free from all Liens (other than the Lien of the
Security Interest), at such time is not less than $50,000,000 or (y) Net Worth
is not less than $6,250,000.
ARTICLE 5
FINANCIAL STATEMENTS AND INFORMATION
------------------------------------
Section 5.01. Financial Statements and Information to Be Furnished.
----------------------------------------------------
From the Agreement Date and until the Repayment Date (except as otherwise set
forth below), the Borrower shall furnish, or cause to be furnished, to the Bank:
(a) Quarterly Unaudited Financial Statements; Officer's Certificate.
----------------------------------------- ---------------------
As soon as available and in any event within 90 days after the close of each of
the first three quarterly accounting periods in each fiscal year of the
Borrower:
(i) separate unaudited statement of financial condition and
balance sheets, as applicable, of the Borrower and each of its Significant
Subsidiaries as at the end of such quarterly period and the related
separate unaudited statements of income, partners' capital and retained
earnings, as applicable, of the Borrower and such
<PAGE>
CUSIP NO. 894081 10 8 Page 43 of 87
----------- ---- ----
Subsidiaries for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, setting forth
in each case in comparative form the figures for the corresponding periods
of the previous fiscal year; and
(ii) a certificate with respect thereto of an officer of the
general partner of the General Partner or of the chief financial officer of
the Borrower in the form of Schedule 5.01(a)(ii).
--------------------
(b) Year-End Audited Financial Statements; Accountants' and Officer's
-----------------------------------------------------------------
Certificates. As soon as available and in any event within 120 days after the
- ------------
end of each fiscal year of the Borrower, in each case audited by an independent
certified public accountant of recognized standing reasonably satisfactory to
the Bank:
(i) a separate audited statement of financial condition of the
Borrower and consolidated statement of financial condition and balance
sheets, as applicable, of the Borrower and its Consolidated Subsidiaries as
at the end of such fiscal year and the related audited statements of
income, partners' capital, retained earnings and cash flows, as applicable,
of the Borrower and of the Borrower and its Consolidated Subsidiaries (on a
consolidated and, if prepared, consolidating basis) for such fiscal year,
setting forth in comparative form the figures as at the end of and for the
previous fiscal year;
(ii) a report of an independent certified public accountants of
recognized standing satisfactory to the Bank, on the financial statements
referred to in clause (i), which report shall be in scope and substance
reasonably satisfactory to the Bank; and
(iii) a certificate of a representative of the Borrower in the
form of Schedule 5.01(b)(iii).
---------------------
(c) Reports, Filings, and Communications. (i) Promptly upon receipt
------------------------------------
thereof, copies of all reports, if any, submitted to the Borrower or any
Significant Subsidiary, the general partner of the Borrower, or the Board of
Directors of any Significant Subsidiary, by its independent certified public
accountants in connection with an examination of the financial statements of the
Borrower or such Significant Subsidiary made by such accountants, including any
management letter; and (ii) as soon as practicable, copies of all such financial
statements and reports as the Borrower or any Significant Subsidiary shall send
to its stockholders and of all registration statements and all regular
<PAGE>
CUSIP NO. 894081 10 8 Page 44 of 87
----------- ---- ----
or periodic reports that the Borrower or any Significant Subsidiary shall file,
or may be required to file, with the Securities and Exchange Commission or any
successor commission.
(d) Requested Information. From time to time and promptly upon
---------------------
request of the Bank, such Information regarding the Loan Documents, the Loans,
the Collateral (as defined in the Security Agreement) and the business, assets,
liabilities, financial condition, results of operations or business prospects of
the Borrower and the Subsidiaries as the Bank may reasonably request, in each
case in form and substance and certified in a manner reasonably satisfactory to
the Bank.
(e) Notice of Defaults, Material Adverse Changes and Other Matters.
--------------------------------------------------------------
Prompt notice of: (i) any Default, (ii) the acquisition or formation of a new
Significant Subsidiary of the Borrower and, in the case of each such new
Significant Subsidiary, its name, jurisdiction of incorporation, the percentages
of the various classes of its Capital Securities owned by the Borrower or any
other of its Subsidiaries whether or not such new Significant Subsidiary is a
Consolidated Subsidiary of the Borrower, (iii) any change in the name of any
such Significant Subsidiary, its jurisdiction of incorporation, the percentages
of the various classes of its Capital Securities owned by the Borrower or
another Subsidiary, its status as a Consolidated or non-Consolidated Subsidiary
or as a Significant or non-Significant Subsidiary, (iv) the commencement of, or
the occurrence or nonoccurrence of any change or event relating to, any action,
suit, proceeding or investigation that would cause the Representation and
Warranty contained in Section 3.04 to be incorrect in any material respect if
made at such time, (v) the occurrence or nonoccurrence of any change or event
that would cause the Representation and Warranty contained in Section 3.06 to be
incorrect if made at such time, and (vi) any amendment of the partnership
agreement of the Borrower.
Section 5.02. Accuracy of Financial Statements and Information.
------------------------------------------------
(a) Future Financial Statements. The financial statements delivered
---------------------------
pursuant to Section 5.01(a) or (b) (subject, in the case of unaudited
statements, to year-end audit adjustments) shall be complete and correct, in all
material respects, and present fairly, in accordance with Generally Accepted
Accounting Principles, except for changes therein or therefrom that are
described in the certificate or report accompanying such statements and that
have been approved in writing by the Borrower's then current independent
certified public accountants, the financial position of the Borrower and the
consolidated financial position of the Borrower and its
<PAGE>
CUSIP NO. 894081 10 8 Page 45 of 87
----------- ---- ----
Consolidated Subsidiaries, as applicable, as at their respective dates and the
related results of operations, retained earnings and cash flows for the
respective periods to which such statements relate, and the furnishing of the
same to the Bank shall constitute a representation and warranty by the Borrower
made on the date the same are furnished to the Bank to that effect and to the
further effect that, except as disclosed or reflected in such financial
statements (including the notes thereto), as at the respective dates thereof,
neither the Borrower nor any Subsidiary had any liability, contingent or
otherwise, nor any unrealized or anticipated loss, that, singly or in the
aggregate, has had or is reasonably expected to have a Materially Adverse Effect
on the Borrower and its Subsidiaries taken as a whole.
(b) Historical Information. The Borrower hereby represents and
----------------------
warrants that all Information furnished to the Bank by or on behalf of the
Borrower or any Subsidiary prior to the Agreement Date in connection with or
pursuant to the Loan Documents and the relationships established thereunder, at
the time the same was so furnished, but in the case of Information dated as of a
prior date, as of such date, (i) in the case of any such prepared in the
ordinary course of business, was complete and correct in all material respects
in the light of the purpose prepared, and, in the case of any such the
preparation of which was requested by the Bank, was complete and correct in all
material respects to the extent necessary to give the Bank true and accurate
knowledge of the subject matter thereof, (ii) did not contain any untrue
statement of a material fact, and (iii) did not omit to state a material fact
necessary in order to make the statements contained therein not misleading in
the light of the circumstances under which they were made.
(c) Future Information. All Information furnished to the Bank
------------------
by or on behalf of the Borrower or any Subsidiary on or after the Agreement Date
in connection with or pursuant to the Loan Documents or in connection with or
pursuant to any amendment or modification of, or waiver of rights under, the
Loan Documents, shall, at the time the same is so furnished, but in the case of
Information dated as of a prior date, as of such date, (i) in the case of any
Information prepared in the ordinary course of business, be complete and correct
in all material respects in the light of the purpose prepared, and, in the case
of any Information required by the terms of the Loan Documents or the
preparation of which was requested by the Bank, be complete and correct in all
material respects to the extent necessary to give the Bank true and accurate
knowledge of the subject matter thereof, (ii) not contain any untrue statement
of a material fact, and (iii) not omit to state a material fact necessary in
order to make the statements contained therein not misleading in
<PAGE>
CUSIP NO. 894081 10 8 Page 46 of 87
----------- ---- ----
the light of the circumstances under which they were made, and the furnishing of
the same to the Bank shall constitute a representation and warranty by the
Borrower made on the date the same are so furnished to the effect specified in
clauses (i), (ii) and (iii).
Section 5.03. Additional Covenants Relating to Disclosure. From the
-------------------------------------------
Agreement Date and until the Repayment Date, the Borrower shall and shall cause
each of its Subsidiaries to:
(a) Accounting Methods and Financial Records. Maintain a system of
----------------------------------------
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects), as may be required or necessary to permit
(i) the preparation of financial statements required to be delivered pursuant to
Section 5.01(a) and (ii) the determination of the compliance of the Borrower and
its Subsidiaries with the terms of the Loan Documents.
(b) Visits and Inspections. Permit, or, in the case of properties,
----------------------
books, records or Persons not within its immediate control, promptly take such
actions as are reasonably practicable in order to permit, representatives
(whether or not officers or employees) of the Bank, from time to time, as often
as may be reasonably requested, to (i) visit and inspect any properties of the
Borrower and each Subsidiary, (ii) inspect and make extracts from the books and
records of the Borrower and each Subsidiary, including management letters
prepared by their respective independent certified public accountants, and (iii)
discuss with any Person, including the principal officers and the independent
certified public accountants of the Borrower and each Subsidiary, the respective
businesses, assets, liabilities, financial conditions, results of operations and
business prospects of the Borrower and each Subsidiary.
ARTICLE 6
DEFAULT
-------
Section 6.01. Events of Default. Each of the following shall
-----------------
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary, or within or without the control of the
Borrower or any Subsidiary, or be effected by operation of law or pursuant to
any judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
<PAGE>
CUSIP NO. 894081 10 8 Page 47 of 87
----------- ---- ----
(a) Any payment of principal of or interest on any of the Loans or the
Note or of the commitment fee shall not be made when and as due (whether at
maturity, by reason of notice of prepayment or acceleration or otherwise) and in
accordance with the terms of this Agreement and the Note (and, in the case of
interest, such default shall continue unremedied for a period of 10 days);
(b) Any Loan Document Representation and Warranty shall at any time
prove to have been incorrect or misleading in any material respect when made;
(c) (i) The Borrower shall default in the performance or observance
of
(A) any term, covenant, condition or agreement contained in
Section 4.01(a) (insofar as such Section requires the preservation of the
partnership existence of the Borrower, and any change in the membership of
the partnership that is the Borrower or any change in the Capital
Commitment of any member of such partnership (other than a change in
membership or change in the Capital Commitment of a member in connection
with a Permitted Partnership Transfer or a Permitted Partnership Admission)
shall be deemed a default of this requirement), 4.01(f), 4.02 through 4.04,
5.01(e)(i) or 5.03(b); or
(B) any term, covenant, condition or agreement contained in this
Agreement (other than a term, covenant, condition or agreement a default in
the performance or observance of which is elsewhere in this Section
specifically dealt with) and, if capable of being remedied, such default
shall continue unremedied for a period of 10 days after written notice
shall have been given by the Bank to the Borrower; or
(ii) Any Loan Party shall default in the performance or observance of:
(A) any term, covenant, condition or agreement contained in
Section 1 or 3 of the Security Agreement or an Event of Default (as defined
in the Security Agreement) shall occur; or
(B) any term, covenant, condition or agreement contained in any
Loan Document (other than any term, covenant, condition or agreement a
default in the performance or observance of which is elsewhere in this
Section specifically dealt with) and, if capable of being remedied, such
default shall continued unremedied for 10
<PAGE>
CUSIP NO. 894081 10 8 Page 48 of 87
----------- ---- ----
days after written notice shall have been given by the Bank to the Loan
Party that is the party to such Loan Document requiring that such default
be cured;
(d) With respect to any Debt (other than the Loans or Notes or the
Debt of Subsidiaries that are not Significant Subsidiaries) the aggregate
outstanding principal amount of which exceeds $500,000: (i) the Borrower or any
Significant Subsidiary shall fail to pay, in accordance with its terms and when
due and payable, the principal of or interest on such Debt, and, with respect to
such Debt of a Significant Subsidiary, such failure shall not be waived and
shall continue beyond any applicable grace period, (ii) the maturity of such
Debt shall have been accelerated, or shall have been required to be prepaid
prior to the stated maturity thereof, in accordance with the provisions of any
Contract evidencing, providing for the creation of or concerning such Debt, and,
with respect to such Debt of a Significant Subsidiary, such acceleration or
prepayment requirement shall not have been waived or revoked or (iii) (A) any
one or more events shall have occurred and be continuing that permits (or, with
the passage of time or the giving of notice or both, would permit) any holder or
holders of such Debt, any trustee or agent acting on behalf of such holder or
holders or any other Person so to accelerate the maturity or require any
prepayment of such Debt, (B) if the Contract or Contracts evidencing, providing
for the creation of or concerning such Debt provides for a cure period for such
event, such event shall not be cured or waived prior to the end of such cure
period and (C) with respect to such Debt of a Significant Subsidiary, such event
shall not be waived at or after the end of such cure period;
(e) A default by Borrower or any Significant Subsidiary shall be
continuing under any Contract (other than a Contract relating to Debt to which
clause (d) of this Section 6.01 is applicable) binding upon the Borrower or any
Subsidiary, except a default that, together with all other such defaults, has
not had and is not reasonably expected to have a Materially Adverse Effect on
(i) the Borrower and its Subsidiaries taken as a whole, (ii) any Loan Document
or (iii) the Collateral;
(f) (i) The Borrower or any Significant Subsidiary shall (A) commence
a voluntary case under the Federal bankruptcy laws (as now or hereafter in
effect), (B) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, (C) consent to or fail to contest in a
timely and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (D) apply for, or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or the
taking
<PAGE>
CUSIP NO. 894081 10 8 Page 49 of 87
----------- ---- ----
of possession by, a receiver, custodian, trustee, liquidator or the like of
itself or of a substantial part of its assets, domestic or foreign, (E) admit in
writing its inability to pay, or generally not be paying, its debts (other than
those that are the subject of bona fide disputes) as they become due, (F) make a
general assignment for the benefit of creditors, or (G) take any corporate
action for the purpose of effecting any of the foregoing; or
(ii) (A) A case or other proceeding shall be commenced against the
Borrower or any Significant Subsidiary seeking (1) relief under the Federal
bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts, or (2) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Borrower or any such
Subsidiary, or of all or any substantial part of the assets, domestic or
foreign, of the Borrower or any such Subsidiary, and such case or proceeding
shall continue undismissed or unstayed for a period of 30 days, or (B) an order
granting the relief requested in such case or proceeding against the Borrower or
any Significant Subsidiary (including an order for relief under such Federal
bankruptcy laws) shall be entered;
(g) A judgment or order for the payment of money shall be entered
against the Borrower or any Subsidiary by any court, and either (i) such
judgment or order shall continue undischarged and unstayed for a period of 30
days in which the aggregate amount of all such judgments and orders exceeds
$500,000 or (ii) enforcement proceedings shall have been commenced upon
judgments or orders in an aggregate amount in excess of $500,000;
(h) Any Loan Party or any Affiliate of any Loan Party asserts, or any
Loan Party or any Affiliate of any Loan Party institutes any proceedings seeking
to establish, or any other Person obtains a final judgment to the effect, that
(A) any provision of the Loan Documents is invalid, not binding or unenforceable
or (B) the Security Interest is not a valid and perfected first priority
security interest in the Collateral; or
(i) The death of Lewis S. Ranieri.
Section 6.02. Remedies Upon Event of Default. During the continuance
------------------------------
of any Event of Default (other than one specified in Section 6.01(f)) and in
every such event, the Bank, upon notice to the Borrower, may do either or both
of the following: (a) declare, in whole or, from time to time, in part, the
principal of and interest on the Loans and the Notes and all other amounts owing
under the Loan Documents to be, and the Loans
<PAGE>
CUSIP NO. 894081 10 8 Page 50 of 87
----------- ---- ----
and the Notes and all such other amounts shall thereupon and to that extent
become, due and payable and (b) terminate, in whole or, from time to time, in
part, the Commitment. Upon the occurrence of an Event of Default specified in
Section 6.01(f), automatically and without any notice to the Borrower, (a) the
principal of and interest on the Loans and the Notes and all other amounts owing
under the Loan Documents shall be due and payable and (b) the Commitment shall
terminate. Presentment, demand, protest or notice of any kind (other than the
notice provided for in the first sentence of this Section 6.02) are hereby
expressly waived.
ARTICLE 7
ADDITIONAL CREDIT FACILITY PROVISIONS
-------------------------------------
Section 7.01. Mandatory Suspension and Conversion of Eurodollar Rate
------------------------------------------------------
Loans. The Bank's obligation to make, continue or convert into Eurodollar Rate
- -----
Loans of any Type shall be suspended, all such Bank's outstanding Loans of that
Type shall be converted on the last day of their applicable Interest Periods
(or, if earlier, in the case of clause (c) below, on the last day the Bank may
lawfully continue to maintain Loans of that Type or, in the case of clause (d)
below, on the day determined by the Bank to be the last Business Day before the
effective date of the applicable restriction) into, and all pending requests for
the making or continuation of or conversion into Loans of such Type by the Bank
shall be deemed requests for, Base Rate Loans, if:
(a) on or prior to the determination of an interest rate for a
Eurodollar Rate Loan of that Type for any Interest Period, the Bank
determines that for any reason appropriate information is not available to
it for purposes of determining the Adjusted Eurodollar Rate for such
Interest Period;
(b) on or prior to the first day of any Interest Period for a
Eurodollar Rate Loan of that Type, the Bank determines that the Adjusted
Eurodollar Rate for such Interest Period would not accurately reflect its
cost of making, continuing or converting into a Eurodollar Rate Loan of
such Type for such Interest Period;
(c) at any time the Bank determines that any Regulatory Change makes
it unlawful or impracticable for the Bank or its applicable Lending Office
to make, continue or convert into any Eurodollar Rate Loan of that Type, or
to comply with its obligations hereunder in respect thereof; or
<PAGE>
CUSIP NO. 894081 10 8 Page 51 of 87
----------- ---- ----
(d) the Bank determines that, by reason of any Regulatory Change, the Bank
or its applicable Lending Office is restricted, directly or indirectly, in
the amount that it may hold of (i) a category of liabilities that includes
deposits by reference to which, or on the basis of which, the interest rate
applicable to Eurodollar Rate Loans of that Type is directly or indirectly
determined or (ii) the category of assets that includes Eurodollar Rate
Loans of that Type.
The Bank shall promptly notify the Borrower of (i) the existence or occurrence
of any condition or circumstance specified above and (ii) the cessation of the
existence of any such condition or circumstance, but the failure by the Bank to
give any such notice specified in clause (i) or (ii) shall not affect the Bank's
rights hereunder.
Section 7.02. Regulatory Changes. If in the determination of the
------------------
Bank (a) any Regulatory Change shall directly or indirectly (i) reduce the
amount of any sum received or receivable by the Bank with respect to any Loan or
the return to be earned by the Bank on any Loan, (ii) impose a cost on the Bank
or any Affiliate of the Bank that is attributable to the making or maintaining
of, or the Bank's commitment to make, any Loan, (iii) require the Bank or any
Affiliate of the Bank to make any payment on or calculated by reference to the
gross amount of any amount received by the Bank under any Loan Document or (iv)
reduce, or have the effect of reducing, the rate of return on the capital of the
Bank or any Affiliate of the Bank that the Bank or such Affiliate is required to
maintain on account of any Loan or the Bank's commitment to make any Loan and
(b) such reduction, increased cost or payment shall not be fully compensated for
by an adjustment in the applicable rates of interest payable under the Loan
Documents (including, without limitation, any adjustment to the Reserve
Requirement), then within 15 days after request by the Bank the Borrower shall
pay to the Bank such additional amounts as the Bank determines will, together
with any adjustment in the applicable rates of interest payable hereunder, fully
compensate for such reduction, increased cost or payment. The Bank will
promptly notify the Borrower of any Regulatory Change of which it has knowledge
that will entitle the Bank to compensation pursuant to this Section 7.01, but
the failure to give such notice shall not affect the Bank's right to such
compensation. If such Regulatory Change shall cease to apply to the Bank, the
Bank shall promptly notify the Borrower. The Borrower will not be required to
compensate the Bank for any such increased cost or payment under this Section
7.02 incurred by the Bank more than 3 months prior to the Bank's request to the
Borrower for such compensation.
<PAGE>
CUSIP NO. 894081 10 8 Page 52 of 87
----------- ---- ----
Section 7.03. Capital Requirements. If, in the determination of the
--------------------
Bank, the Bank or any Affiliate of the Bank is required, under Applicable Law,
interpretations, directives, requests and guidelines (whether or not having the
force of law), to maintain capital on account of any Loan or the Bank's
commitment to make any Loan in a greater amount than the Bank or such Affiliate
would otherwise have been required to maintain on account of such Loan or
commitment under Applicable Law, interpretations directives, requests or
guidelines as in effect on the Agreement Date, then, upon request by the Bank,
the Borrower shall from time to time thereafter pay to the Bank such additional
amounts as the Bank determines will fully compensate for any reduction in the
rate of return on the capital that the Bank or such Affiliate is so required to
maintain on account of such Loan or commitment suffered as a result of such
additional capital requirement. Such additional amounts shall be payable, in
the case of those applicable to prior periods, within 15 days after request by
the Bank for such payment, provided, however, that the Borrower shall only be
-------- -------
required to compensate the Bank under this Section 7.02 if the Bank notifies
Borrower within three months after the occurrence of the relevant circumstance
and the determination of the Bank that such occurrence has caused a reduction in
the rate of return on the capital maintained on account of such loans or
commitment.
Section 7.04. Funding Losses. The Borrower shall pay to the Bank,
--------------
upon request, such amount or amounts as the Bank determines are necessary to
compensate it for any actual loss, cost or expense incurred by it as a result of
(a) any payment, prepayment or conversion of a Eurodollar Rate Loan on a date
other than the last day of an Interest Period for such Eurodollar Rate Loan or
(b) a Eurodollar Rate Loan for any reason not being made or converted, or any
payment of principal thereof or interest thereon not being made, on the date
therefor determined in accordance with the applicable provisions of this
Agreement. At the election of the Bank, and without limiting the generality of
the foregoing, but without duplication, such compensation on account of losses
may include an amount equal to the excess of (i) the interest that would have
been received from the Borrower under this Agreement on any amounts to be
reemployed during an Interest Period or its remaining portion over (ii) the
interest component of the return that the Bank determines it could have obtained
had it placed such amount on deposit in the interbank Dollar market selected by
it for a period equal to such Interest Period or its remaining portion.
Section 7.05. Certain Determinations. In making the determinations
----------------------
contemplated by Sections 7.01, 7.02, 7.03 and 7.04, the Bank may make such
estimates, assumptions, allocations and the like that such Bank in good faith
determines to be
<PAGE>
CUSIP NO. 894081 10 8 Page 53 of 87
----------- ---- ----
appropriate, and such Bank's selection thereof in accordance with this Section
7.05, and the determinations made by the Bank on the basis thereof, shall be
final, binding and conclusive upon the Borrower, except, in the case of such
determinations, for manifest errors in computation or transmission. The Bank
shall furnish to the Borrower upon request a certificate outlining in reasonable
detail the computation of any amounts claimed by it under Sections 7.02, 7.03
and 7.04 and the assumptions underlying such computations.
Section 7.06. Change of Lending Office. If an event occurs with
------------------------
respect to a Lending Office of the Bank that makes operable the provisions of
clause (c) or (d) of Section 7.01 or entitles the Bank to make a claim under
Section 7.02 or 7.03, the Bank shall, if requested by the Borrower, use
reasonable efforts to designate another Lending Office or Offices the
designation of which will reduce the amount the Borrower is so obligated to pay,
eliminate such operability or reduce the amount the Bank is so entitled to
claim, provided that such designation would not, in the sole and absolute
discretion of the Bank, be disadvantageous to the Bank in any manner or contrary
to the Bank's policies. The Bank may at any time and from time to time change
any Lending Office and shall give notice of any such change to the Borrower.
Except in the case of a change in Lending Offices made at the request of the
Borrower, the designation of a new Lending Office by the Bank shall not make
operable the provisions of clause (c) or (d) of Section 7.01 or entitle the Bank
to make a claim under Section 7.02 or 7.03 if the operability of such clause or
such claim results solely from such designation and not from a subsequent
Regulatory Change.
ARTICLE 8
MISCELLANEOUS
-------------
Section 8.01. Notices and Deliveries. (a) Notices and Materials
---------------------- ---------------------
Other than Collateral. Except as provided in Section 8.01(b):
- ---------------------
(i) Manner of Delivery. All notices, communications and materials
------------------
(including all Information) to be given or delivered pursuant to the Loan
Documents shall, except in those cases where a telephone notice is expressly
permitted, be in writing. All written notices, communications and materials
shall be sent by registered or certified mail, postage prepaid, return receipt
requested, by telex or telecopier (receipt acknowledged), or delivered by hand.
Notices under Sections 1.02, 1.05, 1.06 and 6.02 may be by telephone, promptly
confirmed
<PAGE>
CUSIP NO. 894081 10 8 Page 54 of 87
----------- ---- ----
in writing. In the event of a discrepancy between any telephonic notice and any
written confirmation thereof, such written confirmation shall be deemed the
effective notice except to the extent that the Bank has acted in reliance on
such telephonic notice.
(ii) Addresses. All notices, communications and materials to be given
---------
or delivered pursuant to the Loan Documents shall be given or delivered at the
following respective addresses and telex, telecopier and telephone numbers and
to the attention of the following individuals or departments:
(A) if to the Borrower, to it at:
HYPERION PARTNERS II L.P.
50 Charles Lindbergh Blvd.
Suite 500
Uniondale, New York 11553
Telecopier No.: 516-745-6787
Telephone No.: 516-745-6644
Attention: Lewis S. Ranieri
with a copy to
Robert A. Perro
(B) if to the Bank, to it at:
THE BANK OF NEW YORK
Mortgage Banking Division
17th Floor
One Wall Street
New York, New York 10286
Telecopier No.: (212) 635-6468
Telephone No.: (212) 635-6465
Attention: Robert A. Tweed
Vice President
or at such other address or telex, telecopier or telephone number or to the
attention of such other individual or department as the party to which such
information pertains may hereafter specify for the purpose in a notice to the
other specifically captioned "Notice of Change of Address".
(iii) Effectiveness. Each notice and communication and
-------------
any material to be given or delivered pursuant to the Loan Documents shall be
effective or deemed delivered or furnished (A) if sent by mail, on the third
Business Day after such notice,
<PAGE>
CUSIP NO. 894081 10 8 Page 55 of 87
----------- ---- ----
communication or material is deposited in the mail, addressed as above provided,
(B) if sent by telex or telecopier, when such notice, communication or material
is transmitted to the appropriate number determined as above provided in this
Section 8.01 and the appropriate answer-back is received or receipt is otherwise
acknowledged, (C) if sent by hand delivery, when left at the address of the
addressee addressed as above provided, and (D) if given by telephone, when
communicated to the individual or any member of the department specified as the
individual or department to whose attention notices, communications and
materials are to be given or delivered, or, in the case of notice by the Bank to
the Borrower under Section 6.02 given by telephone as provided above, if any
individual or any member of the department to whose attention notices,
communications and materials are to be given or delivered is unavailable at the
time, to any other officer of the general partner of the General Partner, except
that notices of a change of address, telex, telecopier or telephone number or
individual or department to whose attention notices, communications and
materials are to be given or delivered, and notices to the Bank under Sections
1.02, 1.05, and 1.06, shall not be effective, and materials to be furnished to
the Bank pursuant to Article 5 shall not be deemed furnished, and such notices
to the Bank shall not be deemed received, until received by the officer of the
Bank responsible, at the time, for the administration of this Agreement.
(iv) Reasonable Notice. Any requirement under Applicable Law of
-----------------
reasonable notice by the Bank to the Borrower of any event in connection with,
or in any way related to, the Loan Documents or the exercise by the Bank of its
rights thereunder shall be met if notice of such event is given to the Borrower
in the manner prescribed above at least 10 days before (A) the date of such
event or (B) the date after which such event will occur.
(b) Collateral. Until the Bank shall otherwise specify, all
----------
Collateral to be delivered to the Bank pursuant to the Loan Documents consisting
of instruments, securities, chattel paper, letters of credit or documents shall
be delivered to the Bank at the Bank's Office either by hand delivery or by
registered or certified mail, postage prepaid, return receipt requested, in
either case (other than documents) insured in an amount not less than the
greater of the aggregate face amount and the aggregate fair market value of the
Collateral so being delivered. All other Collateral to be delivered to the Bank
pursuant to the Loan Documents shall be delivered to such Person, at such
address, by such means and in such manner as the Bank may designate.
<PAGE>
CUSIP NO. 894081 10 8 Page 56 of 87
----------- ---- ----
Section 8.02. Expenses; Indemnification. Whether or not any Loans
-------------------------
are made hereunder, the Borrower shall:
(a) pay or reimburse the Bank for all transfer, documentary, stamp and
similar taxes, and all recording and filing fees and taxes, payable in
connection with, arising out of, or in any way related to, the execution,
delivery and performance of the Loan Documents or the making of the Loans;
(b) pay or reimburse the Bank for all reasonable out-of-pocket costs
and expenses (including reasonable fees and disbursements of legal counsel,
appraisers, accountants and other experts employed or retained by the Bank,
subject to presentation of the statement therefor accompanied by time ticket
details) incurred by the Bank in connection with, arising out of, or in any way
related to (i) the negotiation, preparation, execution and delivery of (A) the
Loan Documents and (B) whether or not executed, any waiver, amendment or consent
thereunder or thereto, (ii) the administration of and any operations under the
Loan Documents, (iii) consulting with respect to any matter in any way arising
out of, related to, or connected with, the Loan Documents, including (A) the
protection and preservation of the Collateral, (B) the protection, preservation,
exercise or enforcement of any of its rights in, under or related to the
Collateral or the Loan Documents or (C) the performance of any of its
obligations under or related to the Loan Documents, (iv) protecting or
preserving the Collateral or (v) protecting, preserving, exercising or enforcing
any of its rights in, under or related to the Collateral or the Loan Documents,
including defending the Security Interest as a valid, perfected first priority
security interest in the Collateral subject only to Permitted Liens; and
(c) indemnify and hold each Indemnified Person harmless from and
against all losses suffered, and pay or reimburse each Indemnified Person for
all reasonable out-of-pocket costs and expenses (including reasonable fees and
disbursements of legal counsel and other experts employed or retained by such
Indemnified Person, subject to presentation of a statement therefor, accompanied
by time ticket details) incurred, by such Indemnified Person in connection with,
arising out of, or in any way related to (i) any Loan Document Related Claim
(whether asserted by such Indemnified Person or the Borrower or any other
Person), including the prosecution or defense thereof and any litigation or
proceeding with respect thereto (whether or not, in the case of any such
litigation or proceeding, such Indemnified Person is a party thereto), or (ii)
any investigation, governmental or otherwise, arising out of, related to, or in
any way connected with, the Loan Documents or the relationship established
thereunder, except that the foregoing
<PAGE>
CUSIP NO. 894081 10 8 Page 57 of 87
----------- ---- ----
indemnity shall not be applicable to any loss suffered by any Indemnified Person
to the extent such loss is determined by a judgment of a court that is binding
on such Indemnified Person, final and not subject to review on appeal, to be the
result of acts or omissions on the part of such Indemnified Person constituting
(x) willful misconduct or gross negligence, (y) knowing violations of Applicable
Law or (z) in the case of claims by the Borrower against such Indemnified
Person, such Indemnified Person's failure to observe any other standard
applicable to it under any of the other provisions of the Loan Documents or, but
only to the extent not waivable thereunder, Applicable Law.
Section 8.03. Amounts Payable Due Upon Request for Payment. All
--------------------------------------------
amounts payable by the Borrower under Section 8.02 and under the other
provisions of the Loan Documents shall, except as otherwise expressly provided,
be immediately due upon request for the payment thereof.
Section 8.04. Remedies of the Essence. The various rights and
-----------------------
remedies of the Bank under the Loan Documents are of the essence of those
agreements, and the Bank shall be entitled to obtain a decree requiring specific
performance of each such right and remedy.
Section 8.05. Rights Cumulative. Each of the Bank's rights and
-----------------
remedies under the Loan Documents shall be in addition to all of its other
rights and remedies under the Loan Documents and Applicable Law, and nothing in
the Loan Documents shall be construed as limiting any such rights or remedies.
Section 8.06. Disclosures. The Bank may disclose to, and exchange
-----------
and discuss with, any other Person (the Bank and each such other Person being
hereby irrevocably authorized to do so) any information concerning the
Collateral or the Borrower or any Subsidiary (whether received by the Bank or
such other Person in connection with or pursuant to the Loan Documents or
otherwise) for the purpose of (a) complying with Applicable Law, (b) protecting
or preserving the Collateral, (c) protecting, preserving, exercising or
enforcing any of its rights in, under or related to the Collateral or the Loan
Documents, (d) performing any of its obligations under or related to the Loan
Documents or (e) consulting with respect to any of the foregoing matters.
Section 8.07. Amendments; Waivers. Any term, covenant, agreement or
-------------------
condition of the Loan Documents may be amended, and any right of the Bank under
the Loan Documents may be waived, if, but only if, such amendment or waiver is
in writing and is signed by the Bank and, in the case of an amendment, by the
Borrower. Unless otherwise specified in such
<PAGE>
CUSIP NO. 894081 10 8 Page 58 of 87
----------- ---- ----
waiver, a waiver of any right under the Loan Documents shall be effective only
in the specific instance and for the specific purpose for which given. No
election not to exercise, failure to exercise or delay in exercising any right,
nor any course of dealing or performance, shall operate as a waiver of any right
of the Bank under the Loan Documents or Applicable Law, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right of the Bank under the Loan Documents
or Applicable Law.
Section 8.08. Set-Off; Retention of Funds. The Bank is hereby
---------------------------
authorized by the Borrower, at any time and from time to time, without notice,
during any Event of Default, to set-off against, and to appropriate and apply to
the payment of, the obligations and liabilities of the Borrower under the Loan
Documents (whether matured or unmatured, fixed or contingent or liquidated or
unliquidated) any and all amounts owing by the Bank or any of its Affiliates to
the Borrower (whether payable in Dollars or any other currency, whether matured
or unmatured and, in the case of deposits, whether general or special, time or
demand and however evidenced and whether maintained at a branch or office
located within or without the United States) and (b) during any Default, to hold
such amounts as collateral to secure such obligations and liabilities and to
return as unpaid for insufficient funds any and all checks and other items drawn
against any deposits so held as the Bank in its sole discretion may elect
provided that Borrower may elect to apply such amount to reduce the Loans.
Section 8.09. Assignments and Participation. (a) Assignments. (i)
----------------------------- -----------
The Borrower may not assign any of its rights or obligations under the Loan
Documents without the prior written consent of the Bank, and no assignment of
any such obligation shall release the Borrower therefrom or constitute a
novation unless the Bank shall have consented to such release in a writing
specifically referring to the obligation from which the Borrower is to be
released.
(ii) The Bank may from time to time assign any or all of its rights
and obligations under the Loan Documents and with respect to the Collateral to
one or more Persons without the consent of the Borrower. Any assignment of any
such obligation that is to an Eligible Assignee or is consented to by the
Borrower in writing shall release the Bank therefrom and constitute a novation.
(b) Participation. The Bank may from time to time sell or otherwise
-------------
grant participation in any or all of its rights and obligations under the Loan
Documents and with respect to the Collateral without the consent of the
Borrower.
<PAGE>
CUSIP NO. 894081 10 8 Page 59 of 87
----------- ---- ----
(c) Rights of Assignees and Participants. Each assignee of, and each
------------------------------------
holder of a participation in, the rights of the Bank under the Loan Documents
and with respect to the Collateral, if and to the extent the applicable
assignment or participation agreement so provides, (i) shall, with respect to
its assignment or participation, be entitled to all of the rights of the Bank
(as fully, in the case of a holder of a participation, as though it were the
Bank) and (ii) may exercise any and all rights of set-off or banker's lien with
respect thereto (as fully, in the case of a holder of a participation, as though
the Borrower were directly indebted to such holder for amounts payable under the
Loan Documents to which such holder is entitled under the applicable
participation agreement); provided, however, that no assignee or holder of a
-------- -------
participation shall be entitled to any amounts that would otherwise be payable
to it with respect to its assignment or participation under Section 1.08(b),
Section 7.01, Section 7.02 or Section 7.03 unless (x) such amounts are payable
in respect of Regulatory Changes or other changes in Applicable Law,
interpretations, directives, requests or guidelines that become effective or are
implemented or first required or expected to be complied with after the date the
applicable assignment or participation agreement was executed or (y) such
amounts would have been payable to the Bank that made such assignment or granted
such participation if such assignment had not been made or such participation
granted.
Section 8.10. Governing Law. This Agreement and the Note shall be
-------------
construed in accordance with and governed by the laws of the State of New York,
excluding those applicable to choice of law but including those applicable to
the Maximum Permissible Rate.
Section 8.11. Judicial Proceedings; Waiver of Jury Trial. Any
------------------------------------------
judicial proceeding brought against the Borrower with respect to any Loan
Document Related Claim may be brought in any court of competent jurisdiction in
the City of New York, and, by execution and delivery of this Agreement, the
Borrower (a) accepts, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any judgment rendered thereby in connection with any Loan
Document Related Claim and (b) irrevocably waives any objection it may now or
hereafter have as to the venue of any such proceeding brought in such a court or
that such a court is an inconvenient forum. The Borrower hereby waives personal
service of process and consents that service of process upon it may be made by
certified or registered mail, return receipt requested, at its address specified
or determined in accordance with the provisions of Section 8.01(a)(ii), and
service so made shall be deemed completed on the third Business
<PAGE>
CUSIP NO. 894081 10 8 Page 60 of 87
----------- ---- ----
Day after such service is deposited in the mail. Nothing herein shall affect
the right of the Bank or any other Indemnified Person to serve process in any
other manner permitted by law or shall limit the right of the Bank or any other
Indemnified Person to bring proceedings against the Borrower in the courts of
any other jurisdiction. Any judicial proceeding by the Borrower against the
Bank involving any Loan Document Related Claim shall be brought only in a court
located in the City and State of New York. THE BORROWER AND THE BANK HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES
INVOLVING ANY LOAN DOCUMENT RELATED CLAIM.
Section 8.12. LIMITATION OF LIABILITY. NEITHER THE BANK NOR ANY
-----------------------
OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND THE
BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH
ANY LOAN DOCUMENT RELATED CLAIM.
Section 8.13. Severability of Provisions. Any provision of the Loan
--------------------------
Documents that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by Applicable Law, the Borrower hereby
waives any provision of Applicable Law that renders any provision of the Loan
Documents prohibited or unenforceable in any respect.
Section 8.14. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.
Section 8.15. Survival of Obligations. Except as otherwise expressly
-----------------------
provided therein, the rights and obligations of the Borrower, the Bank and the
other Indemnified Persons under the Loan Documents shall survive the Repayment
Date.
Section 8.16. Entire Agreement. This Agreement and the Notes embody
----------------
the entire agreement between the Borrower and the Bank relating to the subject
matter hereof and supersede all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
Section 8.17. Successors and Assigns. All of the provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
<PAGE>
CUSIP NO. 894081 10 8 Page 61 of 87
----------- ---- ----
Section 8.18. Exculpation. (a) No recourse shall be had for the
-----------
payment of any principal, interest, penalties or other charges of any kind under
the Loan Documents or for any claim based on the Loan Documents (including,
without limitation, all covenants and Representations and Warranties contained
in the Loan Documents) against any partner of the Borrower, whether general or
limited; provided, however, that this Section 8.18 shall not prevent recourse to
the Collateral described in the Security Agreement.
ARTICLE 9
INTERPRETATION
--------------
Section 9.01. Definitional Provisions. (a) Defined Terms. For the
-----------------------
purposes of this Agreement:
"Adjusted Eurodollar Rate" means, for any Interest Period, a rate per
------------------------
annum (rounded upward, if necessary, to the next higher 1/100 of 1%) equal to
the rate obtained by dividing (a) the Eurodollar Rate for such Interest Period
by (b) a percentage equal to 1 minus the Reserve Requirement in effect from time
to time during such Interest Period.
"Affiliate" means, with respect to a Person, any other Person that,
---------
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an Affiliate of the Borrower.
"Agreement" means this Agreement, including all schedules, annexes and
---------
exhibits hereto.
"Agreement Date" means the date set forth as such on the last
--------------
signature page hereof.
"Allocated Qualifying Balances" means the daily amount of Qualifying
-----------------------------
Balances held by the Bank, or with a financial institution designated by the
Bank and acceptable to the Borrower, on a calendar day (or determined on such
other basis as the Bank and the Borrower may agree) allocated to Loans of the
Bank, taking into account any carryforwards of surplus Allocated Qualifying
Balances from any previous day or period, and which balances are not included in
determining "Allocated Qualifying Balances" under any other credit arrangements
between the Bank and the Borrower, as agreed between the Bank and the Borrower.
Qualifying Balances allocated to a Loan for purposes of determining whether such
Loan is Balance Funded shall not be
<PAGE>
CUSIP NO. 894081 10 8 Page 62 of 87
----------- ---- ----
considered Qualifying Balances for purposes of determining whether any other
Loan is Balance Funded.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
-------------------
to the higher of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Rate in effect on such day plus 1/2 of l%.
"Applicable Law" means, anything in Section 8.10 to the contrary
--------------
notwithstanding, (i) all applicable common law and principles of equity and (ii)
all applicable provisions of all (A) constitutions, statutes, rules, regulations
and orders of governmental bodies, (B) Governmental Approvals and (C) orders,
decisions, judgments and decrees of all courts (whether at law or in equity or
admiralty) and arbitrators.
"Assignment of Certificate of Deposit" means each Assignment of
------------------------------------
Certificate of Deposit by the Borrower to the Bank assigning to the Bank a
Certificate of Deposit and dated the date of such assignment.
"Balance Funded" means, as applied to Loans of the Bank on any day (or
--------------
for such other period as the Borrower and the Bank may agree), the lesser of (a)
the principal amount of such Loans on such day or for such other period and (b)
the Allocated Qualifying Balances on such day or for such other period deemed to
be applicable to such Loans by the Bank.
"Balance Funded Amount" means, with respect to any Loan of the Bank,
---------------------
on any day (or for such other period as the Borrower and the Bank may agree),
the lesser of (a) the principal amount of such Loan and (b) the amount of
Allocated Qualifying Balances on such day or for such other period deemed to be
applicable to such Loan by the Bank.
"Balance Funded Rate" means 2.0% per annum.
-------------------
"Bank" means THE BANK OF NEW YORK and its successors and assigns,
----
including any assignees pursuant to Section 8.09(a).
"Bank's Office" means the address of the Bank specified in or
-------------
determined in accordance with the provisions of Section 8.01(a)(ii).
"Base Rate Loan" means any Loan the interest on which is, or is to be,
--------------
as the context may require, computed on the basis of the Alternate Base Rate.
"Borrower" means HYPERION PARTNERS II L.P., a Delaware limited
--------
partnership, and its successors and assigns.
<PAGE>
CUSIP NO. 894081 10 8 Page 63 of 87
----------- ---- ----
"Borrower's Partnership Agreement" means the Amended and Restated
--------------------------------
Agreement of Limited Partnership of the Borrower dated as of June 16, 1995.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banks in New York City are authorized to close.
"Capital Call Notice" is a notice in the form of Schedule C to the
------------------- ----------
Security Agreement.
"Capital Commitment" has the meaning ascribed to that term in the
------------------
Borrower's Partnership Agreement and, with respect to each partner and in the
aggregate, the Capital Commitments, as of the Agreement Date, are set forth in
Schedule 3.08.
- -------------
"Capital Security" means, with respect to any Person, (i) any share of
----------------
capital stock or other equity interest of such Person or (ii) any security
convertible into, or any option, warrant or other right to acquire, any share of
capital stock or other equity interest of such Person.
"Certificate of Deposit" means, collectively, each certificate of
----------------------
deposit referred to in the instrument of assignment referred to in the
definition of the term Assignment of Certificate of Deposit, and any
substitutions, extensions, modifications and proceeds thereof.
"Code" means the Internal Revenue Code of 1986.
----
"Collateral" means all property in which a Lien is created pursuant to
----------
the Loan Documents.
"Commitment" means the amount set forth in Section 1.01, as the same
----------
may be reduced from time to time pursuant to Section 1.06, or, as the context
may require, the obligation of the Bank to make Loans in an aggregate unpaid
principal amount not exceeding such amount as so reduced.
"Consolidated Subsidiary" means, with respect to any Person at any
-----------------------
time, any Subsidiary or other Person the accounts of which would be consolidated
with those of such first Person in its consolidated financial statements as of
such time in accordance with Generally Accepted Accounting Principles; unless
otherwise specified, "Consolidated Subsidiary" means a Consolidated Subsidiary
of the Borrower.
"Contract" means any indenture, agreement, other contractual
--------
restriction, lease, instrument, certificate of
<PAGE>
CUSIP NO. 894081 10 8 Page 64 of 87
----------- ---- ----
incorporation or charter, or by-law, other than any such that constitutes a Loan
Document.
"Debt" of any Person means (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, except trade accounts payable that arise
in the ordinary course of business but only if and so long as the same are
payable on customary trade terms, (iv) obligations of such Person as lessee
under capital leases, (v) Mandatorily Redeemable Stock of such Person owned by
any Person other than such Person or a Wholly Owned Subsidiary of such Person
that has no Debt other than the Loans (the amount of any such Mandatorily
Redeemable Stock to be determined for this purpose as the higher of the
liquidation preference of and the amount payable upon redemption of such
Mandatorily Redeemable Stock), (vi) obligations of such Person to purchase
securities or other property that arise out of or in connection with the sale of
the same or substantially similar securities or property, (vii) non-contingent
obligations of such Person to reimburse any other Person in respect of amounts
paid under a letter of credit or similar instrument to the extent that such
reimbursement obligations remain outstanding after they become non-contingent,
(viii) obligations with respect to interest rate and currency swaps and similar
obligations obligating 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, (ix) Debt secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person provided, however, that in the event that the liability
-------- -------
of such Person is non-recourse to such Person and is recourse only to specified
property of such Person, the amount of Debt attributed thereto shall not exceed
the greater of the market value of such property or the book value of such
property, and (x) Debt of others Guaranteed by such Person.
"Default" means any condition or event that constitutes an Event of
-------
Default or that with the giving of notice or lapse of time or both would, unless
cured or waived, become an Event of Default.
"Dollars" and the sign "$" mean lawful money of the United States of
------- -
America.
<PAGE>
CUSIP NO. 894081 10 8 Page 65 of 87
----------- ---- ----
"Domestic Rate Loan" means a Base Rate Loan or a Federal Funds Rate
------------------
Loan.
"Eligible Assignee" means (i) any commercial bank, savings and loan
-----------------
institution or savings bank organized under the laws of the United States, or
any State thereof, and having combined capital and surplus in excess of
$300,000,000 and a Keefe, Bruyette and Woods rating of "C" or better, (ii) any
commercial bank organized under the laws of any other country that is a member
of the Organization for Economic Cooperation and Development ("OECD"), or a
political subdivision of any such country, and having combined capital and
surplus (or the equivalent thereof under the accounting principles applicable
thereto) in excess of $300,000,000, provided that such bank is acting through a
branch, agency or Affiliate located in the country in which it is organized or
another country that is also a member of the OECD, (iii) the central bank of any
country that is a member of the OECD or (iv) any insurance company, pension
fund, mutual fund or other financial institution of recognized standing.
"Eligible Pledged Instrument" means any Pledged Instrument which is
---------------------------
(i) an interest bearing United States Treasury Security or an other instrument
acceptable to the Bank and (ii) subject to the first priority perfected lien
purported to be granted by the Security Agreement in favor of the Bank.
"Eurodollar Business Day" means any Business Day on which dealings in
-----------------------
Dollar deposits are carried on in the London interbank market and on which
commercial banks are open for domestic and international business (including
dealings in Dollar deposits) in London, England.
"Eurodollar Rate" means, for any Interest Period, the rate per annum
---------------
(rounded upward, if necessary, to the next higher 1/100 of 1%) at which the Bank
offered or would have offered to place with first-class banks in the London
interbank market deposits in Dollars in amounts comparable to the Eurodollar
Rate Loan of the Bank to which such Interest Period applies, for a period equal
to such Interest Period, at 11:00 a.m. (London time) on the second Eurodollar
Business Day before the first day of such Interest Period.
"Eurodollar Rate Loan" means any Loan the interest on which is, or is
--------------------
to be, as the context may require, computed on the basis of the Adjusted
Eurodollar Rate.
"Event of Default" means any of the events specified in Section 6.01.
----------------
<PAGE>
CUSIP NO. 894081 10 8 Page 66 of 87
----------- ---- ----
"Federal Funds Rate" means, for any day, the weighted average of the
------------------
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of quotations for such day on such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by the Bank.
"Federal Funds Rate Loans" means any Loan the interest on which is, or
------------------------
is to be, as the context may require, computed on the basis of the Federal Funds
Rate.
"General Partner" means Hyperion Ventures II L.P., a Delaware limited
---------------
partnership.
"Generally Accepted Accounting Principles" means the accounting
----------------------------------------
principles followed in the preparation of the most recent, audited consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries referred to in
Schedule 5.02(a) and the related statements of income, retained earnings and, as
- ----------------
applicable, changes in financial position or cash flows for the fiscal year
ended with the date of such balance sheet.
"Governmental Approval" means any authorization, consent, approval,
---------------------
license or exemption of, registration or filing with, or report or notice to,
any governmental unit.
"Guaranty" of any Person means any obligation, contingent or
--------
otherwise, of such Person (a) to pay any Liability of any other Person or to
otherwise protect, or having the practical effect of protecting, the holder of
any such Liability against loss (whether such obligation arises by virtue of
such Person being a partner of a partnership or participant in a joint venture
or by agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (b) incurred in connection with the
issuance by a third Person of a Guaranty of any Liability of any other Person
(whether such obligation arises by agreement to reimburse or indemnify such
third Person or otherwise). The word "Guarantee" when used as a verb has the
---------
correlative meaning.
"Indemnified Person" means any Person that is, or at any time was, the
------------------
Bank, an Affiliate of the Bank or a director, officer, employee or agent of any
such Person.
<PAGE>
CUSIP NO. 894081 10 8 Page 67 of 87
---------- ---- ----
"Information" means data, certificates, reports, statements (including
-----------
financial statements), opinions of counsel, documents and other information.
"Initial Loan" means the first Loan made or to be made pursuant to
------------
Section 1.02.
"Intellectual Property" means (i) (A) patents and patent rights, (B)
---------------------
trademarks, trademark rights, trade names, trade name rights, corporate names,
business names, trade styles, service marks, logos and general intangibles of
like nature and (C) copyrights, in each case whether registered, unregistered or
under pending registration and, in the case of any such that are registered or
under pending registration under the laws of the United States or any other
country, (ii) reissues, continuations, continuations-in-part and extensions of
any Intellectual Property referred to in clause (i), and (iii) rights relating
to any Intellectual Property referred to in clause (i) or (ii), including rights
under applications (whether pending under the laws of the United States or any
other country) or licenses relating thereto.
"Interest Payment Date" means the first Business Day of each month,
---------------------
commencing with September, 1995, through the Termination Date.
"Interest Period" means a period commencing, in the case of the first
---------------
Interest Period applicable to a Eurodollar Rate Loan, on the date of the making
of, or conversion into, such Loan, and, in the case of each subsequent,
successive Interest Period applicable thereto, on the last day of the
immediately preceding Interest Period, and ending, depending on the Type of
Loan, on the same day in the first, second or third calendar month thereafter,
except that (a) any Interest Period that would otherwise end on a day that is
not a Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day and (b) any Interest Period that begins on the
last Eurodollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month in which such Interest
Period ends) shall end on the last Eurodollar Business Day of a calendar month.
"Lending Office" of any Bank means as to any Loan, the office of the
--------------
Bank designated by the Bank as the office out of which such Loan was made or is
maintained.
<PAGE>
CUSIP NO. 894081 10 8 Page 68 of 87
----------- ---- ----
"Liability" of any Person means any obligation or liability, whether
---------
arising under Contract, Applicable Law or otherwise, in each case to the extent
such obligation or liability does not otherwise constitute Debt of such Person.
"Lien" means, with respect to any property or asset (or any income or
----
profits therefrom) of any Person (in each case whether the same is consensual or
nonconsensual or arises by Contract, operation of law, legal process or
otherwise) (i) any mortgage, lien, pledge, attachment, levy, priority or other
security interest or encumbrance of any kind thereupon or in respect thereof and
(ii) any arrangement, express or implied, under which the same is subordinated,
transferred, sequestered or otherwise identified so as to subject the same to,
or make the same available for, the payment or performance of any Debt or
Liability in priority to the payment of the ordinary, unsecured creditors of
such Person.
"Limited Partner" and "Transfer" have the meanings ascribed to those
--------------- --------
terms in the Borrower's Partnership Agreement.
"Loan" means any amount advanced by the Bank pursuant to Section 1.01.
----
"Loan Document Related Claim" means any claim (whether sounding in
---------------------------
tort, contract or otherwise) in any way arising out of, related to, or connected
with, the Loan Documents or the relationships established thereunder, whether
such claim arises or is asserted before or after the Agreement Date or before or
after the Repayment Date.
"Loan Document Representation and Warranty" means any "Representation
-----------------------------------------
and Warranty" as defined in any Loan Document and any other representation or
warranty made or deemed made under any Loan Document.
"Loan Documents" means (i) this Agreement, the Note, the Security
--------------
Agreement, the Assignment of Certificate of Deposit, and (ii) all other
agreements, documents, amendments, certificates and instruments relating to,
arising out of, or in any way connected with (A) any agreement, document or
instrument referred to in clause (i), (B) any other agreement, document,
amendment, certificate or instrument referred to in this clause (ii) or (C) any
of the transactions contemplated by any agreement, document, amendment,
certificate or instrument referred to in clause (i) or in this clause (ii).
"Loan Party" means any Person (other than the Bank) that is a party to
----------
a Loan Document.
<PAGE>
CUSIP NO. 894081 10 8 Page 69 of 87
----------- ---- ----
"Margin Stock" means "margin stock" as defined in Regulation U.
------------
"Materially Adverse Effect" means, (i) with respect to any Person, any
-------------------------
materially adverse effect on such Person's business, assets, liabilities,
financial condition, results of operations or business prospects, (ii) with
respect to a group of Persons "taken as a whole", any materially adverse effect
on such Persons' business, assets, liabilities, financial conditions, results of
operations or business prospects taken as a whole on, where appropriate, a
consolidated basis in accordance with Generally Accepted Accounting Principles,
(iii) with respect to any Loan Document, any adverse effect, WHETHER OR NOT
MATERIAL, on the binding nature, validity or enforceability thereof as an
obligation of any Loan Party that is a party thereto and (iv) with respect to
any Collateral, or any category of Collateral, pledged by any Loan Party, a
materially adverse effect on its value as Collateral or an adverse effect,
WHETHER OR NOT MATERIAL, on the validity, perfection, priority or enforceability
of the Security Interest therein.
"Maximum Permissible Rate" means, with respect to interest payable on
------------------------
any amount, the rate of interest on such amount that, if exceeded, could, under
Applicable Law, result in (i) civil or criminal penalties being imposed on the
payee or (ii) the payee's being unable to enforce payment of (or, if collected,
to retain) all or any part of such amount or the interest payable thereon.
"Net Worth" means, at any time, the total partners' capital of the
---------
Borrower as of such time.
"Note" means a note in the form of Exhibit A hereto.
----
"Permitted Partnership Admission" means an admission of a Limited
-------------------------------
Partner to the Borrower (whether by the way of adding a new Limited Partner or
by increasing the Capital Commitment of an existing Limited Partner (in either
case, referred to herein as an "Admitted Limited Partner")) with respect to
which each of the following applies:
(A) Either (i) the Bank has previously consented in writing or (ii)
the Admitted Limited Partner is a Person that has outstanding unsecured
securities of a grade that is rated in one of the four highest categories
(without regard to subcategories within such rating categories) by Standard
& Poor's Rating Group, Fitch Investors Service, L.P., Moody's Investors
Service, Inc., or A.M. Best & Company, or any other nationally recognized
credit agency of similar
<PAGE>
CUSIP NO. 894081 10 8 Page 70 of 87
----------- ---- ----
standing if none of the foregoing are currently rating such Person.
(B) The admission is in all respects permitted under and made in
compliance with the applicable provisions of the Borrower's Partnership
Agreement (except for such provisions which may be waived as provided for
in the Borrower's Partnership Agreement).
(C) On the Admission Date (as defined in Section 3.3.3(a) of the
Partnership Agreement), (i) Schedule A hereto shall be amended to include
such Admitted Limited Partner's Capital Commitment, (ii) such Limited
Partner's Capital Commitment shall constitute a Pledged Capital Commitment
as to which all representations and warranties contained in the Security
Agreement shall be true and correct, and (iii) such documents, certificates
and other instruments reflecting the pledge of and the perfection of the
security interest in, all right, title and interest of such Admitted
Limited Partner in its Unused Capital Commitment to the Bank have been
executed, delivered and, if applicable, filed, all as reasonably requested
by the Bank.
(D) the General Partner shall have certified that the admission is a
Permitted Partnership Admission by delivering to the Bank a certificate, in
the form of Schedule 9.01(b), duly certified and fully completed (with all
----------------
elections made as required therein) and accompanied by all exhibits
required to be attached thereto (each of which shall be complete in all
respects), certifying as to all matters set forth therein and in the
attached exhibits, and each matter so certified shall be true and accurate
as so certified.
"Permitted Partnership Transfer" means a Transfer of all or any
------------------------------
fraction of an existing limited partnership interest in the Borrower with
respect to which each of the following applies:
(A) Either (i) the Bank has previously consented in writing or (ii)
the transferee is a Person that has outstanding unsecured securities of a
grade that is at least equal to that of the outstanding unsecured
securities of the transferor, in each case, as rated by Standard & Poor's
Corporation, Moody's Investors Service, Fitch Investors Service, L.P., or
A.M. Best & Company or any other nationally recognized credit agency of
similar standing if none of the foregoing is currently rating such Person
or;
(B) The Transfer is in all respects permitted under and made in
compliance with the applicable provisions of the
<PAGE>
CUSIP NO. 894081 10 8 Page 71 of 87
----------- ---- ----
Borrower's Partnership Agreement (except for such provisions which may be
waived as provided for in the Borrower's Partnership Agreement), and after
giving effect to the Transfer, either
(i) the transferor ceases to be a Limited Partner and is released
from its obligation to the Borrower with respect to the transferred Unused
Capital Commitment and the transferee is admitted to the Borrower as an
Assignee Substituted Limited Partner (as defined in the Security Agreement)
and has fully assumed the obligations to the Borrower with respect to the
transferred Unused Capital Commitment, or
(ii) Each of the transferor and the transferee shall be obligated
jointly and severally to the Borrower with respect to the transferred
Unused Capital Commitment, whether or not the transferor remains a Limited
Partner and whether or not the transferee is an Assignee Substituted
Limited partner; and
(C) the General Partner shall have certified that the Transfer is a
Permitted Partnership Transfer, by delivering to the Bank a certificate, in
the form of Schedule 9.01(a), duly certified and fully completed (with all
----------------
elections made as required therein) and accompanied by all exhibits
required to be attached thereto (each of which shall be complete in all
respects), certifying as to all matters set forth therein and in the
attached exhibits, and each matter so certified shall be true and accurate
as so certified.
"Person" means any individual, sole proprietorship, corporation,
------
partnership, trust, unincorporated organization, mutual company, joint stock
company, estate, union, employee organization, government or any agency or
political subdivision thereof.
"Pledged Capital Commitments" has the meaning ascribed to it in the
---------------------------
Security Agreement.
"Post-Default Rate" means the rate otherwise applicable under Section
-----------------
1.03(a) plus 3%.
"Prime Rate" shall mean the prime commercial lending rate of the Bank
----------
as publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate (which rate may not be the Bank's lowest rate of interest).
<PAGE>
CUSIP NO. 894081 10 8 Page 72 of 87
----------- ---- ----
"Purchase Money Debt" means (i) Debt of the Borrower that is incurred
-------------------
to finance part or all of (but not more than) the purchase price of a tangible
asset, provided that (A) neither the Borrower nor any Subsidiary had at any time
--------
prior to such purchase any interest in such asset other than a security interest
or an interest as lessee under an operating lease and (B) such Debt is incurred
within 30 days after such purchase, or (ii) Debt that (A) constitutes a renewal,
extension or refunding of, but not an increase in the principal amount of,
Purchase Money Debt that is such by virtue of clause (i) or (ii) and (B) bears
interest at a rate per annum that is commercially reasonable at the time such
Debt is incurred.
"Qualifying Balances" means those free collected balances maintained
-------------------
in non-interest bearing accounts (whether or not such accounts are trust
accounts) of the Borrower with the Bank or with a financial institution
designated by the Bank and acceptable to the Borrower (after deducting for
purposes of calculating such balances FDIC insurance premiums, float and
balances required by the Bank under its normal practices to compensate the Bank
for the maintenance of such accounts and taking into consideration any reserve
requirements and other costs of complying with Applicable Law applicable to such
accounts).
"Regulation D" means Regulation D of the Board of Governors of the
------------
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
------------
Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
------------
Federal Reserve System.
"Regulation Z" means Regulation Z of the Board of Governors of the
------------
Federal Reserve System.
"Regulatory Change" means any Applicable Law, interpretation,
-----------------
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Agreement Date, whether the same is (i) the result of an enactment by
a government or any agency or political subdivision thereof, a determination of
a court or regulatory authority, or otherwise or (ii) enacted, adopted, issued
or proposed before or after the Agreement Date, including any such that imposes,
increases or modifies any Tax, reserve requirement, insurance charge, special
deposit requirement, assessment or capital adequacy requirement, but excluding
any such that
<PAGE>
CUSIP NO. 894081 10 8 Page 73 of 87
----------- ---- ----
imposes, increases or modifies any income, gross receipts or franchise tax
imposed upon the Bank by any jurisdiction (or any political subdivision thereof)
in which the Bank's Office is located.
"Repayment Date" means the later of (i) the termination of the
--------------
Commitment (whether as a result of the occurrence of the Termination Date,
reduction to zero pursuant to Section 1.06 or termination pursuant to Section
6.02) and (ii) the payment in full of the Loans and all other amounts payable or
accrued hereunder.
"Representation and Warranty" means any representation or warranty
---------------------------
made pursuant to or under (i) Section 2.02, Article 3, Section 5.02 or any other
provision of this Agreement or (ii) any amendment to, or waiver of rights under,
this Agreement, WHETHER OR NOT, IN THE CASE OF ANY REPRESENTATION OR WARRANTY
REFERRED TO IN CLAUSE (i) OR (ii) OF THIS DEFINITION (EXCEPT, IN EACH CASE, TO
THE EXTENT OTHERWISE EXPRESSLY PROVIDED), THE INFORMATION THAT IS THE SUBJECT
MATTER THEREOF IS WITHIN THE KNOWLEDGE OF THE BORROWER.
"Reserve Requirement" means, for any Eurodollar Loan for any Interest
-------------------
Period, the maximum rate at which reserves (including any marginal, supplemental
or emergency reserve) are required to be maintained by the Bank during such
Interest Period under Regulation D against "Eurocurrency liabilities", as that
term is used in Regulation D. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
"Security Agreement" means the Security Agreement, dated as of the
------------------
Agreement Date, between the Borrower and the Bank.
"Security Agreements" means the Assignment of Certificate of Deposit
-------------------
and the Security Agreement.
"Security Interest" means the Liens created, or purported to be
-----------------
created, by the Loan Documents.
"Significant Subsidiary" means each Subsidiary of Borrower that is a
----------------------
"significant subsidiary" of Borrower, as such term is used in Regulation S-X of
the Securities and Exchange Commission, each of which, as of the Agreement Date,
being indicated as a Significant Subsidiary in Schedule 3.02(a), and, after the
----------------
Agreement Date, shall include any Subsidiary, whether or not newly acquired,
that shall become such a "significant subsidiary".
<PAGE>
CUSIP NO. 894081 10 8 Page 74 of 87
----------- ---- ----
"Subsidiary" means, with respect to any Person, any other Person (i)
----------
securities of which having ordinary voting power to elect a majority of the
board of directors (or other persons having similar functions) or (ii) other
ownership interests of which ordinarily constituting a majority voting interest,
are at the time, directly or indirectly, owned or controlled by such first
Person, or by one or more of its Subsidiaries, or by such first Person and one
or more of its Subsidiaries; unless otherwise specified, "Subsidiary" means a
Subsidiary of the Borrower.
"Tax" means any Federal, State or foreign tax, assessment or other
---
governmental charge or levy (including any withholding tax) upon a Person or
upon its assets, revenues, income or profits.
"Termination Date" means, the date which is 364 days from and
----------------
including the Agreement Date.
"Total Debt" means, at any time, the aggregate principal amount of the
----------
Borrower's Debt as of such time.
"Type" means, with respect to Loans, any of the following, each of
----
which shall be deemed to be a different "Type" of Loan: Base Rate Loans,
Federal Funds Rate Loans, Eurodollar Rate Loans having a one-month Interest
Period, Eurodollar Rate Loans having a two-month Interest Period and Eurodollar
Rate Loans having a three-month Interest Period. Any Eurodollar Rate Loan
having an Interest Period that differs from the duration specified for a Type of
Eurodollar Rate Loan listed above solely as a result of the operation of clauses
(a) and (b) of the definition of "Interest Period" shall be deemed to be a Loan
of such above-listed Type notwithstanding such difference in duration of
Interest Periods.
"Unused Capital Commitment" has the meaning ascribed to it in the
-------------------------
Security Agreement.
"Wholly Owned Subsidiary" means any Subsidiary all of the Capital
-----------------------
Securities and all other ownership interests and rights to acquire ownership
interests of which (except directors' qualifying shares) are, directly or
indirectly, owned or controlled by the Borrower or one or more Wholly Owned
Subsidiaries or by the Borrower and one or more of such Subsidiaries.
(b) Other Definitional Provisions. (i) Except as otherwise specified
-----------------------------
herein, all references herein (A) to any Person shall be deemed to include such
Person's successors and assigns, (B) to any Applicable Law defined or referred
to herein
<PAGE>
CUSIP NO. 894081 10 8 Page 75 of 87
----------- ---- ----
shall be deemed references to such Applicable Law as the same may have been or
may be amended or supplemented from time to time and (C) to any Loan Document or
Contract defined or referred to herein shall be deemed references to such Loan
Document or Contract (and, in the case of any Note or other instrument, any
instrument issued in substitution therefor) as the terms thereof may have been
or may be amended, supplemented, waived or otherwise modified from time to time.
(ii) When used in this Agreement, the words "herein", "hereof" and
"hereunder" and words of similar import shall refer to this Agreement as a whole
and not to any provision of this Agreement, and the words "Article", "Section",
"Schedule" and "Exhibit" shall refer to Articles and Sections of, and Schedules
and Exhibits to, this Agreement unless otherwise specified.
(iii) Whenever the context so requires, the neuter gender includes the
masculine or feminine, the masculine gender includes the feminine, and the
singular number includes the plural, and vice versa.
(iv) Any item or list of items set forth following the word "including",
"include" or "includes" is set forth only for the purpose of indicating that,
regardless of whatever other items are in the category in which such item or
items are "included", such item or items are in such category, and shall not be
construed as indicating that the types of items in the category in which such
item or items are "included" are limited to such items or to items similar to
such items.
(v) Except as otherwise specified herein, all references herein to the Bank
or any Loan Party shall be deemed to refer to such Person however designated in
Loan Documents, so that (i) a reference to rights of the Bank under the Loan
Documents shall be deemed to include the rights of such Person as the Secured
Party under the Security Agreement, (ii) a reference to costs incurred by the
Bank in connection with the Loan Documents shall be deemed to include costs
incurred by such Person as the Secured Party under the Security Agreement and
(ii) a reference to the obligations of the Borrower under the Loan Documents
shall be deemed to include the obligations of such Person as the "Pledgor" under
the Security Agreement.
(vi) Except as otherwise specified therein, all terms defined in this
Agreement shall have the meanings herein ascribed to them when used in the Notes
or any certificate, opinion or other document delivered pursuant hereto.
Section 9.02. Accounting Matters. Unless otherwise specified herein,
------------------
all accounting determinations hereunder and all
<PAGE>
CUSIP NO. 894081 10 8 Page 76 of 87
----------- ---- ----
computations utilized by the Borrower in complying with the covenants contained
herein shall be made, all accounting terms used herein shall be interpreted, and
all financial statements required to be delivered hereunder shall be prepared,
in accordance with Generally Accepted Accounting Principles, except, in the case
of such financial statements, for departures from Generally Accepted Accounting
Principles that may from time to time be approved in writing by the independent
certified public accountants who are at the time, in accordance with Section
5.01(b), reporting on the Borrower's financial statements.
Section 9.03. Representations and Warranties. All Representations
------------------------------
and Warranties shall be deemed made (a) in the case of any Representation and
Warranty contained in this Agreement at the time of its initial execution and
delivery, at and as of the Agreement Date, (b) in the case of any Representation
and Warranty contained in this Agreement or any other document at the time any
Loan is made, at and as of such time and (c) in the case of any particular
Representation and Warranty, wherever contained, at such other time or times as
such Representation and Warranty is made or deemed made in accordance with the
provisions of this Agreement or the document pursuant to, under or in connection
with which such Representation and Warranty is made or deemed made.
Section 9.04. Captions. Captions to Articles, Sections and
--------
subsections of, and Schedules and Exhibits to, this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or in any way affect the meaning or construction of any
provision of this Agreement.
<PAGE>
CUSIP NO. 894081 10 8 Page 77 of 87
----------- ---- ----
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the Agreement Date.
HYPERION PARTNERS II L.P.,
a Delaware limited partnership
By: Hyperion Ventures II L.P.
Its General Partner
By: HYPERION FUNDING II CORP.
Its General Partner
By: /s/Scott A. Shay
----------------
Name: Scott A. Shay
Title: Executive Vice
President
THE BANK OF NEW YORK
By: /s/Robert A. Tweed
------------------
Name: Robert A. Tweed
Title: Vice President
Agreement Date: August 15, 1995
<PAGE>
CUSIP NO. 894081 10 8 Page 78 of 87
----------- ---- ----
EXHIBIT VIII
FORM OF AGREEMENT
HYPERION PARTNERS II L.P.
Security Agreement
Dated as of August 15, 1995
THE BANK OF NEW YORK (the "Secured Party") and
HYPERION PARTNERS II L.P. (the "Debtor"), hereby agree as follows:
WHEREAS, Debtor and Secured Party entered into a Secured Credit
Agreement dated as of August 15, 1995 (as amended from time to time, the "Credit
Agreement"), pursuant to which the Secured Party has committed to extend to the
Debtor, and the Debtor may obtain from the Secured Party, credit in the form of
Loans in the aggregate principal amount not to exceed the amount specified
therein (the "Commitment"), and Debtor has executed and delivered to the Secured
Party a promissory note dated as of August 15, 1995 in the aggregate principal
amount of the Commitment bearing interest as set forth in the Credit Agreement
(as amended or substituted from time to time, the "Note"). This Agreement, the
Credit Agreement, the Note, and all other agreements, documents and instruments
relating to, arising out of, or in any way connected with any of the foregoing,
the "Loan Documents". All debts, liabilities and obligations evidenced by or
arising hereunder or by or under any of the Loan Documents, including any
extensions, renewals, refinancing or changes in form thereof, are hereinafter
referred to as the "Obligations"; other terms used but not defined herein that
are defined in the Credit Agreement are used with the meanings there ascribed to
them;
WHEREAS, as security for the Obligations, Debtor has agreed to
collaterally assign, grant and set over to Secured Party, and the Secured Party
shall have a security interest in and to, all of Debtor's right, title and
interest in and to the Collateral (as defined below).
NOW THEREFORE, the parties hereto agree as follows:
1. As security for the timely payment and performance of the
Obligations, Debtor does hereby collaterally assign, grant, and set over to
Secured Party, and Secured Party shall have a security interest in and to, all
of Debtor's right, title and interest in and to the following (collectively, the
<PAGE>
CUSIP NO. 894081 10 8 Page 79 of 87
----------- ---- ----
"Collateral"): (i) the Pledged Capital Commitments, (ii) the Certificate of
Deposit, (iii) the Pledged Account, together with all instruments, money or
other property held therein or credited thereto, (iv) the Pledged Instruments
and (v) all proceeds of any of the foregoing, including but not limited to all
amounts which are withheld by the Debtor (whether by right of set-off or
otherwise) from amounts that otherwise would have been payable by the Debtor
(whether under the Borrower's Partnership Agreement or otherwise) and which are
applied to reduce amounts payable to the Debtor in respect of any Pledged
Capital Commitments. The Debtor agrees that the security interest granted
hereunder, shall at all times be valid, perfected and enforceable against the
Debtor and all third parties, in accordance with the terms hereof and thereof,
as security for the Obligations, and that the Collateral shall not at any time
be subject to any lien or security interest that is prior to, on a parity with
or junior to such security interest.
2. At any time and from time to time, upon the request of Secured
Party, Debtor will give, execute, file and/or record any notice, financing
statement, continuation statement, instrument, document or agreement that
Secured Party may consider necessary or desirable to create, preserve, continue,
perfect or validate any security interest granted hereunder or which Secured
Party may consider necessary or desirable to exercise or enforce its rights
hereunder with respect to such interest. Without limiting the generality of the
foregoing, Secured Party is authorized to file, with respect to the Collateral,
one or more financing statements, continuation statements or other documents
without the signature of Debtor and to name therein Debtor as debtor and Secured
Party as secured party, or to correct or complete, or caused to be corrected or
completed any financing statements, continuation statements or other such
documents as have been signed by Debtor and/or have been filed naming Debtor as
debtor and Secured Party as secured party. The Debtor hereby (i) agrees that
each Pledged Instrument will be held through The Bank of New York as a financial
intermediary (as defined in the Uniform Commercial Code as in effect in the
State of New York) and (ii) authorizes The Bank of New York to mark its books
and records so as to identify such Pledged Instrument as subject to the security
interest of the Secured Party hereunder and to confirm such pledge by notice to
the Secured Party.
3. Debtor represents (a) that all information provided in the
Questionnaire, attached hereto as Schedule B, is true and complete in all
material respects and contains no material misrepresentations or omissions; (b)
that, as of the date hereof, it has full right, title and interest to the entire
Unused Capital Commitment pursuant to the terms and conditions of the Borrower's
Partnership Agreement free and clear of all liens
<PAGE>
CUSIP NO. 894081 10 8 Page 80 of 87
----------- ---- ----
and encumbrances and, thereafter, it is in compliance with the fifth sentence of
paragraph 3; and (c) that the Pledged Capital Commitments are fully assignable,
to the extent purported to be assigned hereunder, by the Debtor and, upon the
effectiveness of this Agreement shall constitute legal, valid, binding and
enforceable obligations of the Limited Partners under all circumstances subject
to no enforceable right of off-set, defense or counterclaim of any kind. Debtor
shall maintain its chief executive office, and if different from its chief
executive office, each office where books and records relating to the Collateral
are kept only at, and shall keep such books and records only at or in transit
to, (x) a location specified therefor in the Questionnaire (attached as Schedule
--------
B) or (y) a location that (A) is within one of the 50 states of the United
- -
States (other than the State of Louisiana) or the District of Columbia, and (B)
with respect to the Collateral and the security interest therein, conforms to
the requirements of the last sentence of Section 1, and (C) the Secured Party
has approved in writing. Debtor shall not change its name or organizational
structure without giving the Secured Party 60 days' prior written notice.
Debtor shall (a) at all times be the owner of the Collateral free from any
right, title or interest in any third party and defend the Collateral against
the claims and demands of all third parties, and (b) take all action and obtain
all consents and government approvals required so that its Obligations with
respect to the Collateral will at all times be legal, valid, binding and
enforceable in accordance with the terms of the Loan Documents. Debtor or the
general partner of the Debtor, Hyperion Ventures II L.P. (the "General Partner")
shall, at any time during the period when any Obligations remain outstanding,
(x) not allow the excess of the aggregate Unused Capital Commitments of the
Limited Partners over the liabilities of the Limited Partners referred to under
Section 3.4.1 of the Borrower's Partnership Agreement (other than such
liabilities with respect to the principal and accrued interest under the Credit
Agreement), to be less than two hundred percent (200%) of the Commitment and (y)
keep free from any Lien (other than the Liens of the security interest
hereunder) an amount of the aggregate Unused Capital Commitments equal to at
least two hundred percent (200%) of the Commitment. Debtor has delivered to
Secured Party prior to the first borrowing under the Credit Agreement (i) the
Certificate of Deposit, together with an assignment thereof, and/or Eligible
Pledged Instruments, in each case in the amounts set forth on Schedule A, and
(ii) duly authorized and signed draw requests, in the form of Schedule C,
----------
addressed to each Limited Partner (other than ) in the
aggregate amount of, when added to the instruments specified in clause (i),
$13,000,000. The Debtor hereby authorizes the Secured Party, in accordance with
the terms of paragraph 6 of this Security
<PAGE>
CUSIP NO. 894081 10 8 Page 81 of 87
----------- ---- ----
Agreement, to date and deliver each of the draw requests specified in clause
(ii) of the immediately preceding sentence (or any substitutes therefor or
additions thereto delivered in connection with a Permitted Partnership Transfer
or a Permitted Partnership Admission) to the General and Limited Partners of the
Debtor on behalf of the Debtor upon an Event of Default (as defined below).
Secured Party shall notify Debtor of its mailing of such notices no later than
the date on which Secured Party sends such notices. In the event the term of
the Certificate of Deposit expires or any Eligible Pledged Instrument matures
prior to the Termination Date, Debtor shall (x) renew such Certificate of
Deposit for a term or terms, in its discretion, not to exceed the period
remaining between the date of expiration and the Termination Date and/or (y)
deposit additional Eligible Pledged Instruments in the Pledged Account, in an
aggregate amount for all such Certificates of Deposit and Eligible Pledged
Instruments equal to $562,009. So long as no Event of Default has occurred and
is continuing, interest on the Certificate of Deposit shall be paid to Debtor or
its designee from time to time as earned.
4. (a) Debtor further represents that the General Partner is vested
with full, exclusive and complete right, power and discretion to operate, manage
and control the affairs and business of the Debtor including the right to borrow
money or guarantee loans to the extent permitted by Section 5.1.2 of the
Borrower's Partnership Agreement and to secure such borrowing with Debtor's
assets, including an assignment by Debtor of its right to receive the Unused
Capital Commitments from time to time of all of its partners, in accordance with
such Section;
(b) Debtor hereby agrees not to set-off against any Partner's Pledged
Capital Commitment any amounts owed to such Partner by or on behalf of the
Debtor; and
(c) Debtor further represents and warrants that, as of the date
hereof, there are no outstanding and unpaid notices of the kind contemplated by
clause (x), (y) and (z) of Section 3.3.1(a), or clause (d) of Section 3.5, of
the Borrower's Partnership Agreement, and hereby agrees to deliver to the
Secured Party a copy of each such notice now or hereafter delivered to any
Limited Partner, together with the certificate of any officer of the general
partner of the General Partner, dated as of the date of such notice, listing
each Partner and stating (i) the amounts of each Partner's, and the aggregate,
(A) Capital Commitment; (B) Unused Capital Commitment and (C) Pledged Capital
Commitment; and (ii) the calculations used in computing the absence of an Event
of Default under Section 5(b), to be delivered to the Secured Party
simultaneously with delivery of such notice to such Partner; and
<PAGE>
CUSIP NO. 894081 10 8 Page 82 of 87
----------- ---- ----
(d) Debtor and the General Partner further represent that no action
has been taken or, to the best of their knowledge, is contemplated to be taken,
by any general or limited partner of the Debtor, to dissolve or liquidate the
Debtor, and the General Partner hereby agrees to take no such action so long as
any Obligations remain outstanding hereunder.
(e) In addition to any other representations or warranties made in the
Loan Documents, the Debtor hereby represents and warrants as follows (each such
representation and warranty being a representation and warranty made in the Loan
Documents):
(i) No filing, recording, refiling or rerecording is necessary to
perfect the security interest in the Pledged Capital Commitments, other than the
filing of the four UCC-1 financing statements, copies of which are hereto
attached as Schedules D (1-4);
(ii) Upon the filing of such UCC-1 statements, its taking possession
of the Certificate of Deposit and the marking of the books and records of the
Bank as contemplated in the last sentence of Section 2 above, the Secured Party
shall have a perfected security interest in the Collateral and the Collateral is
and will be free of any other security interest, lien or other encumbrance that
is prior to, on parity with or subordinate to the security interest granted
under the Security Agreement; and
(iii) No Loan Party nor any affiliate thereof is an investment company
or a company controlled by an investment company, within the meaning of the
Investment Company Act of 1940.
5. Each of the following shall constitute an event of default ("Event
of Default") hereunder: (a) an Event of Default under the Credit Agreement; (b)
if a notice contemplated by clause (x), (y) and (z) of Section 3.3.1(a), or
clause (d) of Section 3.5, of the Borrower's Partnership Agreement is issued,
which, when aggregated with the payments contemplated by all other such notices
actually issued, would, if paid, cause the excess of the aggregate Unused
Capital Commitments (as defined in Section 3.3.4 of the Borrower's Partnership
Agreement) of the Limited Partners, over the aggregate liabilities of the
Limited Partners referred to under clause (iii) of Section 3.4.1 of the
Borrower's Partnership Agreement (other than such liability with respect to
principal and accrued interest under the Credit Agreement), to be less than two
hundred percent (200%) of the outstanding unpaid principal plus accrued and
unpaid interest due under the Credit Agreement; or (c) a violation of the fifth
sentence of paragraph 3.
<PAGE>
CUSIP NO. 894081 10 8 Page 83 of 87
----------- ---- ----
6. If an Event of Default shall occur, then all Obligations shall
become immediately due and payable and Secured Party may avail itself of all
rights and remedies granted to a secured party under the Uniform Commercial Code
as in force and effect in the State of New York. Without limiting the
foregoing, upon an Event of Default, Secured Party shall have the right, either
(a) to date and deliver, on behalf of the General Partner, notice in the form of
Schedule C hereto (such notice having been executed in blank by the General
Partner and delivered herewith), or (b) to cause Debtor to deliver the written
notice contemplated by clause (z) of Section 3.3.1(a) of the Borrower's
Partnership Agreement and, if, as of the close of the tenth day immediately
following the delivery of such notice, the outstanding Obligations shall not
have been paid in full, for whatever reason, including but not limited to the
default of any Limited Partner with respect to the payment of its Pledged
Capital Commitment, then, the General Partner shall (i) in the event of a
defaulting Limited Partner, immediately deliver the notice of default
contemplated by Section 3.5 of the Partnership Agreement and, if, within five
days thereafter, such defaulting Partner shall not make payment in full,
immediately deliver to the remaining Partners the notice contemplated by clause
(d) of Section 3.5 of the Partnership Agreement; or (ii) in the event of no
defaulting Partner, immediately deliver a new notice under clause (z) of Section
3.3.1(a) of the Borrower's Partnership Agreement. The Debtor hereby represents
that the notices referred to in clause (a) of this Section 6, as executed and
delivered herewith, when delivered by the Secured Party to the Partners in
accordance with such clause (a)(i), shall have the full force and effect of, and
shall be binding upon and enforceable against the Partners to the same extent
as, a valid and enforceable notice delivered by the General Partner pursuant to
clause (z) of Section 3.3.1(a) of the Borrower's Partnership Agreement. Debtor
shall be liable for reasonable attorneys' fees and legal expenses and other
costs of collection, if any, incurred by Secured Party in enforcing any of its
rights or remedies under this Agreement.
7. Failure of the Secured Party to exercise any right or remedy
under this Agreement or any other Loan Documents, or otherwise, or delay by
Secured Party in exercising same, will not operate as a waiver thereof. No
waiver by Secured Party will be effective unless and until it is in writing and
signed by Secured Party. Secured Party shall have no obligation to resort to
the Collateral or any other security which is or may become available to it;
provided, however, that Secured Party shall have recourse only against Debtor
and shall have no recourse for the payment of any of the Obligations or for any
claim based hereon or on the Note (including, without limitation, all covenants,
representations and warranties contained herein or therein)
<PAGE>
CUSIP NO. 894081 10 8 Page 84 of 87
----------- ---- ----
against the General Partner or any of the Limited Partners other than recourse
to the Collateral or any other collateral which is or may be available to it.
8. This Agreement and any amendments or replacements hereof and
thereof, and the legality, validity and performance of the terms hereof and
thereof, shall be governed by and enforced, determined and construed in all
respects in accordance with the internal laws of the State of New York without
regard to its conflict of laws rules.
9. This Agreement and any amendments hereof or replacements
hereof and, the rights, powers and duties set forth herein shall be binding upon
Debtor, its successors and assigns and shall inure to the benefit of Secured
Party, its successors and assigns.
10. In the event any provision of this Agreement is deemed
unenforceable in part by a court of competent jurisdiction, said provision shall
be modified by the court so as to make it enforceable. Provisions deemed
entirely unenforceable by such a court shall be severed and the remainder of the
Agreement shall remain in full force and effect.
11. Notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to be sufficiently given when
sent by overnight courier or registered mail, postage prepaid addressed if to
Debtor, at 50 Charles Lindbergh Blvd., Suite 500, Uniondale, New York 11553,
Attention: Lewis S. Ranieri, with a copy to Robert A. Perro or if to the Secured
Party, to The Bank of New York, One Wall Street, New York, New York 10286,
Attention: Robert A. Tweed, Vice President, or in either case, to such address
furnished by the appropriate party by notice given in accordance with this
paragraph.
12. Upon payment in full in cash of all the Obligations, this
Agreement and the assignment of the remaining Collateral hereunder shall
terminate and all notices delivered to the Secured Party pursuant to Paragraph 3
of this Agreement, and the Certificate of Deposit, the Pledged Account and the
Pledged Instruments shall be returned to the Debtor.
13. This Agreement contains the entire agreement between Debtor
and Secured Party, with respect to its subject matter, and supersedes any and
all prior agreements, arrangements or understandings between Debtor and Secured
Party.
14. All issues with respect to the construction of any Loan
Document, and the rights and liabilities of the parties
<PAGE>
CUSIP NO. 894081 10 8 Page 85 of 87
----------- ---- ----
thereto shall be determined in accordance with the applicable provisions of the
internal laws of the State of New York, without regard to the principles of
conflicts of law.
15. As used in this Security Agreement, the following terms are
defined as follows:
"Admitted Partner" means a Limited Partner admitted to the Partnership
----------------
after the Agreement Date.
"Assignee Substituted Limited Partner" means (i) a Substituted Limited
------------------------------------
Partner that is an assignee of a Limited Partner listed on Schedule A hereto or
----------
(ii) a Substituted Limited Partner that is an assignee of any Person that is an
Assignee Substituted Limited Partner by virtue of any provision of this
definition, including this subclause (ii).
"Collateral" is defined in Section 1(a), hereof.
----------
"Certificate of Deposit" means any certificate of deposit issued by
----------------------
The Bank of New York to the Debtor and substitutions therefor and modifications
or extensions thereof.
"Pledged Account" means the custody account, having account number
---------------
920046, of the Debtor held at The Bank of New York, and any other custody
account from time to time designated by the Debtor in writing to the Bank.
"Pledged Capital Commitment" means, at any time, whether now existing
--------------------------
or hereafter arising, to the extent set forth in Schedule A, (i) the Unused
----------
Capital Commitment obligation of the General Partner and of each Limited Partner
of Debtor, (ii) the Unused Capital Commitment obligation of any Assignee
Substituted Limited Partner in respect of a transferred Unused Capital
Commitment, (iii) the Unused Capital Commitment obligation of any Admitted
Partner and (iv) the obligation for any Unused Capital Commitment (or any part
thereof) of any other Person(s) who may be obligated to the Debtor in respect of
an Unused Capital Commitment (or any part thereof) (whether under and pursuant
to the Borrower's Partnership Agreement or otherwise, and whether directly or
indirectly, individually or jointly and severally, actually or contingently, or
otherwise, and whether or not such obligation arose by Transfer or otherwise,
and whether or not any such Transfer was a Permitted Partnership Transfer) and,
in each case, their successors and assigns, including, the right of the Debtor
to demand and receive payments from time to time from each such General Partner,
Limited Partner, Assignee Substituted Limited Partner, and/or each such other
Person in respect of its Unused Capital Commitment in order to perform the
Debtor's obligations for any
<PAGE>
CUSIP NO. 894081 10 8 Page 86 of 87
----------- ---- ----
borrowing made by the Debtor in accordance with Sections 3.3.1(a) and 5.1.2 of
the Borrower's Partnership Agreement.
"Pledged Instrument" means each United States Treasury Security and
------------------
each other security or instrument which is deposited in or credited to the
Pledged Account.
"Schedule A" means, at any time, the Schedule A attached hereto as it
---------- ----------
may be revised from time to time in connection with Permitted Partnership
Transfers and Permitted Partnership Admissions.
"Substituted Limited Partner" has the meaning ascribed to that term in
---------------------------
the Borrower's Partnership Agreement.
"Unused Capital Commitment" has the meaning ascribed to that term in
-------------------------
Section 3.3.4 of the Borrower's Partnership Agreement.
<PAGE>
CUSIP NO. 894081 10 8 Page 87 of 87
----------- ---- ----
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
HYPERION PARTNERS II L.P.,
a Delaware limited partnership
By: Hyperion Ventures II L.P.
Its General Partner
By: Hyperion Funding II Corp.
Its General Partner
By: ______________________________
Name: Scott A. Shay
Title: Executive Vice
President
HYPERION VENTURES II L.P., agreeing with
respect to Section 4(d) only
By: Hyperion Funding II Corp.
Its General Partner
By: ______________________________
Name: Scott A. Shay
Title: Executive Vice
President
THE BANK OF NEW YORK
By: ______________________________
Name: Robert A. Tweed
Title: Vice President
