SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Coram Healthcare Corporation
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(Name of Issuer)
Common Stock (par value $0.001 per share)
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(Title of Class of Securities)
218103109
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(CUSIP Number)
Barbara Sherman, Esq.
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000
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(Name, address and telephone number of person authorized
to receive notices and communications)
June 30, 1998
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(Date of Event which requires Filing of this Statement)
If a 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 [ ].
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.
<PAGE>
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CUSIP NO. 21810310
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- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman Sachs Credit Partners, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO [See Item 3.]
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES ------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 13,320,844
EACH ------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
13,320,844
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,320,844
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.4%
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14. TYPE OF REPORTING PERSON
PN
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<PAGE>
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CUSIP NO. 21810310
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman Sachs Global Holdings L.L.C.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO [See Item 3.]
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES ------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 13,320,844
EACH ------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH ------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
13,320,844
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,320,844
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.4%
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14. TYPE OF REPORTING PERSON
OO
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<PAGE>
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CUSIP NO. 21810310
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Goldman Sachs Group, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF - OO [See Item 3.]
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 13,499,850
EACH -------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
13,499,850
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,499,850
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.7%
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14. TYPE OF REPORTING PERSON
HC-PN
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<PAGE>
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CUSIP NO. 297025108
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- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF - OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ X ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 13,499,850
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
13,499,850
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
13,499,850
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.7%
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14. TYPE OF REPORTING PERSON
BD-PN-IA
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<PAGE>
SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
CORAM HEALTHCARE CORPORATION
Item 1. Security and Issuer.
This Statement on Schedule 13D relates to the Common Stock, par value
$.001 per share (the "Common Stock"), of Coram Healthcare Corporation, a
Delaware corporation (the "Company").
The principal executive offices of the Company are located at 1125 17th
Street, Suite 2100, Denver, Colorado, 80202.
Item 2. Identity and Background.
This Statement is being filed by Goldman Sachs Credit Partners, L.P.
("GSCP"), Goldman Sachs Global Holdings L.L.C. ("GSGH"), Goldman, Sachs & Co.
("GS&Co."), and The Goldman Sachs Group, L.P. ("GS Group"), together with GSCP,
GSGH and GS&Co. the "Filing Persons".1
As of June 30, 1998, GSCP owned (i) $52,837,117.31 principal amount of
Series A Subordinated Notes due 2000 (the "Subordinated Notes") and
$30,970,375.22 principal amount of Series B Convertible Subordinated Notes due
2008 (the "Convertible Notes") directly and (ii) $15,341,104.08 principal amount
of Subordinated Notes and $8,992,158.80 principal amount of Convertible Notes
subject to a Risk Participation Agreement (described under Item 3 below). The
Convertible Notes are held directly and indirectly by GSCP and are convertible
into 13,320,844 shares of Common Stock of the Company (representing 21.4% of the
Common Stock outstanding), subject to certain antidilution adjustments.
As of June 30, 1998, GS&Co. owned warrants giving GS&Co. the right to
acquire 178,427 shares (subject to antidilution and other adjustments) of
Common Stock of the Company (the "Warrant Shares") exercisable on or before
October 13, 2000 at the exercise price of an amount equal to the par value of
such Warrant Share (i.e., $0.001 per share).
As of June 30, 1998, GS&Co. and GS Group beneficially own 579 shares of
Common Stock of the Company held in client accounts with respect to which GS&Co.
or employees of GS&Co. have voting or investment discretion, or both ("Managed
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1 Neither the present filing nor anything contained herein shall be construed
as an admission that any Filing Person constitutes a "person" for any
purposes other than Section 13(d) of the Securities Exchange Act of 1934 or
that the Filing Persons constitute a "group" for any purpose.
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<PAGE>
Accounts"). GS&Co. and GS Group each disclaims beneficial ownership of shares of
Common Stock held in Managed Accounts.
GSCP, a Bermuda limited partnership, was formed for the purpose of
providing bank debt financing and trading and investing in bank loans, trade
claims and other loans and loan instruments. GSGH, a Delaware limited liability
company, is the sole general partner of GSCP. The managing member of GSGH is GS
Group. The principal business address of GSCP is Conyers, Dill & Pearman, Church
Street, Hamilton HM CX, Bermuda. The principal business address of GSGH is 85
Broad Street, New York, NY 10004.
GS&Co., a New York limited partnership, is an investment banking firm
and a member of the New York Stock Exchange, Inc. and other national exchanges.
GS Group, one of the general partners of GS&Co., owns a 99% interest in GS&Co.
GS Group is a Delaware limited partnership and holding partnership that
(directly and indirectly through subsidiaries or affiliated companies or both)
is a leading investment banking organization. The other general partner of
GS&Co. is The Goldman Sachs & Co. L.L.C., a Delaware limited liability company
("GS L.L.C."), which is a wholly-owned subsidiary of GS Group and The Goldman
Sachs Corporation, a Delaware corporation ("GS Corp."). GS Corp. is the sole
general partner of GS Group. The principal business address of each of GS&Co.,
GS Group, GS L.L.C. and GS Corp. is 85 Broad Street, New York, NY 10004.
The name, business address, present principal occupation or employment
and citizenship of each director of GS Corp. and GS L.L.C. and of each member of
the executive committees of GS Corp., GS L.L.C., GS&Co. and GS Group are set
forth in Schedule I hereto and are incorporated herein by reference. The name,
business address, present principal occupation or employment and citizenship of
each director and each executive officer of GSCP and GSGH are set forth in
Schedule II hereto and are incorporated herein by reference.
During the last five years, none of the Filing Persons, or, to the
knowledge of each of the Filing Persons, any of the persons listed on Schedule I
or II hereto, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) except as set forth in Schedule III
to this Schedule 13D, has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
In April 1997, GSCP and certain other parties, collectively the
"Noteholders," became parties to a Securities Purchase Agreement, dated April 6,
1995,
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<PAGE>
with Coram Inc., a Delaware corporation ("Coram"), and the Company, as amended
and supplemented by letter agreements dated October 13, 1995, March 31, 1996,
March 28, 1997 and March 29, 1998 pursuant to which GSCP acquired $68,883,070
principal amount of senior subordinated increasing rate notes of Coram (the
"Subordinated Rollover Notes") and approximately 1,269,500 warrants issued by
the Company to the Noteholders pursuant to the Warrant Agreement dated April 6,
1995 between the Company and Coram Funding, Inc. (the "Warrants").
On April 22, 1997 GSCP entered, as the risk participant, into the Risk
Participation Agreement dated as of April 22, 1997 (the "Risk Participation
Agreement") with Cerberus as seller. Through the Risk Participation Agreement
GSCP obtained indirect ownership of an additional $20,000,000 principal amount
of Subordinated Rollover Notes and approximately 368,596 additional Warrants.
In order to refinance the Subordinated Rollover Notes and Warrants, the
Company, Coram and the Noteholders entered into the Securities Exchange
Agreement dated May 6, 1998 (the "Securities Exchange Agreement") pursuant to
which the Subordinated Rollover Notes and Warrants were exchanged for
$150,000,000 principal amount of Subordinated Notes, $87,922,213 principal
amount of Convertible Notes, and $4,300,000 (payable on the earlier of the
closing of the transactions under the Senior Loan Agreement described under Item
4 below and 90 days following the closing of the transactions under the
Securities Exchange Agreement). The transactions under the Securities Exchange
Agreement closed on June 30, 1998. Following the transactions under the
Securities Exchange Agreement, GSCP owned (i) $52,837,117.31 principal amount of
Subordinated Notes and $30,970,375.22 principal amount of Convertible Notes
directly and (ii) $15,341,104.08 principal amount of Subordinated Notes and
$8,992,158.80 principal amount of Convertible Notes subject to the Risk
Participation Agreement. The Convertible Notes held directly and indirectly by
GSCP entitle GSCP to 13,320,844 shares of Common Stock of the Company
(representing 21.4% of the Common Stock outstanding), subject to certain
antidilution adjustments.
As of June 30, 1998, GS&Co. owned warrants giving GS&Co. the right to
acquire 178,427 shares (subject to antidilution and other adjustments) of Common
Stock of the Company exercisable on or before October 13, 2000 at the exercise
price of an amount equal to the par value of such Warrant Share (i.e., $0.001
per share).
As of June 30, 1998 GS&Co. and GS Group beneficially owned 579 shares
of Common Stock of the Company which were held in Managed Accounts and which
were acquired in the ordinary course of business. The funds used to purchase
shares of Common Stock in Managed Accounts came from client funds.
None of the persons listed on Schedules I or II hereto has contributed
any funds or other consideration towards the purchase of the securities of the
Company, except insofar as they may be general or limited partners of the
limited partnerships of
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<PAGE>
GS&Co., GS Group or GSCP and have made capital contributions to such limited
partnerships, as the case may be.
Item 4. Purpose of the Transaction.
The Convertible Notes and the Subordinated Notes obtained by GSCP
pursuant to the Securities Exchange Agreement were acquired in connection with
the refinancing of the Subordinated Rollover Notes and Warrants as described
above in Item 3. The warrants entitling GS&Co. to 178,427 Warrant Shares were
acquired in 1995 by GSCP upon the amendment of a senior loan facility to which
GSCP and the Company were party and were transferred by GSCP to GS&Co. The 579
shares of Common Stock beneficially owned by GS&Co. for the Managed Accounts
were acquired for investment purposes.
Each Filing Person expects to evaluate on an ongoing basis the
Company's financial condition, business operations and prospects, the market
price of the Common Stock, conditions in the securities markets generally,
general economic and industry conditions and other factors. Accordingly, each
Filing Person reserves the right to change its plans and intentions at any time,
as it deems appropriate. In particular, each Filing Person may, subject to the
restrictions discussed in Item 6 below and the restrictions contained in the
Securities Act of 1933 (the "Securities Act"), at any time and from time to time
acquire additional shares of Common Stock or securities convertible or
exchangeable for Common Stock in public or private transactions; dispose of
shares of Common Stock or other securities in public or private transactions;
and/or enter into privately negotiated derivative transactions with
institutional counterparties to hedge the market risk of some or all of its
positions in the Common Stock or other securities. Any such transactions may be
effected at any time and from time to time. To the knowledge of each Filing
Person, each of the persons listed on Schedules I, II-A and II-B hereto may make
the same evaluation and may reserve the same rights.
On June 30, 1998 the Company, Coram and the Noteholders entered into
Amendment No. 1 and Waiver to the Securities Exchange Agreement. Pursuant to the
Securities Exchange Agreement, as amended, the parties agreed to use their best
efforts to enter into a senior loan agreement providing for senior secured loans
to be used by Coram for acquisitions, working capital, letters of credit, and
general corporate requirements in a form approved by the Noteholders (the
"Senior Loan Agreement") as soon as practicable following June 30, 1998, and in
any event on or prior to September 30, 1998. In connection with such Senior Loan
Agreement new warrants to purchase up to 2,000,000 shares of Common Stock of the
Company, exercisable at an exercise price of $0.01, will be issued to the
Noteholders.
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<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) As of June 30, 1998, the aggregate of shares owned and shares for
which there is a right to acquire by GSCP and GS&Co., except for the shares for
which GS&Co. and GS Group have disclaimed beneficial ownership, is 13,499,271
shares of Common Stock, representing approximately 21.7% of the shares of Common
Stock reported to be outstanding in the Company's Quarterly Report on Form 10-Q
for the period ended March 31, 1998.
As of June 30, 1998, GSCP directly owns $30,970,375.22 principal amount
of Convertible Notes issued pursuant to the Securities Exchange Agreement and
indirectly owns an additional $8,992,158.80 principal amount of Convertible
Notes issued pursuant to the Securities Exchange Agreement and held subject to
the Risk Participation Agreement. As a result, GSCP beneficially owns 13,320,844
shares of Common Stock, representing approximately 21.4% of the shares of Common
Stock reported to be outstanding as of May 12, 1998 (as reported in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998
(the "Company's 10-Q")).
As of June 30, 1998, GS&Co. owned warrants giving GS&Co. the right to
acquire 178,427 shares (subject to antidilution and other adjustments) of Common
Stock of the Company, which upon exercise would represent approximately 0.4% of
the total diluted outstanding shares of Common Stock of the Company. In
addition, GS&Co. and GS Group may be deemed to own beneficially the 579 shares
of Common Stock held in Managed Accounts. GS&Co. and GS Group each disclaims
beneficial ownership of these shares of Common Stock held in Managed Accounts.
None of the Filing Persons beneficially own any shares of Common Stock
other than as set forth herein.
(b) Each Filing Person shares the power to vote or direct the vote and
to dispose or direct the disposition of shares of Common Stock beneficially
owned by such Filing Person as indicated in the second through fifth pages of
this filing.
(c) Except as set forth in Item 3 no transactions in the Common Stock
were effected by the Filing Persons or, to their knowledge, any of the persons
listed on Schedule I or II hereto, during the past 60 days.
(d) Other than as described in Item 3 with respect to the Risk
Participation Agreement and except for clients of Goldman Sachs who may have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, any shares of Common Stock held in Managed Accounts,
no person is known by any Filing Person to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
any shares of Common Stock beneficially owned by any Filing Person.
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<PAGE>
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
As described in Item 4 above, in Amendment No. 1 and Waiver to the
Securities Exchange Agreement, dated June 30, 1998, among the Company, Coram and
the Noteholders, the parties agreed to use their best efforts to enter into the
Senior Loan Agreement as soon as practicable following June 30, 1998, and in any
event on or prior to September 30, 1998. In connection with such Senior Loan
Agreement, new warrants to purchase up to 2,000,000 shares of Common Stock of
the Company, exercisable at an exercise price of $0.01, will be issued to the
Noteholders.
As of June 30, 1998, GS&Co. owned warrants with respect to the purchase
of shares of common stock of a wholly owned subsidiary of the Company.
On July 13, 1998 the Board of Directors of the Company, pursuant to the
Stockholder Rights Agreement dated as of June 25, 1997 (the "Stockholder Rights
Agreement"), gave its express written approval to GSCP and its affiliates to
acquire an aggregate beneficial ownership up to 25% of the outstanding common
stock of the Company as a "Minority Investor" under the Stockholder Rights
Agreement.
Except as described in this Schedule 13D, none of the Filing Persons
or, to the knowledge of the Filing Persons, any of the persons listed on
Schedule I or II hereto is a party to any contract, arrangement, understanding
or relationship with respect to any securities of the Company.
Item 7. Material to be filed as Exhibits.
(1) Not applicable.
(2) Not applicable.
(3) (a) The Securities Exchange Agreement, incorporated herein by
reference from the Company's Quarterly Report on Form 10-Q
for the period ended March 31, 1998;
(b) The Form of Series B Note of the Securities Exchange
Agreement, filed as Exhibit 99.1;
(c) The Amendment No.1 and Waiver to the Securities Exchange
Agreement, filed as Exhibit 99.2;
(d) The Risk Participation Agreement, filed as Exhibit 99.3;
(e) The Warrant for the Purchase of Shares of Common Stock dated
October 12, 1995, incorporated herein by reference from the
Company's Current Report on Form 8-K dated October 24, 1995.
(4) Powers of Attorney
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
Dated: July 14, 1998
THE GOLDMAN SACHS GROUP, L.P.
By: /s/ Hans-Linhard Reich
---------------------------------------
Name: Hans-Linhard Reich
Title: Attorney-in-fact
GOLDMAN, SACHS & CO.
By: /s/ Hans-Linhard Reich
---------------------------------------
Name: Hans-Linhard Reich
Title: Attorney-in-fact
GOLDMAN SACHS CREDIT
PARTNERS, L.P.
By: /s/ Hans-Linhard Reich
---------------------------------------
Name: Hans-Linhard Reich
Title: Attorney-in-fact
GOLDMAN SACHS GLOBAL
HOLDINGS L.L.C.
By: /s/ Hans-Linhard Reich
---------------------------------------
Name: Hans-Linhard Reich
Title: Attorney-in-fact
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<PAGE>
SCHEDULE I
The name of each director and of each member of the executive committee
of The Goldman Sachs Corporation and The Goldman, Sachs & Co. L.L.C. and of each
member of the executive committee of The Goldman Sachs Group, L.P. and Goldman,
Sachs & Co. is set forth below.
The business address of each person listed below except John L.
Thornton is 85 Broad Street, New York, NY 10004. The business address of John L.
Thornton is 133 Fleet Street, London EC4A 2BB, England. Each person is a citizen
of the United States of America. The present principal occupation or employment
of each of the listed persons is as a managing director of Goldman, Sachs & Co.
or another Goldman Sachs operating entity and as a member of the executive
committee.
Jon Z. Corzine
Henry M. Paulson, Jr.
Roy J. Zuckerberg
Robert J. Hurst
John A. Thain
John L. Thornton
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<PAGE>
SCHEDULE II
The name, position and present principal occupation of each director
and executive officer of Goldman Sachs Global Holdings L.L.C., which is the sole
general partner of Goldman Sachs Credit Partners, L.P., are set forth below.
The business address for all the executive officers and directors
listed below is 85 Broad Street, New York, New York 10004.
All executive officers and directors listed below are United States
citizens.
Name Position Present Principal Occupation
- ---- -------- ----------------------------
Robert J. Katz Director Managing Director of
Goldman, Sachs & Co.
Esta E. Stecher Director/Secretary Managing Director of
Goldman, Sachs & Co.
David A. Viniar Director Managing Director of
Goldman, Sachs & Co.
James B. McHugh Assistant Secretary Vice President of
Goldman, Sachs & Co.
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<PAGE>
SCHEDULE III
In Securities and Exchange Commission Administrative Proceeding File
No. 3-8282 In the Matter of Goldman, Sachs & Co., the Firm, without admitting or
denying any of the SEC's allegations, settled administrative proceedings
involving alleged books and records and supervisory violations relating to
eleven trades of U.S. Treasury securities in the secondary markets in 1985 and
1986. The SEC alleged that the Firm had failed to maintain certain records
required pursuant to Section 17(a) of the Exchange Act and had also failed to
supervise activities relating to the aforementioned trades in violation of
Section 15(b)(4)(E) of the Exchange Act.
The Firm was ordered to cease and desist from committing or causing any
violation of the aforementioned sections of the Exchange Act, pay a civil money
penalty to the SEC in the amount of $250,000 and establish policies and
procedures reasonably designed to assure compliance with Section 17(a) of the
Exchange Act and Rules 17a-3 and 17a-4 thereunder.
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POWER OF ATTORNEY
This power of attorney will expire December 31, 1999.
KNOW ALL PERSONS BY THESE PRESENTS that Goldman Sachs Credit Partners,
L.P. (the "Company") does hereby make, constitute and appoint each of
Hans-Linhard Reich and Roger S. Begelman, acting individually, its true and
lawful attorney, to execute and deliver in its name and on its behalf whether
the Company is acting individually or as representative of others, any and all
filings required to be made by the Company under the Securities Exchange Act of
1934, as amended, giving and granting unto each said attorney-in-fact power and
authority to act in the premises as fully and to all intents and purposes as the
Company might or could do if personally present by one of its authorized
signatories, hereby ratifying and confirming all that said attorney-in-fact
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly subscribed these presents
as of July 14, 1998.
Goldman Sachs Credit Partners, L.P.
By: Goldman Sachs Global Holdings L.L.C.
By: /s/ Esta E. Stecher
------------------------------------
Esta E. Stecher, Secretary
POWER OF ATTORNEY
This power of attorney will expire December 31, 1999.
KNOW ALL PERSONS BY THESE PRESENTS that Goldman Sachs Global Holdings
L.L.C. (the "Company") does hereby make, constitute and appoint each of
Hans-Linhard Reich and Roger S. Begelman, acting individually, its true and
lawful attorney, to execute and deliver in its name and on its behalf whether
the Company is acting individually or as representative of others, any and all
filings required to be made by the Company under the Securities Exchange Act of
1934, as amended, giving and granting unto each said attorney-in-fact power and
authority to act in the premises as fully and to all intents and purposes as the
Company might or could do if personally present by one of its authorized
signatories, hereby ratifying and confirming all that said attorney-in-fact
shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly subscribed these presents
as of July 14, 1998.
Goldman Sachs Global Holdings L.L.C.
By: /s/ Esta E. Stecher
-----------------------------------
Esta E. Stecher, Secretary
EXHIBIT A-2
FORM OF
SERIES B SENIOR SUBORDINATED CONVERTIBLE NOTE
$____________________ New York, New York
_____________, 1998
FOR VALUE RECEIVED, the undersigned, CORAM, INC., a Delaware
corporation ("Company"), hereby unconditionally PROMISES TO PAY to the order of
____________________________ ("Holder"), at ___________________ or at such other
place as the holder of this Series B Senior Subordinated Convertible Note (the
"Note") may designate from time to time in writing, in lawful money of the
United States of America and in immediately available funds, the principal
amount of ________________________, together with interest on the unpaid
principal amount of this Note outstanding from time to time from the date
hereof, at the rate provided in the Securities Exchange Agreement (as
hereinafter defined).
This Note is issued pursuant to that certain Securities Exchange
Agreement, dated as of May 6, 1998 between the Company and CORAM HEALTHCARE
CORPORATION, a Delaware corporation ("Holdings"), CERBERUS PARTNERS, L.P.,
GOLDMAN SACHS CREDIT PARTNERS L.P., and FOOTHILL CAPITAL CORPORATION, (the
"Securities Exchange Agreement"), and is entitled to the benefit of the Note
Documents provided for therein, to which reference is hereby made for a
statement of all of the terms and conditions under which the indebtedness
evidenced hereby is made. All capitalized terms, unless otherwise defined
herein, shall have the meanings ascribed to them in the Securities Exchange
Agreement.
This Note shall be convertible into shares of common stock of Holdings
in the manner and in the time set forth in the Securities Exchange Agreement.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Securities Exchange
Agreement and, if not sooner paid in full, on _________ __, 2008. Interest
thereon shall be paid until such principal amount is paid in full at such
interest rates and at such times as are specified in the Securities Exchange
Agreement.
If any payment on this Note becomes due and payable on a day other than
a Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
1
<PAGE>
Upon and after the occurrence of an Event of Default, this Note may, as
provided in the Securities Exchange Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.
Except as set forth in the Securities Exchange Agreement, demand,
presentment, protest and notice of nonpayment and protest are hereby waived by
Company.
This Note has been executed, delivered and accepted at New York, New
York and shall be interpreted, governed by and construed in accordance with, the
laws of the State of New York.
CORAM, INC.
By:
--------------------------------------
Name:
Title:
2
AMENDMENT NO. 1 AND WAIVER
TO
SECURITIES EXCHANGE AGREEMENT
AMONG
CORAM, INC.
CORAM HEALTHCARE CORPORATION
AND
CERBERUS PARTNERS, L.P.
GOLDMAN SACHS CREDIT PARTNERS L.P.
FOOTHILL CAPITAL CORPORATION
AS NOTEHOLDERS
DATED: JUNE 30, 1998
<PAGE>
Amendment No. 1 and Waiver (this "Amendment"), dated as of June 30,
1998, to the Securities Exchange Agreement dated as of May 6, 1998, among CORAM,
INC., a Delaware corporation (the "Company"), CORAM HEALTHCARE CORPORATION, a
Delaware corporation ("Holdings"), CERBERUS PARTNERS, L.P. ("Cerberus"), GOLDMAN
SACHS CREDIT PARTNERS L.P. ("GSCP") and FOOTHILL CAPITAL CORPORATION
("Foothill") (each a "Noteholder" and, together with any other holders from time
to time of interests in the Series A Notes or Series B Notes, collectively, the
"Noteholders"). Capitalized terms used herein shall have the respective meanings
assigned to them in the Securities Exchange Agreement.
W I T N E S S E T H :
WHEREAS, the condition precedent set forth in 7.1(l) of the Securities
Exchange Agreement (the "Financing Condition") has not as of the date hereof
been satisfied, and the Company and Holdings have not entered into the Senior
Loan Agreement;
WHEREAS, on June 30, 1998 the Original Noteholders offered to the
Company and Holdings to provide the senior loans contemplated by the Financing
Condition;
WHEREAS, the Original Noteholders have proposed and the Company and
Holdings have agreed to the Agreed Rate and the Agreed Terms (each as defined
below) with respect to such senior loans;
WHEREAS, on the date hereof the Board of Directors of Holdings approved
the Agreed Terms and the Agreed Rate and authorized the Company and Holdings to
agree to use their best efforts to negotiate in good faith towards definitive
documentation with respect to the Senior Loan Agreement as set forth below;
WHEREAS, on the basis of such agreement, the Noteholders have agreed to
waive the Financing Condition; and
WHEREAS, the Company, Holdings and the Noteholders have agreed to amend
the Securities Exchange Agreement and to enter into this Amendment upon the
terms and subject to the conditions contained herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments to the Securities Exchange Agreement. Upon the
satisfaction of the conditions in Section 3 of this Amendment relating to the
<PAGE>
effectiveness of Sections 1 and 2, the Securities Exchange Agreement is hereby
amended as follows:
(a) Section 1 is hereby amended by deleting the existing definitions of
"Home Healthcare Non Compete Agreement", "Initial Healthcare Non-Compete
Agreement", "New Healthcare Non-Compete Agreement", "Non-Compete Agreements",
"Note Documents", "Senior Loan Agreement", and "Stockholder Approval" and
replacing them with the following:
"Note Documents" shall mean this Agreement, the Notes, the
Registration Rights, the Holdings Guarantee and the Subsidiary
Guarantees.
"Senior Loan Agreement" shall mean the agreement to be entered
into among the Company as borrower, Holdings and the Subsidiaries named
therein as guarantors and the Original Noteholders as lenders (together
with any other financial institutions acceptable to the Original
Noteholders to which the credit provided for thereby may be syndicated
by them), providing for (i) senior secured loans to the Company bearing
interest at the Agreed Rate and having the other Agreed Terms and (ii)
the issuance to the Senior Lenders of the New Bank Warrants, such
senior secured loans to be used by the Company for acquisitions,
working capital, letters of credit and general corporate requirements.
"Stockholder Approval" and "Stockholder Approval Condition" shall
have the respective meanings set forth in Section 7.1(h).
(b)Section 1 is hereby amended by adding the following new definitions:
"Agreed Rate" shall mean, with respect to the Senior Loan
Agreement, an interest rate of the Chase Prime Rate plus 1.50% per
annum.
"Agreed Terms" shall mean, with respect to the Senior Loan
Agreement, (i) a final maturity date of 2 1/2 years from closing, (ii)
an upfront fee of 1.0% payable upon execution of the Senior Loan
Agreement (such upfront fee to replace the Advisory Fee and the
Arranger Fee referred to in the Chase Commitment Letter) and (iii)
2
<PAGE>
otherwise (other than with respect to the Agreed Rate) containing
substantially similar terms to the terms set forth in the Chase
Commitment Letter.
"Chase Commitment Letter" shall mean the commitment letter to
Holdings dated June 4, 1998 signed by The Chase Manhattan Bank and
includes the Outline of Terms and Fee Letter referred to therein.
"Chase Prime Rate" shall mean the rate defined as Chase's
Alternate Base Rate ("ABR") in the Chase Commitment Letter.
"New Bank Warrants" shall mean the warrants to purchase up to 2.0
million shares of Common Stock of Holdings, exerciseable at an exercise
price of $0.01, issued to the Senior Lenders pursuant to the Senior
Loan Agreement.
(c) Section 5 is hereby amended by deleting Section 5.12 and replacing
it with the following:
"5.12 Senior Loan Agreement. Use its best efforts to enter into
the Senior Loan Agreement as soon as practicable following the Closing
Date, and in any event on or prior to September 30, 1998."
(d) Section 6 is hereby amended by adding new Sections 6.11 as follows:
"6.11 New Amaral Employment Agreement. Amend the terms of the New
Amaral Employment Agreement without the consent of the Required
Noteholders and each Original Noteholder so long as it continues to be
a Noteholder."
(e) Section 7.1(e) is hereby deleted and replaced with the following:
"(e) A copy of the articles or certificates of incorporation and
all amendments thereto of each of Holdings, the Company and the
Significant Subsidiaries, certified as of a recent date by the
Secretary of State of such party's jurisdiction of organization, and
copies of each such party's by-laws, certified by the Secretary or
Assistant Secretary of such party as true and correct as of the Closing
Date."
3
<PAGE>
(f) Section 7.1(f) is hereby deleted and replaced with the following:
"(f) The New Amaral Employment Agreement, duly executed by
Holdings, the Company and Donald Amaral (the condition precedent in
this paragraph being the "Employment Agreement Condition")."
(g) Section 7.1(k) is hereby deleted and replaced with the following:
"(k) Copies of all documentation evidencing all Indebtedness of
the Company existing on the Closing Date, the terms of which shall be
satisfactory to the Noteholders."
(h) Section 7.1(g) is hereby deleted.
(i) Section 8.1(n) is hereby deleted and replaced with the following:
"(n) the New Amaral Employment Agreement delivered pursuant to
Section 7.1(f) of this Agreement shall be terminated or shall otherwise
cease to be enforceable or in full force and effect or Donald Amaral
shall cease to be the chief executive officer of the Company for any
reason (other than by reason of his incapacitation of death; or upon
expiration of the original term of such agreement; or upon his removal
by majority vote of the Board of Directors of the Company in which the
Board member appointed by the Noteholders pursuant to Section 10 hereof
voted in favor of such removal (or if no board member has been
appointed pursuant to Section 10, the Required Holders have approved
such removal)); or"
(j) A new Section 8.1(o) is added as follows:
"(o) the Senior Loan Agreement shall not have been entered into,
or all conditions to funding under thereunder shall not have been
satisfied, on or prior to September 30, 1998;"
(k) Schedule 4.9 to the Securities Exchange Agreement is hereby
replaced with the amended Schedule 4.9 attached hereto as Exhibit A.
SECTION 2. Waiver. The Noteholders hereby waive compliance by the
Company and Holdings with the condition precedent set forth in Section 7.1(l) of
the Securities Exchange Agreement.
4
<PAGE>
SECTION 3. Representations and Warranties. Each of the Company and
Holdings hereby represents and warrants as to itself and the Coram Parties that
(a) the execution, delivery and performance of this Amendment have been duly
authorized by all necessary corporate action on the part of such Coram Party and
this Amendment and the Securities Exchange Agreement amended hereby each
constitutes a legal, valid and binding obligation of such Coram Party,
enforceable against it in accordance with its terms, (b) no event has occurred
and is continuing on the date hereof that constitutes a Default or Event of
Default or would constitute a Default or Event of Default after giving effect to
this Amendment, and (c) the representations and warranties of Holdings and the
Company contained in Section 4 of the Securities Exchange Agreement are true and
correct both before and after giving effect to this Amendment, except to the
extent such representations and warranties are stated to be true only as of a
particular date, in which case such representations and warranties were correct
on and as of such date.
SECTION 4. Conditions to Effectiveness. The amendments and waiver in
Sections 1 and 2 of this Amendment shall become effective on the date (the
"Effective Date") no later than June 30, 1998 when counterparts hereof shall
have been executed by each of the Noteholders, Holdings and the Company.
SECTION 5. Effect on the Securities Exchange Agreement. Except as
amended hereby, the Securities Exchange Agreement and the other Note Documents
shall remain in full force and effect. Nothing in this Amendment shall be deemed
to (i) except as set forth herein, constitute a waiver of compliance by any of
the Coram Parties of any term, provision or condition of the Securities Exchange
Agreement or any other instrument or agreement referred to therein or under the
Note Documents or (ii) prejudice any right or remedy that any Noteholder may now
have or may have in the future under or in connection with the Securities
Exchange Agreement or any other Note Document.
SECTION 6. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together constitute one and the same agreement.
SECTION 7. Governing Law. The validity, interpretation and enforcement
of this Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York, without regard to the conflict of laws principles
thereof.
5
<PAGE>
SECTION 8. Headings. Section headings in this Amendment are included
herein for the convenience of reference only and shall not constitute part of
this Amendment for any other purpose.
SECTION 9. References. References herein and in the other Note
Documents to the "Securities Exchange Agreement", "this Agreement", "hereunder",
"hereof", or words of like import referring to the Securities Exchange
Agreement, shall mean and be a reference to the Securities Exchange Agreement as
amended hereby.
SECTION 10. Senior Loan Agreement. The parties hereto agree to
negotiate in good faith with a view to proceeding to definitive documentation
with respect to the Senior Loan Agreement as soon as is reasonably practicable
following the date hereof.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their proper and duly authorized officers as of the
date set forth above.
CORAM, INC.
By:
---------------------------------
Name:
Title:
CORAM HEALTHCARE CORPORATION
By:
---------------------------------
Name:
Title:
CERBERUS PARTNERS, L.P.
By:
---------------------------------
Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.
By:
---------------------------------
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:
---------------------------------
Name:
Title:
[EXECUTION COPY]
Coram (Cerberus to Goldman)
[$20,000,000]
RISK PARTICIPATION AGREEMENT
RISK PARTICIPATION AGREEMENT, dated as of April 22, 1997 by and between
Cerberus Partners, L.P. ("Seller") and Goldman Sachs Credit Partners L.P. ("Risk
Participant").
WITNESSETH:
WHEREAS, Seller is party to that certain Assignment Agreement dated as
of the date hereof (the "Assignment Agreement") among Coram Funding, Inc.
("Initial Purchaser"), Seller and Donaldson, Lufkin & Jenrette, Inc. ("DLJ")
under which Seller acquired the Assigned Rights (as defined in the Assignment
Agreement), a copy of which is attached as Exhibit A hereto.
WHEREAS, Seller desires to sell to Risk Participant, and Risk
Participant desires to purchase from Seller the Risk Participation (as defined
herein).
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. As used herein, capitalized terms have the
following meanings (and capitalized terms used but not otherwise defined herein
have the meanings stated in the Assignment Agreement):
Risk Participant's Percentage: The percentage set forth on Schedule A,
Item I attached hereto.
Proceeds: All proceeds of any kind of the Risk Participation.
Seller's Interest: All of Seller's right, title and interest, in to and
under the Assigned Rights and the Assignment Agreement.
Section 2. Funding Amount; Effective Time.
(a) Risk Participation. The Risk Participant agrees that, upon
receiving by facsimile a copy of this Agreement duly executed by the Seller, the
Risk Participant will fund the Funding Amount set forth on Schedule B to the
Seller (in immediately available funds by wire transfer to the account set forth
in Schedule A, Item II). The time at which the Seller receives such payment is
referred to herein as the "Effective Time". The Risk Participant's interest
granted hereunder in the Risk Participant's Percentage of the Seller's Interest
is hereinafter referred to as the "Risk Participation".
<PAGE>
(b) Conditions.
(i) Risk Participant's obligations in Section 2(a) are subject to the
Seller's representations, warranties and covenants shall be true and complied
with, in all material respects.
(ii) Seller's obligations in Section 2(a) are subject to the following
conditions: (A) Risk Participant's representations, warranties and covenants
shall be true and complied with, in all material respects; (B) the consummation
of the purchase by Seller from Initial Purchaser of the Assigned Rights under
the Assignment Agreement; and (C) Risk Participant shall have paid to Seller the
Funding Amount set forth in Section 2(a).
Section 3. Seller's Representations. Seller hereby represents and
warrants to Risk Participant as of the date hereof and the Effective Time that:
(a) Seller has full power and authority to sell and assign the
Risk Participation and to enter into and perform this Agreement, and
such transaction and this Agreement and the documents to be executed
and delivered by Seller in connection herewith (i) have been duly
authorized by Seller, (ii) are legal, valid and binding and enforceable
against Seller in accordance with their terms, and (iii) are not in
contravention of any law, order or agreement by which Seller is bound.
(b) Seller has made no prior assignment or sale of the Risk
Participation or of any interest therein.
(c) Except for those consents, notices, filings, approvals or
authorizations already obtained or received or required to be obtained
under the Assignment Agreement or the Transaction Documents, to
Seller's actual knowledge, without independent investigation, no
consents, notices, filings, approvals or authorizations are required to
be made to or with any person, entity or governmental body for the
consummation of the transactions contemplated by this Agreement.
(d) To the extent Seller received the same from Initial Purchaser,
Seller is the sole legal and beneficial owner of the Seller's Interest
and has good title thereto, free and clear of all liens, claims and
encumbrances of any kind and will transfer the Risk Participation to
Risk Participant free and clear of any liens or encumbrances of any
kind.
(e) Based solely on Initial Purchaser's representations and
warranties in the Assignment Agreement, as of March 31, 1997, the
portion of the Risk Participation constituting (i) the Bridge Notes
and/or the Rollover Note is in the total outstanding amount of
$20,000,000 as broken down on Schedule C hereto; (ii) the Warrants
equal to not less than 368,596 Warrants (or 10.2274027% of the Warrants
purchased by Seller from Initial Purchaser under the Assignment
Agreement); and (iii) any interest thereon as of the date hereof, which
has not been paid and continues to be accruing and owing.
-2-
<PAGE>
(f) Except as set forth in the Assignment Agreement, no
proceedings relating to the Risk Participation are pending against
Seller or to Seller's actual knowledge, without independent
investigation, threatened against Seller before any court, arbitrator
or administrative or governmental body which, in the aggregate, would
have a material adverse effect on the Risk Participation or Risk
Participant's rights and remedies hereunder or in respect thereof.
(g) To Seller's actual knowledge, without independent
investigation, Seller has not received any written notice, claim or
demand from or on behalf of Initial Purchaser, Coram, Holdings or any
other person or entity that the Risk Participation or any portion
thereof is void or voidable or subject to any defense, right of set-off
or recoupment, counterclaim, claim or impairment of any kind (including
but not limited to for disallowance, expungement, reduction,
subordination or otherwise).
(h) Seller has not engaged in any act, conduct or omission that
would result in the Risk Participation or any portion thereof being
void or voidable or subject to any defense, right of set-off,
recoupment, counterclaim, claim or impairment of any kind (including,
but not limited to, for disallowance, expungement, reduction,
subordination or otherwise).
(i) There are no fees, commissions or compensation payable by Risk
Participant to any party engaged or retained by, through or on behalf
of Seller in connection with the transactions contemplated hereby.
(j) Seller is a sophisticated seller with respect to the Risk
Participation, has adequate information concerning the business and
financial condition of Coram and Holdings to make an informed decision
regarding the sale of the Risk Participation, and has independently,
without reliance upon Risk Participant and based on such information as
it deemed appropriate, made its own analysis and decision to enter into
this Agreement.
(k) Seller has provided Risk Participant complete and accurate
copies of the Assignment Agreement and the Transaction Documents in the
forms and to the extent delivered to Seller by Initial Purchaser.
(l) Seller has not breached any of its obligations under the
Assignment Agreement or the Transaction Documents and no amounts are
owing thereunder by Seller.
(m) Seller is not (i) an "insider" within the meaning of Section
101(31) of Title 11 of the United States Bankruptcy Code; or (ii) an
affiliate of Coram or Holdings or any of Coram's or Holdings'
affiliates.
(n) Seller acknowledges that Risk Participant may have access to
or possess material non-public information not known to Seller
regarding or relating to Coram, Holdings or the Risk Participation
("Risk Participant Excluded Information") and Seller acknowledges that
it has not requested the Risk Participant Excluded Information and
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<PAGE>
agrees that Risk Participant shall have no liability whatsoever (and
Seller hereby waives and releases all claims which it would otherwise
have) with respect to the non-disclosure of Risk Participant Excluded
Information, either before or after the date hereof.
(o) None of the Seller Excluded Information contradicts or is
inconsistent with any representation or warranty made by Seller in this
Agreement.
(p) The Seller has not made any offers to sell, or solicitations
of offers to buy, any portion of the Risk Participation in violation of
the Securities Act of 1933, as amended (the "Securities Act").
Seller makes only the representations and warranties set forth above. Seller (i)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties, or representations made by any person other than
Seller in or in connection with the Assignment Agreement or the Transaction
Documents or the execution, legality, validity, or enforceability (with respect
to any person other than Seller) of the Assignment Agreement or the Transaction
Documents or any collateral purported to be granted thereunder and (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition, creditworthiness, properties, affairs, status or nature of
Coram or Holdings or the performance or observance by Coram or Holdings of any
of their respective obligations under the Assignment Agreement or the
Transaction Documents or any other instrument or document.
Section 4. Risk Participant's Representations. Risk Participant hereby
represents and warrants to Seller as of the date hereof and the Effective Time
that:
(a) Risk Participant has full power and authority to enter into
and perform this Agreement and such transaction and this Agreement and
the documents to be executed and delivered in connection herewith (i)
have been duly authorized by Risk Participant, (ii) are legal, valid
and binding and enforceable against Risk Participant in accordance with
their terms and (iii) are not in contravention of any law, order or
agreement by which Risk Participant is bound.
(b) Except for those consents, notices, filings, approvals or
authorizations required by the Transaction Documents or hereunder or
already obtained or received, to Risk Participant's actual knowledge,
without independent investigation, no consents, notices, filings,
approvals or authorizations are required to be made to or with any
person, entity or governmental body for the consummation of the
transactions contemplated by this Agreement.
(c) No proceedings are pending or to Risk Participant's actual
knowledge, without independent investigation, threatened against Risk
Participant before any court, arbitrator or administrative or
governmental body which, in the aggregate, would have a material
adverse effect on any action taken or to be taken by Risk Participant
under this Agreement.
-4-
<PAGE>
(d) There are no fees, commissions or compensation payable by
Seller to any party engaged or retained by, through or on behalf of
Risk Participant in connection with the transactions contemplated
hereby.
(e) Risk Participant agrees and acknowledges that (A) it is a
sophisticated Risk Participant with respect to the Risk Participation,
has adequate information concerning the business and financial
condition of Coram and Holdings to make an informed decision regarding
the purchase of the Risk Participation, and has independently, without
reliance upon Seller and based on such information as it deemed
appropriate, made its own analysis and decision to enter into this
Agreement; (B) it has made its credit determination and analysis based
upon such information as it deemed sufficient to enter into this
Agreement and not based on any statements or representations by Seller
except as expressly set forth herein; (C) it is purchasing the Risk
Participation and not with a view to or for resale in connection with,
any distribution or public offering of all or any part thereof or of
any interest therein or in a manner which would violate applicable
securities laws; (D) it is able to bear the economic risk associated
with the purchase of the Risk Participation; (E) it has such knowledge
and experience and has made investments of a similar nature so as to be
aware of the risks and uncertainties inherent in purchases of the type
contemplated herein; (F) except as provided in this Agreement, it will
not rely upon Seller to furnish or make available any documents or
other information regarding the credit, affairs, financial condition or
business of, or any other matter concerning Coram, Holdings or any of
their respective affiliates; (G) it is not an agent for Seller; (H) it
is a "qualified institutional Risk Participant" as defined in Rule 144A
of the Securities Act; (I) Seller has not given any investment advice,
credit information or rendered any opinion as to whether the purchase
of the Risk Participation is prudent; and (J) other than by virtue of
Risk Participant's status as a creditor of Coram or Holdings, it is not
affiliated, directly or indirectly, with Coram, Holdings, or any of
their respective subsidiaries, affiliates or employees.
(f) Risk Participant is entitled to receive all payments and
distributions to be made to it hereunder without the withholding of any
tax and will furnish to Seller such forms, certifications, statements
and other documents as Seller may request from time to time to evidence
Risk Participant's exemption from the withholding of any tax imposed by
any jurisdiction or to enable Seller to comply with any applicable laws
or regulations relating thereto.
(g) Risk Participant is not purchasing the Risk Participation or
any interest therein with funds which directly or indirectly constitute
"plan assets" as defined in the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
(h) Risk Participant acknowledges that it has received copies of
the Assignment Agreement and the Transaction Documents and that it has
otherwise been provided an opportunity to obtain copies of such other
documents and information as it has deemed appropriate in making its
own evaluation of the Risk Participation and Risk Participant is
-5-
<PAGE>
assuming all risk with respect to the completeness, accuracy or
sufficiency of such documents and information.
(i) Risk Participant acknowledges that Seller may have access to
or possess material non-public information not known to Risk
Participant regarding or relating to Coram, Holdings or the Risk
Participation ("Seller Excluded Information") and Risk Participant
acknowledges that it has not requested the Seller Excluded Information
and agrees that Seller shall have no liability whatsoever (and Risk
Participant hereby waives and releases all claims which it would
otherwise have) with respect to the non-disclosure of Seller Excluded
Information, either before or after the date hereof.
(j) None of the Risk Participant Excluded Information contradicts
or is inconsistent with any representation or warranty made by Risk
Participant in this Agreement.
(k) As required by Section 8 of the Assignment Agreement, Risk
Participant makes to Seller each of the representations and warranties
made by Seller to Initial Purchaser under the Assignment Agreement
(mutatis, mutandis) and agrees to be bound by the terms of the
Assignment Agreement and the Transaction Documents.
Section 5. Acknowledgments. Seller and Risk Participant acknowledge and
represent and warrant to each other that (i) neither party has made any
representation or warranty, whether express or implied, of any kind or character
except as expressly set forth in this Agreement; (ii) the assignment and
transfer of the Risk Participation by Seller to Risk Participant is irrevocable,
and Seller shall have no recourse to the Risk Participation; and (iii) either
party may have engaged and may engage in any other relationships with or
concerning Initial Purchaser, Coram, Holdings and their respective affiliates
without any obligation or liability of any kind to the other party.
Section 6. Payment and Delivery Instructions.
(a) Upon receipt by the Seller of any cash Proceeds or other cash
distributions made under or in respect of the Seller's Interest, the
Seller shall promptly (but in no event later than 2 business days after
receipt of immediately available funds or after funds become available
for distribution after deposit of a check, draft or other instrument),
pay to the Risk Participant an amount equivalent to Risk Participant's
Percentage of such payment or, subject to paragraph (b) of this Section
6, distribute Risk Participant's Percentage of such property to the
Risk Participant in the form in which the same was received by the
Seller, with endorsements (without recourse, representation or
warranty) where necessary.
(b) Upon receipt by the Seller of any securities issued pursuant
to or in connection with the Seller's Interest, the Seller shall, upon
receipt of any such securities, hold the Risk Participant's Percentage
of such securities. In the event that the Seller shall, in its
reasonable good faith business judgment decide to sell, exercise,
transfer or otherwise take any action (an "Action") with respect to
similar securities held by Seller, Seller shall give Risk Participant
notice of any such Action 6 business days prior to taking such Action.
-6-
<PAGE>
Seller agrees to take an identical Action with respect to the Risk
Participant's Percentage of such securities. In the event that the
Action results in any proceeds, Seller shall pay to Risk Participant
promptly (but in no event later than 2 business days after receipt of
such proceeds) an amount of cash equal to the Risk Participant's
Percentage of such proceeds.
Section 7. Further Assignments. Risk Participant shall have the right
to sell, assign, grant participations and subparticipations in, and otherwise
transfer (each a "transfer") the Risk Participation and this Agreement to any
person or entity (each direct or indirect transferee is called a "transferee")
with the consent of Seller (which consent shall not be unreasonably withheld or
delayed)); provided that any such transfer shall not violate any of the terms
and conditions of the Assignment Agreement, any Transaction Document or any law,
rule, regulation, order, writ, judgment, injunction or decree, and provided
further that, unless such transferee and such transferee assumes all of Risk
Participant's obligations under this Agreement, then (a) the obligations of Risk
Participant and Seller under this Agreement shall remain in full force and
effect, and (b) Seller shall continue to deal solely and directly with Risk
Participant in connection with Risk Participant's obligations under this
Agreement.
Section 8. Indemnities.
(a) By Seller. Seller agrees to indemnify, defend and hold Risk
Participant and its officers, directors, employees, agents, partners and
controlling persons (collectively, the "Risk Participant Indemnitees") harmless
from and against any and all expenses, losses, claims, damages and liabilities
which are incurred by or threatened against the Risk Participant Indemnitees or
any of them, including without limitation reasonable attorneys' fees and
expenses, caused by, or in any way resulting from or relating to: (i) Seller's
breach of any of the representations, warranties, covenants or agreements of
Seller set forth in this Agreement; or (ii) Seller's failure to duly and timely
pay and perform the Excluded Obligations.
(b) By Risk Participant. Risk Participant agrees to indemnify, defend
and hold each of Seller and its officers, directors, employees, agents, partners
and controlling persons (collec tively, the "Seller Indemnitees") harmless from
and against any and all expenses, losses, claims, damages and liabilities which
are incurred by or threatened against the Seller Indemnitees or any of them,
including without limitation reasonable attorneys' fees and expenses, caused by,
or in any way resulting from or relating to (i) Risk Participant's breach of any
of the representations, warranties, covenants or agreement of Risk Participant
set forth in this Agreement; (ii) Risk Participant's failure to duly and timely
pay and perform the Assumed Obligations; or (iii) any further sale, assignment,
participation, subparticipation or transfer of the Risk Participation, this
Agreement or any portion thereof in violation of the Assignment Agreement, any
Transaction Document or applicable law, rule, order or judgment.
Section 9. Costs and Fees. Risk Participant shall reimburse Seller for
Risk Participant's Percentage of Seller's costs and expenses, including but not
limited to attorneys' fees and expenses and transfer fees, in connection with
closing the transactions contemplated by the Assignment Agreement. Except as
otherwise expressly provided for herein, Risk Participant shall bear all
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costs and expenses, including but not limited to attorneys' fees and expenses,
and any transfer fees in connection with the closing of the transactions
contemplated hereby.
Section 10. Further Assurances.
(a) Upon the written request of either the Seller or the Risk
Participant, the parties shall use reasonable best efforts to convert the
participation to an outright assignment as contemplated by this Agreement,
including, without limitation, the execution and delivery of all notices,
documents, opinions and certificates necessary to effectuate (i) the outright
assignment of the Rollover Note, the Warrants and the Risk Participation
hereunder and (ii) the registration of new Rollover Notes and Warrants in the
appropriate names and denominations. Notwithstanding any provision contained
herein, if the transfer of the Risk Participation is prohibited by, or if all of
the requirements are not or have not been satisfied under, the Transaction
Documents, then Seller shall be deemed not to have sold or assumed the Risk
Participation, but Seller shall, upon receipt of any payment with respect to the
Risk Participation, forward such payment to Risk Participant so as to place Risk
Participant in the same position as if Risk Participant had received the Risk
Participation.
(b) Each of the parties hereto agrees, at its own cost and expense, to
execute and deliver, or to cause to be executed and delivered, all such
instruments (including all necessary endorsements) and to take all such action
as the other party may reasonably request in order to effectuate the intent and
purposes of, and to carry out the terms of this Agreement.
Section 11. Payments. If any payments or distributions made by Seller
to Risk Participant hereunder are thereafter required to be returned or
disgorged by Seller, Risk Participant shall promptly return such payments or
distributions to Seller together with all interest and charges thereon and the
claim relating thereto shall be for the account of Risk Participant.
Section 12. Integration. This Agreement constitutes the complete
agreement of the parties hereto with respect to the subject matters referred to
herein and supersede all prior or contemporaneous negotiations, promises,
covenants, agreements or representations of every nature whatsoever with respect
thereto, all of which have become merged and finally integrated therein
(including, without limitation, the Confirmation Letter between Seller and Risk
Participant). This Agreement cannot be amended, modified or supplemented except
by an instrument in writing executed by both parties hereto.
Section 13. Notices, Payments and Deliveries. Notices shall be given by
telecopy, certified or registered mail or personally or by courier at the
addresses set forth on Schedule A, Item II. Payments and deliveries of Proceeds
shall be made as set forth on Schedule A, Item II.
Section 14. No Relationship; No Assignment; No Participation. Nothing
contained in this Agreement shall (i) establish any agency, fiduciary,
partnership, joint venture or similar relationship between or among the parties,
(ii) operate as an assignment to the Risk Participant of any of any legal,
beneficial or participation interest in the Seller's rights under the
Transaction
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Documents, or (iii) be construed to grant the Risk Participant any rights to
deal directly with, make payments to, or receive payments from any party (other
than the Seller) under the Transaction Documents.
Section 15. Miscellaneous. The terms of this Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns. All representations and warranties made herein shall
survive the execution and delivery of this Agreement. This Agreement may be
executed in counterparts, each of which when so executed shall be an original,
but all such counterparts shall together constitute but one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to any conflicts of laws
provisions thereof. Each party to this Agreement hereby irrevocably consents to
the jurisdiction of the United States Court for the Southern District of New
York and the courts of the State of New York located in the State and City of
New York in any action to enforce, interpret or construe any provision of this
Agreement or of any other agreement or document delivered in connection with
this Agreement, and also hereby irrevocably waives any defense of improper
venue, forum non conveniens or lack of personal jurisdiction to any such action
brought in those Courts. Each party further irrevocably agrees that any action
to enforce, interpret or construe any provision of this Agreement will be
brought only in one of those Courts. Each party hereby irrevocably consents to
the service by certified or registered mail, return receipt requested, to be
sent to its address set forth on the signature pages of this Agreement or to
such other address as it may designate from time to time by notice given in the
manner provided above, of any process in any action to enforce, interpret or
construe any provision of this Agreement.
Section 16. Interest. If any payment hereunder is not paid by either
party to the other when due hereunder, then interest shall accrue, and be
payable immediately, on all such amounts at a per annum rate equal to the
Federal Funds Rate from time to time in effect plus 2%.
Section 17. Confidentiality. Each party agrees that except as provided
herein or as may be compelled by legal process, by an order, judgment or decree
or a court or other governmental authority of competent jurisdiction, it shall
not disclose to any person the terms or conditions of this Agreement or any
document executed or delivered in connection herewith (including, without
limitation, the Purchase Price), unless any of the foregoing shall have entered
the public domain by no breach of such party hereunder; provided, however, that
each party may disclose this Agreement (other than the Purchase Price) and the
documents executed in connection herewith to Coram and Holdings and Risk
Participant may disclose this Agreement and the documents executed or delivered
in connection herewith (other than the Purchase Price) to any prospective
purchaser, transferee or participant and shall require that such prospective
purchasers, transferees or participants abide by confidentiality provisions
substantially the same as those set forth in Section 17 of the Assignment
Agreement.
Section 18. Telecopies. Transmission by telecopier of an executed
counterpart of this Agreement shall be deemed to constitute due and sufficient
delivery of such counterpart, provided
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that the parties hereby agree to deliver to each other an original of such
counterpart promptly after delivery of the facsimile.
Section 19. Severability. If any provision of this Agreement or any
other agreement or document delivered in connection with this Agreement, if any,
is partially or completely invalid or unenforceable in any jurisdiction, then
that provision shall be ineffective in that jurisdiction to the extent of its
invalidity or unenforceability, but the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any other provision
of this Agreement, all of which shall be construed and enforced as if that
invalid or unenforceable provision were omitted, nor shall the invalidity or
unenforceability of that provision in one jurisdiction affect its validity or
enforceability in any other jurisdiction.
Section 20. No Recourse Against Partners; Several Liability.
Notwithstanding anything contained in this Agreement to the contrary, the
parties agree that (i) no general or limited partner of Seller shall be
personally liable for any obligation or liability of Seller under this
Agreement; and (ii) all obligations and liabilities of Seller under this
Agreement are enforceable solely against Seller and Seller's assets and not
against any assets of any general or limited partner of Seller.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement of the date first stated above.
CERBERUS PARTNERS, L.P.
By: Its General Partner
Cerberus Associates L.P.
By:
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Name:
Title:
GOLDMAN SACHS CREDIT PARTNERS L.P.
By:
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Name:
Title:
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