Exhibit 10.3
CONCENTRA MANAGED CARE, INC.
110,000 Units Consisting of
$216,230,000 (Face Amount) 14% Senior Discount Debentures due 2010
and
Warrants to Purchase 1,595,406 Shares of Common Stock
PURCHASE AGREEMENT
August 17, 1999
PURCHASERS NAMED ON SCHEDULE I HERETO
PURCHASE AGREEMENT dated as of August 17, 1999 (this
"AGREEMENT") by and among, the several persons named in Schedule I hereto (each
a "BUYER" and collectively, "BUYERS"), and Concentra Managed Care, Inc., a
Delaware corporation ("Concentra").
RECITALS:
Yankee Acquisition Corp., a Delaware corporation ("NEWCO") and
Concentra, are parties to an Amended and Restated Agreement and Plan of Merger
dated as of March 24, 1999 (the "MERGER AGREEMENT"), pursuant to which, upon the
terms and subject to the conditions set forth therein, (i) Newco will merge with
and into Concentra (the "MERGER"), (ii) each outstanding share of common stock,
par value $0.01 per share ("CONCENTRA COMMON STOCK"), of Concentra outstanding
immediately prior to the Merger (other than shares of Concentra Common Stock
owned by Concentra or Newco or their affiliates) will be converted into the
right to receive $16.50 per share in cash, without interest, (iii) each
outstanding share of common stock, par value $0.01 per share, of Newco will be
converted into one share of Concentra Common Stock and (iv) each outstanding
share of Class A common stock, par value $0.01 per share, of Newco will be
converted into one share of Class A common stock, par value $0.01 per share, of
Concentra.
Concentra proposes to issue and sell to the Buyers an
aggregate of 110,000 units (the "UNITS"), in the aggregate consisting of
$216,230,000 (face amount) of its 14% Senior Discount Debentures due 2010 (the
"DEBENTURES") and warrants to purchase 1,595,406 shares of Concentra Common
Stock (the "WARRANTS"), subject to the terms and conditions set forth herein.
The Debentures are to be issued pursuant to the provisions of an indenture (the
"INDENTURE"), to be dated as of the Closing Date (as defined below), between
Concentra and United States Trust Company of New York, as trustee (the
"TRUSTEE"). The Warrants will be issued pursuant to a warrant agreement to be
dated as of the Closing Date (the "WARRANT AGREEMENT") between Concentra and
each of the Buyers. The shares of Concentra Common Stock issuable upon exercise
of the Warrants are collectively referred to herein as the "WARRANT SHARES." The
Units, the Debentures, the Warrants and the Warrant Shares are collectively
referred to herein as the "SECURITIES."
Each Buyer has conditioned its purchase of the Units to be
purchased by it hereunder on Concentra making certain representations and
warranties to it hereunder and, in order to induce such Buyer to purchase the
Units and in connection with the transactions contemplated to occur on the
Closing Date, including the Merger, Concentra is willing to make such
representations and warranties.
2
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. In addition to the terms defined elsewhere
herein, the following terms have the following meanings when used herein with
initial capital letters:
"BOARD" means the Board of Directors of the Company.
"BUSINESS DAY" means a day other than a Saturday, Sunday,
federal or New York State holiday or other day on which commercial banks in New
York City are authorized or required by law to close.
"COMMISSION" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"PERSON" means any individual, corporation, limited liability
company, partnership, trust, joint stock company, business trust, unincorporated
association, joint venture, governmental authority or other legal entity of any
nature whatsoever.
"PUBLIC OFFERING" means the sale of Debentures (and Warrants,
if applicable) to the public pursuant to an effective registration statement
(other than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as the same may be amended
from time to time.
"TRANSFER" means a transfer, sale, assignment, pledge,
hypothecation or other disposition, whether directly or indirectly pursuant to
the creation of a derivative security, the grant of an option or other right,
the imposition of a restriction on disposition or voting or transfer by
operation of law.
ARTICLE 2
PURCHASE AND SALE
Section 2.1 PURCHASE AND SALE. (a) Upon the terms and subject
to the conditions of this Agreement, Concentra agrees to issue and sell to each
Buyer, and each Buyer agrees to purchase from Concentra, the number of Units,
including Debentures and Warrants, set forth
3
opposite its name on Schedule I hereto. The purchase price for the Units is
$1,000 per Unit (the "PER UNIT PURCHASE PRICE") and the aggregate purchase price
for all the Units is $110,000,000 (the "AGGREGATE PURCHASE Price").
(b) Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture or the Warrant Agreement,
as the case may be, the Debentures and Warrants, as the case may be, and all
securities issued in exchange therefor or in substitution thereof shall bear the
following legend:
"THIS [DEBENTURE][WARRANT] (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
[DEBENTURE][WARRANT] EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND
(2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
[DEBENTURE][WARRANT] OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE [INDENTURE][WARRANT
AGREEMENT] CONTAINS A PROVISION REQUIRING THE
[TRUSTEE][COMPANY] TO REFUSE TO REGISTER
4
ANY TRANSFER OF THIS [DEBENTURE][WARRANT] IN VIOLATION OF THE
FOREGOING."
(c) Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture the Debentures and all
securities issued in exchange therefor or in substitution thereof shall bear the
following legend:
"THIS DEBENTURE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID")
AS DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED. THE FOLLOWING INFORMATION IS PROVIDED
PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS SET FORTH
IN TREASURY REGULATION 1.1275-3.
THE ISSUE PRICE OF THIS DEBENTURE IS 76.069% OF ITS ORIGINAL
ACCRETED VALUE. THE AMOUNT OF OID ON THIS DEBENTURE IS EQUAL
TO THE EXCESS OF ALL THE PAYMENTS TO BE MADE ON THIS DEBENTURE
OVER THIS DEBENTURE'S ISSUE PRICE. THE ISSUE DATE OF THIS
DEBENTURE IS AUGUST 17, 1999. THE PER ANNUM YIELD TO MATURITY
OF THIS DEBENTURE IS 17.21% COMPOUNDED SEMI-ANNUALLY.
THIS DEBENTURE MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNTIL THE DATE THE INITIAL PURCHASERS SELL AT
LEAST 50% OF THE OUTSTANDING DEBENTURES EXCEPT, SUBJECT TO THE
OTHER RESTRICTIONS ON TRANSFER HEREIN, AT ANY TIME AND FROM
TIME TO TIME A HOLDER MAY SELL OR OTHERWISE TRANSFER
DEBENTURES IF SUCH TRANSFERRED DEBENTURES HAVE AN AGGREGATE
PRINCIPAL AMOUNT AT MATURITY OF $5,000,000 OR MORE."
Section 2.2 CLOSING. The closing (the "CLOSING") of the
purchase and sale of the Units hereunder shall take place at the offices of
Reboul, MacMurray, Hewitt, Maynard & Kristol, 45 Rockefeller Plaza, New York,
New York, immediately after the consummation of the Merger. At the Closing, (a)
each Buyer, shall deliver to Concentra, in immediately available funds or as
otherwise agreed between Concentra and any Buyer, the purchase price for the
Units to be purchased by such Buyer by wire transfer to an account designated by
Concentra not later than one business day prior to the date of the Closing (the
"CLOSING DATE") and (b) Concentra shall deliver to each Buyer (i) certificates
for such Buyer's Debentures and (ii) Warrants, duly registered in the name of
such Buyer and executed copies of such other documents contemplated hereby.
5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CONCENTRA
Concentra represents and warrants to Buyers as of the date
hereof that:
Section 3.1 CORPORATE EXISTENCE AND POWER. Each of Concentra
and its subsidiaries (as defined in Rule 1-02 of Regulation S-X of Commission,
the "SUBSIDIARIES") has been duly organized and is validly existing as a
corporation in good standing under the laws of the respective states in which
they have been incorporated. Each of Concentra and its Subsidiaries has full
corporate power and authority to carry on its business and to own, lease and
operate its properties. Concentra has the requisite corporate power and
authority to authorize the offering of the Units, including the Debentures and
the Warrants, and Concentra has the requisite power to execute, deliver and
perform its obligations under the Agreement, the Indenture, the Debentures, the
registration rights agreement, dated the date hereof, by and among Concentra and
each of the Buyers with respect to the Debentures (the "REGISTRATION RIGHTS
AGREEMENT"), the Warrants and the Warrant Agreement (collectively, the
"OPERATIVE AGREEMENTS"). Each of Concentra and its Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which such qualification is required, except
where the failure to be so qualified or in good standing would not (i) have a
material adverse effect on the business, prospects, financial condition or
results of operations of Concentra and its Subsidiaries, taken as a whole, or
(ii) materially adversely affect in any manner the validity of this Agreement or
any of the other Operative Agreements (any event referred to in clause (i)
or(ii), a "MATERIAL ADVERSE EFFECT").
Section 3.2 SUBSIDIARIES. All of the outstanding equity
interests of each of Concentra's Subsidiaries (i) have been duly authorized and
validly issued, (ii) are fully paid, nonassessable and not subject to any
preemptive or similar rights and (iii) are owned by Concentra or its
Subsidiaries free and clear of all liens, encumbrances, pledges, claims,
security interests, mortgage, assessments, easements, rights of way, covenants,
restrictions, rights of first refusal, defects in title, encroachments and other
burdens or adverse claims (collectively "LIENS") (other than Liens on such
equity interests pursuant to the Credit Agreement, dated as of August 17, 1999,
among Concentra, Concentra Operating Corporation, a Nevada corporation and a
wholly-owned subsidiary of Concentra, the several lenders from time to time
parties thereto, The Chase Manhattan Bank, as Administrative Agent, Credit
Suisse First Boston and Fleet National Bank, as Co-Documentation Agents and DLJ
Capital Funding, Inc., as Syndication Agent (the "SENIOR CREDIT FACILITIES")).
Section 3.3 AUTHORIZATION. Each of the Operative Agreements
has been duly authorized, executed and delivered by Concentra and, assuming the
due execution and delivery by the other parties thereto, is a valid and binding
agreement of Concentra, enforceable against Concentra in accordance with its
terms, except (i) as the enforceability thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws
6
affecting creditors' rights generally, (ii) for general principles of equity
(regardless of whether enforcement is brought in a proceeding at law or in
equity), (iii) limitations of applicable law regarding the enforceability of
any rights to contribution or indemnification and (iv) the waiver as to stay,
extension or usury laws may not be enforceable. The Indenture conforms in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA"), and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder.
Section 3.4 NO VIOLATION. None of Concentra or any of its
Subsidiaries (i) is in violation of its organizational documents or by-laws, or
(ii)(a) before giving effect to the Merger or the transactions contemplated
thereby is, or (b) assuming that the Merger and the transactions contemplated
thereby are consummated as contemplated by the Merger Agreement will be, in
default in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other agreement
or instrument to which Concentra or any of its Subsidiaries is a party or by
which Concentra or any of its Subsidiaries or any of their respective property
is bound, except for any such defaults in (ii) as would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.5 CONSENTS; APPROVALS; CONFLICTS. The execution,
delivery and performance by Concentra of each Operative Agreement, the issuance
and sale of the Units as contemplated by this Agreement and the consummation of
the transactions contemplated by this Agreement and each other Operative
Document will not (i) except to the extent such has been obtained, require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as have been obtained and are
in full force and effect and as may be required under the securities or Blue Sky
laws of the various states and except, in the case of the Registration Rights
Agreement, such as may be required under the Securities Act), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or a default under,
(A) the organizational documents or by-laws of Concentra or any of its
Subsidiaries or (B) any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to Concentra or any of its
Subsidiaries, taken as a whole, to which Concentra or any of its Subsidiaries is
a party or by which Concentra or any of its Subsidiaries or their respective
property is bound, (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over Concentra or any of its Subsidiaries or
their respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which Concentra or any of its Subsidiaries is a party or by which Concentra or
any of its Subsidiaries or their respective property is bound (other than any
Lien pursuant to the Senior Credit Facilities), or (v) result in the termination
or revocation of any permit (as defined below) of Concentra or any of its
Subsidiaries or result in any other impairment of the rights of the holder of
any such permit, except in the case of clauses (i), (ii) (B), (iv) and (v), as
would not, singly or in the aggregate, have a Material Adverse Effect.
7
Section 3.6 REAL OR PERSONAL PROPERTY. Concentra and each of
its Subsidiaries has good and marketable title to, or valid leasehold interests
in, all its real or personal properties material to the business of Concentra
and each of its Subsidiaries, taken as a whole, in each case free and clear of
all Liens, except for Liens under the Senior Credit Facilities or such as do
not, singly or in the aggregate, have a Material Adverse Effect. Any real
property and buildings held under lease by Concentra or any of its Subsidiaries
are held by Concentra or such Subsidiary under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and business by the Concentra
and its Subsidiaries.
Section 3.7 LEGAL PROCEEDINGS. There is no legal or
governmental proceeding pending or, to Concentra's knowledge, threatened to
which Concentra or any of its Subsidiaries is bound or could reasonably be
expected to be a party or to which any of their respective property is or could
reasonably be expected to be subject, except for any such proceedings as would
not, singly or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
Section 3.8 ENVIRONMENTAL LAWS. Except as could not reasonably
be expected, singly or in the aggregate, to have a Material Adverse Effect, (i)
Concentra and its Subsidiaries are not in violation of any Federal, state or
local laws or regulations relating to pollution or protection of human health or
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENT LAWS") or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder, which
violation includes, but is not limited to, noncompliance with or lack of any
permits or other governmental authorizations; and (ii) (A) Concentra and its
Subsidiaries have not received any communication, whether from a governmental
authority or otherwise, alleging any such violation or noncompliance, and there
are no circumstances, either past, present or that are reasonably foreseeable,
that are reasonably likely to lead to such violation in the future, (B) there is
no pending or, to Concentra's knowledge, threatened claim, action, investigation
or notice by any person or entity alleging potential liability for
investigatory, cleanup, or governmental response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
any actual, alleged or, to Concentra's knowledge, threatened pollution or
contamination, or, to the Concentra's knowledge, any circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law
(collectively, "ENVIRONMENTAL CLAIMS"), and (C) there are no past or present
actions, activities, circumstances, conditions, events or incidents that could
reasonably be expected to form the basis of any Environmental Claim against
Concentra or any of its Subsidiaries or against any person or entity whose
liability for any Environmental Claim Concentra or any of its Subsidiaries has
retained or assumed either contractually or by operation of law. There are no
costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, any related
constraints on operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, have a Material Adverse
Effect.
8
Section 3.9 NO BROKERS. There are no contracts, agreements or
understandings between Concentra or any of its Subsidiaries and any person that
would give rise to a valid claim against Concentra, any of its Subsidiaries or
any Buyer for a brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Units.
Section 3.10 LABOR MATTERS. Concentra has no knowledge of any
actionable violation by Concentra or any of its Subsidiaries of any Federal,
state or local law relating to employment practices, discrimination in the
hiring, promotion or pay of employees or any applicable wage or hour laws, or of
any provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations promulgated thereunder that
would, singly or in the aggregate, have a Material Adverse Effect. There is (A)
no material unfair labor practice complaint pending against Concentra or any of
its Subsidiaries or, to the best knowledge of Concentra, threatened against
Concentra or any of its Subsidiaries, before the National Labor Relations Board
or any state or local labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is pending against Concentra or any of its Subsidiaries or,
to the knowledge of Concentra, threatened against Concentra or any of its
Subsidiaries, (B) no labor strike, dispute, slowdown or stoppage ("LABOR
DISPUTE") in which Concentra or any of its Subsidiaries is involved nor, to the
best knowledge of Concentra, is any Labor Dispute imminent, other than routine
disciplinary and grievance matters, or (C) no union representation question
existing with respect to the employees of Concentra or any of its Subsidiaries
except with respect to any matter specified in clause (A), (B) or (C) above as
would not, singly or in the aggregate, have a Material Adverse Effect. Except as
set forth in the Proxy Statement of Concentra dated July 16, 1999 (the "PROXY
STATEMENT"), there exist no material employment, consulting, severance or
termination agreements or arrangements between Concentra or any of its
Subsidiaries and any current or former officer or director of Concentra or any
of its Subsidiaries and there are no collective bargaining or other labor union
agreements to which Concentra or any of its Subsidiaries is a party or by which
any of them is bound.
Section 3.11 PERMITS. Each of Concentra and its Subsidiaries
has such permits, licenses, consents, exemptions, franchises, authorizations and
other approvals ("PERMITS") of, and has made all filings with and notice to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, laws relating to the provisions of occupational healthcare
services, medical review services and the operation of managed care provider
networks as are necessary to own, lease, license and operate its properties and
to conduct its business, except where the failure to have any such permit or to
make any such filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect. Each such permit is valid and in full force and effect
and Concentra and each of its Subsidiaries is in compliance with all the terms
and conditions of its permits and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto; no
event has occurred (including the receipt of any notice from any authority or
governing body) which allows or, after notice or elapse of time or both, would
allow revocation, suspension or termination of any such permit, or results or,
after
9
notice or lapse of time or both, would result in any other impairment of the
rights of the holder of any such permit; and such permits contain no
restrictions that are unduly burdensome to Concentra and its Subsidiaries,
except, in each case, where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction would not, singly or in the aggregate, have a Material
Adverse Effect.
Section 3.12 INTELLECTUAL PROPERTY. Except as would not,
singly or in the aggregate, have a Material Adverse Effect: (i) Concentra and
its Subsidiaries own or possess, free and clear of all Liens (other than Liens
under the Senior Credit Facilities), valid rights to all patents, patent rights,
copyrights, computer databases and software, logos, slogans, inventions,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names and all licenses, applications and registrations
related to the foregoing used in the business of Concentra and its Subsidiaries
(collectively, the "INTELLECTUAL PROPERTY"); (ii) none of Concentra and its
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or has
knowledge of any infringement of the Intellectual Property by any person; and
(iii) to the best of Concentra's knowledge after due inquiry, the use of the
Intellectual Property in connection with the business and operations of
Concentra and each of its Subsidiaries does not infringe on the rights of any
person.
Section 3.13 INSURANCE. Concentra and each of its Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; and neither Concentra nor any of its
Subsidiaries (i) has received notice from any insurer or agent of such insurer
that substantial capital improvements or other material expenditures will have
to be made in order to continue such insurance or (ii) has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers at a
cost that would not reasonably be expected to have a Material Adverse Effect.
Section 3.14 HEALTHCARE LAWS. Except for such violations
which, singly or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, to Concentra's knowledge, neither Concentra, any of
its Subsidiaries nor any affiliated professional corporation, partnership or
association associated with Concentra or any of its Subsidiaries has violated
any federal, state or local statutes, rules or regulations or permit
requirements relating to fraud and abuse, self-referral, fee-splitting, the
corporate practice of medicine, the Programs (as defined below), workers'
compensation, automobile insurance and other laws that regulate the ownership or
operation of managed care provider networks or the provision of occupational
healthcare services, cost containment services or medical review services or
healthcare services generally or require licensing, certification or other
approval of such services provided (collectively, the "RELEVANT HEALTHCARE
LAWS"). Except for such violations which, singly or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, to Concentra's
knowledge, neither Concentra, any of its Subsidiaries nor any affiliated
professional
10
corporation, partnership or association associated with Concentra or any of its
Subsidiaries has engaged in a pattern or practice of making payments intended to
obtain or induce patient referrals for any of their operations.
Section 3.15 INVESTMENT COMPANY ACT. Each of Concentra and its
Subsidiaries is not an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
Section 3.16 NO VIOLATION OF FEDERAL RESERVE SYSTEM. Neither
Concentra nor any agent acting on behalf of Concentra has taken, and none of
them will take, any action that would cause this Agreement or the issuance or
sale of the Units to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System.
Section 3.17 CREDIT RATING. No "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Securities Act (i) has imposed (or has informed Concentra
that it is considering imposing) any condition (financial or otherwise) on
Concentra's or any of its Subsidiaries' retaining any rating assigned to
Concentra or any of its Subsidiaries or any securities of Concentra or any of
its Subsidiaries or (ii) has indicated to Concentra or any of its Subsidiaries
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change in, any rating so assigned or (b) any change in the
outlook for any rating of Concentra or any of its Subsidiaries.
Section 3.18 NO REGISTRATION REQUIRED. No registration under
the Securities Act of the Units, including the Debentures and the Warrants, is
required for the sale of the Units to the Buyers as contemplated hereby,
assuming the accuracy of the Buyers representations and warranties and
agreements contained herein.
Section 3.19 NO QUALIFICATION UNDER TIA REQUIRED. Assuming the
accuracy of the Buyers' representations, warranties and agreements contained
herein, prior to the effectiveness of any registration statement relating to the
Debentures, the Indenture is not required to be qualified under the TIA.
Section 3.20 INTERNAL ACCOUNTING CONTROLS. Concentra has
established a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
11
Section 3.21 SOLVENCY. Immediately after and after giving
effect to the offering of the Units as contemplated hereby and the consummation
of the Merger and the transactions contemplated thereby, (i) the present fair
salable value of Concentra's and each of its Subsidiaries' assets shall be more
than the amount that will be required to pay its debts (including contingent and
unliquidated debts) as they become absolute and matured, (ii) Concentra's and
each of its Subsidiaries' assets, at a fair valuation, shall be greater than the
sum of its debts (including contingent and unliquidated debts), (iii) Concentra
and each of its Subsidiaries shall not be engaged in a business or transaction
for which its remaining assets are unreasonably small in relation to such
business or transaction, and (iv) Concentra and each of its Subsidiaries shall
not intend to incur or believe that it will incur debts beyond its ability to
pay such debts as they become absolute and matured. Concentra and each of its
Subsidiaries disclaim any intent to hinder, defraud or delay its creditors, or
to prefer some creditors over other creditors, and believes that the obligations
represented by the Debentures are being incurred for proper purposes in good
faith.
Section 3.22 FRAUD AND ABUSE LAWS. To the best of Concentra's
knowledge, neither (A) Concentra, (B) any of its Subsidiaries, nor (C) any
affiliated entity, including without limitation any professional corporation,
partnership or association, with which Concentra or any of its Subsidiaries
contracts and through which services are provided (each a "GROUP MEMBER" or
collectively, the "GROUP MEMBERS") has received any indication or notice,
written or oral, from representatives of state workers' compensation bureaus or
organizations or the Medicare, Medicaid or CHAMPUS programs (collectively, the
"PROGRAMS") or any other federal or state agency that any of the Group Members'
agreements or arrangements are contrary to any federal or state fraud and abuse
laws or regulations or federal or state self-referral laws or regulations.
Section 3.23 ELIGIBILITY TO PARTICIPATE IN PROGRAMS. All Group
Members that provide items and services reimbursed by the Programs are eligible
to participate in the Programs.
Section 3.24 WORKERS' COMPENSATION. The Group Members employ
personnel familiar with the various laws and regulations governing workers'
compensation and reimbursement under the Programs and conduct periodic audits of
the Group Members' billing and collection procedures. To the best of Concentra's
knowledge, (i) each Group Member is in substantial compliance with those laws
and regulations; and (ii) no Group Member has received any indication or notice,
written or oral, from representatives of the Programs or any other federal or
state agency that any of the Group Members' billing procedures will be audited.
Section 3.25 PHYSICIAN LICENSING. To the best of Concentra's
knowledge, the Group Members are in compliance with the laws and regulations
pertaining to (i) physician licensure and (ii) physician fee-splitting in all
states in which they are organized and otherwise authorized to conduct business,
and are not engaged, either directly or indirectly, in either the unauthorized
or unlicensed practice of medicine or in prohibited physician fee-splitting
12
arrangements, except where such failure to be in compliance, singly or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Section 3.26 CORPORATE INTEGRITY PROGRAM. To the best of
Concentra's knowledge, the Group Members are in substantial compliance with the
terms and conditions of the Corporate Integrity Program of Concentra, except
where such failure to be in compliance, singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
Section 3.27 REVOCATION OR SUSPENSION OF LICENSES. To the best
of Concentra's knowledge, no Group Member, or any individual or business entity
with which a Group Member contracts and through which services are provided, has
received any indication or notice, written or oral, from representatives of the
United States Department of Health and Human Services or any other federal or
state agency or accrediting body regarding any matters, including but not
limited to the revocation, suspension, termination or modification of any
applicable licenses, certifications, accreditations or supplier numbers, which
has had or could have with the passage of time a Material Adverse Effect.
Section 3.28 EFFECT OF CERTIFICATES. Each certificate signed
by any officer of the Concentra or any of its Subsidiaries and delivered to the
Buyers or counsel for the Buyers in connection with this Agreement on or prior
to the Closing Date shall be deemed to be a representation and warranty of
Concentra to the Buyers as to the matters covered thereby.
ARTICLE 4
REPRESENTATION AND WARRANTIES OF BUYERS
Each Buyer, severally and not jointly, represents and warrants
to Concentra as of the date hereof that:
Section 4.1 EXISTENCE AND POWER. Such Buyer is a corporation,
limited partnership or limited liability company, or other entity, as the case
may be, duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization.
Section 4.2 AUTHORIZATION. Each of the Operative Agreements to
which such Buyer is a party has been duly authorized, executed and delivered by
such Buyer and, assuming the due execution and delivery by Concentra, is a valid
and binding agreement of such Buyer, enforceable against such Buyer in
accordance with its terms, except (i) as the enforceability thereof may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally, (ii) for
general principles of equity (regardless of whether enforcement is brought in a
proceeding at law or in equity), (iii) limitations of applicable law regarding
the enforceability of any rights to contribution or indemnification and (iv) the
waiver as to stay, extension or usury laws may not be enforceable.
13
Section 4.3 GOVERNMENTAL AUTHORIZATION. The execution,
delivery and performance by such Buyer of each Operative Agreement to which such
Buyer is a party requires no order, license, consent, authorization or approval
of, or exemption by, or action by or in respect of, or notice to, or filing or
registration with, any governmental body, agency or official except such as have
been obtained or except for (i) filings under the HSR Act, (ii) such filings and
approvals as may be required by any applicable state securities "blue sky" laws,
(iii) such as have been obtained, or (iv) where the failure to obtain any such
order, license, consent, authorization, approval or exemption or give any such
notice or make any filing or registration would not reasonably be expected to
adversely affect the ability of such Buyer to perform its obligations hereunder.
Section 4.4 NONCONTRAVENTION. The execution, delivery and
performance by such Buyer of each Operative Agreement to which such Buyer is a
party does not and will not (i) violate, if such Buyer is a corporation, the
certificate of incorporation or bylaws of such Buyer, if such Buyer is a limited
partnership, the certificate of limited partnership or agreement of limited
partnership of such Buyer, or, if such Buyer is a limited liability company, the
certificate of formation or limited liability company agreement of such Buyer,
(ii) violate any law, rule, regulation, judgment, injunction, order or decree
applicable to or binding upon such Buyer, (iii) require any consent or other
action by any person under, constitute a default under (with due notice or lapse
of time or both), or give rise to any right of termination, cancellation or
acceleration of any right or obligation of such Buyer or to a loss of any
benefit to which such Buyer is entitled under any provision of any agreement or
other instrument binding upon such Buyer or any of its assets or properties or
(iv) result in the creation or imposition of any material Lien on any property
or asset of such Buyer.
Section 4.5 PURCHASE FOR INVESTMENT. Such Buyer is purchasing
its Units for investment for its own account and not with a view to, or for sale
in connection with, any distribution thereof.
Section 4.6 PRIVATE PLACEMENT. (a) Such Buyer's financial
situation is such that such Buyer can afford to bear the economic risk of
holding its Units for an indefinite period of time, and such Buyer can afford to
suffer the complete loss of the investment in its Units.
(b) Such Buyer's knowledge and experience in financial and
business matters are such that it is capable of evaluating the merits and risks
of the investment in its Units or such Buyer has been advised by a
representative possessing such knowledge and experience.
(c) Such Buyer understands that the Units acquired hereunder
is a speculative investment which involves a high degree of risk of loss of the
entire investment therein, that there will be substantial restrictions on the
transferability of the Units and that for an indefinite period following the
date hereof there will be no public market for the Units and that, accordingly,
it may not be possible for such Buyer to sell the Units in case of emergency or
otherwise.
14
(d) Such Buyer and its representatives, including, to the
extent it deems appropriate, its professional, financial, tax and other
advisors, have reviewed all documents provided to them in connection with the
investment in the Units, and such Buyer understands and is aware of the risks
related to such investment.
(e) Such Buyer and its representatives have been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, Concentra and its respective representatives concerning the terms
and conditions of the acquisition of the Units and related matters and to obtain
all additional information which such Buyer or its representatives deem
necessary.
(f) Except as otherwise disclosed to Concentra, such Buyer is
an "ACCREDITED INVESTOR" as such term is defined in Regulation D under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Section 4.7 LITIGATION. There is no action, suit,
investigation or proceeding pending against, or to the knowledge of such Buyer
threatened against or affecting, such Buyer before any court or arbitrator or
any governmental body, agency or official which would be reasonably likely to
have a Material Adverse Effect.
Section 4.8 NO BROKERS. There are no contracts, agreements or
understandings between such Buyer and any person that would give rise to a valid
claim against Concentra, any of its Subsidiaries or any Buyer for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Units.
ARTICLE 5
COVENANTS OF CONCENTRA AND BUYERS
Section 5.1 FURTHER ASSURANCES. Concentra and each Buyer agree
that, from time to time, whether on or after the Closing Date, each of them will
execute and deliver such further instruments of conveyance and transfer and take
such other actions as may be reasonably necessary to carry out the purposes and
intents of this Agreement.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1 CONDITIONS TO OBLIGATIONS OF BUYERS. The
obligations of each of the Buyers to consummate the transactions contemplated
hereby are subject to the satisfaction of the following conditions:
15
(a) On the Closing Date, the Buyers shall have received an
opinion, dated the Closing Date, of Richard A. Parr II, general counsel for
Concentra, substantially to the effect that:
a. Each of the Operative Agreements to which
Concentra is a party has been duly authorized, executed and delivered
by Concentra.
b. The execution, delivery and performance by
Concentra of each Operative Document, the issuance and sale of the
Units, including the Debentures and the Warrants, as contemplated by
this Agreement and the consummation of the transactions contemplated by
this Agreement and each other Operative Document will not (i) except to
the extent such has been obtained, require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states and except, in the
case of the Registration Rights Agreement, such as may be required
under the Securities Act), (ii) conflict with or constitute a breach of
any of the terms or provisions of, or a default under (A) the
organization documents or by-laws or other organizational documents of
Concentra or any of its Subsidiaries or (B) any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to Concentra or any of its Subsidiaries, taken as a whole, to
which Concentra or any of its Subsidiaries is a party or by which
Concentra or any of its Subsidiaries or their respective property is
bound, (iii) to such counsel's knowledge after due inquiry, violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over Concentra or any of its Subsidiaries or their
respective property, (iv) result in the imposition or creation of (or
the obligation to create or impose) a Lien under, any agreement or
instrument to which Concentra or any of its Subsidiaries is a party or
by which Concentra or any of its Subsidiaries or their respective
property is bound, or (v) result in the termination or revocation of
any permit of Concentra or any of its Subsidiaries or result in any
other impairment of the rights of the holder of any such permit, except
in the case of clauses (i), (ii) (B), (iv) and (v), as would not,
singly or in the aggregate, have a Material Adverse Effect.
c. No injunction, restraining order or other order or
relief of any nature by a federal or state court or other tribunal of
competent jurisdiction has been issued with respect to Concentra or any
of its Subsidiaries which would prevent or suspend the issuance or sale
of the Units, including the Debentures or the Warrants, or the
consummation of any transaction contemplated by the Operative
Agreements.
d. To the best of counsel's knowledge after due
inquiry, there is no legal or governmental proceeding pending or
threatened to which Concentra or any of its Subsidiaries is bound or
could reasonably be expected to be a party or to which any of their
respective property is or could reasonably be expected to be subject,
except for
16
any such proceedings as would not, singly or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
e. Neither Concentra nor any of its Subsidiaries is
in violation of its organizational documents or bylaws or other
organizational documents and, to the knowledge of such counsel after
due inquiry, neither Concentra nor any of its Subsidiaries (a) is in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease
or other agreement or instrument that is material to Concentra or any
of its Subsidiaries, taken as a whole, to which Concentra or any of its
Subsidiaries is a party or by which Concentra or any of its
Subsidiaries or their respective property is bound, or (b) is in
violation of any applicable statute, rule or regulation (including,
without limitation, any Environmental Law, any Relevant Healthcare Laws
or any provision of ERISA or the rules and regulations promulgated
thereunder) or any order, writ or decree of any court or governmental
agency or body having jurisdiction over Concentra or any of its
Subsidiaries or their respective property, except in the case of (a)
and (b), for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(b) On the Closing Date, the Buyers shall have received an
opinion, dated the Closing Date, of Reboul, MacMurray, Hewitt, Maynard &
Kristol, special counsel to Concentra substantially to the effect that:
a. All of the outstanding capital stock of Concentra
issued after the Merger is consummated (i) has been duly authorized and
validly issued and (ii) is fully paid, nonassessable and, to such
counsel's knowledge after due inquiry, not subject to preemptive or
similar rights, except as provided in the Stockholders Agreement, dated
as of August 17, 1999, by and among Concentra and the several
purchasers name in Schedule I thereto.
b. Assuming due authorization by Concentra, this
Agreement has been duly executed and delivered by Concentra.
c. Assuming the due authorization of the Indenture by
Concentra and the Trustee, each of the Operative Agreements has been
duly authorized, executed and delivered by Concentra and, assuming the
due execution and delivery by the Buyers, is a valid and binding
agreement of Concentra, enforceable against Concentra in accordance
with its terms, except (i) as the enforceability thereof may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally,
(ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity), (iii)
limitations of applicable law regarding the enforceability of any
rights to contribution or indemnification and (iv) the waiver as to
stay, extension or usury laws may not be enforceable.
17
d. When executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the
Buyers in accordance with the terms of this Agreement, the Debentures
will be valid and binding obligations of Concentra, entitled to the
benefits of the Indenture and enforceable against Concentra in
accordance with their terms, except (i) as the enforceability thereof
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, (ii) for general principles of equity (regardless of
whether enforcement is brought in a proceeding at law or in equity) and
(iii) the waiver as to stay, extension or usury laws may not be
enforceable.
e. The Warrants are convertible into Warrant Shares
in accordance with their terms and the Warrant Shares have been duly
authorized and reserved for issuance upon such conversion and, when
issued upon such conversion, will be validly issued, fully paid and
nonassessable.
f. Each of Concentra and its Subsidiaries is not an
"investment company," as such term is defined in the Investment Company
Act of 1940, as amended.
g. The Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
h. No registration under the Securities Act of the
Units, including the Debentures and the Warrants, or qualification of
the Indenture under the TIA is required for the sale of the Units,
including the Debentures and the Warrants, to the Buyers as
contemplated by this Agreement, assuming (i) the accuracy of, and
compliance with, the Buyers' representations and agreements contained
in Article 4 of this Agreement and (ii) the accuracy of the
representations and agreements of Concentra set forth in this Agreement
and (iii) that the offer, sale and delivery of the Units, including the
Debentures and the Warrants have been made as contemplated by this
Agreement.
i. To such counsel's knowledge after due inquiry, no
action has been taken and no law, statute, rule or regulation or order
has been enacted, adopted or issued by any governmental agency or body
which prevents the execution, delivery or performance of any of the
Operative Agreements, the consummation of any of the transactions
contemplated thereunder or the issuance of the Units, including the
Debentures or the Warrants, or suspends the sale of the Units,
including the Debentures or the Warrants.
(c) Concentra shall have executed and delivered the Operative
Agreements.
(d) Concentra and the Trustee shall have executed and
delivered the Indenture.
18
(e) On the Closing Date, the Buyers shall have received a
solvency opinion from Valuation Research, dated the Closing Date, as to the
solvency of Concentra (on a consolidated basis) after giving effect to the
Merger, the transactions contemplated thereby and the financings and
transactions contemplated herein in form and substance reasonably satisfactory
to the Buyers.
(f) The Senior Credit Facilities shall have been executed by
the parties thereto and, on the Closing Date, the closing under the Senior
Credit Facilities (including, without limitation, the borrowing of all term
loans thereunder) shall have been consummated simultaneously with the
consummation of the offering of the Units.
(g) All of the conditions precedent to the Merger Agreement
shall have been satisfied or waived and the Merger shall have been consummated.
Section 6.2 CONDITIONS TO OBLIGATION OF CONCENTRA. The
obligation of Concentra to consummate the transactions contemplated hereby is
subject to the satisfaction of the following further conditions:
(a) Each Buyer shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or
prior to the Closing Date.
(b) Each Buyer shall have executed and delivered the
Registration Rights Agreement and the Warrant Agreement.
ARTICLE 7
SURVIVAL OF REPRESENTATIONS AND WARRANTIES: INDEMNIFICATION
Section 7.1 SURVIVAL. Except for the representations and
warranties contained in Sections 3.1 and 3.3, which shall survive indefinitely,
the representations and warranties of the parties hereto contained in this
Agreement shall survive the Closing until twelve months after the Closing Date,
and thereafter shall terminate and be of no further force or effect.
Section 7.2 INDEMNIFICATION. (a) Concentra hereby indemnifies
each Buyer and its affiliates, limited partners, general partners, directors,
officers, trustees and employees against and agrees to hold each of them
harmless from any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding)
("DAMAGES") incurred or suffered by any such party arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by Concentra pursuant to this Agreement; PROVIDED that with respect to
any Buyer, (i) Concentra shall not be liable under this Section 7.2(a) unless
the aggregate amount of Damages with respect to all matters referred to in this
Section 7.2(a) for
19
which such Buyer has sought indemnification exceeds $100,000 and then only to
the extent of such excess and (ii) the indemnifying parties' aggregate maximum
liability under this Section 7.2(a) to any Buyer shall not exceed the amount of
the Aggregate Purchase Price paid by such Buyer to Concentra.
(b) Each Buyer hereby indemnifies, severally and not jointly,
Concentra and its affiliates, limited partners, general partners, directors,
officers and employees against and agrees to hold each of them harmless from any
and all Damages incurred or suffered by any such party arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by such Buyer pursuant to this Agreement; PROVIDED that (i) such Buyer
shall not be liable under this Section 7.2(b) unless the aggregate amount of
Damages with respect to all matters referred to in this Section 7.2(b) exceeds
$100,000 and then only to the extent of such excess and (ii) such Buyer's
maximum liability under this Section 7.2(b) shall not exceed the amount of
Aggregate Purchase Price paid by such Buyer to Concentra.
(c) Each Buyer acknowledges that because of the $100,000
threshold established in Section 7.2(a), one or more Buyers may be compensated
under such section while another Buyer or Buyers is not so compensated because
of the operation of such $100,000 threshold. In order to correct the inequities
which might otherwise result, each Buyer agrees to contribute such amounts to
such other Buyers as may be necessary so that, after giving effect to all such
contributions, each Buyer has received (i) the amount it would have received had
there been no $100,000 threshold in Section 7.2(a), (ii) multiplied by a
fraction, the numerator of which is the aggregate of all indemnity payments
actually paid under Section 7.2(a) and the denominator of which is the aggregate
of all indemnity payments actually paid under Section 7.2(a) plus all indemnity
amounts actually offset against the $100,000 threshold.
Similarly, each Buyer acknowledges that because of the
$100,000 threshold in Section 7.2(b), one or more Buyers could be required to
make indemnity payments under such section while another Buyer or Buyers is not
so required because of the operation of such $100,000 threshold. Each Buyer
agrees to contribute such amounts to such other Buyers as may be necessary so
that, after giving effect to all such contributions, each Buyer has paid an
indemnity amount equal to (i) the amount it would have paid had there been no
$100,000 threshold in Section 7.2(b), (ii) multiplied by a fraction, the
numerator of which is the aggregate of all indemnity payments actually paid
under Section 7.2(b) and the denominator of which is the aggregate of all
indemnity payments actually paid under Section 7.2(b) plus all indemnity amounts
actually offset against the $100,000 threshold.
Concentra shall provide WCAS Capital Partners III, L.P. ("WCAS
CP III") with information relating to any amounts paid or offset under Sections
7.2(a) or 7.2(b), within 30 days of the date of each such payment or offset.
WCAS will provide such information to its independent accountants who will, no
later than February 28 (or 29) of each year determine the contribution amounts,
contribution payors and contribution payees for the previous calendar year and
provide notice to each Buyer as to its determinations under this Section 7.2(c).
Those Buyers
20
who are required to make contributions shall pay such amounts to WCAS CP III's
independent accountants within 30 days of the receipt of such notice. Such
accountants will in turn, make payments to the contribution payees in accordance
with the determinations set forth in the notice. Buyers agree that the
determination of WCAS CP III's independent accounts as to all matters relating
to this Section 7.2(c) shall be conclusive and binding on all parties, absent
manifest error.
ARTICLE 8
TAG-ALONG AND DRAG-ALONG RIGHTS
SECTION 8.1 TAG-ALONG RIGHTS.
(a) Until the earlier of (1) the second anniversary of the
date the Debentures are first issued and (2) the date the Buyers sell at least
50% of the outstanding Debentures, with respect to any proposed Transfer by WCAS
CP III (the "SELLING DEBENTUREHOLDER") of a majority of the Debentures held by
WCAS CP III to any Person (including an underwriter or an initial purchaser in
connection with an offering pursuant to Rule 144A or Regulation S of the
Securities Act or in a Public Offering pursuant to a bona fide sale to the
public) (any such transaction, a "PROPOSED SALE"), each Buyer (other than WCAS
CP III) (a "TAGGING DEBENTUREHOLDER") will have the right to require the Selling
Debentureholder to include in such Proposed Sale a face amount of the Debentures
equal to up to the product (rounded up to the nearest whole number) of (i) the
quotient determined by dividing (A) the aggregate face amount of the Debentures
owned by such Tagging Debentureholders by (B) the aggregate face amount of the
Debentures owned by WCAS CP III and the Tagging Debentureholders and (ii) the
total face amount of the Debentures proposed to be directly or indirectly
Transferred to the transferee or acquiring Person in the Proposed Sale (a
"PROPOSED TRANSFEREE"), at the same price per face amount of the Debentures and
upon the same terms and conditions (including, without limitation, time of
payment, form of consideration, inclusion of Warrants and adjustments to
purchase price) as the Selling Debentureholder; PROVIDED that in order to be
entitled to exercise its right to sell Debentures to the Proposed Transferee
pursuant to this Section 8.1(a), each Tagging Debentureholder (x) shall agree to
the same covenants with respect to such Tagging Debentureholders, as
appropriate, as the Selling Debentureholder agrees to in connection with the
Proposed Sale; PROVIDED, however, that the aggregate amount of liability of such
Tagging Debentureholder with respect to such covenants shall not exceed the
proceeds to such Tagging Debentureholder in connection with the Proposed Sale,
and (y) shall make such representations and warranties concerning its title to
the Debentures (and Warrants, if applicable) to be sold in connection with the
Proposed Sale and its authority to enter into and consummate the Proposed Sale
as the Selling Debentureholder makes, but shall not be required to make any
other representations and warranties or indemnities other than with respect to
its own representations and warranties.
(b) Each Tagging Debentureholder will be responsible for
funding its proportionate share of any escrow arrangements in connection with
the Proposed Sale and for its proportionate share of any withdrawals therefrom,
including without limitation any such
21
withdrawals that are made with respect to claims arising out of agreements,
covenants, representations, warranties or other provisions relating the Proposed
Sale that were made by the Tagging Debentureholder.
(c) Each Tagging Debentureholder will be responsible for its
proportionate share of the reasonable fees, discounts, commissions and other
out-of-pocket expenses (collectively, "COSTS") of the Proposed Sale to the
extent not paid or reimbursed by Concentra, the Proposed Transferee or another
Person (other than the Selling Debentureholder); PROVIDED that the Proposed Sale
is consummated and the liability for such Costs shall not exceed the total
purchase price received by such Tagging Debentureholder for such Debentures (and
Warrants, if applicable). The Selling Debentureholder shall be entitled to
estimate the Tagging Debentureholders' proportionate share of such Costs and to
withhold such amounts from payments to be made to the Tagging Debentureholder at
the time of closing of such Proposed Sale; PROVIDED that (i) such estimate shall
not preclude the Selling Debentureholder from recovering additional amounts from
the Tagging Debentureholder in respect of such Tagging Debentureholder's
proportionate share of such Costs and (ii) the Selling Debentureholder shall
reimburse the Tagging Debentureholder to the extent actual amounts are
ultimately less than the estimated amounts or any such amounts are paid by the
Company, the Proposed Transferee or another Person (other than the Selling
Debentureholder).
(d) The Selling Debentureholder will give notice to Concentra
of each Proposed Sale not more than five days after such Selling Debentureholder
has determined to effect a Proposed Sale, setting forth the face amount of
Debentures (and Warrants, if applicable) proposed to be so Transferred, the
manner in which the Proposed Sale will be effected, the name and address of the
Proposed Transferee (if applicable), the proposed amount and form of
consideration (and if such consideration consists in part or in whole of
property other than cash, the Selling Debentureholder will provide such
information, to the extent reasonably available to the Selling Debentureholder,
relating to such non-cash consideration as each of the Tagging Debentureholders
may reasonably request in order to evaluate such non-cash consideration) and
other terms and conditions of the Proposed Sale. If any holders of the
Debentures are given an option as to the form and amount of consideration to be
received, all holders of the Debentures shall be given the same option. In the
event that any of the terms and/or conditions set forth in the notice are
thereafter amended in any respect, the Selling Debentureholder shall also give
written notice of the amended terms and conditions of the Proposed Sale to
Concentra, and each Tagging Debentureholder shall be permitted to cancel its
exercise of its rights under this Section 8.1 upon delivery of written notice to
Concentra to such effect and shall be released from its obligation hereunder.
Upon its receipt of any such notice or amended notice, Concentra shall promptly,
but in all events within three (3) Business Days of its receipt thereof, forward
copies thereof to each of the Tagging Debentureholders. The Selling
Debentureholder will deliver or cause to be delivered to each Tagging
Debentureholder copies of all transaction documents relating to the Proposed
Sale promptly as the same become available. The tag-along rights provided by
this Section 8.1 must be exercised by the Tagging Debentureholders within 10
Business Days following receipt of the notice required by the preceding sentence
by delivery of a
22
written notice to the Selling Debentureholder indicating its desire to exercise
its rights and specifying the face amount of the Debentures it desires to sell
(the "TAG-ALONG NOTICE"). The Tagging Debentureholders will be entitled under
this Section 8.1 to Transfer to the Proposed Transferee the face amount of the
Debentures calculated in accordance with Section 8.1(a).
(e) Any Tagging Debentureholder participating in the Proposed
Sale shall deliver to Concentra, as agent for such Tagging Debentureholder, for
transfer to the Proposed Transferee one or more Debentures (and Warrants, if
applicable), properly endorsed for transfer and with all transfer taxes paid and
stamps affixed, which represent the face amount of the Debentures (and Warrants,
if applicable) that such Tagging Debentureholder elects to dispose of pursuant
to paragraph (d) above. The consummation of such proposed disposition shall be
subject to the sole discretion of the Selling Debentureholder, who shall have no
liability or obligation whatsoever to any Tagging Debentureholder participating
therein other than to obtain for such Tagging Debentureholder the same terms and
conditions as those of the Selling Debentureholder. Upon the consummation of any
such sale, Concentra (i) shall transfer to the Proposed Transferee a Debenture
or Debentures representing the face amount of the Debentures to be disposed of
by any Tagging Debentureholders (and Warrants, if applicable) and (ii) shall
promptly thereafter remit to each Tagging Debentureholder (i) that portion of
the proceeds of the disposition to which such Tagging Debentureholder is
entitled by reason of such participation and (ii) Debentures or Warrants, as the
case may be, representing any balance of face amount of the Debentures or any
number of Warrants that were not so disposed of (or all of the Debentures and
Warrants, in the event the proposed disposition is not consummated).
(f) If any Tagging Debentureholder exercises its rights under
this Section 8.1, the closing of the purchase of the Debentures (and Warrants,
if applicable) with respect to which such rights have been exercised will take
place concurrently with the closing of the sale of the Selling Debentureholder's
Debentures (and Warrants, if applicable) to the Proposed Transferee. If by the
end of ninety (90) days following the date of delivery of the notice of the
Proposed Sale provided by Concentra pursuant to Section 8.1(d), the Selling
Debentureholder and the Proposed Transferee have not completed the Proposed
Sale, each Tagging Debentureholder shall be released from its obligations under
this Section 8.1, and the Tag-Along Notices shall be null and void, and it shall
be necessary for the terms of this Section 8.1 to be separately complied with in
order to consummate such Proposed Sale pursuant to this Section 8.1.
SECTION 8.2. DRAG-ALONG RIGHTS.
(a) Until the earlier of (1) the second anniversary of the
date the Debentures are first issued and (2) the date the Buyers sell at least
50% of the outstanding Debentures, if WCAS CP III (the "DRAGGING
DEBENTUREHOLDER") decides to, and does, sell (including to an underwriter or an
initial purchaser in a Public Offering, pursuant to a bona fide sale to the
public or pursuant to Rule 144A or Regulation S under the Securities Act), all
of the face amount of the Debentures then owned by the Dragging Debentureholder
(a "SECTION 8.2 TRANSFER") then each Buyer (other than the Dragging
Debentureholder) (collectively, the "DRAG-ALONG
23
DEBENTUREHOLDERS") hereby agrees that, if requested by the Dragging
Debentureholder, it will Transfer in the Section 8.2 Transfer, subject to the
other provisions of this Section 8.2, on the terms of the Section 8.2 Transfer
as finally determined by the Dragging Debentureholder, including, without
limitation, time of payment, form and choice of consideration, inclusion of
Warrants and adjustments to purchase price, the face amount of the Debentures
(and number of Warrants, if applicable) equal to the face amount of the
Debentures (and number of Warrants, if applicable) owned by it multiplied by the
percentage of the then outstanding face amount of Debentures (and number of
Warrants) to which the Section 8.2 Transfer offer is applicable; PROVIDED,
HOWEVER, Chase Equity Associates, L.P. and its transferees and assigns shall
have the right to refuse to participate in any proposed Section 8.2 Transfer
giving rise to the rights of the Dragging Debentureholder set forth in this
Section 8.2(a) within five (5) Business Days following the receipt of the
Drag-Along Notice (as defined below) by sending written notice of its refusal to
the Dragging Debentureholder.
(b) The Dragging Debentureholder will give notice (the
"DRAG-ALONG NOTICE") to the Drag-Along Debentureholders of any Section 8.2
Transfer within five (5) Business Days following the Dragging Debentureholder's
determination to effect a Section 8.2 Transfer and, in any event, not less than
ten (10) Business Days prior to the proposed closing date for such Section 8.2
Transfer. The Drag-Along Notice will set forth the face amount of the Debentures
(and number of Warrants, if applicable) proposed to be so Transferred, the
manner in which the Section 8.2 Transfer will be effected, the name of the
proposed Transferee or acquiring Person (if applicable), the proposed amount and
form of consideration (and if such consideration consists in part or in whole of
property other than cash, the Dragging Debentureholder will provide such
information, to the extent reasonably available to the Dragging Debentureholder,
relating to such non-cash consideration as the Drag-Along Debentureholders
together may reasonably request in order to evaluate such non-cash
consideration), the face amount of the Debentures (and number of Warrants, if
applicable) sought and the other terms and conditions of the Section 8.2
Transfer. If any holders of the Debentures are given an option as to the form
and amount of consideration to be received, all holders of the Debentures shall
be given the same option. Each Drag-Along Debentureholder (x) shall agree to the
same covenants with respect to such Drag-Along Debentureholders, as appropriate,
as the Dragging Debentureholder agrees to in connection with the Section 8.2
Transfer; PROVIDED, HOWEVER, that the aggregate amount of liability of such
Drag-Along Debentureholder with respect to such covenants shall not exceed the
proceeds to such Drag-Along Debentureholder in connection with the Section 8.2
Transfer and (y) shall make such representations and warranties concerning its
title to the Debentures (and Warrants, if applicable) to be sold in connection
with the Section 8.2 Transfer and its authority to enter into and consummate the
Section 8.2 Transfer as the Dragging Debentureholder makes, but shall not be
required to make any other representations and warranties or indemnities other
than in respect of its own representations and warranties. If the Dragging
Debentureholder does not request that the Drag-Along Debentureholders
participate in a Section 8.2 Transfer, then each holder of Debentures shall have
the right to participate in such proposed transfer in accordance with its rights
under Section 8.1 above.
24
(c) Each Drag-Along Debentureholder will be responsible for
funding its proportionate share of any escrow arrangements in connection with
the Section 8.2 Transfer and for its proportionate share of any withdrawals
therefrom, including without limitation any such withdrawals that are made with
respect to claims arising out of agreements, covenants, representations,
warranties or other provisions relating the Section 8.2 Transfer that were made
by the Drag-Along Debentureholder.
(d) Each Drag-Along Debentureholder will be responsible for
its proportionate share of the Costs of the Section 8.2 Transfer to the extent
not paid or reimbursed by Concentra or another Person (other than the Dragging
Debentureholder); PROVIDED that such Section 8.2 Transfer is consummated and the
liability for such Costs shall not exceed the total purchase price received by
such Drag-Along Debentureholder for such Debentures (and Warrants, if
applicable). The Dragging Debentureholder shall be entitled to estimate the
Drag-Along Debentureholders' proportionate share of such Costs and to withhold
such amounts from payments to be made to the Drag-Along Debentureholder at the
time of closing of the Section 8.2 Transfer; PROVIDED that (i) such estimate
shall not preclude the Dragging Debentureholder from recovering additional
amounts from the Drag-Along Debentureholder in respect of such Drag-Along
Debentureholder's proportionate share of such Costs and (ii) the Dragging
Debentureholder shall reimburse the Drag-Along Debentureholder to the extent
actual amounts are ultimately less than the estimated amounts or any such
amounts are paid by Concentra or another Person (other than the Dragging
Debentureholder). If the Section 8.2 Transfer is not consummated within 180 days
from the date of the Drag-Along Notice, the Dragging Debentureholder must
deliver another Drag-Along Notice in order to exercise its rights under this
Section 8.2 with respect to such Section 8.2 Transfer.
(e) At the closing of such Section 8.2 Transfer, each of the
Dragging Debentureholders shall deliver one or more Debentures (and Warrants, if
applicable), properly endorsed for transfer and with all transfer taxes paid and
stamps affixed, which represent the face amount of the Debentures (and Warrants,
if applicable) then held by it and to be sold in such sale, duly endorsed for
transfer, against payment of the purchase price therefor by wire transfer to the
account or accounts specified by such Drag-Along Debentureholder.
(f) The proceeds from such Section 8.2 Transfer shall be
allocated among the selling holders of Debentures on a PRO RATA basis, based on
the face amount of the Debentures and number of Warrants then sold by each such
Debentureholder;
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission) and shall be given:
25
if to Concentra, to:
Concentra Managed Care, Inc.
5080 Spectrum Drive
Suite 400 West Tower
Addison, Texas 75001
Attention: General Counsel
Fax: (972) 364-8043
with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Attention: Othon A. Prounis
Fax: (212) 841-5725
if to any Buyer, to it at the address set forth under its name
in Schedule I hereto;
or to such other address or telecopy number and with such other copies as such
party may hereafter specify for the purpose of notice. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
Section 9.2 AMENDMENTS AND WAIVERS. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and signed in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
Section 9.3 BOARD OBSERVER. (a) For so long as Chase Equity
Associates, L.P. (or its affiliates) shall own $23,000,000 or greater in
principal amount at maturity of Debentures, Chase Equity Associates, L.P. shall
have the right to appoint one non-voting observer to the Board of Directors (the
"Board Observer"). The appointment and removal of the Board Observer shall be by
written notice from Chase Equity Associates, L.P. to the Company and shall take
effect upon the delivery of written notice thereof at the Company's registered
office. The Board Observer and Chase Equity Associates, L.P. shall receive
copies of all notices, minutes,
26
consents, and other materials that the Company provides to the members of the
Board, PROVIDED, HOWEVER, that the Company reserves the right to exclude the
Board Observer from access to any meeting or any materials if it is reasonably
believed, upon advice of counsel, that such exclusion is necessary to preserve
any privilege or to protect confidential information. Except to the extent so
excluded, the Board Observer may participate in discussions of any and all
matters brought before any meeting it attends as a non-voting observer.
Section 9.4 EXPENSES. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense; PROVIDED, HOWEVER, that if for any reason Units are not delivered by or
on behalf of Concentra as provided herein, Concentra agrees to reimburse the
Buyers for all out-of-pocket expenses (including the fees and disbursements of
counsel) reasonably incurred by them. .
Section 9.5 SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon any inure to the benefit of the parties hereto
and their respective successors and assigns, PROVIDED that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each of the other parties hereto (it being
agreed that a merger (including the Merger) shall not be deemed an assignment
requiring the consent of Buyers). Notwithstanding the foregoing, a Buyer may
assign its rights under this Agreement or the right to receive any of the Units
under this Agreement to any general or limited partner of such Buyer or any
affiliates (as defined in Rule 405 promulgated under the Securities Act) thereof
(collectively, the "BUYER PARTIES" and each a "BUYER PARTY"), who are reasonably
acceptable to Concentra; PROVIDED that any such Buyer Party executes an
assumption agreement reasonably satisfactory in form and substance to Concentra
whereby such Buyer Party makes certain representations and warranties as set
forth in this Agreement and agrees to be bound, to the same extent as its
transferor, by the terms of this Agreement.
Section 9.6 GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the law of the State of New York.
Section 9.7 JURISDICTION. The parties hereto agree that any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.1 shall be deemed
effective service of process on such party.
27
Section 9.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 9.9 COUNTERPARTS; THIRD PARTY BENEFICIARIES. 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 and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement shall confer upon any person other than
the parties hereto any rights or remedies hereunder.
Section 9.10 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 9.11 CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
Section 9.12 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be deemed to be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforced in accordance with its terms to the maximum extent permitted by law.
Section 9.13 INTERPRETATION. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
CONCENTRA MANAGED CARE, INC.
By: /s/ Richard Parr II
-------------------------------
Name: Richard Parr II
Title: Executive Vice President and
General Counsel
WCAS CAPITAL PARTNERS III, L.P.
By: WCAS CP III Associates, L.L.C., General Partner
By /s/ Paul Queally
----------------
Managing Member
JP MORGAN DIRECT CORPORATE FINANCE
INSTITUTIONAL INVESTORS, LLC
By: /s/ Julian E. Shles
---------------------
Name: Julian E. Shles
Title: Vice President of J.P. Morgan Investment
Management, Inc., as Investment Advisor
JP MORGAN DIRECT CORPORATE FINANCE
PRIVATE INVESTORS, LLC
By: /s/ Julian E. Shles
---------------------
Name: Julian E. Shles
Title: Vice President of J.P. Morgan Investment
Management, Inc., as Investment Advisor
CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
By: /s/ David E.j. Maxwell
----------------------
Name: David E. J. Maxwell
Title: Principal Investment Officer
CALIFORNIA STATE TEACHERS'
RETIREMENT SYSTEM
By: /s/ Eileen Y. Okada
-------------------
Name: Eileen Y. Okada
Title: Director of Investment Administration
and External Relations
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By: /s/ Jonas Steinman
------------------
Name: Jonas Steinman
Title:
CMS CO-INVESTMENT SUBPARTNERSHIP II
By: CMS CO-INVESTMENT SUBPARTNERSHIP,
a Delaware general partnership
By: CMS Co-Investment Partners, L.P.,
a Delaware limited partnership
By: CMS/Co-Investment Associates, L.P.,
a Delaware limited partnership
By: MSPS/Co-Investment, Inc.,
a Delaware corporation
By: /s/ Richard Mitchell
------------------------------
Its: Vice President
By: CMS 1997 Investment Partners, L.P.,
a Delaware limited partnership
By: CMS 1997, Inc.
a Delaware corporation
By: /s/ Richard Mitchell
------------------------------
Its: Vice President
By: CMS Co-Investment Partners I-Q, L.P.,
a Delaware limited partnership
By: CMS/Co-Investment Associates, L.P.,
a Delaware limited partnership
By: MSPS/Co-Investment, Inc.,
a Delaware corporation
By: /s/ Richard Mitchell
------------------------------
Its: Vice President
By: CMS 1997 Investment Partners, L.P.,
a Delaware limited partnership
By: CMS 1997, Inc.
a Delaware corporation
By: /s/ Richard Mitchell
------------------------------
Its: Vice President
By: /s/ Ira Brind
------------------------------
Ira Brind
By: /s/ Bruce Lindsay
------------------------------
Bruce Lindsay
CMS DIVERSIFIED PARTNERS, L.P.
By: CMS/DP Associates, L.P, a general partner
By: MSPS/DP, Inc., its general partner
By: /s/ Richard Mitchell
--------------------------------
Vice President
By: CMS 1995 Investment Partners, L.P,
a general partner
By: CMS 1995, Inc., its general
partner
By: /s/ Richard Mitchell
------------------------------
Vice President
BT CAPITAL INVESTORS, L.P.
By: /s/ Heidi Silverstein
------------------------------
Name: Heidi Silverstein
Title: Director
FINANCIERE ET INDUSTRIELLE GAZ ET EAUX
By: /s/ Bertrand Soleil
------------------------------
Name:Bertrand Soleil
Title:
GS PRIVATE EQUITY PARTNERS II, L.P.
By: GS PEP II Advisors, L.L.C.,
its General Partner
By: GSAM Gen-Par, L.L.C.,
its Managing Member
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS II OFFSHORE, L.P.
By: GS PEP II Offshore Advisors, Inc.,
its General Partner
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS II -
DIRECT INVESTMENT FUND, L.P.
By: GS PEP II Direct Investment Advisors, L.L.C., its
General Partner
By: GSAM Gen-Par, L.L.C.,
its Managing Member
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS III, L.P.
By: GS PEP III Advisors, L.L.C., its
General Partner
By: GSAM Gen-Par, L.L.C., its Managing
Partner
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
GS PRIVATE EQUITY PARTNERS III OFFSHORE, L.P.
By: GS PEP III Offshore Advisors, Inc., its General
Partner
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
NBK/GS PRIVATE EQUITY PARTNERS, L.P.
By: GS PEP Offshore Advisors (NBK), Inc. General
Partner
By: /s/ Jerome Truzzolino
------------------------------
Name: Jerome Truzzolino
Title: Vice President
HAMILTON LANE PRIVATE EQUITY PARTNERS, L.P.
By: HLSP Investment Management, LLC
By: /s/ Mario L. Giannini
------------------------------
Mario L. Giannini
Managing Member
HAMILTON LANE PRIVATE EQUITY FUND, PLC
By: HLSP Investment Management, LLC
By: /s/ Mario L. Giannini
------------------------------
Mario L. Giannini
Managing Member
A.S.F. CO-INVESTMENT PARTNERS, L.P.
By: /s/ Jonathan F. Murphy
----------------------
Name: Jonathan F. Murphy
Title: Managing Member of Old Kings I LLC, the Sole
Member of PAF 10/98, LLC, the Sole
General Partner of A.S.F. Co-Investment
Partners, L.P.
NASSAU CAPITAL PARTNERS III L.P.
By: Nassau Capital L.L.C.,
its General Partner
By: /s/ John G. Quigley
-------------------
Name: John G. Quigley
Title: Member
NAS PARTNERS LLC
By: /s/ John G. Quigley
-------------------
Name: John G. Quigley
Title: Member
NEW YORK LIFE INSURANCE COMPANY
By: /s/ Steven M. Benevent
----------------------
Name: Steven M. Benevento
Title: Director
SCHEDULE I
DEBENTURES Aggregate
NAME UNITS (face amount) WARRANTS PURCHASE PRICE
---- ----- ------------- -------- ----------------
WCAS Capital Partners III, L.P. 42,703.311 $ 83,943,063.00 619,356 $ 42,703,311.00
JP Morgan Director Corporate Finance 867.678 $ 1,705,618.00 12,585 $ 867,678.00
Institutional Investors, LLC
JP Morgan Director Corporate Finance 194.950 $ 383,219.00 2,827 $ 194,950.00
Private Investors, LLC
California Public Employees' 1,918.513 $ 3,771,273.00 27,826 $ 1,918,513.00
Retirement System
California State Teachers' Retirement 3,179.191 $ 6,249,422.00 46,110 $ 3,179,191.00
System
Chase Equity Associates, L.P.* 35,000.000 $ 68,800,455.00 507,629 $ 35,000,000.00
CMS Co-Investment Subpartnership II 345.896 $ 679,937.00 5,017 $ 345,896.00
CMS Diversified Partners, L.P. 11.235 $ 22,085.00 163 $ 11,235.00
BT Capital Investors, L.P. 20,000.000 $ 39,314,545.00 290,074 $ 20,000,000.00
Financiere et Industrielle Gaz et Eaux 226.308 $ 444,860.00 3,282 $ 226,308.00
GS Private Equity Partners II, L.P. 542.358 $ 1,066,128.00 7,866 $ 542,358.00
GS Private Equity Partners II 280.871 $ 552,116.00 4,074 $ 280,871.00
Offshore, L.P.
GS Private Equity Partners II - 224.697 $ 441,693.00 3,259 $ 224,697.00
Direct Investment Fund, L.P.
GS Private Equity Partners III, L.P. 568.467 $ 1,117,451.00 8,245 $ 568,467.00
GS Private Equity Partners III 132.524 $ 260,506.00 1,922 $ 132,524.00
Offshore, L.P.
NBK/GS Private Equity Partners, L.P. 60.130 $ 118,199.00 872 $ 60,130.00
hamilton Lane Private Equity Fund PLC 95.355 $ 187,442.00 1,383 $ 95,355.00
Hamilton Lane Private Equity Partners, L.P. 44.032 $ 86,555.00 639 $ 44,032.00
A.S.F. Co-Investment Partners, L.P. 2,098.590 $ 4,125,256.00 30,437 $ 2,098,590.00
Nassau Capital Partners III L.P. 892.108 $ 1,753,641.00 12,939 $ 892,108.00
NAS Partners LLC 6.892 $ 13,548.00 100 $ 6,892.00
New York Life Insurance Company 606.894 $ 1,192,988.00 8,802 $ 606,894.00
TOTAL: 110,000.000 $216,230,000.00 1,595,406 $110,000,000.00
- --------------------------------------------------------------------------------
c/o Welsh, Carson, Anderson & Stowe | * Chase Capital Partners
320 Park Avenue, Suite 2500 | 380 Madison Avenue, 12th Floor
New York, New York 10022 | New York, New York 10017
Attention: Paul B. Queally | Attention: Eric Green
Telecopy: (212) 893-9566 | Telecopy: (212) 622-3950
- --------------------------------------------------------------------------------