-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C5p4/erpPH2SU4pO6cRzL26xM4l7qzzR/3wKN+0VZ+HlvLjXc12jEy75M/AN1bos Nxj4mmMgEAimX2/abY8h6g== 0000891836-98-000495.txt : 19980720 0000891836-98-000495.hdr.sgml : 19980720 ACCESSION NUMBER: 0000891836-98-000495 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19980714 SROS: NONE GROUP MEMBERS: GOLDMAN SACHS CREDIT PARTNERS, L.P. GROUP MEMBERS: GOLDMAN SACHS GLOBAL HOLDINGS L.L.C. GROUP MEMBERS: GOLDMAN SACHS GROUP LP GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: THE GOLDMAN SACHS GROUP, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CORAM HEALTHCARE CORP CENTRAL INDEX KEY: 0000924174 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 330615337 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-43605 FILM NUMBER: 98665748 BUSINESS ADDRESS: STREET 1: 1125 SEVENTEENTH ST. STE. 1500 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032924973 MAIL ADDRESS: STREET 1: ONE LAKESHORE CENTRE STREET 2: 3281 GUASTI ROAD SUITE 700 CITY: ONTARIO STATE: CA ZIP: 91761 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP LP CENTRAL INDEX KEY: 0000904571 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133501777 STATE OF INCORPORATION: NY FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD STREET CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Coram Healthcare Corporation - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock (par value $0.001 per share) - -------------------------------------------------------------------------------- (Title of Class of Securities) 218103109 - -------------------------------------------------------------------------------- (CUSIP Number) Barbara Sherman, Esq. Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 (212) 902-1000 - -------------------------------------------------------------------------------- (Name, address and telephone number of person authorized to receive notices and communications) June 30, 1998 - -------------------------------------------------------------------------------- (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. - -------------------- CUSIP NO. 21810310 - -------------------- - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Goldman Sachs Credit Partners, L.P. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS OO [See Item 3.] - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Bermuda - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,320,844 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.4% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- -2- - -------------------- CUSIP NO. 21810310 - -------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Goldman Sachs Global Holdings L.L.C. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS OO [See Item 3.] - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 0 SHARES ------------------------------------------------------------ BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 13,320,844 EACH ------------------------------------------------------------ REPORTING 9. SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------ 10. SHARED DISPOSITIVE POWER 13,320,844 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,320,844 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.4% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- -3- - -------------------- CUSIP NO. 21810310 - -------------------- - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Goldman Sachs Group, L.P. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF - OO [See Item 3.] - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 0 SHARES ------------------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 13,499,850 EACH ------------------------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 13,499,850 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,499,850 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.7% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON HC-PN - -------------------------------------------------------------------------------- -4- - -------------------- CUSIP NO. 297025108 - -------------------- - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Goldman, Sachs & Co. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF - OO - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ X ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,499,850 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 21.7% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON BD-PN-IA - -------------------------------------------------------------------------------- -5- 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 - --------------- 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. -6- 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, -7- 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 -8- 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. -9- 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. -10- (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 -11- 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 -12- 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 -13- 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. -14- 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. -15- EX-24.1 2 POWER OF ATTORNEY, GOLDMAN SACHS CREDIT PARTNERS 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 EX-24.2 3 POWER OF ATTORNEY, GOLDMAN SACHS GLOBAL HOLDINGS 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 EX-99.1 4 FORM OF SERIES B SENIOR SUB. CONVERTIBLE NOTE 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 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 EX-99.2 5 AMEND # 1 AND WAIVER TO SECURITIES EXCHANGE AGMT 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 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 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 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 (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 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 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 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: EX-99.3 6 RISK PARTICIPATION AGREEMENT [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". (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- (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 -3- 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- (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- 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- 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 -7- 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 -8- 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 -9- 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. -10- 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: ---------------------------------- Name: Title: GOLDMAN SACHS CREDIT PARTNERS L.P. By: ---------------------------------- Name: Title: -11- -----END PRIVACY-ENHANCED MESSAGE-----