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SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT ("AGREEMENT") dated as of May 3, 1995, is
entered into by and between COMDISCO, INC., a Delaware corporation
("SUBORDINATED CREDITOR"), and BIOSTAR, INC., a Delaware corporation (the
"BORROWER"), for the express benefit of the SENIOR CREDITOR (as defined below).
RECITALS
A. Concurrently herewith, the Subordinated Creditor is advancing
to the Borrower a secured loan of money in the original principal amount of Two
Million Five Hundred Thousand Dollars ($2,500,000) evidenced by a Subordinated
Promissory Note dated the same date as this Agreement (as the same may from
time to time be amended, modified, supplemented, extended, renewed, restated or
replaced, the "SUBORDINATED NOTE") made by the Borrower in favor of the
Subordinated Creditor. The Borrower's obligations to the Subordinated Creditor
evidenced by the Subordinated Note are secured by the personal property
collateral granted by the Borrower to the Subordinated Creditor pursuant to a
Subordinated Security Agreement dated as of the same date as this Agreement (as
the same may from time to time be amended, modified, supplemented or restated,
the "SUBORDINATED SECURITY AGREEMENT").
B. The Borrower has advised the Subordinated Creditor that it
contemplates entering into a loan agreement (as the same may from time to time
be amended, modified, supplemented or restated, the "LOAN AGREEMENT") with a
financial institution or a syndicate of financial institutions to be determined
(such financial institution or syndicate of financial institutions, including,
without limitation, any agent or other representative for such syndicate being
hereinafter referred to individually and collectively as the "SENIOR
CREDITOR"), pursuant to which the Senior Creditor shall make available to the
Borrower, on a senior secured basis, certain extensions of credit as described
in the Loan Agreement.
C. In contemplation of the Borrower obtaining such senior secured
financing and the conditions expected to be imposed by such Senior Creditor as
conditions precedent to making available to the Borrower the proceeds of such
financing, and in order to assist the Borrower to obtain such senior secured
financing, the Subordinated Creditor is willing to enter into this Agreement
with the Borrower for the express benefit of the Senior Creditor, on the terms
and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in order to induce the Senior Creditor to enter into a
Loan Agreement and to make extensions of credit available to the Borrower
thereunder, and to grant such renewals or extensions thereof constituting
Senior Debt (as defined in Section 1, below), and intending to be legally
bound, the Subordinated Creditor and the Borrower hereby severally agree for
the benefit of the Senior Creditor as set forth below.
1. DEFINITIONS. As used herein, the following terms shall have
the following meanings:
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"SENIOR DEBT" means (i) the principal amount of all indebtedness of
the Borrower to the Senior Creditor under the Loan Agreement and any promissory
note or other evidence of indebtedness executed by the Borrower pursuant to the
Loan Agreement in favor of the Senior Creditor; (ii) all other indebtedness and
obligations of the Borrower to the Senior Creditor under or relating to any of
the Loan Agreement or any agreement, document or instrument executed by the
Borrower pursuant to or in connection with the Loan Agreement (collectively,
the "SENIOR LOAN DOCUMENTS"); (iii) all amounts due or to become due relating
to any of the foregoing, including, without limitation, all interest, all loan
and other fees, expenses and costs (including attorneys' fees), including costs
of enforcement, amounts reimbursable and other liabilities (including interest,
fees, professional fees and costs which would become due but for the operation
of Title 11 of the United States Code, the Bankruptcy Rules promulgated
pursuant thereto, or any subsequent bankruptcy law of the United States (the
"BANKRUPTCY CODE"); and (iv) any and all obligations pursuant to any amendment
of any of the foregoing in favor of the Senior Creditor.
"SUBORDINATED DEBT" means (i) the principal amount of all indebtedness
of the Borrower which shall from time to time exist in favor of the
Subordinated Creditor under the Subordinated Note; (ii) all other indebtedness
and debt obligations of the Borrower to the Subordinated Creditor under or
relating to any of the Subordinated Note or any agreement, document or
instrument, including, without limitation, the Subordinated Security Agreement,
executed by the Borrower pursuant to the Subordinated Note (collectively, the
"SUBORDINATED LOAN DOCUMENTS"); (iii) all amounts due or to become due relating
to any of the foregoing, including, without limitation, all interest and all
fees, expenses and costs (including attorneys' fees), including costs of
enforcement, amounts reimbursable and other liabilities (including interest,
fees, professional fees and costs which would become due but for the operation
of the Bankruptcy Code); and (iv) any and all obligations pursuant to any
amendment, replacement, substitution, extension or renewal of any of the
foregoing in favor of the Subordinated Creditor. Notwithstanding anything to
the contrary contained in this definition of "SUBORDINATED DEBT", there shall
be expressly excluded from such definition (1) the Warrant Agreement dated as
of May 3, 1995 between Borrower and the Subordinated Creditor pursuant to which
Borrower granted Subordinated Creditor the right to purchase 214,285 shares of
Series E Preferred Stock ("WARRANT AGREEMENT"); (2) the principal amount of all
indebtedness of the Borrower which shall from time to time exist in favor of
the Subordinated Creditor under the Master Lease Agreement dated as of the same
date as this Agreement (as the same may from time to time be amended, modified,
supplemented or restated, the "MASTER LEASE AGREEMENT") entered into between
the Borrower and the Subordinated Creditor; (3) all other indebtedness and
obligations of the Borrower to the Subordinated Creditor under or relating to
any of the Master lease Agreement or any agreement, document or instrument,
including, without limitation, any schedules to the Master Lease Agreement,
executed or delivered by the Borrower pursuant to the Master Lease Agreement,
including, but not limited to the Warrant Agreement issued in connection
therewith dated May 3, 1995; and (4) all amounts due or to become due relating
to any of the foregoing, including, without limitation, all interest and all
fees, expenses and costs (including attorneys' fees), including costs of
enforcement, amounts reimbursable and other liabilities (including interest,
fees, professional fees and costs which would become due but for the operation
of the Bankruptcy Code) (collectively, the "EXCLUDED LEASE OBLIGATIONS").
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2. SUBORDINATION.
(a) On the terms and conditions set forth below, the
payment and performance, and the Subordinated Creditor's right to receipt
thereof, of the Subordinated Debt is hereby subordinated to the full and final
payment and performance, and the Senior Creditor's right to receipt thereof, of
the Senior Debt. Subject to and except as set forth in Section 3, below, the
Subordinated Creditor shall not ask, demand, xxx for, take or receive from the
Borrower, by setoff or in any other manner, the whole or any part of any monies
which may now or hereafter be owing by the Borrower, or any successor or assign
of the Borrower, including, without limitation, any receiver or trustee (the
term "BORROWER" hereinafter shall include any such successor or assignee of the
Borrower), to the Subordinated Creditor, or be owing by any other person to the
Subordinated Creditor under a guaranty or similar instrument, on account of the
Subordinated Debt, nor any collateral security for any of the foregoing,
including, without limitation, any personal property collateral granted to the
Subordinated Creditor pursuant to the Subordinated Security Agreement, unless
and until all Senior Debt shall have been fully and finally paid in cash and
all commitments to extend credit under the Loan Agreement shall have been
terminated (the temporary reduction of outstanding obligations, liabilities and
indebtedness of the Borrower to the Senior Creditor not being deemed to
constitute full payment or satisfaction thereof).
(b) The Subordinated Creditor expressly understands that
the Senior Creditor is expected not to permit the Subordinated Creditor to
create, maintain or perfect any lien on or in any property of the Borrower,
other than the security interest granted in favor of the Subordinated Creditor
in certain of the Borrower's personal property under and as described in the
Subordinated Security Agreement. If, notwithstanding the foregoing, any lien
shall be created or shall arise (including, without limitation, the security
interests granted in favor of the Subordinated Creditor pursuant to the
Subordinated Security Agreement), whether by operation of law or otherwise, and
may from time to time exist in favor of the Subordinated Creditor in or on any
property of the Borrower securing all or any portion of the Subordinated Debt,
then, regardless of the relative times of attachment or perfection thereof or
the order of filing of financing statements, mortgages or other documents, any
liens granted by the Borrower in favor of the Senior Creditor shall in all
respects be first and senior liens, superior to any liens in favor of the
Subordinated Creditor, including, without limitation, the security interests
granted in favor of the Subordinated Creditor pursuant to the Subordinated
Security Agreement. The Subordinated Creditor shall not have any right to
possession of any such property or to foreclose upon any such property, whether
by judicial action or otherwise, and all liens in and on the property of the
Borrower shall be held in trust by the Subordinated Creditor for the benefit of
the Senior Creditor unless and until all of the Senior Debt shall have been
fully and finally paid in cash and all commitments to extend credit under the
Loan Agreement shall have been terminated. In the event the Senior Creditor
releases any of its collateral security for the Senior Debt which constitutes
collateral security for part or all of the Subordinated Debt, at the request of
the Senior Creditor, so long as the Subordinated Debt is paid in full, the
Subordinated Creditor shall thereupon execute and deliver to the Borrower such
termination statements and releases as the Senior Creditor shall reasonably
request to release the Subordinated Creditor's lien, if any, in or on such
property. This subordination is intended to define the rights and duties of
the Subordinated Creditor and Senior Creditor; it is not intended that any
third party shall benefit from it. If the effect of this subordination
provision would be to give any third party a priority
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status to which that party would not otherwise be entitled, that provision
shall, to the extent necessary to avoid that priority, be given no effect and
the rights and priorities of the Senior Creditor and the Subordinated Creditor
shall be determined in accordance with applicable law.
(c) No agreement or instrument evidencing any obligation
of the Borrower to the Subordinated Creditor may be modified or amended without
the Senior Creditor's prior written consent, which consent shall not be
unreasonably withheld or delayed.
3. PERMITTED PAYMENTS; PAYMENT BLOCKAGE.
(a) Notwithstanding anything to the contrary contained in
Section 2, above, but subject expressly to Section 3(b), below, the Borrower
shall be permitted to make, and the Subordinated Creditor shall be permitted to
accept or receive, (i) scheduled repayments of principal when due under the
Subordinated Note, (ii) scheduled payments of accrued interest when due under
the Subordinated Note and (iii) payments of reimbursable expenses and costs
expressly provided for in the Subordinated Note and the other Subordinated Loan
Documents. The payments permitted to be made by the Borrower under this
Section 3(a) shall herein be collectively referred to as the "PERMITTED
PAYMENTS."
(b) Notwithstanding anything to the contrary contained in
this Section 3 or elsewhere in this Agreement, the Subordinated Creditor shall
not, after delivery of written notice to the Subordinated Creditor from the
Senior Creditor that (i) an Event of Default (as defined in the Loan Agreement)
shall have occurred and be continuing and shall have resulted in such Senior
Debt becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable (an "ACCELERATION NOTICE") or (ii)
an Event of Default has occurred, but in respect of which the Senior Creditor
has not yet declared the Senior Debt due and payable prior to the date on which
it would otherwise have become due and payable (a "BLOCKAGE NOTICE"), accept or
receive any payment of any kind, including any Permitted Payment, of or on
account of the Subordinated Debt, (A) in the case of any event described in
clause (i) above, unless and until such Senior Debt shall have been fully and
finally paid in cash or such Acceleration Notice shall have been rescinded by
the Senior Creditor in writing (whether as the result of the Borrower having
cured all Events of Default or otherwise), or (B) in the case of any event
described in clause (ii) above, unless and until the expiration of the Blockage
Period. Upon the expiration of the Blockage Period, the Subordinated Creditor
shall be entitled to receive all Permitted Payments not previously paid. Each
Blockage Notice shall be effective as of the date of delivery thereof to the
Subordinated Creditor. As used herein "BLOCKAGE PERIOD" means a period of time
beginning on the delivery date of a Blockage Notice and terminating on the
earlier to occur of:
(1) the one hundred eightieth (180th) day following such
date;
(2) the Senior Creditor's written consent to such
termination;
(3) commencement of a judicial proceeding by the Senior
Creditor to collect or enforce any of the Senior Debt or
giving notice of any non-judicial sale of any of the
collateral for the Senior Debt;
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(4) the cure to the reasonable satisfaction of the Senior
Creditor of each Event of Default which is the basis for the
applicable Blockage Notice (such cure of each of the Events of
Default which is the basis for such Blockage Notice being
deemed to also be a cure of any default under the Subordinated
Note arising as a result of the occurrence and continuance of
any such Event of Default); or
(5) an Event of Default under the Loan Agreement relating
to an Insolvency Event (as defined in Section 6, below).
The Senior Creditor shall not be permitted to issue more than one (1) Blockage
Notice in any twelve (12) moth period.
4. ENFORCEMENT RIGHTS. Any rights of the Subordinated Creditor
to accelerate the maturity of the Subordinated Debt, enforce any claim,
including any default remedy, with respect to the Subordinated Debt, or
otherwise to take any action against the Borrower or the Borrower's property
with respect to the Subordinated Debt shall be subject to any Blockage Period
given pursuant to Section 3 hereof.
5. SUBORDINATED DEBT OWED ONLY TO THE SUBORDINATED CREDITOR. The
Subordinated Creditor hereby warrants and represents to the Senior Creditor
that the entire Subordinated Debt created in favor of the Subordinated Creditor
is owing only to the Subordinated Creditor, that the Subordinated Debt has not
been assigned to any other person, and that no subordinations of the
Subordinated Debt have previously been made for the benefit of any other
person. The Subordinated Creditor hereby covenants to the Senior Creditor that
the entire Subordinated Debt created in favor of the Subordinated Creditor
shall continue to be owing only to the Subordinated Creditor and any collateral
security therefor, including, without limitation, the collateral security
granted to the Subordinated Creditor pursuant to the Subordinated Security
Agreement, shall continue to be held solely for the benefit of the Subordinated
Creditor unless assigned in accordance with the terms of this Agreement.
6. THE SENIOR CREDITOR'S PRIORITY. In the event of any
distribution, division, or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the
property of the Borrower or the proceeds thereof to the creditors of the
Borrower, or the readjustment of the Senior Debt and the Subordinated Debt of
the Borrower, whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustment of all or any part of the Senior Debt or
the Subordinated Debt, or the application of the property of the Borrower to
the payment or liquidation thereof, or upon the dissolution or other winding up
of the Borrower's business, or upon the sale of all or any substantial part of
the Borrower's property (any of the foregoing being hereinafter referred to as
an "INSOLVENCY EVENT"), then, and in any such event, the Senior Creditor shall
be entitled to receive full and final payment in cash of any and all of the
Senior Debt before the Subordinated Creditor shall be entitled to receive any
payment on account of the Subordinated Debt, and to that end and in furtherance
thereof: (a) all payments and distributions of any kind or character, whether
in cash or property or securities in respect of the Subordinated Debt to which
the Subordinated Creditor would be entitled if the Subordinated Debt were not
subordinated pursuant to this Agreement (other than pursuant to the
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Warrant Agreement), shall be paid to the Senior Creditor and applied in payment
of the Senior Debt; (b) the Subordinated Creditor shall promptly file a claim
or claims, on the form required in such proceedings, for the full outstanding
amount of the Subordinated Debt, and shall use its best efforts to cause said
claim or claims to be approved and all payments or other distributions in
respect thereof to be made directly to the Senior Creditor; (c) the
Subordinated Creditor hereby irrevocably agrees that in the event Subordinated
Creditor fails to file a claim or claims, the Senior Creditor may in the name
of the Subordinated Creditor, or otherwise, prove up any and all claims of the
Subordinated Creditor relating to the Subordinated Debt; and (d) in the event
that, notwithstanding the foregoing, any payment or distribution of any kind or
character, whether in cash, properties or securities (other than pursuant to
the Warrant Agreement), shall be received by the Subordinated Creditor on
account of the Subordinated Debt before all of the Senior Debt has been fully
and finally paid in cash, then such payment or distribution shall be received
by the Subordinated Creditor in trust for and shall be promptly paid over to
the Senior Creditor for application to the payments of amounts due on the
Senior Debt until all amounts due on the Senior Debt shall have been fully and
finally paid in cash.
7. GRANT OF AUTHORITY. In the event of the occurrence of an
Insolvency Event, and in order to enable the Senior Creditor to enforce its
rights hereunder in any of the aforesaid actions or proceedings, the Senior
Creditor is hereby irrevocably authorized and empowered, in the Senior
Creditor's discretion, as follows:
(a) The Senior Creditor is hereby irrevocably authorized
and empowered (in its own name or in the name of the Subordinated Creditor or
otherwise) but shall have no obligation, to demand, xxx for, collect and
receive every payment or distribution referred to in Section 6, above, and give
acquittance therefor and (if the Subordinated Creditor has failed to file
claims or proofs of claim on or before forty-five (45) days prior to the date
such claims or proofs of claim must be filed pursuant to law or the order of
any court exercising jurisdiction over such proceeding) to file claims and
proofs of claim and take such other action (including, without limitation,
enforcing any lien securing payment of the Subordinated Debt) as it may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Senior Creditor hereunder;
(b) The Subordinated Creditor shall duly and promptly
take such action as the Senior Creditor may request to execute and deliver to
the Senior Creditor such powers of attorney, assignments, or other instruments
as they may request in order to enable the Senior Creditor to enforce any and
all claims with respect to, and any liens securing payment of, the Subordinated
Debt as such enforcement is contemplated herein; and
(c) To the extent that payments or distributions on
account of the Subordinated Debt are made in property other than cash, the
Subordinated Creditor authorizes the Senior Creditor to sell such property to
such buyers and on such terms as are commercially reasonable in the situation
in question. Following full and final payment in cash of the Senior Debt, the
Senior Creditor shall remit to the Subordinated Creditor to the extent of the
Subordinated Creditor's interest therein, all payments or distributions paid to
and held by the Senior Creditor in excess of the Senior Debt.
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8. PAYMENTS RECEIVED BY THE SUBORDINATED CREDITOR. Should any
payment or distribution or security be received by the Subordinated Creditor
upon or with respect to the Subordinated Debt (other than Permitted Payments
and any security issued pursuant to the Warrant Agreement) prior to termination
of this Agreement in accordance with Section 11, below, the Subordinated
Creditor shall receive and hold the same in trust, as trustee, for the benefit
of the Senior Creditor and shall forthwith deliver the same to the Senior
Creditor in precisely the form received (except for the endorsement or
assignment of the Subordinated Creditor where necessary), for application to
any of the Senior Debt, due or not due, and, until so delivered, the same shall
be held in trust by the Subordinated Creditor as the property of the Senior
Creditor.
9. FURTHER ASSURANCES; COOPERATION. The Subordinated Creditor
agrees to cooperate with the Senior Creditor and to take all actions that the
Senior Creditor may reasonably require to enable the Senior Creditor to realize
the full benefits of this Agreement.
10. ASSIGNMENT OF CLAIMS. The Subordinated Creditor agrees that
until the termination of this Agreement in accordance with Section 11, below,
the Subordinated Creditor will not assign to others any portion of the
Subordinated Debt unless such assignment is made expressly subject to this
Agreement.
11. TERMINATION OF AGREEMENT. This Agreement shall be effective
and may not be terminated or otherwise revoked by the Subordinated Creditor
until the date which is 105 days following the date on which the Senior Debt
shall have been fully, completely and finally paid in cash and all commitments
under the Loan Agreement shall have been terminated.
12. ADDITIONAL AGREEMENTS. At any time and from time to time, the
Senior Creditor may enter into such agreement or agreements with the Borrower
as the Senior Creditor may deem proper, extending the time of payment of or
renewing or otherwise altering the terms of all or any of the obligations
constituting Senior Debt or affecting the collateral security for, supporting
or underlying any or all of the Senior Debt, and may exchange, sell, release,
surrender or otherwise deal with any such collateral without in any way thereby
impairing or affecting this Agreement.
13. SUBROGATION. In case cash or other property otherwise payable
or deliverable to the Subordinated Creditor shall have been applied pursuant to
this Agreement to the payment of the Senior Debt, and if the Senior Debt shall
have been fully and finally paid, to the Senior Creditor's satisfaction, then
and in such case, the Subordinated Creditor shall be subrogated to any rights
of the Senior Creditor to receive further payments or distributions applicable
to the Senior Debt until the Subordinated Debt owed to the Subordinated
Creditor shall have been paid in full. No such payments or distributions
received by the Subordinated Creditor by reason of such subrogation shall, as
between the Borrower and its creditors other than the Senior Creditor, on the
one hand, and the Subordinated Creditor, on the other hand, be deemed to be a
payment by the Borrower on account of the Subordinated Debt owed to the
Subordinated Creditor.
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14. THE SUBORDINATED CREDITOR'S WAIVERS AND COVENANTS.
(a) Without limiting the generality of any other waiver
made by the Subordinated Creditor in this Agreement, the Subordinated Creditor
hereby expressly waives (i) reliance by the Senior Creditor upon the
subordination and other agreements (including, without limitation, any
agreement to provide notice) as herein provided and (ii) any claim which the
Subordinated Creditor may now or hereafter have against the Senior Creditor
arising out of any and all actions which the Senior Creditor in good faith,
takes or omits to take (A) with respect to the creation, perfection or
continuation of liens in or on any collateral security for the Senior Debt, (B)
with respect to the foreclosure upon, sale, release, or depreciation of, or
failure to realize upon, any of the collateral security for the Senior Debt,
(C) with respect to the collection of any claim for all or any part of the
Senior Debt from any account debtor, guarantor or any other third party and (D)
with respect to the valuation, use, protection or release of any collateral
security for the Senior Debt.
(b) Without limiting the generality of any other covenant
or agreement made by the Subordinated Creditor in this Agreement, the
Subordinated Creditor hereby covenants and agrees that (i) the Senior Creditor
has not made any warranties or representations with respect to the due
execution, legality, validity, completeness or enforceability of the Loan
Agreement or any of the other Senior Loan Documents, or the collectibility of
the Senior Debt; (ii) the Senior Creditor shall be entitled to manage and
supervise the Senior Creditor's extensions of credit to the Borrower in
accordance with applicable law and the Senior Creditor's usual practices,
modified from time to time as the Senior Creditor deems appropriate under the
circumstances, without regard to the existence of any rights that the
Subordinated Creditor may now or hereafter have in or to any of the property of
the Borrower; and (iii) the Subordinated Creditor will not interfere with or in
any manner oppose a disposition of any collateral security for the Senior Debt
by the Senior Creditor.
15. REINSTATEMENT OF SENIOR DEBT. To the extent that the Senior
receives payments on, or proceeds of any collateral security for the Senior
Debt which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law, or
equitable cause, then, to the extent of such payment or proceeds invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid,
the Senior Debt, or part thereof, intended to be satisfied shall be revived and
continue in full force and effect as if such payments or proceeds had not been
received by the Senior Creditor.
16. NO WAIVERS. The Senior Creditor shall not be prejudiced in
its rights under this Agreement by any act or failure to act of the Borrower or
the Subordinated Creditor or any noncompliance of the Borrower or the
Subordinated Creditor with any agreement or obligation, regardless of any
knowledge thereof which the Senior Creditor may have, or with which the Senior
Creditor may be charged; and no action permitted hereunder taken by the Senior
Creditor shall in any way affect or impair the rights of the Senior Creditor in
the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by any such person of any right or remedy shall
preclude other or further exercise thereof, or their exercise of any other
right or remedy; nor shall any modification or waiver of any of the provisions
of this Agreement
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be binding upon the Senior Creditor, except as expressly set forth in a writing
duly signed and delivered on by the Senior Creditor.
17. INFORMATION CONCERNING FINANCIAL CONDITION OF THE BORROWER.
The Subordinated Creditor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower, any and all endorsers and
any and all guarantors of the Senior Debt and of all other circumstances
bearing upon the risk of nonpayment of the Senior Debt or the Subordinated Debt
that diligent inquiry would reveal, and the Subordinated Creditor hereby agree
that the Senior Creditor shall have no duty to advise the Subordinated Creditor
of information known to the Senior Creditor regarding such condition.
18. NOTICES. Unless otherwise provided herein, all notices
required or desired to be given hereunder shall be deemed validly given or
delivered upon the earlier of (a) actual receipt thereof or (b) three (3)
business days following deposit in the United States mails, and certified or
registered with postage prepaid and if addressed as set forth under each
party's signature below or to such other address as such party shall advise in
writing.
19. SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
20. EXPENSES. Each party hereto agrees that in the event of any
dispute hereunder, any party prevailing in such dispute shall be entitled to
receive its reasonable out-of-pocket fees and expenses incurred in connection
with such dispute or the enforcement of any of their rights or interests
hereunder, including the fees and expenses of their counsel (including outside
and the allocated fees and expenses of in-house counsel).
21. GOVERNING LAW; ASSIGNMENT. This Agreement shall be governed
by and interpreted, in accordance with the laws of the State of California
without regard to principles of conflicts of laws. This Agreement shall be
binding upon the Subordinated Creditor, the Borrower and their respective
successors and assigns, and shall inure to the benefit of and be enforceable by
the Senior Creditor and its successors and assigns.
22. EFFECTIVENESS OF AGREEMENT. This Agreement shall be effective
upon the later to occur of (a) the execution of counterparts by both the
Subordinated Creditor and the Borrower and (b) the delivery by the Borrower to
the Subordinated Creditor of written notice (the "NOTICE OF SENIOR LOAN") that
the Borrower has entered into a Loan Agreement with a Senior Creditor, which
notice shall identify the Senior Creditor and state the address to which
notices to the Senior Creditor are to be sent. The Senior Creditor, as a third
party beneficiary, does not need to execute this Agreement for this Agreement
to be effective. The Borrower agrees to furnish the Subordinated Creditor with
a copy of the Loan Agreement and such other Senior Loan Documents as the
Subordinated Creditor shall reasonably request; provided, however, that any
delay or failure by the Borrower to furnish such copies shall not limit or
impair the effectiveness of this Agreement.
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23. COUNTERPARTS. This Agreement and any amendments, waivers,
consents or supplements hereto 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 an original, but all such counterparts
together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, this Subordination Agreement has been executed as
of the date first above written.
THE SUBORDINATED CREDITOR COMDISCO, INC.
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title: President, Comdisco Venture
Lease Division
Notices To:
COMDISCO, INC.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
With a copy to:
COMDISCO INC./VENTURE GROUP
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
THE BORROWER BIOSTAR, INC.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President Finance
Notices To:
BIOSTAR, INC.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Vice President Finance
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