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Exhibit 10.14
Loan No. 99-407
THIRD AMENDED AND RESTATED
SUBORDINATION AGREEMENT
THIS THIRD AMENDED AND RESTATED SUBORDINATION AGREEMENT (this
"Agreement") is made as of March 7, 2001, by and among the entities listed on
Exhibit A hereto, each a Delaware corporation (collectively, "Borrowers"),
BALANCED CARE CORPORATION, a Delaware corporation ("BCC"), the entities listed
on Exhibit D hereto, each a Delaware corporation, which are direct or indirect
subsidiaries of BCC and shareholders of one or more of the Borrowers
(collectively "BCC Subs", and collectively with BCC, "Pledgor"), FRR Investments
Limited, a Cayman Islands corporation ("FRR"), IPC Advisors, S.a.r.l., a
Luxembourg corporation ("IPC"), HR Investments Limited, a Cayman Islands
corporation ("HR"), RH Investments Limited, a Cayman Islands corporation ("RH"),
VXM Investments Limited, a Cayman Islands corporation ("VXM") (FRR, IPC, RH, HR
and VXM, together with any successors or assigns in such capacity, are
collectively referred to herein as the "Junior Lender"), and XXXXXX HEALTHCARE
FINANCE, INC., a Delaware corporation, (together with any successors or assigns
in such capacity, "Senior Creditor").
W I T N E S S E T H:
WHEREAS, the Borrowers, BCC, the BCC Subs, FRR, IPC and the Senior
Creditor are parties to that certain Amended and Restated Subordination
Agreement dated as of November 6, 2000 (the "Original Amended and Restated
Subordination Agreement"), which was amended and restated pursuant to that
certain Second Amended and Restated Subordination Agreement dated as of February
9, 2001 (the "Second Amended and Restated Subordination Agreement");
WHEREAS, the Borrowers have executed and delivered a Second Amended
and Restated Promissory Note A in the principal amount of Thirty Million Six
Hundred Thousand and No/100 Dollars ($30,600,000.00) in favor of the Senior
Creditor (the "Senior Note A"), a Second Amended and Restated Subordinated
Promissory Note B in the principal amount of Six Million Four Hundred Thousand
and No/100 Dollars ($6,400,000.00) in favor of the Senior Creditor (the "Senior
Note B"; Senior Note A and Senior Note B being referred to herein collectively
as the "Senior Notes"), and a Promissory Note C in the principal amount of Five
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Million and No/100 Dollars ($5,000,000.00) in favor of the Senior Creditor
("Note C");
WHEREAS, in connection with the execution and delivery of the
Original Amended and Restated Subordination Agreement, (i) a reserve account
originally funded with some of the proceeds of Note C was disbursed to the
Senior Creditor to repay, in part, Note C, (ii) Note C was repaid in its
entirety, and (iii) a Third Amendment to Loan Documents dated as of November 6,
2000 (the "Third Amendment") was entered into among the Borrowers, BCC, the
Senior Creditor and certain affiliates of BCC and the Borrowers;
WHEREAS, all amounts owed by the Borrowers to the Senior Creditor
under the Senior Notes or otherwise under the Senior Security Documents (as
defined below) and all amounts owed by the BCC Borrowers (as defined in the
Third Amendment) to the Senior Creditor pursuant to the Revolving Credit
Facility Loan Documents (as defined in (and amended by) the Third Amendment) or
otherwise are being hereinafter referred to collectively as the "Senior Debt;"
WHEREAS, the Senior Debt is secured by, among other things, those
certain mortgages and deeds of trust, each dated December 30, 1999 listed on
Exhibit B hereto, as each has been amended (together with the Revolving Credit
Facility Mortgages (as defined in (and amended by) the Third Amendment),
collectively, the "Senior Mortgages"), covering certain real property including
the real property more particularly described on Exhibit C attached hereto and
incorporated herein by reference (together with the properties encumbered by the
Revolving Credit Facility Mortgages, collectively, the "Properties");
WHEREAS, (i) FRR agreed to loan an amount not to exceed Seven
Million and No/100 Dollars ($7,000,000.00) to BCC, which loan was evidenced by a
Series One 1999 BCC Discount Note dated December 29, 1999, executed by BCC in
favor of FRR, and which loan was subsequently repaid in full, and (ii) BCC has
executed and delivered in favor of IPC that certain Indemnification, Defense,
Hold Harmless and Reimbursement Agreement dated as of December 29, 1999 (the
"Indemnification Agreement");
WHEREAS, some or all of the Junior Lenders have loaned BCC (through
one or more disbursements, made on one or more dates and evidenced by one or
more notes) an amount not to exceed Nine Million Six Hundred Thousand and No/100
Dollars ($9,600,000.00) in aggregate (the note(s) evidencing such loan being
referred to (collectively) as the "Junior Note");
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WHEREAS, the indebtedness and other obligations of BCC to each
Junior Lender under the Indemnification Agreement, and the indebtedness and
other obligations of the Borrowers to each Junior Lender pursuant to the Junior
Note, is hereinafter referred to collectively as the "Junior Debt";
WHEREAS, the Junior Debt is secured by a Pledge Agreement pursuant
to which Pledgor is pledging the capital stock of the Borrowers (the "Stock") to
the Junior Lender as security for the Junior Debt (as amended from time to time,
the "Pledge Agreement", and together with the Junior Note and Indemnification
Agreement, the "Junior Loan Documents");
WHEREAS, the Junior Lender has agreed to fully subordinate the
Junior Debt and the Junior Loan Documents to the Senior Debt and Senior Security
Documents;
WHEREAS, that certain Loan Agreement dated December 30, 1999 among
the Senior Creditor and the Borrowers, as amended to date, including by the
Third Amendment (the "Loan Agreement"), the Senior Mortgages, the Senior Notes
and all other documents evidencing, securing or otherwise executed in connection
with the Senior Notes or the Senior Debt (other than this Agreement), together
with the Revolving Credit Facility Loan Documents are referred to herein as the
"Senior Security Documents;"
WHEREAS, all capitalized terms used herein and not defined herein
shall have the meanings as signed to them in the Loan Agreement; and
WHEREAS, the parties intend that the Second Amended and Restated
Subordination Agreement is hereby amended and restated in its entirety to read
as provided in this Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the parties agree as follows:
1. The Junior Loan Documents and the Junior Debt and the liens,
security interests and assignments created thereunder (including without
limitation the Pledge Agreement and any liens created thereby) are and shall
continue to be expressly subject and subordinate to (a) the Senior Debt and the
liens, security interests and assignments created by the Senior Security
Documents (regardless of the relative times and method of attachment or
perfection thereof or the order of filing, of financing statements, mortgages,
deeds of trust, assignments or other security agreements or documents, or
anything in the Junior
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Loan Documents or this Agreement to the contrary); (b) all the terms, covenants
and conditions contained in the Senior Security Documents and any extensions,
replacements, consolidation, modifications and supplements thereto, including
without limitation any and all advances (whether or not obligatory), in whatever
amounts and whenever made, with interest thereon, and to any expenses, charges
and fees incurred thereby, including any and all advances, interest, expenses,
charges and fees which may increase the indebtedness secured by the Senior
Security Documents above the original principal amount thereof and any
post-petition interest which accrues, or would have accrued but for such filing,
after the commencement of any case under the Federal Bankruptcy Code, to the
full extent of all of the foregoing; and (c) any amounts advanced or incurred,
in the sole judgment of the Senior Creditor whether or not in accordance with
the Senior Security Documents, for the benefit of the Properties or for costs
and expenses associated with the Senior Debt or otherwise. In foreclosing on the
Senior Creditor's security interests and liens, the Senior Creditor may proceed
to foreclose on its security interests and liens in any manner which the Senior
Creditor, in its sole discretion, chooses, even though a higher price might have
been realized if the Senior Creditor had proceeded to foreclose on its security
interests and liens in another manner. Notwithstanding the foregoing to the
contrary, nothing in this Agreement shall be construed to prevent the Junior
Lender from receiving (i) payment of the obligations under the Indemnification
Agreement at any time from BCC, (ii) so long as no Event of Default has occurred
and is continuing under (and as defined in) any of the Senior Security
Documents, regularly scheduled interest payments under the Junior Note may be
made from BCC, and (iii) so long as (1) BCC obtains new funds to repay the
Junior Note from either (A) an equity contribution (without an increase in BCC's
liabilities as would be the case, for example, if convertible debt were issued,
as opposed to common or preferred stock) or (B) new debt incurred by BCC which
debt is consented to by the Senior Creditor (whose consent will not be
unreasonably withheld), and which new debt is subject to a complete standstill
and subordination in favor of the Senior Creditor by the holder of such debt,
pursuant to a written agreement in substantially the form of this Agreement, and
(2) no Event of Default has occurred and is continuing under (and as defined in)
any of the Senior Security Documents, payment due under the Junior Note upon
maturity (as the maturity date may be extended from time to time) (the payments
described in clauses (i), (ii) and (iii) of this sentence being referred to
collectively as the "Permitted Payments").
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2. (a) Until the Senior Debt has been satisfied in full, the Junior
Lender shall not be entitled to receive or retain any payment made by BCC, any
of the BCC Borrowers, any of the Borrowers or any of the BCC Subs with respect
to the Junior Debt or under the Junior Loan Documents, except for the Permitted
Payments. The BCC Subs, BCC, the BCC Borrowers and the Borrowers agree that they
shall not, directly or indirectly, make any payments (whether of principal,
interest or otherwise) on account of the Junior Debt (other than the Permitted
Payments) or redeem, purchase or otherwise acquire, directly or indirectly, any
Junior Debt, and the Junior Lender agrees that it will not accept any such
payment (other than the Permitted Payments) or payment from any other source
including, without limitation, proceeds of insurance or any condemnation award
or participate in any such redemption, purchase or other acquisition.
(b) Until the Senior Debt has been satisfied in full, the
Junior Lender agrees that it shall not exercise any remedies whatsoever under
the Junior Loan Documents, including without limitation, any remedies with
respect to the capital shares of any of the Borrowers or of any of the Pledgors
(or if applicable at any time hereafter, any of the BCC Borrowers), whether
under the Junior Loan Documents or otherwise.
(c) Until the Senior Debt has been satisfied in full, the
Junior Lender shall not take, require or accept from BCC, any BCC Borrower, any
Borrower or any BCC Sub any security or collateral for the Junior Debt or any
guaranty of the Junior Debt (except for pledges of shares by the Pledgor and
other security granted by the Pledgor under the Pledge Agreement).
3. At all times during which the Senior Debt is outstanding, the
Junior Lender agrees that it shall not (i) vote for any plan of reorganization
of the BCC Borrowers, the Borrowers or Pledgor without the written consent of
the Senior Creditor; (ii) commence or join with any other creditor or creditors
of the BCC Borrowers, the Borrowers or Pledgor in commencing any bankruptcy,
reorganization or insolvency proceeding against the BCC Borrowers, the Borrowers
or Pledgor; (iii) object to any motion filed in any bankruptcy proceeding that
rents from the Properties, or any of them, shall constitute cash collateral of
the Senior Creditor; (iv) oppose any motion filed by the Senior Creditor to lift
the automatic stay in a bankruptcy proceeding; or (v) take any action to appoint
a receiver for Pledgor, the Borrowers, the BCC Borrowers or any of the
Properties.
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4. Nothing contained in this Agreement is intended to or shall
impair the obligations of the Borrowers, BCC and the BCC Borrowers, which are
absolute and unconditional, to pay to the Senior Creditor the principal or the
prepayment premium, if any, and the interest on the Senior Debt as and when the
same shall become due and payable in accordance with its terms, or to affect the
relative rights of the Senior Creditor and creditors of the BCC Borrowers, the
Borrowers or Pledgor, other than the Junior Lender.
5. Should any payment on account of, or any stock as collateral (or
other collateral) for any part of, the Junior Debt be paid to the Junior Lender
in violation of the terms of this Agreement, such payment or collateral shall be
delivered forthwith to the Senior Creditor by the recipient for application to
the Senior Debt, in the form received. The Senior Creditor is irrevocably
authorized to supply any required endorsement or assignment which may have been
omitted. Until so delivered, any such payment or collateral shall be held by the
Junior Lender in trust for the Senior Creditor and shall not be commingled with
other funds or property of the Junior Lender.
6. Each of FRR, IPC, HR, RH and VXM represents that it has not
transferred or assigned its rights under the Junior Note, in the case of HR, RH
and VXM, and the Indemnification Agreement, in the case of IPC, and no part
thereof has been subordinated in favor of anyone except the Senior Creditor. The
Junior Lender may not sell, assign or transfer its collateral interest in the
Stock or its interest in the Junior Note or any of the Junior Loan Documents
without the Senior Creditor's consent.
7. The rights in favor of the Senior Creditor created hereunder are
solely for its benefit and protection and for the benefit and protection of its
participants, successors and assigns. Nothing herein contained shall impose on
the Senior Creditor any duties with respect to any property of the BCC
Borrowers, the Borrowers, Pledgor or the Junior Lender.
8. The Senior Creditor is hereby authorized to demand specific
performance of this Agreement, whether or not the BCC Borrowers, the Borrowers
or Pledgor shall have complied with the provisions hereof applicable to it, at
any time when the Junior Lender shall have failed to comply with any provision
hereof applicable to it. The Junior Lender hereby irrevocably waives any defense
based on the adequacy of a remedy at law which might be asserted as a bar to the
remedy of specific performance hereof in any action brought therefor by the
Senior Creditor. The Junior Lender consents that, without the necessity of any
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reservation of rights against the Junior Lender, and without notice to or
further assent by the Junior Lender:
(a) any demand for payment of any Senior Debt may be rescinded in
whole or in part, and any Senior Debt may continue;
(b) the Senior Debt, or the liability of BCC, the BCC Borrowers, the
Borrowers or any other party upon or for any part thereof, or any collateral
security therefor or guaranty thereof or right of offset with respect thereto,
may, from time to time, in whole or in part, be renewed, increased, extended,
modified, compromised, waived, surrendered or released;
(c) the Senior Notes and any other agreement or instrument
evidencing the Senior Debt or governing the terms of the Senior Debt, and any
collateral security documents or guaranties or documents signed in connection
therewith, and the Revolving Credit Facility Loan Documents, may be amended,
modified, supplemented or terminated, in whole or in part, as the Senior
Creditor may deem advisable from time to time; and
(d) any collateral security at any time held by the Senior Creditor
for the payment of any of the Senior Debt may be sold, waived, surrendered or
released, and the Senior Creditor may take any other action it deems desirable
with respect to the collateral for the Senior Debt.
9. The Junior Lender shall execute and deliver to the Senior
Creditor such further instruments and shall take such further action as the
Senior Creditor may reasonably request from time to time in order to carry out
the provisions and intent of this Agreement or to enable the Senior Creditor to
exercise and enforce its rights and remedies hereunder.
10. The Junior Lender and the Senior Creditor agree to provide to
each other estoppel certificates current to the date of such request within
thirty (30) business days of the request of the other party, but not more
frequently than three times per year, which estoppel certificate shall provide
that the Junior Debt or Senior Debt (as the case may be) is in full force and
effect, that, to the affirming party's knowledge, no defaults have occurred and
are continuing thereunder, and as to any other matters reasonably requested by
the requesting party.
11. The Junior Lender agrees that in the event of a casualty to one
or more of the Properties or a condemnation or taking under a power of eminent
domain of all or any portion of one or more of the Properties, or a threat of
such a condemnation
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or taking, all adjustments of insurance claims, condemnation claims and
settlements in anticipation of such a condemnation or taking shall be
prosecuted, at the Senior Creditor's election, by the Senior Creditor or at the
Senior Creditor's direction pursuant to the terms and provisions of the Senior
Security Documents, and all payments and settlements of insurance claims or
condemnation awards or payments in anticipation of condemnation or a taking
shall be paid to the Senior Creditor or at the Senior Creditor's direction for
use and application pursuant to the terms and provisions of the Senior Security
Documents. The Junior Lender irrevocably assigns to the Senior Creditor all of
its interest, if any, in any such claims, settlements or awards and irrevocably
grants to the Senior Creditor authorization to execute any and all documents on
the Junior Lender's behalf necessary in connection with the prosecution or
settlement of such claims, awards and payments.
12. The execution of this Agreement shall not create or be construed
as creating a partnership, joint venture or other joint enterprise between the
Senior Creditor and the Junior Lender, and shall not be construed as creating
any special relationship between the Senior Creditor and the Junior Lender.
Except as provided in Sections 5 and 15, nothing in this Agreement shall be
construed to constitute the Senior Creditor or the Junior Lender as trustee or
other fiduciary for the other or to impose on either of them any duty,
responsibility or obligation other than those expressly provided for herein,
including, without limitation, any duty of good faith and fair dealing. Each of
the Senior Creditor and the Junior Lender has, independently and without
reliance on the other and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the BCC Borrowers, the
Borrowers and/or Pledgor, as applicable, and agrees that it will, independently
and without reliance upon the other, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own independent
analysis and decisions in taking or not taking action under this Agreement, the
Senior Security Documents or the Junior Loan Documents, respectively.
13. In the event there exists a conflict between the terms and
provisions of the Senior Security Documents, the Junior Loan Documents and this
Agreement, the terms and provisions of this Agreement will prevail. The Senior
Lender hereby consents to, and waives any default under the Senior Security
Documents in connection with, the execution and delivery of the Junior Loan
Documents, and the performance thereunder of the parties thereto, subject to the
terms and conditions of this Agreement.
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14. If the Junior Lender shall acquire by subrogation or otherwise,
any lien, estate, right, or other interest in the Properties which is or may be
prior in right to the Senior Creditor, including, but not limited to, advances
made by the Junior Lender for real estate taxes and assessments, such lien,
estate, right or other interest shall be subordinate to the Senior Security
Documents and the Junior Lender shall not exercise any such subrogation or other
rights until all amounts due under the Senior Security Documents are paid in
full and all obligations thereunder are fully satisfied.
15. Upon any distribution of the assets of one or more of BCC, the
BCC Borrowers or the Borrowers in connection with any dissolution, winding up,
liquidation or reorganization of one or more of BCC, the BCC Borrowers or the
Borrowers (whether in bankruptcy proceedings or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
BCC, a BCC Borrower or a Borrower or otherwise), or the distribution of
insurance proceeds or condemnation awards received with respect to one or more
of the Properties in the event of a casualty or condemnation, the Senior
Creditor shall first be entitled to receive payment in full of all the Senior
Creditor claims which claims shall include, without limitation, the right to
payment in full of the Senior Debt (the "Senior Claims") before the Junior
Lender shall be entitled to receive any payment from such proceeds in respect of
the claims of the Junior Lender (the "Junior Claims"). Upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets of BCC, a BCC Borrower or a Borrower of any kind or
character, whether in cash, property or securities, to which the Senior Creditor
is entitled shall be made directly to the Senior Creditor by the liquidating
trustee or agent or other persons making such payment or distribution (whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise) (a
"Paying Party"). If the aggregate amount of such payments or distributions on
the Senior Claims is insufficient to pay the Senior Claims in full, then the
Junior Lender hereby irrevocably authorizes the Paying Party to remit promptly
to the Senior Creditor, and the Junior Lender hereby assigns to the Senior
Creditor, the lesser of the proceeds the Junior Lender is entitled to receive by
reason of any payment or distribution on the Junior Claims, or the difference
between the aggregate amount of the Senior Claims and the proceeds the Senior
Creditor receives by reason of any payment on distribution on the Senior Claims.
In furtherance of the foregoing, but not by way of limitation thereof, if one or
more of BCC, the BCC Borrowers or the Borrowers are subject to any proceeding,
with the result that
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BCC, such BCC Borrower or BCC Borrowers or such Borrower or Borrowers, as
applicable, are excused from the obligation to pay all or part of the interest
otherwise payable in respect of the Senior Claims during the period subsequent
to the commencement of any such Proceedings, the Junior Lender agrees that such
interest (calculated at the rate of interest set forth in the Senior Security
Documents) shall be payable out of payments or distributions made by the Paying
Party in respect of the Junior Claims.
If any payment or distribution of assets of BCC, a BCC Borrower or a
Borrower of any kind or character (including any distribution of insurance
proceeds or condemnation awards received with respect to the Property owned by
BCC, such BCC Borrower or such Borrower in the event of a casualty or
condemnation), whether in cash, property or securities, and whether or not
pursuant to any dissolution, winding up, liquidation or reorganization, not
permitted by or in accordance with the provisions of this Agreement shall be
received by the Junior Lender in connection with the Junior Claims, such payment
or distribution to the Junior Lender shall be held in trust for the benefit of,
and shall be paid over or delivered to, the Senior Creditor, or to its
representative, in precisely the form received (except for the endorsement or
assignment of the Junior Lender where necessary). In the event of any failure by
the Junior Lender to make any such endorsement or assignment, the Senior
Creditor is hereby irrevocably authorized to make same.
16. This Agreement shall be binding upon the parties hereto until
all of the Senior Debt shall have been paid and fully satisfied.
17. The Junior Lender agrees that: (a) the Senior Creditor shall be
entitled to manage and supervise the Senior Debt and its relationship to the
Borrowers, the BCC Borrowers and BCC as it deems appropriate under the
circumstances; (b) the Senior Creditor shall not have any responsibility to the
Junior Lender to advise it of information known to the Senior Creditor regarding
the financial condition of the BCC Borrowers, the Borrowers or Pledgor or of any
circumstances bearing upon the risk of nonpayment of the Senior Debt or any
other indebtedness of the BCC Borrowers, the Borrowers or Pledgor; and (c) the
Senior Creditor shall have the right at all times to determine the order in
which any or all of the collateral for the Senior Debt shall be subjected to the
remedies provided by the Senior Security Documents. In any event, the Senior
Creditor shall not have any liability to the Junior Lender for, and the Junior
Lender hereby waives any claim which it may now or hereafter have
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against the Senior Creditor arising out of any amendment to, waiver or departure
from, any term of the Senior Security Documents and any and all actions to which
the Senior Creditor, takes or omits to take with respect to the BCC Borrowers,
the Borrowers, Pledgor, the Senior Security Documents or any collateral
(including, without limitation, (i) actions with respect to the taking,
perfection or release of liens or security interests in any other collateral,
(ii) actions with respect to the foreclosure upon sale of, release of or failure
to realize upon, any collateral or to the collection of the Senior Debt or the
valuation, use or protection of any collateral, and (iii) actions under any
guaranty of the Senior Debt.)
18. All notices or other written communications hereunder shall be
deemed to have been properly given (i) upon delivery, if delivered in person or
by facsimile transmission with receipt acknowledged by the recipient thereof,
(ii) one (1) Business Day (defined below) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Senior Creditor: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
0 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attn: Manager, Portfolio
Administration Group
Facsimile No. (000) 000-0000
with a copy to: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn:Xxxxx Xxxxxxxxxx,
V.P. and Chief Counsel
Senior Living Group
Facsimile No. (000) 000-0000
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with a copy to: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn:Xxxxx XxXxxx,
Senior Vice President
Facsimile No. (000) 000-0000
If to the Junior Lender: IPC Advisors S.a.r.l.
00, xxx Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx L-1542
Attn:X.X. Xxxxxxxx
Facsimile No.: (000) 0000-0000
with a copy to: FRR Investments Limited
Xxxxxx House
Xxxx Street
Xxxxxx Town, Grand Cayman
Attn:X.X. Xxxxxxxx
Facsimile No.: (0000) 000-0000
and with copies to: Xxxxxxx, Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attn:Xxxxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Alliance Finance B.V.
Xxxxxxxxxxx 000, 0000 XX
Xxxxxxxxx, Xxxxxxxxxxx
Attn:X.X. Xxxxxxxx
Facsimile No.: (0000) 000-0000
If to the Borrowers, BCC Balanced Care Corporation
or the BCC Subs: 0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:Xxxxx Xxxxx, Chief Financial
Officer
Telecopy: (000) 000-0000
with a copy to: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
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with a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Section, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in
Chicago, Illinois, and a day which is not any of the first, second, seventh or
eighth day of Passover, the first or second day of Shavuoth, the first or second
day of Rosh Hashanah, Yom Kippur, the first or second day of Sukkoth, Shemini
Azerth or Simchas Torah.
19. Time is of the essence with respect to the obligations contained
herein.
20. The Agreement shall be binding upon BCC, the BCC Borrowers, the
BCC Subs, the Borrowers, the Senior Creditor, the Junior Lender and their
respective successors and assigns, and shall inure to the benefit of the Senior
Creditor and its successors and assigns. The terms "Borrowers", "BCC", "BCC
Subs" and "BCC Borrowers" as used herein shall also refer to their respective
successors and assigns, including, without limitation, a receiver, trustee,
custodian or debtor in possession.
21. This Agreement may be executed in any number of counterparts,
but all such counterparts shall together constitute but one agreement. In making
proof of this Agreement, it shall not be necessary to produce or account for
more than one counterpart signed by each of the parties hereto.
22. This Agreement and the rights and obligations of the parties
hereunder shall in all respects be construed, governed, applied and enforced in
accordance with the laws of the State of Illinois (without regard to conflicts
of laws principles) and the applicable laws of the United States of America.
PLEDGOR, THE BORROWERS, THE BCC BORROWERS AND THE JUNIOR LENDER HEREBY CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF
XXXX, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT, SUBJECT TO THE SENIOR
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CREDITOR'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. PLEDGOR, THE BORROWERS, THE
BCC BORROWERS AND THE JUNIOR LENDER EXPRESSLY SUBMIT AND CONSENT TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. PLEDGOR, THE BORROWERS, THE BCC BORROWERS AND THE JUNIOR LENDER
HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE UPON PLEDGOR, THE BORROWERS, THE BCC BORROWERS
AND THE JUNIOR LENDER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO PLEDGOR, THE BORROWERS, THE BCC BORROWERS AND THE JUNIOR LENDER, AT
THE ADDRESSES SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE
TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
23. Pledgor, the BCC Borrowers and the Borrowers are executing this
Agreement for the sole purpose of evidencing their consent to the terms hereof
and the agreements made between the Senior Creditor and the Junior Lender
evidenced hereby; however, none of Pledgor, the BCC Borrowers or the Borrowers
shall be entitled to enforce any of the provisions of this Agreement, but
nonetheless are permitted to rely on (i) the consent by the Senior Creditor to
the pledge to the Junior Lender of the stock owned by Pledgor in the Borrowers,
and (ii) the waiver of any default under any Senior Security Document as a
result of entering into the Pledge Agreement and making the Junior Debt. There
are no third party beneficiaries to this Agreement.
24. Notwithstanding any other provision of this Agreement which may
be to the contrary: (i) any debt or obligation which is or becomes secured by
the Pledge Agreement shall automatically and without further documentation
irrevocably become part of the Junior Debt for all purposes of this Agreement
and all documents, notes, debentures, agreements or other instruments evidencing
or securing such debt or obligations shall automatically and without further
documentation irrevocably become Junior Loan Documents for all purposes of this
Agreement; provided, however, nothing in this clause (i) shall be deemed to
constitute the consent of the Senior Creditor to any debt incurred hereafter by
BCC (other than the debt evidenced (or to be evidenced) by the Junior Note as
defined above), the Borrowers, the BCC Subs or the BCC Borrowers, when such
consent is required under the terms of the Senior Security Documents; (ii) the
Junior Lender and their affiliates will not make additional loans or provide
other financial assistance (other than the debt evidenced (or to be evidenced)
by the Junior Note as defined above), without regard to how they are documented
(as notes, convertible securities or otherwise), to BCC, the Borrowers, the BCC
Subs, the BCC Borrowers or their affiliates,
- 14 -
15
if doing so would cause a default under any of the Senior Security Documents,
without in each instance obtaining the prior written consent of the Senior
Creditor; (iii) the Junior Lender and their affiliates will not take additional
security to secure any existing or future debt or obligations of BCC, the
Borrowers, the BCC Subs, the BCC Borrowers or their affiliates, if doing so
would cause a default under any of the Senior Security Documents, without in
each instance obtaining the prior written consent of the Senior Creditor; (iv)
if the Senior Creditor consents to any debt or other financial assistance
described in clause (ii) above, in the exercise of the Senior Creditor's
reasonable discretion, the Senior Creditor may require as a condition to its
consent, that such debt or other financial assistance become part of the Junior
Debt for all purposes of this Agreement and, if required as a condition to the
Senior Creditor's consent, all documents, notes, debentures, agreements or other
instruments evidencing or securing such debt or other financial assistance shall
automatically and without further documentation irrevocably become part of the
Junior Loan Documents and subject to the provisions of this Agreement; and (v)
if the Senior Creditor consents to any security described in clause (iii) above,
all documents, notes, debentures, agreements or other instruments evidencing
such security interests shall automatically and without further documentation
irrevocably become Junior Loan Documents for all purposes of this Agreement. The
Junior Lender shall give the Senior Creditor prompt written notice as to any
debts or obligations which become secured by the Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
JUNIOR LENDER:
IPC Advisors, S.a.r.l.
By:/s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Manager
FRR Investments Limited
By:/s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Director
- 15 -
16
HR Investments Limited
By:/s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Director
RH Investments Limited
By:/s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Director
VXM Investments Limited
By:/s/X.X. Xxxxxxxx
Name: X.X. Xxxxxxxx
Title: Director
SENIOR CREDITOR:
XXXXXX HEALTHCARE FINANCE, INC., a
Delaware corporation
By:/s/Xxxxxxx Xxxxxx
Name:Xxxxxxx Xxxxxx
Title:Vice President
BCC:
BALANCED CARE CORPORATION, a Delaware
corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and Counsel;
Assistant Secretary
BORROWERS:
BALANCED CARE REALTY AT STATE COLLEGE,
INC., a Delaware corporation
BALANCED CARE REALTY AT ALTOONA, INC.,
- 16 -
17
a Delaware corporation
BALANCED CARE REALTY AT ALTOONA, INC.,
a Delaware corporation
BALANCED CARE REALTY AT LEWISTON, INC.,
a Delaware corporation
BALANCED CARE REALTY AT READING, INC.,
a Delaware corporation
BALANCED CARE REALTY AT BERWICK, INC.,
a Delaware corporation
BALANCED CARE REALTY AT PECKVILLE, INC.,
a Delaware corporation
BALANCED CARE REALTY AT SCRANTON, INC.,
a Delaware corporation
BALANCED CARE REALTY AT MARTINSBURG, INC.,
a Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BORROWERS:
BALANCED CARE REALTY AT MAUMELLE, INC.,
a Delaware corporation
BALANCED CARE REALTY AT SHERWOOD, INC.,
a Delaware corporation
BALANCED CARE REALTY AT MOUNTAIN HOME, INC.,
a Delaware corporation
BALANCED CARE REALTY AT MANSFIELD, INC.,
a Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
- 17 -
18
BCC SUBS:
BALANCED CARE REALTY I, INC.,
a Delaware corporation
BALANCED CARE REALTY II, INC.,
a Delaware corporation
BALANCED CARE REALTY III, INC.,
a Delaware corporation
BALANCED CARE REALTY IV, INC.,
a Delaware corporation
BALANCED CARE REALTY V, INC.,
a Delaware corporation
BALANCED CARE REALTY VI, INC.,
a Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC SUBS:
BALANCED CARE REALTY VII, INC.,
a Delaware corporation
BALANCED CARE REALTY VIII, INC.,
a Delaware corporation
BALANCED CARE REALTY IX, INC.,
a Delaware corporation
BALANCED CARE REALTY X, INC.,
a Delaware corporation
BALANCED CARE REALTY XI, INC.,
a Delaware corporation
BALANCED CARE REALTY XII, INC.,
a Delaware corporation
BALANCED CARE REALTY XIII, INC.,
a Delaware corporation
- 18 -
19
BALANCED CARE REALTY XIV, INC., a
Delaware corporation
BALANCED CARE REALTY XV, INC., a
Delaware corporation
BALANCED CARE REALTY XVI, INC., a
Delaware corporation
BALANCED CARE REALTY XVII, INC., a
Delaware corporation
BALANCED CARE REALTY XVIII, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC SUBS:
BALANCED CARE REALTY XIX, INC., a
Delaware corporation
BALANCED CARE REALTY XX, INC., a
Delaware corporation
BALANCED CARE REALTY XXI, INC., a
Delaware corporation
BALANCED CARE REALTY XXII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIV, INC., a
Delaware corporation
BALANCED CARE REALTY XXV, INC., a
Delaware corporation
BALANCED CARE REALTY XXVI, INC., a
Delaware corporation
BALANCED CARE REALTY XXVII, INC., a
Delaware corporation
- 19 -
20
BALANCED CARE REALTY XXVIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIX, INC., a
Delaware corporation
BALANCED CARE REALTY XXX, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC SUBS:
BALANCED CARE REALTY XXXI, INC., a
Delaware corporation
BALANCED CARE REALTY XXXII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIV, INC., a
Delaware corporation
BALANCED CARE REALTY XXXV, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVI, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIX, INC., a
Delaware corporation
BCC AT HARRISBURG, INC., a Delaware
corporation
BALANCED CARE AT TALLAHASSEE, INC., a
Delaware corporation
- 20 -
21
BALANCED CARE AT PENSACOLA, INC., a
Delaware corporation
BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC SUBS:
BALANCED CARE AT AKRON, INC., a
Delaware corporation
BALANCED CARE AT YORK, INC., a
Delaware corporation
BALANCED CARE AT HAGERSTOWN, INC., a
Delaware corporation
BALANCED CARE AT BRISTOL, INC., a
Delaware corporation
BALANCED CARE AT XXXXXXX CITY, INC., a
Delaware corporation
BALANCED CARE AT MURFREESBORO, INC., a
Delaware corporation
BALANCED CARE AT TEAY'S VALLEY, INC., a
Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC BORROWERS:
BCC AT DARLINGTON, INC.,
a Delaware corporation
BALANCED CARE AT EYERS GROVE, INC.,
a Delaware corporation
By/s/Xxxxx X. Xxxxxx
- 21 -
22
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC BORROWERS:
BALANCED CARE AT XXXXXX, INC.,
a Delaware corporation
BALANCED CARE AT XXXXXX, INC.,
a Delaware corporation
BALANCED CARE AT NORTH RIDGE, INC.,
a Delaware corporation
By/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
- 22 -
23
EXHIBIT A
Borrowers
1. Balanced Care Realty at State College, Inc.
2. Balanced Care Realty at Altoona, Inc.
3. Balanced Care Realty at Lewiston, Inc.
4. Balanced Care Realty at Reading, Inc.
5. Balanced Care Realty at Berwick, Inc.
6. Balanced Care Realty at Peckville, Inc.
7. Balanced Care Realty at Scranton, Inc.
8. Balanced Care Realty at Martinsburg, Inc.
9. Balanced Care Realty at Maumelle, Inc.
10. Balanced Care Realty at Sherwood, Inc.
11. Balanced Care Realty at Mountain Home, Inc.
12. Balanced Care Realty at Mansfield, Inc.
24
EXHIBIT D
BCC Subs
1. Balanced Care Realty I, Inc.
2. Balanced Care Realty II, Inc.
3. Balanced Care Realty III, Inc.
4. Balanced Care Realty IV, Inc.
5. Balanced Care Realty V, Inc.
6. Balanced Care Realty VI, Inc.
7. Balanced Care Realty VII, Inc.
8. Balanced Care Realty VIII, Inc.
9. Balanced Care Realty IX, Inc.
10. Balanced Care Realty X, Inc.
11. Balanced Care Realty XI, Inc.
12. Balanced Care Realty XII, Inc.
13. Balanced Care Realty XIII, Inc.
14. Balanced Care Realty XIV, Inc.
15. Balanced Care Realty XV, Inc.
16. Balanced Care Realty XVI, Inc.
17. Balanced Care Realty XVII, Inc.
18. Balanced Care Realty XVIII, Inc.
19. Balanced Care Realty XIX, Inc.
20. Balanced Care Realty XX, Inc.
21. Balanced Care Realty XXI, Inc.
22. Balanced Care Realty XXII, Inc.
23. Balanced Care Realty XXIII, Inc.
24. Balanced Care Realty XXIV, Inc.
25. Balanced Care Realty XXV, Inc.
26. Balanced Care Realty XXVI, Inc.
27. Balanced Care Realty XXVII, Inc.
28. Balanced Care Realty XXVIII, Inc.
29. Balanced Care Realty XXIX, Inc.
30. Balanced Care Realty XXX, Inc.
31. Balanced Care Realty XXXI, Inc.
32. Balanced Care Realty XXXII, Inc.
33. Balanced Care Realty XXXIII, Inc.
34. Balanced Care Realty XXXIV, Inc.
35. Balanced Care Realty XXXV, Inc.
36. Balanced Care Realty XXXVI, Inc.
37. Balanced Care Realty XXXVII, Inc.
38. Balanced Care Realty XXXVIII, Inc.
39. Balanced Care Realty XXXIX, Inc.
40. BCC at Harrisburg, Inc.
41. Balanced Care at Tallahassee, Inc.
42. Balanced Care at Pensacola, Inc.
43. Balanced Care at Lakemont Farms, Inc.
25
44. Balanced Care at Xxxxxxxx, Inc.
45. Balanced Care at Akron, Inc.
46. Balanced Care at York, Inc.
47. Balanced Care at Hagerstown, Inc.
48. Balanced Care at Bristol, Inc.
49. Balanced Care at Xxxxxxx City, Inc.
50. Balanced Care at Murfreesboro, Inc.
51. Balanced Care at Teay's Valley, Inc.
