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EXHIBIT 10.10
[EXECUTION COPY]
XXXXXX SUBORDINATION AGREEMENT
XXXXXX SUBORDINATION AGREEMENT (the "Agreement"), dated as of September
30, 1999, among NORTHSTAR HEALTH SERVICES, INC., a Delaware corporation (the
"Company"), certain creditors of the Company set forth on Schedule I hereto (the
"Subordinated Creditors"), CERBERUS CAPITAL MANAGEMENT, LLC (the "Agent") and
THE CHASE MANHATTAN BANK (the "Collateral Agent"), as collateral agent for the
Senior Lenders (as defined below).
RECITALS
A. The Company, IBJ Xxxxxxxx Bank & Trust Company (the "Original
Agent") and the Senior Lenders are parties to that certain Credit Agreement,
dated as of October 20, 1995 (as amended, modified or supplemented prior to the
date hereof, the "Original Credit Agreement"), pursuant to which the Senior
Lenders agreed to extend certain credit facilities to the Company (the "Original
Loans") which were represented by certain promissory notes (the "Original
Notes"), the proceeds of which were used (i) to refinance substantially all
indebtedness of the Company and its Subsidiaries outstanding on the date
thereof, (ii) to pay certain fees and expenses, (iii) to provide financing for
the working capital needs of the Company and its Subsidiaries and (iv) to
provide a portion of the purchase price of certain acquisitions by the Company
and its Subsidiaries.
B. The Company secured all of the Senior Obligations (as defined below)
under the Original Credit Agreement and under the other Senior Loan Documents
(as defined below) by granting to the Original Agent, on behalf of Senior
Lenders, a first priority security interest in all of its personal property,
including, without limitation, a pledge of all of the capital stock of each of
its Subsidiaries.
C. Xxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxx X. Xxxxxx, the Xxxxxx Family
Limited Partnership, the Company, Keystone Rehabilitation Systems, Inc.
("Keystone") and NSK Merger Corp., a wholly-owned subsidiary of the Company
("NSK"), entered into that certain Merger Agreement (as amended, modified or
supplemented, the "Merger Agreement"), dated as of November 15, 1995, pursuant
to which Keystone merged with and into NSK (the "Merger"). Pursuant to the
Merger Agreement, Xxxxxx became the president and a director of the Company.
D. Pursuant to the Merger, the Company (i) agreed to make the Stock
Guarantee Payments (as defined below) to the Subordinated Creditors, (ii) issued
the Merger Notes (as defined below) to the Subordinated Creditors and (iii)
agreed to make the Contingent Payments (as defined below) to the Subordinated
Creditors.
E. Subsequent to the Merger, Xxxxxx was removed as president and
director of the Company. In an effort to regain control of the Company, Xxxxxx
waged and won a proxy fight through the solicitation of proxy consents from the
shareholders of the Company (the "Consent Solicitation") and in doing so
personally incurred significant costs and expenses in connection
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with such Consent Solicitation. Xxxxxx, after his reinstatement as president of
the Company, requested that the Company reimburse and pay to Xxxxxx the Consent
Solicitation Expenses (as defined below).
F. The Company, the Senior Lenders, the Agent and the Collateral Agent
have agreed to amend and restate the Original Credit Agreement as of the date
hereof (the Original Credit Agreement, as so amended and restated being referred
to herein as the "Credit Agreement") to (i) extend the maturity of the Original
Loans on the terms set forth therein, (ii) reflect the Original Agent's
resignation as agent for the Senior Lenders thereunder and the appointment of
the Agent as successor agent for the Senior Lenders and the appointment of the
Collateral Agent as collateral agent for the Senior Lenders under this
Agreement, and (iii) make certain other changes as more fully set forth therein.
G. The Company, the Subordinated Creditors, Agent and the Collateral
Agent now wish to enter into this Agreement pursuant to which the Subordinated
Creditors agree to subordinate, to the extent provided herein, the obligations
of the Company to the Subordinated Creditors in respect of the Subordinated
Obligations (as defined below).
H. It is a condition precedent to the obligation of the Senior Lenders
to amend and restate the Original Credit Agreement and to extend the maturity of
the Original Loans that the Subordinated Creditors execute this Agreement and
agree to subordinate the Subordinated Obligations in accordance with the terms
of this Agreement.
AGREEMENT
In consideration of the premises and the mutual covenants and the
mutual agreements herein set forth, the parties, intending to be legally bound,
hereby agree as follows:
Section 1. Certain Defined Terms. Capitalized terms used but not
defined herein have the meanings given to them in the Credit Agreement. In
addition, the following terms have the following meanings:
"Consent Solicitation Expenses" means any and all expenses
incurred by or on behalf of Xxxxxx, due to, arising out of, relating
to, or in respect of, the Consent Solicitation.
"Contingent Payments" means the payments that are payable or
may become payable to the Subordinated Creditors under Section 2.3 of
the Merger Agreement.
"Guarantee Agreement" means that certain Guaranty Agreement,
dated as of November 15, 1995, among the Company and the Subordinated
Creditors.
"Insolvency Event" means any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding up or total or
partial liquidation or reorganization of the Company,
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whether voluntary or involuntary or upon bankruptcy, insolvency,
receivership or other proceedings.
"Merger Notes" means the (a) Three Year Notes (as defined in
the Merger Agreement) and (b) Northstar Term Notes (as defined in the
Merger Agreement) and any replacements or substitutes thereof.
"Senior Lenders" means the Lenders (as defined in the Credit
Agreement).
"Senior Lien" means the security interest granted to the
Collateral Agent for the benefit of the Senior Lenders, pursuant to the
Collateral Documents (as defined in the Credit Agreement).
"Senior Loan Documents" means the Loan Documents (as defined
in the Credit Agreement).
"Senior Loan Event of Default" means any Event of Default (as
defined in the Credit Agreement).
"Senior Obligations" means the Obligations (as defined in the
Credit Agreement).
"Stock Guarantee Payments" means the payments that are payable
or may become payable to the Subordinated Creditors under Section 2.7
of the Merger Agreement and under the Guarantee Agreement.
"Subordinated Documents" means (a) the Merger Agreement and
all documents, agreements and instruments executed in connection
therewith, (b) the Merger Notes and (c) the Guarantee Agreement.
"Subordinated Lien" means any lien, claim, encumbrance or
security interest that the Subordinated Creditors may have, or which
may arise in the future, on or with respect to any of the Company's
assets.
"Subordinated Obligations" means (i) all liabilities,
obligations and/or amounts owed by or on behalf of the Company under or
in respect of (a) the Consent Solicitation Expenses, (b) the Contingent
Payments, (c) the Stock Guarantee Payments, (d) the Merger Agreement,
(e) the Merger Notes, (f) the Guarantee Agreement or (g) any of the
other Subordinated Documents and (ii) all liabilities, obligations
and/or amounts owed by or on behalf of the Company to one or more
Subordinated Creditors; provided, however, that the term "Subordinated
Obligations" shall not include (A) the salary payable to Xx. Xxxxxx X.
Xxxxxx by the Company or (B) the lease payments payable by the Company
and its Subsidiaries under the lease agreements (as such agreements
exist as of the date of this Agreement) with certain of the
Subordinated Creditors and Xx. Xxxxx X. Xxxxxxxxxxx, in each case, not
exceeding the current amount of such payments as of the date of this
Agreement.
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Section 2. Agreement and Acknowledgment.
(a) Agreement to Subordinate. Each of the Subordinated Creditors
acknowledges and agrees that the Subordinated Obligations are and shall be
subordinate, to the extent and in the manner provided by this Agreement, in
right of payment to the prior payment in full of the Senior Obligations.
(b) Priority of Liens. Each of the Subordinated Creditors hereby (i)
acknowledges the grant to the Agent, the Collateral Agent and the Senior Lenders
of the Senior Lien in the Collateral, and (ii) acknowledges and agrees that the
Subordinate Lien (if any) is subordinate, junior and inferior and postponed in
priority, operation and effect to the priority, operation and effect of the
Senior Lien, notwithstanding the perfection, order of perfection or failure by
the Senior Lender to perfect any such Senior Lien and other liens or the filing
or recording, order of filing or recording of, or failure to file or record any
instrument or other document in any filing or recording office in any
jurisdiction.
Section 3. Subordination Provisions.
(a) Payment of Subordinated Obligations.
(i) Except as provided in Section 3(a)(ii) below:
(A) none of the Subordinated Creditors shall ask, demand, xxx
for, take or receive from the Company or any of its Subsidiaries,
directly or indirectly, in cash or other property or by setoff or in
any other manner, including, without limitation, from or by way of
collateral, payment of all or any of the Subordinated Obligations
unless and until the Senior Obligations have been indefeasibly paid in
full; provided, however, that with (and only with) the prior written
consent of the Senior Lenders, the Subordinated Creditors may convert
all or a portion of the Subordinated Obligations into equity of the
Company; provided, further, however, that the Subordinated Creditors
may convert their entire right to receive the Stock Guarantee Payments
into 4,888,982 shares of common stock of the Company, without the
consent of the Senior Lenders; and
(B) the Company shall not, and shall not permit any of its
Subsidiaries to, make any payment on or in respect of all or any part
of the Subordinated Obligations or take any other action prejudicial to
or inconsistent with the priority position of the Agent, the Collateral
Agent and the Senior Lenders under this Agreement or otherwise in
contravention of the provisions of this Agreement.
(ii) So long as all of the conditions to such payments set forth in the
Senior Loan Documents are satisfied, the Subordinated Creditors may receive
payments, and the Company may make payments to the Subordinated Creditors, in
respect of the Subordinated Obligations to the extent (and only to the extent)
permitted in Section 2.4B(ii)(e)(i)(II) of the Credit Agreement; provided,
however, that in no event shall such payments exceed $25,000 per month.
(b) Payments to be Held in Trust; Turn-Over of Collateral.
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(i) All payments, funds, instruments or distributions received by the
Subordinated Creditors under, on or in respect of the Subordinated Obligations
(other than the payments permitted by Section 3(a)(ii) above) shall be held in
trust by the Subordinated Creditors for the benefit of the Agent, the Collateral
Agent and the Senior Lenders, shall be segregated from other funds and property
of or held by the Subordinated Creditors and shall be promptly paid and
delivered to the Agent or the Collateral Agent in the form received, with all
necessary endorsements. The Agent or the Collateral Agent may supply any
necessary endorsements that are omitted.
(ii) If any Collateral (or proceeds thereof) shall be received by the
Subordinated Creditors, such Collateral and/or proceeds shall be delivered
forthwith to the Agent or the Collateral Agent for the benefit of the Senior
Lenders by the Subordinated Creditors in the form received. Until so delivered,
any such Collateral shall be held by the Subordinated Creditors in trust for the
Senior Lenders and shall not be commingled with other funds or property of the
Subordinated Creditors.
(c) Senior Loan Event of Default.
(i) Each of the Subordinated Creditors acknowledges that upon the
occurrence and during the continuance of a Senior Loan Event of Default, the
Agent, the Collateral Agent and the Senior Lenders shall be entitled to take any
and all actions and to exercise any and all rights, remedies and options which
the Agent, the Collateral Agent and the Senior Lenders may have under the Senior
Loan Documents and at law or in equity.
(ii) Upon and after the occurrence of a Senior Loan Event of Default:
(A) Any payment or distribution of any kind (whether
in cash, property or securities) that otherwise would be
payable or deliverable on or in respect of the Subordinated
Obligations shall be paid or delivered directly to the Agent
or the Collateral Agent;
(B) In its own name or in the name of the
Subordinated Creditors as the Subordinated Creditors'
attorney-in-fact or otherwise, the Agent and/or the Collateral
Agent may (but shall have no obligation to) demand, xxx for,
collect and receive every payment or distribution on or in
respect of the Subordinated Obligations, give acquittance for
any payment and file claims and proofs of claim and take such
other action, including, without limitation, voting all or any
part of the Subordinated Obligations or enforcing any
Subordinated Lien, as it may deem necessary or advisable for
the exercise or enforcement of any of the rights or interests
of the Agent, the Collateral Agent, or the Senior Lenders
under this Agreement.
(d) Priority in An Insolvency Event. Upon the payment or distribution
of assets of the Company or any of its Subsidiaries of any kind or character,
whether in cash, property, securities or otherwise, to creditors in connection
with an Insolvency Event:
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(i) all principal, premium (if any) and interest and all other
amounts due or to become due upon the Senior Obligations shall first be
paid in full before the holders of any of the Subordinated Obligations
shall be entitled to receive or retain any assets so paid or
distributed in respect of the Subordinated Obligations (for principal,
premium (if any), interest or otherwise), and
(ii) any and all payments and distributions of assets of the
Company or any of its Subsidiaries of any kind or character, whether in
cash, property, securities or otherwise, to which the holders of any of
the Subordinated Obligations would be entitled but for the provisions
hereof, shall be paid by the Company or any of its Subsidiaries or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, or by the holders of
any of the Subordinated Obligations if received by any of them,
directly to the holders of the Senior Obligations, to the extent
necessary to pay the Senior Obligations in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Obligations, before any payment or distribution is made to the holders
of any of the Subordinated Obligations.
(e) Certain Actions. Upon the occurrence of an Insolvency Event or a
Senior Loan Event of Default, the Subordinated Creditors shall duly and promptly
take such action as the Agent, the Collateral Agent or the Senior Lenders may
request (i) to accelerate, enforce and collect the Subordinated Obligations for
account of the Agent, the Collateral Agent and the Senior Lenders and to file
appropriate claims or proofs of claim in respect of the Subordinated
Obligations, (ii) to execute and deliver to the Agent, the Collateral Agent or
the Senior Lenders the powers of attorney, assignments or other instruments
requested by the Agent, the Collateral Agent or the Senior Lenders in order to
enable it to enforce any and all claims in respect of the Subordinated
Obligations and any Subordinated Liens and (iii) to collect and receive any and
all payments or distributions that may be payable or deliverable on or in
respect of the Subordinated Obligations.
Section 4. Affirmative Covenants. So long as any of the Senior
Obligations shall not have been indefeasibly paid or performed in full or this
Agreement shall remain in effect, each of the Company and the Subordinated
Creditors, at their own expense, shall:
(a) Certificates. Cause any Subordinated Obligation that is
not evidenced by any instrument to be so evidenced by an appropriate
instrument or instruments endorsed with the legend stated in Section 6.
(b) Delivery of Instruments. Promptly upon the request of the
Agent, the Collateral Agent or the Senior Lenders, deliver to the
Agent, the Collateral Agent or the Senior Lenders, all certificates and
instruments, whether negotiable or otherwise, representing or
evidencing the Subordinated Obligations duly endorsed or accompanied by
undated instruments of transfer or undated assignments duly executed in
blank, in each case with signatures guaranteed and otherwise in form
and substance satisfactory to the Agent, the Collateral Agent or the
Senior Lenders, as the case may be.
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(c) Notices. Simultaneously with the delivery of any such
notice to the Company, provide the Agent, the Collateral Agent and the
Senior Lenders with a copy of any notice of any default or event of
default under any of the Subordinated Documents.
Section 5. Negative Covenants. So long as any of the Senior Obligations
shall not have been indefeasibly paid or performed in full or this Agreement
shall remain in effect, neither the Company nor any Subordinated Creditor shall,
unless the Agent shall otherwise expressly consent in writing:
(a) No Proceedings. Commence, or join with any creditor other
than the Agent, the Collateral Agent and the Senior Lenders in
commencing, any proceeding to collect, enforce or otherwise enforce any
rights with respect to the Subordinated Obligations against the
Company, any of its Subsidiaries or any of their respective properties.
(b) No Exercise of Rights. Exercise any rights of subrogation
in respect of any payment or distribution to the Agent, the Collateral
Agent or the Senior Lenders pursuant to this Agreement.
(c) No Discharge, Etc. Except as provided in Section 3(a)(ii)
above, cancel, repay, prepay or otherwise discharge any of the
Subordinated Obligations, accelerate any of the Subordinated
Obligations, or convert any of the Subordinated Obligations into other
indebtedness of the Company or its Subsidiaries.
(d) No Disposition. Sell, assign, pledge, encumber or
otherwise dispose of any of the Subordinated Obligations unless the
sale, assignment, pledge, encumbrance or disposition (i) is to a person
or entity other than the Company or any of the Subsidiaries or any of
their affiliates and (ii) is made expressly subject to this Agreement.
(e) No Security. Grant or take any collateral security for any
of the Subordinated Obligations or convert any Subordinated Obligation
into any property or capital stock or other securities of the Company
or any of the Subsidiaries; provided, however, that with (and only
with) the prior written consent of the Senior Lenders, the Subordinated
Creditors may convert all or a portion of the Subordinated Obligations
into equity of the Company; provided, further, however, that the
Subordinated Creditors may convert their entire right to receive the
Stock Guarantee Payments into 4,888,982 shares of common stock of the
Company, without the consent of the Senior Lenders.
(f) No Alterations. Permit the terms of any of the
Subordinated Obligations to be changed in such a manner as to have an
adverse effect upon the rights or interests of the Agent, the
Collateral Agent or the Senior Lenders under this Agreement.
(g) No Disputing Senior Lien. Challenge or dispute the Senior
Lien or the priority thereof.
(h) No Inconsistent Actions. Take or permit any action
prejudicial to or inconsistent with the priority position of the Agent,
the Collateral Agent and the Senior
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Lenders created under this Agreement or otherwise in contravention of
the provisions of this Agreement or interfere with the exercise by the
Agent, the Collateral Agent or the Senior Lenders of any right, remedy
or power under this Agreement.
(i) No Interference. Notwithstanding any provision of this
Agreement to the contrary, the Subordinated Creditors (i) shall in no
way interfere with the ability of the Company to perform its
obligations under the Senior Loan Documents, and (ii) shall in no way
adversely affect the validity, existence, priority or effect of the
Senior Lien, or the exercise of remedies or rights by the Senior
Lender.
Section 6. Notation of Subordination. Each of the Subordinated
Creditors and the Company will cause each instrument or certificate evidencing
Subordinated Obligations to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated
to the prior payment in full of certain Senior Obligations as provided
in the Subordination Agreement dated as of September 30, 1999, among
Northstar Health Services, Inc. (the "Company"), certain creditors of
the Company set forth on Schedule I thereto, Cerberus Capital
Management, LLC, as agent and The Chase Manhattan Bank, as Collateral
Agent."
Each of the Subordinated Creditors and the Company shall xxxx their respective
books of account to give effective notice of this Agreement. The Agent, the
Collateral Agent and the Senior Lenders may examine books of account of the
Subordinated Creditors and the Company from time to time and make any notations
required by this Agreement.
Section 7. Assignment of Interests. Each of the Senior Lenders may
assign, transfer, sell, convey or otherwise dispose of (any such event being a
"Transfer") all or any portion of its share of the Senior Obligations and its
respective rights hereunder without the consent of the Subordinated Creditors,
the Company or any other party. Except as provided in Section 3(a) and Section
5(e) of this Agreement, none of the Subordinated Creditors may Transfer all or
any portion of its share of the Subordinated Obligations or its respective
rights and obligations hereunder unless both (a) the Agent shall have expressly
consented in writing to such Transfer and (b) such Transfer is made subject to
the provisions of this Agreement and upon the execution and delivery to the
Agent of an agreement by any such assignee to be bound by the terms of this
Agreement (including provisions relating to assignment), in the form hereof. The
Company may not transfer any of its rights or obligations hereunder without the
prior written consent of the Agent and the Senior Lenders, which may be withheld
in each such party's sole discretion.
Section 8. Remedies. In addition to the other rights and remedies
stated in this Agreement, if a default has occurred under this Agreement, the
Agent, the Collateral Agent and the Senior Lenders may exercise all other rights
and remedies in respect of the Subordinated Obligations and against the
Subordinated Creditors available to it by law or equity, whether under the UCC
of the State of New York, or otherwise.
Section 9. Duties of Agent and the Collateral Agent. The powers
conferred on the Agent and Collateral Agent by this Agreement are solely to
protect its interest in the Senior Obligations
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and shall not impose on it any duty to exercise any powers. Except for the safe
custody of any instruments representing Subordinated Obligations in its
possession and the accounting for moneys actually received by it under this
Agreement, neither the Agent nor the Collateral Agent shall have any duty or
liability as to any Person in respect of the Subordinated Obligations. The Agent
and the Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of instruments representing Subordinated
Obligations if the Agent and the Collateral Agent treats those instruments
substantially the same as it treats similar property of their own. The Agent,
the Collateral Agent and the Senior Lenders shall not have any duty,
responsibility or liability for (a) ascertaining or taking action with respect
to any Subordinated Obligations, (b) collecting of any proceeds of any
Subordinated Obligations or (c) any other matter in connection with any
Subordinated Document except in respect of duties specifically undertaken by it
in this Agreement and in that case none of the Agent, the Collateral Agent or
any of the Senior Lenders shall be liable to any party in the absence of gross
negligence or willful misconduct.
Section 10. Continuing Subordination. This Agreement shall continue to
be effective and shall remain in full force and effect until the Senior
Obligations have been indefeasibly paid and otherwise performed in full. For the
purposes of this Agreement, the Senior Obligations shall not be deemed to have
been paid and performed in full until the holders or owners of the Senior
Obligations shall have indefeasibly received payment of the Senior Obligations
in full in cash. Thereafter, this Agreement shall be reinstated if at any time
any payment of any of the Senior Obligations is rescinded or must otherwise be
returned upon the insolvency, bankruptcy or reorganization of the Company, any
Subsidiary or any other Person or otherwise, all as though the payment had not
been made. This Agreement shall apply to the Subordinated Obligations and shall
bind the holders thereof and their successors and assigns.
Section 11. Waiver. Each of the Subordinated Creditors unconditionally
waives, to the full extent permitted by law:
(a) Set Off. Any defense, set-off or counterclaim which such
Subordinated Creditor may otherwise assert against the Agent, the
Collateral Agent or the Senior Lenders.
(b) Notice, etc. Presentment, protest, demand for payment,
promptness, diligence, notice of protest, notice of any other action at
any time taken or omitted by the Agent, the Collateral Agent or any
Senior Lender and, generally, all demands and notices of every kind in
connection with any Senior Loan Document or the Senior Obligations,
including, without limitation:
(i) notice of any of the matters referred to in
Section 12;
(ii) all notices which may be required by statute,
rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights against such Subordinated Creditor
under any Senior Loan Document or as a requirement to the
enforcement, assertion or exercise against the Company, any
Subsidiary or any Subordinated
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Creditor of any right, power, privilege or remedy conferred
under any Senior Loan Document.
(c) Exhaust Other Remedies. Any requirement to exhaust any
rights or remedies or to mitigate the damages resulting from any
default under any Senior Loan Document or any other document or any
requirement to protect, secure, perfect or insure any Lien or any
property subject to the Lien or take any other action against any
person or any collateral or other property.
(d) Claims. All claims that the sale price of any collateral
was inadequate or unreasonable for any reason and all other claims to
damages and demands of any nature against the Agent, the Collateral
Agent and the Senior Lenders.
(e) Equitable Rights. All equities and rights of appraisal,
stay and redemption (whether now or hereafter existing), in each case
arising out of the Agent, the Collateral Agent or the Senior Lenders
enforcing any of their rights and remedies under any Senior Loan
Document.
(f) Subrogation and/or Contribution. Any exoneration or
release from the Senior Obligations resulting from any loss by any
Subordinated Creditor of its rights, if any, of subrogation or
contribution.
(g) Other Circumstances. Any other circumstance whatsoever
which might otherwise constitute a defense to or a legal or equitable
discharge or release of a subordinated creditor from its subordination
obligations or which might otherwise limit recourse against any
Subordinated Creditor or affect the rights of the Senior Lenders
hereunder.
Section 12. Obligations Not Affected. The rights of the Agent, the
Collateral Agent and the Senior Lenders and the obligations of the Subordinated
Creditors and the Company under this Agreement shall be absolute and
unconditional, present and continuing and shall remain in full force and effect
and shall not be released, discharged or in any way affected by any circumstance
or condition of any nature (whether or not any Subordinated Creditor, the
Company, any Subsidiary, the Agent, the Collateral Agent or any Senior Lender
shall have any notice or knowledge of the circumstance or condition), including,
without limitation:
(a) Failure of Documents. The invalidity, illegality,
unenforceability, discharge, termination, cancellation or frustration,
in whole or in part, of any Senior Obligation, Senior Loan Document, or
other document.
(b) Failure to Exercise Rights and/or Remedies. The exercise
or failure to exercise by any person any right, remedy, privilege or
power under any Senior Loan Document or other document.
(c) Collection Attempts. Any demand or attempt to collect
from, or failure to demand or attempt to collect from, the Company, any
Subsidiary, any Subordinated Creditor, or any other Person under any
Senior Loan Document or other document.
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(d) Security and Guarantees. The giving, acceptance,
existence, non-existence, validity, invalidity, value or release of any
security or collateral securing the Senior Obligations or any guarantee
of the Senior Obligations, including, without limitation the Collateral
and the subordination and security interest given under this Agreement,
or any attempt or failure to attempt to realize upon that security or
collateral.
(e) Actions. The exchange, substitution, renewal, extension,
modification, compromise, release, discharge or failure to perfect for
any reason that security, or collateral.
(f) Modifications. Any change in the time, place or manner of
payment or the waiver, consent, extension, renewal, indulgence,
compromise, release, settlement, refunding, funding, or any other
forbearance or other action taken, delayed or omitted by the Agent, the
Collateral Agent, any Senior Lender, the Company, any Subsidiary, any
Subordinated Creditor, or any other person under or in respect of any
term or provision of any Senior Obligation, Senior Loan Document, or
other document.
(g) Reorganizations. The termination, modification,
alteration, amendment, waiver, addition, deletion or other change to
any Senior Obligation, Senior Loan Document, or other document or any
provision of any of those documents.
(h) Bankruptcy. The liquidation, dissolution, merger or
consolidation of the Company, any Subsidiary, any Subordinated
Creditor, or any other Person, or the transfer by the Company, any
Subordinated Creditor, or any other Person of all or any part of its
property or assets. The voluntary or involuntary bankruptcy,
receivership, liquidation, insolvency, reorganization, arrangement,
assignment for the benefit of creditors or similar proceedings
involving or affecting the Company, any Subsidiary, any the
Subordinated Creditor, or any other Person or any of their property.
(i) Change in Ownership. The change in the ownership of any
shares of capital stock of the Company, any Subsidiary, any
Subordinated Creditor or the change in or termination of the
relationship between the Company, any Subsidiary, and any Subordinated
Creditor.
(j) Release. The release or discharge, by operation of law or
otherwise, of the Company, any Subsidiary, any Subordinated Creditor,
or any other person from any Senior Obligation or any provision of any
Senior Loan Document or other document.
(k) Other Circumstances. Any other circumstance whatsoever,
foreseen or unforseen, which may or might in any manner or to any
extent vary the risks of the Subordinated Creditors or might otherwise
constitute a defense available to or a legal or equitable discharge of
or limit recourse against a surety, a guarantor, a party granting
security, the Subordinated Creditors or otherwise.
Section 13. Subrogation. Notwithstanding any payments or distributions
received by the Collateral Agent in respect of the Subordinated Obligations and
applied by the Collateral Agent
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toward the payment or prepayment of any Senior Obligation, the Subordinated
Creditors shall be subrogated to the then existing rights of the Agent, the
Collateral Agent and the Lenders, if any, in respect of the Senior Obligations
only when the Senior Obligations have been indefeasibly paid in full.
Section 14. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications to
any party or given under this Agreement (collectively, "Notices") will be in
writing and delivered personally, by overnight courier or by registered mail to
the parties at the addresses specified for such Person on the signature pages of
this Agreement. All Notices will be deemed delivered when actually received;
provided, however, that Notices to the Collateral Agent will not be deemed to be
received and will not be effective until a copy of such Notice has also been
actually received by the Agent. Each of the parties will hereafter notify the
others in accordance with this Section of any change of address or telecopy
number to which any Notice is required to be mailed.
(b) Expenses. The Company agrees to pay to the Agent, the Collateral
Agent and the Senior Lenders on demand the amount of any and all expenses,
including, without limitation, the fees and expenses of the Agent's, the
Collateral Agent's or the Senior Lenders' counsel, which the Agent, the
Collateral Agent or any Senior Lender may pay or incur in exercising or
enforcing their rights under this Agreement.
(c) Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, and by different parties hereto in separate counterparts,
each of which when executed will be deemed an original, but all of which taken
together will constitute one and the same instrument.
(d) Interpretation. As used in this Agreement, references to the
singular will include the plural and vice versa and references to the masculine
gender will include the feminine and neuter genders and vice versa, as
appropriate. Unless otherwise expressly provided in this Agreement (i) the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement and (ii) article, section, subsection, schedule and
exhibit references are references with respect to this Agreement unless
otherwise specified. References in this Agreement to any law or regulation will
refer to such laws and regulations as from time to time amended and to any laws
or regulations successor thereto. Unless the context otherwise requires, the
term "including" will mean "including, without limitation".
(e) Incorporation of Schedules, Exhibits and Annexes. The Schedules,
Exhibits and Annexes hereto are incorporated into this Agreement and will be
deemed a part hereof as if set forth herein in full. In the event of any
conflict between the provisions of this Agreement and any Schedule, Exhibit or
Annex, the provisions of this Agreement will control.
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(f) Amendment of Agreement. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties against whom
enforcement of such amendment is sought.
(g) Successors and Assigns. This Agreement will be binding upon and
inures to the benefit of and is enforceable by the respective successors and
permitted assigns of the parties hereto.
(h) No Waiver; Remedies. No failure or delay by any party in exercising
any right, power or privilege under this Agreement will operate as a waiver of
the right, power or privilege. A single or partial exercise of any right, power
or privilege will not preclude any other or further exercise of the right, power
or privilege or the exercise of any other right, power or privilege. The rights
and remedies provided in this Agreement and the other Senior Loan Documents will
be cumulative and not exclusive of any rights or remedies provided by law.
(i) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto will negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
(j) Governing Law. This Agreement will be governed by, and construed in
accordance with, the laws of the state of New York applicable to contracts
executed in and to be performed entirely within that state.
(k) No Third-Party Rights. This Agreement is not intended, and will not
be construed, to create any rights in any parties other than the Company, the
Subsidiaries, the Subordinated Creditors, the Agent, the Collateral Agent and
the Senior Lenders, and no Person may assert any rights as third-party
beneficiary hereunder.
(l) Submission to Jurisdiction. Any Action with respect to this
Agreement may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, and each of the
Company, the Subsidiaries, the Subordinated Creditors, the Agent, the Collateral
Agent and the Senior Lenders hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of these courts. Each
of the Company, the Subsidiaries, the Subordinated Creditors, the Agent, the
Collateral Agent and the Senior Lenders hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any Action in those jurisdictions.
(m) Waiver of Jury Trial. Each party waives any right to a trial by
jury in any Action to enforce or defend any right under this Agreement or any
amendment, instrument, document or
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agreement delivered or to be delivered in connection with this Agreement and
agrees that any Action will be tried before a court and not before a jury.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
Address for Notices: NORTHSTAR HEALTH SERVICES, INC.
The Atrium
000 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000 By:______________________________
Name:
Title:
Address for Notices:
c/o Northstar Health Services, Inc.
The Atrium
000 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
_________________________________
XXXXXX X. XXXXXX
Address for Notices:
c/o Northstar Health Services, Inc.
The Atrium
000 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
_________________________________
XXXXX X. XXXXXX
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Address for Notices: XXXXXX FAMILY LIMITED PARTNERSHIP,
c/o Northstar Health Services, Inc. L.P.
The Atrium
000 Xxxxxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
By:_______________________________
Xxxxxx X. Xxxxxx
General Partner
By:_______________________________
Xxxxx X. Xxxxxx
General Partner
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Address for Notices: CERBERUS CAPITAL MANAGEMENT, LLC,
000 Xxxx Xxxxxx as Agent
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx-Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
By:_______________________________
Name:
Title:
Address for Notices: CHASE MANHATTAN BANK,
000 Xxxx 00xx Xxxxxx as Collateral Agent
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Capital Markets Fiduciary
Services, Cerberus Capital
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
By:_______________________________
Name:
Title:
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SCHEDULE I
to
XXXXXX SUBORDINATION AGREEMENT
Subordinated Creditors
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx Family Partnership
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