Exhibit 10.4
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT (this "Agreement"), dated as of May 9, 2006, made
and entered into by and among XXXXXXX.XXX INC., a Delaware corporation (the
"Borrower"), the subsidiaries of the Borrower named as Guarantors on the
signature pages to this Agreement (the "Guarantors" and, together with the
Borrower, collectively the "Loan Parties" and each individually a "Loan Party"),
TECHNOLOGY INVESTMENT CAPITAL CORP., a Maryland corporation, individually and as
Collateral Agent under the Note and Warrant Purchase Agreement referred to below
(together with its successors and assigns, the "Senior Lender"), and the several
lenders whose names are set forth on Schedule A hereto (together with their
respective successors and assigns, the "Subordinated Lenders").
R E C I T A L S :
A. The Loan Parties and the Senior Lender are parties to a Note and
Warrant Purchase Agreement dated as of March 31, 2004, as amended by amendments
dated May 30, 2004, June 29, 2004, September 30, 2004, March 15, 2005 and July
11, 2005, a Limited Waiver and Amendment dated February 23, 2005, a Waiver and
Amendment dated as of August 30, 2005, a Limited Waiver and Amendment dated as
of October 26, 2005, an Amendment to Note and Warrant Purchase Agreement dated
as of November 29, 2005, a Limited Waiver and Amendment dated as of December 20,
2005, and an Amendment and Consent dated as of February 21, 2006 (as further
amended by a Consent and Amendment dated as of the date hereof, and as from time
to time hereafter amended, modified, supplemented or restated, the "Senior Loan
Agreement").
B. On the date hereof, the Borrower and the Subordinated Lenders are
entering into a Loan Agreement of even date herewith (as from time to time
amended, modified, supplemented or restated in accordance with the terms hereof
and thereof, the "Subordinated Loan Agreement"), pursuant to which the
Subordinated Lenders are lending to the Borrower term loans in the aggregate
principal amount of $4,838,710. The obligations of the Borrower under the
Subordinated Loan Agreement and under that certain Subordinated Promissory Note
dated as of the date hereof issued by the Borrower to the Subordinated Lenders
in the principal amount of $4,838,710 (as from time to time amended, modified,
supplemented or restated in accordance with the terms hereof and thereof, the
"Subordinated Note") are guarantied by those certain Unconditional Guaranties,
each dated as of the date hereof, executed by each of the Guarantors (as from
time to time amended, modified, supplemented or restated in accordance with the
terms hereof and thereof, the "Subordinated Guaranties").
C. Under the terms of the Senior Loan Agreement, the consent of the Senior
Lender is required in order to permit the Loan Parties to enter into and to
execute, deliver and perform their obligations under the Subordinated Loan
Agreement and the other documents executed in connection therewith. The Senior
Lender and the Loan Parties are executing a Consent and Amendment dated as of
the date hereof (the "Senior Lender Consent") which, among other things,
provides such required consent of the Senior Lender and which also requires, as
a condition precedent to such consent, that the Loan Parties and the
Subordinated Lenders execute and deliver this Agreement.
NOW, THEREFORE, in order to induce the Senior Lender to execute the Senior
Lender Consent, and pursuant to the terms of the Senior Lender Consent, the Loan
Parties and the Subordinated Lenders hereby agree with the Senior Lender that,
until the Senior Indebtedness (as hereinafter defined) shall have been
indefeasibly paid in full in cash, each of the Loan Parties and the Subordinated
Lenders will comply with such of the following provisions as are respectively
applicable to them:
1. Definitions. Capitalized terms used in this Agreement without
definition shall have the respective meanings ascribed to them in the Senior
Loan Agreement. As used in this Agreement, the terms set forth below shall have
the following meanings:
"Bankruptcy Code" means 11 U.S.C. Sec. 101 et seq., as from time to
time hereafter amended, and any successor or similar statute.
"Bankruptcy Proceeding" means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code or any comparable federal, state or foreign
statute or law providing for the relief of debtors, relating to any of the Loan
Parties or their respective assets or securities, (b) any receivership, total or
partial liquidation, reorganization, adjustment, readjustment, arrangement,
composition or other similar case or proceeding relating to any of the Loan
Parties or their respective assets or securities, whether voluntary or
involuntary, (c) any liquidation, dissolution, reorganization or winding up of
any of the Loan Parties or their respective assets or securities, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
proceedings, or (d) any assignment for the benefit of creditors or other
marshalling of the assets of any of the Loan Parties.
"Enforcement Action" means, with respect to any holder of Subordinated
Indebtedness, the exercise of any rights or remedies against any of the Loan
Parties or their respective assets in respect of the Subordinated Indebtedness,
including, without limitation, (a) the acceleration of the maturity of the
Subordinated Indebtedness or any part thereof, (b) the commencement of any
litigation, action, suit, claim, remedy or proceeding in respect thereof
(including, without limitation, the commencement of any involuntary Bankruptcy
Proceeding against any of the Loan Parties), (c) the creation or perfection of
any Lien on any of the Loan Parties' real or personal property to secure any of
the Subordinated Indebtedness or any judgment in respect thereto, (d) the
enforcement of any Lien securing the Subordinated Indebtedness (including,
without limitation, the commencement of any foreclosure action, the exercise of
any power of sale, right of setoff, sale by advertisement, the taking of a deed
or assignment in lieu of foreclosure, the obtaining of a receiver, or the
exercise of any other remedies available under the Uniform Commercial Code of
any state), (e) the exercise of any right of setoff against any of the Loan
Parties, or (f) the exercise any other rights or remedies under the provisions
of the Subordinated Loan Documents or at law or in equity which such holder may
have by reason of the occurrence and continuance of any Subordinated Default.
"Exempted Subordinated Default" means any "Event of Default" of the type
specified in Section 4 of the Subordinated Note to the extent that such Event of
Default relates to the failure of the Borrower to pay in full on or prior to
July 1, 2009 the principal amount of the Subordinated Indebtedness, together
with all interest accrued thereon and all other amounts then due hereunder and
under the other Subordinated Loan Documents.
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"Senior Indebtedness" means (a) the principal amount of Indebtedness now
or hereafter incurred by the Loan Parties under the Senior Loan Documents, (b)
prepayment charges, if any, payable with respect thereto, (c) interest and fees
payable thereunder (including, without limitation, interest and fees accruing
subsequent to the commencement by or against any of the Loan Parties of any
proceeding under the Bankruptcy Code, whether or not such interest or fees are
allowed as claims in such proceeding), (d) all obligations of the Guarantor or
any other Person under any Guarantee of any of such Indebtedness now or
hereafter executed pursuant to the Senior Loan Documents, including, without
limitation, the Senior Guarantee, and (e) costs, expenses (including, without
limitation, attorneys' fees and disbursements), charges, indemnities and other
amounts now or hereafter payable pursuant to the terms of or in connection with
any of the Senior Loan Documents; provided, however, that the term "Senior
Indebtedness" shall not include any increases resulting from any amendment,
modification or supplement to or restatement of the Senior Loan Documents in any
of the amounts identified in clauses (a) through (e) above from the amounts
outstanding, or otherwise provided for pursuant to the terms of, the Senior Loan
Documents as amended and in effect on the date hereof to the extent of:
(i) increases in the aggregate principal amount of all such Senior
Indebtedness in excess of 115% of the maximum amount provided for in the Senior
Loan Agreement as of the date hereof;
(ii) increases aggregating more than 2.0% per annum in the
applicable interest rate that accrues with respect to any Senior Indebtedness in
excess of the rate provided for in the Senior Loan Agreement (but nothing herein
shall be construed to prevent the accrual of interest at a greater rate per
annum upon the occurrence and during the continuance of a default under the
Senior Loan Documents as now provided therein); or
(iii) increases in (x) any prepayment charges in respect of the
Senior Indebtedness as identified in clause (b) above, (y) any fees payable in
respect of the Senior Indebtedness as identified in clause (c) above or (z) any
of the amounts specified in clause (e) above in excess of the amounts provided
for pursuant to the terms of the Senior Loan Documents in the form in effect on
the date hereof (but nothing herein shall be construed to prevent the Senior
Lender from charging additional fees in connection with any amendment,
modification or supplement to or restatement of any of the Senior Loan
Documents, any waiver or consent given in respect of any of the provisions
thereof, or any workout or restructuring of the Senior Indebtedness).
"Senior Lender" means and includes all Persons who shall now or hereafter
hold all or any part of the Senior Indebtedness, and their respective successors
and assigns.
"Senior Loan Documents" means the Senior Loan Agreement, the Notes, the
Security Agreement, the Guaranty Agreement, and all other notes, mortgages,
indentures, deeds of trust, security agreements, pledge agreements, letters of
credit, financing statements, guarantees and other agreements, instruments and
documents now or hereafter executed pursuant thereto or in connection therewith,
and all credit agreements, loan agreements, notes, mortgages, indentures, deed
of trusts, security agreements, pledge agreements, letters of credit, financing
statements, guarantees and other agreements, instruments and documents hereafter
executed in connection with any extension or renewal of any of the Senior
Indebtedness, or in connection with any
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refunding or refinancing of the Senior Indebtedness which does not increase the
principal amount of Senior Indebtedness at the time outstanding, as any of the
same may hereafter from time to time be amended, modified, supplemented or
restated in accordance with the terms thereof.
"Subordinated Default" means any "Event of Default" as such term is
defined in Article VII of the Subordinated Loan Agreement or in Section 4 of the
Subordinated Note.
"Subordinated Indebtedness" means the principal amount of all Indebtedness
of the Loan Parties now or hereafter outstanding under the Subordinated Loan
Documents together with interest thereon and prepayment charges (if any) payable
with respect thereto, all fees, costs, expenses, indemnities and other amounts
now or hereafter payable pursuant to the terms of or in connection with any of
the Subordinated Loan Documents, and all obligations of the Loan Parties or any
other Person under any guarantee of any of such Indebtedness now or hereafter
executed pursuant to the Subordinated Loan Agreement (including, without
limitation, the Subordinated Loan Guarantees). "Subordinated Indebtedness" shall
include, without limitation, any obligation or claim with respect to an optional
or mandatory prepayment or redemption of the Subordinated Indebtedness and any
obligation or claim (whether for rescission or damages and whether based on
contract, tort, duty imposed by law, or any other theory of liability) relating
to or arising out of the extension of the Subordinated Indebtedness or the
offer, sale or purchase of any notes, guarantees or other instruments issued by
any of the Loan Parties pursuant to any of the Subordinated Loan Documents.
Notwithstanding anything to the contrary set forth herein, in no event shall the
payment required to be made pursuant to Section 5.4 of the Subordinated Loan
Agreement (if paid on the date hereof in accordance with the provisions of that
Section) be deemed to be "Subordinated Indebtedness" hereunder and, in
furtherance of the foregoing, for all purposes of the Senior Loan Documents, the
Senior Lenders hereby irrevocably consent to and approve such payment if so
paid.
"Subordinated Lender" means and includes all Persons who shall now or
hereafter hold all or any part of the Subordinated Indebtedness, and their
respective successors and assigns.
"Subordinated Loan Documents" means the Subordinated Loan Agreement, the
Subordinated Note, the Subordinated Guaranties and all other notes, guaranties
and other agreements, instruments and documents now or hereafter executed
pursuant to or in connection with any of the foregoing, as any of the same may
hereafter from time to time be amended, modified, supplemented or restated in
accordance with the terms hereof and thereof.
"Subsidiary" means as to any Person a corporation of which outstanding
shares of capital stock having ordinary voting power (other than capital stock
having such power only by reason of the happening of a contingency) to elect a
majority of the Board of Directors of such corporation are at the time owned,
directly or indirectly through one or more intermediaries, or both, by such
Person.
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2. Subordination.
2.1 Subordinated Indebtedness Subordinated to Senior Indebtedness.
(a) Each of the Loan Parties, for itself and its successors and assigns,
covenants and agrees, and each holder of Subordinated Indebtedness, by its
acceptance thereof, shall be deemed to have agreed, that the payment of the
Subordinated Indebtedness shall be subordinate and subject in right of payment,
to the extent and in the manner hereinafter set forth, to the prior indefeasible
payment in full in cash of all Senior Indebtedness, and that each holder of
Senior Indebtedness, whether now outstanding or hereafter created, incurred,
assumed or guaranteed, shall be deemed to have acquired Senior Indebtedness in
reliance upon the provisions contained in this Agreement.
(b) Notwithstanding anything set forth in this Agreement to the contrary,
the provisions of this Agreement (other than the provisions of this Section
2.1(b)) shall not apply to any payments made by Borrower to the Subordinated
Lenders in respect of the principal amount of the Subordinated Indebtedness and
accrued interest and other amounts payable thereon ("Exempted Payments") if and
only if (i) such payments are made in connection with a Qualified Financing (as
defined below) and (ii) immediately following such payments, all amounts
received by the Subordinated Lenders in respect of such payments are remitted to
Borrower in payment of the purchase price of Permitted Junior Securities issued
by Borrower to the Subordinated Lenders in connection with such Qualified
Financing. For purposes of clarity, the Senior Lenders hereby acknowledge and
agree that (i) none of the provisions of this Agreement (other than this Section
2.1(b)) shall be deemed applicable to any such Exempted Payment, (ii) for all
purposes of the Senior Loan Documents, the Senior Lenders hereby irrevocably
consent to and approve any such Exempted Payment, and (iii) upon receipt of any
Exempted Payment in payment of any Subordinated Indebtedness, so long as all
amounts so received are immediately paid to Borrower to purchase Permitted
Junior Securities as set forth above, the applicable holder of such Subordinated
Indebtedness shall not be subject to any provisions of this Agreement in respect
of such Exempted Payment (other than this Section 2.1(b)). For the purposes
hereof, (A) "Qualified Financing" means any public or private placement, or
series of related placements, of Permitted Junior Securities of Borrower which
provides gross proceeds to Borrower of at least $16,000,000; and (B) "Permitted
Junior Securities" means shares of common stock of Borrower or any other equity
securities of Borrower that are convertible into or exchangeable for common
stock of Borrower, or any right, warrant or option to acquire any such common
stock or any such convertible or exchangeable equity securities, if Borrower
shall not be subject to any obligation, absolute or contingent, to redeem or
repurchase any of such common stock, convertible or exchangeable equity
securities or rights, warrants or options at any time prior to the final
maturity date of the Senior Indebtedness..
2.2 Subordinated Indebtedness Subordinated to Prior Payment of All Senior
Indebtedness Upon a Bankruptcy Proceeding. Upon any payment or distribution of
the assets of any of the Loan Parties of any kind or character, whether in cash,
property or securities from any source whatsoever (including any collateral, and
proceeds thereof whether in cash or in kind, at any time securing the
Subordinated Indebtedness), to creditors upon any Bankruptcy Proceeding, then in
such event:
(i) all Senior Indebtedness shall first be indefeasibly paid in full
in cash before any payment is made on account of or applied on the
Subordinated Indebtedness;
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(ii) any payment or distribution of assets of the Loan Parties of
any kind or character, whether in cash, property or securities from any
source whatsoever, to which the holders of the Subordinated Indebtedness
would be entitled except for the provisions of this Section 2, shall be
paid or delivered by any debtor, custodian, liquidating trustee, agent or
other Person making such payment or distribution, directly to the holders
of the Senior Indebtedness, or their representative or representatives,
ratably according to the aggregate amounts remaining unpaid on account of
the principal of and interest on such Senior Indebtedness held or
represented by each, for application to the payment of all such Senior
Indebtedness remaining unpaid, until all of the Senior Indebtedness shall
be indefeasibly paid in full in cash; and
(iii) in the event that, notwithstanding the foregoing provisions of
this Section 2.2, any payment or distribution of assets of the Loan
Parties of any kind or character, whether in cash, property or securities
from any source whatsoever, shall be received by any holder of
Subordinated Indebtedness before all of the Senior Indebtedness is
indefeasibly paid in full in cash, such payment or distribution shall be
held in trust for the benefit of, and shall immediately be paid or
delivered by such holder to, as the case may be, the holders of such
Senior Indebtedness remaining unpaid, or their representative or
representatives, for application to the payment of all such Senior
Indebtedness remaining unpaid, ratably according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness held or
represented by each, until all of the Senior Indebtedness shall be
indefeasibly paid in full in cash.
2.3 No Payments With Respect to Subordinated Indebtedness in Certain
Circumstances.
(a) Except as otherwise specifically provided in Section 2.1(b), no
payment on account of the Subordinated Indebtedness or any judgment with respect
thereto, whether in cash, property or securities from any source whatsoever,
shall be made by or on behalf of any of the Loan Parties prior to the date on
which all of the Senior Indebtedness shall be indefeasibly paid in full in cash.
(b) Following any acceleration of the maturity of any Senior Indebtedness
and as long as such acceleration shall continue unrescinded and unannulled, all
Senior Indebtedness shall first be indefeasibly paid in full in cash before any
payment is made on account of or applied to the Subordinated Indebtedness.
(c) Following any acceleration of the maturity of any Subordinated
Indebtedness, and as long as such acceleration shall continue unrescinded and
unannulled, all Senior Indebtedness shall first be indefeasibly paid in full in
cash before any payment is made on account of or applied to the Subordinated
Indebtedness.
(d) Except as otherwise specifically provided in Section 2.1(b), in the
event that, notwithstanding the foregoing provisions of this Section 2.3, any
payment or distribution of assets of the Loan Parties of any kind or character,
whether in cash, property or securities, from any source whatsoever, shall be
received by any holder of Subordinated Indebtedness contrary to the foregoing
provisions of this Section 2.3, such payment or distribution shall be held in
trust
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for the benefit of, and shall be immediately paid or delivered by such holder
to, as the case may be, the holders of such Senior Indebtedness remaining
unpaid, or their representative or representatives, for application to the
payment or prepayment of all such Senior Indebtedness remaining unpaid, ratably
according to the aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, to the extent necessary to pay all
such Senior Indebtedness in full in cash after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.
2.4 Limitations on Enforcement Actions.
(a) Notwithstanding the occurrence and continuance of any Subordinated
Default (other than an Exempted Subordinated Default, in which case,
notwithstanding anything to the contrary set forth herein, the Subordinated
Lenders shall have the right to accelerate the Subordinated Indebtedness and to
seek any other remedy in respect thereof provided for in Section 5 of the
Subordinated Note; provided, that, notwithstanding the acceleration of the
Subordinated Indebtedness or the seeking of any other remedy in respect thereof,
the Subordinated Indebtedness shall remain subject to each of the other
provisions of this Agreement), no holder of Subordinated Indebtedness shall at
any time commence or pursue any Enforcement Action with respect to the
Subordinated Indebtedness until the earliest to occur of the following and in
any event no earlier than ten (10) days after the Senior Lender's receipt of
written notice from a holder of Subordinated Indebtedness of its intent to take
an Enforcement Action specifying what action such holders intend to take in
respect thereto:
(i) the acceleration of the Senior Indebtedness;
(ii) the commencement of a Bankruptcy Proceeding with respect to any
Loan Party or its assets; or
(iii) the date on which all of the Senior Indebtedness shall be
indefeasibly paid in full in cash.
(b) Notwithstanding anything contained herein to the contrary, if
following any acceleration of the maturity of the Senior Indebtedness by the
Senior Lender such acceleration is rescinded (whether or not any existing
default under the Senior Loan Documents has been cured or waived), then all
Enforcement Actions taken by the holders of Subordinated Indebtedness on the
basis of the provisions of Section 2.4(b)(i) shall likewise be immediately
rescinded.
2.5 Holders of Subordinated Indebtedness to be Subrogated to Rights of
Holders of Senior Indebtedness. Subject to the prior payment in full in cash of
all Senior Indebtedness, the holders of the Subordinated Indebtedness shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Loan Parties applicable to the Senior
Indebtedness until the Subordinated Indebtedness shall be paid in full, and for
purposes of such subrogation, no payment or distribution to the holders of the
Senior Indebtedness of assets, whether in cash, property or securities,
distributable to the holders of Senior Indebtedness under the provisions hereof
to which the holders of the Subordinated Indebtedness would be entitled except
for the provisions of this Section 2, and no payment pursuant to the provisions
of this Section 2 to the holders of Senior Indebtedness by the holders
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of the Subordinated Indebtedness shall, as between the Loan Parties, their
creditors other than the holders of the Senior Indebtedness and the holders of
the Subordinated Indebtedness, be deemed to be a payment by the any of the Loan
Parties to or on account of such Senior Indebtedness, it being understood that
the provisions of this Section 2 are, and are intended, solely for the purpose
of defining the relative rights of the holders of the Subordinated Indebtedness,
on the one hand, and the holders of Senior Indebtedness, on the other hand.
2.6 Obligations of the Loan Parties Unconditional. Nothing contained in
this Section 2 or elsewhere in this Agreement or in the Subordinated Loan
Documents is intended to or shall impair, as between the Loan Parties and their
creditors other than the holders of Senior Indebtedness, the obligations of the
Loan Parties to the holders of the Subordinated Indebtedness to pay the
Subordinated Indebtedness as and when it shall become due and payable in
accordance with its terms, or is intended to or shall affect the relative rights
of the holders of the Subordinated Indebtedness and creditors of the Loan
Parties other than the holders of Senior Indebtedness, nor shall anything herein
or therein (except as otherwise expressly provided in this Agreement) prevent
any holder of Subordinated Indebtedness from exercising all remedies otherwise
permitted by applicable law upon the happening of a Subordinated Default,
subject to the rights, if any, under this Section 2 of the holders of Senior
Indebtedness in respect to assets, whether in cash, property or securities, of
the Loan Parties received upon the exercise of any such remedy. The failure of
any of the Loan Parties to make payment on account of the Subordinated
Indebtedness by reason of any provision of this Section 2 shall not be construed
as preventing the occurrence or continuance of a Subordinated Default under the
Subordinated Note Documents.
3. No Liens; Subordination. Notwithstanding any provision to the contrary
contained in the Subordinated Loan Documents or elsewhere, the holders of
Subordinated Indebtedness agree that, so long as any of the Senior Indebtedness
shall be outstanding, the holders of Subordinated Indebtedness shall not take
any action to create or perfect any Lien on any of the Loan Parties' assets or
property to secure any of the Subordinated Indebtedness or any judgment in
respect thereto, or permit any such Lien to be outstanding or in effect. In the
event that any such Lien shall at any time be in effect, then notwithstanding
the date, manner or order of grant, attachment or perfection of the Liens in any
collateral granted to or for the benefit of the holders of Senior Indebtedness
or granted to or for the benefit of the holders of Subordinated Indebtedness,
and notwithstanding any provision of the Uniform Commercial Code, or any other
applicable law or decisions, the holders of the Senior Indebtedness shall have a
first and prior Lien and security interest in all such collateral, and any Lien
in such collateral held by or for the benefit of the holders of Subordinated
Indebtedness shall be junior and subordinate to all Liens in such collateral
held by or for the benefit of the holders of Senior Indebtedness.
4. Authorization to Take Action to Effect Subordination. The Subordinated
Lender by its acceptance of the Subordinated Indebtedness (i) irrevocably
authorizes and empowers (but without imposing any obligation on) each holder of
any Senior Indebtedness at the time outstanding, and the representatives of such
holder of Senior Indebtedness, in any Bankruptcy Proceeding involving any of the
Loan Parties to demand, xxx for, collect, receive and receipt for such
Subordinated Lender's ratable share of payments or distributions in respect of
the Subordinated Indebtedness which are required to be paid or delivered to the
holders of Senior Indebtedness as provided in Section 2.2, and to file and prove
all claims therefor and take all
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such other action (including the right to vote such Subordinated Lender's
ratable share of the Subordinated Indebtedness), in the name of such
Subordinated Lender or otherwise, as such holder of Senior Indebtedness or its
representatives may determine to be necessary or appropriate for the enforcement
of the provisions of Section 2.2; and (ii) agrees to execute and deliver to each
holder of Senior Indebtedness, and such holder's representatives, all such
further instruments confirming the authorization hereinabove set forth, and all
such powers of attorney, proofs of claim, assignments of claim and other
instruments, and to take all such other action, as may be requested by such
holder of Senior Indebtedness or its representatives in order to enable such
holder to enforce all claims upon or in respect of such Subordinated Lender's
ratable share of payments or distributions in respect of the Subordinated
Indebtedness. Each Subordinated Lender by its acceptance thereof acknowledges
and agrees that each holder of Senior Indebtedness (whether the Senior
Indebtedness held by such holder is now or hereafter incurred) shall have
acquired or will acquire such Senior Indebtedness in reliance upon the covenants
and provisions contained in this Agreement.
5. Non-Interference by Holders of Subordinated Indebtedness.
(a) The holders of Subordinated Indebtedness shall not, in their capacity
as holders of Subordinated Indebtedness, institute any judicial or
administrative proceeding against any of the Loan Parties or the holders of
Senior Indebtedness, or their representative or representatives, which directly
or indirectly would interfere with or delay the exercise by the holders of
Senior Indebtedness, or their representative or representatives, of their rights
and remedies in respect of the collateral securing the Senior Indebtedness or
any part thereof, or their rights and remedies under the Senior Loan Documents
or this Agreement. Without limiting the generality of the foregoing, in the
event of Bankruptcy Proceeding, the holders of Subordinated Indebtedness shall
not object to or oppose any efforts by the holders of Senior Indebtedness, or
their representative or representatives, to obtain relief from the automatic
stay under Section 362 of the Bankruptcy Code or to seek to cause the bankruptcy
estate of any of the Loan Parties to abandon the collateral (or any portion
thereof) that is subject to the Senior Loan Documents and/or the security
interests created thereby.
(b) No holder of Subordinated Indebtedness, nor any agent or
representative thereof, shall at any time take any action in any Bankruptcy
Proceeding or in any other judicial, administrative, arbitral or other
proceeding to object to or challenge the legality, validity or enforceability of
any of the Senior Loan Documents or any term or provision thereof, or to object
to or challenge the validity, priority or perfection of any of the Liens in the
collateral securing the Senior Indebtedness.
6. Consent by the Holders of Subordinated Indebtedness. Each holder of
Subordinated Indebtedness hereby consents and agrees that any lawful action
taken by or on behalf of the holders of Senior Indebtedness, or their
representative or representatives, in the exercise of their rights and/or
remedies under the Senior Loan Documents (including, without limitation, any
foreclosure or acquisition of title to the collateral securing the Senior
Indebtedness or any part thereof by deed in lieu of foreclosure or otherwise)
are hereby deemed to be consented to and approved by the each holder of
Subordinated Indebtedness in all respects.
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7. No Fiduciary Duty. The holders of Senior Indebtedness, and their
representative or representatives, shall have no fiduciary duty to any holder of
Subordinated Indebtedness arising out of the exercise of the rights and/or
remedies of the holders of Senior Indebtedness, or their representative or
representatives, under the Senior Loan Documents, or from the existence of this
Agreement.
8. Reinstatement. To the extent any payment of Senior Indebtedness
(whether by or on behalf of any of the Loan Parties, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside, rescinded or required to be paid to a trustee,
receiver, debtor in possession or other similar party under any bankruptcy,
insolvency, receivership or similar law, then to the extent such payment is
recovered by, or paid over to, such trustee, receiver, debtor in possession or
other similar party, the Senior Indebtedness or part thereof originally intended
to be satisfied shall be deemed to be reinstated and outstanding as if such
payment had not occurred. All Senior Indebtedness shall be and remain Senior
Indebtedness for all purposes of this Agreement, whether or not subordinated, in
any bankruptcy, insolvency, receivership or similar proceeding.
9. No Waiver of Subordination Provisions.
(a) No right of the holders of Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any of the Loan Parties or
by any act or failure to act on the part of any such holder or holders, or by
any noncompliance by any of the Loan Parties with the terms, provisions and
conditions of the Senior Loan Documents regardless of any knowledge thereof
which the holders of Senior Indebtedness, or any of them, may have or be
otherwise charged with.
(b) Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness, or any of them, may, at any time and from
time to time, without the consent of or notice to the holders of the
Subordinated Indebtedness, without incurring any liabilities to any such holders
and without impairing or releasing the subordination and other benefits provided
in this Agreement or the obligations hereunder of the holders of Subordinated
Indebtedness to the holders of Senior Indebtedness, even if any right of
reimbursement or subrogation or other right or remedy of any holder of the
Subordinated Indebtedness is affected, impaired or extinguished thereby, do any
one or more of the following:
(i) change the manner, place or terms of payment or change or extend
the time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Senior Indebtedness, any security therefor or guarantee
thereof or any liability of any of the Loan Parties to such holder, or any
liability incurred directly or indirectly in respect thereof (including,
without limitation, any extension or increase in the amount of any Senior
Indebtedness, without any restriction as to the amount, tenor or terms of
any such extension or increase), or otherwise amend, renew, exchange,
extend, modify, increase or supplement in any manner Senior Indebtedness
or any instrument evidencing or guaranteeing or securing the same or any
agreement under which Senior Indebtedness is outstanding;
-10-
(ii) settle or compromise any Senior Indebtedness or any other
liability of any of the Loan Parties to such holder or any security
therefor or any liability incurred directly or indirectly in respect
thereof and apply any sums by whomsoever paid and however realized to any
liability (including, without limitation, Senior Indebtedness) in any
manner or order; and
(iii) fail to take or to record or otherwise perfect, for any reason
or for no reason, any Lien securing Senior Indebtedness by whomsoever
granted, exercise or delay in or refrain from exercising any right or
remedy against any of the Loan Parties or any other Person or any
security, elect any remedy and otherwise deal freely with any security and
with any of the Loan Parties or any liability of any Loan Party to such
holder or any liability incurred directly or indirectly in respect
thereof.
(c) All rights and interests under this Agreement of the holders of Senior
Indebtedness, and all agreements and obligations of the holders of Subordinated
Indebtedness and the Loan Parties hereunder, shall remain in full force and
effect irrespective of (i) any lack of validity or enforceability of the Senior
Loan Documents, or of any provision of any thereof, or (ii) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any of the Loan Parties in respect of the Senior Indebtedness.
10. Representations and Warranties.
10.1 Representations and Warranties of the Subordinated Lenders. Each of
the Subordinated Lenders hereby represents and warrants to the Senior Lender
that as of the date hereof: (a) such Subordinated Lender is a [corporation,
partnership or limited liability company] duly organized and validly existing
under the laws of the jurisdiction set forth opposite its name on Schedule A
hereto; (b) such Subordinated Lender has the power and authority to enter into,
execute, deliver and perform its obligations under this Agreement, all of which
have been duly authorized by all necessary action; (c) the execution of this
Agreement by such Subordinated Lender will not violate or conflict with the
charter, bylaws or other organizational documents of such Subordinated Lender,
any material agreement binding upon such Subordinated Lender or any federal,
state or local statute, law, rule, regulation or administrative or judicial
judgment, order or decree applicable to it or require any consent or approval of
any Governmental Authority or other Person which has not been obtained; (d) this
Agreement is the legal, valid and binding obligation of such Subordinated
Lender, enforceable against such Subordinated Lender in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by principles of equity; and (e) such
Subordinated Lender owns Subordinated Indebtedness in the principal amount set
forth opposite its name on Schedule A hereto and has not sold, transferred,
pledged, hypothecated, granted a security interest in, or otherwise encumbered
or disposed of any of such Subordinated Indebtedness or any interest therein or
right pertaining thereto.
10.2 Representations and Warranties of the Senior Lender. The Senior
Lender hereby represents and warrants to the Subordinated Lender that as of the
date hereof: (a) the Senior Lender is a corporation duly organized and validly
existing under the laws of the State of Maryland; (b) the Senior Lender has the
power and authority to enter into, execute, deliver and
-11-
perform its obligations under this Agreement, all of which have been duly
authorized by all necessary corporate action; (c) the execution of this
Agreement by the Senior Lender will not violate or conflict with the Articles of
Incorporation or by-laws of the Senior Lender, any material agreement binding
upon the Senior Lender or any federal, state or local statute, law, rule,
regulation or administrative or judicial judgment, order or decree applicable to
it or require any consent or approval of any Governmental Authority or other
Person which has not been obtained; and (d) this Agreement is the legal, valid
and binding obligation of the Senior Lender, enforceable against the Senior
Lender in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
principles of equity.
11. Legend. The Loan Parties and each holder of any note evidencing
Subordinated Indebtedness now or hereafter outstanding covenant to cause such
note to have affixed upon it at all times a conspicuous legend which reads
substantially as follows:
"THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION
AGREEMENT DATED AS OF MAY [ ], 2006, AMONG
TECHNOLOGY INVESTMENT CAPITAL CORP., THE MAKER
HEREOF, CERTAIN SUBSIDIARY GUARANTORS OF THE MAKER
HEREOF, XXXXXXX INVESTMENTS LLC., PEQUOT HEALTHCARE
FUND, L.P., PEQUOT HEALTHCARE OFFSHORE FUND, INC.,
PREMIUM SERIES PCC LIMITED - CELL 32, PEQUOT
DIVERSIFIED MASTER FUND, LTD., PEQUOT HEALTHCARE
INSTITUTIONAL FUND, L.P., NORTH SOUND LEGACY
INSTITUTIONAL FUND LLC, AND NORTH SOUND LEGACY
INTERNATIONAL LTD., WHICH, AMONG OTHER THINGS,
CONTAINS PROVISIONS SUBORDINATING THE OBLIGATIONS OF
THE MAKER OF THIS INSTRUMENT TO THE PAYEE HEREOF TO
SUCH MAKER'S OBLIGATIONS TO THE HOLDERS OF THE SENIOR
INDEBTEDNESS (AS DEFINED IN SAID SUBORDINATION
AGREEMENT), TO WHICH PROVISIONS EACH HOLDER OF THIS
INSTRUMENT, BY ACCEPTANCE HEREOF, AGREES."
12. Amendments to Subordinated Loan Documents. No provision of the
Subordinated Loan Documents shall, without the prior written consent of the
holders of a majority in principal amount of the Senior Indebtedness at the time
outstanding, be amended, supplemented, modified or waived if the effect of such
amendment, supplement, modification or waiver would be to (a) increase the
amount of, or advance to an earlier date the scheduled maturity date or due date
of, any required payment or prepayment of the principal of the Subordinated
Indebtedness, (b) increase the rate or amount of interest, or the amount of any
prepayment charges, fees, expenses or other amounts payable with respect to the
Subordinated Indebtedness, or advance to an earlier date the scheduled payment
date or due date of any of such amounts, (c) amend, modify or supplement any
existing covenant, restriction, agreement, default, event of default,
representation, warranty, condition or requirement contained in the Subordinated
Loan Documents, or the definition of any term used in any of such provisions, in
a
-12-
manner that makes such provision more restrictive or burdensome in any respect
with respect to the Loan Parties than such provision as in effect on the date
hereof or (d) add any new or additional covenant, restriction, agreement,
default, event of default, representation, warranty, condition, restriction or
requirement not contained in the Subordinated Loan Documents as in effect on the
date hereof that would impose any additional restriction or burden on the the
Loan Parties not imposed by the Subordinated Loan Documents as in effect on the
date hereof, or (e) otherwise impair or adversely affect in any way the rights
of the holders of Senior Indebtedness under this Agreement or any of the Senior
Loan Documents.
13. Notices. All notices hereunder shall be in writing and shall be
conclusively deemed to have been received and shall be effective (a) on the day
on which delivered if delivered personally or transmitted by telecopier, (b) one
Business Day after the date on which the same is delivered to a nationally
recognized overnight courier service, or (c) three Business Days after being
sent by registered or certified United States mail, return receipt requested,
and shall be addressed:
(i) If to any of the Loan Parties, to it at the following address
(or, in the case of a telecopy, to the following telecopy number):
XXXXXXX.XXX INC.
000 Xxxxxxx 0, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy No.: 203-295-2102
(ii) If to a Subordinated Lender, to it at the following address
(or, in the case of a telecopy, to the telecopy number) set forth for such
Subordinated Lender in Schedule A hereto;
(iii) If to the Senior Lender, to it at the following address (or,
in the case of a telecopy, to the following telecopy number):
Technology Investment Capital Corp.
0 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
-13-
or at such other address and/or telecopy number and/or to the attention of such
other Person as any of such Persons shall have advised the others by notice in
the manner herein specified.
14. Successors; Continuing Effect; Etc. This Agreement is being entered
into for the benefit of, and shall be binding upon, the Senior Lender and the
Subordinated Lenders and their respective successors and assigns, including,
without limitation, all subsequent holders of Senior Indebtedness and
Subordinated Indebtedness whether now outstanding or hereafter incurred. This
Agreement shall be binding upon the Loan Parties and their respective successors
and assigns. This Agreement shall be a continuing agreement and shall be
irrevocable and remain in full force and effect as long as there is both Senior
Indebtedness and Subordinated Indebtedness outstanding, but shall terminate upon
the indefeasible payment in full in cash of all outstanding Senior Indebtedness.
15. Specific Performance. The holders of Senior Indebtedness are hereby
authorized to demand specific performance of this Agreement, whether or not any
of the Loan Parties or any holder of Subordinated Indebtedness shall have
complied with any of the provisions hereof applicable to it, at any time when
the Loan Parties or such holder of Subordinated Indebtedness shall have failed
to comply with any of the provisions of this Agreement applicable to it. Each of
the Loan Parties and each holder of Subordinated Indebtedness irrevocably waives
any defense based on the adequacy of a remedy at law, which might be asserted as
a bar to such remedy of specific performance.
16. No Disposition of Subordinated Indebtedness. No holder of Subordinated
Indebtedness shall sell, assign, pledge, encumber or otherwise dispose of any of
the Subordinated Indebtedness unless the purchaser, pledgee, assignee or other
transferee thereof shall first deliver to the holders of Senior Indebtedness a
written agreement, satisfactory in form and substance to the holders of Senior
Indebtedness, to be bound by all of the provisions of this Agreement in respect
of such Subordinated Indebtedness in the same manner and to the same extent as
the seller, assignor, pledgor or transferor of such Subordinated Indebtedness.
17. Amendments and Waivers. This Agreement may be amended only with the
written consent of the Loan Parties, the holders of Senior Indebtedness and the
holders of Subordinated Indebtedness. No term or provision of this Agreement may
be waived except pursuant to a writing signed by the party entitled to the
benefit thereof.
18. Conflicting Provisions. In the event of any conflict or inconsistency
between the provisions of this Agreement, on the one hand, and any term or
provision of the Senior Loan Documents or the Subordinated Loan Documents, on
the other hand, the provisions of this Agreement shall govern and prevail.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or other
electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement. Delivery of manually executed counterparts of
this Agreement shall immediately follow delivery by telecopy or other electronic
means, but the failure to so
-14-
deliver a manually executed counterpart shall not affect the validity,
enforceability, or binding effect hereof.
20. Headings. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
21. Integration and Severability. This Agreement embodies the entire
agreement and understanding among the Loan Parties, the Senior Lender and the
Subordinated Lenders relating to the subject matter hereof, and supersedes all
prior agreements and understandings relating to the subject matter hereof. In
case any one or more of the obligations of any party under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of such party shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of such party under this Agreement in any
other jurisdiction.
22. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
23. Submission to Jurisdiction; Waiver of Venue.
(a) EACH OF THE LOAN PARTIES, THE SENIOR LENDER AND THE SUBORDINATED
LENDERS CONSENTS AND AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND WAIVES
ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN.
(b) EACH OF THE LOAN PARTIES AND THE SUBORDINATED LENDERS HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY HAND DELIVERY OR BY REGISTERED OR CERTIFIED
UNITED STATES MAIL TO SUCH RESPECTIVE PARTY AT ITS ADDRESS SET FORTH IN SECTION
13. EACH OF SUCH PERSONS HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID.
(c) NOTHING IN THIS SECTION 23 SHALL AFFECT THE RIGHT OF THE SENIOR LENDER
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF THE SENIOR LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF THE LOAN
PARTIES OR THE SUBORDINATED LENDERS IN THE COURTS OF ANY OTHER JURISDICTION.
24. Waiver of Right to Trial by Jury. EACH OF THE LOAN PARTIES, THE SENIOR
LENDER AND THE SUBORDINATED LENDERS HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF
-15-
ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM IN RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. EACH OF THE LOAN PARTIES, THE
SENIOR LENDER AND THE SUBORDINATED LENDERS HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
-16-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
BORROWER:
---------
XXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
GUARANTORS
----------
XXXXXXX ADVANCED AESTHETICS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
ADVANCED AESTHETICS SUB, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
ADVANCED AESTHETICS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
XXXXXXX ADVANCED AESTHETICS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
-17-
ANUSHKA PBG, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
ANUSHKA BOCA, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
WILD HARE, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
XXXXXXXX CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
ANUSHKA PBG ACQUISITION SUB, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
ANUSHKA BOCA ACQUISITION SUB, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
-18-
WILD HARE ACQUISITION SUB, LLC
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
SENIOR LENDER:
--------------
TECHNOLOGY INVESTMENT CAPITAL
CORP.
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
SUBORDINATED LENDERS:
---------------------
PEQUOT HEALTHCARE FUND, L.P.
By: Pequot Capital Management, Inc.,
Investment Advisor
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
PEQUOT HEALTHCARE OFFSHORE FUND,
INC.
By: Pequot Capital Management, Inc.,
Investment Advisor
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
PEQUOT DIVERSIFIED MASTER FUND, L.P.
By: Pequot Capital Management, Inc.,
Investment Advisor
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
-19-
PEQUOT HEALTHCARE INSTITUTIONAL
FUND, L.P.
By: Pequot Capital Management, Inc.,
Investment Advisor
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
PREMIUM SERIES PCC LIMITED - CELL 33
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx x. Xxxxxxx
Title: Attorney in Fact
NORTH SOUND LEGACY
INSTITUTIONAL FUND LLC
By: /s/ Xxxxxx X. Mlauley
-------------------------------------
Name: Xxxxxx X. Mlauley
Title: Chief Investment Officer
NORTH SOUND LEGACY
INTERNATIONAL LTD.
By: /s/ Xxxxxx X. Mlauley
-------------------------------------
Name: Xxxxxx X. Mlauley
Title: Chief Investment Officer
XXXXXXX INVESTMENTS LLC
By: /s/ Xxxxxx X. Mlauley
-------------------------------------
Name: Xxxxxx X. Mlauley
Title: Chief Investment Officer
-20-
SCHEDULE A
SUBORDINATED LENDERS
Jurisdiction of
Incorporation or Principal Amount of
Name and Address Organization Subordinated Indebtedness
--------------------------------------------------------------------------------
Pequot Healthcare Fund, L.P. $675,077
c/o Pequot Capital
Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Pequot Healthcare Offshore $628,087
Fund, Inc.
c/o Pequot Capital
Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Premium Series PCC Limited $116,578
- Cell 32
c/o Pequot Capital
Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Pequot Diversified Master $70,664
Fund, Ltd.
c/o Pequot Capital
Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Pequot Healthcare $122,497
Institutional Fund, L.P.
c/o Pequot Capital
Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
North Sound Legacy $602,151
Institutional Fund LLC
c/o North Sound Capital LLC
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx
00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
North Sound Legacy $1,548,387
International Ltd.
c/o North Sound Capital LLC
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx
00000
--------------------------------------------------------------------------------
Xxxxxxx Investments LLC $1,075,269
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx
00000
--------------------------------------------------------------------------------
-2-
