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Exhibit 10.172
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of
April 4, 2001, by and among the entities listed on Exhibit A hereto, each a
Delaware corporation (collectively, "Borrowers"), BALANCED CARE CORPORATION, a
Delaware corporation ("BCC"), the entities listed on Exhibit D hereto, each a
Delaware corporation, which are direct or indirect subsidiaries of BCC and
shareholders of one or more of the Borrowers (collectively "BCC Subs", and
collectively with BCC, "Pledgor"), VXM INVESTMENTS LIMITED, a Cayman Islands
corporation ("VXM"), HR INVESTMENTS LIMITED, a Cayman Islands corporation ("HR")
and RH INVESTMENTS LIMITED, a Cayman Islands corporation ("RH" and, together
with VXM and HR, the "Junior Lenders"), and XXXXXX HEALTHCARE FINANCE, INC., a
Delaware corporation, (together with any successors or assigns in such capacity,
"Senior Creditor").
W I T N E S S E T H:
WHEREAS, the Borrowers have executed and delivered a Second
Amended and Restated Promissory Note A in the principal amount of Thirty Million
Six Hundred Thousand and No/100 Dollars ($30,600,000.00) in favor of the Senior
Creditor (the "Senior Note A"), and a Second Amended and Restated Subordinated
Promissory Note B in the principal amount of Six Million Four Hundred Thousand
and No/100 Dollars ($6,400,000.00) in favor of the Senior Creditor (the "Senior
Note B"; Senior Note A and Senior Note B being referred to herein collectively
as the "Senior Notes");
WHEREAS, all amounts owed by the Borrowers to the Senior
Creditor under the Senior Notes or otherwise under the Senior Security Documents
(as defined below) and all amounts owed by the BCC Borrowers (as defined in the
Third Amendment to Loan Documents, dated as of November 6, 2000 (the "Third
Amendment"), among the Borrowers, BCC, the Senior Creditor and certain
affiliates of BCC and the Borrowers) to the Senior Creditor pursuant to the
Revolving Credit Facility Loan Documents (as defined in (and amended by) the
Third Amendment) or otherwise are being hereinafter referred to collectively as
the "Senior Debt;"
WHEREAS, the Senior Debt is secured by, among other things,
those certain mortgages and deeds of trust, each dated December 30, 1999 listed
on Exhibit B hereto, as each has been
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amended (together with the Revolving Credit Facility Mortgages (as defined in
(and amended by) the Third Amendment), collectively, the "Senior Mortgages"),
covering certain real property including the real property more particularly
described on Exhibit C attached hereto and incorporated herein by reference
(together with the properties encumbered by the Revolving Credit Facility
Mortgages, collectively, the "Properties");
WHEREAS, pursuant to the Bridge Loan Agreement, dated as of
April 4, 2001, among BCC, the Junior Lenders and VXM, as agent (the "Agent") for
the Junior Lenders (the "Bridge Loan Agreement"), some or all of the Junior
Lenders have agreed to loan to BCC (through one or more disbursements, made on
one or more dates and evidenced by one or more notes) an amount not to exceed
$27,853,524 in the aggregate (the note(s) evidencing such loan being referred to
(collectively) as the "Junior Note");
WHEREAS, the indebtedness and other obligations of the
Borrowers to each Junior Lender pursuant to the Bridge Loan Agreement and the
Junior Note is hereinafter referred to collectively as the "Junior Debt";
WHEREAS, the Junior Debt is secured by a Pledge Agreement
pursuant to which Pledgor is pledging the capital stock of the Borrowers (the
"Stock") to the Agent as security for the Junior Debt (as amended from time to
time, the "Pledge Agreement", and together with the Junior Note, the "Junior
Loan Documents");
WHEREAS, the Junior Lenders have agreed to fully subordinate
the Junior Debt and the Junior Loan Documents to the Senior Debt and Senior
Security Documents;
WHEREAS, that certain Loan Agreement dated December 30, 1999
among the Senior Creditor and the Borrowers, as amended to date, including by
the Third Amendment (the "Loan Agreement"), the Senior Mortgages, the Senior
Notes and all other documents evidencing, securing or otherwise executed in
connection with the Senior Notes or the Senior Debt (other than this Agreement),
together with the Revolving Credit Facility Loan Documents are referred to
herein as the "Senior Security Documents;" and
WHEREAS, all capitalized terms used herein and not defined
herein shall have the meanings as signed to them in the Loan Agreement.
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NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the parties agree as follows:
1. The Junior Loan Documents and the Junior Debt and the
liens, security interests and assignments created thereunder (including without
limitation the Pledge Agreement and any liens created thereby) are and shall
continue to be expressly subject and subordinate to (a) the Senior Debt and the
liens, security interests and assignments created by the Senior Security
Documents (regardless of the relative times and method of attachment or
perfection thereof or the order of filing, of financing statements, mortgages,
deeds of trust, assignments or other security agreements or documents, or
anything in the Junior Loan Documents or this Agreement to the contrary); (b)
all the terms, covenants and conditions contained in the Senior Security
Documents and any extensions, replacements, consolidation, modifications and
supplements thereto, including without limitation any and all advances (whether
or not obligatory), in whatever amounts and whenever made, with interest
thereon, and to any expenses, charges and fees incurred thereby, including any
and all advances, interest, expenses, charges and fees which may increase the
indebtedness secured by the Senior Security Documents above the original
principal amount thereof and any post-petition interest which accrues, or would
have accrued but for such filing, after the commencement of any case under the
Federal Bankruptcy Code, to the full extent of all of the foregoing; and (c) any
amounts advanced or incurred, in the sole judgment of the Senior Creditor
whether or not in accordance with the Senior Security Documents, for the benefit
of the Properties or for costs and expenses associated with the Senior Debt or
otherwise. In foreclosing on the Senior Creditor's security interests and liens,
the Senior Creditor may proceed to foreclose on its security interests and liens
in any manner which the Senior Creditor, in its sole discretion, chooses, even
though a higher price might have been realized if the Senior Creditor had
proceeded to foreclose on its security interests and liens in another manner.
Notwithstanding the foregoing to the contrary, nothing in this Agreement shall
be construed to prevent the Junior Lenders from receiving payment (i) so long as
no Event of Default has occurred and is continuing under (and as defined in) any
of the Senior Security Documents, regularly scheduled interest payments under
the Junior Note may be made from BCC, and (ii) so long as (1) BCC obtains new
funds to repay the Junior Note from either (A) an equity contribution (without
an increase in BCC's liabilities as
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would be the case, for example, if convertible debt were issued, as opposed to
common or preferred stock) or (B) new debt incurred by BCC which debt is
consented to by the Senior Creditor (whose consent will not be unreasonably
withheld), and which new debt is subject to a complete standstill and
subordination in favor of the Senior Creditor by the holder of such debt,
pursuant to a written agreement in substantially the form of this Agreement, and
(2) no Event of Default has occurred and is continuing under (and as defined in)
any of the Senior Security Documents, payment due under the Junior Note upon
maturity (as the maturity date may be extended from time to time) (the payments
described in clauses (i) and (ii) of this sentence being referred to
collectively as the "Permitted Payments").
2. (a) Until the Senior Debt has been satisfied in full, the
Junior Lender shall not be entitled to receive or retain any payment made by
BCC, any of the BCC Borrowers, any of the Borrowers or any of the BCC Subs with
respect to the Junior Debt or under the Junior Loan Documents, except for the
Permitted Payments. The BCC Subs, BCC, the BCC Borrowers and the Borrowers agree
that they shall not, directly or indirectly, make any payments (whether of
principal, interest or otherwise) on account of the Junior Debt (other than the
Permitted Payments) or redeem, purchase or otherwise acquire, directly or
indirectly, any Junior Debt, and the Junior Lender agrees that it will not
accept any such payment (other than the Permitted Payments) or payment from any
other source including, without limitation, proceeds of insurance or any
condemnation award or participate in any such redemption, purchase or other
acquisition.
(b) Until the Senior Debt has been satisfied in full, the
Junior Lender agrees that it shall not exercise any remedies whatsoever under
the Junior Loan Documents, including without limitation, any remedies with
respect to the capital shares of any of the Borrowers or of any of the Pledgors
(or if applicable at any time hereafter, any of the BCC Borrowers), whether
under the Junior Loan Documents or otherwise.
(c) Until the Senior Debt has been satisfied in full, the
Junior Lender shall not take, require or accept from BCC, any BCC Borrower, any
Borrower or any BCC Sub any security or collateral for the Junior Debt or any
guaranty of the Junior Debt (except for pledges of shares by the Pledgor and
other security granted by the Pledgor under the Pledge Agreement).
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3. At all times during which the Senior Debt is outstanding,
the Junior Lender agrees that it shall not (i) vote for any plan of
reorganization of the BCC Borrowers, the Borrowers or Pledgor without the
written consent of the Senior Creditor; (ii) commence or join with any other
creditor or creditors of the BCC Borrowers, the Borrowers or Pledgor in
commencing any bankruptcy, reorganization or insolvency proceeding against the
BCC Borrowers, the Borrowers or Pledgor; (iii) object to any motion filed in any
bankruptcy proceeding that rents from the Properties, or any of them, shall
constitute cash collateral of the Senior Creditor; (iv) oppose any motion filed
by the Senior Creditor to lift the automatic stay in a bankruptcy proceeding; or
(v) take any action to appoint a receiver for Pledgor, the Borrowers, the BCC
Borrowers or any of the Properties.
4. Nothing contained in this Agreement is intended to or shall
impair the obligations of the Borrowers, BCC and the BCC Borrowers, which are
absolute and unconditional, to pay to the Senior Creditor the principal or the
prepayment premium, if any, and the interest on the Senior Debt as and when the
same shall become due and payable in accordance with its terms, or to affect the
relative rights of the Senior Creditor and creditors of the BCC Borrowers, the
Borrowers or Pledgor, other than the Junior Lenders.
5. Should any payment on account of, or any stock as
collateral (or other collateral) for any part of, the Junior Debt be paid to the
Junior Lender in violation of the terms of this Agreement, such payment or
collateral shall be delivered forthwith to the Senior Creditor by the recipient
for application to the Senior Debt, in the form received. The Senior Creditor is
irrevocably authorized to supply any required endorsement or assignment which
may have been omitted. Until so delivered, any such payment or collateral shall
be held by the Junior Lender in trust for the Senior Creditor and shall not be
commingled with other funds or property of the Junior Lender.
6. The Agent represents that it has not transferred or
assigned its rights under the Junior Note, and no part thereof has been
subordinated in favor of anyone except the Senior Creditor. None of the Junior
Lenders may sell, assign or transfer their respective collateral interests in
the Stock or their respective collateral interests in the Junior Note or any of
the Junior Loan Documents without the Senior Creditor's consent.
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7. The rights in favor of the Senior Creditor created
hereunder are solely for its benefit and protection and for the benefit and
protection of its participants, successors and assigns. Nothing herein contained
shall impose on the Senior Creditor any duties with respect to any property of
the BCC Borrowers, the Borrowers, Pledgor or the Junior Lenders.
8. The Senior Creditor is hereby authorized to demand specific
performance of this Agreement, whether or not the BCC Borrowers, the Borrowers
or Pledgor shall have complied with the provisions hereof applicable to it, at
any time when the Junior Lenders shall have failed to comply with any provision
hereof applicable to them. The Junior Lenders hereby irrevocably waive any
defense based on the adequacy of a remedy at law which might be asserted as a
bar to the remedy of specific performance hereof in any action brought therefor
by the Senior Creditor. The Junior Lenders consent that, without the necessity
of any reservation of rights against the Junior Lenders, and without notice to
or further assent by the Junior Lenders:
(a) any demand for payment of any Senior Debt may be rescinded
in whole or in part, and any Senior Debt may continue;
(b) the Senior Debt, or the liability of BCC, the BCC
Borrowers, the Borrowers or any other party upon or for any part thereof, or any
collateral security therefor or guaranty thereof or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, increased,
extended, modified, compromised, waived, surrendered or released;
(c) the Senior Notes and any other agreement or instrument
evidencing the Senior Debt or governing the terms of the Senior Debt, and any
collateral security documents or guaranties or documents signed in connection
therewith, and the Revolving Credit Facility Loan Documents, may be amended,
modified, supplemented or terminated, in whole or in part, as the Senior
Creditor may deem advisable from time to time; and
(d) any collateral security at any time held by the Senior
Creditor for the payment of any of the Senior Debt may be sold, waived,
surrendered or released, and the Senior Creditor may take any other action it
deems desirable with respect to the collateral for the Senior Debt.
9. The Junior Lenders shall execute and deliver to the Senior
Creditor such further instruments and shall take such
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further action as the Senior Creditor may reasonably request from time to time
in order to carry out the provisions and intent of this Agreement or to enable
the Senior Creditor to exercise and enforce its rights and remedies hereunder.
10. The Agent and the Senior Creditor agree to provide to each
other estoppel certificates current to the date of such request within thirty
(30) business days of the request of the other party, but not more frequently
than three times per year, which estoppel certificate shall provide that the
Junior Debt or Senior Debt (as the case may be) is in full force and effect,
that, to the affirming party's knowledge, no defaults have occurred and are
continuing thereunder, and as to any other matters reasonably requested by the
requesting party.
11. The Junior Lenders agree that in the event of a casualty
to one or more of the Properties or a condemnation or taking under a power of
eminent domain of all or any portion of one or more of the Properties, or a
threat of such a condemnation or taking, all adjustments of insurance claims,
condemnation claims and settlements in anticipation of such a condemnation or
taking shall be prosecuted, at the Senior Creditor's election, by the Senior
Creditor or at the Senior Creditor's direction pursuant to the terms and
provisions of the Senior Security Documents, and all payments and settlements of
insurance claims or condemnation awards or payments in anticipation of
condemnation or a taking shall be paid to the Senior Creditor or at the Senior
Creditor's direction for use and application pursuant to the terms and
provisions of the Senior Security Documents. The Junior Lenders irrevocably
assign to the Senior Creditor all of their respective interests, if any, in any
such claims, settlements or awards and irrevocably grants to the Senior Creditor
authorization to execute any and all documents on the Junior Lenders' behalf
necessary in connection with the prosecution or settlement of such claims,
awards and payments.
12. The execution of this Agreement shall not create or be
construed as creating a partnership, joint venture or other joint enterprise
among the Senior Creditor and the Junior Lenders, and shall not be construed as
creating any special relationship among the Senior Creditor and the Junior
Lenders. Except as provided in Sections 5 and 15, nothing in this Agreement
shall be construed to constitute the Senior Creditor or the Junior Lenders as
trustee or other fiduciary for the other or to impose on any of them any duty,
responsibility or obligation other than those expressly provided for herein,
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including, without limitation, any duty of good faith and fair dealing. Each of
the Senior Creditor and each Junior Lender has, independently and without
reliance on the other and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the BCC Borrowers, the
Borrowers and/or Pledgor, as applicable, and agrees that it will, independently
and without reliance upon the other, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own independent
analysis and decisions in taking or not taking action under this Agreement, the
Senior Security Documents or the Junior Loan Documents, respectively.
13. In the event there exists a conflict between the terms and
provisions of the Senior Security Documents, the Junior Loan Documents and this
Agreement, the terms and provisions of this Agreement will prevail. The Senior
Lender hereby consents to, and waives any default under the Senior Security
Documents in connection with, the execution and delivery of the Junior Loan
Documents, and the performance thereunder of the parties thereto, subject to the
terms and conditions of this Agreement.
14. If the Junior Lenders shall acquire by subrogation or
otherwise, any lien, estate, right, or other interest in the Properties which is
or may be prior in right to the Senior Creditor, including, but not limited to,
advances made by the Junior Lenders for real estate taxes and assessments, such
lien, estate, right or other interest shall be subordinate to the Senior
Security Documents and the Junior Lenders shall not exercise any such
subrogation or other rights until all amounts due under the Senior Security
Documents are paid in full and all obligations thereunder are fully satisfied.
15. Upon any distribution of the assets of one or more of BCC,
the BCC Borrowers or the Borrowers in connection with any dissolution, winding
up, liquidation or reorganization of one or more of BCC, the BCC Borrowers or
the Borrowers (whether in bankruptcy proceedings or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
BCC, a BCC Borrower or a Borrower or otherwise), or the distribution of
insurance proceeds or condemnation awards received with respect to one or more
of the Properties in the event of a casualty or condemnation, the Senior
Creditor shall first be entitled to receive payment in full of all the Senior
Creditor claims which claims shall include, without limitation, the right to
payment in full of the Senior Debt (the "Senior
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Claims") before the Junior Lenders shall be entitled to receive any payment from
such proceeds in respect of the claims of the Junior Lenders (the "Junior
Claims"). Upon any such dissolution, winding up, liquidation or reorganization,
any payment or distribution of assets of BCC, a BCC Borrower or a Borrower of
any kind or character, whether in cash, property or securities, to which the
Senior Creditor is entitled shall be made directly to the Senior Creditor by the
liquidating trustee or agent or other persons making such payment or
distribution (whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise) (a "Paying Party"). If the aggregate amount of such payments or
distributions on the Senior Claims is insufficient to pay the Senior Claims in
full, then the Junior Lenders hereby irrevocably authorize the Paying Party to
remit promptly to the Senior Creditor, and the Junior Lenders hereby assign to
the Senior Creditor the lesser of the proceeds the Junior Lenders are entitled
to receive by reason of any payment or distribution on the Junior Claims, or the
difference between the aggregate amount of the Senior Claims and the proceeds
the Senior Creditor receives by reason of any payment on distribution on the
Senior Claims. In furtherance of the foregoing, but not by way of limitation
thereof, if one or more of BCC, the BCC Borrowers or the Borrowers are subject
to any proceeding, with the result that BCC, such BCC Borrower or BCC Borrowers
or such Borrower or Borrowers, as applicable, are excused from the obligation to
pay all or part of the interest otherwise payable in respect of the Senior
Claims during the period subsequent to the commencement of any such Proceedings,
the Junior Lenders agree that such interest (calculated at the rate of interest
set forth in the Senior Security Documents) shall be payable out of payments or
distributions made by the Paying Party in respect of the Junior Claims.
If any payment or distribution of assets of BCC, a BCC
Borrower or a Borrower of any kind or character (including any distribution of
insurance proceeds or condemnation awards received with respect to the Property
owned by BCC, such BCC Borrower or such Borrower in the event of a casualty or
condemnation), whether in cash, property or securities, and whether or not
pursuant to any dissolution, winding up, liquidation or reorganization, not
permitted by or in accordance with the provisions of this Agreement shall be
received by the Junior Lenders in connection with the Junior Claims, such
payment or distribution to the Junior Lenders shall be held in trust for the
benefit of, and shall be paid over or delivered to, the Senior Creditor, or to
its representative, in precisely the form received (except for the endorsement
or assignment of
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the Junior Lenders where necessary). In the event of any failure by the Junior
Lenders to make any such endorsement or assignment, the Senior Creditor is
hereby irrevocably authorized to make same.
16. This Agreement shall be binding upon the parties hereto
until all of the Senior Debt shall have been paid and fully satisfied.
17. The Junior Lenders agree that: (a) the Senior Creditor
shall be entitled to manage and supervise the Senior Debt and its relationship
to the Borrowers, the BCC Borrowers and BCC as it deems appropriate under the
circumstances; (b) the Senior Creditor shall not have any responsibility to the
Junior Lenders to advise them of information known to the Senior Creditor
regarding the financial condition of the BCC Borrowers, the Borrowers or Pledgor
or of any circumstances bearing upon the risk of nonpayment of the Senior Debt
or any other indebtedness of the BCC Borrowers, the Borrowers or Pledgor; and
(c) the Senior Creditor shall have the right at all times to determine the order
in which any or all of the collateral for the Senior Debt shall be subjected to
the remedies provided by the Senior Security Documents. In any event, the Senior
Creditor shall not have any liability to the Junior Lenders for, and the Junior
Lenders hereby waive any claim which they may now or hereafter have against the
Senior Creditor arising out of any amendment to, waiver or departure from, any
term of the Senior Security Documents and any and all actions to which the
Senior Creditor takes or omits to take with respect to the BCC Borrowers, the
Borrowers, Pledgor, the Senior Security Documents or any collateral (including,
without limitation, (i) actions with respect to the taking, perfection or
release of liens or security interests in any other collateral, (ii) actions
with respect to the foreclosure upon sale of, release of or failure to realize
upon, any collateral or to the collection of the Senior Debt or the valuation,
use or protection of any collateral, and (iii) actions under any guaranty of the
Senior Debt).
18. All notices or other written communications hereunder
shall be deemed to have been properly given (i) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof, (ii) one (1) Business Day (defined below) after having been deposited
for overnight delivery with any reputable overnight courier service, or (iii)
three (3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the
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U.S. Postal Service and sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If to the Senior Creditor: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
0 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attn: Manager, Portfolio
Administration Group
Facsimile No. (000) 000-0000
with a copy to: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn:Xxxxx Xxxxxxxxxx,
V.P. and Chief Counsel
Senior Living Group
Facsimile No. (000) 000-0000
with a copy to: Xxxxxx Healthcare Finance, Inc.
Loan No. 99-407
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn:Xxxxx XxXxxx,
Senior Vice President
Facsimile No. (000) 000-0000
If to the Junior Lenders: VXM Investments Limited
c/o Unsworth & Associates
Xxxxxxxxxxx 000, Xxxxxxxxx, Xxxxxxxxxxx
Attn:Xxxx Xxxxxxxx
Facsimile No.:011-31-20-623-2285
with a copy to: Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:Xxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Borrowers, BCC or the Balanced Care Corporation
BCC Subs: 0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:Xxxxx Xxxxx, Chief Financial
Officer
Telecopy: (000) 000-0000
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with a copy to: Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn:Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to: Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
For purposes of this Section, "Business Day" shall mean a day
on which commercial banks are not authorized or required by law to close in
Chicago, Illinois and a day which is not any of the first, second, seventh or
eighth day of Passover, the first or second day of Shavuoth, the first or second
day of Rosh Hashanah or Yom Kippur, the first or second day of Sukkoth, Shemini
Azerth or Simchas Torah, and the day prior to any of the foregoing days.
19. Time is of the essence with respect to the obligations
contained herein.
20. The Agreement shall be binding upon BCC, the BCC
Borrowers, the BCC Subs, the Borrowers, the Senior Creditor, the Junior Lenders
and their respective successors and assigns, and shall inure to the benefit of
the Senior Creditor and its successors and assigns. The terms "Borrowers",
"BCC", "BCC Subs" and "BCC Borrowers" as used herein shall also refer to their
respective successors and assigns, including, without limitation, a receiver,
trustee, custodian or debtor in possession.
21. This Agreement may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart signed by each of the parties
hereto.
22. This Agreement and the rights and obligations of the
parties hereunder shall in all respects be construed,
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governed, applied and enforced in accordance with the laws of the State of
Illinois (without regard to conflicts of laws principles) and the applicable
laws of the United States of America. PLEDGOR, THE BORROWERS, THE BCC BORROWERS
AND THE JUNIOR LENDERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX, STATE OF ILLINOIS AND
IRREVOCABLY AGREE THAT, SUBJECT TO THE SENIOR CREDITOR'S ELECTION, ALL ACTIONS
OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED
IN SUCH COURTS. PLEDGOR, THE BORROWERS, THE BCC BORROWERS AND THE JUNIOR LENDERS
EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND
WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. PLEDGOR, THE BORROWERS, THE BCC
BORROWERS AND THE JUNIOR LENDERS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON PLEDGOR, THE
BORROWERS, THE BCC BORROWERS AND THE JUNIOR LENDERS BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO PLEDGOR, THE BORROWERS, THE BCC
BORROWERS AND THE JUNIOR LENDERS, AT THE ADDRESSES SET FORTH IN THIS AGREEMENT
AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
POSTED.
23. Pledgor, the BCC Borrowers and the Borrowers are executing
this Agreement for the sole purpose of evidencing their consent to the terms
hereof and the agreements made between the Senior Creditor and the Junior
Lenders evidenced hereby; however, none of Pledgor, the BCC Borrowers or the
Borrowers shall be entitled to enforce any of the provisions of this Agreement,
but nonetheless are permitted to rely on (i) the consent by the Senior Creditor
to the pledge to the Junior Lenders of the stock owned by Pledgor in the
Borrowers, and (ii) the waiver of any default under any Senior Security Document
as a result of entering into the Pledge Agreement and making the Junior Debt.
There are no third party beneficiaries to this Agreement.
24. Notwithstanding any other provision of this Agreement
which may be to the contrary: (i) any debt or obligation which is or becomes
secured by the Pledge Agreement shall automatically and without further
documentation irrevocably become part of the Junior Debt for all purposes of
this Agreement and all documents, notes, debentures, agreements or other
instruments evidencing or securing such debt or obligations shall automatically
and without further documentation irrevocably become Junior Loan Documents for
all purposes of this Agreement; provided, however, nothing in this clause (i)
shall be deemed to constitute the consent of the
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Senior Creditor to any debt incurred hereafter by BCC (other than the debt
evidenced (or to be evidenced) by the Junior Note as defined above), the
Borrowers, the BCC Subs or the BCC Borrowers, when such consent is required
under the terms of the Senior Security Documents; (ii) the Junior Lenders and
their affiliates will not make additional loans or provide other financial
assistance (other than the debt evidenced (or to be evidenced) by the Junior
Note as defined above), without regard to how they are documented (as notes,
convertible securities or otherwise), to BCC, the Borrowers, the BCC Subs, the
BCC Borrowers or their affiliates, if doing so would cause a default under any
of the Senior Security Documents, without in each instance obtaining the prior
written consent of the Senior Creditor; (iii) the Junior Lenders and their
affiliates will not take additional security to secure any existing or future
debt or obligations of BCC, the Borrowers, the BCC Subs, the BCC Borrowers or
their affiliates, if doing so would cause a default under any of the Senior
Security Documents, without in each instance obtaining the prior written consent
of the Senior Creditor; (iv) if the Senior Creditor consents to any debt or
other financial assistance described in clause (ii) above, in the exercise of
the Senior Creditor's reasonable discretion, the Senior Creditor may require as
a condition to its consent, that such debt or other financial assistance become
part of the Junior Debt for all purposes of this Agreement and, if required as a
condition to the Senior Creditor's consent, all documents, notes, debentures,
agreements or other instruments evidencing or securing such debt or other
financial assistance shall automatically and without further documentation
irrevocably become part of the Junior Loan Documents and subject to the
provisions of this Agreement; and (v) if the Senior Creditor consents to any
security described in clause (iii) above, all documents, notes, debentures,
agreements or other instruments evidencing such security interests shall
automatically and without further documentation irrevocably become Junior Loan
Documents for all purposes of this Agreement. The Junior Lenders shall give the
Senior Creditor prompt written notice as to any debts or obligations which
become secured by the Pledge Agreement.
* * * * *
15
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
JUNIOR LENDERS:
VXM Investments Limited, as Junior
Lender
By:/s/X.X. Xxxxxxxx
Name:X.X. Xxxxxxxx
Title:Director
HR Investments Limited
By:/s/X.X. Xxxxxxxx
Name:X.X. Xxxxxxxx
Title:Director
RH Investments Limited
By:/s/X.X. Xxxxxxxx
Name:X.X. Xxxxxxxx
Title:Director
AGENT:
VXM Investments Limited, as Agent
By:/s/X.X. Xxxxxxxx
Name:X.X. Xxxxxxxx
Title:Director
SENIOR CREDITOR:
XXXXXX HEALTHCARE FINANCE, INC., a
Delaware corporation
By:/s/J. Xxxxxxx Xxxxxx
Name:Xxxxxxx Xxxxxx
Title:Vice President
16
BCC:
BALANCED CARE CORPORATION, a Delaware
corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Counsel; Assistant Secretary
BORROWERS:
BALANCED CARE REALTY AT STATE COLLEGE,
INC., a Delaware corporation
BALANCED CARE REALTY AT ALTOONA, INC.,
a Delaware corporation
BALANCED CARE REALTY AT LEWISTOWN,
INC., a Delaware corporation
BALANCED CARE REALTY AT READING, INC.,
a Delaware corporation
BALANCED CARE REALTY AT BERWICK, INC.,
a Delaware corporation
BALANCED CARE REALTY AT PECKVILLE,
INC., a Delaware corporation
BALANCED CARE REALTY AT SCRANTON, INC.,
a Delaware corporation
BALANCED CARE REALTY AT MARTINSBURG,
INC., a Delaware corporation
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
17
BORROWERS:
BALANCED CARE REALTY AT MAUMELLE, INC.,
a Delaware corporation
BALANCED CARE REALTY AT SHERWOOD, INC.,
a Delaware corporation
BALANCED CARE REALTY AT MOUNTAIN HOME,
INC., a Delaware corporation
BALANCED CARE REALTY AT MANSFIELD,
INC., a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC SUBS:
BALANCED CARE REALTY I, INC., a
Delaware corporation
BALANCED CARE REALTY II, INC., a
Delaware corporation
BALANCED CARE REALTY III, INC., a
Delaware corporation
BALANCED CARE REALTY IV, INC., a
Delaware corporation
BALANCED CARE REALTY V, INC., a
Delaware corporation
BALANCED CARE REALTY VI, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
18
BCC SUBS:
BALANCED CARE REALTY VII, INC., a
Delaware corporation
BALANCED CARE REALTY VIII, INC., a
Delaware corporation
BALANCED CARE REALTY IX, INC., a
Delaware corporation
BALANCED CARE REALTY X, INC., a
Delaware corporation
BALANCED CARE REALTY XI, INC., a
Delaware corporation
BALANCED CARE REALTY XII, INC., a
Delaware corporation
BALANCED CARE REALTY XIII, INC., a
Delaware corporation
BALANCED CARE REALTY XIV, INC., a
Delaware corporation
BALANCED CARE REALTY XV, INC., a
Delaware corporation
BALANCED CARE REALTY XVI, INC., a
Delaware corporation
BALANCED CARE REALTY XVII, INC., a
Delaware corporation
BALANCED CARE REALTY XVIII, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
19
BCC SUBS:
BALANCED CARE REALTY XIX, INC., a
Delaware corporation
BALANCED CARE REALTY XX, INC., a
Delaware corporation
BALANCED CARE REALTY XXI, INC., a
Delaware corporation
BALANCED CARE REALTY XXII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIV, INC., a
Delaware corporation
BALANCED CARE REALTY XXV, INC., a
Delaware corporation
BALANCED CARE REALTY XXVI, INC., a
Delaware corporation
BALANCED CARE REALTY XXVII, INC., a
Delaware corporation
BALANCED CARE REALTY XXVIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXIX, INC., a
Delaware corporation
BALANCED CARE REALTY XXX, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
20
BCC SUBS:
BALANCED CARE REALTY XXXI, INC., a
Delaware corporation
BALANCED CARE REALTY XXXII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIV, INC., a
Delaware corporation
BALANCED CARE REALTY XXXV, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVI, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXVIII, INC., a
Delaware corporation
BALANCED CARE REALTY XXXIX, INC., a
Delaware corporation
BCC AT HARRISBURG, INC., a Delaware
corporation
BALANCED CARE AT TALLAHASSEE, INC.,
a Delaware corporation
BALANCED CARE AT PENSACOLA, INC., a
Delaware corporation
BALANCED CARE AT XXXXXXXX, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
21
BCC SUBS:
BALANCED CARE AT AKRON, INC., a
Delaware corporation
BALANCED CARE AT YORK, INC., a Delaware
corporation
BALANCED CARE AT HAGERSTOWN, INC., a
Delaware corporation
BALANCED CARE AT BRISTOL, INC., a
Delaware corporation
BALANCED CARE AT XXXXXXX CITY, INC., a
Delaware corporation
BALANCED CARE AT MURFREESBORO, INC., a
Delaware corporation
BALANCED CARE AT TEAY'S VALLEY, INC., a
Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
BCC BORROWERS:
BCC AT DARLINGTON, INC.,
a Delaware corporation
BALANCED CARE AT EYERS GROVE, INC.,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
22
BCC BORROWERS:
BALANCED CARE AT XXXXXX, INC.,
a Delaware corporation
BALANCED CARE AT XXXXXX, INC.,
a Delaware corporation
BALANCED CARE AT NORTH RIDGE, INC.,
a Delaware corporation
By:/s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President and Secretary
23
EXHIBIT A
Borrowers
1. Balanced Care Realty at State College, Inc.
2. Balanced Care Realty at Altoona, Inc.
3. Balanced Care Realty at Lewistown, Inc.
4. Balanced Care Realty at Reading, Inc.
5. Balanced Care Realty at Berwick, Inc.
6. Balanced Care Realty at Peckville, Inc.
7. Balanced Care Realty at Scranton, Inc.
8. Balanced Care Realty at Martinsburg, Inc.
9. Balanced Care Realty at Maumelle, Inc.
10. Balanced Care Realty at Sherwood, Inc.
11. Balanced Care Realty at Mountain Home, Inc.
12. Balanced Care Realty at Mansfield, Inc.
24
EXHIBIT B
Senior Mortgages
1. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at State College, Inc. in favor of Senior
Creditor, as amended
2. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Altoona, Inc. in favor of Senior Creditor,
as amended
3. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Lewistown, Inc. in favor of Senior Creditor,
as amended
4. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Reading, Inc. in favor of Senior Creditor,
as amended
5. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Berwick, Inc. in favor of Senior Creditor,
as amended
6. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Peckville, Inc. in favor of Senior Creditor,
as amended
7. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Scranton, Inc. in favor of Senior Creditor,
as amended
8. Credit Line Deed of Trust, Assignment of Rents and Security Agreement
executed by Balanced Care Realty at Martinsburg, Inc. in favor of
Senior Creditor, as amended
9. Mortgage, Assignment of Rents and Security Agreement executed by
Balanced Care Realty at Maumelle, Inc. in favor of Senior Creditor, as
amended
10. Mortgage, Assignment of Rents and Security Agreement executed by
Balanced Care Realty at Sherwood, Inc. in favor of Senior Creditor, as
amended
11. Mortgage, Assignment of Rents and Security Agreement executed by
Balanced Care Realty at Mountain Home, Inc. in favor of Senior
Creditor, as amended
25
12. Open-End Mortgage, Assignment of Rents and Security Agreement executed
by Balanced Care Realty at Mansfield, Inc. in favor of Senior Creditor,
as amended
26
EXHIBIT C
Properties
Borrower Property
Balanced Care Realty at State College, Inc. 0000 Xxxxxxxxxxx Xxxx (Xxx 0X, Xxxxxx Xxxxx Drive),
State College, PA 16803
Xxxxxxxx Township, Centre County
Balanced Care Realty at Altoona, Inc. 000 Xxx Xxx Xxxxx, Xxxxxxxxxxxx, XX 00000
Allegheny Township, Xxxxx County
Balanced Care Realty at Lewistown, Inc. 00 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, XX 00000
Mifflin County
Balanced Care Realty at Reading, Inc. 0 Xxxxx Xxxxx, Xxxxxxx, XX 00000
Exeter Township, Berks County
Balanced Care Realty at Berwick, Inc. 0000 Xxxx Xxxxx Xxxxxx (State Route 11),
Berwick, PA 18603
Columbia County
Balanced Care Realty at Peckville, Inc. Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000
Mid Valley, Lackawanna County
Balanced Care Realty at Scranton, Inc. 000-000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
Lackawanna County
Balanced Care Realty at Martinsburg, Inc. 000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Berkeley County
Balanced Care Realty at Maumelle, Inc. 000 Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000
Pulaski County
Balanced Care Realty at Sherwood, Inc. 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000
Pulaski County
Balanced Care Realty at Mountain Home, Inc. 000 Xxxx 0xx Xxxxxx, Xxxxxxxx Xxxx, XX 00000
Xxxxxx County
Balanced Care Realty at Mansfield, Inc. 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxx, XX 00000
Ontario Village, Richland County
27
EXHIBIT D
BCC Subs
1. Balanced Care Realty I, Inc.
2. Balanced Care Realty II, Inc.
3. Balanced Care Realty III, Inc.
4. Balanced Care Realty IV, Inc.
5. Balanced Care Realty V, Inc.
6. Balanced Care Realty VI, Inc.
7. Balanced Care Realty VII, Inc.
8. Balanced Care Realty VIII, Inc.
9. Balanced Care Realty IX, Inc.
10. Balanced Care Realty X, Inc.
11. Balanced Care Realty XI, Inc.
12. Balanced Care Realty XII, Inc.
13. Balanced Care Realty XIII, Inc.
14. Balanced Care Realty XIV, Inc.
15. Balanced Care Realty XV, Inc.
16. Balanced Care Realty XVI, Inc.
17. Balanced Care Realty XVII, Inc.
18. Balanced Care Realty XVIII, Inc.
19. Balanced Care Realty XIX, Inc.
20. Balanced Care Realty XX, Inc.
21. Balanced Care Realty XXI, Inc.
22. Balanced Care Realty XXII, Inc.
23. Balanced Care Realty XXIII, Inc.
24. Balanced Care Realty XXIV, Inc.
25. Balanced Care Realty XXV, Inc.
26. Balanced Care Realty XXVI, Inc.
27. Balanced Care Realty XXVII, Inc.
28. Balanced Care Realty XXVIII, Inc.
29. Balanced Care Realty XXIX, Inc.
30. Balanced Care Realty XXX, Inc.
31. Balanced Care Realty XXXI, Inc.
32. Balanced Care Realty XXXII, Inc.
33. Balanced Care Realty XXXIII, Inc.
34. Balanced Care Realty XXXIV, Inc.
35. Balanced Care Realty XXXV, Inc.
36. Balanced Care Realty XXXVI, Inc.
37. Balanced Care Realty XXXVII, Inc.
38. Balanced Care Realty XXXVIII, Inc.
39. Balanced Care Realty XXXIX, Inc.
40. BCC at Harrisburg, Inc.
41. Balanced Care at Tallahassee, Inc.
42. Balanced Care at Pensacola, Inc.
28
43. Balanced Care at Lakemont Farms, Inc.
44. Balanced Care at Xxxxxxxx, Inc.
45. Balanced Care at Akron, Inc.
46. Balanced Care at York, Inc.
47. Balanced Care at Hagerstown, Inc.
48. Balanced Care at Bristol, Inc.
49. Balanced Care at Xxxxxxx City, Inc.
50. Balanced Care at Murfreesboro, Inc.
51. Balanced Care at Teay's Valley, Inc.
