Exhibit 10.66
SUBORDINATION AGREEMENT
HMO MISSOURI, INC.
AND
BLUE CROSS AND BLUE SHIELD OF MISSOURI
This Subordination Agreement made and executed this 30th day of
July, 1987, by and between HMO Missouri, Inc. ("HMO"), a Missouri
Corporation, and Blue Cross and Blue Shield of Missouri
("BCBSMo") is made in reference to the following facts:
A. BCBSMo is related to HMO in that HMO is a wholly-owned
subsidiary of BCBSMo.
B. HMO seeks to maintain the necessary approvals of a state
licensed and federally qualified health maintenance organization.
C. In order to assure the federal government and the State of
Missouri of the financial viability xx XXX, XXXXXx will, with the
execution of this Agreement, extend a line of credit to HMO in
the amount of $3,500,000.
D. It is necessary for BCBSMo irrevocably and fully to
subordinate all right, title and interest to receive payment of
principal and interest on such amounts as are advanced, to all
other present and future creditors of HMO.
NOW, THEREFORE, in consideration of the mutual covenants and
promises hereinafter set forth, HMO and BCBSMo do agree as
follows:
1. Concurrent with the execution of the Subordination
Agreement, HMO will execute a line of credit agreement as set
forth in Paragraph C above.
2. BCBSMo hereby covenants and agrees with respect to any
indebtedness incurred under such line of credit agreement as
follows:
a. to irrevocably and fully subordinate all right, title and
interest in and to said indebtedness to all other present and
future creditors of HMO;
b. that the payment by HMO of principal and/or interest to
BCBSMo pursuant to such line of credit shall be suspended where
either the federal government or the State of Missouri advises
HMO in writing that making any such payment shall jeopardize the
financial stability of HMO;
c. that in the event of liquidation and dissolution, the
payment by HMO of an indebtedness pursuant to such line of credit
is fully subordinated and subject to the prior payment or
provision for payment in full of any claims of all other present
and future creditors of HMO;
d. that BCBSMo shall seek payment of indebtedness pursuant to
such line of credit exclusively from the surpluses generated from
HMOs operations and shall have no recourse against any HMO
reserve funds.
3. This Subordination Agreement shall not be subject to
cancellation by either HMO or BCBSMo, nor may this Subordination
Agreement be terminated, rescinded or modified by mutual consent
or otherwise, except that either party may assign its rights and
responsibilities under this Agreement with the written consent of
the other party and with prior approval by the Commissioner of
the Missouri Insurance Department.
4. This instrument embodies the entire Subordination Agreement
between HMO and BCBSMo.
5. The provisions of this Subordination Agreement shall be
binding upon BCBSMo.
6. This Subordination Agreement shall be deemed to have been
under, and shall be governed by the laws of the State of Missouri
in all respects.
IN WITNESS WHEREOF, the parties have executed this Agreement.
HMO MISSOURI, INC. (HMO) BLUE CROSS AND BLUE SHIELD OF MISSOURI
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxx Xxxxxxxxxx
Title: Chief Executive Officer Title: President and Chief
Executive Officer
Date: July 30, 1987 Date: July 30, 1987
