EXHIBIT 99.3
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT is made and entered into as
of December 21, 2000, by and among HEALTH POWER, INC., a Delaware corporation
("Health Power"), COMPMANAGEMENT, INC., an Ohio corporation ("CMI"),
COMPMANAGEMENT HEALTH SYSTEMS, INC., an Ohio corporation ("CHSI"), M&N RISK
MANAGEMENT, INC., an Ohio corporation ("MNRMI"), M&N ENTERPRISES, INC., an Ohio
corporation ("MNEI"), WC HOLDINGS, INC., a Delaware corporation ("WC Holdings"),
BANK ONE, N.A., a national banking association, with its main office in
Columbus, Ohio (together with its successors and assigns, the "Senior Lender"),
and BANC ONE MEZZANINE CORPORATION, a Delaware corporation (the "Subordinated
Lender").
WITNESSETH:
In order to induce the Senior Lender to make financial accommodations to
Health Power, CMI, CHSI, MNRMI and MNEI (individually, a "Company" and
collectively, the "Companies"), and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Companies, WC
Holdings and the Subordinated Lender hereby agree with the Senior Lender that,
so long as any Senior Indebtedness (as hereinafter defined) is outstanding or
committed to be advanced, each such party shall comply with such of the
following provisions as are applicable to it:
1. CERTAIN DEFINITIONS.
1.1 ADDITIONAL CAPITAL CONTRIBUTION. The term "Additional Capital
Contribution" is defined in Section 8(a) hereof.
1.2 COLLATERAL. The term "Collateral" is defined in Section 9 hereof.
1.3 COMPANY STOCK. The term Company Stock is defined in Section 8(a)
hereof.
1.4 LIFE INSURANCE POLICY. The term "Life Insurance Policy" is defined in
Section 8(a) hereof.
1.5 LIMITED PAYMENT BLOCKAGE PERIOD. The term "Limited Payment Blockage
Period" shall mean any period commencing on the date of receipt by the
Subordinated Lender from the Senior Lender (with a copy to the Companies and WC
Holdings) of a written notice specifying that a Senior Covenant Default has
occurred and is continuing (and a brief description thereof) and ending on the
earlier to occur of: (a) the expiration of a 180-day period after the beginning
of such period; (b) the date on which the Senior Covenant Default specified in
such notice has been cured, or waived in writing by the Senior Lender, or the
Limited Payment Blockage Period shall have been terminated by written notice
from the Senior Lender; (c) the date on which the Senior Indebtedness is paid in
full and the obligation of the Senior Lender to extend further credit to the
Companies under the Senior Loan Documents is terminated; and (d)
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the commencement of a Reorganization, in which case the provisions of Section
3.3 hereof shall apply.
1.6 PAYMENT BLOCKAGE PERIOD. The term "Payment Blockage Period" shall be
any period commencing on the date of receipt by the Subordinated Lender from the
Senior Lender (with a copy to the Companies and WC Holdings) of a written notice
specifying that a Senior Payment Default has occurred and is continuing (and a
brief description thereof) and ending on the earlier to occur of: (a) the date
on which such Senior Payment Default has been cured, or waived in writing by the
Senior Lender, or the Payment Blockage Period shall have been terminated by
written notice to the Subordinated Lender from the Senior Lender; (b) the date
on which the Senior Indebtedness is paid in full and the obligation of the
Senior Lender to extend further credit to the Companies under the Senior Loan
Documents is terminated; and (c) the commencement of a Reorganization, in which
case the provisions of Section 3.3 hereof shall apply.
1.7 QUALIFIED PUBLIC OFFERING. The term "Qualified Public Offering" means
a firm commitment underwritten public offering of the equity securities of any
Company or WC Holdings, which is permitted under the terms of the Senior Loan
Documents or consented to in writing by the Senior Lender, and which is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), covering the offer and sale of such
equity securities to the public at an aggregate offering price in excess of
$10,000,000, which securities are intended to be listed on a national stock
exchange or The NASDAQ National Market.
1.8 REORGANIZATION. The term "Reorganization" is defined in Section 3.2
hereof.
1.9 REORGANIZATION SECURITIES. The term "Reorganization Securities" shall
mean (a) shares of stock of the Companies or their successors as reorganized in
a Reorganization and (b) other securities of the Companies or any other Person
provided for by a plan of reorganization, the payment of which is subordinated
in right of payment to all Senior Indebtedness to the same or greater extent
that the Subordinated Indebtedness is subordinated to the Senior Indebtedness
under this Agreement.
1.10 SENIOR COVENANT DEFAULT. The term "Senior Covenant Default" shall
mean the occurrence and continuance of any Event of Default (as defined in the
Senior Loan Agreement) (after the expiration of any applicable grace periods),
other than an Event of Default set forth in Sections 8.1(m) or (n) of the Senior
Loan Agreement.
1.11 SENIOR DEFAULT. The term "Senior Default" shall mean a Senior Payment
Default or Senior Covenant Default.
1.12 SENIOR INDEBTEDNESS. The term "Senior Indebtedness" shall mean any
and all loans, advances, extensions of credit and other indebtedness,
obligations and liabilities, now existing or hereafter arising, direct or
contingent, of the Companies or WC Holdings, or any of them, to the Senior
Lender outstanding from time to time, pursuant to that certain Loan Agreement of
even date herewith by and among the Companies, WC Holdings and the Senior
Lender, as the same may be amended, modified, restated or supplemented from time
to time (the
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"Senior Loan Agreement"), any and all promissory notes issued by the Companies,
or any of them, to the Senior Lender pursuant to the terms of the Loan
Agreement, as the same may be amended from time to time (collectively, the
"Senior Notes"), the Guaranty of WC Holdings, any other Loan Documents (as such
term is defined in the Senior Loan Agreement) (the "Senior Loan Documents")
(including, without limitation, any and all indebtedness to the Senior Lender in
respect of any and all future loans or advances or extensions of credit made to
the Companies, or any of them, by the Senior Lender prior to, during or
following any proceeding in respect of any Reorganization) together with
interest thereon and all fees, expenses and other amounts (including costs of
collection and reasonable attorneys' fees) at any time owing to the Senior
Lender, whether arising in connection with the Senior Loan Agreement, the Senior
Notes, the other Senior Loan Documents or such other indebtedness (regardless of
the extent to which the Senior Loan Agreement, the Senior Notes, the other
Senior Loan Documents or such other indebtedness is enforceable against the
Companies or WC Holdings, or any of them, and regardless of the extent to which
such amounts are allowed as claims against any Company or WC Holdings in any
Reorganization, and including any interest thereon accruing after the
commencement of any Reorganization and any other interest that would have
accrued thereon but for the commencement of such Reorganization). All Senior
Indebtedness shall be entitled to the benefits of this Agreement without notice
thereof being given to the Subordinated Lender.
1.13 SENIOR PAYMENT DEFAULT. The term "Senior Payment Default" shall mean
the occurrence and continuance of an Event of Default (as defined in the Senior
Loan Agreement) consisting of the failure to pay any portion of the principal of
or interest on Senior Indebtedness when due or as a result of the acceleration
thereof.
1.14 STOCK PLEDGE. The term "Stock Pledge" is defined in Section 3.2
hereof.
1.15 SUBORDINATED INDEBTEDNESS. The term "Subordinated Indebtedness" shall
mean all existing and hereafter arising indebtedness, obligations and
liabilities of the Companies or WC Holdings, or any of them, to the Subordinated
Lender, whether direct or contingent, and all claims, rights, causes of action,
judgments and decrees in respect of the foregoing, including, without
limitation:
(i) all indebtedness and obligations of WC Holdings and/or the Companies
under the Subordinated Note Purchase Agreement of even date herewith among WC
Holdings, the Companies and the Subordinated Lender (the "Subordinated Note
Purchase Agreement);
(ii) all indebtedness and obligations under WC Holdings' Senior
Subordinated Note of even date herewith issued to the Subordinated Lender in the
original principal amount of $6,000,000, as the same may be amended, modified,
restated or supplemented from time to time in accordance with the provisions of
this Agreement (the "Subordinated Note"); and
(iii) the obligations of each party to, under or in respect of any
agreement or instrument securing any of the obligations of the Companies or WC
Holdings, or any of them, to the Subordinated Lender under the Subordinated Note
Purchase Agreement, the Subordinated Note or the Related Documents (as defined
in the Subordinated Note Purchase Agreement) (collectively, the "Subordinated
Security Documents") (the Subordinated Note Purchase Agreement, the Subordinated
Note and the Subordinated Security Documents and any other
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agreement evidencing, securing or relating to Subordinated Indebtedness being
hereinafter collectively referred to as the "Subordinated Agreements").
1.16 OTHER CAPITALIZED TERMS. Except as otherwise specified herein,
capitalized terms used in this Agreement which are defined in the Senior Loan
Agreement shall have the same meanings herein as therein.
2. REPRESENTATIONS AND WARRANTIES. The Subordinated Lender, the Companies
and WC Holdings hereby represent and warrant to the Senior Lender that:
(a) As of the date hereof, the total outstanding and unpaid principal
balance of the Subordinated Indebtedness owing by WC Holdings and the Companies
to the Subordinated Lender pursuant to the Subordinated Agreements is
$6,000,000;
(b) The Subordinated Lender is the holder of the Subordinated Agreements
free and clear of all liens, claims and encumbrances, and the Subordinated
Lender is not subject to any contractual limitation or restriction which would
impair in any way its ability to execute or perform its obligations under this
Agreement;
(c) True, accurate and complete copies of the Subordinated Agreements have
been provided to the Senior Lender and its counsel;
(d) There is currently no default in respect of the Subordinated
Indebtedness; and
(e) The Subordinated Lender has not previously subordinated the
Subordinated Indebtedness to any other party.
3. TERMS OF SUBORDINATION.
3.1 NO TRANSFER. The Subordinated Lender shall not sell or otherwise
dispose of any of the Subordinated Indebtedness, including, without limitation,
the Subordinated Note, except with the consent of the Senior Lender (which
consent shall not be unreasonably withheld) and except to a person who agrees in
advance in writing, pursuant to an agreement in form reasonably acceptable to
the Senior Lender, to become a party hereto. The Subordinated Lender shall give
the Senior Lender at least thirty (30) days' prior written notice of any such
proposed transfer stating the identity of the transferee and providing such
other information as the Senior Lender shall reasonably require.
3.2 PAYMENT SUBORDINATED. Anything in the Subordinated Agreements to the
contrary notwithstanding, the payment of the Subordinated Indebtedness is and
shall be expressly subordinate and junior in right of payment and exercise of
remedies (a) to the prior payment in full in cash of all principal and interest
of the Senior Indebtedness to the extent and in the manner provided herein, and,
except as otherwise specifically provided herein, the Subordinated Indebtedness
is hereby subordinated as a claim against (i) the Companies and WC Holdings to
any and all claims against the Companies and WC Holdings, or any of them, that
the Senior Lender may possess under, arising from or related to the Senior Loan
Documents or the Senior Indebtedness, or (ii) any of the assets of the Companies
and WC Holdings, or any of them, that
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secure the Senior Indebtedness, whether such claim be in the event of any
distribution of the assets of the Companies and WC Holdings, or any of them,
upon any voluntary or involuntary dissolution, winding-up, total or partial
liquidation or reorganization, or bankruptcy, insolvency, receivership or other
statutory or common law proceedings or arrangements involving any Company or WC
Holdings or the readjustment of the liabilities of any Company or WC Holdings or
any assignment for the benefit of creditors or any marshalling of the assets or
liabilities of any Company or WC Holdings (collectively called a
"Reorganization"), or (b) other than in connection with a Reorganization, to the
prior payment in full in cash of all principal and interest with respect to the
Senior Indebtedness. Except as otherwise agreed in writing by the Subordinated
Lender, the Subordinated Indebtedness shall in no event be subordinated to any,
and shall rank in all respects prior to, all existing and future indebtedness of
WC Holdings to the Senior Lender that is not Senior Indebtedness.
Notwithstanding anything to the contrary set forth in this Agreement, the
Subordinated Lender, the Senior Lender and all other parties hereto agree that
the Subordinated Indebtedness may be repaid, in full or in part, by Security
Capital Corporation, a Delaware corporation ("SCC"), at any time, provided that
any such full or partial repayment of the Subordinated Indebtedness by SCC shall
be made solely with the assets and property of SCC (and not with any assets or
property of WC Holdings or any Company) and such payment by SCC shall not be
subject in any way to the terms, conditions or restrictions of this Agreement.
In furtherance of the foregoing (except as provided in Section 3.6 hereof and
except for the payment of (i) the Additional Capital Contribution, (ii) the
proceeds of the Life Insurance Policy and (iii) the proceeds of the Subordinated
Lender's exercise of its rights under WC Holdings' pledge to the Subordinated
Lender (the "Stock Pledge") of the shares of common stock of Health Power held
by WC Holdings (the "Company Stock") in accordance with the provisions of the
Subordinated Agreements), neither any Company nor WC Holdings shall make, and no
holder of Subordinated Indebtedness shall accept or receive, any payment of
Subordinated Indebtedness until all principal and interest with respect to the
Senior Indebtedness has been paid in full in cash and the obligation of the
Senior Lender to extend further credit to the Companies under the Senior Loan
Documents is terminated.
3.3 DISTRIBUTIONS IN REORGANIZATION. Except as specifically provided in
Sections 8(a), 21, 22 and 23 hereof, in the event of any Reorganization relative
to any Company or WC Holdings or their respective property, all of the Senior
Indebtedness shall first be paid in full in cash from the proceeds of the
Collateral before any payment on account of principal, premium, interest, the
Performance Fee (as defined in the Subordinated Note Purchase Agreement) or
otherwise is made upon or in respect of the Subordinated Indebtedness is paid
therefrom, and in any such proceedings any payment or distribution of any kind
or character, whether in cash or property or securities which may be payable or
deliverable from the proceeds of the Collateral only in respect of the
Subordinated Indebtedness shall be paid or delivered directly to the Senior
Lender for application in payment of the Senior Indebtedness, unless and until
all such Senior Indebtedness shall have been paid and satisfied in full in cash.
In the event that, notwithstanding the foregoing, upon any such Reorganization,
any payment or distribution of assets of any Company or WC Holdings of any kind
or character that secure the Senior Indebtedness, whether in cash, property or
securities, shall be received by any holder of the Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be immediately paid over to the holder of the Senior
Indebtedness, for application to the payment of any Senior Indebtedness
remaining unpaid until all such Senior Indebtedness shall have been paid in full
in cash, after giving effect to any other concurrent payments or distributions
to the
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holder of such Senior Indebtedness. Notwithstanding the foregoing provisions of
this Section 3.3, the Companies and WC Holdings may pay and deliver to the
Subordinated Lender, and the Subordinated Lender shall be entitled to receive
and retain, any Reorganization Securities.
3.4 EFFECT OF PROVISIONS. The provisions hereof as to subordination are
solely for the purpose of defining the relative rights of the holder of the
Senior Indebtedness, on the one hand, and the holder of the Subordinated
Indebtedness, on the other hand, and none of such provisions (i) shall impair,
as between and among the Companies, WC Holdings and the holder of the
Subordinated Indebtedness, the obligations of the Companies and WC Holdings,
which are unconditional and absolute, to pay to such holder all of the
Subordinated Indebtedness in accordance with the terms thereof, nor (ii) except
as provided in Section 8 below, shall any such provisions prevent the holder of
the Subordinated Indebtedness from exercising all remedies otherwise permitted
by applicable law or under the terms of such Subordinated Indebtedness upon a
default thereunder, subject to the rights, if any, of the holder of the Senior
Indebtedness under the provisions of this Agreement.
3.5 SUBROGATION, ETC.
(a) The holder of the Subordinated Indebtedness hereby waives all rights
to be subrogated to the rights of the holder of the Senior Indebtedness in
respect of payments or distributions of assets of, or ownership interests in,
the Companies and WC Holdings, or any of them, made on the Senior Indebtedness,
except (i) in the event all outstanding obligations with respect to the Senior
Indebtedness are paid in full by the Subordinated Lender and the obligation of
the Senior Lender to extend further credit to the Companies under the Senior
Loan Documents is terminated and (ii) as provided in Sections 3.5(b) and (c),
below.
(b) If any payment or distribution to which the Subordinated Lender would
otherwise have been entitled (but for the provisions of this Agreement) shall
have been turned over, and retained by, the Senior Lender or otherwise applied
to the payment of the Senior Indebtedness pursuant to the provisions of this
Agreement and retained by the Senior Lender, then the Subordinated Lender shall
be entitled to receive from the Senior Lender (unless otherwise required by the
order of any court of competent jurisdiction) any payments or distributions
received and retained by the Senior Lender in excess of the amount sufficient to
pay all Senior Indebtedness in full, and upon payment in full of the Senior
Indebtedness and termination of the Senior Lender's obligation to extend further
credit to the Companies under the Senior Loan Documents, the Subordinated Lender
shall be subrogated to all rights of the Senior Lender to receive all further
payments or distributions applicable to the Senior Indebtedness, and, to the
extent permitted by law, shall have the benefit of all liens and security
interests of the Senior Lender in the assets and properties of WC Holdings and
the Companies, until the Subordinated Indebtedness shall have been paid in full.
If the Subordinated Lender has been subrogated to the rights of the Senior
Lender pursuant to the operation of this Section 3.5, WC Holdings and the
Companies shall take, and the Senior Lender, at the sole cost and expense of the
Subordinated Lender, shall take, all reasonable actions requested by the
Subordinated Lender in order to enable the Subordinated Lender to obtain
payments from WC Holdings and the Companies with respect to such subrogation
rights as soon as reasonably possible. For purposes of the Subordinated Lender's
subrogation rights hereunder, payments to the Senior Lender with respect to the
Senior Indebtedness that the Subordinated Lender would have been entitled to
receive with respect to the Subordinated Indebtedness but for the provisions of
this Agreement shall not, as between WC
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Holdings, the Companies, their creditors (other than the Senior Lender) and the
Subordinated Lender, be deemed payments with respect to the Senior Indebtedness,
but rather, shall be deemed payments with respect to the Subordinated
Indebtedness, it being understood that the provisions of this Agreement are
solely for the purpose of defining the relative rights of the holders of the
Senior Indebtedness, on the one hand, and the holders of the Subordinated
Indebtedness, on the other hand.
(c) If any payment or distribution to which any Subordinated Lender would
otherwise have been entitled but for the provisions of this Agreement shall have
been applied, pursuant to the provisions of this Agreement, to the payment of
the Senior Indebtedness and retained by the Senior Lender, then and in such
case, the Subordinated Lender shall be entitled to receive from the Senior
Lender (unless otherwise required by the order of any court of competent
jurisdiction) any payments or distributions received and retained by the Senior
Lender in excess of the amount sufficient to pay all of the Senior Indebtedness
in full.
3.6 PERMITTED PAYMENTS OF SUBORDINATED INDEBTEDNESS. Subject to the
provisions of Section 3.7 hereof, WC Holdings may, from time to time, pay, or
cause to be paid, to the holder of Subordinated Indebtedness, and any such
holder may accept and retain, regularly scheduled payments of principal and
interest and payment of fees and reimbursement of expenses and other amounts
owing with respect to the Subordinated Indebtedness, as and at the time when
each of the same is due and payable under the Subordinated Agreements; provided,
however, that no such payment shall be made or retained if, at the time of such
payment, or after giving effect thereto, there is in effect a Payment Blockage
Period or a Limited Payment Blockage Period. Payments due on any maturity date
and mandatory prepayments with respect to any of the Subordinated Indebtedness
and payment of the Performance Fee (as defined in the Subordinated Note Purchase
Agreement) shall be considered regularly scheduled payments of principal and
interest for purposes of this Section 3.6. Notwithstanding the foregoing to the
contrary: (a) if no Event of Default exists at the time of such payment or would
exist after giving effect thereto, then WC Holdings may pay, and the
Subordinated Lender may receive and retain, principal prepayments with respect
to the Subordinated Indebtedness to the extent it has sufficient assets to make
such payments (provided, however, that the distributions permitted to be paid by
the Companies to WC Holdings shall at all times be subject to the restrictions
set forth in the Senior Loan Agreement); (b) as provided in Sections 21, 22 and
23 hereof, the Subordinated Lender may receive and retain at any time (i)
payments of proceeds from the Life Insurance Policy, (ii) payments made by SCC,
including, without limitation, payments of the Additional Capital Contribution
and (iii) payments of proceeds from the exercise of Subordinated Lender's rights
and remedies under the Stock Pledge in respect of the Company Stock; and (c) if
no Event of Default exists at the time of such payment or would exist after
giving effect thereto, then the Subordinated Lender may receive and retain any
proceeds from a Qualified Public Offering by WC Holdings or any Company to the
extent that the same are not used to pay the Senior Lender.
Health Power and its subsidiaries shall be permitted to make payments
under the Management Consulting Agreement to the extent that (i) such payment is
applied to the Subordinated Indebtedness and such payment of the Subordinated
Indebtedness is permitted hereunder, or (ii) such payment is for the payment of
premiums for the Life Insurance Policy and such payment under this clause (ii)
is permitted under the Senior Loan Agreement.
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3.7 SUBORDINATION ON DEFAULT IN SENIOR DEBT. Except as provided in
Sections 8(a), 21, 22 and 23 hereof, the Companies and WC Holdings shall not
make any payment in respect of the Subordinated Indebtedness, whether pursuant
to the terms of the Subordinated Indebtedness, upon acceleration or otherwise,
if at the time of such payment: (a) there is in effect a Payment Blockage Period
or (b) there is in effect a Limited Payment Blockage Period. The Senior Lender
shall not be permitted to declare a Limited Payment Blockage Period if the
aggregate number of days in which a Limited Payment Blockage Period has been in
effect in any 360-day period equals or exceeds 180 days. The Senior Lender shall
not be permitted to declare during the term of the Subordinated Indebtedness
more than the sum of three (3) Limited Payment Blockage Periods plus one
additional Limited Payment Blockage Period for each twenty-four (24) months that
the maturity date of the Subordinated Indebtedness is extended; provided,
however, that any such additional Limited Payment Blockage Periods may only be
used during such extension period and not prior to the commencement thereof.
Subject to the provisions of Section 3.3 hereof, upon termination of any Payment
Blockage Period or Limited Payment Blockage Period, WC Holdings and the
Companies shall resume all payments on account of the Subordinated Indebtedness
(including making any payments prohibited during any Payment Blockage Period or
Limited Payment Blockage Period) if and to the extent that the making of the
same would otherwise be permitted to be made under the provisions of this
Agreement and the Senior Loan Agreement. A Senior Covenant Default that exists
as a result of certain specific facts or circumstances actually known by the
Senior Lender to be occurring or existing at or prior to the commencement of a
Limited Payment Blockage Period may not serve as the basis for the commencement
of a subsequent Limited Payment Blockage Period.
4. AGREEMENT TO HOLD IN TRUST. If the holder of the Subordinated
Indebtedness shall receive any payment on account of the Subordinated
Indebtedness in violation of this Agreement, it shall hold such payment in trust
for the benefit of the holder of the Senior Indebtedness and, promptly upon
discovery or notice of such violation, pay it over to such holder for
application in payment of the Senior Indebtedness (after giving effect to any
other concurrent payment or distribution to the Senior Lender).
5. AMENDMENTS TO SUBORDINATED AGREEMENTS; ADDITIONAL LIENS ON COLLATERAL.
As between the Senior Lender and the Subordinated Lender, the Subordinated
Lender covenants and agrees that, unless the Senior Lender otherwise consents
thereto in writing, it will not (i) amend, modify, extend or renew the terms of
the Subordinated Agreements and the Subordinated Indebtedness if any such change
would (a) increase the principal amount of the Subordinated Indebtedness to an
amount greater than $6,000,000 (but permitting increases attributable to the
accrual of PIK interest and the Performance Fee); (b) increase the rate of
interest or rates per annum or fees payable with respect to the Subordinated
Indebtedness other than in accordance with the terms of the Subordinated
Agreements; (c) advance the scheduled payment dates or final maturity dates of
the Subordinated Indebtedness; or (d) impose any express restrictions on the
Companies' or WC Holdings' ability to make payments on the Senior Indebtedness
(it being understood that the Subordinated Agreements currently contain no
restrictions); or (ii) obtain any liens or security interests on the Collateral
as security for the Subordinated Indebtedness other than as contemplated under
the Subordinated Agreements as of the date hereof. WC Holdings and the
Companies, in entering into any modification or amendment of the Subordinated
Agreements, may rely on this Section 5.
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6. REQUIREMENT OF NOTICE.
(a) The Subordinated Lender, the Companies and WC Holdings each agree to
notify the Senior Lender immediately in writing upon becoming aware of the
happening of any of (and to contemporaneously give the Senior Lender a copy of
any written notice to any Company or WC Holdings, or both, of) the following:
(i) The occurrence of any default (including any demand for payment
of the Subordinated Indebtedness) under any of the Subordinated Agreements
of which it has actual knowledge or any event of which it has actual
knowledge which, upon notice or lapse of time or both, would constitute
such a default;
(ii) The waiver by the Subordinated Lender of any default which is
not cured within any applicable cure period under any of the Subordinated
Agreements; and
(iii) Acceleration of all or any portion of the Subordinated
Indebtedness.
(b) The Senior Lender shall contemporaneously give the Subordinated Lender
a copy of any written notice to a Company, or WC Holdings, or both, of (i) the
occurrence of any Event of Default (including any demand for payment of the
Senior Indebtedness), (ii) the acceleration of all or any portion of the Senior
Indebtedness and (iii) the assignment of all or any portion of the Senior
Indebtedness (together with the name and address of the assignee).
7. LEGEND. The Companies, WC Holdings and the Subordinated Lender, for
itself and its successors and assigns as holders of Subordinated Indebtedness,
covenant to cause each agreement and instrument representing or evidencing any
of the Subordinated Indebtedness issued or executed by any Company or WC
Holdings and held by the Subordinated Lender to have affixed upon it a legend
which reads substantially as follows:
"This instrument/agreement is subject to an Intercreditor and
Subordination Agreement dated as of December ___, 2000, by and among
Health Power, Inc., its subsidiaries, WC Holdings, Inc. and Bank One,
N.A., with its main office in Columbus, Ohio. By its acceptance of this
instrument/agreement, the holder hereof agrees to be bound by the
provisions of such Intercreditor and Subordination Agreement to the same
extent that the Subordinated Lender (as defined therein) is bound."
8. LIMITS ON RIGHT OF ACTION.
(a) The Subordinated Lender, for itself and its successors and assigns,
agrees for the benefit of the holder of the Senior Indebtedness that so long as
the Senior Indebtedness remains outstanding or committed to be advanced, the
Subordinated Lender will not, directly or indirectly, take any action (other
than (i) acceleration of the Subordinated Note, (ii) enforcement of SCC's
obligation under the Subordinated Agreements to pay directly to the Subordinated
Lender an amount up to $2,000,000, payable in cash pursuant to the terms of the
Capital Contribution Agreement (the "Additional Capital Contribution"), (iii)
foreclosure of the Stock Pledge with respect to the Company Stock in accordance
with the provisions of the Subordinated Agreements such that the Subordinated
Lender or an affiliate thereof becomes the holder of the
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Company Stock, and (iv) foreclosure and realization on the assignment to the
Subordinated Lender of that certain life insurance policy specifically
identified in the Subordinated Agreements as being for the benefit of the
Subordinated Lender, in the face amount of $3,000,000, on the life of Xxxxxx X.
Xxxxxxx (the "Life Insurance Policy") in accordance with the provisions of the
Subordinated Agreements) to exercise any of its remedies in respect of the
Subordinated Indebtedness, to initiate any Reorganization of, or litigation
against, any Company or WC Holdings, or to foreclose or otherwise realize on any
security given by any Company or WC Holdings or any other person to secure the
Subordinated Indebtedness prior to the earlier of (A) a Reorganization of such
Company or WC Holdings, as applicable, or (B) the acceleration of the Senior
Indebtedness by the holder thereof and the Senior Lender's commencement or
institution of creditor remedies to enforce payment of, or foreclose upon
collateral securing payment of, the Senior Indebtedness.
(b) The foregoing provisions of this Section 8 are solely for the purpose
of defining the relative rights of the holder of Senior Indebtedness, on the one
hand, and the holder of the Subordinated Indebtedness, on the other hand, and
shall not otherwise limit or affect any rights which the holder of the
Subordinated Indebtedness may have against any Company or WC Holdings under the
terms of the Subordinated Agreements.
9. THE SUBORDINATED LENDER'S JUNIOR SECURITY. The Subordinated Lender
hereby confirms that, regardless of the relative times and method of attachment
or perfection thereof or the order of filing of financing statements, mortgages,
assignments or other security agreements or documents, or anything in the
Subordinated Agreements or the other Sections of this Agreement to the contrary,
the security interests, assignments and liens granted or to be granted from time
to time to secure the Senior Indebtedness, shall in all respects be first and
senior security interests, assignments and liens, superior to any security
interests, assignments and liens granted or to be granted to the Subordinated
Lender in assets of any Company or WC Holdings that secure the obligations of
the Companies and WC Holdings to the Senior Lender, it being the express
intention of the parties that, notwithstanding anything in the other Sections of
this Agreement to the contrary, all liens, assignments and security interests
granted to the Senior Lender from time to time pursuant to the terms of the
Senior Loan Documents shall be prior and superior to any liens, assignments or
security interests granted to the Subordinated Lender in the same assets;
provided, however, that the Senior Lender hereby confirms that the Subordinated
Lender shall have a first and senior security interest in, assignment and pledge
of, and lien on, the Company Stock, the Additional Capital Contribution and the
Life Insurance Policy. In foreclosing on the Senior Lender's security interests
and liens in the collateral described in or covered by the Senior Loan Documents
(other than the Company Stock, the Additional Capital Contribution and the Life
Insurance Policy) (the "Collateral"), so long as the Senior Lender proceeds in a
commercially reasonable manner, the Senior Lender may proceed to foreclose on
the Senior Lender's security interests and liens in any manner that the Senior
Lender, in its sole discretion, chooses, even though a higher price might have
been realized if the Senior Lender had proceeded to foreclose on the Senior
Lender's security interest and liens in another manner.
10. RELEASE OF COLLATERAL. Without affecting any of the rights (including
any of the foreclosure rights) of the Senior Lender under the Senior Loan
Agreement, the Senior Notes, the other Senior Loan Documents or any documents
delivered to evidence or secure the obligations of any Company or WC Holdings to
the Senior Lender in connection therewith or under the
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provisions of any applicable law, in the event that the Senior Lender releases
or discharges its security interests in, or liens upon, any Collateral which is
subject to a lien or security interest in favor of the Subordinated Lender, such
Collateral shall thereupon be deemed to have been released from all such liens
and security interests of the Subordinated Lender, provided that the Senior
Lender believes in good faith that any such released or discharged Collateral is
being sold or transferred either (a) in the ordinary course of the applicable
Company's or WC Holdings' business provided that, if the net proceeds of such
Collateral are in excess of $250,000 ("Collateral Sale Proceeds"), then such net
proceeds shall be used to purchase replacement property in accordance with the
provisions of the Senior Loan Agreement or applied to payment of the Senior
Indebtedness, or (b) following the occurrence and during the continuance of an
Event of Default under the Senior Loan Agreement and the giving of five (5)
days' prior written notice of any such proposed release to the Subordinated
Lender, for consideration believed by the Senior Lender to be reasonably
equivalent to the fair value of such Collateral, under circumstances in which
the seller of such Collateral shall have agreed that the net proceeds of any
such sale under this clause (b) shall be applied to the payment of the Senior
Indebtedness and the Subordinated Indebtedness in the order of priority provided
in this Agreement. The Subordinated Lender agrees that within five (5) days
following the Senior Lender's written request therefor, the Subordinated Lender
shall execute, deliver and file any and all such termination statements, lien
releases and other agreements and instruments as the Senior Lender reasonably
deems necessary or appropriate in order to give effect to the preceding
sentence. The Subordinated Lender hereby authorizes the holder of the Senior
Indebtedness to effect any such executions, deliveries and filings upon the
earlier of receipt thereof or the expiration of such five (5) day period.
Without limiting the foregoing, and without implying that the Senior Lender is
obligated to undertake any special investigation with respect to its good faith
belief as to the fair value of any property, the parties hereto agree to be
bound as to the fair value of any property as determined by any independent
appraisal of such property that may be conducted at the request of the Senior
Lender. The cost of any such appraisal shall be borne by the Companies and WC
Holdings and, if funded by the Senior Lender, shall constitute Senior
Indebtedness. Nothing contained herein shall be deemed to impose an obligation
upon the Senior Lender or Subordinated Lender to release any lien or security
interests except in accordance with the terms of this Agreement, the Senior Loan
Documents or the Subordinated Agreements, respectively.
11. ADDITIONAL RIGHTS OF SENIOR LENDER. If the Subordinated Lender, in
violation of this Agreement, shall commence, prosecute or participate in any
suit, action or proceeding against any Company or WC Holdings, the Companies and
WC Holdings may interpose as a defense or plea the making of this Agreement and
the Senior Lender may intervene and interpose such defense or plea in the Senior
Lender's name or in the name of any Company or WC Holdings. If the Subordinated
Lender shall attempt to enforce any security agreement, real estate mortgage,
deed of trust or any lien instrument or other encumbrance in violation of the
terms of this Agreement, then the Senior Lender may by virtue of this Agreement
restrain the enforcement thereof in the Senior Lender's name or in the name of
any Company or WC Holdings. If the Subordinated Lender obtains any assets (other
than Reorganization Securities) of any Company or WC Holdings as a result of any
administrative, legal or equitable action, or otherwise, then the Subordinated
Lender agrees forthwith to pay, deliver and assign to the Senior Lender any such
assets for application to the Senior Indebtedness.
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12. COMPANIES' AND GUARANTOR'S ADDITIONAL AGREEMENTS. The Companies and WC
Holdings, jointly and severally, agree with the Senior Lender that they shall
not, without the Senior Lender's prior written consent, execute or deliver any
negotiable instrument as evidence of the Subordinated Indebtedness or any part
thereof, except as otherwise permitted by this Agreement or by the terms of the
Subordinated Agreements.
13. RIGHTS OF SENIOR LENDER TO AMEND SENIOR LOAN DOCUMENTS AND DISCONTINUE
SENIOR INDEBTEDNESS. As between the Senior Lender and the Subordinated Lender,
the Senior Lender hereby reserves the right (a) to modify, amend, waive or
release any of the terms of the Senior Loan Agreement, the Senior Notes, the
other Senior Loan Documents or any other document or agreement at any time
executed by any Company or WC Holdings or any other person evidencing or
securing the Senior Indebtedness or any other documents executed in connection
with the Senior Indebtedness or of any other document related thereto, provided
such amendment does not (i) increase the principal amount of the Senior
Indebtedness to an amount greater than the sum of (a) $25,000,000 (being the
principal balance of the Senior Indebtedness, as of the date hereof), as reduced
by the amount of all regularly scheduled payments (but not by any prepayments
other than Collateral Sale Proceeds (as defined in Section 10 hereof)) of
principal on the Term Loan theretofore paid to the Senior Lender (it being
hereby agreed that the Senior Lender, the Companies and WC Holdings may, without
the consent of the Subordinated Lender, by written agreement, increase the then
outstanding principal balance of the Term Loan by the aggregate amount of any
permanent reduction in the Revolving Credit Commitment made at the election of
the Borrowers pursuant to Section 1.4 of the Senior Loan Agreement) plus (b)
such additional amounts to be used to finance acquisitions or other purposes, in
each case as approved by the Subordinated Lender in its reasonable discretion,
(ii) subject to clause (iii) below, advance or extend the scheduled payment
dates or the maturity date of any of the Senior Indebtedness (provided, however,
that notwithstanding any other provision of this Agreement to the contrary, the
Senior Lender may agree to extend the maturity date of the Revolving Credit
Loans and make the Revolving Credit Commitment available to the Borrowers until
December 31, 2005 or such later date to which the maturity date of the Term
Loan, with the consent of the Subordinated Lender, may be extended), (iii) amend
or modify the amount of any payment of principal and interest due and payable on
any date (including without limitation, any balloon payment payable on the
maturity date) by more than 10% of the originally scheduled amount of such
payment (not including any increase in interest permitted under clause (iv)
below), (iv) increase the interest rate or rates per annum or fees payable with
respect to the Senior Indebtedness, other than increases in interest rates not
in excess of 200 basis points over the rates set forth in the Senior Loan
Agreement as of the date hereof, (v) impose any additional express restriction
on the Companies' or WC Holdings' ability to (A) make payments of principal,
interest or other amount on, or to redeem or repurchase, the Subordinated
Indebtedness in accordance with its terms, (B) grant a first priority lien in
favor of the holders of the Subordinated Indebtedness in the proceeds of the
Life Insurance Policy and the Company Stock, (C) grant a second priority lien in
favor of the holders of the Subordinated Indebtedness on the Companies' and WC
Holdings' assets, or (D) accept payments from SCC of the Additional Capital
Contribution (it being understood that the Senior Loan Documents currently
contains no such restrictions with regard to clauses (A), (B), (C) or (D)
hereof), (vi) release any material portion of the collateral securing the Senior
Indebtedness (except as permitted in Section 10 hereof) or cause any lien
securing the Senior Indebtedness to be subordinated to any other lien except as
permitted in the Senior Loan Documents, (vii) make more restrictive (taking into
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consideration the financial condition of the Companies at such time), in any
material respect, any financial covenant, (viii) subordinate the Senior
Indebtedness to any other debt, (ix) change any provision relating to (A) the
ability of the Companies and WC Holdings to amend the Subordinated Agreements,
(B) the secured obligations under the security agreements securing the Senior
Indebtedness, or (C) the order of applications of proceeds from collateral, or
make any change to the definitions of the following capitalized terms set forth
in the Senior Loan Agreement: Intercreditor Agreement, Subordinated
Indebtedness, Subordinated Note and Subordinated Note Purchase Agreement, or (x)
change any of the subordination provisions, unless the Subordinated Lender
consents in writing, which consent shall not be unreasonably withheld, delayed
or conditioned, and to exercise or refrain from exercising any powers or rights
that the Senior Lender may have thereunder, and, except as otherwise set forth
in Section 8 hereof, such modification, amendment, waiver, release, exercise or
failure to exercise shall not affect any of the Senior Lender's rights under
this Agreement as between the Senior Lender and the Subordinated Lender. The
Subordinated Lender hereby agrees that the Senior Lender may from time to time,
in the Senior Lender's sole discretion, but subject to the limitations set forth
herein, amend the instruments and agreements evidencing and securing the Senior
Indebtedness, grant extensions of time of payment of performance and make
compromises and settlements with the Companies and WC Holdings or other
creditors of the Companies or WC Holdings, without affecting the agreements of
the Subordinated Lender, the Companies or WC Holdings hereunder. If at any time
hereafter, the Senior Lender shall, in its own judgment, determine to
discontinue the extension of credit to the Companies, it may, subject to the
terms of the Senior Loan Documents, do so without affecting the relative
position of the Senior Lender and the Subordinated Lender set forth herein.
Except as otherwise set forth in Section 8 hereof, the Senior Lender's failure
to insist upon the strict performance of any term, condition or other provision
of this Agreement, the Senior Loan Agreement, the Senior Notes, the other Senior
Loan Documents or any agreement evidencing, securing payment of, or relating to,
the Senior Indebtedness or to exercise any right or remedy hereunder or
thereunder, shall not affect or alter this Agreement, the Senior Loan Agreement,
the Senior Notes or the other Senior Loan Documents, and each and every term,
condition and other provision of this Agreement, the Senior Loan Agreement, the
Senior Notes and the other Senior Loan Documents shall, in such event, continue
in full force and effect and shall be operative with respect to any other then
existing or subsequent default or event of default in connection therewith. The
Senior Lender shall not lend any money to the Borrowers or the Guarantor that is
not Senior Indebtedness or share their collateral with any other Person other
than with the holders of the Subordinated Indebtedness; provided, however, that
the Senior Lender shall be permitted to loan additional amounts to the Borrowers
or the Guarantor that are not Senior Indebtedness provided that such loans or
subordinated to the Subordinated Indebtedness on specific terms and conditions
reasonably satisfactory to, and approved in writing by, the Subordinated Lender,
which approval shall not be unreasonably withheld. WC Holdings and the
Companies, in entering into any modification or amendment of the Senior Loan
Documents, may rely on this Section 13.
14. FURTHER ASSURANCES. Each of the Companies, WC Holdings and the
Subordinated Lender, for itself and its successors and assigns as holders of
Subordinated Indebtedness, covenants to execute and deliver to the Senior Lender
such further instruments and documents and to take such further actions as the
Senior Lender may from time to time reasonably request, and each of the
Companies, WC Holdings and the Senior Lender agrees to execute and deliver to
the Subordinated Lender such further instruments and documents and take
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such further actions as the Subordinated Lender may from time to time reasonably
request, in each case for the purpose of carrying out the provisions and intent
of this Agreement.
15. NOTICES. All notices, requests, consents, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed sufficiently given or furnished if delivered by personal delivery, by
telecopy, by overnight delivery service with proof of delivery, or by registered
or certified United States mail, postage prepaid, to the applicable party at the
address of such party set forth below (unless changed by similar notice in
writing given by the particular party whose address is to be changed):
If to the Companies or WC Holdings, to the following address:
c/o Security Capital Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, President
Facsimile: (000) 000-0000
with copies to:
Health Power, Inc.
c/o CompManagement, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
and
Xxxx Xxxxx & Xxxxxxx LLP
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Senior Lender, to the following address:
Bank One, N.A.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx,
First Vice President
with a copy to:
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Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Subordinated Lender, to the following address:
Banc One Mezzanine Corporation
Mail Code: OH1-0170
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Managing Director
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxxx Xxxxx & Xxxxx Co., L.P.A.
2100 Bank One Center
000 Xxxxxxxx Xxxxxx, Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Any such notice or communication shall be deemed to have been given (a)
in the case of personal delivery, overnight delivery service or registered or
certified United States mail, as of the date of actual delivery at the address
and in the manner provided herein, or (b) in the case of telecopy, upon receipt.
16. SUCCESSORS; CONTINUING EFFECT; ETC. This Agreement is being entered
into for the benefit of the holders of the Senior Indebtedness and the
Subordinated Indebtedness, and their respective successors and assigns. This
Agreement shall be a continuing agreement and shall be irrevocable and shall
remain in full force and effect until all Senior Indebtedness has been paid in
full in cash and the Senior Lender has no outstanding commitment to advance or
loan monies to the Companies. The liability of the Subordinated Lender hereunder
shall be reinstated and revived, and the rights of the holders of the Senior
Indebtedness shall continue, with respect to any amount at any time paid on
account of the Senior Indebtedness which shall thereafter be required to be
restored or returned by the holders of the Senior Indebtedness in any
Reorganization (including without limitation, any repayment made pursuant to any
provision of Chapter 5 of Title 11, United States Code), all as though such
amount had not been paid.
17. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and no
modification or waiver of any provision of this Agreement shall in any event be
effective unless the same shall be in writing signed by the Senior Lender and
the Subordinated Lender (unless such amendment or modification shall impose any
additional obligations upon or modify any of the rights and
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responsibilities of the Companies or WC Holdings, in which case such amendment
or modification shall also require execution by the Companies and/or WC
Holdings, as applicable).
18. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) Each of the Companies, WC Holdings, the Subordinated Lender and the
Senior Lender, to the extent that each may lawfully do so, hereby consents to
the jurisdiction of the courts in Franklin County, Ohio, as well as to the
jurisdiction of all courts from which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its obligations arising hereunder or transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts.
(b) Each of the parties hereto, after having had the opportunity to
consult with counsel, knowingly, voluntarily, irrevocably, unconditionally and
intentionally waive any right to a trial by jury in any litigation based upon or
arising out of this Agreement or any related instrument or agreement, or any of
the transactions contemplated by this Agreement, or any course of conduct,
dealing, statements (whether oral or written) or actions of any party hereto. No
party hereto shall seek to consolidate, by counterclaim or otherwise, any action
in which a jury trial has been waived with any other action in which a jury
trial cannot be or has not been waived.
19. MISCELLANEOUS. This Agreement, which may be executed in any number of
counterparts, shall be governed by and construed in accordance with the laws of
the State of Ohio. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. The headings in this Agreement are for
convenience of reference only and shall not alter or otherwise affect the
meaning hereof. In the event of any conflict between the provisions of this
Agreement and the provisions of any of the Senior Loan Documents or any of the
Subordinated Agreements, the provisions of this Agreement shall control. The
Companies, WC Holdings and the Subordinated Lender shall reimburse the holders
of the Senior Indebtedness upon demand for all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements) paid or incurred by the
holders of the Senior Indebtedness in connection with the successful enforcement
of this Agreement in favor of the holders of the Senior Indebtedness.
20. ESTOPPEL CERTIFICATE. Within ten (10) days after a request therefor
by the Senior Lender, the Subordinated Lender, the Companies and/or WC Holdings
shall deliver to the Senior Lender a certificate confirming the matters set
forth in Section 2 hereof and providing the dollar amount of the total
outstanding and unpaid Subordinated Indebtedness, as set forth in item (a) of
Section 2 hereof, as of the date of such certificate.
21. LIFE INSURANCE POLICIES. Notwithstanding anything contained herein or
in any of the Senior Loan Documents to the contrary, this Agreement shall not
apply to any amount paid or payable to or received by the Subordinated Lender in
respect of its Subordinated Indebtedness from the Life Insurance Policy required
to be obtained and maintained pursuant to the Subordinated Agreements, and the
Subordinated Lender shall be entitled to accept and retain
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such proceeds notwithstanding the existence of any Payment Blockage Period,
Limited Payment Blockage Period, Event of Default, Reorganization, or any other
provision of this Agreement or any of the Senior Loan Documents. Notwithstanding
anything contained herein or in any of the Senior Loan Documents to the
contrary, (a) the right of the Senior Lender to receive any payment from, and to
exercise any rights and remedies against WC Holdings with respect to, any
proceeds of the Life Insurance Policy, is and shall remain expressly subordinate
and junior in right of payment and exercise of remedies, unless and until (i)
all of the Subordinated Indebtedness shall have been fully and finally paid and
satisfied with interest; and (ii) all financing arrangements between WC Holdings
and the Subordinated Lender in respect of the Subordinated Indebtedness have
been terminated; and (b) the Senior Lender acknowledges that it has no right,
title or interest in respect of the Additional Capital Contribution or the
Company Stock.
22. ADDITIONAL CAPITAL CONTRIBUTION. Notwithstanding anything contained
herein or in any of the Senior Loan Documents to the contrary, this Agreement
shall not apply to any amount paid or payable to or received by the Subordinated
Lender in respect of the Additional Capital Contribution as required pursuant to
the Subordinated Agreements, and the Subordinated Lender shall be entitled to
accept and retain such proceeds notwithstanding the existence of any Payment
Blockage Period, Limited Payment Blockage Period, Event of Default,
Reorganization, or any other provision of this Agreement or any of the Senior
Loan Documents.
23. STOCK PLEDGE. Notwithstanding anything contained herein or in any of
the Senior Loan Documents to the contrary, this Agreement shall not apply to any
amount paid or payable to or received by the Subordinated Lender or the exercise
of any right or remedy by the Subordinated Lender in respect of the Company
Stock pursuant to the Subordinated Agreements, and the Subordinated Lender shall
be entitled to accept and retain any such amounts paid or exercise any of its
rights or remedies thereunder notwithstanding the existence of any Payment
Blockage Period, Limited Payment Blockage Period, Event of Default,
Reorganization, or any other provision of this Agreement or any of the Senior
Loan Documents.
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24. NO CONTEST OF SECURITY INTEREST. Subject to the provisions of Section
3.2 and 3.3 hereof, the Senior Lender, the Subordinated Lender, the Companies
and WC Holdings agree that none of them will contest the security interest or
lien of the others granted by the Companies and WC Holdings, or the perfection
thereof, in any proceeding or for any reason. All UCC financing statements,
mortgages and assignments filed by the Senior Lender or the Subordinated Lender
to secure any of the Senior Indebtedness or Subordinated Indebtedness, as
applicable, shall make reference to the existence of this Agreement. This
covenant shall be specifically enforceable against any party hereto.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed by its duly authorized officer as of the
day and year above written.
SENIOR LENDER: SUBORDINATED LENDER:
BANK ONE, N.A. BANC ONE MEZZANINE
CORPORATION, a Delaware corporation
By:/S/ XXXXX X. XXXXXXXX By: /S/ XXXXXX X. XXXXXXXX
Xxxxx X. Xxxxxxxx, Name: XXXXXX X. XXXXXXXX
First Vice President Title: FIRST VICE PRESIDENT
COMPANIES:
HEALTH POWER, INC., a Delaware COMPMANAGEMENT, INC., an Ohio
corporation corporation
By: /S/XXXXXX X. XXXXXXX By: /S/XXXXXX X. XXXXXXX
Name: XXXXXX X. XXXXXXX Name: XXXXXX X. XXXXXXX
Title: CHAIRMAN Title: CHAIRMAN
COMPMANAGEMENT HEALTH M&N ENTERPRISES, INC., an Ohio
SYSTEMS, INC., an Ohio corporation corporation
By: /S/XXXXXX X. XXXXXXX By: /S/XXXXXX X. XXXXXXX
Name: XXXXXX X. XXXXXXX Name: XXXXXX X. XXXXXXX
Title: CHAIRMAN Title: CHAIRMAN
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M&N RISK MANAGEMENT, INC., an
Ohio corporation
By: /S/XXXXXX X. XXXXXXX
Name: XXXXXX X. XXXXXXX
Title: CHAIRMAN
WC HOLDINGS:
WC HOLDINGS, INC., a Delaware
corporation
By: /S/XXXXX X. XXXXXXXXXX
Xxxxx X. Xxxxxxxxxx, Chairman
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