1
Exhibit 10.3
EXECUTION COPY
FORBEARANCE AGREEMENT
FORBEARANCE AGREEMENT, dated as of August 18, 1997 (this "Forbearance
Agreement"), among
(i) NORTHSTAR HEALTH SERVICES, INC., a Delaware corporation (the
"Borrower"),
(ii) NORTHSTAR MEDICAL SERVICES, INC., f/k/a NSHS HOLDINGS, INC., a
Delaware corporation; DIRECT PROVIDER NETWORK, INC., f/k/a NORTHSTAR HS
HOLDINGS, INC., a Delaware corporation; NSHS SERVICES, INC., a Delaware
corporation; NORTHSTAR HEALTH CONSULTING, INC., a Delaware corporation;
ABILITY PLUS REHABILITATION MANAGEMENT COMPANY, f/k/a NSHS CARDIAC
HOLDINGS, INC., a Delaware corporation; NORTHSTAR DIAGNOSTIC SERVICES,
INC., f/k/a NORTHSTAR NUCLEAR SERVICES, INC., a Delaware corporation;
KEYSTONE REHABILITATION SYSTEMS, INC., a Pennsylvania corporation; KEYSTONE
REHABILITATION MANAGEMENT, INC., a Pennsylvania corporation; and
VASCUSONICS, INC., a Pennsylvania corporation (collectively, together with
the New Guarantors referred to below, the "Subsidiary Guarantors"); and
(iii) IBJ XXXXXXXX BANK & TRUST COMPANY ("IBJS");
in respect of the Credit Agreement referred to below.
WITNESSETH:
WHEREAS, the Borrower, the lenders parties thereto (the "Lenders") and
IBJS, as Agent (in such capacity, the "Agent") have entered into that certain
Credit Agreement dated as of October 20, 1995 (as amended, the "Credit
Agreement") and the Borrower has entered into certain other Credit Documents (as
defined in the Credit Agreement); and
WHEREAS, the Subsidiary Guarantors are parties to that certain Subsidiaries
Guarantee dated as of October 20, 1995 (as amended, supplemented or otherwise
modified, the "Subsidiaries Guarantee") to the Agent for the benefit of the
Lenders and have entered into certain other Credit Documents; and
WHEREAS, certain Events of Default (as defined in the Credit Agreement)
exist under the Credit Agreement; and
WHEREAS, the Agent and the Lenders are unwilling to waive the Events of
Default that currently exist; and
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WHEREAS, notwithstanding the foregoing, subject to the terms and conditions
hereof, the Agent and the Lenders are willing, through August 31, 1997, to
forbear in certain respects in the enforcement of the remedies set forth in the
Credit Documents as set forth herein; provided, that the rights of the Agent
and the Lenders are not otherwise waived or impaired.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and for other valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Borrower, the Subsidiary Guarantors, the
Agent and the Lenders hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement.
2. Acknowledgments.
(a) The Borrower acknowledges that, as of June 30, 1997, it is
indebted to the Lenders (i) pursuant to the Term Loan and the Term Note, in the
amount of $6,083,335 (the "Existing Term Loan Principal"); (ii) pursuant to the
Revolving Credit Loans and the Revolving Credit Note, in the amount of
$2,000,000 (the "Existing Revolving Credit Principal"); (iii) pursuant to the
Acquisition Loans and the Acquisition Note, in the amount of $6,000,000 (the
"Existing Acquisition Loan Principal"); (iv) accrued but unpaid interest on the
Existing Term Loan Principal, Existing Revolving Credit Principal and Existing
Interest"), and (v) accrued but unpaid fees in the amount of $1,176.48
("Existing Fees") (collectively, the Existing Term Loan Principal, the Existing
Revolving Credit Principal, the Existing Acquisition Principal, the Existing
Interest and the Existing Fees, the "Outstanding Indebtedness").
(b) The Borrower acknowledges the effectiveness and continuing validity
of the Credit Agreement (including, without limitation, Section 12.5 thereof)
and of each Credit Document to which it is a party.
(c) The Borrower acknowledges that one or more Events of Default have
occurred and are continuing and that, pursuant to Section 10 of the Credit
Agreement, the Agent is presently entitled, with the consent of the Lenders, to
terminate the Commitments and to declare the Outstanding Indebtedness and the
other amounts owing under the Credit Agreement to be due and payable.
(d) The Borrower acknowledges the cancellation of (i) the unused
portion of the Acquisition Credit Commitment and (ii) of the Revolving Credit
Commitment, in each case prior to the date hereof. The Revolving Credit
Commitment is subject to reinstatement at the sole option of the Lenders.
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(e) Each Subsidiary Guarantor acknowledges the effectiveness and
continuing validity of the Subsidiaries Guarantee and of each Credit Document to
which it is a party.
(f) Each Subsidiary Guarantor acknowledges the existence and amount of
the Outstanding Indebtedness and its liability therefor pursuant to the terms of
the Subsidiaries Guarantee.
(g) Each Subsidiary Guarantor expressly acknowledges and consents to
this Forbearance Agreement and to the terms hereof, such Forbearance Agreement
and terms to be without prejudice to such Subsidiary Guarantor's liability
pursuant to the Subsidiaries Guarantee and the other Credit Documents to which
it is a party.
(h) Each of the Borrower, each Subsidiary Guarantor, and each of Xxxxxx
X. Xxxxxx, Xxxxx X. Xxxxxx and the Xxxxxx Family Limited Partnership
(collectively, the "Xxxxxx Parties"), hereby ratifies and acknowledges all of
the terms and conditions of the letter agreement, dated April 8, 1997, between
IBJ Xxxxxxxx Bank & Trust Company and the Xxxxxx Parties (the "First
Pre-Negotiation Letter"), the Borrower and each Subsidiary Guarantor hereby
represent and warrant that all corporate action on its part necessary for such
ratification has been taken and is in full force and effect, and such terms and
conditions of the First Pre-Negotiation Letter are hereby incorporated by
reference as if such terms and conditions were set forth herein in full.
(i) The Company hereby ratifies and acknowledges all of the terms and
conditions of the letter agreement, dated May 21, 1997, between the Company and
IBJS (the "Second Pre-Negotiation Letter"), and the Company hereby represents
and warrants that all corporate action on its part necessary for such
ratification has been taken and is in full force and effect, and such terms and
conditions of the Second Pre-Negotiation Letter are hereby incorporated by
reference as if such terms and conditions were set forth herein in full.
(j) The Borrower and its Subsidiaries hereby acknowledge and agree
that, without the consent of the Agent and the Lenders as provided in the Credit
Agreement and in the Subordination Agreement, dated as of October 15, 1995, by
and among the Subordinated Creditors parties thereto, the Company and the Agent,
as amended by an Amendment and Supplement, dated as of November 15, 1995
(designating the Xxxxxx Parties and Xxxxx Xxxxxx as New Subordinated Creditors),
no payments shall be made to Xxxxxx Parties in respect of debt owing to the
Xxxxxx Parties subject to the Subordination Agreement except in strict
conformity with the terms of the Subordination Agreement, notwithstanding that
any payments may have heretofore been permitted to be made to the Xxxxxx Parties
in respect of such debt.
3. Forbearance; Deferral of Principal; Interest Rate.
(a) Subject to the terms and conditions set forth herein, the Agent and the
Lenders hereby agree that none of them shall, prior to the Forbearance
Termination Date,
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exercise any of the remedies set forth in the Credit Agreement or in any of the
other Credit Documents.
(b) Subject to the terms and conditions set forth herein, the Agent and the
Lenders hereby agree that the unpaid principal installments of the Term Loan
which were due or became due prior to the date hereof, and each principal
installment of the Term Loan that shall become due and payable from the date
hereof to the Forbearance Termination Date, together with accrued interest on
the Outstanding Indebtedness shall be deferred until, and shall be due on, the
Forbearance Termination Date.
(c) Subject to the terms and conditions set forth herein, the Agent and the
Lenders hereby waive the imposition of interest at the Default Rate as provided
in Section 5.5(c) of the Credit Agreement prior to the Forbearance Termination
Date and the Agent, the Lenders agree that interest shall accrue on all unpaid
Obligations for the period from the date of the Credit Agreement to but
excluding the Forbearance Termination Date at the rates provided for such
Obligations in Section 5.5(a) or (b) (or, if no such rate is so provided, at the
rate provided for Revolving Credit Loans which are Base Rate Loans in Section
5.5(b)).
(d) For so long as this Forbearance Agreement shall remain in effect or a
Default shall have occurred and be continuing, none of the Loans may be
maintained as Eurodollar Loans.
4. Termination. This Forbearance Agreement shall terminate on August 31,
1997, unless earlier terminated upon the occurrence of a Forbearance Event of
Default (any such date, the "Forbearance Termination Date"). The Forbearance
Termination Date may be extended from time to time by the execution and delivery
by the Agent and the Borrower of an extension supplement substantially in the
form of Exhibit A hereto and appropriately completed (an "Extension
Supplement"). The Lender shall have no obligation to extend the Forbearance
Termination Date pursuant to any Extension Supplement, and the Agent's agreement
to permit any such extension shall be subject to the sole discretion of the
Agent.
5. Representations and Warranties. In order to induce the Lenders to enter
into this Forbearance Agreement, the Borrower and each Subsidiary Guarantor
hereby represents and warrants to the Agent and to each Lender that:
(a) Subject to Section 5(b) of this Forbearance Agreement, each of the
representations and warranties made by the Borrower and each of the
Subsidiary Guarantors in each Credit Document to which it is a party is
true and correct in all material respects as of the date hereof.
(b) The representations and warranties made by the Borrower in the
Credit Agreement are qualified to the extent set forth on the Supplemental
Disclosure Schedule attached as Schedule 1 hereto.
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(c) The Borrower has no intention of commencing bankruptcy, insolvency
or similar proceedings prior to August 31, 1997 and has no intention of
commencing such proceedings thereafter if mutually acceptable agreements
can be reached among the Borrower and its principal creditors and
shareholders.
(d) Attached to this Forbearance Agreement as Exhibit B is a true and
complete description of any and all mergers, name changes, asset
dispositions (whether by dividend or otherwise) or similar transactions to
reorganize the corporate or capital structure of the Borrower and its
Subsidiaries which are currently contemplated by the Borrower or any
Subsidiaries or which have occurred since October 20, 1995 (the "Corporate
Structure Transactions").
6. Conditions Precedent to Effectiveness of Forbearance Agreement. This
Forbearance Agreement shall not become effective unless and until:
(a) the Agent has received this Agreement, executed and delivered by a
duly authorized officer of the Borrower and each Subsidiary Guarantor;
(b) [intentionally omitted];
(c) the Agent has received evidence satisfactory to the Agent that the
Pre-Negotiation Letter has been ratified by the Board of Directors of the
Borrower;
(d) the Agent has received the executed legal opinion of Wilikie Xxxx
& Xxxxxxxxx, counsel to the Borrower and the Subsidiary Guarantors,
covering such matters incident to the transactions contemplated by this
Forbearance Agreement as the Agent may reasonably require;
(e) the Borrower shall have taken (at the Borrower's expense) all
actions necessary or desirable to perfect or to continue perfected the
security interests of the Agent and the Lenders in all of the property of
the Borrower and its Subsidiaries after giving effect to the Corporate
Structure Transactions (including, without limitation, delivery of stock
certificates and stock powers to the Agent, execution, delivery and filing
of financing statements under the Uniform Commercial Code of any
jurisdiction, execution and delivery of any amendments or supplements to
any Credit Documents, and any other filings, recordations or notices as the
Agent may request); and
(f) the Agent has received such other documents and information as the
Agent may reasonably require, which documents and information shall be
satisfactory to the Agent in its sole discretion.
7. Covenants. The agreement of the Agent and the Lenders to forbear from
exercising remedies as set forth in Section 3 hereof is expressly conditioned
upon the Borrower's continued compliance with the following:
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(a) The Borrower shall continue to comply with the affirmative covenants
set forth in Section 8 of the Credit Agreement (other than Section 8.3 thereof);
provided that the monthly financial statements required to be delivered pursuant
to Section 8.1(c) of the Credit Agreement within 30 days following the last day
of each month may, with respect to the last month of each fiscal quarter, be
delivered within 45 days following the last day of each such month.
(b) The Borrower shall furnish to the Agent:
(i) weekly reports of actual cash receipts and disbursements ("Weekly
Cash Flow Reports") no later than Thursday of the next succeeding week,
each such Weekly Cash Flow Report to be in the format currently being
provided to the Agent; and
(ii) monthly reports of actual cash receipts and disbursements for
each month, each period of three months ended on such month and
year-to-date ("Monthly Cash Flow Reports") and the Company's "Monthly
Profit and Loss Statement (Consolidated by Cost Center)" and "Detail
Consolidated Profit and Loss Statement", in each case no later than the
fifteenth day of the next succeeding month, and in the format currently
being provided to the Agent (including all schedules thereto currently
being provided to the Agent);
each of such Weekly Cash Flow Reports and Monthly Cash Flow Reports (including
schedules thereto) to be certified as correct and complete by a Responsible
Officer of the Borrower and to be provided both in hard copy form and an
electronic form reasonably satisfactory to the Agent.
(d) Collections for each successive four-week period ending on a Friday
shall be no less than $2,500,000.
(e) Cash disbursements for each successive four-week period ended on a
Friday, excluding cash disbursements during such period for shareholder
lawsuits, shall not exceed the sum of collections for such period and the amount
of cash balances on the first day of such period. Except as provided in the
immediately prior sentence, without the prior consent of the Lenders, the
Borrower and each of its Subsidiaries agrees that it shall not pay, or commit to
pay, or undertake any transaction which would result in or require the payment
of, any cash disbursement that would be unusual or extraordinary or outside the
ordinary course of business, such determination to be made by reference both to
the business of the Borrower and its Subsidiaries as presently conducted and by
reference to the business plan, budget and projections delivered pursuant to
Section 7(k).
(f) Amounts invoiced by the Borrower and its Subsidiaries on or prior to
the tenth day of each month for the prior month shall be no less than
$3,000,000.
(g) The Borrower shall provide full disclosure to the Agent of all proposed
settlements of any material litigation involving the Borrower.
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(h) The Borrower shall promptly provide such additional financial and other
information, including, without limitation, payment plans for significant
creditors not yet negotiated or known as of the date hereof, certified copies of
corporate proceedings of the Borrower and any of its Subsidiaries, certified
copies of management communications and communications from certified public
accountants engaged by the Borrower or any of its Subsidiaries from time to
time, certified copies of all notices from or other communications with the
Securities and Exchange Commission, the National Association of Securities
Dealers, any stock exchange or similar organization and other Governmental
Authorities, and such other information as the Agent or the Lenders may from
time to time request. Without limitation of the foregoing, the Borrower shall
deliver to the Agent promptly, copies of all reports filed by the Borrower or
any Subsidiary with the Securities and Exchange Commission on the XXXXX system.
(j) The Borrower shall, not later than September 30, 1997, provide to the
Agent and each Lender a business plan and projected financial statements of the
Borrower and its Subsidiaries for the period from July 1, 1997 to June 30, 1998
(the "Plan Period"), which business plan and projected financial statements
shall be in form and substance reasonably acceptable to the Agent and the
Lenders.
(1) The Borrower shall pay:
(i) to Cadwalader, Xxxxxxxxxx & Xxxx, an amount equal to $5,000 per
week on account of legal fees and disbursements previously invoiced;
(ii) to the Agent for the account of the Lenders, an amount for each
month listed in the table below set forth opposite such month below,
payable in the equal bimonthly installments set forth below on the 10th day
and the 25th day of each of such months:
Monthly Bi-Monthly
Month Amount Installment
----- ------ -----------
June 1997 $130,000 $65,000
July 1997 130,000 65,000
August 1997 130,000 65,000
in each case on account of accrued and unpaid interest on the outstanding
Loans;
(iii) to the Agent for the account of the Lenders, concurrently with
the delivery to the Agent of each Weekly Cash Plow Report, an amount equal
to the excess, if any, of (A) collections for such week over (B) the sum of
cash disbursements for such week (including cash disbursements pursuant to
Section 6(l)(i) and (ii) hereof) and an amount of cash to be retained from
such collections determined by the Borrower in light of reasonably
anticipated cash needs and consistent with maintaining prudent,
non-excessive reserves (such excess, "Excess Cash"), which Excess Cash
shall be applied by the Agent and
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the Lenders to the payment of accrued and unpaid interest on the
outstanding Loans, until all such accrued and unpaid interest has been
paid in full; and
(iv) notwithstanding the provisions of Section 5.4(b) of the
Credit Agreement and Section 7(l)(iii) hereof, to the Agent for the
account of the Lenders, a percentage to be negotiated between the
Borrower and the Lenders of net proceeds of any extraordinary
transactions, including, without limitation, transactions of the type
described in Section 5.4(b) of the Credit Agreement.
If the Forbearance Termination Date is extended pursuant to an Extension
Supplement, unless modified pursuant to such Extension Supplement the
payments set forth in this Section 7(1) shall continue during the term of
such extension of the Forbearance Termination Date, in the same amounts and
at the same periodicity, as set forth for the initial term of this
Forbearance Agreement in this Section 7(1).
8. Events of Default.
(a) The agreement of the Agent and the Lenders to make Forbearance
Revolving Credit Loans and to forbear from exercising remedies pursuant to
Section 3 hereof shall immediately terminate and be of no further force and
effect upon the occurrence of any of the following (each, a "Forbearance Event
of Default"):
(i) the occurrence of one or more Defaults or Events of Default
under any of Subsections 10(c), (d), (f), (h), (i), (j) and (1) of the
Credit Agreement (other than a Default or Event of Default arising
solely from a breach of the Borrower's obligations under Section 9.1,
9.13 (to the extent applicable to Withdrawal Payments) or 9.20 of the
Credit Agreement); or
(ii) any representation or warranty made or deemed made by the
Borrower or any Subsidiary Guarantor in Section 5 hereof or elsewhere
herein or which is contained in any certificate, document or financial
or other statement created and/or delivered at any time under or in
connection with this Forbearance Agreement or on or subsequent to the
date hereof under or in connection with any other Credit Document
shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or
(iii) the Borrower or any Subsidiary shall default in the
observance or performance of any agreement contained in Section 7; or
(iv) Withdrawal Payments shall be paid in excess of (A) with
respect to lump sum payments, $550,000 in the aggregate, and (B) with
respect to any other payments to any Person entitled to receive
Withdrawal Payments, an amount in excess of the amounts currently
being paid to such Person as "Employment Commission EA Payments" (such
amounts to be paid no more frequently than such Employment
Commission EA Payments and to be payable only to Persons who
continue to operate a clinic of the Company); or
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(v) the Agent or the Lenders shall in their sole discretion
determine that an adverse change has occurred in the finances or
business operations of the Borrower or the Subsidiary Guarantors; or
(vi) (x) the Agent or the Lenders shall in their sole discretion
determine that any litigation, investigation or proceeding relating to
the Borrower or any Subsidiary thereof or any present or former
Affiliate of any thereof, any actual or proposed solicitation of
proxies or consents from any holders of any securities issued by the
Borrower or any of its Subsidiaries or similar action, or any change
or development in or in respect of any of the foregoing (including,
without limitation, any settlement thereof), could have an adverse
effect on the business, operations, properties, condition (financial
or otherwise) or prospects of the Borrower or any Subsidiary thereof
or on the rights or remedies of the Agent or the Lenders under any of
the Credit Documents, or (y) any settlement of any of the foregoing
shall be entered into on terms and conditions that are not acceptable
to the Agent or any Lender in their sole discretion, or (z) the
litigation currently pending in the Federal District Court for the
Western District of Pennsylvania captioned "Xxxxxxx Xxxxxx et al. vs.
Northstar Health Services, Inc. et al." shall fail to be settled on
terms and conditions satisfactory to the Agent and the Lenders on or
prior to September 30, 1997; or
(vii) (x) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended)
other than the Xxxxxx Parties (A) shall have acquired beneficial
ownership of 30% or more of any outstanding class of Capital Stock
having ordinary voting power in the election of directors of the
Borrower or (B) shall obtain the power (whether or not exercised) to
elect a majority of the Borrower's directors or (ii) the Board of
Directors of the Borrower shall not consist of a majority of
Continuing Directors; for purposes of this Agreement, "Continuing
Directors" shall mean the directors of the Borrower on the Forbearance
Effective Date and each other director, if such other director's
nomination for election to the Board of Directors of the Borrower is
recommended by a majority of the then Continuing Directors; or
(ix) an Event of Default shall occur under Section 10(g) of the Credit
Agreement, or the Company shall incur liabilities (including in respect of a
compliance audit) relating to a 401(k) Plan (one such liability which is more
fully described on the Supplemental Disclosure Schedule), together aggregating
in excess of $150,000.
(b) Upon the occurrence of a Forbearance Event of Default on or as of any
date, the Forbearance Termination Date shall be deemed to occur on said date.
9. Absence of Waiver. The parties hereto agree that the agreements set
forth in Sections 2 and 3 hereof shall not be deemed to:
(a) be a consent to, or waiver of, any Default or Event of Default;
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(b) except as expressly set forth herein; modify or limit any other
term or condition of the Credit Agreement or any other Credit Document;
(c) impose upon any Lender or the Agent any obligation, express or
implied, to consent to any amendment or further modification of the Credit
Agreement or other Credit Documents, including, without limitation, any
further extension of the Revolving Credit Commitment; or
(d) prejudice any right or remedy that the Agent or the Lenders may now
have or may in the future have under the Credit Agreement or under or in
connection with the other Credit Documents or any instrument or agreement
referred to therein including, without limitation, any right or remedy
resulting from any Default or Event of Default.
10. Miscellaneous.
(a) Section headings used in this Forbearance Agreement are for
convenience of reference only and shall not affect the construction of this
Forbearance Agreement.
(b) This Forbearance Agreement may be executed by one or more of the
parties hereto by facsimile or in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
(c) This Forbearance Agreement and the rights and obligations of the
parties under this Forbearance Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York, without giving
effect to conflicts of laws principles.
(d) All obligations of the Borrower and each Subsidiary Guarantor and
all rights of the Agent and the Lenders that are expressed herein shall be in
addition to and not in limitation of those provided by applicable law.
(e) This Forbearance Agreement, the Credit Agreement and the other
Credit Documents represent the agreement of the Borrower, the Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.
(f) Whenever possible, each provision of this Forbearance Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law; but if any provision of this Forbearance Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision of such provision or the remaining
provisions of this Forbearance Agreement.
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(g) THE BORROWER AND EACH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS FORBEARANCE AGREEMENT AND THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR
THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT
AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 12.2 OF
THE CREDIT AGREEMENT AND TO EACH SUBSIDIARY GUARANTOR AT ITS ADDRESS
SET FORTH BELOW ITS SIGNATURE ON THE SUBSIDIARIES GUARANTEE, OR AT
SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED
PURSUANT THERETO;
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION; AND
(E) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
(h) EACH OF THE BORROWER, THE SUBSIDIARY GUARANTORS, THE LENDERS AND THE
AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS FORBEARANCE AGREEMENT AND ANY
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OTHER CREDIT DOCUMENT TO WHICH IT Is A PARTY AND FOR ANY
COUNTERCLAIM THEREIN.
(i) This Forbearance Agreement shall be deemed a "Credit Document" for
purposes of the Credit Agreement and the other Credit Documents.
(j) This Forbearance Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous oral or written agreements with respect to the subject matter
hereof.
(k) The Borrower and each Subsidiary Guarantor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution
and delivery of this Forbearance Agreement;
(ii) neither the Agent nor any Lender has any fiduciary
relationship to the Borrower or any Subsidiary Guarantor, and the
relationship between the Agent and the Lenders, on the one hand, and
the Borrower and the Subsidiary Guarantors, on the other, is solely
that of creditor and debtor; and
(iii) no joint venture exists among the lenders or among the
Borrower, the Subsidiary Guarantors and the Lenders.
[SIGNATURE PAGES FOLLOW]
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Forbearance Agreement
dated as of August 18, 1997
IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be duly executed and delivered as of the day and year first above
written.
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Agent and as a Lender
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HEALTH SERVICES, INC.
By
------------------------------
Name:
Title:
NORTHSTAR MEDICAL SERVICES, INC.,
f/k/a NSHS HOLDINGS, INC.
By
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Name:
Title:
DIRECT PROVIDER NEWWORK, INC.; f/k/a
NORTHSTAR HS HOLDINGS, INC.
By
------------------------------
Name:
Title:
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Forbearance Agreement
dated as of August 18, 1997
IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be duly executed and delivered as of the day and year first above
written.
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Agent and as a Lender
By
------------------------------
Name:
Title:
NORTHSTAR HEALTH SERVICES, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman & CEO
NORTHSTAR MEDICAL SERVICES. INC.,
f/k/a NSHS HOLDINGS, INC;
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
DIRECT PROVIDER NETWORK, INC.; f/k/a
NORTHSTAR HS HOLDINGS, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
-13-
15
Forbearance Agreement
dated as of August 18, 1997
NSHS SERVICES, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
NORTHSTAR HEALTH
CONSULTING, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
ABILITY PLUS REHABILITATION
MANAGEMENT COMPANY, f/k/a
NSHS CARDIAC HOLDINGS, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
NORTHSTAR DIAGNOSTIC
SERVICES, INC., f/k/a
NORTHSTAR NUCLEAR SERVICES, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
-14-
16
Forbearance Agreement
dated as of August 18, 1997
KEYSTONE REHABILITATION SYSTEMS,
INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
KEYSTONE REHABILITATION
MANAGEMENT, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
VASCUSONICS, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title:
-15-