Exhibit 10.171 - Subordination Agreement
SUBORDINATION AGREEMENT dated as of January 28, 1998 made by DREW
INDUSTRIES INCORPORATED, a Delaware corporation (the "Company") and each direct
and indirect Subsidiary of the Company (each, together with the Company, a
"Credit Party"), with and in favor of TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA, ING INVESTMENT MANAGEMENT, INC., as agent for Midwestern Life
Insurance Company and ING INVESTMENT MANAGEMENT LLC, as agent for Equitable Life
Insurance Company of Iowa and USG Annuity & Life Company (collectively, together
with each future holder of the Notes (as defined in the Note Purchase Agreement
referred to below), the "Noteholders").
Reference is hereby made to the Note Purchase Agreement, dated as of
January 28, 1998 (as amended, supplemented, or modified from time to time, the
"Note Purchase Agreement") among Kinro, Inc., an Ohio corporation, Shoals
Supply, Inc., a Delaware corporation, and Xxxxxxx Components, Inc., a Delaware
corporation (collectively the "Co-Issuers"), and the Noteholders. Terms used
herein as defined terms and not otherwise defined shall have the meanings given
thereto in the Note Purchase Agreement.
The Noteholders have agreed to purchase the Notes subject to the
conditions specified in the Note Purchase Agreement. Each Co-Issuer is a direct
subsidiary of the Company. The Credit Parties may make loans and advances to
other Credit Parties upon the terms and conditions contained in the Note
Purchase Agreement, including, without limitation, the subordination of such
obligations to the obligations of the Credit Parties under the Note Purchase
Agreement, the Transaction Documents and the other Agreements. The obligations
of the Noteholders to purchase the Notes is conditioned on, among other things,
the execution and delivery by each Credit Party of a Subordination Agreement in
the form hereof.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1.01 Definitions, Terms. References to this "Agreement" shall be
to this Subordination Agreement as amended, supplemented, or otherwise modified
from time to time. The term "Senior Obligations" shall mean, collectively, the
due and punctual payment of (i) the principal of and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes when and as due, whether at maturity,
by acceleration, upon one or more dates on which repayment or prepayment is
required, or otherwise, and (ii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), (x) of the
Co-Issuers to one or more of the
Noteholders under the Note Purchase Agreement, (y) of the Guarantors under the
Guarantee Agreements, and (z) of the Co-Issuers and of the other Credit Parties
under any Transaction Documents to which the Co-Issuers or such other Credit
Parties are or are to be parties. The term "Subordinated Debt" shall mean any
and all Indebtedness, obligations and liabilities that is or was at any time
owed by any Credit Party to any other Credit Party (including all interest
accrued or to accrue thereon up to the date of such full payment thereof) of
every kind and nature whatsoever, whether represented by negotiable instruments
or other writings, whether direct or indirect, absolute or contingent, due or
not due, secured or unsecured, original, renewed, modified or extended, now in
existence or hereafter incurred, originally contracted with the Credit Party or
with another Person, and whether contracted alone or jointly and/or severally
with another or others.
Section 2.01 Subordination. Each Credit Party hereby agrees that all
claims and demands, and all interest accrued or that may hereafter accrue
thereon, in respect of any Subordinated Debt are subject and subordinate to the
prior indefeasible payment and satisfaction in full in cash of all Senior
Obligations. In furtherance of and not in limitation of the foregoing:
(i) no payment or prepayment of any principal or interest on
account of, and no repurchase, redemption or other retirement (whether at
the option of the holder or otherwise) of Subordinated Debt shall be made,
if at the time of such payment, prepayment, repurchase, redemption or
retirement or immediately after giving effect thereto there shall exist a
Default or Event of Default;
(ii) in the event of any insolvency or bankruptcy proceedings,
and any receivership, liquidation, reorganization or other similar
proceedings in connection therewith, relating to any Credit Party or to
its creditors, as such or to its property, and in the event of any
proceedings for voluntary liquidation, dissolution or other winding up of
any Credit Party, whether or not involving insolvency or bankruptcy, then
the holders of Senior Obligations shall be entitled to receive final,
indefeasible payment in full in cash of all Senior Obligations (including
interest thereon accruing after the commencement of any such proceedings,
whether or not allowed or allowable as a claim in such proceedings),
before the holders of the Subordinated Debt (including any other Credit
Party) shall be entitled to receive any payment or other distribution on
account of the Subordinated Debt, and to that end the holders of Senior
Obligations shall be entitled to receive distributions of any kind or
character, whether in cash or property or securities, which may be payable
or deliverable in any such proceedings in respect of the Subordinated
Debt;
(iii) in the event that any Subordinated Debt is declared due
and payable before its expressed maturity because of the occurrence of an
event of default (under circumstances when the provisions of the foregoing
paragraphs (i) or (ii) are not applicable), the holders of the Senior
Obligations outstanding at the time such Subordinated Debt so becomes due
and payable because of such occurrence of such an event of default shall
be entitled to receive final, indefeasible payment in full in cash of all
Senior Obligations before the holders of the Subordinated Debt (including
any Credit
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Party) are entitled to receive any payment or other distribution on
account of the Subordinated Debt;
(iv) in the event that, notwithstanding the occurrence of any
of the events described in paragraphs (i), (ii) and (iii), any such
payment or distribution of assets of any Credit Party of any kind or
character, whether in cash, property or securities, shall be received by
the holders of Subordinated Debt (including any Credit Party) before all
Senior Obligations are finally and indefeasibly paid in full in cash, such
payment or distribution shall be held in trust for the benefit of, and
shall be promptly paid over or delivered to the holders of such Senior
Obligations or their representative or representatives or as their
respective interests may appear, for application to the payment of all
Senior Obligations remaining unpaid to the extent necessary to pay such
Senior Obligations in full in cash, in accordance with the terms thereof,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Obligations; and
(v) no holder of Senior Obligations shall be prejudiced in its
right to enforce subordination of the Subordinated Debt by any act or
failure to act on the part of any Credit Party.
Section 2.02 No Payment or Security. Each Credit Party agrees not to make
payment (except if permitted under Section 2.01 hereof) of, or give any security
for, an Subordinated Debt.
Section 2.03 Waiver, No Limitations. (a) Each Credit Party waives any and
all notice of the acceptance of the subordination hereunder and of the creation
or accrual of any of the Senior Obligations or of any renewals, extensions,
increases, or other modifications thereof from time to time, or of the reliance
of any Noteholder upon this Agreement.
(b) Nothing contained herein shall constitute or be deemed to be a
waiver or to limit any rights in any insolvency proceeding or under applicable
law of any Noteholder, including in respect of any claim that any payment in
respect of Subordinated Debt, whether or not permitted under Section 2.01
hereof, is a preferential transfer or otherwise should be set aside or recovered
for the benefit of creditors of any Credit Party.
Section 2.04 No Impairment of Subordination. Each holder of Subordinated
Debt hereby consents that the liability of each Credit party or of any other
party for or upon the Senior Obligations may from time to time, in whole or in
part be renewed, increased, extended, or modified, in any and all respects, or
accelerated, compromised, settled or released, and that any collateral security
and Liens for the Senior Obligations, or any guarantee or other accommodation in
respect thereof may, from time to time, in whole or in part, be exchanged, sold,
released or surrendered by any Noteholder, as it may deem advisable, or that any
security interest may be unperfected, and that the financial condition, legal
status, corporate structure or identity, entity classification, affiliation, or
any other characteristic affecting any Credit Party, or affecting any Senior
Obligation, may change in any respect whatsoever, and any other fact or
circumstance may occur that would, but for this specific provision to the
contrary, relieve such
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holder of Subordinated Debt from the provisions of this Agreement, all without
impairing the subordination contained in this Agreement and without any notice
to or assent from such holder of Subordinated Debt.
Section 2.05 Proof of Claim, Past Default. (a) Each holder of Subordinated
Debt hereby irrevocably authorizes the Noteholders and irrevocably constitutes
and appoints the Noteholders as its attorney in fact with full power (coupled
with an interest, and with power of substitution) in the name, place and stead
of such holder of Subordinated Debt and whether or not a default exists with
respect to the Subordinated Debt, to file proofs of claim for the full, amount
of the Subordinated Debt held by it against any obligor in respect thereof or
such obligor's property in any statutory or non-statutory proceeding affecting
such obligor or the Subordinated Debt or any other proceeding and to vote the
full amount of the Subordinated Debt (i) for or against any proposal or
resolution; (ii) for a trustee or trustees or for a committee of creditors; or
(iii) for the acceptance or rejection of any proposed arrangement, plan of
reorganization, composition, settlement or extension and in connection with any
such proceeding.
(b) After the occurrence and during the continuation of a Default or
Event of Default, should any payment or distribution or collateral security or
proceeds of any collateral security be received or collected by the holder of
any Subordinated Debt for or on account of any Subordinated Debt, prior to the
time that all Senior Obligations have been fully, finally, and indefeasibly paid
in cash, such holder of Subordinated Debt shall forthwith deliver the same to
the Noteholders, in precisely the form received (with the endorsement of such
holder of Subordinated Debt where necessary), for application on account of the
Senior Obligations (or, in the case of collateral security, delivery to the
Trustee, for such application thereby) and such holder of Subordinated Debt
agrees that, until so delivered, the same shall be deemed received by such
holder of Subordinated Debt as trustee for the Noteholders in trust for the
Noteholders; and in the event of the failure of such holder of Subordinated Debt
to endorse any instrument for the payment of money so received payable to its
order, the Noteholders or any officer or employee thereof is hereby irrevocably
constituted and appointed attorney in fact for such holder of Subordinated Debt,
with full power (coupled with an interest and with full power of substitution)
to make any such endorsement. In the event that such holder of Subordinated Debt
fails to make such delivery, such holder of Subordinated Debt agrees to
immediately pay to the Noteholders an amount equivalent to any such payment or
the value of such security received.
Section 2.06 No Transfer. Each Credit Party represents and warrants to the
Noteholders that such Credit Party has not (except for the benefit of the
Noteholders) granted any security interest in or made any other transfer or
assignment of any Subordinated Debt (except to the Noteholders) and agrees that
such Credit Party will not grant a security interest therein or make any other
transfer or assignment thereof (except to or as designated by the Noteholders).
Section 2.07 Instruments. Each Credit Party represents and warrants to the
Noteholders that as of the date hereof the Subordinated Debt is not represented
by any instruments or other writings. Each Credit Party agrees that at no time
hereafter will any part of the Subordinated
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Debt be represented by any instruments or other writings, except such
instruments or other writings, if any, (i) that in each case bear a legend
clearly referring to this Agreement and setting forth that the obligations
represented by such instruments or writings are subject to the subordination
hereunder, and (ii) true copies of which shall have been delivered to the
Noteholders promptly after execution thereof. Subordinated Debt not evidenced by
an instrument or document shall nevertheless be deemed subordinated by virtue of
this Agreement.
Section 2.08 Statements of Account, Books and Records. Each holder of
Subordinated Debt further hereby agrees that it will render to any Noteholder
upon demand, from time to time, a statement of the account of each Credit Party
with it. Each holder of Subordinated Debt agrees that its respective books and
records, and financial statements, will appropriately show that the Subordinated
Debt is subject to this Agreement.
Section 2.09 Other Subordination Provisions. The subordination hereunder
shall be in addition to, and shall not limit or be limited by, any subordination
provisions contained in any Guarantee Agreement or other Transaction Document.
Section 3.01 Representation and Warranties. Each Credit Party represents
and warrants to the Noteholders that all representations and warranties relating
to it in the Note Purchase Agreement are true and correct.
Section 4.01 Amendment; Waiver. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by any Credit Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Noteholders. Any such waiver, consent or approval shall be effective only
in the specific instance and for the purpose for which given. No notice to or
demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in the same, similar or other circumstances.
No waiver of any breach or default of or by any Credit Party under this
Agreement shall be deemed a waiver of any other previous breach or default or
any thereafter occurring.
Section 4.02 Survival; Severability.
(a) All covenants, agreements, representations and warranties made
by the Credit Parties herein and in the certificates or other instruments
prepared or delivered in correction with or pursuant to this Agreement, the Note
Purchase Agreement or any Transaction Document (i) shall be considered to have
been relied upon by the Noteholders and shall survive the purchase of the Notes,
and the execution and delivery to the Noteholders of any Notes, regardless of
any investigation made by the Noteholders, and (ii) shall continue in full force
and effect as long as any of the Notes are outstanding and unpaid.
(b) Any provision of this Agreement that is illegal, invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such illegality, invalidity or unenforceability without
invalidating the remaining provisions hereof or affecting the legality, validity
or enforceability of such provisions in any other jurisdiction. The parties
hereto agree to negotiate in good faith to replace any illegal, invalid or
unenforceable provision
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of this Agreement with a legal, valid and enforceable provision that, to the
extent possible, will preserve the economic bargain of this Agreement, or to
otherwise amend this Agreement to achieve such result.
Section 4.03 Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Credit Party that are contained in this Agreement shall
bind and inure to the benefit of each party hereto and their respective
successors and assigns. No Credit Party may assign or transfer any of its rights
or obligations hereunder except as expressly contemplated by this Agreement, the
Note Purchase Agreement or the Transaction Documents (and any such attempted
assignment shall be void).
Section 4.04 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Section 4.05 Headings. The Article and Section headings in this Agreement
are for convenience only and shall not affect the construction hereof.
Section 4.06 Notices. Notices, consents and other communications provided
for herein shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 20 of the Note Purchase Agreement.
Communications and notices to any Credit Party shall be given to it at its
address set forth in Schedule A hereto.
Section 4.07 Counterparts, Additional Parties. (a) This Agreement may be
executed in separate counterparts (telecopy of any executed counterpart having
the same effect as manual delivery thereof), each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
Agreement.
(b) Upon execution and delivery after the date hereof by the
Noteholders and a Subsidiary of the Company of an instrument in the form of
Exhibit 4.07(b) hereto, such Subsidiary shall become a party hereto with the
same force an effect as if originally named herein. The execution and delivery
of such instrument shall not require the consent of any Credit Party. The rights
and obligations of each Credit Party and each other holder of Subordinated Debt
hereunder shall remain in full force and effect notwithstanding the addition of,
or the failure to add, any Person as a party hereto, in each case whether or not
required under the Note Purchase Agreement.
Section 4.08 Jurisdiction, Consent to Service of Process.
(a) Each Credit Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, the Note Purchase Agreement or the Transaction
Documents, or
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for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Noteholder may otherwise have to bring any action or proceeding
relating to this Agreement, the Note Purchase Agreement or the Transaction
Documents against any Credit Party or its properties in the courts of any
jurisdiction.
(b) Each Credit Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in the preceding paragraph. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 4.06. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 4.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, THE NOTE PURCHASE AGREEMENT, NOTES OR THE TRANSACTION
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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IN WITNESS WHEREOF, the parties hereto have caused this
Subordination Agreement to be duly executed and delivered by their respective
officers or representatives as of the day and year first above written.
DREW INDUSTRIES INCORPORATED
By:_____________________________________________________
Name:
Title:
KINRO, INC.
By:_____________________________________________________
Name:
Title:
SHOALS SUPPLY, INC.
By:_____________________________________________________
Name:
Title:
XXXXXXX COMPONENTS, INC.
By:_____________________________________________________
Name:
Title:
KINRO HOLDING, INC.
By:_____________________________________________________
Name:
Title:
SHOALS HOLDING, INC.
By:_____________________________________________________
Name:
Title:
[Signature Page to Subordination Agreement Continued]
KINRO MANUFACTURING, INC.
By:_____________________________________________________
Name:
Title:
KINRO TEXAS LIMITED PARTNERSHIP
By: KINRO MANUFACTURING, INC.,
its general partner
By:_____________________________________________________
Name:
Title:
KINRO TENNESSEE LIMITED PARTNERSHIP
By: KINRO MANUFACTURING, INC.,
its general partner
By:_____________________________________________________
Name:
Title:
SHOALS SUPPLY TEXAS LIMITED PARTNERSHIP
By: SHOALS SUPPLY, INC., its general partner
By:_____________________________________________________
Name:
Title:
SHOALS SUPPLY TENNESSEE LIMITED PARTNERSHIP
By: SHOALS SUPPLY, INC., its general partner
By:_____________________________________________________
Name:
Title:
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF
AMERICA
By:_____________________________________________________
Name:
Title:
[Signature Page to Subordination Agreement Continued]
ING INVESTMENT MANAGEMENT, INC., as agent for each of
the following:
Midwestern Life Insurance Company
Security Life of Denver Insurance Company
By:_____________________________________________________
Name: Xxxx X. Xxxxx
Title: Senior Vice President and Managing Director
ING INVESTMENT MANAGEMENT, LLC., as agent for each of
the following:
Equitable Life Insurance Company of Iowa
USG Annuity & Life Company
By:_____________________________________________________
Name: Xxxx X. Xxxxx
Title: Senior Vice President and Managing Director
Schedule A
to
Subordination Agreement
Addresses for Notice
Party Mailing Address County
----- --------------- ------
Drew Industries Incorporated 000 Xxxxxxxxxx Xxxxxx Xxxxxxxxxxx
Xxxxx Xxxxxx, XX 00000
Kirtro, Inc. 0000 Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Shoals Supply, Inc. 0000 Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Components, Inc. 000 Xxxxxx Xxxxxx Xxxxxxx
Xxxx, Xxxxxxxx 00000
Kinro Holding, Inc. c/o Drew Industries Incorporated Westchester
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Shoals Holding, Inc. c/o Drew Industries Incorporated Westchester
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Kinro Manufacturing, Inc. 0000 Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Kinro Texas Limited 0000 Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxxxx, XX 00000
Kinro Tennessee Limited 000 Xxxxxxxx Xxxxxxxxx Xxxxxx and
Partnership Xxxxxx, XX 00000 Xxxxxxxxxx
Shoals Supply Texas Limited 0000 Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxxxx
Xxxxxxxxxxx Xxxxxxxxx, XX 00000
Shoals Supply Tennessee 000 Xxxxxx Xxxx Xxxx
Limited Partnership Xxxxxxxxxxxx, XX 00000
