NOTE: TABLE OF CONTENTS WAS MANUALLY ENTERED (NOT CONFORMED).{PRIVATE }
SUBORDINATION AGREEMENT
Dated as of May 14, 1997
By
VALHI, INC.
("Subordinated Creditor")
and
SNAKE RIVER SUGAR COMPANY
("Borrower")
In favor of
THE HOLDERS OF THE SENIOR NOTES (AS DEFINED HEREIN)
("Senior Debt Holders")
TABLE OF CONTENTS
Page
1. Certain Defined Terms............................... 2
2. Default on Senior Debt; Acceleration of Subordinated Debt 4
3. Insolvency, Dissolution, Etc. of Borrower........... 5
4. Distributions Held in Trust; Subrogation............ 6
5. Legends............................................. 7
6. Power of Attorney................................... 7
7. Agreements by Subordinated Creditor and Senior Debt Holders 8
8. Waivers............................................. 9
9. Representations and Warranties...................... 9
10. Negative Covenants.................................. 10
11. Financial Matters................................... 11
12. Reliance............................................ 12
13. Amendments, Etc..................................... 12
14. Entire Agreement.................................... 12
15. Notices............................................. 12
16. Expenses............................................ 12
17. No Waiver........................................... 13
18. Validity of Subordinated Debt and Senior Debt....... 13
19. Termination......................................... 13
20. Successors.......................................... 13
21. Counterparts........................................ 14
22. Duties of Senior Debt Holders Limited............... 14
23. Additional Documentation............................ 14
24. Severability........................................ 14
25. Waiver of Jury Trial................................ 14
26. Governing Law....................................... 15
SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT, dated as of May 14, 1997 ("Agreement"),
is made by Valhi, Inc., a Delaware corporation ("Subordinated Creditor"), and
Snake River Sugar Company, an Oregon cooperative ("Borrower"), in favor of the
holders from time to time of the Senior Debt (as defined below) ("Senior Debt
Holders") and First Security Bank, N.A., as Collateral Agent for the Senior Debt
Holders.
R E C I T A L S
WHEREAS, Borrower has entered into separate but identical Note
Purchase Agreements, each dated as of May 14, 1997 with the financial
institutions named therein ("Purchasers") (said agreements, as they may
hereafter be amended or otherwise modified from time to time, collectively being
the "Note Agreement", the terms defined in the Note Agreement and not otherwise
defined herein being used herein as defined in the Note Agreement) pursuant to
which Borrower has issued to the Purchasers its senior notes in the principal
amount of $100,000,000 (as such senior notes may be amended, renewed or
otherwise modified from time to time the "Senior Notes"); and
WHEREAS, Subordinated Creditor and Borrower have entered into a Loan
and Security Agreement dated as of January 3, 1997, as amended and restated by
the Subordinated Loan Agreement dated as of the date of this Agreement (said
agreement, as it may hereafter be amended or otherwise modified from time to
time, being the "Subordinated Agreement") pursuant to which Borrower has issued
or may issue in the future to Subordinated Creditor certain subordinated notes
(as such subordinated notes may be amended, renewed or otherwise modified from
time to time, collectively, the "Subordinated Note"); and
WHEREAS, it is a condition precedent to the purchase of the Senior
Notes by the Purchasers pursuant to the Note Agreement that Borrower and
Subordinated Creditor shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Purchasers to purchase the Notes under the Note Agreement, the
parties hereto hereby agree as follows:
{PRIVATE } CERTAIN DEFINED TERMS{TC \L 1 " CERTAIN DEFINED
TERMS"}. For purposes of this Agreement, the following terms shall have the
following meanings:
"Debt" means, with respect to any person, (i) all indebtedness,
obligations and other liabilities (contingent or otherwise) of such person for
borrowed money or evidenced by bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of the assets of such
person or to only a portion thereof); (ii) all reimbursement obligations and
other liabilities (contingent or otherwise) of such person with respect to
letters of credit or bankers' acceptances issued for the account of such person
or with respect to interest rate protection agreements or currency exchange
agreements; (iii) all obligations and other liabilities (contingent or
otherwise) of such person with respect to any conditional sale, installment sale
or other title retention agreement, purchase money mortgage or security
interest, or otherwise to pay the deferred purchase price of property or
services (except trade accounts payable and accrued expenses arising in the
ordinary course of business) or in respect of any sale and leaseback
arrangement; (iv) all obligations and liabilities (contingent or otherwise) in
respect of leases by such person as lessee which, in conformity with generally
accepted accounting principles, are required to be accounted for as capitalized
lease obligations on the balance sheet of such person; (v) all direct or
indirect guaranties or similar agreements in respect of, and obligations and
liabilities (contingent or otherwise) to purchase or otherwise acquire or
otherwise to assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of others; and (vi) all liabilities for borrowed
money secured by any Lien with respect to any property owned by such person
(whether or not it has assumed or otherwise become liable for such liabilities).
"Distribution of Assets" means any distribution of assets of
Borrower of any kind or character, whether (a) a payment, purchase or other
acquisition or retirement for cash, property or securities or (b) by way of
cancellation, forgiveness or offset of the Subordinated Debt against any Debt
owed by Subordinated Creditor to Borrower or (c) payable or deliverable by
reason of the payment of any other Debt of Borrower being subordinated to the
payment of the Subordinated Debt and, in any case, shall include any assets of
any kind or character received by Subordinated Creditor in connection with the
realization of security for the Subordinated Debt.
"Specified Default" means any Event of Default described in the
following Sections of the Note Agreement and any Default that would, after
notice or lapse of time or both, give rise to such an Event of Default (all
references to sections in this definition of Specified Default are references to
sections of the Note Agreement):
(i) Section 11(a);
(ii) Section 11(b); provided that any Default or Event of Default
under Section 11(b) that occurs by reason of a default in the performance
or compliance with Section 7.1(d) or (l) shall not be a Specified Default;
provided further that for purposes of determining a Specified Default due
to a Default or Event of Default under Section 11(b) that occurs by reason
of a default in the performance or compliance with Section 9.7, the
relevant amount of acres shall be 200,000 acres, not 210,000 acres;
provided further that, for purposes of determining a Specified Default due
to a Default or Event of Default under Section 11(b) that occurs by reason
of a default in the performance or compliance with Section 10.3, Section
10.3 shall be deemed to contain an additional clause (k) which reads "Liens
securing Debt the amount of which does not exceed $500,000"; provided
further that, for purposes of determining a Specified Default due to a
Default or Event of Default under Section 11(b) that occurs by reason of a
default in the performance or compliance with Section 10.4, Section 10.4
shall be deemed to contain an additional clause (e) which reads "Debt of
LLC and Subsidiaries of the Company not exceeding $500,000"; provided
further that, for purposes of determining a Specified Default due to a
Default or Event of Default under Section 11(b) that occurs by reason of a
default in the performance or compliance with Section 10.6, Section 10.6
shall be deemed to contain an additional clause (d) which reads "Additional
Debt of the Company not to exceed $500,000 in the aggregate"; provided
further that, for purposes of determining a Specified Default due to a
Default or Event of Default under Section 11(b) that occurs by reason of a
default in the performance or compliance with Section 10.9, the amount in
clause (k) of Section 10.9 shall be deemed to be $1,000,000; and provided
further that, for purposes of determining a Specified Default due to a
Default or Event of Default under Section 11(b) that occurs by reason of a
default in the performance or compliance with Section 10.10, the amounts
set forth in Section 10.10 shall be deemed to be $18,500,000 and
$44,500,000, not $18,000,000 and $44,000,000.
(iii) Section 11(e)(i), but only if, as a consequence of the
occurrence or continuation of any event or condition in such section, the
lenders under the Bank Loan or any other lenders under or holders of Debt
exercise their right to accelerate such Debt or to prohibit LLC from making
distributions with respect to the AGM Interest or any other distributions
to its members;
(iv) Section 11(e)(ii) and Section 11(e)(iii);
(v) Section 11(m)(i); and
(vi) Section 11(m)(ii), but only if the amount of the Debt or other
obligation referred to in such section exceeds $500,000.
"Section 6 Event" means: (i) the acceleration of all or any
portion of the Senior Debt pursuant to Section 12.1 of the Note Agreement or
(ii) the occurrence of an Event of Default specified in Section 11(f) or 11(g)
of the Note Agreement with respect to Borrower.
"Senior Debt" means: (i) the principal of all Debt of Borrower
under the Note Agreement and the Senior Notes; the Make-Whole Amount, if any,
thereon; interest accrued or accruing thereon both before and after the date of
filing a petition in any bankruptcy, insolvency, arrangement, reorganization or
receivership proceedings, whether or not allowed as a claim in such case or
proceeding; commitment, facility and other fees payable under the Note Agreement
and any other amounts due under the Note Agreement, whether direct or indirect,
absolute or contingent, secured or unsecured, due or to become due, now existing
or hereafter arising; and (ii) any refundings, renewals or extensions of any
Debt or other obligation described in clause (i) above; and (iii) all expenses
and attorney's fees for which Borrower is now or hereafter becomes liable to pay
to any Senior Debt Holder or to the Collateral Agent.
"Subordinated Debt" means all Debt of Borrower to Subordinated
Creditor now or hereafter existing (whether created directly or acquired by
assignment or otherwise), including, but not limited to, all Debt of Borrower
pursuant to the Subordinated Agreement and the Subordinated Note, and interest
and premium, if any, thereon and other amounts payable in respect thereof.
{PRIVATE } Default on Senior Debt; Acceleration of Subordinated
▇▇▇▇{▇▇ \▇ ▇ " Default on Senior Debt; Acceleration of Subordinated Debt"}.
Subordinated Creditor will not receive or accept from Borrower,
and the Borrower will not make to or for the benefit of Subordinated Creditor,
any payment or Distribution of Assets in respect of the Subordinated Debt at any
time (i) after a Specified Default shall have occurred or if payment in respect
of the Subordinated Debt would result in a Specified Default or (ii) after all
or any portion of the Senior Debt shall have been accelerated pursuant to
Section 12.1 of the Note Agreement, unless and until, in the case of clause (i),
such Specified Default has been cured to the satisfaction of the Required
Holders (and in the case of a Specified Default described in clause (i) of the
definition of "Specified Default" to the satisfaction of all of the Senior Debt
Holders), in their sole discretion, or, in the case of clause (ii), such
acceleration has been rescinded pursuant to Section 12.2 of the Note Agreement,
as applicable, or all Senior Debt has been paid in full in cash.
Until all Senior Debt has been paid in full in cash, Subordinated
Creditor shall deliver to the largest holder of Senior Debt (the "Senior Debt
Representative") prior written notice of any intent by Subordinated Creditor to
(i) declare all or any part of the Subordinated Debt due and payable prior to
its scheduled maturity, (ii) take any enforcement action with respect to the
Subordinated Debt, or (iii) commence or join with any other creditor of Borrower
to commence any bankruptcy, insolvency, reorganization, readjustment of debt,
arrangement of debt, receivership or liquidation or other similar proceeding
against Borrower (collectively a "Bankruptcy Action"). Subordinated Creditor
shall not take any action to declare the Subordinated Debt due and payable, or
to otherwise demand, ask for or take any enforcement action in respect of the
Subordinated Debt, including without limitation the exercise of any remedy or
Bankruptcy Action, in each case subject to Section 2a above, until the earlier
of (x) the date on which the Required Holders consent in writing to such
acceleration or enforcement action or (y) the date on which all of the Senior
Debt is accelerated or (z) if there has been a default in the payment of the
principal of or interest on the Subordinated Debt (other than as a result of
such intended acceleration) which has existed continuously since the date of
such notice, 180 days after receipt by the Senior Debt Representative of such
written notice. Notwithstanding anything to the contrary in this Section 2b,
Borrower and Subordinated Creditor shall at all times be subject to the
prohibitions set forth in Section 2a on the payment to, and receipt of, funds
and other assets by Subordinated Creditor.
{PRIVATE } INSOLVENCY, DISSOLUTION, ETC. OF BORROWER{TC \L 1 "
INSOLVENCY, DISSOLUTION, ETC. OF BORROWER"}.
In the event of any dissolution, winding up, liquidation,
reorganization or other similar proceedings with respect to Borrower, its
property or its operations (whether in bankruptcy, insolvency or receivership
proceedings, or upon an assignment for the benefit of creditors, or any other
marshalling of the assets of Borrower or otherwise),
all Senior Debt (including, without limitation, interest on
Senior Debt at the rate stated in the Note Agreement or the Senior Notes from
the date of filing any petition in bankruptcy to the date of payment whether or
not allowed as a claim) shall first be paid in full in cash before Subordinated
Creditor shall be entitled to receive or retain any payment or Distribution of
Assets of Borrower with respect to the Subordinated Debt. In any such
proceedings, any payment or distribution of any kind (whether in cash, property
or securities) to which Subordinated Creditor would be entitled if the
Subordinated Debt were not subordinated to the Senior Debt shall be paid by the
trustee or agent or other person making such payment or distribution, or by
Subordinated Creditor if received by it, directly to the Collateral Agent for
the benefit of the Senior Debt Holders to the extent necessary to make payment
in full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution to or for the benefit of the Senior Debt
Holders; and
Subordinated Creditor shall duly and promptly take such action as
the Required Holders may reasonably request (i) to collect the Subordinated Debt
for the account of the Senior Debt Holders and to file appropriate claims or
proofs of claim in respect of the Subordinated Debt, (ii) to execute and deliver
to any Senior Debt Holder such powers of attorney, assignments, or other
instruments as it may reasonably request in order to enable it to enforce any
and all claims with respect to the Subordinated Debt, and (iii) to collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Debt.
{PRIVATE } DISTRIBUTIONS HELD IN TRUST; SUBROGATION{TC \L 1 "
DISTRIBUTIONS HELD IN TRUST; SUBROGATION"}.
If Subordinated Creditor receives any payment or Distribution of
Assets of Borrower which Subordinated Creditor is not entitled to retain under
the provisions of this Agreement, such payment or assets shall be delivered
forthwith by Subordinated Creditor to the Collateral Agent for the benefit of
the Senior Debt Holders for application to the Senior Debt, in the form received
except for the addition of any endorsement or assignment necessary to effect a
transfer of all rights therein to the Collateral Agent for the benefit of the
Senior Debt Holders. The Collateral Agent for the benefit of the Senior Debt
Holders is irrevocably authorized by Subordinated Creditor to supply any
required endorsement or assignment which may have been omitted. Until so
delivered any such payment or collateral shall be held by Subordinated Creditor
in trust for the Senior Debt Holders.
If all Senior Debt of Borrower has been paid in full in cash and
thereafter (i) Subordinated Creditor receives any payment or Distribution of
Assets of Borrower and (ii) any portion or all of the amounts received by any
Senior Debt Holder is required to be returned to Borrower or any receiver,
trustee or other Person succeeding to the assets of Borrower, such payment or
assets received by Subordinated Creditor shall be delivered forthwith by
Subordinated Creditor to the Collateral Agent for the benefit of the Senior Debt
Holders for application to the Senior Debt. Until so delivered any such payment
or collateral shall be held by Subordinated Creditor in trust for the Senior
Debt Holders.
After all Senior Debt of Borrower has been paid in full in cash
and until the Subordinated Debt is paid in full, Subordinated Creditor shall be
subrogated to the rights of the Senior Debt Holders to receive distributions
applicable to the Senior Debt to the extent that distributions otherwise payable
to Subordinated Creditor have been applied to the payment of such Senior Debt.
A distribution made under this Agreement to holders of the Senior Debt that
otherwise would have been made to Subordinated Creditor is not, as between the
Borrower and Subordinated Creditor, a payment by the Borrower on the
Subordinated Debt.
{PRIVATE } LEGENDS{TC \L 1 " LEGENDS"}. If Borrower issues or
has issued any instrument or document evidencing the Subordinated Debt,
including without limitation the Subordinated Agreement and the Subordinated
Notes, each such instrument and document shall bear a conspicuous legend that it
is subordinated to the Senior Debt. Borrower's books shall be marked to
evidence the subordination of all of the Subordinated Debt to the Senior Debt.
Any Senior Debt Holder is authorized to examine such books from time to time and
to make any notations required by this Agreement.
{PRIVATE } POWER OF ATTORNEY{TC \L 1 " POWER OF ATTORNEY"}.
Subordinated Creditor hereby irrevocably authorizes and empowers
the Collateral Agent for the benefit of the Senior Debt Holders (and its
representative or representatives), after the occurrence of any Section 6 Event,
to demand, ▇▇▇ for, collect and receive all payments and distributions under the
Subordinated Agreement and the Subordinated Notes and give acquittance therefor
and to file and enforce claims and proofs of claims or suits and take all such
other actions (including, without limitation, voting the Subordinated Debt
(including in connection with any liquidation, reorganization or arrangement) or
enforcing any security interest or other lien securing payment of the
Subordinated Debt) in the name of Subordinated Creditor or otherwise, as the
Collateral Agent or the Required Holders determine to be necessary or
appropriate. In no event shall Subordinated Creditor waive, forgive or cancel
any claim Subordinated Creditor may now or hereafter have against Borrower.
In no event shall the Collateral Agent or any Senior Debt Holder
be liable to Subordinated Creditor for any failure to prove the Subordinated
Debt, to exercise any right with respect thereto or to collect any sums payable
thereon.
{PRIVATE } AGREEMENTS BY SUBORDINATED CREDITOR AND SENIOR DEBT
HOLDERS{TC \L 1 " AGREEMENTS BY SUBORDINATED CREDITOR AND SENIOR DEBT
HOLDERS"}.
Subordinated Creditor has received and has been given an opportunity
to review the Note Agreement and the Transaction Documents, and Subordinated
Creditor hereby consents to and approves of the provisions contained therein.
Subordinated Creditor agrees that the Senior Debt Holders may, at any time and
from time to time, without the consent of or notice to Subordinated Creditor,
without incurring responsibility to Subordinated Creditor, and without impairing
or releasing the rights of the Collateral Agent or any of the Senior Debt
Holders, or any of the obligations of Subordinated Creditor hereunder:
Change the amount, manner, place or terms of payment or change or
extend the time of payment of or renew or alter Senior Debt or amend the
Note Agreement, the Senior Notes, the Transaction Documents or any other
document referred to therein in any manner or enter into or amend in any
manner any other agreement relating to the Senior Debt; provided that
notwithstanding the foregoing, (x) if a payment default on the Senior Notes
has occurred and is continuing, Borrower and the Senior Debt Holders shall
not increase the principal amount of the Senior Debt by an amount in excess
of 25% of the outstanding principal amount of the Senior Notes without the
consent of Subordinated Creditor, and (y) if no Event of Default exists in
respect of the Senior Debt, Borrower and the Senior Debt Holders will not
increase the interest rate on the Senior Notes or change the principal
payment schedule with respect to the Senior Notes in a manner which would
cause the average life of the Senior Notes to be shortened, in each case
without the consent of Subordinated Creditor;
Sell, exchange, release or otherwise deal with any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Senior Debt;
Release anyone (including any guarantor) liable in any manner for the
payment or collection of the Senior Debt;
Exercise or refrain from exercising any rights against Borrower and
others (including any guarantor or Subordinated Creditor);
Apply any sums by whomsoever paid or however realized to the
Senior Debt; or
Take any other action with respect to the Senior Debt which otherwise
might be deemed to impair the rights of Subordinated Creditor.
{PRIVATE } WAIVERS{TC \L 1 " WAIVERS"}. Borrower and
Subordinated Creditor each hereby waives any defense based on the adequacy of a
remedy at law which might be asserted as a bar to the remedy of specific
performance of this Agreement in any action brought therefor by the Collateral
Agent or any Senior Debt Holder. To the fullest extent permitted by law,
Borrower and Subordinated Creditor each hereby further waives: promptness,
diligence, presentment, demand, protest, notice of protest, notice of default or
dishonor, notice of payment or nonpayment and any and all other notices and
demands of any kind in connection with all negotiable instruments evidencing all
or any portion of the Senior Debt or the Subordinated Debt to which Borrower or
Subordinated Creditor may be a party; notice of the acceptance of this
Agreement; notice of any loans made, extensions granted or other actions taken
in reliance hereon; and any requirement that the Collateral Agent or the Senior
Debt Holders exhaust any right or take any action against Borrower or any other
person or entity or any collateral.
{PRIVATE } REPRESENTATIONS AND WARRANTIES{TC \L 1 "
REPRESENTATIONS AND WARRANTIES"}. Subordinated Creditor hereby represents
and warrants to the Senior Debt Holders, which representations, warranties and
covenants shall be true and correct as of the date hereof, that:
Subordinated Creditor has not heretofore assigned or transferred
any of the Subordinated Debt or any interest therein; Subordinated Creditor is
the true and lawful holder and owner of the Subordinated Debt and the
Subordinated Note; the Subordinated Note and the Subordinated Agreement have not
been amended or modified in any way; and the Subordinated Note is free and clear
of any defense, offset, counterclaim or other adverse claims and any liens,
encumbrances or security interests.
There are no agreements or understandings, written or oral, by
Subordinated Creditor with Borrower other than as set forth in this Agreement,
the Snake River Loan, the Subordinated Agreement, the Subordinated Note and the
other Transaction Documents to which Subordinated Creditor is a party with
respect to the obligations evidenced by the Subordinated Note and Subordinated
Creditor has not heretofore given any subordination in respect of the
Subordinated Debt.
Subordinated Creditor has the requisite power, authority,
capacity and legal right to execute, deliver and perform this Agreement, and
this Agreement, when executed and delivered, will constitute the legal, valid
and binding obligation of Subordinated Creditor enforceable against Subordinated
Creditor in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, with or without
notice and/or lapse of time, constitute a breach of any of the terms and
provisions of, or constitute a default under, any note, contract, instrument,
agreement or undertaking, whether written or oral, to which Subordinated
Creditor is a party.
{PRIVATE }NEGATIVE COVENANTS{TC \L 1 " NEGATIVE COVENANTS"}. Until
all of the Senior Debt has been paid in full in cash:
Except as expressly permitted in this Agreement, Borrower shall
not, directly or indirectly, make any payment or Distribution of Assets on
account of or grant a security interest in, mortgage, pledge, assign or transfer
any properties to secure or satisfy all or any part of the Subordinated Debt or
in any way amend or modify the Subordinated Note or Subordinated Agreement.
Except as expressly permitted in this Agreement, Subordinated
Creditor shall not demand or accept from Borrower or any other person any such
payment, Distribution of Assets or collateral nor shall Subordinated Creditor
release, exchange, extend the time of payment of, compromise, set off or
otherwise discharge or enforce any part of the Subordinated Debt or in any way
amend or modify the Subordinated Debt or this Agreement.
Neither Subordinated Creditor nor any receiver, trustee or other
Person succeeding to the assets of Subordinated Creditor shall set off all or
any portion of the Subordinated Debt against Debt of Subordinated Creditor owing
to Borrower (including, without limitation, the Snake River Loan), give any
subordination in respect of the Subordinated Debt, convert any or all of the
Subordinated Debt to capital stock or other securities of Borrower. The parties
acknowledge that all or a substantial part of the Snake River Loan may be non-
recourse to Subordinated Creditor, and agree that (i) nothing in this Agreement
shall be deemed to affect any such non-recourse nature of the Snake River Loan
and (ii) any change in the characterization of all or any part of the Snake
River Loan as non-recourse, limited recourse or recourse or similar
characterization shall not be deemed a set off.
Borrower will not hereafter issue any instrument, security or
other writing evidencing any part of the Subordinated Debt, and Subordinated
Creditor will not receive any such writing or transfer or assign any of the
Subordinated Debt, except upon the prior written approval of the Required
Holders or in connection with a transfer of the Subordinated Debt as permitted
under paragraph (e) below.
Neither Subordinated Creditor nor any receiver, trustee or other
Person succeeding to the assets of Subordinated Creditor shall transfer or
assign any of the Subordinated Debt, or any interest therein, to any person
(other than the Collateral Agent for the benefit of the Senior Debt Holders),
unless such transferee shall have executed and delivered to the Collateral Agent
and each Senior Debt Holder its assumption of the due and punctual performance
and observance of each covenant, condition and provision of this Agreement.
{PRIVATE }FINANCIAL MATTERS{TC \L 1 " FINANCIAL MATTERS"}.
Subordinated Creditor has established adequate and independent means of
obtaining from Borrower on a continuing basis financial and other information
pertaining to the financial condition of Borrower. Subordinated Creditor agrees
that no Senior Debt Holder shall have any obligation to disclose to Subordinated
Creditor information or material acquired by such Senior Debt Holder in the
course of its relationship with Borrower. Subordinated Creditor understands
that there may be various agreements among the Collateral Agent, the Senior Debt
Holders and Borrower evidencing and governing the Senior Debt and Subordinated
Creditor acknowledges and agrees that such agreements are not intended to confer
any benefits on Subordinated Creditor and that no Senior Debt Holder shall have
any obligation to Subordinated Creditor or any other Person to exercise any
rights, enforce any remedies, or take any actions which may be available to it
under such agreements.
{PRIVATE }RELIANCE{TC \L 1 " RELIANCE"}. Subordinated Creditor
understands that in reliance upon the terms and provisions of this Agreement,
specific monetary and other obligations are being entered into and will be
entered into by the Senior Debt Holders that would not be made or entered into
but for reliance on this Agreement. Subordinated Creditor further understands
that this Agreement constitutes a continuing offer to all persons who become
holders of, or continue to hold Senior Debt (whether such Senior Debt was
created or acquired before or after the date of this Agreement).
{PRIVATE }AMENDMENTS, ETC.{TC \L 1 " AMENDMENTS, ETC."} No
amendment or waiver of any provision of this Agreement nor consent to any
departure by Subordinated Creditor or Borrower therefrom shall in any event be
effective unless the same shall be in writing and signed by each Senior Debt
Holder and Subordinated Creditor, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
{PRIVATE }ENTIRE AGREEMENT{TC \L 1 " ENTIRE AGREEMENT"}. This
Agreement constitutes and expresses the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings, whether express or implied or
oral or written. If there is any conflict between the terms hereof and the
terms of any other documents executed in connection with the Note Agreement, the
terms of such documents shall be read together so as to provide the Senior Debt
Holders with the broadest possible range of rights and remedies.
{PRIVATE }NOTICES{TC \L 1 " NOTICES"}. All notices, requests,
demands and other communications required or permitted under this Agreement or
by law shall be in writing and shall be deemed to have been duly given, made and
received only when delivered against receipt or actually received by the noticed
party at the address set forth on the signature pages hereof. Any addressee may
change the address to which communications are to be sent by giving notice of
such change in accordance with the provisions of this Section 15.
{PRIVATE }EXPENSES{TC \L 1 " EXPENSES"}. Borrower agrees to pay,
upon demand, to the Collateral Agent and the Senior Debt Holders the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
their respective counsel, which the Collateral Agent or the Senior Debt Holders
may incur in connection with the exercise or enforcement of any of their rights
or interests hereunder.
{PRIVATE } NO WAIVER{TC \L 1 " NO WAIVER"}. No course of dealing
by the Collateral Agent or any holder of Senior Debt, nor any failure on the
part of the Collateral Agent or any Senior Debt Holder to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law. No Senior Debt Holder shall be prejudiced in its right to enforce
subordination of the Subordinated Debt by any act or failure to act by Borrower,
Subordinated Creditor or anyone in custody of Borrower's assets or property.
{PRIVATE } VALIDITY OF SUBORDINATED DEBT AND SENIOR ▇▇▇▇{▇▇ \▇ ▇ "
VALIDITY OF SUBORDINATED DEBT AND SENIOR DEBT"}.
The provisions of this Agreement subordinating the Subordinated
Debt are solely for the purpose of defining the relative rights of the Senior
Debt Holders and Subordinated Creditor and shall not impair, as between
Subordinated Creditor and Borrower, the obligation of Borrower, which is
unconditional and absolute, to pay the Subordinated Debt in accordance with its
terms, nor shall any such provisions, except as otherwise set forth in Section
2b or elsewhere in this Agreement, prevent Subordinated Creditor from exercising
all remedies otherwise permitted by applicable law or under any instrument or
agreement evidencing the Subordinated Debt upon default thereunder, subject to
the rights of the Senior Debt Holders hereunder to receive cash, property or
securities or any other Distribution of Assets otherwise payable or deliverable
to Subordinated Creditor until the Senior Debt is paid in full.
This Agreement is effective notwithstanding any defect in the
validity or enforceability of any instrument or document evidencing the Senior
Debt.
{PRIVATE }TERMINATION{TC \L 1 " TERMINATION"}. This Agreement is a
continuing agreement and shall remain in full force and effect until ninety-one
(91) days after payment in full of all Senior Debt. Neither the bankruptcy or
dissolution of Subordinated Creditor shall effect a termination hereof. Subject
to the limitation set forth in Section 7(i), any Senior Debt Holder may, without
notice to Subordinated Creditor, extend or continue credit and make other
financial accommodations to or for the account of Borrower in reliance upon this
Agreement.
{PRIVATE }SUCCESSORS{TC \L 1 " SUCCESSORS"}. Each of the
provisions hereof shall be binding upon Subordinated Creditor and Subordinated
Creditor's legal representatives, successors and assigns and shall inure to the
benefit of the Senior Debt Holders, the Collateral Agent and their respective
successors and assigns. Without limiting the generality of the foregoing, any
Senior Debt Holder may assign or otherwise transfer the Senior Notes to any
other person or entity in accordance with the Note Agreement, and such other
person or entity shall thereupon become vested with all the rights in respect
thereof granted to the Senior Debt Holders herein or otherwise.
{PRIVATE } COUNTERPARTS{TC \L 1 " COUNTERPARTS"}. This Agreement may
be executed in one or more counterparts, and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
{PRIVATE }DUTIES OF SENIOR DEBT HOLDERS LIMITED{TC \L 1 " DUTIES OF
SENIOR DEBT HOLDERS LIMITED"}. The rights granted to the Collateral Agent and
Senior Debt Holders in this Agreement are solely for their protection and
nothing herein contained imposes on any Senior Debt Holder any duties with
respect to any property either of Borrower or of Subordinated Creditor
heretofore or hereafter received by any Senior Debt Holder. No Senior Debt
Holder has any duty to preserve rights against prior parties on any instrument
or chattel paper received from Borrower or Subordinated Creditor as collateral
security for the Senior Debt or any portion thereof.
{PRIVATE }ADDITIONAL DOCUMENTATION{TC \L 1 "ADDITIONAL
DOCUMENTATION"}. Borrower and Subordinated Creditor shall execute and deliver
to the Collateral Agent and any Senior Debt Holder such further instruments and
shall take such further action as the Collateral Agent or any Senior Debt Holder
may at any time reasonably request in order to carry out the provisions and
intent of this Agreement.
{PRIVATE } SEVERABILITY{TC \L 1 " SEVERABILITY"}. The provisions of
this Agreement are independent of and severable from each other. If any
provision hereof shall for any reason be held invalid or unenforceable, it is
the intent of the parties that such invalidity or unenforceability shall not
affect the validity or enforceability of any other provision hereof, and that
this Agreement shall be construed as if such invalid or unenforceable provision
had never been contained herein.
{PRIVATE }WAIVER OF JURY TRIAL{TC \L 1 " WAIVER OF JURY TRIAL"}.
SUBORDINATED CREDITOR, BORROWER AND EACH SENIOR DEBT HOLDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation, contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Subordinated Creditor, Borrower and each
Senior Debt Holder each acknowledges that this waiver is a material inducement
to enter into a business relationship, that each has already relied on this
waiver in entering into this Agreement and that each will continue to rely on
the waiver in related future dealings. Subordinated Creditor, Borrower and each
Senior Debt Holder each further warrant and represent that each has reviewed
this waiver with legal counsel, and that each knowingly and voluntarily waives
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
{PRIVATE }GOVERNING LAW{TC \L 1 " GOVERNING LAW"}. It is expressly
agreed that this Agreement and the rights and obligations and all other aspects
hereof shall be deemed to be made under, shall be governed by, and shall be
construed and enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, Subordinated Creditor and Borrower each has caused
this Agreement to be duly executed and delivered for the benefit of the Senior
Debt Holders by its officer thereunto duly authorized as of the date first above
written.
SNAKE RIVER SUGAR COMPANY
By: __________________________
Name: ________________________
Title: _______________________
Notice Address:
Snake River Sugar Company
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VALHI, INC.
By: __________________________
Name: ________________________
Title: _______________________
Notice Address:
Valhi, Inc.
Three Lincoln Centre
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Accepted this _____ day of
May, 1997:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
Address:
c/o Prudential Capital Group - Corporate,
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Accepted this _____ day of
May, 1997:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA Investments, Inc.
By:
Name:
Title:
Address:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
LIFE INSURANCE COMPANY OF NORTH AMERICA
By CIGNA Investments, Inc.
By:
Name:
Title:
Address:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
Accepted this _____ day of
May, 1997:
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By:
Name:
Title:
Address:
The Minnesota Mutual Life Insurance Company
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Attention: MIMLIC Asset Management Company
Accepted this _____ day of
May, 1997:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, as Collateral Agent
By:
Name:
Title:
Address:
First Security Bank, National Association
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▇▇▇▇▇▇▇▇▇ Trust Department
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Accepted this _____ day of
May, 1997:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
Address:
c/o Prudential Capital Group - Corporate,
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