DEBT SUBORDINATION AGREEMENT
To: People's Bank
Bridgeport Center
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000
Gentlemen:
The undersigned, Xxxxx Xxxxxxx having an address of (herein called
"Subordinating Creditor"), is or in the future may be owed money by The
Millbrook Press Inc. of 0 Xxx Xxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000
(herein called "Obligor"). Subordinating Creditor understands that Obligor has
requested you to extend credit to Obligor, but that you are unwilling to do so
unless you first receive Subordinating Creditor's agreement as herein contained.
In order to induce you, at this time and from time to time hereafter,
at your option, to make loans or extend credit or other financial accommodations
or benefits to or for the account of Obligor or to grant such renewals or
extensions of any thereof as you may deem advisable, it is agreed as follows:
1. Subordinating Creditor and Obligor represent and
warrant to you that:
(a) At the date hereof the total Indebtedness owing by Obligor
to Subordinating Creditor is $ . "Indebtedness" as used herein shall mean
present indebtedness together with all future indebtedness of Obligor to
Subordinating Creditor which may be from time to time directly or indirectly
incurred, whether evidenced by a note or any other form of indebtedness or book
entry thereof or any extension, renewal or amendment of same and shall include
any negotiable instruments, notes, documents or other evidences of indebtedness
evidencing the same and all other debts, demands, monies, indebtedness,
liabilities and obligations owed or to become owing, all interest, principal,
costs and other charges, and all claims, rights, causes of action, judgments,
decrees or other obligations of any kind whatsoever owing from Obligor to
Subordinating Creditor, exclusive of compensation for (i) services rendered to
Obligor and (ii) expenses incurred in performing services on behalf of Obligor.
(b) The evidence of the Indebtedness, if written, at your
option, either shall be delivered to you or the face of said instruments shall
be permanently marked with the following legend:
"Subject to that certain Subordination Agreement executed by the Millbrook Press
Inc. on December 14, 1995, addressed to People's Bank."
and, after being so marked, the originals of said written instruments shall be
exhibited to you and a copy of the marked instruments delivered to you.
(c) There is no default under the Indebtedness or to
the knowledge of the undersigned under any other agreements
between Obligor and third parties.
2. Subordinating Creditor agrees with you that:
(a) The Indebtedness whether now existing or hereafter
acquired, shall be and hereby is subordinated to, and the payment thereof is
deferred until the full and final payment in cash or its equivalent of, any and
all obligations (including all interest accruing after the date of filing of a
petition by or against Obligor under any bankruptcy or insolvency statute or
code) of any nature whatsoever now due to you from Obligor or which may
hereafter be incurred and become due to you from Obligor.
(b) Subordinating Creditor will not, without you prior written
consent, assert, collect or enforce the Indebtedness or any part thereof, or
take any action to institute legal proceedings against Obligor to collect the
Indebtedness.
(c) Subordinating Creditor will hold in trust and immediately
pay to you in the same form of payment received for application upon the amount
now or hereafter owing to you by Obligor any amount Obligor pays to
Subordinating Creditor or which Subordinating Creditor receives from any source
on the principal amount of any Indebtedness.
(d) Subordinating Creditor will upon your request forthwith
assign, deliver or cause to be delivered to you any collateral for the
Indebtedness now held by Subordinating Creditor or anyone on its behalf, or in
the future received by it or anyone on its behalf.
(e) Subordinating Creditor shall not, without your prior
written consent, commence, prosecute or participate in any administrative, legal
or equitable action against Obligor or in any administrative, legal or equitable
action that might adversely affect your interest, rights or liens or the
interest or rights of Obligor.
3. If Subordinating Creditor, in violation of this agreement,
shall commence, prosecute or participate in any suit,
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action or proceeding against Obligor, you or Obligor may interpose as a defense
or plea the making of this agreement.
4. Obligor shall not, without your prior written consent, other
than as provided for herein, pay to Subordinating Creditor any sum on account of
the Indebtedness or execute or deliver any negotiable instruments as evidence of
the Indebtedness or any part thereof.
5. You may grant extensions of the time of payment or performance
to and make compromises, including releases of collateral, and settlements with
Obligor and all other persons without the consent of Obligor or Subordinating
Creditor and without affecting the agreements of Subordinating Creditor or
Obligor hereunder.
6. If, at any time hereafter, you shall, in your own judgment
determine to discontinue the extension of credit to Obligor, you may do so. This
Agreement shall continue in full force and effect until Obligor shall have
satisfied all obligations and you shall have been paid in full on all of the
Indebtedness.
7. This Agreement shall be binding upon the heirs,
administrators, personal representatives, successors and assigns of
Subordinating Creditor and Obligor, and shall inure to the benefit of you and
your successors and assigns.
8. This Agreement and the obligations which it secures and all
rights and liabilities of the parties shall be governed as to validity,
interpretations, enforcement and effect by the laws of Connecticut.
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IN WITNESS WHEREOF, Subordinating Creditor and Obligor have severally
executed this Agreement on December 14, 1995.
Obligor:
The Millbrook Press Inc.
By--------------------------------
Its Vice President
Subordinating Creditor (Debtor):
Xxxxx Xxxxxxx
----------------------------------
Accepted by:
Secured Party:
People's Bank
By-------------------------
Its Vice President
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