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EXHIBIT 10-8
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INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT is entered into and is effective
as of December 15, 2000 by and among:
HIGH FALLS BREING COMPANY, LLC, a New York limited liability company
with an address of ▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Borrower"),
MANUFACTURERS AND TRADERS TRUST COMPANY, New York banking corporation
with an address of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Senior Creditor"),
▇▇▇▇▇▇ CAPITAL PARTNERS, L.P., a New York limited partnership, having
an address of ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Subordinated Creditor"), and
THE GENESEE BREWING COMPANY, INC., a New York corporation having an
address of ▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Seller").
As of this date, Borrower has requested that the Creditors
each provide financial accommodations and/or credit to Borrower. Borrower and
the Creditors each represent and acknowledge that they will benefit as a result
of the proposed transactions and acknowledges receipt of valuable consideration
for entering into this Agreement.
The Borrower and the Creditors agree as follows:
1. Definitions. The following words shall have the following meanings
when used in this Agreement. All reference to dollar amounts shall mean amounts
in lawful money of the United States of America.
"Agreement" shall mean this Intercreditor Agreement together
with all exhibits and schedules attached to this Agreement from time to time, if
any, and as amended from time to time.
"Alternative Financing" shall have the same meaning as it is
given in the Revolving Credit and Term Loan Agreement between the Borrower and
the Senior Creditor as in effect on the date hereof.
"Boston Beer Agreement" shall mean the Indemnification
Agreement between Seller and Borrower pursuant to which the parties have agreed
to certain
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indemnification terms in connection with obligations and liabilities under an
Amended and Restated Agreement dated as of April 30, 1997 between Seller and
Boston Brewing Company, Inc. d/b/a/ The Boston Beer Company, a Massachusetts
corporation, for itself and as the sole general partner of Boston Beer Company
Limited Partnership, a Massachusetts limited partnership (which agreement has
been assigned by Seller to Borrower on even date herewith) (the Production
Agreement).
"Boston Beer Collateral" shall mean any and all bottling
lines, equipment, and capital assets of any kind that are transferred at any
time to Borrower pursuant to the Production Agreement for the consideration paid
by Seller therefor, and in which Borrower grants Seller a Security Interest to
secure the Boston Beer Note, and all additions and accessions thereto and
replacements therefor and the proceeds thereof.
"Boston Beer Deficiency" shall mean any obligations that
remain unpaid with respect to the Boston Beer Note after an Event of Default
under the same and application to the payment thereof of all proceeds of
disposition of the Boston Beer Collateral.
"Boston Beer Note" shall mean a Promissory Note, if any, that
after the date hereof may be executed and delivered by Borrower to Seller
pursuant to the Boston Beer Agreement by way of reimbursement for the purchase
price of the Boston Beer Collateral, or such other instrument evidencing the
obligation of Buyer to Seller in respect thereof.
"Business Day" shall mean any day that commercial banks settle
transactions in the State of New York.
"Credit Agreements" shall mean, collectively, the Senior
Credit Agreements, the Subordinated Credit Agreements, the Seller Senior Credit
Agreements, and the Seller Junior Credit Agreements.
"Creditors" shall mean, collectively, the Senior Creditor, the
Subordinated Creditor, and the Seller, each as defined in the Preamble to this
Agreement.
"Event of Default" shall mean any event that constitutes an
"Event of Default" under the respective Credit Agreements.
"Investor Note(s)" shall mean the Investor Subordinated
Note(s) dated on even date herewith made by the Borrower in favor of various
investors as contemplated by the Offering Summary Statement dated September 5,
2000 and the Rescission Offer dated December 8, 2000 made by the Borrower.
"Mortgage" shall mean the Mortgage delivered on even date
herewith by Borrower to Seller covering Borrower's real estate located at ▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and the improvements thereon, which
secures the Second Seller
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Bridge Note of even date herewith issued by Borrower to Seller in the original
principal amount of $3,000,000.
"▇▇▇▇▇▇ Equipment" shall mean equipment more particularly
described on Schedule A attached to and made a part of this Agreement as well as
▇▇▇▇▇▇ equipment acquired by Borrower after the date hereof.
"Security Interest" shall mean and include without limitation
any type of collateral security, whether in the form of a security interest,
lien, charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust receipt,
lien or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created by
law, contract or otherwise.
"Seller" shall mean the Seller defined in the Preamble to this
Agreement, and its successors and assigns.
"Seller Junior Credit Agreements" shall mean the $4,500,000
Subordinated Promissory Note of even date herewith issued by Borrower to Seller,
evidencing the $4,500,000 loan given by Borrower in favor of Seller and all
related collateral and other documents and agreements, as the same may be
amended, modified, extended, or replaced from time to time.
"Seller Junior Indebtedness" shall mean and include without
limitation all present and future indebtedness, obligations, liabilities,
claims, rights and demands owing from Borrower to the Seller except the Seller
Senior Indebtedness and the Boston Beer Note, including without limitation
obligations of the Borrower to the Seller arising under the Seller Junior Credit
Agreements.
"Seller Senior Credit Agreements" shall mean (i) the First
Seller Bridge Note of even date herewith issued by Borrower to the Seller
evidencing a $3,500,000 loan by Seller to the Borrower, (ii) the Second Seller
Bridge Note of even date herewith issued by Borrower to the Seller evidencing a
$3,000,000 loan by Seller to the Borrower, and (iii) all related collateral and
other documents and agreements, as the same may be amended, modified, extended,
or replaced from time to time.
"Seller Senior Indebtedness" shall mean all present and future
indebtedness, obligations, liabilities, claims, rights and demands owing from
Borrower to the Seller arising under the Seller Senior Credit Agreements, as
well as indebtedness to any successor or assign of the Seller that replaces such
original Seller Senior Indebtedness provided that the principal amount of such
replacement Seller Senior Indebtedness, at the time incurred, shall not exceed
the Seller Senior Indebtedness and the Boston Beer Note outstanding on the date
of this Agreement.
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"Seller Standstill Period" shall mean the Seller Standstill
Period relating to the Seller Subordinated Indebtedness and the Boston Beer
Deficiency as described in Section 11 of this Agreement.
"Senior Credit Agreement" shall mean the Revolving Credit and
Term Loan Agreement between the Borrower and the Senior Creditor, dated of even
date herewith, and all related collateral and other documents and agreements, as
the same may be amended, modified, extended, or replaced from time to time.
"Senior Creditor" shall mean the Senior Creditor defined in
the Preamble to this Agreement. Senior Creditor shall also mean any successors
or assign with respect to the Senior Indebtedness as described in the definition
of Senior Indebtedness.
"Senior Indebtedness" shall mean all indebtedness,
obligations, liabilities, claims, rights, and demands committed or outstanding
under the Senior Credit Agreement as it exists on the date hereof ("Original
Senior Indebtedness") and any additional indebtedness of Borrower to Senior
Creditor or any indebtedness that replaces such Original Senior Indebtedness
provided that such additional indebtedness when added to the Original Senior
Indebtedness, or replacement Indebtedness, in each case when aggregated with the
Sellers Senior Indebtedness, does not exceed three (3) times Borrower's EBITDA
(as defined in the Senior Credit Agreement as it exists on the date hereof),
calculated according to generally accepted accounting principles as shown in
Borrower's most recent audited financial statement for the 12-months then ended
provided to the Creditors (or during 2001 only, three (3) times Borrower's
projected EBITDA for that year.
"Standstill Period" shall mean collectively, or individually
as applicable, the Seller Standstill Period and the Subordinated Creditor
Standstill Period as described in Section 11 of this Agreement.
"Subordinated Credit Agreements" shall mean the Subordinated
Note and the Note and Warrant Purchase Agreement between the Borrower and the
Subordinated Creditor, each dated on even date herewith, and all related
collateral and other documents and agreements, as the same may be amended,
modified, extended, or replaced from time to time.
"Subordinated Creditor" shall mean the Subordinated Creditor
defined in the Preamble to this Agreement, and its successors and assigns.
"Subordinated Creditor Standstill Period" shall mean the
Subordinated Creditor Standstill Period as described in Section 11 of this
Agreement.
"Subordinated Indebtedness" shall mean and include without
limitation all present and future indebtedness, obligations, liabilities,
claims, rights and demands owing from Borrower to the Subordinated Creditor
including without limitation obligations of the Borrower to the Subordinated
Creditor arising under the Subordinated Credit Agreements as they exist on the
date hereof; provided, however, that when Subordinated Indebtedness
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is used to refer to the rights of the Subordinated Creditor relative to the
Seller Junior Indebtedness, it shall not include the Subordinated Creditor's
rights with respect to warrants or any put rights or other monetary obligations
with respect thereto or any equity securities issued or to be issued thereunder.
2. Subordination of Seller Junior Indebtedness and Subordinated
Indebtedness. As provided for in this Agreement:
(a) all Seller Junior Indebtedness is junior and shall be
subordinated in all respects to the Senior Indebtedness, the
Seller Senior Indebtedness, indebtedness under the Boston Beer
Note, and the Subordinated Indebtedness, and
(b) all Subordinated Indebtedness is junior and shall be
subordinated in all respects to the Senior Indebtedness, the
Seller Senior Indebtedness, and indebtedness under the Boston
Beer Note.
3. Relationship of Senior Indebtedness and Seller Senior Indebtedness.
(a) Borrower has on the date hereof delivered a Security Interest to
Senior Creditor covering all assets of Borrower (other than its real estate and
the improvements thereon) and has delivered a Security Interest to Seller
covering all of the assets of Borrower. Seller expressly acknowledges and agrees
that Seller's Security Interest, other than the Mortgage and its Security
Interest in the Boston Beer Collateral, is and all rights with respect thereto,
are hereby subordinate and subject in all respects to any Security Interest held
by Senior Creditor irrespective of the order of filing any financing statements
or otherwise. On the date hereof Borrower has delivered the Mortgage to Seller,
and on or after the date hereof Borrower may deliver the Boston Beer Note and
the Boston Beer Collateral to Seller. Senior Creditor acknowledges and agrees
that the Seller's rights with respect to the Mortgage (including without
limitation proceeds from enforcement) as they relate to the Seller Senior
Indebtedness (but not the Seller Junior Indebtedness or indebtedness under the
Boston Beer Note), and the Seller's rights with respect to the Boston Beer
Collateral (including without limitation proceeds from enforcement) as they
relate to indebtedness under the Boston Beer Note, each are senior to and shall
not be subordinate in any respects to any Security Interest held by Senior
Creditor.
(b) Borrower will not make and Seller will not accept, at any time
while any Senior Indebtedness is owing (i) any payment upon any Seller Senior
Indebtedness, (ii) any payment upon the Boston Beer Note, (iii) any advance,
transfer or assignment of assets to Seller in any form whatsoever that would
reduce at any time or in any way the amount of Seller Senior Indebtedness or the
Boston Beer Note, or (iv) any transfer of any assets as security for the Seller
Senior Indebtedness or the Boston Beer Note, except in each case upon Senior
Creditor's prior written consent. Notwithstanding anything to the contrary
contained herein, (i) Seller may receive proceeds of the Mortgage, (ii) Seller
may receive the Security Interest described in Section 3a hereof and the
proceeds thereof, and (iii) Borrower may make and Seller may receive regularly
scheduled payments to Seller under
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the Seller Senior Credit Agreements and the Boston Beer Note. In no event,
however, shall Borrower make or Seller accept (i) prepayments on the Seller
Senior Indebtedness except for (a) prepayments from the proceeds of Alternative
Financing, (b) subject to Section 3(d) hereof, prepayments following
acceleration of maturity due to a payment default by Borrower, or (c) prepayment
following acceleration of maturity at least 120 days after any other Event of
Default, or (ii) prepayments on the Boston Beer Note other than by reason of
acceleration of maturity and liquidation of the Boston Beer Collateral.
(c) Through and including September 30, 2001, any waiver granted by the
Senior Creditor of any Event of Default with respect to the Senior Indebtedness
shall also act as a waiver of any like Event of Default with respect to the
Seller Senior Indebtedness and the Boston Beer Note, if applicable.
(d) Through and including September 30, 2001, Seller agrees that it
will not accelerate any Seller Senior Indebtedness or the Boston Beer Note, if
applicable, unless Senior Creditor either has accelerated the Senior
Indebtedness or has consented to acceleration of the Seller Senior Indebtedness.
(e) If this Agreement requires that any payment be held in trust for
and/or paid over to Senior Creditor with respect to the Senior Indebtedness and
Seller with respect to the Seller Senior Indebtedness, as between Senior
Creditor and Seller the Senior Creditor shall have a priority right to receive
such payment for application to the Senior Indebtedness over the rights of
Seller to receive such payment for application to the Seller Senior
Indebtedness.
4. Miscellaneous Collateral Issues/Preferential Payments and the Like.
(a) In connection with the closing of any Alternative Financing, Senior
Creditor, Subordinated Creditor, and Seller each agree to release their
respective Security Interests in the ▇▇▇▇▇▇ Equipment provided the proceeds
thereof are applied to the Seller Senior Indebtedness.
(b) Seller, as holder of the Mortgage, has entered into a Mortgagee
Waiver on even date herewith in favor of Senior Creditor and Subordinated
Creditor (as it may be amended, restated, or modified from time to time, the
"Mortgagee Waiver"). The Mortgagee Waiver is intended to be supplemental to any
rights granted and obligations imposed under this Agreement.
(c) In the event that any of the Creditors (the "Disgorging Creditor"),
as a result of the assertion of any claim for the return of moneys (including
the proceeds of any collateral) received or applied by it in partial or full
payment of indebtedness to such Disgorging Creditor (including without
limitation all claims based upon allegations that moneys so received by the
Disgorging Creditor constituted trust funds under the Lien Law of the State of
New York or other applicable laws, or that the payment of such moneys or the
giving of such collateral to the Disgorging Creditor constituted a preference or
fraudulent transfer under the Bankruptcy Code or any other applicable statute),
is required
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to disgorge such moneys, any other Creditor (the "Receiving Creditor") that has
received any moneys that it would not have been entitled to receive had the
disgorged payment not been applied in the first instance to indebtedness held by
the Disgorging Creditor, then the Receiving Creditor also shall disgorge the
moneys to which it would not have been entitled to be paid to other Creditors in
the order in which such moneys would have been applied but for the payment to
the Disgorging Creditor.
5. Senior Creditor as Collateral Agent. The parties acknowledge that
each of the parties' Security Interests covers certain motor vehicles and that
perfection of the interests therein requires notation of such interests on the
certificates of title to such vehicles. The parties also acknowledge that the
New York Department of Motor Vehicles will not make a notation of multiple lien
holders on such certificates of title. The parties therefore agree that the
Senior Creditor, acting for itself and as collateral agent for the Seller and
the Subordinated Creditor, shall have its interest noted on such certificates of
title, and may freely and in its sole discretion add and release interests on
such titles on existing and additional vehicles from time to time; provided,
however, that if Senior Creditor intends to release its interest on vehicles in
which the Borrower will retain ownership, Senior Creditor will make reasonable
efforts to notify Subordinated Creditor and Seller of such intention reasonably
in advance of the intended release date so that either of them, acting for
itself and as agent for the other, may take appropriate steps to perfect their
interests therein; provided, however, that Senior Creditor shall have no
liability for any failure to make any such notification. To the extent that the
Senior Creditor realizes proceeds from any such vehicles, such proceeds shall be
applied in accordance with the priorities set forth elsewhere in this Agreement.
With respect to this Section 5, the Senior Creditor (a) shall not be
subject to any fiduciary or other implied duties, regardless of whether an Event
of Default has occurred, (b) shall not have any duty to take any discretionary
action or exercise any discretionary powers, and (c) except as expressly
provided herein shall not have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to the motor vehicles or the
Borrower that is communicated to or obtained by the Senior Creditor. The Senior
Creditor shall not be liable in any manner for any action taken or not taken by
it under this Section 5.
6. Payment With Respect To Seller Junior Indebtedness and Subordinated
Indebtedness. Except as provided below, Borrower will not make and neither
Seller nor Subordinated Creditor will accept, at any time while any Senior
Indebtedness and/or Seller Senior Indebtedness is owing (i) any payment upon any
Seller Junior Indebtedness, Boston Beer Deficiency, or Subordinated
Indebtedness, (ii) any advance, transfer or assignment of assets to Seller or
Subordinated Creditor in any form whatsoever that would reduce at any time or in
any way the amount of Seller Junior Indebtedness, Boston Beer Deficiency, or
Subordinated Indebtedness, (iii) any transfer of any assets as security for the
Seller Junior Indebtedness, Boston Beer Deficiency, or the Subordinated
Indebtedness, except upon Senior Creditor's and Seller's prior written consent.
Notwithstanding the foregoing:
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(a) Borrower may on the date hereof deliver a Security Interest to
Subordinated Creditor covering all assets of Borrower (other
than its real estate and the improvements thereon) which
Security Interest and the rights thereunder are hereby
expressly agreed to be subordinate and subject in all respects
to any Security Interest held by Senior Creditor and held by
Seller but limited to those held by Seller to secure Seller
Senior Indebtedness, irrespective of the order of filing any
financing statements or otherwise,
(b) Borrower may make regularly scheduled payments (but not
prepayments or payments due to the acceleration of maturity)
to Subordinated Creditor under the Subordinated Credit
Agreements and regularly scheduled payments (but not
prepayments or payments due to the acceleration of maturity)
to the Seller under the Seller Junior Credit Agreements,
(c) Subordinated Creditor may receive the proceeds of life
insurance policies assigned to Subordinated Creditor covering
the lives of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the
"Assignment of Life Insurance"), and
(d) Borrower may on the date hereof deliver a Security Interest to
Seller covering all assets of Borrower (other than its real
estate and the improvements thereon) which Security Interest
and the rights thereunder are hereby expressly agreed to be
subordinate and subject in all respects to any Security
Interest held by Senior Creditor, any Security Interest held
by Seller to secure Seller Senior Indebtedness, and any
Security Interest held by Subordinated Creditor, in each case
irrespective of the order of filing any financing statements
or otherwise;
provided, (i) no direct or indirect payment by or on behalf of the Borrower of
Seller Junior Indebtedness or Subordinated Indebtedness or any Boston Beer
Deficiency, whether pursuant to the terms of the Seller Junior Credit
Agreements, the Boston Beer Note, or the Subordinated Credit Agreements, upon
acceleration or otherwise, shall be made (except from proceeds of the Assignment
of Life Insurance) if at the time of such payment there exists an Event of
Default under the Senior Credit Agreements and/or the Seller Senior Credit
Agreements and such Event of Default shall not have been cured or waived by the
Senior Creditor or Seller, as the case may be, in writing, and (ii) no direct or
indirect payment by or on behalf of the Borrower of Seller Junior Indebtedness
or any Boston Beer Deficiency, whether pursuant to the terms of the Seller
Junior Credit Agreements or the Boston Beer Note, upon acceleration or
otherwise, shall be made if at the time of such payment there exists an Event of
Default under the Subordinated Credit Agreements and such Event of Default shall
not have been cured or waived by the Subordinated Creditor in writing. Upon the
occurrence of such cure or waiver, payment of scheduled payments (including past
due scheduled payments) with respect to the Seller Junior Indebtedness, the
Subordinated Indebtedness, and the Boston Beer Deficiency as the case may be,
may be resumed. This section is not intended to preclude Seller or Subordinated
Creditor from exercising their respective rights and remedies, subject to the
terms of Section 11 of this Agreement, but to require that any payments or
proceeds received other than as permitted
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by this Section 6 shall be held in trust for Senior Creditor and Seller and
applied to the Senior Indebtedness and Seller Senior Indebtedness, respectively,
or in the case of an Event of Default under the Subordinated Credit Agreement
absent a requirement that the payment be held in trust for the Senior Creditor
or the Seller with respect to the Seller Senior Indebtedness, held in trust for
the Subordinated Creditor and applied to the Subordinated Indebtedness. Without
limiting its discretion in the administration of the Senior Credit Agreement,
Senior Creditor agrees and undertakes to act in good faith in accordance with
prudent commercial lending practices with respect to any Standstill Periods, but
in no event shall Senior Creditor have any liability to Seller or Subordinated
Creditor in respect of such agreement beyond what it would have in the absence
thereof.
7. Insolvency.
(a) In the event of any distribution, division, or application, whether
partial or complete, voluntary or involuntary, by operation of law or otherwise,
of all or any part of Borrower's assets, or the proceeds of Borrower's assets,
in whatever form, to creditors of Borrower or upon any indebtedness of Borrower,
whether by reason of liquidation, dissolution or other winding-up of Borrower,
or by reasons of any execution sale, receivership, insolvency, or bankruptcy
proceeding, assignment for the benefit of creditors, proceedings for
reorganization, or readjustment of Borrower or Borrower's properties, then and
in such event, (i) the Senior Indebtedness shall be paid in full before any
payment is made upon the Seller Senior Indebtedness (other than from the
proceeds of the Mortgage or, to the extent of indebtedness under the Boston Beer
Note, the Boston Beer Collateral), (ii) the Senior Indebtedness and the Seller
Senior Indebtedness shall be paid in full before any payment is made upon the
Subordinated Indebtedness (other than from the proceeds of the Assignment of
Life Insurance) or the Seller Junior Indebtedness, (iii) the Subordinated
Indebtedness shall be paid in full before any payment is made upon the Seller
Junior Indebtedness, (iv) the indebtedness under the Boston Beer Note (but not
any Boston Beer Deficiency) shall be paid from the proceeds of the Boston Beer
Collateral before any payment is made from the Boston Beer Collateral to the
Senior Creditor, the Seller with respect to the Seller Senior Indebtedness, the
Seller with respect to the Seller Junior Indebtedness, or the Subordinated
Indebtedness, and (v) all payments and distributions, of any kind or character
and whether in cash, property, or securities, which shall be payable or
deliverable upon or in respect of the Seller Junior Indebtedness, the Boston
Beer Deficiency, or the Subordinated Indebtedness shall be paid or delivered
directly first to Senior Creditor (except for payments or distributions related
to the Mortgage) and secondly to Seller as provided above, for application in
payment of the amounts then due on the Senior Indebtedness and Seller Senior
Indebtedness until the Senior Indebtedness and Seller Senior Indebtedness shall
have been paid in full, but not including payments of proceeds of the Assignment
of Life Insurance, and (vi) after payment of the Senior Indebtedness and Seller
Senior Indebtedness in full, all payments and distributions, of any kind or
character and whether in cash, property, or securities, which shall be payable
or deliverable upon or in respect of the Seller Junior Indebtedness or the
Boston Beer Deficiency shall be paid or delivered directly to Subordinated
Creditor for application in payment of the amounts then due on the Subordinated
Indebtedness until the Subordinated Indebtedness shall have been paid in full.
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(b) The Senior Creditor is hereby authorized but is not obligated to
file an appropriate claim for and on behalf of the Seller on account of the
Seller Junior Indebtedness, and for and on behalf of the Subordinated Creditor
on account of the Subordinated Indebtedness, if Seller or Subordinated Creditor
respectively does not file, and there is not otherwise filed on behalf of the
Seller or Subordinated Creditor, a proper claim or proof of claim in the form
required in any dissolution, liquidation or reorganization proceeding prior to
thirty (30) days before the expiration of the time to file such claim or claims.
In the event that none of Senior Creditor, Subordinated Creditor, or Seller as
holder of the Seller Junior Indebtedness, has filed and there is not otherwise
filed on behalf of Seller as holder of the Seller Junior Indebtedness such a
proper claim or proof of claim prior to twenty (20) days before expiration of
the time to file such claims with respect to the Seller Junior Indebtedness,
Seller as holder of the Seller Senior Indebtedness is hereby authorized but is
not obligated to file an appropriate claim for and on behalf of the Seller as
holder of the Seller Junior Indebtedness. In the event that neither Senior
Creditor nor Subordinated Creditor has filed and there is not otherwise filed on
behalf of Subordinated Creditor such a proper claim or proof of claim prior to
twenty (20) days before expiration of the time to file such claims with respect
to the Subordinated Indebtedness, Seller as holder of the Seller Senior
Indebtedness is hereby authorized but is not obligated to file an appropriate
claim for and on behalf of the Subordinated Creditor with respect to the
Subordinated Indebtedness. In connection with each above authorization, the
Seller and the Subordinated Creditor, as the case may be, hereby respectively
irrevocably authorizes, empowers, and appoints the Senior Creditor and as
applicable the Seller as the Seller's and/or the Subordinated Creditor's agent
and attorney-in-fact to (i) execute, verify, deliver and file such proofs of
claim and to receive, (ii) collect any and all dividends, payments, or other
disbursements made thereon in whatever form the same may be paid or issued, and
(iii) to apply the same first on account of the Senior Indebtedness and then on
account of the Seller Senior Indebtedness, provided, however, that proceeds of
the Boston Beer Collateral shall be applied first on account of the indebtedness
under the Boston Beer Note, and that proceeds of the Mortgage shall be applied
first on account of the Seller Senior Indebtedness.
(c) The Subordinated Creditor is hereby authorized but not obligated to
file an appropriate claim for and on behalf of the Seller on account of the
Seller Junior Indebtedness if Seller and/or Senior Creditor does not file, and
there is not otherwise filed on behalf of the Seller, a proper claim or proof of
claim in the form required in any dissolution, liquidation or reorganization
proceeding prior to ten (10) days before the expiration of the time to file such
claim or claims. In connection with such authorization, the Seller hereby
irrevocably authorizes, empowers, and appoints the Subordinated Creditor the
Seller's agent and attorney-in-fact to execute, verify, deliver and file such
proofs of claim and to receive and collect any and all dividends, payments, or
other disbursements made thereon in whatever form the same may be paid or issued
and to apply the same on account of the Subordinated Indebtedness after payment
in full of the Senior Indebtedness and Seller Senior Indebtedness.
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(d) Should any payment, distribution, security, or proceeds thereof be
received by Seller and/or the Subordinated Creditor at any time on the Seller
Junior Indebtedness, the Boston Beer Deficiency, or the Subordinated
Indebtedness, as applicable, contrary to the terms of this Agreement, Seller
and/or Subordinated Creditor immediately will deliver the same first to Senior
Creditor with respect to the Senior Indebtedness, and after payment in full of
the Senior Indebtedness to Seller with respect to the Seller Senior
Indebtedness, and after payment in full of the Senior Indebtedness and Seller
Senior Indebtedness, to Subordinated Creditor, in precisely the form received
(except for the endorsement or assignment of Seller and/or Subordinated Creditor
where necessary), for application on or to secure the Senior Indebtedness,
Seller Senior Indebtedness, or Subordinated Indebtedness in the order described
above, whether each of them as applicable is due or not due, and until so
delivered the same shall be held in trust by Seller or Subordinated Creditor as
property of Senior Creditor with respect to the Senior Indebtedness, Seller with
respect to the Seller Senior Indebtedness, and Subordinated Creditor with
respect to the Subordinated Indebtedness in the priority described herein. In
the event Seller fails to make any such endorsements or assignment Senior
Creditor or any of its officers on behalf of Senior Creditor, or after payment
in full of the Senior Indebtedness Seller with respect to the Seller Senior
Indebtedness or any of its officers on behalf of Seller, or after payment in
full of both the Senior Indebtedness and Seller Senior Indebtedness,
Subordinated Creditor or any of its officers on behalf of Subordinated Creditor,
are hereby irrevocably authorized by Seller and/or Subordinated Creditor, as the
case may be, to make the same.
8. Payments Upon Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Borrower in a liquidation or dissolution of the
Borrower or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Borrower or its property or in any assignment for the
benefit of creditors or any marshaling of the assets and liabilities of the
Borrower:
(a) Senior Creditor shall be entitled to receive payment in full
of all Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in
the applicable Senior Credit Agreements, whether or not such
interest is an allowable claim in any such proceeding) before
Seller and Subordinated Creditor shall be entitled to receive
any payment of any Seller Senior Indebtedness, Seller Junior
Indebtedness, any Boston Beer Deficiency, or Subordinated
Indebtedness except, in the case of Seller, from proceeds of
the Mortgage to the extent of the Seller Senior Indebtedness
or the Boston Beer Note to the extent of the Boston Beer
Collateral, and except in the case of Subordinated Creditor,
proceeds of Life Insurance respectively;
(b) Seller shall be entitled to receive payment in full of all
Seller Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in
the applicable Seller Senior Credit Agreements, whether or not
such interest is an allowable claim in any such proceeding),
before Seller and Subordinated Creditor shall be entitled to
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receive any payment of any Seller Junior Indebtedness or
Subordinated Indebtedness (except in the case of Subordinated
Creditor proceeds of Life Insurance) respectively;
(c) Notwithstanding anything to the contrary herein, Seller shall
be entitled to receive all proceeds from the Boston Beer
Collateral to the extent of indebtedness under the Boston Beer
Note (including interest after the commencement of any such
proceeding at the rate specified in the Boston Beer Note
whether or not such interest is an allowable claim in any such
proceeding) before Senior Creditor, Seller with respect to the
Seller Senior Indebtedness, Subordinated Creditor, or Seller
with respect to the Seller Junior Indebtedness shall be
entitled to receive any proceeds from the Boston Beer
Collateral;
(d) until all Senior Indebtedness with respect to the Senior
Credit Agreements and all Seller Senior Indebtedness with
respect to the Seller Senior Credit Agreements (as provided in
subsections (a) and (b) above) is paid in full, any
distribution to which Seller or Subordinated Creditor would be
entitled but for this paragraph (but not including in the case
of the Subordinated Creditor proceeds of the Assignment of
Life Insurance) shall be made first to the Senior Creditor
with respect to the Senior Indebtedness and, if the Senior
Indebtedness is paid in full, to the Seller with respect to
the Seller Senior Indebtedness;
(e) after payment in full of the Senior Indebtedness and Seller
Senior Indebtedness, Subordinated Creditor shall be entitled
to receive payment in full of all Subordinated Indebtedness
(including interest after the commencement of any such
proceeding at the rate specified in the applicable
Subordinated Credit Agreements, whether or not such interest
is an allowable claim in any such proceeding) before Seller
shall be entitled to receive any payment of any Seller Junior
Indebtedness or the Boston Beer Deficiency; and
(f) after payment in full of the Senior Indebtedness and Seller
Senior Indebtedness, until all Subordinated Indebtedness with
respect to the Subordinated Credit Agreements (as provided in
subsection (e) above) is paid in full, any distribution to
which Seller would be entitled with respect to the Seller
Junior Indebtedness or the Boston Beer Deficiency but for this
paragraph shall be made to the Subordinated Creditor.
9. Assignments. Senior Creditor, Seller, and Subordinated Creditor each
agree not to sell, assign, pledge or otherwise transfer the Senior Indebtedness,
Seller Senior Indebtedness, Seller Junior Indebtedness, Boston Beer Note, and
Subordinated Indebtedness respectively except subject to all the terms and
conditions of this Agreement. Any note evidencing the Senior Indebtedness,
Seller Senior Indebtedness, Seller Junior
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Indebtedness, or the Subordinated Indebtedness, and the Boston Beer Note, shall
bear the following legend or a legend substantially similar thereto:
"THIS NOTE IS SUBJECT TO A CERTAIN INTERCREDITOR AGREEMENT, DATED
DECEMBER 15, 2000 AMONG HIGH FALLS BREWING COMPANY, LLC, MANUFACTURERS
AND TRADERS TRUST COMPANY, ▇▇▇▇▇▇ CAPITAL PARTNERS, L.P., AND THE
GENESEE BREWING COMPANY, INC."
10. Seller and Subordinated Creditor Representation and Warranties.
Seller and Subordinated Creditor each represents and warrants to Senior
Creditor, and Seller represents and warrants to Subordinated Creditor, that:
(a) no representations or agreements of any kind have been made to
such party which would limit or qualify in any way the terms
of this Agreement,
(b) Senior Creditor has made no representation to the Seller or
Subordinated Creditor, and Subordinated Creditor has made no
representation to the Seller, as to the creditworthiness of
Borrower;
(c) Seller has made no representation to the Senior Creditor as to
the creditworthiness of Borrower;
(d) Seller and Subordinated Creditor each has established adequate
means of obtaining from Borrower on a continuing basis such
information regarding Borrower's financial condition as such
party deems necessary. Seller and Subordinated Creditor agree
that Senior Creditor shall have no obligation to disclose to
them, and Seller agrees that Subordinated Creditor shall have
no obligation to disclose to it, information or material
acquired by Senior Creditor or Subordinated Creditor
respectively in the course of its relationships with Borrower.
11. Standstill Period.
(a) Prior to the Seller notifying Senior Creditor and Subordinated
Creditor that an Event of Default has occurred with respect to the Seller Junior
Indebtedness or that a Boston Beer Deficiency exists, and during the Seller
Standstill Period (defined below), the Seller shall have no authority to enforce
the Seller Junior Indebtedness or the Boston Beer Deficiency by legal
proceedings or otherwise, or in any manner interfere with the Security Interests
held by Senior Creditor, Seller with respect to the Seller Senior Indebtedness,
and/or Subordinated Creditor until all of the Senior Indebtedness, Seller Senior
Indebtedness, and Subordinated Indebtedness have been paid in full.
(b) Prior to the Subordinated Creditor notifying Senior Creditor and
Seller that an Event of Default has occurred with respect to the Subordinated
Indebtedness, and during the Subordinated Creditor Standstill Period (defined
below), the Subordinated Creditor shall have no authority to enforce the
Subordinated Indebtedness by legal
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proceedings or otherwise, or in any manner interfere with the Security Interests
held by Senior Creditor with respect to the Senior Indebtedness and Seller with
respect to the Seller Senior Indebtedness until all of the Senior Indebtedness
and Seller Senior Indebtedness have been paid in full; provided however, that
Subordinated Creditor may enforce its rights to proceeds of the Assignment of
Life Insurance.
(c) The term "Subordinated Creditor Standstill Period" shall mean one
hundred eighty (180) days following the date on which the Senior Creditor has
notified the Subordinated Creditor and Seller that an Event of Default has
occurred under the Senior Credit Agreements and has requested imposition of a
standstill period. The term "Seller Standstill Period" shall mean two hundred
forty (240) days following the date on which the Senior Creditor has notified
the Subordinated Creditor and the Seller that an Event of Default has occurred
under the Senior Creditor Agreements. If, during the respective Standstill
Period, the Events of Default under the Senior Credit Agreements are cured or
waived by the Senior Creditor, the applicable Standstill Period shall cease
running, and a new Standstill Period shall commence running when the Senior
Creditor has notified the Subordinated Creditor and the Seller of the occurrence
of a new Event of Default with respect the Senior Indebtedness. The Standstill
Period shall be tolled during any period of time that there is in effect an
automatic stay under the Bankruptcy Code or an injunction or restraining order
issued by a court prohibiting the Senior Creditor, Seller, and/or the
Subordinated Creditor from exercising its remedies, until a court of competent
jurisdiction has lifted such stay, injunction, or restraint. During the
applicable Standstill Period, the Seller and/or Subordinated Creditor shall not
take any action to exercise its rights and remedies with respect to the Seller
Junior Indebtedness, the Boston Beer Deficiency, and/or Subordinated
Indebtedness respectively, provided, however, that Subordinated Creditor may
enforce its right hereunder to receive payments from the Assignment of Life
Insurance. Nothing in this Agreement shall restrict or prohibit the Seller or
the Subordinated Creditor from taking any action to declare the Borrower in
default of its obligations to the Seller or Subordinated Creditor, taking such
limited actions as may be required to prevent loss of rights due to the effect
of any statute of limitations, and/or sending notice of any Event of Default
under the Seller Junior Credit Agreements or Subordinated Credit Agreements.
12. Waivers. Each of Seller, Senior Creditor, and Subordinated Creditor
waives any right to require any of the others:
(a) to make, extend, renew, or modify any loan to Borrower or to
grant any other financial accommodations to Borrower
whatsoever;
(b) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of any indebtedness
or of any nonpayment related to any Security Interests, or
except as expressly required by this Agreement notice of any
action or nonaction or the part of Borrower or any other party
to this Agreement as the case may be, any surety, endorser, or
other guarantor in connection with any indebtedness, or in
connection with the creation of new or additional indebtedness
as the case may be;
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(c) to resort for payment or to proceed directly or at once
against any person, including Borrower;
(d) to proceed directly against or exhaust any Security Interest;
(e) to pursue any other remedy within any creditor's power; or
(f) to commit any act or omission of any kind, at any time, with
respect to any matter whatsoever.
13. Senior Creditor's and Seller's Rights. Except as otherwise
expressly provided in this Agreement, Senior Creditor and Seller may take or
omit any and all actions with respect to the Senior Indebtedness and Seller
Senior Indebtedness or any Security Interests for the Senior Indebtedness and/or
Seller Senior Indebtedness without affecting whatsoever any of Senior Creditor's
or Seller's rights under this Agreement. In particular, without limitation,
Senior Creditor and Seller (with respect to the Seller Senior Indebtedness) may,
without notice of any kind to Seller or Subordinated Creditor:
(a) make one or more additional loans to Borrower whether pursuant
to the terms of the Senior Credit Agreements or Seller Senior
Credit Agreements or otherwise;
(b) repeatedly alter, amend, modify, or otherwise change the fees,
or any part thereof, applicable under the Senior Credit
Agreements or Seller Senior Credit Agreements;
(c) repeatedly alter, compromise, renew, extend, accelerate, or
otherwise change the time for payment or other terms of the
Senior Indebtedness or Seller Senior Indebtedness or any part
thereof, including increases and decreases of the rate of
interest on the Senior Indebtedness or Seller Senior
Indebtedness, and extensions may be repeated and may be for
longer than the original loan term;
(d) take and hold Security Interests for the payment of the Senior
Indebtedness and Seller Senior Indebtedness, and exchange,
enforce, waive, and release any such Security Interests, with
or without the substitution of new collateral;
(e) release, substitute, agree not to ▇▇▇, or deal with any one or
more of Borrower's sureties, endorsers, or guarantors on any
terms or manner Senior Creditor or Seller (with respect to the
Seller Senior Indebtedness) chooses;
(f) determine how, when and what application of payments and
credits shall be made on the Senior Indebtedness and Seller
Senior Indebtedness;
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(g) apply such security and direct the order or manner of sale
thereof, as Senior Creditor and Seller (with respect to the
Seller Senior Indebtedness) in their respective discretion may
determine; and
(h) assign this Agreement in whole or in part in connection with
an assignment in whole or in part of the Senior Credit
Agreements, Seller Senior Credit Agreements, or any interest
therein; provided however, that notwithstanding anything to
the contrary contained in this Agreement, after any such
assignment the assignee shall have the rights of the Senior
Creditor only with respect to Senior Indebtedness, or the
Seller with respect to the Seller Senior Indebtedness, as the
case may be as defined herein.
14. Subordinate Creditor's Rights. Subordinate Creditor may take or
omit any and all actions with respect to the Subordinated Indebtedness or any
Security Interests for the Subordinated Indebtedness without affecting
whatsoever any of Subordinated Creditor's rights as related to those of the
Seller with respect to the Seller Junior Indebtedness or the Boston Beer
Deficiency under this Agreement. In particular, without limitation, Subordinated
Creditor may, without notice of any kind to Seller:
(a) make one or more additional loans to Borrower whether pursuant
to the terms of the Subordinated Credit Agreements or
otherwise;
(b) repeatedly alter, amend, modify, or otherwise change the fees,
or any part thereof, applicable under the Subordinated Credit
Agreements;
(c) repeatedly alter, compromise, renew, extend, accelerate, or
otherwise change the time for payment or other terms of the
Subordinated Indebtedness or any part thereof, including
increases and decreases of the rate of interest on the
Subordinated Indebtedness, and extensions may be repeated and
may be for longer than the original loan term;
(d) take and hold Security Interests for the payment of the
Subordinated Indebtedness, and exchange, enforce, waive, and
release any such Security Interests, with or without the
substitution of new collateral;
(e) release, substitute, agree not to ▇▇▇, or deal with any one or
more of Borrower's sureties, endorsers, or guarantors on any
terms or manner Subordinated Creditor chooses;
(f) determine how, when and what application of payments and
credits shall be made on the Subordinated Indebtedness;
(g) apply such security and direct the order or manner of sale
thereof, as Subordinated Creditor in its discretion may
determine; and
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(h) assign this Agreement in whole or in part in connection with
an assignment in whole or in part of the Subordinated Credit
Agreements or any interest therein.
15. Marshaling.
(a) Senior Creditor may foreclose on its Security Interests in any
manner which it in its sole discretion chooses even though a higher price might
have been realized if the Senior Creditor had proceeded to foreclose on its
Security Interests in another manner. Without in any manner limiting the
foregoing, the Seller and Subordinated Creditor agree that Senior Creditor may
exercise its remedies against the property in which it holds Security Interests
in any order that the Senior Creditor, in its sole discretion, chooses; and
Seller and Subordinated Creditor confirm that the Senior Creditor shall in no
manner be required to marshal its claims against one or more properties in which
it holds a Security Interest.
(b) Seller may foreclose on the Mortgage and its Security Interests in
the Boston Beer Collateral in any manner which it in its sole discretion chooses
even though a higher price might have been realized if the Seller had proceeded
to foreclose on its Security Interests in another manner. Without in any manner
limiting the foregoing, the Senior Creditor, Subordinated Creditor, and Seller
with respect to the Seller Junior Indebtedness and Boston Beer Deficiency agree
that Seller may exercise its remedies against the property covered by the
Mortgage and the Boston Beer Collateral in any order that the Seller, in its
sole discretion, chooses; and Senior Creditor, Seller with respect to the Seller
Junior Indebtedness and any Boston Beer Deficiency, and Subordinated Creditor
confirm that the Seller with respect to the Mortgage and the Boston Beer
Collateral shall in no manner be required to marshal its claims against one or
more properties in which it holds a Security Interest.
(c) Subject to the rights of the Senior Creditor with respect to the
Senior Creditor's Security Interests, Seller may foreclose on its Security
Interests not covered by subsection (b) of this Section with respect to the
Seller Senior Indebtedness in any manner which it in its sole discretion chooses
even though a higher price might have been realized if the Seller had proceeded
to foreclose on its Security Interests in another manner. Without in any manner
limiting the foregoing, the Seller with respect to the Seller Junior
Indebtedness and Boston Beer Deficiency, and the Subordinated Creditor, agree
that Seller with respect to the Seller Senior Indebtedness may exercise its
remedies against the property in which it holds Security Interests in any order
that the Seller, in its sole discretion, chooses; and Seller with respect to the
Seller Junior Indebtedness and any Boston Beer Deficiency, and Subordinated
Creditor confirm that the Seller with respect to the Seller Senior Indebtedness
shall in no manner be required to marshal its claims against one or more
properties in which it holds a Security Interest.
(d) Subject to the rights of Senior Creditor with respect to the Senior
Indebtedness and Seller with respect to the Seller Senior Indebtedness under
this Agreement, Subordinated Creditor may foreclose on its Security Interests in
any manner
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which it, in its sole discretion, chooses even though a higher price might have
been realized if the Subordinated Creditor had proceeded to foreclose on its
Security Interests in another manner. Without in any manner limiting the
foregoing, the Seller with respect to the Seller Junior Indebtedness and any
Boston Beer Deficiency agrees that Subordinated Creditor may exercise its
remedies against the property in which it holds Security Interests in any order
that the Subordinated Creditor, in its sole discretion, chooses; and Seller with
respect to the Seller Junior Indebtedness and any Boston Beer Deficiency
confirms that the Subordinated Creditor shall in no manner be required to
marshal its claims against one or more properties in which it holds a Security
Interest.
16. Modification of Seller Senior Indebtedness, Seller Junior
Indebtedness, and Subordinated Indebtedness. Seller and Borrower waive any right
to modify or amend the terms of the payment of interest or the repayment of
principal with respect to the Seller Senior Indebtedness, the Seller Junior
Indebtedness and the Boston Beer Note during the term of this Agreement absent
the prior written consent of Senior Creditor, Seller with respect to the Seller
Senior Indebtedness, and Subordinated Creditor. Subordinated Creditor and
Borrower waive any right to modify or amend the terms of the payment of interest
or the repayment of principal with respect to the Subordinated Indebtedness
during the term of this Agreement absent the prior written consent of Senior
Creditor and Seller with respect to the Seller Senior Indebtedness. Seller and
Borrower waive any right to modify or amend the terms of the payment of interest
or the repayment of principal with respect to the Seller Senior Indebtedness
during the term of this Agreement absent the prior written consent of Senior
Creditor.
17. Default by Borrower. If Borrower becomes insolvent or bankrupt,
this Agreement shall remain in full force and effect. In the event of a
corporate reorganization or corporate arrangement of Borrower under the
provisions of the Bankruptcy Code, as amended, this Agreement shall remain in
full force and effect and the court having jurisdiction over the reorganization
or arrangement is hereby authorized and expressly requested to preserve such
priority and subordination in approving any such plan or reorganization or
arrangement. Any payment default under the terms of the Seller Junior
Indebtedness, Seller Senior Indebtedness, Subordinated Indebtedness, or Senior
Indebtedness, or any other Event of Default under the Seller Junior Credit
Agreements, Seller Senior Credit Agreements, Subordinated Credit Agreements, or
Senior Credit Agreements which could result in an acceleration of the Seller
Junior Indebtedness, Seller Senior Indebtedness, Subordinated Indebtedness, or
Senior Indebtedness respectively also shall be an Event of Default under the
terms of each of the Seller Junior Indebtedness, Seller Senior Indebtedness,
Subordinated Indebtedness, and Senior Indebtedness.
18. Investor Notes. The Investor Notes shall be subordinated to the
Senior Indebtedness, Seller Senior Indebtedness, Subordinated Indebtedness, the
Boston Beer Note and Seller Junior Indebtedness in the manner described in such
Investor Notes. No right of the Senior Creditor, Seller with respect to the
Seller Senior Indebtedness or the Boston Beer Note, Subordinated Creditor, or
Seller with respect to the Seller Junior Indebtedness that is relative to the
Investor Notes, other than to enforce the subordination provisions as contained
therein on the date hereof, shall be exercised, amended, waived,
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compromised, or settled except by unanimous consent of the Senior Creditor,
Seller with respect to the Seller Senior Indebtedness, Subordinated Creditor, or
Seller with respect to the Seller Junior Indebtedness or any Boston Beer
Deficiency.
19. Duration and Termination. This Agreement shall remain in full force
and effect until all of the Senior Indebtedness and Seller Senior Indebtedness
have been irrevocably paid in full and the Senior Creditor's obligation to lend
under the Senior Credit Agreements has been terminated, and until all of the
Subordinated Indebtedness has been irrevocably paid in full.
20. Subrogation. After all Senior Indebtedness and Seller Senior
Indebtedness is irrevocably paid in full and until the Subordinated Indebtedness
is paid in full, Subordinated Creditor shall be subrogated to the rights of the
Senior Creditor and Seller to receive distributions applicable to the Senior
Indebtedness and Seller Senior Indebtedness to the extent that distributions
otherwise payable to Subordinated Creditor have been applied to the payment of
the Senior Indebtedness and Seller Senior Indebtedness. A distribution made
under this Agreement to the Senior Creditor on account of the Senior
Indebtedness and/or Seller on account of the Seller Senior Indebtedness which
otherwise would have been made to Subordinated Creditor is not, as between the
Subordinated Creditor and the Borrower, a payment by the Borrower on the
Subordinated Indebtedness. After irrevocable payment in full of the Senior
Indebtedness and Seller Senior Indebtedness, Subordinated Creditor shall be
entitled to receive from the Senior Creditor and/or Seller any payments or
distributions received by Senior Creditor and/or Seller in excess of the amounts
sufficient to pay all Senior Indebtedness and Seller Senior Indebtedness in
full.
After all Senior Indebtedness, Seller Senior Indebtedness, and
Subordinated Indebtedness are irrevocably paid in full and until the Seller
Junior Indebtedness and Boston Beer Deficiency are paid in full, Seller shall be
subrogated to the rights of the Senior Creditor to receive distributions
applicable to the Senior Indebtedness, the rights of Seller to receive
distributions applicable to the Seller Senior Indebtedness, and the rights of
the Subordinated Creditor to receive distributions applicable to the
Subordinated Indebtedness to the extent that distributions otherwise payable to
Seller have been applied to the payment of the Senior Indebtedness, Seller
Senior Indebtedness, and Subordinated Indebtedness. A distribution made under
this Agreement to the Senior Creditor on account of the Senior Indebtedness,
Seller on account of the Seller Senior Indebtedness, or to the Subordinated
Creditor on account of the Subordinated Indebtedness, which otherwise would have
been made to Seller is not, as between the Seller and the Borrower, a payment by
the Borrower on the Seller Junior Indebtedness or Boston Beer Deficiency. After
irrevocable payment in full of the Senior Indebtedness, Seller Senior
Indebtedness, and Subordinated Indebtedness, Seller shall be entitled to receive
from the Senior Creditor, Seller, and Subordinated Creditor any payments or
distributions received by Senior Creditor, Seller, and Subordinated Creditor in
excess of the amounts sufficient to pay all Senior Indebtedness, Seller Senior
Indebtedness, and Subordinated Indebtedness respectively in full.
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21. Rights of Setoff Against Seller Junior Indebtedness. Nothing in
this Agreement shall be deemed to prevent Borrower from exercising any right of
setoff against the Seller Junior Indebtedness as permitted by the Seller Junior
Credit Agreements.
22. Obligations of Borrower Unconditional. Subject to the subordination
provisions of this Agreement, nothing contained in this Agreement is intended to
or shall impair, as between Borrower and the Seller or the Subordinated
Creditor, the respective rights and remedies of the Seller and the Subordinated
Creditor or the obligations of Borrower, which are absolute and unconditional,
to pay to the Seller all obligations under the Seller Credit Agreements and to
pay the Subordinated Creditor all obligations under the Subordinated Credit
Agreements as and when the same shall become due and payable in accordance with
their respective terms, or is intended to or shall affect the relative rights of
the Seller and creditors of Borrower other than the Senior Creditor and
Subordinated Creditor, or is intended to or shall affect the relative rights of
the Subordinated Creditor and creditors of Borrower other than the Senior
Creditor and Seller.
23. Notice to Seller, Subordinated Creditor and Senior Creditor by
Borrower.
(a) Borrower shall give prompt written notice to the Seller,
Subordinated Creditor and Senior Creditor of any fact known to Borrower which
would prohibit the making of any payment in respect of the Seller Junior
Indebtedness or Subordinated Indebtedness, but failure to give such notice shall
not affect the subordination of the Seller Junior Indebtedness to the
Subordinated Indebtedness, Seller Senior Indebtedness, and the Senior
Indebtedness, or the subordination of the Subordinated Indebtedness to the
Senior Indebtedness and Seller Senior Indebtedness, in each case as provided in
this Agreement.
(b) Notwithstanding the provisions of this Agreement, the Subordinated
Creditor shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment in respect of the Subordinated
Indebtedness, unless and until the Subordinated Creditor shall have received
written notice thereof from the Borrower, the Senior Creditor, and/or the Seller
in respect of the Seller Senior Indebtedness. Prior to the receipt of any such
written notice, subject to the provisions of this Agreement, the Subordinated
Creditor shall be entitled in all respects to assume no such facts exist and to
receive payments otherwise permitted hereunder; provided however notice shall
not be a condition precedent to any prohibition of the making of any such
payments if such prohibition is a result of a default with respect to the
Subordinated Indebtedness.
(c) Notwithstanding the provisions of this Agreement, the Seller shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment in respect of the Seller Junior Indebtedness, unless
and until the Seller shall have received written notice thereof from the
Borrower, the Senior Creditor, and/or the Subordinated Creditor. Prior to the
receipt of any such written notice, subject to the provisions of this Agreement,
the Seller shall be entitled in all respects to assume no such facts exist and
to receive payments otherwise permitted hereunder; provided however notice shall
not be a condition precedent to any prohibition of the making of any such
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payments if such prohibition is a result of a default with respect to the Seller
Junior Indebtedness or, so long as it is held by the Seller, the Seller Senior
Indebtedness.
24. Miscellaneous Provisions.
(a) Amendments. This Agreement constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Agreement. To the extent there is any conflict between this Agreement and any
document evidencing the Seller Junior Indebtedness, the Seller Senior
Indebtedness, the Senior Indebtedness, the indebtedness under the Boston Beer
Note, or the Subordinated Indebtedness, this Agreement shall control. No
alteration of or amendment to this Agreement shall be effective unless made in
writing and signed by Senior Creditor, Borrower, Seller with respect to the
Seller Junior Indebtedness, Seller with respect to the Seller Senior
Indebtedness, Seller with respect to the Boston Beer Note, and Subordinated
Creditor.
(b) Attorney's Fees; Expenses. Borrower agree to pay upon
demand all of Senior Creditor's and Seller's (with respect to the Seller Senior
Indebtedness), and after payment in full of Senior Indebtedness and Seller
Senior Indebtedness, Subordinated Creditor's costs and expenses, including
attorneys' fees and legal expenses, incurred in connection with enforcement of
this Agreement. Costs and expenses include Senior Creditor's, Seller's (with
respect to the Seller Senior Indebtedness) and Subordinated Creditor's
attorney's fees and legal expenses whether or not there is a lawsuit, including
attorneys' fees and legal expenses for bankruptcy proceedings (and including
efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also shall pay all court
costs and such additional fees as may be directed by the court.
(c) Successors. Subject to the express terms of this Agreement
related to assignments of Senior Indebtedness and Seller Senior Indebtedness,
this Agreement shall extend to and bind the respective successors and assigns of
the parties to this Agreement. The covenants of the parties hereto respecting
subordination of the Subordinated Indebtedness in favor of Senior Indebtedness
and the Seller Senior Indebtedness shall extend to, include, and be enforceable
by any transferee or endorsee to whom Senior Creditor and/or Seller may transfer
any or all of the Senior Indebtedness and/or Seller Senior Indebtedness
respectively. The covenants of the parties hereto respecting subordination of
the Seller Junior Indebtedness and Boston Beer Deficiency in favor of Senior
Indebtedness, Seller Senior Indebtedness, and Subordinated Indebtedness shall
extend to, include, and be enforceable by any transferee or endorsee to whom
Senior Creditor and/or Seller may transfer any or all of the Senior Indebtedness
and/or Seller Senior Indebtedness respectively, and to whom Subordinated
Creditor may transfer any of all of the Subordinated Indebtedness.
(d) General Waivers. No party shall be deemed to have waived
any rights under this Agreement unless such waiver is given in writing and
signed by the party against whom such waiver is enforced. No delay or omission
on the part of any party in exercising any right shall operate as a waiver of
such right or any other right. A waiver by any party
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of any provision of this Agreement shall not prejudice or constitute a waiver of
such party's right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by any party, nor any
course of dealing between any of the parties, shall constitute a waiver of any
of such party's rights or of another party's obligations as to any further
transactions. Whenever the consent of a party is required under this Agreement,
the granting of such consent by such party in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in
all cases such further consent may be granted or withheld in the sole discretion
of such party.
(e) Severability. In the event that any provision of this
Agreement is deemed to be invalid, illegal or unenforceable by reason of the
operation of any law or by reason of the interpretation placed thereon by any
court or governmental authority, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby, and the affected provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Agreement.
(f) Notice. Any notice, demand, request, consent, or other
communication hereunder shall be in writing, shall be addressed to the
respective party shown in the preamble to this Agreement or to such other
address as such party may, by notice given in compliance with this Section,
designate. Notices shall be deemed to have been given and received upon the
earlier of: (i) if by facsimile, upon confirmed transmission if transmission
occurs between 8:00 a.m. and 5:00 p.m. New York time on any Business Day
provided that a copy of such notice is deposited with Federal Express or other
nationally recognized overnight delivery service for next Business Day delivery;
(ii) if by Federal Express or other nationally recognized overnight delivery
service deposited for next Business Day delivery, on the next Business Day
following deposit with such delivery service; (iii) if by personal delivery,
upon completion of delivery; or (iv) if by mail, three (3) Business Days after
deposit in the U.S. Mail, first class, postage prepaid.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard or
reference to its conflict of laws principles. The parties each hereby consent to
the jurisdiction of any state or federal court located in Monroe County, New
York and irrevocably agree that all actions or proceedings arising out of or
relating to this Agreement shall be litigated in such courts. Each of the
parties accepts for itself the exclusive jurisdiction of the aforesaid courts
and waives any defense of forum non coveniens.
(h) WAIVER OF JURY TRIAL. EACH OF THE PARTIES WAIVES THE RIGHT
TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY WHICH CASE OR CONTROVERSY
ARISES OUT OF OR IS IN RESPECT OF ANY DEALINGS AMONG THEM OR ANY ONE OF THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.
Page 186 of 272
(i) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(j) Reproductions. This Agreement may be reproduced by the
parties hereto by any photographic, photostatic, microfilm, xerographic or
similar process, and any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made in
the regular course of business).
(k) Entire Agreement. This Agreement constitutes the complete,
final and exclusive understanding and agreement between parties with respect to
the subject matter covered hereby, and supersedes any and all prior or
contemporaneous oral or written representations, understandings, agreements,
correspondence or communications concerning the subject matter hereof.
IN WITNESS WHEREOF, each of the parties intending to be bound hereby
has caused this Agreement to be executed by its duly authorized representative
as of the date first above written.
HIGH FALLS BREWING COMPANY, LLC
("Borrower")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------------
Its:
---------------------------------
▇▇▇▇▇▇ CAPITAL PARTNERS, L.P.
("Subordinated Creditor")
By: Chephas LLC, its general partner,
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Its: Managing Member
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MANUFACTURERS AND TRADERS TRUST COMPANY
("Senior Creditor")
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Its: Vice President
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THE GENESEE BREWING COMPANY, INC.
("Seller")
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Its: Vice President
---------------------------------
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SCHEDULE A
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▇▇▇▇▇▇ EQUIPMENT DESCRIPTION
