Exhibit 4.11
------------
Associate-Patron
Subordination Agreement
(Subordination of Required Deposit)
The undersigned Associate-Patron of Unified Western Grocers, Inc.
("Unified Western") acknowledges that pursuant to the APPLICATION AND AGREEMENT
FOR SERVICE AFFILIATION AS AN ASSOCIATE-PATRON WITH UNIFIED WESTERN GROCERS,
INC. AND PLEDGE AND SECURITY AGREEMENT ("Membership Agreement") executed by the
undersigned and pursuant to Unified Western's Bylaws and its rules, regulations
and policies for the servicing of accounts, the undersigned is required to
maintain a deposit account or deposit accounts with Unified Western in at least
such amount (the "Required Deposit") as may from time to time be established by
Unified Western.
In consideration of financial accommodation given, to be given or
continued to be given to the undersigned by Unified Western and in consideration
of Unified Western's servicing of the undersigned's account and in compliance
with rules and regulations for the servicing of accounts as established by
Unified Western, the undersigned agrees:
(A) that any and all deposit accounts which the undersigned
now has or may in the future have with Unified Western are and shall be
partially subordinated deposit account(s) ("Deposit Account" or
"Deposit Accounts") which shall in all respects except as modified by
this Subordination Agreement continue to be governed by and subject to
the Membership Agreement and all provisions thereof regarding deposits
and deposit accounts; and
(B) that all Deposit Accounts of the undersigned are
non-transferable without the consent of Unified Western, which will
normally be withheld, and may be withheld in Unified Western's absolute
discretion, and have been and are hereby assigned and pledged to
Unified Western as security for the full and prompt payment and
performance of any and all contracts, agreements, obligations or
liabilities of the undersigned, or any of them, to Unified Western, or
any of its subsidiaries, existing at any time, including but not
limited to full and prompt compliance by the undersigned, and each of
them, with any and all requirements and obligations regarding the use,
care and return of equipment and other property of Unified Western, or
any of its subsidiaries, now or hereafter in the possession or under
the control of the undersigned, or any of them.
Further, in consideration of financial accommodation given, to be given
or continued to be given to the undersigned by Unified Western, and in
consideration of Unified Western's servicing of the undersigned's account, and
in consideration of the providing of financing to Unified Western by the holders
of Senior Indebtedness as hereinafter defined, and in order to induce such
financing, the undersigned agrees that that portion of each Deposit Account
which consists of the Required Deposit shall be subordinate and subject in right
of payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Indebtedness. "Senior Indebtedness" means all
indebtedness, liabilities or obligations of Unified Western, contingent or
1
otherwise, whether existing on the date of execution of this Subordination
Agreement or thereafter incurred, (A) in respect of borrowed money; (B)
evidenced by bonds, notes, debentures or other instruments of indebtedness; (C)
evidenced by letters of credit, bankers' acceptances or similar credit
instruments; (D) in respect of Capitalized Lease Obligations; (E) in respect of
the deferred purchase price of property or assets (whether real, personal,
tangible or intangible) or in respect of any mortgage, security agreement, title
retention agreement or conditional sale contract; (F) in respect of any interest
rate swap agreement, interest rate collar agreement or other similar agreement
or arrangement designed to provide interests rate protection; (G) in respect of
all indebtedness, liabilities or obligations of others of any of the types
referred to in clauses (A) through (F) for which Unified Western is responsible
or liable as obligor, guarantor or otherwise or in respect of which recourse may
be had against any of the property or assets (whether real, personal, tangible
or intangible) of Unified Western; and (H) in respect of all modifications,
renewals, extensions, replacements and refundings of any indebtedness,
liabilities or obligations of any of the types described in clauses (A) through
(G); provided, however, that the term "Senior Indebtedness" shall not mean any
indebtedness, liabilities or obligations of Unified Western, contingent or
otherwise, whether existing on the date of execution of this Subordination
Agreement or thereafter incurred, (i) to trade creditors arising or incurred in
the ordinary course of Unified Western's business, (ii) in respect of any
redemption, repurchase or other payments on capital stock, (iii) in respect of
Patrons' Deposits, or (iv) in respect of Patronage Dividend Certificates.
For purposes of the foregoing definition, "Capitalized Lease
Obligations" means the discounted present value of the rental obligations of any
person or entity under any lease of any property which, in accordance with
generally accepted accounting principles, has been recorded on the balance sheet
of such person or entity as a capitalized lease; "Patrons' Deposits" means the
deposits from time to time required to be made or maintained with Unified
Western by its patrons or customers in accordance with the Bylaws of Unified
Western in effect from time to time or in accordance with the policies for the
servicing of accounts of patrons or customers established from time to time by
Unified Western, and any deposits from time to time made or maintained with
Unified Western by its patrons or customers in excess of such required deposits;
and "Patronage Dividend Certificates" means any notes, revolving fund
certificates, retain certificates, certificates of indebtedness, patronage
dividend certificates or any other written evidences of indebtedness of Unified
Western at any time outstanding which evidence the indebtedness of Unified
Western respecting the distribution by Unified Western of patronage dividends.
That portion of each Deposit Account which consists of the Required
Deposit shall be subordinate and junior in right of payment to all Senior
Indebtedness in the following respects:
(1) In the event of any insolvency or bankruptcy proceedings,
and any receivership, liquidation, reorganization, arrangement or other
similar proceedings in connection therewith, relative to Unified
Western or to its creditors, as such, or to its property or assets
(whether real, personal, tangible or intangible), or in the event of
any proceedings for voluntary liquidation, dissolution or other winding
up of Unified Western, whether or not involving insolvency or
bankruptcy, then the holders of Senior Indebtedness shall be entitled
2
to receive payment in full of all Senior Indebtedness (whether accrued
prior or subsequent to the commencement of such case or proceedings)
before the undersigned is entitled to receive any payment with respect
to that portion of any Deposit Account which consists of the Required
Deposit, and to that end (but subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the
rights conferred herein upon the Senior Indebtedness and the holders
thereof with respect to that portion of any Deposit Account which
consists of the Required Deposit and the undersigned by a lawful plan
of reorganization under applicable bankruptcy law) the holders of
Senior Indebtedness shall be entitled to receive for application in
payment thereof any payment or distribution of any kind or character,
whether in cash or property or securities, or by set off or otherwise,
which may be payable or deliverable in any such proceedings in respect
of that portion of any Deposit Account which consists of the Required
Deposit (other than securities which are subordinate and junior in
right of payment, at least to the extent provided herein with respect
to the Required Deposit, to the payment of all Senior Indebtedness then
outstanding) and the undersigned irrevocably authorizes and empowers
such holders of Senior Indebtedness to demand, xxx for, collect and
receive any such payment or distribution and to receipt therefor, and
to file all such claims and take all such action, in the name of the
undersigned or otherwise, as such holders of Senior Indebtedness may
determine to be necessary or appropriate for the enforcement of these
subordination provisions, and the undersigned will also execute and
deliver such instruments confirming such authorizations and such powers
of attorney, proofs of claim, assignments of claim and other
instruments as may be requested by such holders of Senior Indebtedness
in order to enable such holders to enforce any and all claims upon or
in respect of that portion of any Deposit Account which consists of the
Required Deposit; and upon any such insolvency or bankruptcy
proceedings, receivership, liquidation, reorganization, arrangement or
other similar proceedings, or voluntary liquidation, dissolution or
other winding up, any payment or distribution of assets of Unified
Western of any kind or character, whether in cash, property or
securities or by set off or otherwise (other than securities which are
subordinate and junior in right of payment, at least to the extent
provided herein with respect to the Required Deposit, to the payment of
all Senior Indebtedness then outstanding) to which the undersigned
would be entitled, except for the provisions hereof, shall be paid by
Unified Western or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution
directly to the holders of Senior Indebtedness (pro rata to each such
holder on the basis of the respective amounts of Senior Indebtedness
held by such holder) or their representatives, to the extent necessary
to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness;
(2) In the event that any default shall occur and be
continuing with respect to the payment of Senior Indebtedness, unless
payment in full shall have first been made on all Senior Indebtedness
or such default with respect to such Senior Indebtedness shall have
been cured or waived in accordance with the terms of such Senior
Indebtedness, no payment shall be made with respect to that portion of
any Deposit Account which consists of the Required Deposit (including
3
any such payment which would cause such default and including any
payment in connection with the acquisition by Unified Western of the
Required Deposit for cash or property other than capital stock of
Unified Western); and
(3) In the event that any default (other than those referred
to in paragraph (2) above) shall occur and be continuing with respect
to any Senior Indebtedness permitting the holders of such Senior
Indebtedness to accelerate the maturity thereof, unless payment in full
shall have first been made on all Senior Indebtedness or such default
with respect to such Senior Indebtedness shall have been cured or
waived in accordance with the terms of such Senior Indebtedness, all
payments with respect to that portion of any Deposit Account which
consists of the Required Deposit (including any such payment which
would cause such default and including any payment in connection with
the acquisition by Unified Western of the Required Deposit for cash or
property other than capital stock of Unified Western) shall be
suspended during any period:
(a) of 180 days after the giving of written notice of
such default by the holders of Senior Indebtedness to Unified
Western; provided, that only one such notice shall be given
pursuant to this clause (3)(a) in any 12 consecutive months;
or
(b) in which judicial proceedings shall be pending in
respect of such default, a notice of acceleration of the
maturity of such Senior Indebtedness shall have been
transmitted to Unified Western in respect of such default and
such judicial proceedings shall be diligently pursued in good
faith.
In the event that any payment or other distribution is made to or
received by the undersigned in contravention of the provisions of paragraphs
(1), (2) and/or (3) above, then such payment or other distribution shall be held
by the undersigned for the benefit of, and shall be paid over and delivered to,
the holders of Senior Indebtedness (pro rata as their interests shall appear) or
to their representative or the trustee under the indenture or other agreement
(if any) pursuant to which Senior Indebtedness may have been issued, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness then due and payable in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
4
The undersigned Associate-Patron has duly executed this Subordination
Agreement this date and by such execution agrees that each and all of the
covenants, terms and provisions of this Subordination Agreement shall be
effective and binding on the undersigned Associate-Patron from and after this
date.
Dated:________________
------------------------------------
Associate-Patron
By: ______________________________
Its: ______________________________
5
