INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT (this "Agreement") is made
and entered into as of December 31, 1995, among XXXXXX MANUFACTURING, INC., a
Minnesota corporation ("Borrower"), THE CIT GROUP/CREDIT FINANCE, INC. ("Senior
Lender") and SANWA BUSINESS CREDIT CORPORATION ("Subordinate Lender").
RECITALS
(A) The Senior Lender has agreed to extend certain credit
accommodations to the Borrower pursuant to the terms of the Senior Loan
Documents.
(B) The Subordinate Lender has agreed to restructure certain
obligations of the Borrower pursuant to the terms of the Subordinate Loan
Documents.
(C) It is a condition precedent to the agreements of the Senior
Lender and the Subordinate Lender that the parties hereto enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth herein, and for other good and
valuable consideration, the mutuality, receipt and sufficiency of which hereby
are acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined (including
capitalized terms used in the foregoing Recitals) shall have the following
meanings:
"BORROWER OBLIGATION" means the Senior Debt or any of the Subordinate
Obligations, as the context requires.
"DEFAULT" means any Senior Default and/or any Subordinate Default, as
the context requires.
"DIP FACILITY" shall have the meaning ascribed to it in Section 2.6.
"EXCESS CASH FLOW" shall have the meaning ascribed to it in the
Subordinate Loan Documents.
"PAYMENT IN FULL" or "PAID IN FULL" or any similar term(s) with
respect to any Borrower Obligation means (a) the satisfaction and final payment
in full of such Borrower Obligation in cash or cash equivalents reasonably
acceptable to the payee and the termination of any obligation on the part of the
holder of such Borrower Obligation to make any loans or to afford any financial
accommodation to the Borrower or (b) in the case of any Borrower Obligation
consisting of contingent obligations (including without limitation contingent
obligations in respect of letters of credit or other reimbursement guarantees
under the Senior Loan Agreement), the setting apart of cash sufficient to
discharge such portion of such Borrower Obligation in an account for the
exclusive benefit of the holders thereof, in which account such holders shall be
granted by the Borrower a first priority perfected security interest in a manner
acceptable to such holders, which payment or perfected security interest shall
have been retained by the holders, in the case of each of (a) and (b) above, for
a period of time in excess of all applicable preference or other similar periods
under applicable bankruptcy, insolvency or creditors' rights laws.
"PERMITTED PREPAYMENTS" is defined in Section 2.3.
"PROCEEDS" means the proceeds of any of Borrower's property in which
both the Senior Lender the Subordinate Lender have perfected security interests.
"SENIOR DEBT" means that portion of the principal amount owing to the
Senior Lender under the Senior Loan Documents from time to time that does not
exceed at the date of determination the principal amount of $4,500,000, together
with all other "Obligations" as that term is defined in the Senior Loan
Documents.
"SENIOR DEFAULT" means any Event of Default under and as defined in
the Senior Loan Agreement.
"SENIOR LOAN AGREEMENT" means that certain Loan and Security Agreement
dated as of February 15, 1991 between the Senior Lender and the Borrower, as the
same may be amended, supplemented, replaced or refinanced from time to time in
compliance with Section 2.14.
"SENIOR LOAN DOCUMENTS" means the Senior Loan Agreement and all other
documents which create, evidence or secure the Senior Debt from time to time, as
any of the same may be amended, supplemented, replaced or refinanced from time
to time in compliance with Section 2.14. A true and correct list of the Senior
Loan Documents existing on the date hereof is set forth on SCHEDULE 1 hereto.
"SUBORDINATE DEBT" means all amounts owing to the Subordinate Lender
under the Subordinate Loan Documents from time to time, whether in respect of
principal, interest or otherwise.
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"SUBORDINATE DEFAULT" means any Event of Default under and as defined
in the Subordinate Loan Documents.
"SUBORDINATE LOAN DOCUMENTS" means all documents which create,
evidence or secure the Subordinate Debt from time to time, as any of the same
may be amended, supplemented, refinanced or replaced from time to time in
compliance with Section 2.14. A true and correct list of the Subordinate Loan
Documents existing on the date hereof is set forth on SCHEDULE 2 hereto.
"SUBORDINATE OBLIGATION DOCUMENTS" means any of the Subordinate Loan
Documents, as the context requires.
"SUBORDINATE OBLIGATIONS" means any of the Borrower's obligations to
the Subordinate Lender under any of the Subordinate Obligation Documents.
SECTION 2. SUBORDINATION AND INTERCREDITOR PROVISIONS.
2.1 SUBORDINATION. Senior Lender hereby consents to the Borrower
granting a security interest in Borrower's property to Subordinate Lender.
Subordinate Lender agrees, for itself and each future holder of the Subordinate
Obligations held by it, that its interest in any of Borrower's property in which
both Senior Lender and Subordinate Lender have a perfected security interest,
and in and to the Proceeds, is subordinate to the interest of Senior Lender and
subject to the terms of this Agreement.
2.2 STANDBY; NON-INTERFERENCE. Subordinate Lender shall not,
without Senior Lender's prior consent, (i) except as provided herein, exercise
any rights or remedies it may have under the Subordinate Loan Documents or
otherwise; or (ii) commence or join with any other creditors of Borrower in
commencing any bankruptcy, reorganization, receivership or insolvency proceeding
against Borrower.
In the event the Borrower defaults on its obligations to Senior Lender
and, as a result, Senior Lender undertakes to enforce Senior Lender's security
interests and liens in Borrower's assets, Subordinate Lender agrees that
Subordinate Lender will not hinder, delay or otherwise prevent Senior Lender
from taking any and all action which Senior Lender deems necessary to enforce
Senior Lender's security interests and liens in Borrower's assets and to realize
thereon.
2.3 MARSHALLING WAIVER. Subordinate Lender hereby waives any
rights it has or may have in the future to require Senior Lender to marshal
Senior Lender's collateral, and agrees that, in addition to Senior Lender's
other rights hereunder, Senior Lender may proceed against Senior Lender's
collateral in any order that Senior Lender deems appropriate in the exercise of
Senior Lender's absolute discretion. Subordinate Lender also waives any right
to be subrogated to the Senior Debt unless and until the Senior Debt is paid in
full.
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2.4 PERMITTED PAYMENTS; RIGHT TO RETAIN PAYMENTS. Notwithstanding
any other provision of this Agreement, the Borrower shall be entitled to make or
deliver to, and Subordinate Lender shall be entitled to receive and retain, (a)
any payments in respect of Subordinate Obligations consisting of scheduled
payments of interest or principal, mandatory prepayments (including without
limitation any mandatory payments of Excess Cash Flow and Net Operating Income
Payment), amounts payable in respect of fees, expenses, taxes or indemnification
obligations and Permitted Prepayments, and (b) any other payments in respect of
Subordinate Obligations to which the Senior Lender expressly consents. Each of
clauses (a) and (b) above is intended to constitute a separate and independent
basis for retaining the payments received by the Subordinate Lender from the
Borrower on account of the Subordinate Obligations.
2.5 PREPAYMENTS. So long as (i) no Senior Default has occurred and
is continuing or would exist immediately after such payment, (ii) the Borrower
has and immediately after such payment will have availability under the
revolving credit facility created by the Senior Loan Documents of at least
$200,000 and further provided that the Borrower does not have any trade debt
more than sixty (60) days past due, unless it is subject to a bona fide dispute
and (iii) the Senior Lender is given at least five days' prior notice of any
such payment, then the Borrower shall be permitted to make, and the Subordinate
Lender shall be permitted to retain, one or more optional prepayments of the
Subordinate Debt ("Permitted Prepayments").
2.6 BANKRUPTCY. If the Borrower shall become subject to a
proceeding under the United States Bankruptcy Code and Senior Lender shall
desire to permit the use of cash collateral by the Borrower or to provide
financing to the Borrower on substantially similar terms as the Senior Loan
Documents under either Section 363 or 364 of the United States Bankruptcy Code,
with or without obtaining a priority lien under Section 364(d) thereof (the "DIP
Facility"), Subordinate Lender hereby agrees as follows: (a) adequate notice to
Subordinate Lender shall have been given for the DIP Facility if Subordinate
Lender receives notice thereof at least 2 business days prior to the hearing on
the motion requesting the DIP Facility; and (b) if Senior Lender proposes to
provide a DIP Facility, Subordinate Lender may seek adequate protection of its
interest by demanding the same treatment as provided in the Subordinate Loan
Documents, provided, however, that failure by the Subordinate Lender to obtain
such adequate protection shall not be grounds for objecting to the DIP Facility.
Senior Lender and Borrower agree to use their best efforts to obtain the
treatment provided in the Subordinate Loan Documents as adequate protection for
Subordinate Lender. For purposes hereof, notice of a proposed financing or use
of cash collateral shall be deemed received by Subordinate Lender upon the
sending of notice by overnight delivery service, telecopy or hand delivery by
Subordinate Lender. Senior Lender is irrevocably authorized and empowered to
receive and collect any and all dividends, payments and distributions made on
account of any proof of claim relating to the Subordinate Debt in whatever form
the same may be paid or issued until the Senior Debt is paid or satisfied.
Subordinate Lender agrees to file a proof of claim in respect of the Subordinate
Debt and to execute and deliver to Senior Lender such assignments or other
instruments as Senior Lender may reasonably require to enable Senior
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Lender to collect all dividends, payments and distributions which may be made at
any time on account of the Subordinated Debt until the Senior Debt is paid or
satisfied. Nothing contained herein shall prohibit Subordinate Lender from
objecting to or demanding additional adequate protection if such financing is
provided by a lender other than Senior Lender.
References herein to the Borrower shall include any successor to, or
assign of, the Borrower, including without limitation any debtor-in-possession
or trustee for the Borrower in any proceeding under the United States Bankruptcy
Code.
2.7 PAYMENT BLOCKAGE. In circumstances in which Section 2.6 does
not apply, Subordinate Lender will not be entitled to receive or retain any
direct or indirect payment (in cash, property, by set-off or otherwise) from the
Borrower of or on account of any Subordinate Obligations:
(a) during the first one hundred twenty (120) days following the
occurrence and continuation of a monetary Senior Default which has not been
cured; or
(b) during the period immediately following the date on which
Senior Lender has commenced legal proceedings to enforce its remedies pursuant
to a monetary default under the Senior Loan Documents; or
(c) during the period where there has occurred and is continuing a
material non-monetary Senior Default which has not been waived by the Senior
Lender and with respect to which the Senior Lender has commenced legal
proceedings and so notified the Subordinate Lender.
Each of the foregoing subsections (a), (b) and (c) is intended to
constitute a separate and independent basis for prohibiting each Subordinate
Party from receiving or retaining payment from the Borrower on account of the
Subordinate Obligations.
2.8 LIMITATIONS ON REMEDIES.
(a) Except in circumstances in which Section 2.6 is applicable,
Subordinate Lender shall not commence any action or proceeding against the
Borrower to enforce or collect any Subordinate Obligation to obtain possession
of property of the Borrower, to exercise control over property of the Borrower
or to create, perfect or enforce any lien against property of the Borrower until
the earliest to occur of (i) the date the Senior Lender accelerates the Senior
Debt, (ii) the date of Borrower's bankruptcy, (iii) if a monetary default (other
than a default that consists of failure to pay Senior Lender) exists and is
continuing with respect to the Subordinate Lender, the date occurring 120 days
after Subordinate Lender has given Senior Lender written notice of such default
and of its intention to take the foregoing action, unless the Subordinate Lender
shall have first obtained the written consent of the Senior Lender or (iv) if a
non-monetary default exists and is continuing with respect to the Subordinate
Lender, the date occurring 180 days after Subordinate Lender
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has given Senior Lender written notice of such default and of its intention to
take the foregoing action, unless the Subordinate Lender shall have first
obtained the written consent of the Senior Lender.
(b) Nothing in this Agreement shall restrict the ability of the
Senior Lender or the Subordinate Lender to declare a Default or accelerate all
or any portion of the Borrower Obligations so long as payments are received and
turned over and remedies are pursued only in compliance with the terms of the
Senior Loan Documents, the Subordinate Loan Documents as applicable and this
Agreement.
(c) In the event Senior Lender enforces its rights and remedies
under the Senior Loan Documents, Subordinate Lender shall not take any action
which materially interferes with or impairs Senior Lender's rights and remedies.
2.9 TURN-OVER OF PROCEEDS RECEIVED. If the Borrower shall make any
payment of Proceeds which the Subordinate Lender is not permitted to receive and
retain pursuant to this Agreement then such payment shall be held in trust for
the benefit of, and shall be paid over promptly on demand to, the Senior Lender,
for application (a) first, to the payment of the Senior Debt and (b) second, to
the payment of the Subordinate Debt. Notwithstanding the foregoing, if the
Subordinate Lender receives a payment in an amount which exceeds the amount
which it is permitted to receive and retain under this Agreement, the
Subordinate Lender shall only be required to pay over the portion of such
payment which is in excess of the amount that it is so permitted to retain. If
any party pays over any payment or distribution as provided above then such
payment or distribution shall be deemed to have been made by the Borrower
directly to the party to whom such payment or distribution was paid over on
account of the Borrower Obligations owed to such party and not to the original
recipient thereof, and no Subordinate Obligations owed to such original
recipient shall be discharged by reason of its receipt of any payment or
distribution which is so paid over.
2.10 NOTICE OF DEFAULTS, ETC. In addition to any other notices
required hereunder, each of the Senior Lender and the Subordinate Lender shall
use its best efforts to give written notice to the other party hereto, promptly
upon the occurrence of the event which triggers the obligation to give such
notice, of (a) the occurrence of any Default or of an event which, with the
giving of notice or the expiration of the applicable cure period, would
constitute a Default, (b) the cure or waiver of any Default, (c) any
acceleration of the Senior Debt or any Subordinate Obligation, (d) any action or
proceeding instituted against the Borrower on account of any Default, (e) any
material amendment to any Senior Loan Document or Subordinate Obligation
Document and (f) the Payment in Full of the Senior Debt or any Subordinate
Obligation; provided, that the failure of any party to give such a notice shall
not affect the rights or obligations or create the basis of any liability of any
party hereunder.
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2.11 BORROWER'S OBLIGATIONS ABSOLUTE. The provisions of this
Agreement are solely for the benefit of the Borrower, the Senior Lender and the
Subordinate Lender for the purpose of defining the relative rights of the
holders of the Borrower Obligations. Nothing herein shall impair, as between
the Borrower and any other party hereto, the obligations of the Borrower, which
are unconditional and absolute, to the Senior Lender and to the Subordinate
Lender, respectively.
2.12 SUBORDINATION NOT AFFECTED. Without the necessity of any
reservation of rights against or any notice to or further assent by the
Subordinate Lender, but subject to compliance with the terms of this Agreement
and the applicable Senior Loan Documents or Subordinate Obligation Documents,
(a) any demand for payment of any Borrower Obligation may be rescinded in whole
or in part by the holder thereof and any Borrower Obligation may be continued,
(b) the holders of any Borrower Obligation may exercise or refrain from
exercising any rights and remedies against the Borrower and others, (c) any
Borrower Obligation, or any collateral security or guaranty therefor or right of
offset with respect thereto, may be modified, accelerated, compromised, waived,
surrendered, or released by the holder thereof and (d) subject to Section 2.14,
any agreement or instrument evidencing, securing or otherwise relating to any
Borrower Obligation may be amended or modified, in each case without impairing,
abridging, releasing or affecting the subordination provided for herein.
2.13 TRANSFERS. Neither the Senior Lender nor the Subordinate
Lender shall sell, assign or otherwise transfer, in whole or in part, any of the
Borrower Obligations or any interest therein to any other person or entity
unless the transferee thereof expressly acknowledges to the other parties to
this Agreement, in writing, that it agrees to be bound by all of the terms
hereof. The Senior Lender and the Subordinate Lender hereby represent and
warrant to the others that as of the execution date hereof neither the Senior
Lender nor the Subordinate Lender has transferred or entered into any agreement
or understanding with a proposed transferee that it will transfer any of the
Borrower Obligations, except as to the interest of Showa Leasing (U.S.A.), Inc.
in the Subordinate Debt.
2.14 MODIFICATION OF DOCUMENTS. Without the prior consent of the
Subordinate Lender, the Senior Lender shall not amend, modify or otherwise alter
any Senior Loan Document so as to (i) increase the amount of the Senior Debt
beyond the principal amount of $4,500,000, except where the excess of any such
increase over the principal amount of $4,500,000 is made expressly subordinate
to all Subordinate Obligations, (ii) provide for an earlier maturity of any
monetary obligation of the Borrower thereunder, or (iii) require payments of
principal or interest thereunder to be made more frequently or in greater
amounts. Notwithstanding the foregoing, the holder or holders of the Senior
Debt may renew the Senior Debt upon the maturity thereof without any consent
from the Subordinate Parties so long as (A) any renewal or extension of the term
of the Senior Term Loan is for a period of not greater than two years from the
date of such renewal or extension, (B) the amortization schedule for any senior
term debt at the commencement of such renewal or extension term is the same as
at the commencement of the original term and (C) except as otherwise
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specifically provided in clauses (A) and (B) above, there is no amendment,
modification or other alteration to the Senior Loan Documents which is
prohibited by the previous sentence.
2.15 MISCELLANEOUS. Except as authorized in Sections 2.4 through
2.8 inclusive, regardless of whether a default or an event of default (however
defined) exists under any one or more of the Subordinated Agreements,
Subordinate Lender further agrees not to (i) accept, retain, request or take any
security for the Subordinated Debt without Senior Lender's prior written
consent, (ii) amend or modify the Subordinated Agreements, or increase or
forgive any of the Subordinated Debt, without Senior Lender's prior written
consent, (iii) accept payment of, demand payment of, xxx for or receive all or
any part of the Subordinated Debt, or (iv) take any action to enforce its rights
in any collateral securing payment thereof, unless or until all Senior Debt
shall have been paid in full.
2.16 LEGENDS. Any instrument issued by the Borrower to evidence the
Subordinate Debt upon issuance or in replacement, renewal, exchange for or
substitution thereof or evidencing the transfer thereof, shall bear an
appropriate legend in substantially the following form:
The security for the payment of this
instrument, both principal and interest,
and all other indebtedness evidenced
hereby, is subject to the prior rights of
The CIT Group/Credit Finance, Inc., its
successors and assigns, in the manner and
to the extent set forth in a certain
Intercreditor and Subordination Agreement
dated as of December 31, 1995, which
Agreement is incorporated herein by
reference.
SECTION 3. MISCELLANEOUS.
3.1 NOTICES. Except as otherwise expressly provided for herein,
any and all notices given in connection with this Agreement shall be deemed to
have been validly served, given or delivered upon (i) deposit in the United
States certified or registered mails, with proper postage prepaid; (ii) sent by
facsimile transmission with a duplicate copy sent contemporaneously by U.S.
Mail; or (iii) delivered by overnight courier or messenger delivery, addressed
to the party to be notified. A written notice shall be deemed to have been
given to the recipient party on the earlier of (a) the date it shall be
delivered to the address required by this Agreement; (b) the date delivery shall
have been refused at the address required by this Agreement; or (c) with respect
to notices sent by mail, the date as of which the postal service shall have
indicated such notice to be undeliverable at the address required by this
Agreement. Any and all notices referred to in this Agreement, or which either
party desires to give to the other, shall be addressed as follows:
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If to the Borrower: Xxxxxx Manufacturing, Inc.
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx Xxxxxx President and Chief
Executive Officer
Fax: (000) 000-0000
with a copy to: Winthrop & Weinstine, P.A.
3200 Minneapolis World Trade Center
00 Xxxx Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxx
Fax: (000) 000-0000
If to the Senior The CIT Group/Credit Finance, Inc.
Lender: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
Fax: (000) 000-0000
with a copy to: The CIT Group/Credit Finance, Inc.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
If to the Subordinate Lender: Sanwa Business Credit Corporation
Xxx Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Asset Management Division
Fax:(000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxx, Ltd.
00 Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Fax:(000) 000-0000
The above addresses may be changed by notice of such changed, mailed
as provided herein, to the last address designated.
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3.2 NO FIDUCIARY DUTY. Nothing in this Agreement shall be
construed to create or impose upon the Senior Lender any fiduciary duty to the
Subordinate Lender, or any other implied obligation to act or refrain from
acting with respect to the Borrower or the Senior Debt or the collateral
security securing the Senior Debt in any manner contrary to what the Senior
Lender may determine is in its own best interests. Nothing in this Agreement
shall be construed to create or impose upon the Subordinate Lender any fiduciary
duty to the Senior Lender or any other implied obligation to act or refrain from
acting with respect to the Borrower or any Subordinate Obligations or the
collateral security securing any Subordinate Obligations in any manner contrary
to what the Subordinate Lender may determine is in its own best interests.
3.3 SUCCESSORS; CONTINUING EFFECT. This Agreement is being
entered into for the benefit of, and shall be binding upon, the Borrower, the
Senior Lender and the Subordinate Lender and their respective successors and
assigns, including each subsequent or additional holder of Senior Debt, or
Subordinate Debt, and the terms "Senior Lender" and "Subordinate Lender", shall
include, respectively, any such subsequent or additional holder of Senior Debt
or Subordinate Debt whenever the context permits. This Agreement shall inure to
the benefit of and be enforceable by any future holder or holders of the
Borrower Obligations or any part of any of the same. This Agreement shall
remain in full force and effect as long as there are any Borrower Obligations
outstanding.
3.4 AMENDMENTS. This Agreement may be amended only by a written
instrument executed by the Senior Lender and the Subordinate Lender and, if such
amendment affects the Borrower, by the Borrower.
3.5 TERM. This Agreement shall remain in full force and effect
until the Payment in Full of the Senior Debt.
3.6 WAIVERS. No waiver shall be deemed to be made by any party
of any of its rights hereunder unless the same shall be in writing and then only
with respect to the specific instance involved, and no such waiver shall impair
or offset the rights of the waiving party or the obligations of the party
benefited by such waiver in any other respect or at any other time.
3.7 GOVERNING LAW. This Agreement, including the validity
hereof and the rights and obligations of the parties hereunder, shall be
governed by and construed and enforced in accordance with the laws of the State
of Illinois.
3.8 SUBORDINATION MAY NOT BE IMPAIRED BY THE BORROWER. No right
of the Senior Lender or the Subordinate Lender to enforce the subordination
created hereby shall be impaired by any act or failure to act by the Borrower or
by the failure by the Borrower to comply with this Agreement, regardless of any
knowledge which the Senior Lender or the Subordinate Lender may have or be
otherwise charged with.
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3.9 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. ALL PARTIES
HERETO ABSOLUTELY AND IRREVOCABLY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED IN XXXX COUNTY, ILLINOIS IN CONNECTION WITH ANY
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT. ALL
PARTIES HERETO HEREBY WAIVE AND SHALL NOT ASSERT IN ANY SUCH ACTION OR
PROCEEDING, IN EACH CASE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT (A) IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH
COURT, (B) SUCH PARTY IS IMMUNE FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION,
EXECUTION OR OTHERWISE), (C) ANY SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, (D) THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER, (E) THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY ANY SUCH COURT, OR (F)
ANY PARTY HAS A RIGHT TO A TRIAL BY JURY OF ANY CLAIM ARISING HEREUNDER. ANY
ACTION BROUGHT BY ANY PARTY IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE BROUGHT IN A STATE OR FEDERAL COURT
SITTING IN XXXX COUNTY, ILLINOIS.
3.10 SPECIFIC PERFORMANCE. The parties hereto acknowledge that
legal remedies may be inadequate and therefore the Senior Lender and the
Subordinate Lender are hereby authorized to demand specific performance of the
provisions of this Agreement at any time when the Borrower, the Senior Lender or
the Subordinate Lender shall have failed to comply with any provision hereof.
Each party hereto hereby irrevocably waives any defense based on the adequacy of
a remedy at law that might be asserted as a bar to such remedy of specific
performance.
3.11 FURTHER ACTIONS. After the execution of this Agreement each
party will execute and deliver all such documents and instruments and do all
such other acts and things as may be reasonably necessary to carry out the
provisions of this Agreement.
3.12 AGREEMENT TO CONTROL. If any provision in any document or
instrument relating to the Senior Debt or the Subordinate Debt, differs with the
terms of this Agreement regarding the same or any similar matter, the provisions
of this Agreement shall control and each other provision shall be interpreted so
as to give effect to the provisions of this Agreement.
3.13 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may
be executed in any number of counterparts, and by each of the parties on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all of which shall constitute but one and the same instrument.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Agreement, but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability or binding effect of this Agreement.
3.14 ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior written and oral agreements, and all contemporaneous oral
agreements, relating to such matters.
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3.15 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day, month and year first above written.
XXXXXX MANUFACTURING, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its: President
-----------------------------------
THE CIT GROUP/CREDIT FINANCE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its: Vice President
-----------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Its: Group Vice President
-----------------------------------
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SCHEDULE 1
LIST OF SENIOR LOAN DOCUMENTS
Loan and Security Agreement, dated February 15, 1991
Amendment, dated July 26, 1994
Amendment, dated December 15, 1994
Amendment, dated January 17, 1995
Amendment, dated October 12, 1995
Amendment, dated December 22, 1995
Fourth Amended and Restated Promissory Note
in the principal amount of $1,500,693.09, dated December 22, 1995
Mortgage and Security Agreement
Collateral Assignment of Certificate of Deposit
Patent, Trademark & License Mortgage
Lockbox Agreement
Blocked Account Agreement
SCHEDULE 2
LIST OF SUBORDINATE LOAN DOCUMENTS
1. Loan and Security Agreement dated August 24, 1995.
2. Senior Subordinated Secured Promissory Note dated August 24, 1995.
3. Junior Subordinated Secured Promissory Note dated August 24, 1995.
4. Net Operating Income Agreement dated August 24, 1995.
5. Mortgage, Assignment of Leases and Rents and Security Agreement dated
August 24, 1995.
6. Standstill Agreement by and among Senior Lender, Subordinate Lender and
Xxxxxx Xxxxxxxxxx dated August 24, 1995.
7. Standstill Agreement by and among Senior Lender, Subordinate Lender and
Xxxxx Xxxxxx dated August 24, 1995.
8. Common Stock Warrant Agreement dated August 24, 1995.
