EXHIBIT (B)(4)
UNSECURED SUBORDINATED PROMISSORY NOTE
$___________ October 30, 2002
U.S. VISION, INC., a Delaware corporation (the "Company"), hereby
promises to pay to ___________________ or his permitted assigns (the "Holder")
the principal amount of _____________________ Dollars ($________), together with
interest thereon calculated from the date hereof in accordance with the
provisions of this Note.
1. Securities Laws. THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
2. Payment of Interest. Interest shall accrue at the Prime Rate plus
one percent (1%) as reported in The Wall Street Journal, Eastern Edition (the
"Journal") effective on the date of this Note (the "Interest Rate") compounded
quarterly, on the unpaid principal amount of this Note outstanding from time to
time. Effective the first (1st) day of each calendar quarter, beginning January
1, 2003, until this Note is paid in full, the Interest Rate shall be adjusted to
Prime Rate plus one percent (1%) as reported in the Journal on such date, or if
the Journal is not published on such date, on the last previous date of its
publication. If the Journal ceases to report the Prime Rate, the Prime Rate
shall be determined by the Company and the Holder in good faith. Interest shall
be calculated on the basis of a year of 365 or 366 days, as applicable, and
charged for the actual number of days elapsed. Subject to the provisions of
Sections 3(c) and 4 hereof, the Company shall pay to the holder of this Note
quarterly, in arrears, all accrued interest on each March 31, June 30, September
30 and December 31 during the term of this Note, beginning on December 31, 2002.
Any accrued interest which for any reason has not theretofore been paid shall be
paid in full on the date on which the remaining principal amount of this Note is
paid.
3. Payment of Principal.
(a) Scheduled Payment. The Company shall repay 100% of the
original principal amount of this Note, together with all accrued and unpaid
interest thereon, on October 30, 2007 [NOTE: CONFIRM THAT FINAL PAYOFF DATE
CORRESPONDS TO PAYOFF DATE OF COMMERCE LOAN].
(b) Optional Prepayments. Subject to the provisions of Section
4 hereof, the Company may, at any time and from time to time without premium or
penalty, prepay all or a portion of the outstanding principal amount of this
Note.
(c) Time of Payment. If any payment of principal or interest
on this Note shall become due on a Saturday, Sunday, or legal holiday under the
laws of the State of Delaware, such payment shall be made on the next succeeding
business day and such extension of time shall in such case be included in
computing interest in connection with such payment.
4. Subordination. This Note and any instrument issued in exchange,
renewal or substitution this Note, including any amendment thereto or
modifications of any of the foregoing, are referred to in this Section 4
collectively as the "Note." Notwithstanding any other provision of this Note,
the indebtedness of the Company evidenced by the Note is subordinated pursuant
to the terms of that certain Subordination Agreement, between Commerce Bank,
N.A., Holder and the other parties thereto, dated as of October 30, 2002.
5. Events of Default.
(a) Definition. For purposes of this Note, the following shall
be deemed to be an "Event of Default":
(i) The failure of the Company to pay or provide for
payment of any installment of interest hereunder when and as the same shall
become due and payable, which failure shall have continued for a period of sixty
(60) days.
(ii) The institution by the Company of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter in effect, or any other applicable Federal
or State bankruptcy, insolvency or other similar law, or the consent by it to
the institution of proceedings thereunder or the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any substantial
part of its property, or the making by the Company of an assignment for the
benefit of creditors, or the admission by the Company in writing of its
inability to pay its debts generally as they become due; or
(iii) The entry of a decree or order by a court
having jurisdiction for relief in respect of the Company, or adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under Title 11 of the United States Code, as now constituted or
hereafter in effect, or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator, assignee,
trustee (or other similar official) of the Company or of any substantial part of
its property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
one hundred eighty (180) consecutive days (each of the events set forth in this
Section 5(a)(iii) and Section 5(a)(ii) above, an "Insolvency Event").
(b) Consequences of Events of Default. The provisions of this
Section 5(b) are expressly subject to Section 4 hereof. Upon the occurrence of
an Event of Default, the Holder shall have any rights which it may possess
pursuant to applicable law or separate agreement.
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6. Immunity of Incorporators, Stockholders, Officers, Directors and
Employees. No recourse shall be had for the payment of the principal or interest
on this Note or for any claim based thereon or otherwise in any manner in
respect thereof, to or against any subsidiary, incorporator, affiliate,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any respective subsidiary, incorporator, affiliate, stockholder,
officer, director or employees, as such, past, present or future, of any
predecessor or successor corporation, either directly or through the Company or
such predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the enforcement of any
assessment or penalty, or in any other manner, all such liability being
expressly waived and released by the acceptance of this Note and as part of the
consideration for the issue thereof.
7. Unsecured Obligation. This Note evidences an unsecured obligation of
the Company to pay money to the Holder pursuant to the terms hereof. Nothing
contained in this Note shall be deemed to create any security interest in any
goods, equipment, inventory or other collateral of the Company. Any attempt by
the Holder, its successors or assigns to create or perfect a security interest
to secure the payment of this Note or performance of any obligation contained in
this Note shall be void.
8. Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of this Note may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the Holder.
9. Cancellation. After all principal and accrued interest at any time
owed on this Note has been paid in full, this Note shall be surrendered to the
Company for cancellation and shall not be reissued.
10. Place of Payment; Notices. Payments of principal and interest and
any notice hereunder are to be delivered to the Holder at the address of the
Holder that appears on the books and records of the Company, or to such other
address as specified in a written notice delivered to the Company by Xxxxxx.
Notices sent by the Company shall be deemed received when delivered personally
or one (1) day after being sent by overnight carrier or three (3) days after
being sent by certified or registered mail.
11. Governing Laws. The validity, construction, and Interpretation off
this Note will be governed by the internal laws, and not the laws of conflicts,
of the State of Delaware.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has executed and delivered this Note on
the date first above written.
U.S. VISION, INC.
By:
-----------------------------------
Xxxxxx X. Xxxx, III
Executive Vice President and
Chief Financial Officer
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FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Note, to:
Name of Assignee Address
, and hereby irrevocably constitutes and appoints ___________________ as agent
and attorney-in-fact to transfer said Note on the books of the within-named
corporation, with full power of substitution in the premises.
Dated: ________ __, 200_
In the presence of:
Signature:
-----------------------------
Name:
-----------------------------
Address:
-----------------------------
-----------------------------
Note: The above signature should
correspond exactly with the name on
the face of the within Note, if
applicable.
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of
October 30, 2002, by and among U.S. VISION, INC. ("U.S. Vision"), STYL-RITE
OPTICAL MFG. CO., INC., USV OPTICAL, INC., U.S. VISION HOLDINGS, INC.
(collectively, the "Borrowers"), COMMERCE BANK, N.A. (the "Lender"); and
_____________________ ("Creditor").
BACKGROUND
A. The Borrowers have requested that the Lender extend credit
to the Borrowers, and the Lender has agreed to extend such credit facilities,
all upon the terms, conditions and provisions as set forth in that certain Loan
and Security Agreement of even date herewith among the Borrowers and Lender (the
"Loan Agreement"). Any capitalized term used herein without definition shall
have the meaning ascribed thereto in the Loan Agreement.
B. Pursuant to the terms and subject to the conditions set
forth in the Loan Agreement, Lender agreed to provide to Borrowers the
following: (i) a Line of Credit in an amount not to exceed at any time the
Maximum Available Credit, which Line of Credit is evidenced by that certain Line
of Credit Note of even date herewith by Borrowers in favor of Lender; and (ii) a
Term Loan (together with the Line of Credit, the "Senior Credit Facilities") in
the amount of Fifteen Million ($15,000,000) Dollars, which Term Loan is
evidenced by that certain Term Note of even date herewith by Borrowers in favor
of Xxxxxx (the "Term Note," and together with the Line of Credit Note, the
"Senior Notes").
C. As collateral security for the Senior Obligations (as
hereinafter defined), pursuant to the terms and subject to the conditions set
forth in the Loan Agreement, and each other agreement or writing pursuant to
which the Borrowers or any of their respective subsidiaries, pledge, grant,
ratify and confirm a first lien on, and security interest in, all of the
collateral securing the Senior Obligations (collectively, the "Senior Security
Documents"), Borrowers granted to the Lender, first priority liens on, and
security interests in substantially all assets of the Borrowers (collectively,
the "Collateral"). The agreements, documents and instruments evidencing or
securing the Senior Credit Facilities are hereinafter collectively referred to
as the "Senior Loan Documents."
D. As a condition precedent to the agreement of the Lender to
enter into and perform under the Senior Loan Documents and to extend to the
Borrowers the Senior Credit Facilities, as more particularly described therein,
the Lender has required that the Creditor, with the acknowledgment of the
Borrowers, agree to subordinate the rights of the Creditor under the Creditor
Loan Documents (as defined below) to the rights of the Lender under the Senior
Loan Documents pursuant to this Agreement. Creditors will benefit from the
financing arrangements among Xxxxxx and Borrowers, as more particularly
described in the Senior Loan Documents.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. Certain Definitions.
1.1 "Creditor Loan Documents" shall mean the Unsecured
Subordinated Promissory Note, dated as of October 30, 2002, executed by U.S.
Vision and delivered to Creditor (the "Subordinated Note").
1.2 "Obligations of Borrowers to Creditor" shall mean the
obligations of the Borrowers to Creditor under the Creditor Loan Documents.
1.3 "Senior Obligations" shall mean the following obligations
of the Borrowers to the Lender, whether outstanding on the date hereof or
hereafter incurred, including, without limitation, any indebtedness of Borrowers
to others which Lender may acquire by assignment or otherwise, and any other
existing or future indebtedness in favor of Lender, whether matured or
unmatured, direct or contingent, joint or several, including, without
limitation, any extensions, modifications, renewals thereof and substitutions
therefor and any refinancing of or increases to, any such indebtedness: (a) all
existing and future debts, liabilities and obligations of the Borrowers in favor
of Lender including, without limitation, those incurred pursuant to the Senior
Loan Documents, including the principal amount of, and accrued interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any of the Borrowers, whether or not allowed as
an enforceable claim against any of the Borrowers pursuant to applicable
bankruptcy, insolvency or reorganization laws) on, the Senior Notes and all
indebtedness, liabilities and obligations of the Borrowers in respect thereof;
and (b) all other indebtedness, obligations and liabilities (including fees and
expenses) of Borrowers to Lender now existing or hereinafter incurred, whether
created under or with respect to the Senior Loan Documents or otherwise,
including as to both clauses (a) and (b) of this Section 1.3, without
limitation, (i) any interest thereon which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of any of the Borrowers, whether or not allowed as an enforceable
claim against any Borrower pursuant to applicable bankruptcy, insolvency or
reorganization laws, or (ii) any advances by the Lender which exceed the
aggregate face amount of the Senior Notes or any other instruments evidencing
any of the Senior Obligations, or which are made after the occurrence of a
default, violation or event of default under the Loan Agreement or any other
agreement among Borrowers and Lender, and any refinancing of, or increases to,
any of the indebtedness described as Senior Obligations. Notwithstanding the
foregoing, the maximum principal amount of indebtedness arising under the Senior
Loan Documents which shall constitute "Senior Obligations" under this Agreement
shall not exceed Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000),
plus all costs of collection and any expenses incurred to (i) protect or defend
the Collateral or (ii) with respect to the exercise of any remedies to enforce
or collect the Senior Obligations.
1.4 "Termination Date" shall mean the first to occur of either
(i) November 1, 2007 or (ii) the date that Lender is paid the Senior
Obligations.
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2. Confirmation of Obligations of Borrowers to Creditor and Lender.
Borrowers and Creditor hereby acknowledge and confirm that as of the date
hereof, no amounts are currently due or owing under the Obligations of Borrowers
to Creditor.
3. Subordination. Until the Termination Date, Creditor hereby
subordinates in favor of Lender all Obligations of Borrowers to Creditor and all
claims and demands arising therefrom to all of the Senior Obligations and agrees
that Xxxxxx shall first be paid all of the Senior Obligations, with interest as
accrues thereon and any costs and expenses of collection thereof, in accordance
with the terms thereof and the requirement that Lender make Advances to the
Borrowers under the Loan Agreement shall be terminated before Creditor shall be
paid any sums due on Obligations of Borrowers to Creditor. Creditors further
agrees that, subject to the limitation on Senior Obligations provided for in
Section 1.3, Lender may, at any time and from time to time, renew, extend,
modify, amend, substitute or alter the time of payment or maturity of, or waive
the right to enforce the Senior Obligations, or any part thereof, or release or
compromise the terms thereof, and that Lender may make new loans, advances and
extensions of credit to or for the benefit of the Borrowers, which will be
deemed to be included in the Senior Obligations or the Senior Obligations may be
refinanced by the Lender, or otherwise, so long as such refinancing does not
increase the annual amortization of the principal of the Senior Obligations
which constitute term loans, all without in any way impairing the subordination
and standstill provisions set forth herein which shall remain in full force and
effect without any further act of Creditor. Lender shall notify Creditor in
writing within 14 days of each of the events referred to in the preceding
sentence; provided, however, that the failure to do so shall not impair in any
manner the subordination of the Obligations of Borrowers to Creditor to the
Senior Obligations, as set forth in this Article 3.
4. Creditor Representations, Warranties and Covenants. Creditor
warrants and represents that it holds no collateral security for Obligations of
Borrowers to Creditor, and agrees that in the event that any collateral security
is acquired or any payment is made by any Borrower in respect of Obligations of
Borrowers to Creditor prior to the Termination Date and in contravention of the
terms of this Agreement, the same shall be held in express trust by Creditor for
Lender and shall forthwith be paid, assigned, transferred and/or delivered to
Lender, and that if any such collateral security is acquired, the same will be
held by Lender as collateral security for the Senior Obligations and, if such
payment is received, the same shall be used to reduce the outstanding balance of
the Senior Obligations in such order and manner as Lender, in its sole and
absolute discretion may determine. Until the Termination Date, Creditor waives
any rights of subrogation or indemnification in regard to any payment or
collateral so paid, assigned, transferred and/or delivered to Lender.
5. No Payment; Standstill.
5.1 Other than as set forth in Section 5.3 below, Creditor
agrees not to accept or demand any payment or reduction of Obligations of
Borrowers to Creditor and that no direct or indirect payment may be made by or
on behalf of any of the Borrowers upon or in respect of Obligations of Borrowers
to Creditor (including, without limitation, all interest payments from Borrowers
to Creditor) prior to the Termination Date. In the event that, notwithstanding
the foregoing, any payment shall be received by any Creditor when such payment
is prohibited by this Agreement, Creditor shall promptly notify Lender of such
prohibited payment and such payment
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shall be held in express trust for the benefit of, and shall, promptly after
such Creditor's receipt thereof, be paid over or delivered to Lender.
5.2 Other than as set forth in Section 5.3 below, Creditor
covenants and agrees that prior to the Termination Date it shall not, directly
or indirectly: (i) take any action to exercise any right of foreclosure or
self-help with respect to any security interest and liens on property and assets
of Borrowers which constitute Collateral or exercise any other right or remedy
with respect to such property and assets; (ii) contact any lessees of any
Collateral or otherwise seek payment from any obligor on any Collateral; (iii)
declare an event of default under any of the Creditor Loan Documents; or (iv)
take any other action that interferes with, is prejudicial to, or is
inconsistent with the Lender's rights and priority secured position with respect
to the Collateral including, without limitation, taking any action that will
impede, restrict or restrain the exercise by the Lender of its rights or
remedies under the Senior Loan Documents.
5.3 Notwithstanding anything to the contrary set forth in this
Agreement, and except as otherwise provided in this Section 5.3, on the
regularly scheduled dates for the quarterly payment of interest as set forth in
the Subordinated Note, Borrowers may make, and Creditor may accept, the
quarterly interest payments at the interest rate specified in the Subordinated
Note.
5.3.1 From and after the date Creditor receives
notice from Lender of the occurrence of an Event of Default (as defined in the
Loan and Security Agreement) in respect of the payment when due, after giving
effect to any applicable grace or cure period, of any principal of or interest
or premium on, or costs, fees or expenses owing in connection with, the Senior
Obligations (a "Payment Default"), no direct or indirect payment or distribution
shall be made by the Borrowers on account of the principal of or interest on the
Obligations of Borrowers to Creditor, or any other payment in respect thereof,
which would otherwise be permitted under Section 5.3, unless and until such
Payment Default shall have ceased to exist or shall have been cured or waived in
writing by the Lender.
5.3.2 From the date the Creditor receives notice (a
"Payment Blockage Notice") from the Lender of the occurrence and continuation of
an Event of Default (as defined in the Loan Agreement) other than a Bankruptcy
Event (as defined in Section 6.1 hereof) or a Payment Default, no direct or
indirect payment or distribution shall be made by the Borrowers on account of
the principal of or interest on Obligations of Borrowers to Creditor, or any
other payment in respect thereof, which would otherwise be permitted under
Section 5.3, unless and until such Event of Default shall have been cured or
waived in writing by the Lender.
5.3.3 Borrowers agree that, promptly following their
receipt of any notice given by the Lender under Paragraph 5.3.1 hereof, or any
Payment Blockage Notice given by the Lender under Paragraph 5.3.2 hereof, the
Borrowers shall send a copy of any such notice to Creditor; provided, however,
that Borrowers' failure to do so shall not impair the Lender's rights arising
under Paragraphs 5.3.1 and 5.3.2 hereof.
6. Payment Upon Dissolution, Etc.
6.1 Until the Termination Date, upon any payment or
distribution of all or
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substantially all assets or securities of any of the Borrowers of any kind or
character, whether in cash, property or securities, whether upon any dissolution
or winding up or total or partial liquidation or reorganization of any of the
Borrowers, or otherwise, whether pursuant to the voluntary or involuntary
bankruptcy, insolvency, receivership or other proceedings, (each such event a
"Bankruptcy Event") all amounts due or to become due upon all Senior Obligations
shall first be paid in full, before Creditor shall be entitled to receive any
payment on account of Obligations of Borrowers to Creditor. Until the
Termination Date, before any payment may be made by or on behalf of the
Borrowers on Obligations of Borrowers to Creditor upon any dissolution, winding
up, liquidation or reorganization or otherwise, any payment or distribution of
assets or securities of any of the Borrowers of any kind or character, whether
in cash, property or securities, to which Creditor would be entitled, but for
the provisions of this Section 6.1, shall be made by the Borrowers or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
person making such payment or distribution, or by Creditor if received by
Creditor, directly to Lender under the Senior Loan Documents.
6.2 Until the Termination Date, to the extent any payment in
respect of the Senior Obligations (whether by or on behalf of Borrowers, as
proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
persons under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then if such payment is recovered by, or paid over to, such
receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
person, the Senior Obligations or, part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. Until the Termination Date, to the extent the obligation to
repay Senior Obligations is declared to be fraudulent, invalid, or otherwise set
aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then the obligations so declared fraudulent, invalid or otherwise
set aside (and all other amounts that would come due with respect thereto had
such obligation not been affected) shall be deemed to be reinstated and
outstanding as Senior Obligations for all purposes hereof as if such
declaration, invalidity or setting aside had not occurred.
6.3 Until the Termination Date, in the event that,
notwithstanding any other provision of this Agreement prohibiting payment or
distribution, any payment or distribution of assets or securities of any of the
Borrowers of any kind or character, whether in cash, property or securities,
shall be received by any Creditor at a time when such payment or distribution is
prohibited by this Agreement and before all obligations in respect of the Senior
Obligations are paid in full, such payment or distribution shall be received and
held in express trust for the benefit of, and shall, promptly after such
Creditor's receipt thereof, be paid over or delivered to, Lender for application
to the payment of Senior Obligations remaining unpaid until all such Senior
Obligations have been paid in full.
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7. Subrogation.
7.1 Upon and following the Termination Date, Creditor shall be
subrogated to the rights of Lender to receive payments or distributions of cash,
property or securities of Borrowers made on the Senior Obligations until the
principal amount of and interest on Obligations of Borrowers to Creditor shall
be paid in full; and, for the purposes of which subrogation, no payments or
distributions to Lender of any cash, property or securities to which Creditor
would be entitled except for the provisions of this Agreement, and no payment
pursuant to the provisions of this Agreement to Lender by Creditor shall, as
among Borrowers, their creditors other than the Lender, and Creditor, be deemed
to be a payment by Borrowers to or on account of the Senior Obligations. It is
understood that the provisions of this Agreement are intended solely for the
purpose of defining the relative rights of Creditor, on the one hand, and
Lender, on the other hand.
7.2 If any payment or distribution to which Creditor would
otherwise have been entitled but for the provisions of this Agreement shall have
been applied, pursuant to the provisions of this Agreement, to the payment of
all amounts payable under the Senior Obligations, then, and in such case,
Creditor shall be entitled to receive from Lender any payments or distributions
received by Lender in excess of the amount required to make payment in full of
such Senior Obligations.
8. Subordination Right Not Impaired by Acts or Omissions of Borrowers
or Lender. No right of any present or future Lender to enforce the subordination
and standstill as provided in this Agreement will at any time in any way be
prejudiced or impaired by any act or failure to act on the part of Borrowers or
by any act or failure to act, by Xxxxxx, or by any noncompliance by Borrowers
with the terms of the Obligations of Borrowers to Creditor regardless of any
knowledge thereof that Lender may have or otherwise be charged with. Creditor
acknowledges that the subordination and standstill provisions of this Agreement
are expressly intended to be for the benefit of, and shall be enforceable
directly and only by Lender.
9. No Waiver of Subordination Provisions. Without in any way limiting
the generality of Article 8 of this Agreement, Lender may, at any time and from
time to time, without the consent of Creditor, without incurring responsibility
to Creditor, and without impairing or releasing the subordination and standstill
provided in this Agreement or the obligations hereunder of Creditor to Lender,
do any one or more of the following; (a) change the manner, place or terms of
payment or extend the time of payment of, increase the amount of or interest
rates with respect to, or otherwise renew or alter, the Senior Obligations or
any instrument evidencing the same or any agreement under which Senior
Obligations are outstanding or secured, (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Obligations; (c) release any person liable in any manner for the collection of
Senior Obligations; and (d) exercise or refrain from exercising any rights
against Borrowers and any other person.
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10. No Transfer or Assignment. Creditor will not sell, assign or
transfer any of the Obligations of Borrowers to Creditor, or any instrument
evidencing the same, to any person, firm or entity unless such transferee(s)
agrees in writing to be bound by the terms of this Agreement. Creditor warrants
and represents that no prior subordination and postponement in payment as to any
of Obligations of Borrowers to Creditor has occurred.
11. No Loans or Advances. Without first obtaining the prior written
consent of Lender, which consent shall not be unreasonably withheld or delayed,
Creditor agrees not to accept any loan or advance from Borrowers nor to
hereafter forgive any of Obligations of Borrowers to Creditor and, in the event
of such a loan, advance or forgiveness without such consent, Creditor shall
thereupon become immediately liable to Lender in the amount of such loan,
advance or forgiveness. Creditor has disclosed to Lender all Obligations of
Borrowers to Creditor, whether direct, indirect, sole, joint or several or joint
and several, whether matured or unmatured, of any nature whatsoever, if any now
exist.
12. Consent to Documents. Creditor hereby consents to all of the terms,
covenants and conditions set forth in the Loan Agreement, the Senior Notes and
the other Senior Loan Documents. Creditor specifically waives notice of protest
and any and all defaults by Borrowers. Creditor further agrees that no
invalidity, irregularity or unenforceability of all or any of the Senior
Obligations, or the security therefor, shall affect, impair or be a defense to
Creditor's obligations under this Agreement.
13. Evidence of Borrowers Obligations to Creditors. Creditor agrees to
cause Obligations of Borrowers to Creditor to be evidenced by the Subordinated
Note or other instruments, which Subordinated Notes or other instruments shall
be legended with a statement to the effect that the indebtedness evidenced
thereby is subject and subordinate to the Senior Obligations in accordance with
the terms and subject to the conditions of this Agreement.
14. Borrowers' Acknowledgments, Representations and Warranties.
14.1 Each of the Borrowers acknowledges receipt of this
Agreement, consents to its terms and conditions, and agrees, except as permitted
herein, not to pay any of Obligations of Borrowers to Creditor while any of the
Senior Obligations remain outstanding. Each of the Borrowers further agrees to
notify Lender of any legal proceedings against Borrowers by Creditor and, at
Xxxxxx's request, to defend such proceedings to the best of Borrowers' ability.
14.2 Each of the Borrowers agrees that, solely in order to
prevent the barring of claims, or any of them, by imposition of any applicable
statute of limitations, Borrowers shall, from time to time and at such times as
Lender and/or Creditor deems necessary, acknowledge in writing Obligations of
Borrowers to Creditor.
14.3 Each of the Borrowers warrants and represents that each
Borrower has disclosed to Lender all of Obligations of Borrowers to Creditor.
15. Acceleration. In the event of a violation of any material term of
this Agreement by Creditor or Borrowers, all of the Senior Obligations shall,
without notice or demand, become immediately due and payable, whether or not by
its terms the Senior Obligations
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are then due and payable, and Xxxxxx may immediately proceed against Borrowers
for the collection thereof. In the event of such violation, Creditor agrees,
upon demand by Xxxxxx, immediately to deliver to Lender any moneys, securities,
and other property received by Creditor in violation of this Agreement.
16. No Impairment of Collateral. Nothing herein contained shall impair
any rights of Lender with respect to any Collateral heretofore, now or hereafter
granted, assigned, pledged or hypothecated to Lender as security for any of the
Senior Obligations, or to the proceeds thereof.
17. [Intentionally Omitted.]
18. Notices. Any notices or consents required or permitted by this
Agreement shall be in writing and shall be deemed delivered if delivered in
person, or by commercial courier against receipt or if sent by certified mail,
postage prepaid, return receipt requested, or telegraph, as follows, unless such
address is changed by written notice hereunder:
If to Borrowers: U.S. Vision, Inc.
Attn: Xxxxxxx Xxxxxxxx, CEO
0 Xxxxxx Xxxxx
Xxxx Xxxx Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
With a copy to: Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
Attn: Xxxxxx X. Xxxxxxxx, Esq.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to Creditor:
------------------------
------------------------
------------------------
------------------------
If to Lender: Commerce Bank, N.A.
Attn: Xxxxxx X. Xxxxx, Vice President
0000 Xxxxx 00 Xxxx
Xxxxxx Xxxx, XX 00000
With a copy to: Xxxxxxxx Xxxxxxxx Xxxxx & Xxxxx LLP
Attn: Xxxxxx X. Xxxxx, Esq.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx XX 00000-0000
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19. Entire Agreement. The "Background" Section above is incorporated
herein by reference and is hereby made a part of this Agreement. This Agreement
embodies the entire agreement of the parties hereto, and it is acknowledged that
there are no customs, representations, promises, terms, conditions, or
obligations referring to the subject matter, and no inducements or
representations leading to the execution hereof, other than mentioned herein;
and there may be no modification of this Agreement except in writing executed
with the same formalities as this Agreement. No failure by Xxxxxx to exercise
any right hereunder shall be construed as a waiver of the right to exercise the
same or any other right at any other time and from time to time thereafter.
20. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original, and such
counterparts shall together constitute but one and the same Agreement. Signature
by facsimile shall bind the parties thereto.
22. Governing Law. This Agreement and all other instruments or
documents issued hereunder or pursuant hereto shall be governed by and construed
in accordance with the laws of the State of New Jersey, without regard to its
principles of conflicts of law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year above written.
U.S. VISION, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxx, III
Title: Executive Vice President and Chief Financial Officer
STYL-RITE OPTICAL MFG. CO., INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxx, III
Title: Executive Vice President and Chief Financial Officer
USV OPTICAL, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxx, III
Title: Executive Vice President and Chief Financial Officer
U.S. VISION HOLDINGS, INC.
By:
--------------------------------------
Name: Xxxxxx X. Xxxx, III
Title: Executive Vice President and Chief Financial Officer
COMMERCE BANK, N.A.
By:
--------------------------------------
Xxxxxx X. Xxxxx, Vice President
---------------------------------
Name:
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