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SUBORDINATION AGREEMENT
Agreement dated as of October 2, 1998, between XXXXXXX PARTNERS, LLC
("Lender") and CONNECTICUT INNOVATIONS, INC. ("CII").
WHEREAS, Lender has agreed to make a loan (the "Priority Loan") to
XXXXXXX INTERNATIONAL, LTD. ("Borrower") in the original principal amount of
Four Million Dollars ($4,000,000.00), which indebtedness shall be evidenced by,
among other things, a Loan and Security Agreement dated the date hereof between
Lender and Borrower ("Priority Loan Agreement"), and a $4,000,000 Term Note
dated the date hereof made by Borrower to the order of Lender (the "Priority
Note"); and
WHEREAS, as security for the payment and performance of the Priority
Loan, Borrower has granted to Lender a valid and perfected security interest in
and lien on all of Borrower's tangible and intangible personal property, whether
now owned or hereafter acquired, and all products and proceeds thereof, all as
more fully set forth in the Priority Loan Agreement (the "Collateral"); and
WHEREAS, Borrower is indebted to CII (the "CII Indebtedness") pursuant
to a certain Amendment and Restatement
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of Development Agreement made as of the 31st day of December, 1995 between
Borrower and CII ("CII Agreement"); and
WHEREAS, payment of the CII Indebtedness is secured by a valid and
perfected security interest in and lien on all of the Collateral, as
hereinbefore defined; and
WHEREAS, the Lender has conditioned its extension of the Priority Loan
to Borrower upon CII subordinating its lien in the Collateral (other than in
Collateral consisting of Patents and Trademarks of Borrower; said Collateral
consisting of Debtor's tangible and intangible personal property other than
Patents and Trademarks referred to herein as "Subordinated Collateral") to
Lender; and
WHEREAS, CII has agreed to subordinate its lien in the Subordinated
Collateral to Lender;
NOW, THEREFORE, Lender, CII and, by its consent and acknowledgment
hereto, Borrower, hereby agree as follows:
1. CII hereby subordinates its security interest and lien in the
Subordinated Collateral to the security interest and lien of the Lender therein.
Notwithstanding the date, time, manner or order of attachment or perfection of
the security interest and liens of the Lender or CII in any of the Subordinated
Collateral, and notwithstanding any provisions of the Uniform Commercial Code,
any applicable law, any decision of any court
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or tribunal of competent jurisdiction or whether Lender or CII holds possession
of all or any part of the Subordinated Collateral, the lien and security
interest of Lender in and to the Subordinated Collateral and all proceeds
thereof shall be prior in right to the lien and security interest of CII in and
to the Subordinated Collateral.
2. After the occurrence of a default in Xxxxxxx'x obligations to the
Lender or CII which continues beyond any applicable grace period, the proceeds
from the disposition, sale or liquidation of any Subordinated Collateral shall
be applied, regardless of when the respective indebtedness of Lender or CII may
be due, first to pay the Priority Loan (including accrued interest, expenses and
other costs) and then, to pay all outstanding CII Indebtedness. At all times,
the Lender may exercise all of its rights and remedies under the Priority Loan
Agreement and Priority Note and, without limiting the foregoing, may take all
actions that it deems desirable to collect the Priority Loan as the case may be,
including without limitation, the repossessing foreclosing, selling, releasing
or disposing of any Subordinated Collateral and the commencement of, or joining
with other creditors in the commencement of, bankruptcy or insolvency actions
against Borrower.
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3. Each of Lender and CII shall give each other written notice of any
event of default or of the occurrence of any event of default under and as
defined in either the Priority Loan Agreement, the Priority Note or the CII
Agreement.
4. Unless otherwise agreed by the parties hereto, this Agreement shall
terminate upon the earlier of (a) the written agreement of all parties hereto,
or (b) the full and final satisfaction of either the Priority Loan or CII
Indebtedness.
5. All notices and other communications pursuant to this Agreement
shall be in writing and shall be deemed given when received as follows:
A. If to Lender:
Xxxxxxx Partners, LLC
c/o Xxxxxx X. Xxxxxxxxx
Tisch Family Interests
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
B. If to CII:
Connecticut Innovations, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attention: Executive Director
6. This Agreement shall be governed by and construed in accordance with
the provisions of the laws of the State of
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Connecticut. This Agreement shall be effective as of October 2, 1998,
notwithstanding the actual date of execution.
7. CII hereby acknowledges that pursuant to a certain Subordination
Agreement dated the date hereof between June X. Xxxxxx, Xxxx X. Xxxxxxx, Xx.,
Xxxxxx X. Xxxxxx and United States Trust Company of New York, as Co-Executors of
the Estate of Xxxxxx X. Xxxxxx, Late of New York, New York (collectively, the
"Estate"), CII and Borrower, CII has subordinated its lien and security interest
in and to the Subordinated Collateral to the lien and security interest therein
granted by Borrower to the Estate. CII further acknowledges that pursuant to a
certain Subordination and Intercreditor Agreement dated the date hereof by and
among the Estate, Lender and Borrower, the Estate has subordinated its lien and
security interest in and to the Collateral to the lien and security interest
therein granted by Borrower to Lender.
8. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9. Telefacsimile transmissions of any executed original document and/or
retransmission of any executed telefacsimile transmission shall be deemed to be
the same as the delivery of an executed original. At the request of any party
hereto, the
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other parties shall confirm telefacsimile transmissions by executing duplicate
original documents and delivering the same to the requesting party or parties.
[Rest of This Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
SIGNED, SEALED AND DELIVER
IN THE PRESENCE OF: XXXXXXX PARTNERS, LLC
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Manager
--------------------------
Name:
CONNECTICUT INNOVATIONS, INC.
/s/ Xxxxx Xxxxx By: Xxxxxx X. Xxxxxxx
-------------------------- --------------------------
Name: Xxxxx Xxxxx Name: Xxxxxx Xxxxxxx
Title: President &
/s/ X. X. Xxxxxx Executive Director
--------------------------
Name: X. X. Xxxxxx
The undersigned acknowledges and accepts the foregoing as of the 2nd
day of October, 1998.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: XXXXXXX INTERNATIONAL, LTD.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Name: Xxxxx X. Xxxxxxx
Title: President & CEO
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Name:
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SIGNATURE PAGE SUBORDINATION AGREEMENT
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STATE OF NEW YORK )
) ss: October 1, 0000
XXXXXX XX XXX XXXX )
Personally appeared Xxxxxx X. Xxxxx, signer and sealer of the foregoing
instrument, personally known to me (or satisfactorily proven) who acknowledged
that he is the Manager of XXXXXXX PARTNERS, LLC, is duly authorized to execute
said instrument and further acknowledged the same to be his free act and deed as
Manager of XXXXXXX PARTNERS LLC, and the free act and deed of said limited
liability company, before me, the undersigned officer.
/s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Notary Public
My Commission Expires Aug. 2, 0000
XXXXX XX XXXXXXXXXXX )
) ss: Xxxxx Xxxx Xxxxxxx 0, 0000
XXXXXX XX XXXXXXXX )
Personally appeared Xxxxxx X. Xxxxxxx, signer and sealer of the
foregoing instrument, personally known to me (or satisfactorily proven) who
acknowledged that he/she as President & Executive Director of CONNECTICUT
INNOVATIONS, INC., is duly authorized to execute said instrument and further
acknowledged the same to be his/her free act and deed as President & Executive
Director of CONNECTICUT INNOVATIONS, INC., and the free act and deed of said
CONNECTICUT INNOVATIONS, INC., before me, the undersigned officer.
/s/ Xxxxx X. Bieber
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Name: Xxxxx X. Bieber
Commissioner of the Superior Court
Notary Public
My Commission Expires Dec. 31, 2002
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SIGNATURE PAGE SUBORDINATION AGREEMENT
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STATE OF CONNECTICUT )
) ss: October __,1998
COUNTY OF )
Personally appeared _________________________, signer and sealer of the
foregoing instrument personally known to me (or satisfactorily proven) who
acknowledged that he/she as ___________________ of XXXXXXX INTERNATIONAL, LTD.,
is duly authorized to execute said instrument and further acknowledged the same
to be his/her free act and deed as ____________________ of XXXXXXX
INTERNATIONAL, LTD., and the free act and deed of said XXXXXXX INTERNATIONAL,
LTD., before me, the undersigned officer.
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Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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SIGNATURE PAGE SUBORDINATION AGREEMENT
