SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") dated as of
____________, 2002 is given by the undersigned in favor of Bank of America,
N.A., as Agent (as defined below), and the Lenders (as defined below).
WHEREAS, Xxxxx & Xxxxx Company (the "Company"), various financial
institutions (together with their respective successors and assigns, the
"Lenders") and Bank of America, N.A., as administrative agent (in such capacity,
the "Agent"), have entered into a Credit Agreement dated as of December 31, 2000
(as amended, restated or refinanced or otherwise modified from time to time, the
"Credit Agreement") pursuant to which the Lenders may make loans and other
financial accommodations to the Company from time to time;
WHEREAS, the Company may from time to time enter into Hedge Agreements
(as defined in the Guaranty and Collateral Agreement referred to in the Credit
Agreement) with one or more Lenders or affiliates thereof (the Lenders, together
with all affiliates thereof which are parties to Hedge Agreements with the
Company, are collectively called the "Lender Parties");
WHEREAS, the Company has issued a promissory note dated the date
hereof in the original principal amount of $6,000,000 (as amended or otherwise
modified from time to time, the "Note") to the undersigned;
WHEREAS, all obligations of the Company to the undersigned under the
Note are to be subordinated to the obligations of the Company to the Agent and
the Lender Parties as more fully set forth below;
NOW, THEREFORE, for good and valuable consideration, receipt whereof
is hereby acknowledged, the undersigned agrees as follows:
1. All obligations of the Company, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, are called "Liabilities". All
Liabilities to the Agent and the Lender Parties under or in connection
with the Credit Agreement are called "Senior Liabilities"; and all
Liabilities to the undersigned under or in connection with the Note are
called "Junior Liabilities"; it being expressly understood and agreed that
the term "Senior Liabilities", as used herein, shall include, without
limitation, any and all interest accruing on any of the Senior Liabilities
after the commencement of any proceedings referred to in Section 3,
notwithstanding any provision or rule of law which might restrict the
rights of the Agent or any Lender Party, as against the Company or anyone
else, to collect such interest.
2. Except as expressly otherwise provided herein or as the Agent may
hereafter otherwise expressly consent in writing, the payment of all
Junior Liabilities shall be postponed and subordinated to the payment in
full in cash of all Senior Liabilities, and no payment or other
distribution whatsoever in respect of any Junior Liabilities shall be
made, nor shall any property or assets of the Company be applied to the
purchase or other acquisition or retirement of any Junior Liabilities
until all Senior Liabilities have been paid in full in cash.
3. In the event of any dissolution, winding up, liquidation, reorganization
or other similar proceeding relating to the Company or to its creditors,
as such, or to its property (whether voluntary or involuntary, partial or
complete, and whether in bankruptcy, insolvency or receivership, or upon
an assignment for the benefit of creditors, or any other marshalling of
the assets and liabilities of the Company, or any sale of all or
substantially all of the assets of the Company, or otherwise), all Senior
Liabilities shall first be paid in full in cash before the undersigned
shall be entitled to receive and to retain any payment or distribution in
respect of any of the Junior Liabilities, and, in order to implement the
foregoing,
a. the undersigned shall cause all payments and distributions of any
kind or character in respect of the Junior Liabilities to which the
undersigned would be entitled if the Junior Liabilities were not
subordinated pursuant to this Agreement to be made directly to the
Agent,
b. the undersigned shall promptly file a claim or claims, in the form
required in such proceeding, for the full outstanding amount of the
Junior Liabilities, and shall cause said claim or claims to be
approved and all payments and other distributions in respect thereof
to be made directly to the Agent and
c. the undersigned hereby irrevocably agrees that the Agent may, at its
sole discretion, in the name of the undersigned or otherwise, demand,
xxx for, collect, receive and receipt for any and all such payments
or distributions, and file and prove, and vote or consent in any such
proceedings with respect to, any and all claims of the undersigned
relating to the Junior Liabilities.
4. In the event that the undersigned receives any payment or other
distribution of any kind or character from the Company or from any other
source whatsoever in respect of any of the Junior Liabilities, other than
as expressly permitted by the terms of this Agreement, such payment or
other distribution shall be received in trust for the Agent and the Lender
Parties and promptly turned over by the undersigned to the Agent. The
undersigned will cause to be clearly inserted in the Note or in any other
promissory note or other instrument which at any time evidences any of the
Junior Liabilities a statement to the effect that the payment thereof is
subordinated in accordance with the terms of this Agreement. The
undersigned will execute such further documents or instruments and take
such further action as the Agent may reasonably from time to time request
to carry out the intent of this Agreement.
5. All payments and distributions received by the Agent in respect of the
Junior Liabilities, to the extent received in or converted into cash, may
be applied by the Agent first to the payment of any and all expenses
(including reasonable attorneys' fees and legal expenses) paid or incurred
by the Agent in enforcing this Agreement or in endeavoring to collect or
realize upon any of the Junior Liabilities or any security therefor, and
any balance thereof shall, solely as between the undersigned and the
Agent, be applied by the Agent, in such order of application as the Agent
may from time to time select, toward the payment of the Senior Liabilities
remaining unpaid; but, as between the Company and its creditors, no such
payment or distribution of any kind or character shall be deemed to be
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a payment or distribution in respect of the Senior Liabilities; and,
notwithstanding any such payment or distribution received by the Agent in
respect of the Junior Liabilities and so applied by the Agent toward the
payment of the Senior Liabilities, the undersigned shall be subrogated to
the then existing rights of the Agent and Lender Parties, if any, in
respect of the Senior Liabilities only at such time as this Agreement
shall have been discontinued and the Senior Liabilities shall have been
finally paid in full in cash.
6. The undersigned hereby waives:
a. notice of acceptance by the Agent or any Lender Party of this
Agreement;
b. notice of the existence or creation or non-payment of all or any of
the Senior Liabilities; and
c. all diligence in collection or protection of or realization upon the
Senior Liabilities or any thereof or any security therefor.
7. The undersigned will not without the prior written consent of the Agent:
a. cancel, waive, forgive, transfer or assign, or attempt to enforce or
collect, or subordinate to any Liabilities other than the Senior
Liabilities, any Junior Liabilities or any rights in respect thereof;
b. take any action to foreclose upon, or exercise any other right with
respect to, any collateral securing the Junior Liabilities; or
c. commence, or join with any other creditor in commencing, any
bankruptcy, reorganization or insolvency proceeding with respect to
the Company.
8. This Agreement shall in all respects be a continuing agreement and shall
remain in full force and effect (notwithstanding, without limitation, the
dissolution of the undersigned or that at any time or from time to time
all Senior Liabilities may have been paid in full) until all Senior
Liabilities shall have been finally paid in full in cash and all
Commitments under and as defined in the Credit Agreement shall have
terminated.
9. The Agent or any Lender Party may, from time to time, at its sole
discretion and without notice to the undersigned, take any or all of the
following actions:
a. retain or obtain security interest in any property to secure any of
the Senior Liabilities,
b. retain or obtain the primary or secondary obligation of any other
obligor or obligors with respect to any of the Senior Liabilities,
c. extend or renew for one or more periods (whether or not longer than
the original period), alter or exchange any of the Senior
Liabilities, or release or compromise any obligation of any nature of
any obligor with respect to any of the Senior Liabilities, and
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d. release its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property
securing any of the Senior Liabilities, or extend or renew for one or
more periods (whether or not longer than the original period) or
release, compromise, alter or exchange any obligation of any nature
of any obligor with respect to any such property.
10. Any Lender Party may, from time to time, without notice to the
undersigned, assign or transfer its interest in any or all of the Senior
Liabilities; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer thereof, such Senior Liabilities shall
be and remain Senior Liabilities for the purposes of this Agreement, and
every immediate and successive assignee or transferee of any of the Senior
Liabilities or of any interest therein shall, to the extent of the
interest of such assignee or transferee in the Senior Liabilities, be
entitled to the benefits of this Agreement to the same extent as the
applicable assignor or transferor.
11. Neither the Agent nor any Lender Party shall be prejudiced in its rights
under this Agreement by any act or failure to act of the Company or the
undersigned, or any noncompliance of the Company or the undersigned with
any agreement or obligation, regardless of any knowledge thereof which the
Agent or any Lender Party may have or with which the Agent or any Lender
Party may be charged; and no action of the Agent or any Lender Party
permitted hereunder shall in any way affect or impair the rights of the
Agent or any Lender Party and the obligations of the undersigned under
this Agreement.
12. No delay on the part of the Agent or any Lender Party in the exercise of
any right or remedy shall operate as a waiver thereof, and no single or
partial exercise by the Agent or any Lender Party of any right or remedy
shall preclude other or further exercise thereof or the exercise of any
other right or remedy; nor shall any modification or waiver of any
provision of this Agreement be binding upon the Agent or any Lender Party
except as expressly set forth in a writing duly signed and delivered on
behalf of the Agent.
13. This Agreement shall be binding upon the undersigned and upon the
successors and assigns of the undersigned; and all references herein to
the Company and to the undersigned, respectively, shall be deemed to
include any successor or assign to such entity.
14. This Agreement shall be construed in accordance with and governed by the
laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State. Wherever possible each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall
be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
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15. The undersigned (and, by accepting the benefits hereof, the Agent and each
Lender Party) expressly waives any right to a trial by jury in any action
or proceeding to enforce or defend any rights under this Agreement or
under any amendment, instrument, document or agreement delivered or which
may in the future be delivered in connection herewith or arising from any
banking relationship existing in connection with this Agreement and agrees
that any such action or proceeding shall be tried before a court and not
before a jury.
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IN WITNESS WHEREOF, this Agreement has been delivered as of the day
first above written.
WARBURG, XXXXXX INVESTORS, L.P.
By __________________________________
Title _______________________________
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The Company hereby acknowledges receipt of a copy of the foregoing
Subordination Agreement, waives notice of acceptance thereof by the Agent or any
Lender Party, and agrees to be bound by the terms and provisions thereof, to
make no payments or distributions contrary to the terms and provisions thereof,
and to do every other act and thing necessary or appropriate to carry out such
terms and provisions.
Dated: ______________, 2002 XXXXX & XXXXX COMPANY
By __________________________________
Title _______________________________
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