SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this "Agreement") is
effective as of December 7, 1999 (the "Effective Date") by and among Hybridon,
Inc., a Delaware corporation ("Borrower"), those persons who from time to time
hold the 8% senior notes (described herein) of the Borrower due November 30,
2002 (collectively, the "Senior Lenders"), and Forum Capital Markets, LLC
("Forum"), Delaware State Employees Retirement Fund, Declaration of Trust for
the Defined Benefit Plans of ICI American Holdings Inc., Declaration of Trust
for the Defined Benefit Plans of Zeneca Holdings Inc., The X.X. XxXxxxxxx Family
Foundation and General Motors Employees Domestic Group Trust (said trusts,
foundation and fund being referred to collectively as the "Pecks Parties"; Forum
and the Pecks Parties are collectively referred to as the "Subordinate
Lenders").
RECITALS:
A. Senior Lenders have agreed to extend financial accommodations to
Borrower pursuant to the terms of the Senior Loan Documents (defined below).
B. Subordinate Lenders are also shareholders of Borrower and have
representatives on Borrower's Board of Directors.
C. As of December 31, 1996, Borrower entered into a non-revolving term
loan with Silicon Valley Bank (the "Bank") which was evidenced, in part, by that
certain Loan and Security Agreement dated as of December 31, 1996 (the
"Subordinate Loan Agreement")
D. As security for the financial accommodations made pursuant to the
Subordinate Loan Agreement, Borrower granted to Bank a security interest in
certain assets of Borrower described more fully in the Subordinate Loan
Agreement and herein.
E. On or about November 20, 1998, Subordinate Lenders purchased the
interests of Bank in credit facility evidenced and secured by the Subordinate
Loan Agreement and the Subordinate Loan Documents (defined herein).
F. As a condition to making their new financial accommodations. Senior
Lenders have required, and the Borrower and Subordinate Lenders have agreed,
that certain obligations of Borrower to Subordinate Lenders be subordinated, and
other processes be agreed to, as more fully set forth herein.
NOW, THEREFORE, in consideration of the foregoing Recitals 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:
1. DEFINITIONS.
Certain terms used herein and not otherwise defined (including capitalized terms
used in the foregoing Recitals) shall have the following meanings:
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An "Acceleration" shall mean the occurrence of any acceleration of the
principal and interest under any of the Borrower Obligations.
"Borrower's Public Filings" shall mean the periodic filings on Forms
10-K, 10-Q and 8-K, as filed from time to time with the U.S. Securities and
Exchange Commission.
Borrower Obligations" means the Senior Obligations or the Subordinate
Obligations, as the context requires.
"Committee Event" shall have the meaning set forth in Section 2.2(a).
"Default" shall mean any Default or "default" under and as defined in
the Senior Loan Agreement or the Subordinate Loan Documents, as the context
requires.
"Event of Default" means any Senior Event of Default or Subordinate
Event of Default, as the context requires.
"Forum Representative" means Xxxxxx X. Xxxxxx, or a successor chosen by
Forum.
"Lenders Committee" shall have the meaning set forth in Section 2.2(a).
"Payment in Full" or "Paid in Full" or any similar term) with respect
to any Borrower Obligation means (a) the indefeasible 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 Borrower and the full and timely performance of
all other obligations to the holder of such Borrower Obligation 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 indemnifications under the Subordinate Loan Documents), 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 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.
"Pecks Representative" means Xxxxxx X. Xxxxx or a successor chosen by
the holders of a majority of the interests held by the Pecks Parties.
"Remedy Notification" means the written notification by Subordinate
Lenders to Senior Lenders or by Senior Lenders to Subordinate Lenders of such
party's desire to exercise a Remedy following the occurrence of an Event of
Default.
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"Remedy" means any the following actions by either Senior Lenders or
Subordinate Lenders:
(i) the exercise of any right or remedies they may have under the
Subordinate Loan Documents or otherwise (other than a declaration of an
Acceleration);
(ii) the commencement or joinder with any other creditors of Borrower in
commencing any bankruptcy, reorganization, receivership or insolvency
proceeding against Borrower; or
(iii) the commencement of any action or proceeding against Borrower to
enforce or collect any Borrower Obligation, to obtain possession of property
of Borrower, to exercise control over property of Borrower or to create,
perfect or enforce any lien against property of Borrower.
"Senior Event of Default" means any Event of Default under and as
defined in the Senior Loan Documents.
"Senior Lenders' Representative" means Youssef El-Zein (a
representative designated by Pillar Investments Ltd.) or a successor
representative chosen by the holders of a majority (measured by dollar amount)
of the Senior Obligations, outstanding from time to time.
"Senior Loan Documents" means the Borrower's 8% notes, due November 30,
2002, issued to Senior Lenders, the Subscription Agreements between Borrower and
each Senior Lender, the Warrant Agreements between Borrower and the Senior
Lenders and all other instruments, agreements and documents which create,
evidence or secure the Senior Obligations from time to time (including but not
limited to any promissory notes, security agreements, pledge agreements,
hypothecation agreements, mortgages, financing statements, and all other
agreements of any type whatsoever), delivered by Borrower to Senior Lenders, as
such may be amended, modified, supplemented, restated, replaced or refinanced
(in any such case with any Senior Lender) from time to time, including all such
extensions, renewals, refinancings or refundings thereof, whether or not the
principal amount is increased.
"Senior Obligations" means all obligations of the Borrower under the
Senior Loan Documents including but not limited to principal, interest, fees and
all other amounts owing to Senior Lenders under the Senior Loan Documents, from
time to time. Notwithstanding the foregoing, the Senior Obligations shall not
include any principal owed by the Borrower to the Senior Lenders in excess of
$10,000,000 except with the consent of the Senior Lenders' Representative and
the Subordinate Lenders' Representatives.
"Subordinate Debt" means all principal, interest, fees and other
amounts owing to Subordinate Lenders under the Subordinate Loan Documents from
time to time, whether in respect of principal interest or otherwise.
"Subordinate Event of Default" means any Event of Default under and as
defined in the Subordinate Loan Documents.
"Subordinate Lenders' Representatives" shall mean the Pecks
Representative and the Forum Representative.
"Subordinate Loan Agreement" shall have the meaning set forth in the
Recitals.
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"Subordinate Loan Documents" means Subordinate Loan Agreement and all
other instruments, agreements and documents which create, evidence or secure the
Subordinate Obligations from time to time.
"Subordinate Obligations" means all obligations of Borrower under the
Subordinate Loan Documents including but not limited to principal, interest,
fees and all other amounts owing to Subordinate Lenders under the Subordinate
Loan Documents, from time to time.
2. SUBORDINATION AND INTERCREDITOR PROVISIONS.
2.1 Subordination.
(a) Subordinate Lenders hereby consent to Borrower obtaining certain
financial accommodations from Senior Lenders, all on a senior secured basis.
(b) Senior Lenders hereby acknowledge that Subordinate Lenders have
been previously granted a security interest in certain of the assets of
Borrower. Subordinate Lenders hereby acknowledge and agree that they are willing
to and hereby do subordinate the Subordinate Obligations and the collateral
securing such obligations to the Senior Obligations.
(c) Borrower and Subordinate Lenders each hereby represents and
warrants to Senior Lenders that a true, accurate and complete copy of all
Subordinate Loan Documents has been either filed as an inhibit to Borrower's
Public Filings or otherwise provided to Senior Lenders' Representative or its
counsel in writing, and that none of the Subordinate Loan Documents has been
amended or modified in any way from the versions so filed or provided.
(d) Subordinate Lenders agree, for themselves and each future holder of
the Subordinate Obligations, that: (i) subject to the terms hereof, the
Subordinate Debt is and shall be expressly subordinate and junior in right of
payment to all Senior Obligations until the Senior Obligations have been Paid in
Full; (ii) Subordinate Lenders shall not accept additional security or further
collateral to support the payment or performance of the Subordinate Debt, unless
the Senior Lender is granted a lien or security interest in such additional
collateral, and such lien or security interest in favor of Senior Lenders is
senior to the lien of the Subordinate Lenders; and (iii) Senior Lenders have
advanced funds in reliance upon the subordination of the Subordinate Debt and
the collateral securing such debt to the Senior Obligations.
2.2 Lenders Committee.
(a) Senior Lenders and Subordinate Lenders hereby agree to constitute a
"Lenders Committee" immediately upon the first to occur of the following: (i)
the occurrence of an Acceleration, or (ii) the occurrence of a Remedy
Notification (a "Committee Event").
(b) The Lenders Committee shall have three members which shall be
comprised of the Senior Lenders' Representative and the two Subordinate Lenders'
Representatives. Any matter which, under the terms of this Agreement or
otherwise, requires a vote or action by the Lenders Committee, shall require the
affirmative votes of a majority of the members of the Lenders Committee.
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(c) From and after its formation following a Committee Event, the
Lenders Committee shall be charged solely with liquidating any collateral held
by any of the Senior Lenders or Subordinate Lenders by obtaining possession of
or exerting control over such collateral, and perfecting or enforcing liens of
the Senior Lenders and the Subordinate Lenders against such collateral. Borrower
and the Lenders Committee shall disburse any proceeds of such liquidation
according to the priorities set by this Agreement.
(d) From and after any Event of Default, neither Senior Lenders nor
Subordinate Lenders may exercise a Remedy without first providing not less that
ten (10) days advance written notice to the other Lenders of its desire to so
exercise a Remedy (the "Remedy Notification"). Subsequent to the delivery of the
Remedy Notification and the resulting formation of the Lenders Committee, then,
until the date the Senior Obligations are Paid in Full, Subordinate Lenders
shall not exercise any Remedy without either (a) direction or approval by the
Lenders Committee or (b) express approval provided herein. Similarly, at any
time prior to the date the Subordinate Obligations are Paid in Full, Senior
Lenders shall not exercise any Remedy, without either (a) direction or approval
by the Lenders Committee or (b) express approval provided herein.
(e) If any insolvency, bankruptcy, receivership, liquidation,
reorganization or other similar proceedings are commenced by or against Borrower
or its property, if any proceedings for involuntary liquidation, dissolution or
other winding up of Borrower whether or not involving insolvency or bankruptcy
are commenced by or against Borrower (collectively, any "Reorganization
Proceedings"), then Senior Lenders shall be entitled in any such Reorganization
Proceedings to receive Payment in Full of all Senior Obligations before
Subordinate Lenders are entitled in any the Reorganization Proceedings to
receive any payment on account of the Subordinate Obligations. In any
Reorganization Proceedings, any payment or distribution of any kind or
character, whether in cash or in property to which Subordinate Lenders would be
entitled on account of the Subordinate Obligations but for the provisions of
this Agreement, shall be delivered to Senior Lender to the extent necessary to
make Payment in Full of all Senior Obligations remaining unpaid, after giving
effect to any concurrent payment or distribution to or for Senior Lender in
respect thereof. Subject to the Payment-in-Full of all Senior Obligations, the
holders of Subordinate Obligations shall be subrogated to the rights of the
holders of the Senior Obligations (to the extent of payments or distributions
made to holders of Senior Obligations pursuant to the foregoing sentence or
Section 2.3(b)) to receive payments or distributions of the assets of Borrower
applicable to the Senior Obligations. No such payments or distributions
applicable to the Senior Obligations shall, as between Borrower and its
creditors, other than the holders of Borrower Obligations, be deemed to be a
payment by Borrower to or on account of the Subordinate Obligations; and for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Obligations to which the holders of Subordinate Obligations would be
entitled except for the provisions of this section shall, as between Borrower
and its creditors, other than the holders of Borrower Obligations, be deemed to
be a payment by Borrower to or on account of the Senior Obligations.
(f) Notwithstanding anything to the contrary contained herein,
Subordinate Lenders may, in any proceedings described in Section 2.2 (e), in the
name of Subordinate Lenders, file claims, proofs of claims and other instruments
of similar character necessary to enforce the obligations of Borrower in respect
of the Subordinate Obligations. Notwithstanding anything to
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the contrary contained herein, Senior Lenders may, in any proceedings described
in Section 2.2 (e), in the name of Senior Lenders, file claims, proofs of claims
and other instruments of similar character necessary to enforce the obligations
of Borrower in respect of the Senior Obligations. Neither this Section 2.2(f)
nor any other provision hereof shall be construed to give Subordinate Lenders
any right to vote any Borrower Obligation held by Senior Lenders, any related
claim or any portion of such claim, whether in connection with any resolution,
arrangement, plan or reorganization, compromise, settlement, election of
trustees or otherwise, all such votes, as to Senior Obligations to be made
solely on the direction of the Senior Lenders. Neither this Section 2.2(f) nor
any other provision hereof shall be construed to give Senior Lenders any right
to vote any Borrower Obligation held by Subordinate Lenders, any related claim
or any portion of such claim, whether in connection with any resolution,
arrangement, plan or reorganization, compromise, settlement, election of
trustees or otherwise, all such votes, as to Subordinate Obligations to be made
solely on the direction of the Subordinate Lenders.
2.3 Payments of Borrower Obligations.
(a) The following provisions shall govern Subordinate Lenders' right to
receive and Borrower's right and obligation to pay any amount due and owing
under the Subordinate Loan Documents:
(i) Provided that the Subordinate Lenders' Representatives shall not
have been notified that an Acceleration shall have occurred and be
continuing or would be created thereby under the terms of the Senior Loan
Documents, Subordinate Lenders may receive and Borrower may pay interest
only at the interest rate set forth in the Subordinate Loan Documents as of
the Effective Date, when due and owing on an unaccelerated basis and not at
a rate applicable upon default.
(ii) Except as expressly permitted pursuant to Section 2.3(a)(i),
Subordinate Lenders shall not be entitled to receive or retain any direct or
indirect payment (in cash, cash-equivalents, property, by set-off or
otherwise) of or on account of any Subordinate Obligation at any time prior
to Payment in Full of the Senior Obligations; provided, however, Borrower
may deliver to Subordinate Lenders' Representatives, at any time (including
during the occurrence of an Event of Default under the Senior Loan Documents
and/or the Subordinate Loan Documents), the proceeds from the sale of
Subordinate Lender's Collateral, which sale shall be made in a manner
directed or approved by the Lenders Committee. Except as expressly permitted
pursuant to Section 2.3(a)(i) and (ii), at any time that any of the Senior
Obligations is outstanding, Borrower shall not make and Subordinate Lenders
shall not receive or accept any payment (in cash, cash equivalents,
property, by set-off, "bid in" of debt in a disposition of collateral or
otherwise) of any kind or nature with respect to the Subordinate
Obligations.
(b) If Subordinate Lenders receive any payment with respect to the
Subordinate Obligations which Subordinate Lenders are 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 to Senior Lenders, for
application to the payment of the Senior Obligations, in such order of priority
as Senior Lenders' Representative shall determine. If Subordinate Lenders pay
over any payment or distribution as provided above, then such payment or
distribution shall be
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deemed to have been made by Borrower directly to Senior Lenders and not to
Subordinate Lenders and no Subordinate Obligation shall be discharged by reason
of its receipt of any payment or distribution which is so paid over to Senior
Lenders.
(c) To the extent necessary for Senior Lenders to realize the benefits
of the subordination of the Subordinate Obligations provided for herein,
Subordinate Lenders shall execute and deliver to Senior Lenders' Representative
such instruments or documents (together with such assignments or endorsements as
Senior Lender shall deem necessary), as are consistent with the terms of this
Agreement and are reasonably requested by Senior Lenders' Representative.
(d) In the event Subordinate Lenders at any time incur any obligation
to pay money to Borrower, Subordinate Lenders hereby irrevocably agree that they
shall pay such obligation in cash or cash equivalents in accordance with the
terms of the document or instrument governing such obligation without deduction
or set-off against the Subordinate Obligations.
2.4 Borrower's Obligations Absolute. The provisions of this Agreement
are solely for the benefit of Borrower, Senior Lenders and Subordinate Lenders
for the purpose of defining the relative rights of the parties thereto. Nothing
herein shall impair, as between Borrower and any other party hereto, the
obligations of Borrower, which are unconditional and absolute, to Senior Lenders
and to Subordinate Lenders, respectively.
2.5 Transfers. Any Senior Lender or any Subordinate Lender may 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, but only on
the express condition that the transferee of the Borrower Obligations shall
expressly acknowledge to the other parties to this agreement, in writing, that
it agrees to be bound by all of the terms hereof. Senior Lenders and Subordinate
Lenders each hereby represents and warrants to the others that as of the
execution date hereof neither Senior Lenders nor Subordinate Lenders has
transferred or entered into any agreement or understanding with a proposed
transferee that they will transfer any of the Borrower Obligations.
2.6 Liens Subordinate. (a) Subordinate Lenders agree that any liens
upon Borrower's assets securing payment of the Subordinated Debt, now or
hereafter existing, are and shall be and remain inferior and subordinate to any
liens securing payment of the Senior Obligations regardless of whether such
encumbrances in favor of the Subordinated Lenders or Senior Lenders presently
exist or are hereafter created or attach.
(b) Senior Lenders and Subordinate Lenders hereby agree that, after the
Lenders Committee is constituted, the Lenders Committee may file any or all lien
releases, UCC releases, and termination statements on behalf of the Senior
Lenders and the Subordinate Lenders at any time Borrower, or any successor,
assign or agent of Borrower, proposes a sale of any asset that is approved by
the Lenders Committee. In furtherance thereof, the Senior Lenders and the
Subordinate Lenders agree to execute, acknowledge and deliver any lien releases,
UCC-3 termination statements or such additional instruments or documents as may
be reasonably necessary to confirm the foregoing within three (3) business days
of the request therefor by Lenders Committee.
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2.7 Additional Representations and Warranties. Subordinate Lenders and
Borrower represent and warrant to Senior Lenders that:
(a) as of the date hereof, the total principal amount of the
Subordinate Obligations is $6,000,000.00 plus accrued but unpaid interest;
(b) except as indicated in Borrower's Public Filings or disclosed in
writing to the Senior Lenders' Representative and its counsel, which writing is
hereby made a part hereof, as of the date hereof, to the best of their
knowledge, after due inquiry, no default or Event of Default, or event which the
notice or passage of time or both would constitute an Event of Default exists or
has occurred under the Subordinate Loan Documents;
(c) Subordinate Lenders are collectively the exclusive legal and
beneficial owner of all of the Subordinate Obligations;
(d) except as indicated in Borrower's Public Filings or disclosed in
writing to the Senior Lenders' Representative and its counsel, which writing is
hereby made a part of this Agreement, none of the Subordinate Obligations is
subject to any lien, security interest (other than Subordinate Lender's
Collateral), financing statements, subordination, assignment or other claim; and
(e) this Agreement constitutes the legal, valid and binding obligations
of Subordinate: Lenders, enforceable in accordance with its terms.
2.8 Legends. Subordinate Lenders agree that any instrument at any time
evidencing the Subordinate Obligations, or any portion thereof, shall be
permanently marked on its face with a legend conspicuously indicating that
payment thereof is subordinate in right of payment to the Senior Obligations and
subject to the terms and conditions of this Agreement, and after being so marked
certified copies thereof shall be delivered to Senior Lenders. In the event any
legend or endorsement is omitted, Senior Lenders or any of their
representatives, officers or employees are hereby irrevocably authorized on
behalf of Subordinate Lenders to make the same. No specific legend, further
assignment or endorsement or delivery of notes, guarantees or instruments shall
be necessary to subject any Subordinate Obligations to the subordination thereof
contained in this Agreement.
2.9 Waiver of Covenant. Subordinate Lenders hereby waive any breaches
or defaults arising from Borrower's failure to maintain compliance with Section
6.9 of the Subordinate Loan Agreement, entitled "Minimum Liquidity", such waiver
to remain in effect so long as any amounts of Senior Obligations remain
outstanding,
3. AGREEMENT BY BORROWER.
(a) Borrower hereby acknowledges and agrees to the foregoing terms and
provisions, and agrees that the provisions hereof will bind Borrower, together
with its successors and assigns.
(b) Borrower acknowledges and agrees that: (i) in the event of a breach
by Borrower or Subordinate Lenders of any of the terms and provisions contained
in this Agreement, such a
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breach shall constitute an Event of Default, as defined in and under the Senior
Loan Documents; and (ii) it will execute and deliver such additional documents
and take such additional action as may be necessary or desirable in the opinion
of either Subordinate Lenders or Senior Lenders to effectuate the provisions and
purposes of this Agreement.
4. MISCELLANEOUS.
4.1 Notices. Any and all notices given in connection with this
Agreement shall be deemed adequately given only if in writing and addressed to
the party for whom such notices are intended at the address set forth below. All
notices shall be sent by personal delivery, Federal Express or other over-night
messenger service, first class registered or certified mail, postage prepaid,
return receipt requested or by other means at least as fast and reliable as
first class mail. 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:
if to Borrower: Hybridon. Inc.
000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attn.: President
with a copy to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx X. Xxxx. Esq.
if to Senior Lenders: Pillar Investments Ltd. Representative
00 Xxxxxx xx Xxxxxxx
Xxxxx, XXXXXX 00000
Attn: Youssef El-Zein
with a copy to: Xxxxxxxx & Xxxxxx, Ltd.
00 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
if to Subordinate Lenders: Pecks Management
0 Xxxxxxxxxxx Xxxxx,
Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
and
Forum Capital Markets
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00 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxx: Xxxxxx X. Xxxxxx
with copies to:
The above addresses may be changed by notice of such change, mailed as provided
herein, to the last address designated.
4.2 No Fiduciary Duty. Nothing in this Agreement shall be construed to
create or impose upon any Senior Lender any fiduciary duty to any Subordinate
Lender, or any other implied obligation to act or refrain from acting with
respect to Borrower or the Senior Obligations or the collateral security
securing the Senior Obligations in any manner contrary to what any Senior Lender
may determine is in its own best interests. Similarly, nothing in this Agreement
shall be construed to create or impose upon any Subordinate Lender any fiduciary
duty to any Senior Lender, or any other implied obligation to act or refrain
from acting with respect to Borrower or the Subordinate Obligations or the
collateral security securing the Subordinate Obligations in any manner contrary
to what any Subordinate Lender may determine is in its own best interests.
4.3 Notice of Default. In addition to any other notices which may be
required hereunder, Subordinate Lenders shall give written notice to Senior
Lender Representative, promptly after they become aware of the occurrence of:
(a) an Event of Default under the terms of the Subordinate Loan Documents; (b)
the cure of any such Event of Default: (c) the payment in full of the
Subordinate Debt; (d) any Acceleration of the Subordinate Debt; and (e) any
action or proceeding instituted against Borrower on account of any Event of
Default.
4.4 Successors; Continuing Effect.
(a) This Agreement is being entered into for the benefit of, and shall
be binding upon, Borrower, each Senior Lender and each Subordinate Lender and
their respective successors and assigns, including each subsequent or additional
holder of Senior Obligations or Subordinate Debt, and any participant (whether
now existing or hereafter arising) in the Senior Obligations. The terms "Senior
Lenders" and "Subordinate Lenders" shall include, respectively, any such
subsequent or additional holder of or participant in Senior Obligations or
Subordinate Obligations 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; provided that, nothing
contained in this Section 4.3 shall be deemed to permit the transfer of the
Subordinate Obligations in violation of the provisions of Section 2.5.
(b) Senior Lenders reserve the right to grant participations in, or
otherwise sell, assign, transfer or negotiate all or any part of, or any
interest in, the Senior Obligations and the Collateral securing same. In
connection with any participation or other transfer or assignment, Senior
Lenders (i) may disclose to such assignee, participant or other transferee or
assignee all documents and information which Senior Lender now or hereafter may
have relating to the Senior Obligations or the Collateral, and (ii) shall
disclose to such participant or other transferee or assignee the existence and
terms and conditions of this Agreement.
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4.5 Amendments. This Agreement may be amended only by a written
instrument executed by holders of a majorities in interest of each of the Senior
Obligations and the Subordinate Obligations and, if such amendment affects
Borrower, by Borrower.
4.6 Term. This Agreement shall remain in full force and effect until
the Payment in Full of the Senior Obligations.
4.7 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.
4.8 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 Commonwealth of
Massachusetts.
4.9 The Borrower May Not Impair Subordination. No right of Senior
Lenders or Subordinate Lenders to enforce the subordination created hereby shall
be impaired by any act or failure to act by Borrower or by the failure by
Borrower to comply with this Agreement, regardless of any knowledge which any
Senior Lender or any Subordinate Lender may have or be otherwise charged with.
4.10 Specific Performance. The parties hereto acknowledge that legal
remedies maybe inadequate and therefore Senior Lenders and Subordinate Lenders
are hereby authorized to demand specific performance of the provisions of this
Agreement at any time when Borrower. Senior Lenders or Subordinate Lenders 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.
4.11 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.
4.12 Agreement to Control. If any provision in any document or
instrument relating to the Senior Obligations 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.
4.13 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.
4.14 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.
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4.15 Facsimile. For purposes of negotiating and finalizing this
Agreement (including any subsequent amendments thereto), any signed document
transmitted by facsimile machine ("Fax") shall be treated in all manner and
respects as an original document. The signature of any party by Fax shall be
considered for these purposes as an original signature. Any such Fax document
shall be considered to have the same binding legal effect as an original
document, provided that an original of the faxed document was mailed by first
class U.S. Mail or personally delivered to the recipient, on the date of its
transmission with proof of the fax transmission. At the request of any party,
any Fax document subject to this Agreement shall be re-executed by both parties
in an original form. The undersigned parties hereby agree that neither shall
raise the use of the Fax or the fact that any signature or document was
transmitted or communicated through the use of a Fax as a defense to the
formation of this Agreement. This agreement may be signed in one or more
counterparts, each of which shall be an original, but all of which together
shall constitute one agreement. binding on all of the parties hereto
notwithstanding that all of the parties hereto are not signatories to the same
counterpart. Each of the undersigned parties authorizes the assembly of one or
more original copies of this Agreement through the combination of the several
executed counterpart signature pages with one or more copies of this Agreement.
including the Schedules and Exhibits, if any to this Agreement. Each such
compilation of this Agreement shall constitute one original of this Agreement.
4.16 Consent to Jurisdiction; Waiver of Jury Trial.
(a) BORROWER, SUBORDINATE LENDERS AND SENIOR LENDER EACH HEREBY (i) TO
THE EXTENT PERMITTED BY APPLICABLE LAW, IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED IN BOSTON, MASSACHUSETTS, OVER ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS
AGREEMENT; (ii) IRREVOCABLY WANES, TO THE FULLEST EXTENT BORROWER, SUBORDINATE
LENDERS AND SENIOR LENDERS MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT;
(iii) AGREES THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW; AND (iv) TO THE EXTENT PERMITTED BY APPLICABLE LAW,
AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST ANY PARTY HERETO
OR ANY OF PARTY'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT 1N ANY COURT OTHER THAN
ONE LOCATED IN BOSTON, MASSACHUSETTS.
(b) NOTHING IN THIS SECTION SHALL AFFECT OR IMPAIR SENIOR OR
SUBORDINATE LENDERS' RIGHT TO SERVE LEGAL PROCESS ON BORROWER IN ANY MANNER
PERMITTED BY LAW OR SENIOR OR SUBORDINATE LENDERS' RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST BORROWER OR BORROWER'S PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
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(c) BORROWER, SENIOR LENDERS AND SUBORDINATE LENDERS EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
EACH PARTY HERETO HEREBY EXPRESSLY ACKNOWLEDGES THIS WAIVER IS A MATERIAL
INDUCEMENT FOR SENIOR LENDER TO ENTER INTO THIS AGREEMENT AND TO MAKE THE LOAN
EVIDENCED BY THE SENIOR LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Subordination Agreement as of the day, month and year first above written.
HYBRIDON, INC.
By:_______________________________
Name: ____________________________
Title:____________________________
SENIOR LENDERS
By: Pillar Investments Ltd,
Their Representative
By:_______________________________
Name:_____________________________
FORUM CAPITAL MARKETS. LLC
By:_______________________________
Name:_____________________________
Title:____________________________
DELAWARE STATE EMPLOYEES RETIREMENT
FUND DECLARATION OF TRUST FOR THE
DEFINED BENEFIT PLANS OF ICI
AMERICAN HOLDINGS INC DECLARATION
OF TRUST FOR THE DEFINED BENEFIT
PLANS OF ZENECA HOLDINGS INC. THE
X.X. XXXXXXXXX FAMILY FOUNDATION
GENERAL MOTORS EMPLOYEES DOMESTIC
GROUP TRUST
By: PECKS MANAGEMENT PARTNERS, LTD.
By:_______________________________
