EXHIBIT 10(H)
SUBORDINATION AGREEMENT
This Subordination Agreement (this "Agreement") is made by and among
Xxxxxx Industries, Inc., a Delaware corporation ("Xxxxxx"), M-TIN, LLC, an
Alabama limited liability company ("M-TIN"), and AmSouth Bank, an Alabama
banking corporation ("AmSouth") on or as of the 5th day of April, 2002.
WHEREAS, Xxxxxx is or is about to become indebted to M-TIN upon a
certain promissory note in the original principal amount of One Million Five
Hundred Thousand and No/100 Dollars ($1,500,000.00) (together with any
extensions and renewals thereof, and substitutions therefore, the "M-TIN
Promissory Note");
WHEREAS, Xxxxxx is indebted to AmSouth under a line of credit pursuant
to that certain Loan Agreement dated January 7, 1993, as amended (the "Loan
Agreement"), as evidenced by that certain $11,000,000 Modified, Amended and
Restated Line of Credit Note dated as of June 15, 2001, as amended to reduce the
amount available thereunder to Seven Million Five Hundred Thousand and No/100
Dollars ($7,500,000.00) (together with any extensions and renewals thereof, and
substitutions therefore, the "AmSouth Promissory Note"); and
WHEREAS, the M-TIN Promissory Note is to be secured by a first mortgage
(the "First Mortgage") covering certain real property of Xxxxxx located in the
Alabama counties of Colbert, Lauderdale, and Limestone, which properties are
more particularly described on EXHIBITS A AND B attached hereto (the
"Properties"); and
WHEREAS, the Properties are currently encumbered by a mortgage in favor
of AmSouth dated as of January 7, 1993 and recorded in the Office of the Judge
of Probate of Colbert County in Fiche 93-01, Frames 467-517, and in the Office
of the Judge of Probate of Lauderdale County in Fiche 93-12, Frame 1-51, and in
the Office of the Judge of Probate of Limestone County in Fiche 02669, Page 012
(the "1993 Mortgage"), which 1993 Mortgage is due to be satisfied by AmSouth as
a result of Xxxxxx'x payment in full of the term loan that was secured thereby;
and
WHEREAS, Xxxxxx has requested and received from AmSouth an extension of
the maturity of the AmSouth Promissory Note until July 1, 2002, and as a
condition to such extension has agreed to secure the AmSouth Promissory Note and
all other indebtedness of Xxxxxx to AmSouth with a second mortgage covering the
Properties (the "Second Mortgage"); and
WHEREAS, the parties hereto desire to establish the priorities of their
respective security interests arising from the First Mortgage and the Second
Mortgage, and any future mortgage given in replacement of the First Mortgage;
NOW, THEREFORE, the parties hereto agree as follows:
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1. AmSouth acknowledges that the indebtedness secured by the 1993
Mortgage has been paid in full, and AmSouth agrees to satisfy of record the 1993
Mortgage.
2. AmSouth acknowledges and agrees that the Second Mortgage
against the Properties is, and shall at all times hereafter remain, subject and
subordinate in all respects to the lien of the First Mortgage upon the
Properties subject to the limitations in paragraph 3, below.
3. AmSouth further agrees that the Second Mortgage shall be
subject and subordinate in all respects to the First Mortgage and to any future
mortgage upon the Properties given in substitution or exchange for the First
Mortgage, or securing a refinancing or replacement loan to Xxxxxx (hereinafter a
"Substitute Mortgage"); provided, that, in no event shall the aggregate
indebtedness secured by the First Mortgage or any Substitute Mortgage at any
time exceed the lesser of (i) the amount outstanding on the M-TIN Promissory
Note (after giving effect to all principal reductions) plus up to an additional
$500,000.00 loaned from M-TIN to Xxxxxx (the "Additional Loan"), but only if the
note evidencing such Additional Loan is pledged and delivered to AmSouth as
collateral for the sums owing by M-TIN to AmSouth, or (ii) Two Million and
No/100 Dollars ($2,000,000.00). The parties hereto acknowledge and agree that,
for purposes of this Subordination Agreement, (x) any principal reductions in
the M-TIN Promissory Note will constitute permanent reductions in the amount
subordinated hereunder, and any readvances and reborrowings of such sums will
not be subordinated to the indebtedness owing to AmSouth, and (y) any sums
advanced pursuant to the Additional Loan, if advanced in the form of a line of
credit, may be repaid and reborrowed, and such reborrowed funds shall be
subordinated by AmSouth pursuant to the terms of this Agreement but not to
exceed $500,000. AmSouth agrees, upon the request of M-TIN or Xxxxxx, to execute
and deliver such documents as may be requested to evidence and confirm such
subordination.
4. M-TIN's delay in or failure to exercise any right or remedy
shall not be deemed a waiver of any obligation of Xxxxxx or AmSouth or any right
of M-TIN. This Agreement may be modified, and any parties' rights hereunder
waived, only by agreement in writing signed by the parties hereto.
5. This Agreement is solely for the benefit of, and shall be
binding upon, Xxxxxx, AmSouth, M-TIN, and their respective successors and
assigns, and shall not inure to the benefit of any other person or entity
whatsoever.
6. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute but one and the same instrument.
7. This Agreement shall be governed by the laws of the State of
Alabama.
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IN WITNESS WHEREOF, the parties have hereto set their hands and seals
on or as of the 5th day of April, 2002.
AMSOUTH BANK
By: /s/ XXXXXXX XXXXXXXX
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Its: Vice President
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M-TIN, LLC
/s/ XXXX X. XXXXXX
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By Xxxx X. Xxxxxx
Its Member
/s/ XXXXX X. XXXXXX, XX.
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By Xxxxx X. Xxxxxx, Xx.
Its Member
XXXXXX INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXX
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Its: Vice President - CFO
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STATE OF ALABAMA )
:
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxxxxx Xxxxxxxx, whose name as Vice President of
AmSouth Bank, an Alabama banking corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the instrument, he/she, as such officer and
with full authority, executed the same voluntarily on the day the same bears
date.
Given under my hand and official seal this the 8th day of April, 2002.
/s/ XXXXXX XXXXX
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Notary Public
[NOTARIAL SEAL] My Commission expires: January 17, 2004
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STATE OF ALABAMA )
:
LAUDERDALE COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxx X. Xxxxxx, whose name as Member of M-TIN, LLC,
an Alabama limited liability company, is signed to the foregoing instrument and
who is known to me, acknowledged before me on this day that, being informed of
the contents of the instrument, he, in his capacity as a Member and with full
authority, executed the same voluntarily on the day the same bears date.
Given under my hand and official seal this the 5th day of April, 2002.
/s/ XXXXX X. XXXXX
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Notary Public
[NOTARIAL SEAL] My Commission expires: 08-20-04
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STATE OF ALABAMA )
:
MADISON COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxxx X. Xxxxxx, Xx., whose name as Member of M-TIN,
LLC, an Alabama limited liability company, is signed to the foregoing instrument
and who is known to me, acknowledged before me on this day that, being informed
of the contents of the instrument, he, in his capacity as a Member and with full
authority, executed the same voluntarily on the day the same bears date.
Given under my hand and official seal this the 5th day of April, 2002.
/s/ XXXXXX XXXXXXX
----------------------------------------------
Notary Public
[NOTARIAL SEAL] My Commission expires: 9-28-04
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STATE OF ALABAMA )
:
LAUDERDALE COUNTY )
I, the undersigned, a notary public in and for said county in said
state, hereby certify that Xxxxx X. Xxxxxx, whose name as Vice President - CFO
of Xxxxxx Industries, Inc., a Delaware corporation, is signed to the foregoing
instrument, and who is known to me, acknowledged before me on this day that,
being informed of the contents of said instrument, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand and official seal this 5th day of April, 2002.
/s/ XXXXX X. XXXXX
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Notary Public
[NOTARIAL SEAL] My Commission expires: 08-20-04
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EXHIBIT A
THE FEE PROPERTY
See attached.
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EXHIBIT B
THE LEASEHOLD PROPERTY
See attached.
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