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EXHIBIT 10.22(viii)
XXXXX FARGO BANK SUBORDINATION AGREEMENT
(PAYMENTS PERMITTED)
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THIS AGREEMENT is entered into by and among HORIZON HIGH REACH, INC.
("Borrower"), X. X. XXXXXXXXX NORTH AMERICA, INC. ("Creditor"), and XXXXX FARGO
BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
A. Borrower is indebted to Creditor, and Borrower proposes to
obtain credit or has obtained credit from Bank; and
B. Bank has indicated that it will extend or continue credit to
Borrower if certain conditions are met, including without limitation, the
requirement that Creditor execute this Agreement.
NOW, THEREFORE, as an inducement to Bank to extend or continue credit
and for other valuable consideration, the parties hereto agree as follows:
1. INDEBTEDNESS SUBORDINATED. Creditor subordinates all
Indebtedness now or at any time hereafter owing from Borrower to Creditor
(including without limitation, interest thereon which may accrue subsequent to
Borrower becoming subject to any state or federal debtor-relief statute)
("Junior Debt") to all Indebtedness now or at any time hereafter owing from
Borrower to Bank ("Senior Debt"). Creditor irrevocably consents and directs that
all Senior Debt shall be paid in full prior to Borrower making any payment on
any Junior Debt, except such payments as are expressly permitted by Section 3 of
this Agreement. Creditor will, and Bank is authorized in the name of Creditor
from time to time to, execute and file such financing statements and other
documents as Bank may require in order to give notice to other persons and
entities of the terms and provisions of this Agreement. As long as this
Agreement is in effect, Creditor will not take any action or initiate any
proceedings, judicial or otherwise, to enforce Creditor's rights or remedies
with respect to any Junior Debt, including without limitation, any action to
enforce remedies with respect to any collateral securing any Junior Debt or to
obtain any judgment or prejudgment remedy against Borrower or any such
collateral.
2. INDEBTEDNESS DEFINED. The word "Indebtedness" is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations and liabilities of Borrower heretofore, now or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether Borrower may be liable individually or
jointly with others, including without limitation, obligations and liabilities
arising from notes, repurchase agreements and trust receipts.
3. RESTRICTION OF PAYMENT OF JUNIOR DEBT; DISPOSITION OF PAYMENTS
RECEIVED BY CREDITOR. Borrower will not make, and Creditor will not accept or
receive, any payment or benefit in cash, by setoff or otherwise, directly or
indirectly, on account of principal, interest or any other amounts owing on any
Junior Debt, except such payments as are expressly permitted herein. Borrower is
permitted to make and Creditor to receive ALL SCHEDULED PAYMENTS OF PRINCIPAL
AND INTEREST on that certain promissory note held by Creditor, dated as of
AUGUST 26, 1999, in the principal amount of $18,000,000.00 (the "Note");
provided however, that (a) Borrower shall not make, nor Creditor receive, any
prepayment or accelerated payment on the Note, and (b) no payment of principal
or interest on the Note shall be made by Borrower, or received by Creditor,
after notice from Bank to Creditor that a default, or any condition, event or
act which with the giving of notice or the passage of time or both would
constitute a default, has occurred under the terms of any Senior Debt. If any
payment is made in violation of this Agreement, Creditor shall promptly deliver
the same to Bank in the form received, with any endorsement or assignment
necessary for the transfer of such payment or amounts setoff from Creditor to
Bank, to be either (in Bank's sole discretion) held as cash collateral securing
the Senior Debt or applied in reduction of the Senior Debt in such order as Bank
shall determine, and until so delivered, Creditor shall hold such payment in
trust for and on behalf of, and as the property of, Bank.
4. DISPOSITION OF EVIDENCE OF INDEBTEDNESS. If there is any
existing promissory note or other evidence of any of the Junior Debt, including
the Note, or if any promissory note or other evidence of Indebtedness is
executed at any time hereafter with respect thereto, then Borrower and Creditor
will xxxx the same with a legend stating that it is subject to this Agreement,
and if asked to do so, will deliver the same to Bank. Creditor shall not,
without Bank's prior written consent, assign, transfer, hypothecate or otherwise
dispose of any claim it now has or may at any time
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hereafter have against Borrower at any time that any Senior Debt remains
outstanding and/or Bank remains committed to extend any credit to Borrower.
5. AGREEMENT TO BE CONTINUING; APPLIES TO BORROWER'S EXISTING
INDEBTEDNESS AND ANY INDEBTEDNESS HEREAFTER ARISING. This Agreement shall be a
continuing agreement and shall apply to any and all Indebtedness of Borrower to
Bank or Creditor now existing or hereafter arising, including any Indebtedness
arising under successive transactions, related or unrelated, and notwithstanding
that from time to time all Indebtedness theretofore existing may have been paid
in full.
6. TERMINATION BY CREDITOR. Creditor may, to the extent provided
herein, terminate this Agreement by delivering written notice to Bank. Any such
notice must be sent to Bank by registered U.S. mail, postage prepaid, addressed
to its office at Fresno RCBO, 0000 X. XXXXXX XXXXXX, XXXXX 000, XXXXXX, XX
00000, or at such other address as Bank shall from time to time designate. If
such notice is received by Bank, this Agreement shall terminate as of the date
of receipt, except that the obligations of Creditor and the rights of Bank
hereunder shall continue with respect to all Senior Debt which existed at the
time of Bank's receipt of such notice, or thereafter arose pursuant to any
agreement to extend credit by which Bank is bound at the time of its receipt of
such notice, and any extensions, renewals or modifications of any such then
existing or committed Senior Debt, including without limitation, modifications
to the amount of principal or interest payable on any Senior Debt and the
release of any security for or any guarantors of all or any portion of any
Senior Debt.
7. REPRESENTATIONS AND WARRANTIES; INFORMATION. Borrower and
Creditor represent and warrant to Bank that: (a) no interest in the Junior Debt
has been assigned or otherwise transferred to any person or entity; (b) payment
of the Junior Debt has not been heretofore subordinated to any other creditor of
Borrower; and (c) Creditor has the requisite power and authority to enter into
and perform its obligations under this Agreement. Creditor further represents
and warrants to Bank that Creditor has established adequate, independent means
of obtaining from Borrower on a continuing basis financial and other information
pertaining to Borrower's financial condition. Creditor agrees to keep adequately
informed from such means of any facts, events or circumstances which might in
any way affect Creditor's risks hereunder, and Creditor agrees that Bank shall
have no obligation to disclose to Creditor information or material about
Borrower which is acquired by Bank in any manner. Bank may, at Bank's sole
option and without obligation to do so, disclose to Creditor any information or
material relating to Borrower which is acquired by Bank by any means, and
Borrower hereby agrees to and authorizes any such disclosure by Bank.
8. TRANSFER OF ASSETS OR REORGANIZATION OF BORROWER. If any
petition is filed or any proceeding is instituted by or against Borrower under
any provisions of the Bankruptcy Reform Act, Title 11 of the United States Code,
or any other or similar law relating to bankruptcy, insolvency, reorganization
or other relief for debtors, or generally affecting creditors' rights, or
seeking the appointment of a receiver, trustee, custodian or liquidator of or
for Borrower or any of its assets, any payment or distribution of any of
Borrower's assets, whether in cash, securities or any other property, which
would be payable or deliverable with respect to any Junior Debt, shall be paid
or delivered to Bank until all Senior Debt is paid in full. Creditor grants to
Bank the right to enforce, collect and receive any such payment or distribution
and to give releases or acquittances therefor, and Creditor authorizes Bank as
its attorney-in-fact to vote and prove the Junior Debt in any of the
above-described proceedings or in any meeting of creditors of Borrower relating
thereto.
9. OTHER AGREEMENTS; NO THIRD PARTY BENEFICIARIES. Bank shall have
no direct or indirect obligations to Creditor of any kind with respect to the
manner or time in which Bank exercises (or refrains from exercising) any of its
rights or remedies with respect to the Senior Debt, Borrower or any of
Borrower's assets. Creditor understands that there may be various agreements
between Bank and Borrower evidencing and governing the Senior Debt, and Creditor
acknowledges and agrees that such agreements are not intended to confer any
benefits on Creditor. Creditor further acknowledges that Bank may administer the
Senior Debt and any of Bank's agreements with Borrower in any way Bank deems
appropriate, without regard to Creditor or the Junior Debt. Creditor waives any
right Creditor might otherwise have to require a marshalling of any security
held by Bank for all or any part of the Senior Debt or to direct or affect the
manner or timing with which Bank enforces any of its security. Nothing in this
Agreement shall impair or adversely affect any right, privilege, power or remedy
of Bank with respect to the Senior Debt, Borrower or any assets of Borrower,
including without limitation, Bank's right to: (a) waive, release or subordinate
any of Bank's security or rights; (b) waive or ignore any defaults by Borrower;
and/or (c) restructure, renew, modify or supplement the Senior Debt, or any
portion thereof, or any agreement with Borrower relating to any Senior Debt. All
rights, privileges, powers and remedies of Bank may be exercised from time to
time by Bank without notice to or consent of Creditor.
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10. BREACH OF AGREEMENT BY BORROWER OR CREDITOR. In the event of any
breach of this Agreement by Borrower or Creditor, then and at any time
thereafter Bank shall have the right to declare immediately due and payable all
or any portion of the Senior Debt without presentment, demand, notice of
nonperformance, protest, notice of protest or notice of dishonor, all of which
are hereby expressly waived by Borrower and Creditor. No delay, failure or
discontinuance of Bank in exercising any right, privilege, power or remedy
hereunder shall be deemed a waiver of such right, privilege, power or remedy;
nor shall any single or partial exercise of any such right, privilege, power or
remedy preclude, waive or otherwise affect the further exercise thereof or the
exercise of any other right, privilege, power or remedy. Any waiver, permit,
consent or approval of any kind by Bank with respect to this Agreement must be
in writing and shall be effective only to the extent set forth in such writing.
11. LIQUIDATED DAMAGES. Inasmuch as the actual damages which could
result from a breach by Creditor of its duties under Section 3 hereof are
uncertain and would be impractical or extremely difficult to fix, Creditor shall
pay to Bank, in the event of any such breach by Creditor, as liquidated and
agreed damages, and not as a penalty, all sums received by Creditor in violation
of this Agreement on account of the Junior Debt, which sums represent a
reasonable endeavor to estimate a fair compensation for the foreseeable losses
that might result from such a breach.
12. COSTS, EXPENSES AND ATTORNEYS' FEES. If any party hereto
institutes any judicial or administrative action or proceeding to enforce any
provisions of this Agreement, or alleging any breach of any provision hereof or
seeking damages or any other judicial or administrative remedy, the losing party
or parties shall pay to the prevailing party or parties all costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of such prevailing party's in-house counsel ), expended or
incurred by the prevailing party or parties in connection therewith, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower, Creditor or any other person or entity.
13. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. This Agreement may be
amended or modified only in writing signed by all parties hereto.
14. OBLIGATIONS JOINT AND SEVERAL; CONSTRUCTION. If this Agreement
is executed by more than one Creditor, it shall bind them jointly and severally.
All words used herein in the singular shall be deemed to have been used in the
plural where the context so requires.
15. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such waiver or other provision
or any remaining provisions of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of California.
17. ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, this Agreement and each other
document, instrument or contract required hereby or now or hereafter delivered
to Bank in connection herewith (collectively, the "Documents"), or any past,
present or future extensions of credit and other activities transactions or
obligations of any kind related directly or indirectly to any of the Documents,
including without limitation, any of the foregoing arising in connection with
the exercise of any self-help, ancillary or other remedies pursuant to any of
the Documents. Any party may by summary proceedings bring an action in court to
compel arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered
by the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act
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(Title 9 of the United States Code), notwithstanding any conflicting choice of
law provision in any of the Documents. The arbitration shall be conducted at a
location in California selected by the AAA or other administrator. If there is
any inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation applicable
to any Dispute shall apply to any arbitration proceeding. All discovery
activities shall be expressly limited to matters directly relevant to the
Dispute being arbitrated. Judgment upon any award rendered in an arbitration may
be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank of
the protections afforded to it under 12 U.S.C. Section 91 or any similar
applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must
be active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported by
substantial evidence or which is based on legal error, (ii) an award shall not
be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of California, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for vacating,
modifying or correcting an award the right to judicial review of (A) whether the
findings of fact rendered by the arbitrators are supported by substantial
evidence, and (B) whether the conclusions of law are erroneous under the
substantive law of the state of California. Judgment confirming an award in such
a proceeding may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance in the court in which such proceeding was commenced in accordance
with California Code of Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for
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disclosures of information by a party required in the ordinary course of its
business, by applicable law or regulation, or to the extent necessary to
exercise any judicial review rights set forth herein. If more than one agreement
for arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the Documents or the subject
matter of the Dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Documents or any relationship
between the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of AUGUST 26, 1999.
BORROWER:
HORIZON HIGH REACH, INC.
By: /s/ Xxxxxxx XxXxx
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Title: CFO
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CREDITOR:
X. X. XXXXXXXXX NORTH AMERICA, INC.
By: /s/ Xxxxxx Xxxxx
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Title: Chief Financial Officer
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BANK:
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ X. Xxxxxx
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Title: Vice President
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