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SUBORDINATION AND INTERCREDITOR AGREEMENT
Subordination and Intercreditor Agreement entered into as of October 2,
1998 by and among XXXXXXX PARTNERS, LLC ("New Lender"), JUNE X. XXXXXX, XXXX
X. XXXXXXX, XX., XXXXXX X. XXXXXX and the 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") and XXXXXXX INTERNATIONAL, LTD. ("Xxxxxxx").
WHEREAS, pursuant to a certain Loan and Security Agreement dated the
date hereof between Xxxxxxx and New Lender (the "Loan Agreement"), New Lender
has made a loan to Xxxxxxx in the amount of Four Million Dollars ($4,000,000)
which loan is evidenced by the Loan Agreement and a certain $4,000,000 Term Note
dated the date hereof made by Xxxxxxx to the order of the New Lender (the
"Priority Note"); and
WHEREAS, payment and performance of Xxxxxxx'x obligations under the
Loan Agreement and the Priority Note are secured by a valid and perfected
security interest in, and lien on, all of Xxxxxxx'x 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 Loan Agreement (the
"Collateral"); and
WHEREAS, Xxxxxxx is indebted to the Estate under a certain
$1,701,168.75 Promissory Note dated the date hereof made by Xxxxxxx to the order
of the Estate (the "Estate Note"); and
WHEREAS, payment and performance of Xxxxxxx'x obligations to the Estate
under the Estate Note are secured by a valid perfected security interest in, and
lien on, all of the Collateral granted to the Estate by Xxxxxxx pursuant to a
certain Security Agreement dated the date hereof (the" Estate Security
Agreement"); and
WHEREAS, the Collateral is also encumbered by a valid perfected
security interest and lien granted by Xxxxxxx to Connecticut Innovations, Inc.
("CII") pursuant to an Amendment and Restatement of Development Agreement dated
as of December 31, 1995 between Xxxxxxx and CII; and
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WHEREAS, pursuant to a certain Subordination Agreement dated the date
hereof between CII, the New Lender and Xxxxxxx, CII has agreed to subordinate
its lien and security interest in all of the Collateral other than patents and
trademarks now owned or hereafter acquired by Xxxxxxx (such patents and
trademarks herein the "Patents and Trademarks") to the lien and security
interest therein held by the New Lender; and
WHEREAS, pursuant to a certain Subordination Agreement dated the date
hereof between CII, the Estate and Xxxxxxx, CII has agreed to subordinate its
lien and security interest in all of the Collateral other than Patents and
Trademarks to the lien and security interest therein held by the Estate; and
WHEREAS, it is in the best interests of the Estate if the New Lender
provide financing to Xxxxxxx pursuant to the Loan Agreement and the Priority
Note; and
WHEREAS, to induce the New Lender to provide financing to Xxxxxxx
pursuant to the Loan Agreement and the Priority Note, the Estate has agreed to
subordinate (i) all obligations of Xxxxxxx to the Estate under the Estate Note
and the Estate Security Agreement to all of Xxxxxxx'x obligations to the New
Lender under the Loan Agreement and the Priority Note as the same may, from time
to time, be modified, amended or extended, and (ii) the Estate's lien and
security interest in and to the Collateral to the New Lender's lien and security
interest in and to the Collateral.
NOW THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. The Estate hereby subordinates its security interest and lien in the
Collateral to the security interest and lien of the New Lender therein.
Notwithstanding the date, time, manner or order of attachment or perfection of
the security interest and liens of the Estate or the New Lender in any of the
Collateral, and notwithstanding any provisions of the Uniform Commercial Code,
any applicable law, any decision of any court or tribunal of competent
jurisdiction or whether the Estate or the New Lender holds possession of all or
any part of the Collateral, the lien and security interest of the New Lender in
and to the Collateral and all proceeds thereof shall be prior in right to the
lien and security interest of the Estate in and to the Collateral.
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2. The Estate does hereby subordinate the payment of all debts,
obligations and liabilities of Xxxxxxx to the Estate under the Estate Note and
the Estate Security Agreement, (all hereinafter referred to as "Secondary
Obligations") to the payment of any and all debts, obligations and liabilities
of Xxxxxxx to the New Lender under the Loan Agreement and the Priority Note (all
hereinafter referred to as the "Primary Obligations").
3. The Estate agrees to execute any assignment, UCC-1 financing
statement, UCC-3 subordination agreement, or any other instrument or document
requested by the New Lender and to take such further action as the New Lender
may at any time, and from time to time, reasonably request in order to
effectuate this Agreement.
4. Upon any distribution of any assets of Xxxxxxx whether by reason of
sale, reorganization, liquidation, dissolution, arrangement, bankruptcy,
receivership, assignment for the benefit of creditors, foreclosure or otherwise,
the New Lender shall be entitled to receive payment in full of said Primary
Obligations prior to the payment of all or any part of said Secondary
Obligations. To enable the New Lender to assert and enforce their rights
hereunder in any such proceeding or upon the happening of any such event, the
New Lender or any person whom the New Lender may designate is hereby irrevocably
appointed attorney in fact for the Estate with full power to act in the place
and stead of the Estate, including the right to make, present, file and vote
such proofs of claim against Xxxxxxx on account of all or any part of said
Secondary Obligations as the New Lender may deem advisable and to receive and
collect any and all dividends or other payments made thereon and to apply the
same on account of said Primary Obligations. By execution and delivery of this
Agreement, the Estate grants to the New Lender full power and authority to take
any and all acts as may be necessary to enforce any and all such Secondary
Obligations, to exercise any rights as assignee of any security for payment of
said Secondary Obligations, to effectuate the aforesaid power of attorney, and
to effect collection of any and all dividends or other payments which may be
made or required at any time on account thereof; and no further documents or
instruments of any kind whatsoever shall be required to effectuate the New
Lender's
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rights under this Agreement or to implement the provisions of this Agreement.
5. The Estate will not ask, demand, xxx for, take or receive payment of
all or any part of said Secondary Obligations or exercise any rights which the
Estate may have as a secured party by agreement or by law, unless and until all
and every part of said Primary Obligations have been fully paid and discharged.
The Estate will not commence or join with any other creditors of Xxxxxxx in
commencing any bankruptcy, receivership, reorganization, insolvency or similar
proceeding against Xxxxxxx. The Estate will not take or permit or cause any
person or entity to take any action prejudicial to or inconsistent with the New
Lender's priority position over Xxxxxxx that is created by this Agreement.
6. The Estate has, to the extent deemed necessary by the Estate,
reviewed the existing agreements among the New Lender and Xxxxxxx and has had
its counsel fully explain to it such agreements and this Agreement, and
understands that there is no commitment or obligation on the New Lender's part
to make any loans or advances or to extend credit to Xxxxxxx except as may be
contained in current and presently effective written agreements between the New
Lender and Xxxxxxx; provided, however, that the Estate further understands that
such agreements may be modified, altered or amended, without notice to or
consent of the Estate.
7. The Estate will not sell, assign, transfer, pledge or hypothecate
all or any part of the Secondary Obligations, except to the New Lender.
8. The New Lender may at any time, in its discretion, renew or extend
the time of payment of all or any of said Primary Obligations or waive or
release any collateral which may be held therefor, and the New Lender may enter
into such agreements with Xxxxxxx as the New Lender may deem desirable without
notice to or further assent from the Estate and without in any way affecting the
New Lender's rights hereunder.
9. This Agreement is and shall be deemed to be a continuing
subordination and shall be and remain in full force and effect until payment in
full of the Primary Obligations.
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10. In the event any payments are made hereafter by Xxxxxxx to the
Estate or any amounts are received by the Estate contrary to the provisions of
this Agreement, the Estate shall hold all such amounts IN TRUST for the New
Lender and will promptly remit said payments or amounts to the New Lender. Upon
failure to so remit, the New Lender shall have the right to proceed directly
against the Estate for any such amount.
11. The Estate shall pay to the New Lender on demand, all expenses of
every kind, including reasonable attorneys' fees that the New Lender may incur
in enforcing any of its rights under this Agreement.
12. This Agreement is effective notwithstanding any defect in the
validity or enforceability of any instrument or document evidencing the Primary
Obligations.
13. This Agreement shall be governed by and construed under the laws of
the State of Connecticut.
14. The Estate shall execute and deliver to the New Lender such further
instruments and shall take such further action as the New Lender may at any time
and from time to time reasonably request in order to carry out the provisions
and intent of this Agreement.
15. The provisions of this Agreement are independent of and severable
from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision hereof, and this Agreement shall be
construed as if such invalid or unenforceable provision had never been contained
herein.
16. Neither the failure nor any delay on the part of the New Lender to
exercise any right, remedy, power or privilege hereunder shall operate as a
waiver thereof or give rise to an estoppel, nor be construed as an agreement to
modify the terms of this Agreement, nor shall any single or partial exercise of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver by the New Lender hereunder shall be effective
unless it is in writing
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and signed by the New Lender, and then only to the extent specifically stated in
such writing.
17. In order to induce the New Lender to provide financing to Xxxxxxx
pursuant to the Loan Agreement and the Priority Note, Xxxxxxx hereby
acknowledges this Agreement and agrees to be bound by all the terms, provisions
and conditions hereof. Xxxxxxx further agrees, without the New Lender's written
consent thereto first procured, not to repay all or any part of the Secondary
Obligations while any portion of the Primary Obligations are outstanding.
18. This Agreement shall be binding upon the Estate and their
respective heirs, executors, administrators, successors, and assigns, and all of
the New Lender's rights hereunder shall inure to the benefit of the New Lender
and its successors and assigns.
19. All notices or other communications pursuant to this Agreement
shall be in writing and shall be deemed given when received at the addresses
provided below:
If to the Estate, to:
Co-Executors of the Estate of Xxxxxx X. Xxxxxx
c/o United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
If to the New Lender, to:
Xxxxxxx Partners, LLC
c/o Xxxxxx X. Xxxxxxxxx, President
Tisch Family Interests
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxxxx, to:
Xxxxxxx International, Ltd.
Xxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: President
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Each party shall have the right to change its address by sending a
written notice thereof to the other parties by registered or certified mail
addressed as provided herein.
20. The Estate, the New Lender and Xxxxxxx hereby agree that any state
court or local court of the State of Connecticut and the United States District
Court for the District of Connecticut shall have exclusive jurisdiction to hear
and determine any claims or disputes between the Estate, the New Lender and
Xxxxxxx pertaining directly or indirectly to this Agreement, or to any matter
arising herefrom. The Estate, the New Lender and Xxxxxxx expressly submit and
consent in advance to such jurisdiction in any action or proceeding commenced in
such courts, hereby waiving personal service of the summons and complaint, or
other process or papers issued therein, and agreeing that service of such
summons and complaint, or other process or papers may be made by registered or
certified mail addressed to the Estate, the New Lender and Xxxxxxx, as the case
may be, at the address of the New Lender, the Estate or Xxxxxxx, as the case may
be, set forth above. The exclusive choice of forum set forth in this paragraph
shall not be deemed to preclude the enforcement of any judgment obtained in such
forum, in any appropriate jurisdiction.
21. 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.
22. 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 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 have caused this Agreement to be duly
executed the day and year first above written.
XXXXXXX PARTNERS, LLC
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Manager
-----------------------------------
Name:
THE ESTATE OF
XXXXXX X. XXXXXX
[signature illegible] By: /s/ June X. Xxxxxx
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Name: June X. Xxxxxx,
Its Co-Executor
[signature illegible]
----------------------------------- ------------------------------------
Name:
/s/ Xxxxx X. Xxxx By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------- ------------------------------------
Name: Xxxxx X. Xxxx Xxxx X. Xxxxxxx, Xx.,
Its Co-Executor
/s/ Geert T.M.J. Raaijnakers
-----------------------------------
Name: Geert T.M.J. Raaijnakers
[signature illegible] By: /s/ Xxxxxx X. Xxxxxx
----------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxx,
Its Co-Executor
[signature illegible]
-----------------------------------
Name:
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SIGNATURE PAGE SUBORDINATION AND INTERCREDITOR AGREEMENT
9
By: UNITED STATES TRUST
COMPANY OF NEW YORK,
Its Co-Executor
[signature illegible] By: /s/ Xxxxxx Xxxxx Xxxxxxxxxxx
----------------------------------- ------------------------------------
Name: Name: Xxxxxx Xxxxx Xxxxxxxxxxx
Title: Vice President
[signature illegible]
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Name:
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:
STATE OF NEW YORK )
) ss. October 1, 0000
XXXXXX XX XXX XXXX )
Personally appeared Xxxxxx J, 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
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Name: Xxxxx X. Xxxxx
Notary Public
My Commission Expires Aug. 2, 1999
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SIGNATURE PAGE SUBORDINATION AND INTERCREDITOR AGREEMENT
00
XXXXX XX XXX XXXXXXXXX )
) ss:
COUNTY OF GRAFTON )
On this 1 day of October, 1998, before me, the undersigned officer,
personally appeared JUNE X. XXXXXX, personally known to me (or satisfactorily
proven) who acknowledged herself to be the person whose name subscribed to the
within instrument and acknowledged that she executed the same for the purposes
therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Notary Public
My Commission Expires Apr. 2, 0000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On this 1st day of October, 1998, before me, the undersigned officer,
personally appeared XXXX X. XXXXXXX, XX., personally known to me (or
satisfactorily proven) who acknowledged himself to be the person whose name
subscribed to the within instrument and acknowledged that he executed the same
for the purposes therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Notary Public
My Commission Expires Mar. 30, 1999
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SIGNATURE PAGE SUBORDINATION AND INTERCREDITOR AGREEMENT
00
XXXXX XX XXX XXXX )
) ss:
COUNTY OF WESTCHESTER )
On this 1st day of October, 1998, before me, the undersigned officer,
personally appeared XXXXXX X. XXXXXX, personally known to me (or satisfactorily
proven) who acknowledged himself to be the person whose name subscribed to the
within instrument and acknowledged that he executed the same for the purposes
therein contained.
In witness whereof I hereunto set my hand.
/s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Notary Public
My Commission Expires July 6, 0000
XXXXX XX XXX XXXX )
) ss:
COUNTY OF )
On this 1 day of October, 1998, before me, the undersigned officer,
personally appeared Xxxxxx Xxxxx Xxxxxxxxxxx, Vice President of UNITED STATES
TRUST COMPANY OF NEW YORK, personally known to me (or satisfactorily proven) who
acknowledged himself to be the person whose name subscribed to the within
instrument and acknowledged that he executed the same for the purposes therein
contained.
In witness whereof I hereunto set my hand.
/s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Notary Public
My Commission Expires Nov. 13, 1999
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SIGNATURE PAGE SUBORDINATION AND INTERCREDITOR 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 AND INTERCREDITOR AGREEMENT
