SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this "AGREEMENT") is
entered into as of March , 1997, by and among MERIDIAN FINANCIAL
CORPORATION, an Indiana corporation ("BORROWER"), INROADS CAPITAL PARTNERS,
L.P. ("INROADS"), MESIROW CAPITAL PARTNERS VII, L.P. ("MESIROW"), EDGEWATER
PRIVATE EQUITY FUND II, L.P. ("EDGEWATER") (Inroads, Mesirow and Edgewater
collectively, the "JUNIOR CREDITORS") and LASALLE NATIONAL BANK, a national
banking association ("LENDER").
R E C I T A L S
A. Borrower and Lender have entered into a Credit Agreement dated as
of April , 1997 (the "CREDIT AGREEMENT") pursuant to which, among other
things, Lender has agreed, subject to the terms and conditions set forth in
the Credit Agreement, to make certain loans and financial accommodations to
Borrower.
B. Borrower and Junior Creditors have entered into a Securities
Purchase Agreement of dated as of March , 1997 (the "SECURITIES PURCHASE
AGREEMENT") pursuant to which Junior Creditors are extending credit to
Borrower as evidenced by Subordinated Notes issued thereunder in the
aggregate principal amount of up to $3,500,000.00 (the "JUNIOR NOTES").
C. As an inducement to and as one of the conditions precedent to the
agreement of Lender to make loans to Borrower under the Credit Agreement,
Lender has required the execution and delivery of this Agreement by Junior
Creditors and Borrower.
NOW THEREFORE, in order to induce Lender to make loans to Borrower
under the Credit Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, the parties
hereto hereby agree as follows:
1. DEFINITIONS. The following terms shall have the following
meanings in this Agreement:
1 COLLECTION ACTION shall mean (a) to make demand for or
accelerate the Junior Debt or (b) to initiate or participate
with others in any suit, action or proceeding against
Borrower to (i) enforce payment of or to collect the whole
or any part of the Junior Debt or (ii) commence judicial
enforcement of any of the rights and remedies under the
Junior Debt Documents or applicable law with respect to the
Junior Debt or the Junior Debt Documents.
2 JUNIOR DEBT shall mean all of the obligations of Borrower to
Junior Creditors evidenced by the Junior Notes and all other
amounts now or hereafter owed by Borrower to Junior
Creditors.
3 JUNIOR DEBT DOCUMENTS shall mean the Junior Notes, the
Securities Purchase Agreement and all other documents and
instruments evidencing or pertaining to all or any portion
of the Junior Debt.
4 JUNIOR DEFAULT shall mean any default (including any payment
default) under the Junior Debt Documents beyond any
applicable grace period with respect thereto which has not
been unconditionally waived by Junior Creditors and which
results in the acceleration of the maturity, or entitles
Junior Creditors to accelerate the maturity, of all or a
portion of the Junior Debt.
5 LENDER means the Lender and any other lenders that are from
time to time parties to the Credit Agreement, and their
respective successors and permitted assigns thereunder.
6 NONPAYMENT DEFAULT shall mean any default (other than a
Payment Default) under the Senior Credit Documents beyond
any applicable grace period with respect thereto (a) which
results in the acceleration of the maturity of the Senior
Indebtedness or (b) which entities Lender to accelerate the
maturity of the Senior Indebtedness and which Lender, in
good faith, deems likely to have a material adverse effect.
7 PAYMENT DEFAULT means any default in the payment of
principal of or interest on or with respect to the Senior
Indebtedness beyond any applicable grace period with respect
thereto.
8 SENIOR CREDIT AGREEMENT means the Credit Agreement, together
with any credit agreement or similar document from time to
time executed by Borrower to evidence any refinancings or
successive refinancings of the Credit Agreement as permitted
hereunder, in each case as amended, modified, supplemented,
restated, refinanced or renewed from time to time and in
effect.
9 SENIOR CREDIT DOCUMENTS means the Senior Credit Agreement,
the Notes, the Security Agreement, the Master Assignment of
Leases, the Assignments Of Lease, the Collateral Assignment
Of Life Insurance Policies and all other documents,
instruments and agreements executed or delivered in
connection therewith, in each case as amended, modified,
supplemented, restated, refinanced or renewed from time to
time as permitted hereunder and in effect.
10 SENIOR INDEBTEDNESS means all monetary obligations of
Borrower to Lender arising under, or with respect to, the
Senior Credit Agreement, the Senior Credit Documents and
under any other agreements or instruments entered into after
the date hereof to amend, waive, modify, supplement,
restate, renew, extend or refinance, in whole or in part
(herein collectively called "MODIFICATIONS") indebtedness of
the Borrower under the Senior Credit Agreement as permitted
hereunder, including, without limitation: (a) obligations
with respect to the principal of, (b) premium, if any, (c)
interest on (including interest accruing after the filing of
a petition initiating any proceeding pursuant to any
bankruptcy law, whether or not such interest is allowed as a
claim in such proceeding), and (d) fees and expenses,
including, without limitation, legal fees; however, the
amount of Senior Indebtedness shall be reduced by the sum of
(x) any principal payments on the Term Loans actually
received by Lender after the date hereof and (y) any actual
prepayment of Senior Indebtedness to the extent Borrower
acknowledges in writing that such prepayments reduce the
availability of borrowings under the Senior Credit Agreement
as in effect on the date of this Agreement or as amended as
permitted hereunder; PROVIDED, that Senior Indebtedness
shall not include any increases in the principal amount of
the indebtedness of Borrower to Lender in excess of
$10,000,000.00, which amount shall be reduced by principal
payments on the Term Loans actually received by Lender.
All other capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Credit Agreement described below.
2. SUBORDINATION.
1 AGREEMENT TO SUBORDINATE. Borrower and each of the Junior
Creditors agree that the Indebtedness evidenced by the Junior
Notes and all other Junior Debt are junior to and subordinated in
right of payment, to the extent and manner provided in this
Section 2, to the prior payment in full of all Senior
Indebtedness, and that such subordination is for the benefit of
the holders of the Senior Indebtedness. The Junior Creditors
further represents that the neither the Junior Notes or any part
of the Junior Debt has not heretofore been subordinated in favor
of or sold, assigned, pledged or otherwise transferred or
encumbered, in whole or in part, to any other person, firm or
corporation, and that the Junior Creditors hold no security
therefor, except as may be set forth in EXHIBIT 2.1 to this
agreement. The Junior Creditors acknowledge that notwithstanding
the time of filing of any financing statement or other instrument
for the purpose of perfecting any mortgage, security interest or
lien in, to or upon the assets of Borrower, the security interest
granted Senior Creditor shall have priority over any mortgage,
security interest or lien granted to the Junior Creditors by
Borrower.
2 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any distribution
to creditors of Borrower in a liquidation or dissolution of
Borrower in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding (each hereinafter referenced
to as a "Proceeding") relating to Borrower or substantially all
of its property:
(a) the Senior Indebtedness shall be paid in full in cash
before any Junior Creditor shall be entitled to receive any
payment of Junior Debt; and
(b) until the Senior Indebtedness is paid in full in cash,
any distribution to which any Junior Creditor would be entitled
but for this subsection 2.2 shall be made to holders of Senior
Indebtedness, as their interests may appear, except that Junior
Creditors may receive securities (the "Reorganization
Securities") that are subordinated to Senior Indebtedness and to
any securities received by the Lenders in connection with such
bankruptcy, reorganization, insolvency, receivership or similar
proceedings to at least the same extent as the Junior Debt is
subordinated to the Senior Indebtedness.
In the event of the liquidation or dissolution of Borrower,
or bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to Borrower or its property, Junior
Creditors shall execute and file any proofs of claim in respect
of the Junior Debt reasonably requested by Lender in connection
with any such proceeding and hereby irrevocably authorize,
empower and appoint Lender, as their agent and attorney-in-fact
to execute, verify, deliver and file such proofs of claim upon
the failure of any Junior Creditor to do so at least thirty (30)
days before the expiration of the time to file any such proof of
claim; provided, however, Lender shall have no obligation to file
any such proof of claim and shall have no liability to the Junior
Creditors or Borrower should Lender not file any proof of claim
on behalf of the Junior Creditors.
For purposes of this Agreement, a distribution may consist
of cash, securities or other property, by set-off or otherwise.
The Senior Indebtedness shall continue to be treated as
Senior Indebtedness and the provisions of this Agreement shall
continue to govern the relative rights and priorities of Lender
and Junior Creditors even if all or part of the Senior
Indebtedness, or the security interests securing the Senior
Indebtedness, are subordinated, set aside, avoided or disallowed
in connection with any such Proceeding and this Agreement shall
be reinstated if at any time any payment of Senior Indebtedness
is rescinded or must otherwise be returned by any holder of
Senior Indebtedness or any representative of such holder.
3 DEFAULT ON SENIOR INDEBTEDNESS.
(a) Upon the final maturity of any Senior Indebtedness by lapse
of time, acceleration or otherwise, all such Senior Indebtedness shall
first be paid in full, or such payment duly provided for in cash or in
a manner satisfactory to the holders of such Senior Indebtedness,
before any payment is made by Borrower or any Person acting on behalf
of Borrower on account of any Junior Debt.
(b) Borrower may not pay any Junior Debt and may not acquire any
Junior Debt for cash or property (other than capital stock of Borrower
or Reorganization Securities) if:
(i) a Payment Default on any Senior Indebtedness occurs and
is continuing that results in the acceleration of the maturity of
such Senior Indebtedness or permits holders of such Senior
Indebtedness to accelerate its maturity; or
(ii) Borrower receives from Lender a notice of a Nonpayment
Default ("NONPAYMENT DEFAULT NOTICE").
If subsection 2.14 and the other provisions of this Section 2
otherwise permit the payment or acquisition at that time, Borrower may
resume regularly scheduled (unaccelerated) principal payments and
interest payments on the Junior Debt and may resume payment of other
amounts due on the Junior Debt when the Payment Default or Nonpayment
Default referred to in clauses (i) and (ii) above is cured or waived
or acceleration of payment of the Senior Indebtedness is rescinded or
annulled. In addition, for purposes of clause (ii) only of this
subsection 2.3(b), Borrower may resume payments on the Junior Debt and
may acquire Junior Notes when 120 days pass after the Nonpayment
Default Notice is given (the "PAYMENT BLOCKAGE PERIOD"); PROVIDED,
that the Senior Indebtedness has not been accelerated prior to
termination of such Payment Blockage Period and subsection 2.14 and
the other provisions of this Section 2 otherwise permit the payment
with respect to the Junior Debt or the acquisition of the Junior Notes
at that time; and PROVIDED, FURTHER, that while any number of such
Nonpayment Default Notices may be given during any consecutive 360-day
period, the aggregate number of days during which Payment Blockage
Periods shall be in effect shall not exceed 120 days during any 360-
day period. For all purposes of this subsection 2.3, no default
which, to the knowledge of Lender or any other holder of Senior
Indebtedness under the Senior Credit Agreement whereby such default
arises, existed or was continuing on the date of the commencement of
any Payment Blockage Period shall be, or be made, the basis for the
commencement of a second Payment Blockage Period, whether or not
within a period of 360 consecutive days, unless such default shall
have been cured or waived for a period of not less than 180 days. Any
Nonpayment Default Notice which fails to comply with the provisions of
this paragraph shall not be effective for purposes of clause (ii) or
otherwise.
After the cure or waiver of any Payment Default, or the expiration of
any Payment Blockage Period (or, if earlier, the cure or waiver of the
Nonpayment Default upon which such Payment Blockage Period is based),
any regularly scheduled interest or principal payment not made when
due as a result of such Payment Blockage Period (the "BLOCKED
PAYMENTS") may be made, together with any accrued and unpaid interest
with respect to such overdue payment(s).
4 ACCELERATION OF JUNIOR NOTE. If payment of any Junior Debt is
accelerated because of a Junior Default, the Junior Creditors and
Borrower shall promptly notify Lender of such acceleration.
5 WHEN DISTRIBUTION MUST BE PAID OVER. (a) In the event that
Borrower shall make any payment to Junior Creditors on account of any
Junior Debt at a time when such payment is prohibited by subsection
2.2 or 2.3, such payment shall be held by Junior Creditors in trust
for the benefit of, and shall be paid forthwith over and delivered to,
Lender for distribution to the holders of Senior Indebtedness for
application to the payment of all Senior Indebtedness remaining unpaid
to the extent necessary to pay all Senior Indebtedness in full in
accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
(b) If a distribution is made to Junior Creditors that because
of this Section 2 should not have been made to Junior Creditors,
Junior Creditors shall hold it in trust for holders of Senior
Indebtedness and pay it over in accordance with the foregoing
paragraph.
6 SUBROGATION. After all Senior Indebtedness is paid in full and
until the Junior Debt is paid in full, Junior Creditors shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to Junior Creditors have been applied
to the payment of Senior Indebtedness. A distribution made under this
Section 2 to holders of Senior Indebtedness which otherwise would have
been made to Junior Creditors is not, as between Junior Creditors and
Borrower, a payment by Borrower on Senior Indebtedness.
7 RELATIVE RIGHTS. This Agreement defines the relative rights of
the Junior Creditors and holders of Senior Indebtedness. Nothing
herein shall:
(a) impair, as between Borrower and Junior Creditors, the,
obligation of Borrower, which is absolute and unconditional, to pay
principal of and interest on the Junior Notes in accordance with their
terms;
(b) affect the relative rights of Junior Creditors and creditors
of Borrower other than their rights in relation to the holders of
Senior Indebtedness; or
(c) prevent Junior Creditors from exercising all available
remedies upon a Junior Default, subject to: (i) the rights of holders
of Senior Indebtedness to receive distribution and payments otherwise
payable to Junior Creditors, (ii) any Payment Blockage Period, and
(iii) the issuance of Standstill Notices as provided in this
Agreement.
If Borrower fails because of this Agreement to pay principal of, or
interest on, or any other amounts due under, the Junior Notes on the
due date, such failure, subject to any grace period set forth in the
Junior Debt Documents, shall constitute a Junior Default.
8 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present
or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time, in any way, be prejudiced or
impaired by any act or failure to act on the part of Borrower or by
any act (other than to give a written waiver in respect thereof) or
failure to act, in good faith, by any such holder, or by any
noncompliance by Borrower with terms, provisions land covenants of
this Agreement, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
9 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of Borrower referred to in
this Agreement, Junior Creditors shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding
is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered
to Junior Creditors, for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the holders
of the Senior Indebtedness and other indebtedness of Borrower, the
amount thereof or payable therein, the amount or amounts paid or
distribution thereon and all other facts pertinent thereto or to this
Agreement; PROVIDED, THAT LENDER HAS BEEN PROVIDED WRITTEN NOTICE OF
SUCH PROCEEDING AND A REASONABLE OPPORTUNITY TO APPEAR AND BE HEARD IN
SUCH MATTER.
10 NOTICE TO JUNIOR CREDITORS. Junior Creditors shall not be
charged with knowledge of the existence of any fact that would
prohibit the making of any payment in respect of Junior Debt to Junior
Creditors, unless and until Junior Creditors shall have received
written notice thereof as contemplated hereby; and, prior to the
receipt of any such written notice, Junior Creditors shall be entitled
in all respects to assume that no such fact exist.
11 SALE, TRANSFER, ETC. Junior Creditors shall not sell, assign,
pledge, dispose of or otherwise transfer all or any portion of the
Junior Debt (a) without giving prior written notice of such action to
Lender and (b) unless prior to the consummation of any such action,
the transferee thereof shall execute and deliver to Lender an
agreement substantially identical to this Agreement providing for the
continued subordination and forbearance of the Junior Debt to the
Senior Indebtedness as provided herein and for the continued
effectiveness of all of the rights of Lender arising under this
Agreement.
Notwithstanding the failure of any such transferee to execute or
deliver to Lend an agreement substantially identical to this
Agreement, the subordination effected hereby shall survive any sale,
assignment, pledge, disposition or other transfer of all or any
portion of the Junior Debt, and the terms of this Agreement shall be
binding upon the successors and assigns of the Junior Creditors, as
provided in Section 9 below.
12 LEGENDS. Until the Senior Indebtedness is paid in full in cash,
each Junior Note at all times shall contain in a conspicuous manner
the following legend:
"This Note and the indebtedness evidenced hereby are subordinate
in the manner and to the extent set forth in that certain
Subordination and Intercreditor Agreement (the "Intercreditor
Agreement") dated as of April ___, 1997 by and among Maker, Payee and
the other parties thereto to the Senior Indebtedness (as defined in
such Intercreditor Agreement); and each holder of this Note, by its
acceptance hereof, shall be bound by the provisions of the
Intercreditor Agreement."
13 RESTRICTION ON ACTION BY JUNIOR CREDITOR. If any Junior Default
(other than a Junior Default caused by (i) the Borrower becoming
insolvent, or admitting in writing its inability to pay its debts as
they mature, or making an assignment for the benefit of creditors, or
applying for or consenting to the appointment of a trustee or receiver
for a major part of its properties or (ii) a trustee or receiver being
appointed for the Borrower or a material part of properties and the
order of such appointment is not discharged, vacated or stayed within
sixty (60) days after such appointment or (iii) a Bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or
other proceedings for relief under any bankruptcy or similar law or
laws for the relief of debtors, are instituted by or against the
Borrower and, if so instituted, are consented to by the Borrower, or
if contested, are not dismissed by the adverse parties or by an order,
decree or judgment within sixty (60) days after such institution)
shall have occurred and be continuing, Junior Creditors shall deliver
to Lender written notice of such Junior Default (a "JUNIOR DEFAULT
NOTICE") not less than five (5) days prior to the date of any
acceleration of the Junior Debt or the taking of any other Collection
Action in respect to such Junior Default. Upon Lender's receipt of a
Junior Default Notice, Lender may, by written notice to Junior
Creditors (a "STANDSTILL NOTICE"), invoke a standstill period (the
"STANDSTILL PERIOD") whereby the Junior Creditors shall not accelerate
any Junior Debt or take any other Collection Action until the earlier
of (a) the acceleration of the Senior Indebtedness or (b) 120 days
after Lender's receipt of such Junior Default Notice; PROVIDED,
however, if the Standstill Period has elapsed and all then-existing
Junior Defaults have not been cured or waived, no subsequent
Standstill Notice shall be effective until such Junior Defaults are
cured or waived.
14 PAYMENTS OTHERWISE PERMITTED. Notwithstanding any provision of
this Agreement, the Junior Notes or the Junior Debt Documents to the
contrary: (a) Borrower shall not make any payments and the Junior
Creditors shall not receive: (i) any payments of interest on or with
respect to the Junior Debt prior to January 1, 1998; nor (ii) payments
of principal and other amounts owing on the Junior Debt or under the
Junior Debt Documents prior to January 1, 2001; and (b) Borrower shall
not acquire, and Junior Creditors shall not sell to Borrower, any
portion of the Junior Debt prior to January 1, 2001.
3. CONTINUED EFFECTIVENESS OF THIS AGREEMENT. The terms of this
Agreement, the subordination effected hereby, and the rights and the
obligations of Junior Creditors or Lender arising hereunder, shall not be
affected, modified or impaired in any manner or to any extent by: (a) any
amendment or modification of or supplement to the Senior Credit Agreement,
any of the other Loan Documents or any of the Junior Debt Documents; (b)
the validity or enforceability of any such documents; or (c) any exercise
or non-exercise of any right, power or remedy under or in respect of the
Senior Indebtedness or the Junior Debt or any of the instruments or
documents referred to in clause (a) above. Junior Creditors and each
holder of Junior Debt hereby acknowledge that the provisions of this
Agreement are intended to be enforceable at all times, whether before the
commencement of, after the commencement of, in connection with or premised
on the occurrence of a reorganization, insolvency, receivership or similar
proceeding.
4. REPRESENTATIONS AND WARRANTIES.
1 JUNIOR CREDITORS. Each Junior Creditor, as to itself only,
hereby represents and warrants to Agent and Lenders as follows:
4.1.1 BINDING AGREEMENTS. This Agreement, when executed
and delivered, will constitute the valid and legally binding
obligation of such Junior Creditor enforceable in accordance
with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditor's rights generally and by equitable principles.
4.1.2 NO DIVESTITURE. Such Junior Creditor is the
current owner and holder of the Junior Note and Junior Debt
and may, pursuant to the Securities Purchase Agreement, be
required to purchase an additional Junior Note, in the
amount described opposite its name below:
Principal Principal Percentage
Amount of Amount of Of
NAME JUNIOR NOTE ADDITIONAL NOTE JUNIOR DEBT
Inroads $230,769.24 $1,384,615.38 46.1538%
Mesirow $134,615.38 $ 807,692.31 26.9231%
Edgewater $134,615.38 $ 807,692.31 26.9231%
4.1.3 DEFAULT UNDER JUNIOR NOTE. No Junior Default
exists under or with respect to its Junior Note or any of
the other Junior Debt Documents.
4.1.4 CONFLICTING AGREEMENTS; LITIGATION. No provisions
of any mortgage, indenture, contract, agreement, statute,
rule, regulation, judgment, decree or order binding on such
Junior Creditor conflicts with, or requires any consent
which has not already been obtained under, or would in any
way prevent the execution, delivery or performance of the
terms of this Agreement by such Junior Creditor. The
execution, delivery and carrying out of the terms of this
Agreement will not constitute a default under, or result in
the creation or imposition of, or obligation to create, any
Lien upon the property of such Junior Creditor pursuant to
the terms of any such mortgage, indenture, contract or
agreement. No pending or, to the best of such Junior
Creditor's knowledge, threatened, litigation, arbitration or
other proceedings if adversely determined would in any way
prevent the performance of the terms of this Agreement by
such Junior Creditor.
2 BY THE LENDER. The Lender hereby represents and warrants to
each Junior Creditor that this Agreement, when executed and
delivered, will constitute the valid and legally binding
obligation of Lender enforceable in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditor's rights generally and
by equitable principles.
5. JUNIOR DEFAULT NOTICE. Upon the occurrence of each Junior
Default, Junior Creditor and Borrower shall provide Lender with written
notice thereof and Junior Creditors shall notify Lender in the event such
Junior Default is cured or waived.
6. MODIFICATION. Any modification or waiver of any provision of
this Agreement, or any consent to any departure by any Junior Creditor
herefrom, shall not be effective in any event unless the same is in writing
and signed by Lender, and then such modification, waiver or consent shall
be effective only in the specific instance and for the specific purpose
given. Any notice to or demand on Junior Creditors in any event not
specifically required of Lender, hereunder shall not entitle Junior
Creditors to any other or further notice or demand in the same, similar or
other circumstances unless specifically required hereunder.
7. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication required or permitted to be given shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied or sent by overnight courier service or
United States mail certified or registered and shall be deemed to have been
given (a) if delivered in person, when delivered; (b) if delivered by
telecopy, on the date of transmission if transmitted on a Business Day
before 4:00 p.m. (Chicago time) or, if not, on the next succeeding Business
Day, and a copy thereof is mailed via United States certified or registered
mail; (c) if delivered by overnight courier, one Business Day after
delivery to such courier properly addressed; or (d) if by the United States
mail, four Business Days after deposit in the United States mail, postage
prepaid and properly addressed.
Notices shall be addressed as follows:
(a) If to Junior Creditors, to:
Inroads Capital Partners, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Mesirow Capital Partners VII, L.P.
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Edgewater Private Equity Fund II, L.P.
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Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Altheimer & ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Borrower:
Meridian Financial Corporation
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▇▇▇▇▇ ▇▇▇
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to Lender:
LaSalle National Bank
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Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Dann, Pecar, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
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▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ 46282
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or in any case, to such other address as the party addressed
shall have previously designated by written notice to the serving
party, given in accordance with this Section 7. A notice not
given as provided above shall, if it is in writing, be deemed
given if and when actually received by the party to whom given.
8. SEVERABILITY. In the event that any provision of this Agreement
is deemed to be invalid, illegal or unenforceable by reason of the
operation of any law or by reason of the interpretation placed thereon by
any court or governmental authority, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby, and the affected provision shall
be modified to the minimum extent permitted by law so as most fully to
achieve the intention of this Agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the successors and assigns of Lender and shall be binding upon
the successors and assigns of Junior Creditors and Borrower.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall be one and the same instrument.
11. DEFINES RIGHTS OF CREDITORS. The provisions of this Agreement
are solely for the purpose of defining the relative rights of Junior
Creditors and Lender and shall not be deemed to create any rights or
priorities in favor of any other person or entity, including, without
limitation, Borrower. Borrower understands and agrees that the provisions
of this Agreement are for the benefit of Lender only and may not be
asserted by Borrower as a defense to any claim for payment under the Junior
Notes or otherwise under the Junior Debt Documents.
12. CONFLICT. In the event of any conflict between any term,
covenant or condition of this Agreement and any term, covenant or condition
of any of the Junior Debt Documents, the provisions of this Agreement shall
control and govern.
13. HEADINGS. The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.
14. TERMINATION. This Agreement shall terminate upon the
indefeasible payment in full in cash of the Senior Indebtedness.
15. APPLICABLE LAW. This Agreement shall be governed by, and be
construed and interpreted in accordance with, the internal laws (as opposed
to conflict of laws provisions) of the State of Indiana.
16. CONSENT TO JURISDICTION AND SERVICE QF PROCESS. EACH OF THE
JUNIOR CREDITORS AND BORROWER HEREBY CONSENT TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF ▇▇▇▇▇▇, STATE OF
INDIANA AND IRREVOCABLY AGREE THAT, SUBJECT TO LENDER'S ELECTION, ALL
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
JUNIOR DEBT DOCUMENTS OR THE LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS. EACH OF THE JUNIOR CREDITORS AND BORROWER ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE JUNIOR DEBT
DOCUMENTS OR THE SENIOR CREDIT DOCUMENTS. EACH OF THE JUNIOR CREDITORS
AND BORROWER IRREVOCABLY AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDINGS TO WHICH AGENT IS A PARTY IN ANY SUCH COURT MAY BE MAILED BY
REGISTERED MAIL TO JUNIOR CREDITORS AND BORROWER AT THEIR RESPECTIVE
ADDRESSES PROVIDED IN SECTION 7, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY
JUNIOR CREDITORS AND BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT OR LENDER
TO BRING PROCEEDINGS AGAINST JUNIOR CREDITORS OR BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION.
17. WAIVER OF JURY TRIAL. EACH OF THE JUNIOR CREDITORS, BORROWER AND
LENDER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE JUNIOR DEBT
DOCUMENTS OR THE SENIOR CREDIT DOCUMENTS, OR ANY DEALINGS AMONG THEM
RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE SENIOR CREDIT DOCUMENTS AND THE JUNIOR DEBT DOCUMENTS. EACH
OF THE JUNIOR CREDITORS AND BORROWER ALSO WAIVE ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
AGENT OR LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE JUNIOR CREDITORS AND
BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT LENDER HAS ALREADY RELIED ON THE WAIVER
IN ENTERING INTO THE LOAN DOCUMENTS AND THAT LENDER WILL CONTINUE TO RELY
ON THE WAIVER IN ITS RELATED FURTHER DEALINGS. EACH OF THE JUNIOR
CREDITORS AND BORROWER RELATED FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (UNLESS SUCH WRITING MAKES SPECIFIC REFERENCE
TO THIS SECTION 17), AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE
SENIOR CREDIT DOCUMENTS OR AGREEMENTS RELATING TO THE SENIOR INDEBTEDNESS
OR THE JUNIOR DEBT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the Junior Creditors, Borrower and Lender have caused
this Agreement to be executed this day of ,
1997.
JUNIOR CREDITORS:
INROADS CAPITAL PARTNERS, L.P.
BY: INROADS GENERAL PARTNERS, L.P.,
ITS GENERAL PARTNER
BY:
Title:
MESIROW CAPITAL PARTNERS VII, L.P.
By: MESIROW FINANCIAL SERVICES, INC.,
its general partner
By:
Title:
EDGEWATER PRIVATE EQUITY FUND II, L.P.
By: ▇▇▇▇▇▇ MANAGEMENT, INC.,
its general partner
By:
Title:
BORROWER:
MERIDIAN FINANCIAL CORPORATION
By:
Its:
LENDER:
LASALLE NATIONAL BANK
By:
Its: