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EXHIBIT 10.2
SUBORDINATION AND INTERCREDITOR AGREEMENT
This Subordination and Intercreditor Agreement ("Agreement")
is made as of this 26th day of March, 1999, among CONGRESS FINANCIAL
CORPORATION (CENTRAL), an Illinois corporation ("Senior Lender"), TYLER
CORPORATION, a Delaware corporation ("Subordinated Lender"), and FOREST CITY
AUTO PARTS COMPANY, a Delaware corporation ("Borrower").
W I T N E S S E T H
WHEREAS, Senior Lender and Borrower have entered into a Loan
and Security Agreement dated on or about the date hereof (as from time to time
amended, modified, extended, renewed, or restated, the "Loan Agreement"),
together with the other Financing Agreements (as defined in the Loan
Agreement), whereby Senior Lender shall make available to Borrower the credit
facilities (collectively, the "Senior Loan") therein set forth, which
obligations under such Senior Loan are secured by certain security interests in
the Collateral (as defined below), as more fully set forth in the Financing
Agreements (each as from time to time amended, modified, extended, renewed or
restated, collectively with the Loan Agreement, the "Senior Loan Documents");
WHEREAS, Borrower has issued in favor of Subordinated Lender
a Senior Subordinated Secured Promissory Note in the original principal amount
of Two Million Dollars ($2,000,000) (as may be amended and restated, the
"Subordinated A Note"), which obligations under such Subordinated A Note (i)
shall be increased to the extent of any outstanding balance under the
Subordinated C Note (defined herein) on the maturity date of the Subordinated C
Note and (ii) are secured by a junior security interest in the Collateral,
except for Permitted First Liens (defined herein), as more fully set forth in
the security agreements, mortgages and other documents executed in connection
therewith (each as from time to time amended, modified, extended, renewed or
restated, collectively with the Subordinated A Note, the "Subordinated A Loan
Documents");
WHEREAS, Borrower has issued in favor of Subordinated Lender
a Senior Subordinated Secured Promissory Note in the principal amount of One
Million Dollars ($1,000,000) (the "Subordinated B Note"), which obligations
under such Subordinated B Note are secured by a junior security interest in the
Collateral, as more fully set forth in the security agreements, mortgages and
other documents executed in connection therewith (each as from time to time
amended, modified, extended, renewed or restated, collectively, the
"Subordinated B Loan Documents");
WHEREAS, Borrower has issued in favor of Subordinated Lender
a Senior Subordinated Secured Promissory Note in the principal amount of
Three Million Eight Hundred Twenty-Five Thousand Dollars ($3,825,000) (the
"Subordinated C Note"), which obligations under such Subordinated C Note shall
(i) to the extent not paid with proceeds from the Term Loan by the maturity
date of such Subordinated C Note, be added to the principal balance
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outstanding under the Subordinated A Note and (ii) be secured by a junior
security interest in the Collateral, as more fully set forth in the security
agreements, mortgages and other documents executed in connection therewith
(each as from time to time amended, modified, extended, renewed or restated,
collectively, the "Subordinated C Loan Documents");
WHEREAS, Borrower has issued in favor of Subordinated Lender
5,500 shares of $1,000.00 par value per share preferred stock (the "Preferred
Stock") and may become obligated to redeem such Preferred Stock under the terms
set forth in the Amendment to Certificate of Incorporation of Borrower in
effect as of the date hereof (together with all certificates, instruments and
agreements evidencing the Preferred Stock, the "Preferred Stock Documents");
WHEREAS, as set forth in Section 19, Subordinated Lender
shall benefit from the execution and delivery of the Loan Agreement and the
making of the Senior Loan; and
WHEREAS, as a condition of the financial accommodations under
the Senior Loan Documents, the parties hereto are required to enter into this
Agreement to establish the priority of the repayment of Borrower's debt, and to
address certain related matters; and
WHEREAS, Subordinated Lender and Borrower desire to enter
into this Agreement in order to induce Senior Lender to enter into the Loan
Agreement with Borrower and to make the Senior Loan.
NOW, THEREFORE, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Definitions.
Except as otherwise provided herein, all capitalized terms
used in this Agreement shall have the meanings ascribed to such terms in the
Loan Agreement, provided that the following terms shall have the meanings set
forth below:
"Bankruptcy Code" shall mean Title 11 of the United States
Code (11 U.S.C. Section 101 et. seq.) or any replacement or supplemental federal
statute dealing with the bankruptcy of debtors.
"Collateral" means all assets, property and property rights
of any kind or nature, tangible or intangible, now or hereafter existing, in
which Borrower or any Obligor owns, asserts or maintains an interest.
"Finally Paid" or "Final Payment", when used in connection
with the Senior Indebtedness, shall mean the full and final payment in cash of
all of the Senior Indebtedness and the termination of Senior Lender's
obligation to make loans or other advances under the Loan Agreement.
"▇▇▇▇▇▇▇ Guaranty" shall mean that certain Limited Guaranty
executed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in favor of Senior Lender with respect to Borrower's
obligations under the Term Loan.
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"Incipient Default" shall mean any event which with the
passage of time or the service of notice or both would mature into an Event of
Default.
"Insolvency Proceeding" shall mean any proceeding commenced
by or against any Person under any provision of the Bankruptcy Code, or under
any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, formal or informal moratoria, compositions, extensions generally
with its creditors, or proceedings seeking reorganization, arrangement or other
similar relief.
"Junior Securities" shall mean any debt or equity securities
distributed to the holders of the Subordinated Indebtedness, but only if they
are subordinated to at least the same extent as the Subordinated Debt Documents
to the Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness, and any such subordination shall include provisions relating to
amortization and prepayment or, if applicable, redemption or repurchase to at
least the same effect as set forth herein such that, except to the extent
otherwise provided herein, all payments of principal on the Senior Indebtedness
or any securities issued in exchange for the Senior Indebtedness are to be made
in full prior to any payment of principal under or redemption or repurchase of
such securities distributed to the holders of the Subordinated Indebtedness.
"Liens" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction).
"Obligor" shall mean any guarantor or obligor of any Senior
Indebtedness.
"Permitted First Lien" shall mean any Lien held by
Subordinated Lender on any of Borrower's Real Property as to which Senior
Lender has agreed in writing to release its Liens on such Real Property and
permit Subordinated Lender to have a first Lien on such Real Property.
"Required Conditions" shall mean the satisfaction of each of
the following conditions: (a) no Event of Default or Incipient Default exists
or would result from the making of an Allowed Payment (defined herein), (b)
with respect to any Allowed Payment under clause (c) of Section 5 of this
Agreement, Borrower will have Excess Availability of at least $2,000,000 after
giving effect to such Allowed Payment and (c) with respect to any Allowed
Payment under clause (d) of Section 5 of this Agreement, Senior Lender shall
have funded that portion of the Term Loan supporting such Allowed Payment.
"Senior Indebtedness" means all principal, interest and other
obligations at any time due and owing by Borrower or any Obligor to Senior
Lender arising out of or incurred in connection with the Senior Loan Documents
or other documents executed in connection with the
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Senior Loan Documents (and any indebtedness which refinances such principal,
interest or other obligations) as modified, extended, renewed or restated,
whether direct or contingent and whether now existing or hereafter created. In
addition to the above, Senior Indebtedness shall also include, without
limitation, (i) all interest and costs of enforcement or preservation and
protection of Collateral which may at any time accrue with respect to the
Senior Indebtedness or which would accrue but for the operation of any
provision or doctrine with respect to the Bankruptcy Code and any obligations
of, advances made to or claims against Borrower pursuant to or with respect to
any financing or extension of credit provided to Borrower by Senior Lender
pursuant to Section 363 or 364 of the Bankruptcy Code and (ii) all interest
which accrues on the principal amount of the Senior Indebtedness subsequent to
the commencement of a proceeding under Chapter 11 of the Bankruptcy Code,
irrespective of whether or not such interest would be allowed as a claim in
such proceedings.
"Subordinated Equity Rights" shall mean all dividends,
distributions and redemption rights now or hereafter arising with respect to
any of the Preferred Stock Documents.
"Subordinated Indebtedness" means (i) the Subordinated Equity
Rights, (ii) all principal, premium, if any, interest, fees costs, enforcement
expenses (including legal fees and disbursements), reimbursement obligations,
indemnity obligations, dividends, distributions, redemptions and all other
obligations now or hereafter existing or arising under the Subordinated A Loan
Documents, Subordinated B Loan Documents and Subordinated C Loan Documents,
(iii) any principal, interest, fees or other monies which may now or hereafter
be owing by any guarantor of any Subordinated Indebtedness and (iv) all present
and future advances, debts, liabilities, indebtedness obligations, claims and
causes of action, otherwise owing to or arising in favor of Subordinated Lender
in respect of Borrower, whether evidenced by any note, or other instrument or
document, whether absolute or contingent, due or to become due, including,
without limitation, all interest, charges, expenses, fees, attorneys' fees and
any other sums chargeable to Borrower or any Obligor (and any indebtedness
which refinances such principal, interest or other obligations) as modified,
extended, renewed or restated, whether direct or contingent and whether now
existing or hereafter created. Subordinated Indebtedness shall include, without
limitation, interest which accrues on any Subordinated Indebtedness subsequent
to the commencement of a case under Chapter 11 of the Bankruptcy Code,
irrespective of whether or not such interest would be allowed as a claim in
such proceedings. Subordinated Indebtedness shall not include amounts owing to
Subordinated Lender, if any, pursuant to Section 1.4 of that certain Purchase
Agreement dated on or about the date hereof between Subordinated Lender and
HalArt, L.L.C.
"Subordinated Loan Documents" means the Subordinated A Loan
Documents, the Subordinated B Loan Documents, the Subordinated C Loan Documents
and the Preferred Stock Documents.
"UCC" shall mean Article 9 of the Uniform Commercial Code, as
in effect in the State of Illinois from time to time.
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2. Subordination.
(A) The payment and performance of the Subordinated
Indebtedness is hereby subordinated to the Final Payment of the Senior
Indebtedness and except for Allowed Payments (defined herein), Subordinated
Lender will not ask, demand, ▇▇▇ for, take or receive from Borrower by setoff
or in any other manner, the whole or any part of the Subordinated Indebtedness
which may now or hereafter be owing by Borrower and will not take any
negotiable instruments evidencing such amounts for any of the foregoing, unless
and until there is a Final Payment of the Senior Indebtedness. Subordinated
Lender now possesses and hereafter may acquire Liens or security interests in
the Collateral and hereby agrees that except for Permitted First Liens, any
Liens, security interests, claims and rights of any kind it may now possess or
hereafter acquire against Borrower, any Obligor and/or the Collateral shall be
subordinate and subject to the Liens, security interests, claims and rights
against Borrower, any Obligor and/or the Collateral of Senior Lender arising
from or out of the Senior Indebtedness, regardless of the order or time as of
which any Liens attach to any of the Collateral, the order or time of UCC
filing or any other filings, notices or recordings, the order or time of
granting of any such Liens, or the physical possession of any of the Collateral
until this Agreement is terminated in accordance with Section 26 hereof. Unless
otherwise permitted by the terms of this Agreement, the Subordinated Lender
shall have no right to possession of any Collateral or to foreclose upon any
Collateral, whether by judicial action or otherwise, unless and until the
Senior Indebtedness has been Finally Paid. The Subordinated Lender also hereby
agrees that, regardless of whether any of the Senior Indebtedness is secured or
unsecured, Senior Lender shall be subrogated to the Subordinated Lender with
respect to the Subordinated Lender's claims against Borrower and the
Subordinated Lender's Liens, if any, in any of Borrower's Collateral and the
proceeds thereof until all of the Senior Indebtedness has been Finally Paid.
(B) Subordinated Lender shall, simultaneously with the
execution and delivery of this Agreement, cause the following legend to be
placed on the Subordinated A Note, the Subordinated B Note and the Subordinated
C Note:
This Senior Subordinated Secured Promissory Note
(this "Note") and the indebtedness evidenced hereby are
subordinated in the manner and to the extent set forth in the
Subordination and Intercreditor Agreement (the "Subordination
Agreement") dated as of March 26, 1999, by the payee of this
Note in favor of Congress Financial Corporation (Central)
(together with its successors and assigns, the "Senior
Lender") to all indebtedness (including interest) at any time
owed by the maker of this Note to Senior Lender, and each
holder of this Note, by its acceptance hereof, shall be bound
by the Subordination Agreement.
(C) Subordinated Lender shall simultaneously with the
execution and delivery of this Agreement, cause the following legend to be
placed on each stock certificate evidencing the Preferred Stock:
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This Certificate and any entitlements afforded to it under
the Certificate of Incorporation, as amended, of Forest City
Auto Parts Company, is subordinated in the manner and to the
extent set forth in the Subordination and Intercreditor
Agreement (the "Subordination Agreement") dated as of March
26, 1999, by the holder of this Certificate in favor of
Congress Financial Corporation (Central) (the "Senior Lender")
to all indebtedness (including interest) at any time owed by
the issuer of this Certificate to Senior Lender, and each
holder of this Certificate, by its acceptance hereof, shall be
bound by the Subordination Agreement.
3. (A) Warranties and Representations of Subordinated Lender.
Subordinated Lender represents and warrants to Senior Lender:
(A) that this Agreement has been duly executed and delivered by Subordinated
Lender and constitutes a legal, valid and binding obligation of Subordinated
Lender, enforceable against Subordinated Lender in accordance with its terms,
except to the extent that the enforceability hereof may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting generally the enforcement of creditors'
rights and remedies and general principles of equity; (B) that Subordinated
Lender is a corporation duly formed, validly existing and in good standing
under the laws of Delaware; (C) that all necessary corporate actions have been
taken by Subordinated Lender to authorize the execution and delivery by
Subordinated Lender of this Agreement and the performance of its obligations
hereunder; (D) that the execution, delivery, and performance by Subordinated
Lender of this Agreement do not and will not conflict with or result in any
default under Subordinated Lender's certificate of incorporation, bylaws or
other governing instrument or any agreement or instrument of any kind to which
Subordinated Lender is a party or by which Subordinated Lender or its
properties are bound, except for those as to which consents have been obtained
and are in full force and effect, and except where such conflict or
contravention will not have a material adverse effect on the financial
condition, operations, prospects, profits, business or property of Subordinated
Lender; (E) Subordinated Lender is the holder and owner of all of the
Subordinated Indebtedness, together with all claims and rights in connection
therewith, arising therefrom or evidenced thereby; and (F) Subordinated Lender
has not relied and shall not rely on any representation or information of any
nature made by or received from Senior Lender relative to Borrower in deciding
to execute this Agreement or to permit it to continue in effect.
(B) Warranties and Representations of Senior Lender.
Senior Lender represents and warrants to Subordinated Lender:
(A) that this Agreement has been duly executed and delivered by Senior Lender
and constitutes a legal, valid and binding obligation of Senior Lender,
enforceable against Senior Lender in accordance with its terms, except to the
extent that the enforceability hereof may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect affecting generally the enforcement of creditors' rights and
remedies and general principles of
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equity; (B) that Senior Lender is a corporation duly formed, validly existing
and in good standing under the laws of Illinois; (C) that all necessary
corporate actions have been taken by Senior Lender to authorize the execution
and delivery by Senior Lender of this Agreement and the performance of its
obligations hereunder; and (D) that the execution, delivery, and performance by
Senior Lender of this Agreement do not and will not conflict with or result in
any default under Senior Lender's articles of incorporation, bylaws or other
governing instrument or any agreement or instrument of any kind to which Senior
Lender is a party or by which Senior Lender or its properties are bound, except
for those as to which consents have been obtained and are in full force and
effect, and except where such conflict or contravention will not have a material
adverse effect on the financial condition, operations, prospects, profits,
business or property of Senior Lender.
4. Negative Covenants. Until all of the Senior Indebtedness has been
Finally Paid: (A) Borrower shall not, directly or indirectly, grant a security
interest in, or mortgage, pledge, assign or transfer any properties to secure
or satisfy all or any part of the Subordinated Indebtedness, except for a Lien
on the Collateral which, except for Permitted First Liens, is junior to the
Lien in favor of Senior Lender on such Collateral and is subject to the terms
of this Subordination Agreement; (B) Subordinated Lender shall not demand or
accept from Borrower or any other Person any such Collateral, except for a Lien
on the Collateral which, except for Permitted First Liens, is junior to the
Lien in favor of Senior Lender on such Collateral and is subject to the terms
of this Subordination Agreement; (C) Subordinated Lender shall not hereafter
give any subordination in respect of the Subordinated Indebtedness; (D)
Subordinated Lender shall not transfer or assign any of the Subordinated
Indebtedness to any Person, except upon the condition that such transferee or
assignee shall have agreed in writing to be bound by the terms of this
Agreement as a Subordinated Lender hereunder (whereupon Subordinated Lender
shall promptly deliver a copy of such writing to Senior Lender); (E) Borrower
shall not hereafter issue any instrument, security or other writing evidencing
any part of the Subordinated Indebtedness and Subordinated Lender shall not
receive any such writing, except upon the condition that such security shall
bear the legend referred to in Section 2 above and a true copy thereof shall be
furnished to Senior Lender; and (F) none of Borrower or Subordinated Lender
otherwise shall take any action contrary to Senior Lender's priority position
over Subordinated Lender that is created by this Agreement, except with respect
to the exercise by Subordinated Lender of the rights granted to it in this
Agreement as and when permitted under this Agreement.
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5. Payments of the Subordinated Indebtedness. Until all of the
Senior Indebtedness has been Finally Paid, Borrower shall not make and
Subordinated Lender shall not accept any direct or indirect payment in cash,
property, securities or anything of value, by set-off or otherwise, with respect
to any Subordinated Indebtedness except to the extent permitted in this Section
5. Borrower may make, and Subordinated Lender may receive, the following
payments (each, an "Allowed Payment") only so long as (i) the applicable
Required Conditions are satisfied and (ii) such payment does not occur during
any Standstill Period, as described in Section 6 of this Agreement:
(a) payments of interest made on or after, and with respect
to, a scheduled interest payment date in accordance with the Subordinated A
Note, Subordinated B Note and Subordinated C Note;
(b) payments of principal made on or after, and with respect
to, a scheduled principal payment date in accordance with the Subordinated B
Note;
(c) "Partial Redemption" payments made within thirty (30)
days after the time period scheduled in accordance with (and as defined in) the
Preferred Stock Documents; and
(d) prepayments of principal under the Subordinated C Note;
provided, that any such prepayment is funded solely with proceeds from the Term
Loan.
6. Prohibition on Payments.
(A) The foregoing provisions of Section 5 to the contrary
notwithstanding, upon the failure of Borrower to satisfy any Required Condition
applicable to any Allowed Payment(s), and upon receipt by Subordinated Lender
of written notice thereof (a "Blockage Notice") from Senior Lender, no direct
or indirect payment in cash, property, securities or anything of value, by set
off or otherwise with respect to such Allowed Payment(s), shall be made or
agreed to be made by Borrower or accepted by Subordinated Lender subsequent to
the issuance of a Blockage Notice on account of any amounts due under the
Subordinated Loan Documents or in respect of any redemption, retirement or
acquisition of any of the Subordinated Indebtedness evidencing or due under the
Subordinated Loan Documents and Borrower shall not segregate or hold in trust
money for any such payment or distribution. Upon notice from Senior Lender
rescinding the Blockage Notice, Subordinated Lender shall be entitled to the
immediate payment in full of all suspended payments of the Subordinated
Indebtedness but only to the extent permitted by Section 5 (including
satisfaction of the applicable Required Conditions).
(B) The foregoing provisions of Section 6(A) to the contrary
notwithstanding, if the Blockage Notice relates solely to an Event of Default
or Incipient Default (other than an Event of Default or Incipient Default under
Section 10.1(a) of the Loan Agreement), no direct or indirect payment in cash,
property, securities or anything of value, by set off or otherwise, shall be
made or agreed to be made by Borrower or accepted by Subordinated Lender
subsequent to the issuance of a Blockage Notice on account of any amounts due
under the Subordinated Loan Documents or in respect of any redemption,
retirement or acquisition of any of the Subordinated
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Indebtedness evidencing or due under the Subordinated Loan Documents and
Borrower shall not segregate or hold in trust money for any such payment or
distribution unless and until the earliest of the following to occur has
occurred: (i) Subordinated Lender has received a written notice from Senior
Lender that such Event of Default referred to in such Blockage Notice has been
cured or waived by Senior Lender (which notice Senior Lender agrees to promptly
forward), or (ii) the expiration of one hundred eighty (180) days following the
giving of the Blockage Notice (or, if the Blockage Notice given by Senior
Lender is the result of an Incipient Default, the date such Incipient Default
ceases to exist if such date is earlier than the expiration of one hundred
eighty (180) days) (the period from the date the Blockage Notice is given to
the earlier to occur of the applicable events described in clauses (i) and (ii)
of this sentence shall be referred to as the "Standstill Period"). Upon the
expiration of the Standstill Period, Subordinated Lender shall be entitled,
notwithstanding anything herein to the contrary, to the immediate payment in
full of all suspended payments of the Subordinated Indebtedness but only to the
extent permitted by Section 5 (including satisfaction of the applicable
Required Conditions) and, subject to Section 7(B), Subordinated Lender shall
further be entitled to seek enforcement, collection, or realization on such
suspended payments of the Subordinated Indebtedness if said suspended payments
are not immediately so paid by Borrower. Senior Lender may issue a Blockage
Notice not less than thirty (30) days after the expiration of any Standstill
Period; provided such Blockage Notice is not with respect to any Event of
Default or Incipient Default in existence on the date the immediately preceding
Blockage Notice was issued.
(C) Should any payment or distribution or security or
instrument or proceeds thereof be received by the Subordinated Lender during
any Standstill Period or at any time at which such payment or distribution is
prohibited by the terms of this Agreement upon or with respect to the
Subordinated Indebtedness or any other obligations of Borrower to the
Subordinated Lender prior to the Final Payment of all of the Senior
Indebtedness, Subordinated Lender shall receive and hold the same in trust, as
trustee, for the benefit of Senior Lender, and shall forthwith deliver the same
to Senior Lender, in precisely the form received (except for the endorsement or
assignment of the Subordinated Lender where necessary), for application on any
of the Senior Indebtedness, due or not due, and, until so delivered, the same
shall be held in trust by the Subordinated Lender as the property of the Senior
Lender. In the event of the failure of the Subordinated Lender to make any such
endorsement or assignment to Senior Lender, Senior Lender, or any of its
officers or employees, is hereby irrevocably authorized to make the same.
(D) In the event that any failure of Borrower to make or of
Subordinated Lender to receive any payment with respect to the Subordinated
Indebtedness as a result of the provisions of Sections 5 and 6 shall be deemed
a default under any Subordinated Loan Document, such event shall not give rise
to any right of Subordinated Lender to exercise any remedies otherwise
available to it in respect of the Subordinated Indebtedness unless otherwise
permitted by the terms of this Agreement, any provision of any Subordinated
Loan Document to the contrary notwithstanding.
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7. Forbearance of Legal Remedies.
(A) The Subordinated Lender, prior to the Final Payment of the Senior
Indebtedness, shall have no right to enforce any claim with respect to the
Subordinated Indebtedness, or otherwise to take any action (other than to file
its claim in any proceeding under the Bankruptcy Code) against Borrower or any
Obligor or Borrower's or any Obligor's property without the prior written
consent of Senior Lender; provided, that, in the event that the Borrower shall
fail to make an Allowed Payment and such failure continues for a period of
thirty (30) days after written notice thereof is given to Senior Lender by the
Subordinated Lender (unless such failure is at a time when any applicable
Required Condition has not been satisfied), then the Subordinated Lender may
file and prosecute a lawsuit against the Borrower for payment thereof (but the
Subordinated Lender shall not enforce its Liens other than in connection with
an enforcement by Senior Lender and on a basis reasonably approved by Senior
Lender, in advance, as not being prejudicial to the interests of Senior Lender,
as senior lien holder).
(B) The foregoing provisions of Section 7(A) to the contrary
notwithstanding, Subordinated Lender may exercise any of its rights and
remedies on or after the tenth day after the scheduled maturity date of the
Subordinated A Note and Subordinated B Note (subject at all times to the
payment subordination and lien subordination provisions set forth in this
Agreement). Subordinated Lender agrees to provide Senior Lender with not less
than ten (10) days prior written notice of its intent to exercise any legal
remedies. In the event that Subordinated Lender has commenced to sell,
foreclose upon or liquidate any of the Collateral that is subject to a Lien
securing Senior Indebtedness, Subordinated Lender will permit Senior Lender to
control such sale, foreclosure or liquidation if Senior Lender gives
Subordinated Lender notice of its election to control such sale, foreclosure or
liquidation for so long as Senior Lender continues to diligently pursue such
sale, foreclosure, or liquidation in a commercially reasonable manner in
accordance with Section 9-504 of the UCC.
8. Subordinated Indebtedness Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or Reorganization of Borrower.
Upon any distribution of assets of Borrower in any dissolution, winding up,
liquidation or reorganization of Borrower (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise) tending toward liquidation of the business and assets of Borrower:
(A) the holder of all Senior Indebtedness shall first be entitled to
receive payment in full (or to have such payment duly provided for in a manner
previously agreed upon or otherwise satisfactory to it) of the principal
thereof, and premium and interest due thereon, and other amounts payable
comprising such Senior Indebtedness, before Subordinated Lender is entitled to
receive any amounts due under the Subordinated Indebtedness, except that
Subordinated Lender may receive Junior Securities; and
(B) any payment or distribution of assets of Borrower of any kind or
character whether in cash, property or securities, to which Subordinated Lender
would be entitled except for these provisions, shall be paid by the liquidating
trustee or agent or other person making such
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payment or distribution directly to the holder of the Senior Indebtedness, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Senior Indebtedness.
Borrower shall give prompt written notice to Senior Lender
and Subordinated Lender of any dissolution, winding up, liquidation or
reorganization of Borrower or any assignment for the benefit of any of the
creditors of Borrower tending toward liquidation of the business and assets of
Borrower.
9. Obligation of Borrower Unconditional. Nothing contained herein or
in the Senior Loan Documents is intended to or shall impair, as between
Borrower on one hand and Subordinated Lender on the other hand, the obligation
of Borrower, which is absolute and unconditional, to pay to the holder of the
Subordinated Indebtedness the amounts owing under the Subordinated Indebtedness
as and when the same shall become due and payable in accordance with their
terms, or to affect the relative rights of Subordinated Lender and creditors of
Borrower other than Senior Lender.
10. Subordination Rights Not Impaired by Acts or Omissions of Borrower
or Holder of Senior Indebtedness. No right of any present or future holder of
any Senior Indebtedness to enforce subordination as provided herein shall at
any time in anyway be prejudiced or impaired by any act or failure to act on
the part of Borrower, by any act or failure to act, in good faith, by any such
holder, by any act or failure to act by any other holder, or by any
noncompliance by Borrower with the terms hereof, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
Subordinated Lender shall not be released, nor shall any of Subordinated
Lender's obligations hereunder be in anyway diminished, by any of the
following: (A) the exercise or the failure to exercise by Senior Lender of any
rights or remedies conferred on it or them under the Senior Loan Documents
hereunder or existing at law or otherwise, or against any of the Collateral;
(B) the commencement of an action at law or the recovery of a judgment at law
against Borrower or any Obligor for the performance of the Senior Indebtedness
and the enforcement thereof through levy or execution or otherwise; (C) the
taking or institution of any other action or proceeding against Borrower or any
Obligor; or (D) any delay in taking, pursuing, or exercising any of the
foregoing actions, rights, powers, or remedies (even though requested by
Subordinated Lender) by Senior Lender or anyone acting for Senior Lender.
Without limiting the generality of the foregoing, Senior Lender, from time to
time, without notice to Subordinated Lender, may take all or any of the
following actions without in any manner affecting or impairing the obligations
or liability of Subordinated Lender hereunder: (i) obtain a lien or a security
interest in any property to secure any of the Senior Indebtedness; (ii) obtain
the primary and secondary liability of any party or parties with respect to any
of the Senior Indebtedness; (iii) renew, extend, or otherwise change the time
for payment of the Senior Loan or any installment thereof for any period; (iv)
release or compromise any liability of any nature of any person or entity with
respect to the Senior Indebtedness; (v) exchange, enforce, waive, release, and
apply any of the Collateral and direct the order or manner of sale thereof as
Senior Lender may in its discretion determine; (vi) enforce its rights
hereunder, whether or not Senior Lender shall proceed against any other person
or entity, (vii) agree to any amendment,
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modification, or alteration of the Senior Loan Documents and/or exercise its
rights to consent to any action or non-action of Borrower which may violate the
covenants and agreements contained in the Senior Loan Documents with or without
consideration, on such terms and conditions as may be acceptable to it; or
(viii) exercise any of its rights conferred by the Senior Loan Documents or by
law.
11. Bankruptcy Financing. Until the Senior Indebtedness has been
Finally Paid, in the event an Insolvency Proceeding shall occur and be
continuing, Subordinated Lender hereby (i) expressly consents to the granting
by Borrower to Senior Lender of senior liens and priorities in connection with
any post-petition financing of Borrower by Senior Lender and (ii) agrees that
adequate notice of such financing to Subordinated Lender shall have been
provided if Subordinated Lender received notice in accordance with Section 18
hereof two (2) Business Days prior to the entry of any order approving such
cash collateral usage or financing. Provided that Senior Lender does not object
to the granting of a junior replacement lien in favor of Subordinated Lender,
Subordinated Lender agrees not to assert any right it may have to "adequate
protection" of its interest in such security in any Insolvency Proceeding and
agrees that it will not seek to have the automatic stay lifted with respect to
such security, in each case without the prior written consent of Senior Lender.
Subordinated Lender waives any claim or defense Subordinated Lender may now or
hereafter have arising out of the election by the Senior Lender in any
Insolvency Proceeding instituted under Chapter 11 of the Bankruptcy Code of any
use of cash collateral, any borrowing or any grant of a security interest under
Sections 363 and/or 364 of the Bankruptcy Code by Borrower, as
debtor-in-possession. To the extent that Senior Lender receives payments on, or
proceeds of Collateral for, the Senior Indebtedness which are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law, or equitable cause, then as
between Senior Lender and Subordinated Lender hereunder, to the extent of such
payment or proceeds received, the Senior Indebtedness, or part thereof,
intended to be satisfied shall be revived and continue in full force and effect
as if such payments or proceeds had not been received by the Senior Lender.
12. Waivers. Borrower and Subordinated Lender each hereby waives, to
the extent permitted by law, any defense based on the adequacy of a remedy at
law which might be asserted as a bar to the remedy of specific performance of
this Agreement in any action brought therefor by Senior Lender. To the fullest
extent permitted by law and except as otherwise expressly provided in this
Agreement or the Senior Loan Documents, Borrower and Subordinated Lender each
hereby further waives presentment, demand, protest, notice of protest, notice
of default or dishonor, notice of payment or nonpayment and any other notices
and demands of any kind in connection with all negotiable instruments
evidencing all or any portion of the Senior Indebtedness or any Subordinated
Indebtedness to which Borrower and Subordinated Lender may be a party; notice
of and consent to any loans made, extensions granted or other action taken in
reliance thereon; and all other demands and notices of every kind in connection
with this Agreement, the Senior Indebtedness or the Subordinated Indebtedness.
Senior Lender shall use its best efforts to give notice to Subordinated Lender
of any notice provided to Borrower of the occurrence of an Event of Default
within five (5) Business Days following the provision of such
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notice to Borrower, provided, however, that the failure of Senior Lender to
give any such notice shall not invalidate or otherwise limit the effectiveness
of any act undertaken by Senior Lender or any of the terms of this Agreement or
provide any rights to Subordinated Lender. Subject to the provisions of Section
15 hereof, Subordinated Lender consents to any release, renewal, extension,
compromise or postponement of the time of payment of the Senior Indebtedness,
to any substitution, exchange or release of Collateral therefor and to the
addition or release of any Person primarily or secondarily liable thereon.
13. Indulgences Not Waivers. Neither the failure nor any delay on the
part of Senior 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 a party
hereunder shall be effective unless it is in writing and signed by the party
making such waiver, and then only to the extent specifically stated in such
writing.
14. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of Borrower referred to in this
Agreement, Subordinated Lender 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 a trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to Subordinated Lender, for the purpose of ascertaining the persons
entitled to participate in such payment or distribution, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto.
15. Amendment of the Subordinated Loan Documents. Subordinated Lender
agrees that it will not, without the consent of Senior Lender, amend any
Subordinated Loan Document, so as to modify the financial terms thereof in a
manner adverse to Senior Lender (including, without limitation, increasing the
amount of principal, rate of interest, dividends, fees, or prepayment premiums,
if any, or expanding any other Subordinated Equity Rights), extend the maturity
thereof, add or change any covenants in a manner more restrictive to Borrower,
or make any other modification to any Subordinated Loan Document which may
adversely affect Senior Lender. Notwithstanding the foregoing, Subordinated
Lender shall be permitted to amend and restate the Subordinated A Note for the
sole purpose of increasing the principal amount thereof by an amount equal to
the amount outstanding under the Subordinated C Note on the maturity date of
such Subordinated C Note.
16. Inconsistent or Conflicting Provisions. In the event any provision
of any of the Senior Loan Documents or the Subordinated Loan Documents is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall govern and prevail.
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17. Default. Subject to applicable notice and/or grace periods, if any
representation or warranty of Borrower or Subordinated Lender in any instrument
evidencing, securing or relating to the Senior Indebtedness proves to have been
materially false when made, or, in the event of a breach by Borrower or
Subordinated Lender in the performance of any of the material terms of this
Agreement or any instrument or agreement evidencing, securing or relating to
the Senior Indebtedness, all of the Senior Indebtedness shall, at the option of
Senior Lender, become immediately due and payable without presentment, demand,
protest, or notices of any kind, notwithstanding any time or credit otherwise
allowed. At any time Subordinated Lender fails to comply with any material term
of this Agreement that is applicable to Subordinated Lender, Senior Lender may
demand specific performance of this Agreement whether or not Borrower has
complied with this Agreement, and may exercise any other remedy available at
law or equity.
18. Notices. Any notice, consent or other communication provided for
in this Agreement shall be in writing and shall be delivered personally
(effective upon delivery), via facsimile (effective upon confirmation of
transmission), via overnight courier (effective the next Business Day after
dispatch if instructed to deliver on next Business Day) or via United States
mail (effective five (5) days after mailing, certified or registered mail,
return receipt requested, postage prepaid, first class) to each party at its
address(es) and/or facsimile number(s) set forth below its signature, or to
such other address as either party shall specify to the other in writing from
time to time.
If to Senior Lender: Congress Financial Corporation (Central)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Subordinated Lender: Tyler Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Forest City Auto Parts Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:(▇▇▇) ▇▇▇-▇▇▇▇
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Any addressee may alter the address to which communications are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
19. Benefit. Subordinated Lender represents and warrants that the
making of the Senior Loan under the Senior Loan Documents will benefit
Subordinated Lender; and Subordinated Lender acknowledges that Senior Lender
would not make the Senior Loan but for the execution of this Agreement.
Therefore, Subordinated Lender has received good, sufficient and adequate
consideration for the making of this Agreement.
20. Entire Agreement. This Agreement constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, whether express or implied, oral or
written. Neither this Agreement nor any portion or provision hereof may be
changed, waived or amended orally or in any manner other than by an agreement
in writing signed by Senior Lender and Subordinated Lender; provided, however,
any such change, waiver or amendment shall be binding upon Borrower only upon
its written consent thereto.
21. Additional Documentation. Borrower and Subordinated Lender, as
applicable, shall execute and deliver to Senior Lender such further instruments
and shall take such further actions as Senior Lender may at any time or times
reasonably request in order to carry out the provisions and intent of this
Agreement.
22. Expenses. Borrower agrees to pay Senior Lender on demand all
expenses of every kind, including reasonable attorney's fees, that Senior
Lender may reasonably incur in enforcing any of its rights against Borrower
under this Agreement. As among Senior Lender and Subordinated Lender, the
non-prevailing party shall pay to the prevailing party all expenses incurred by
the prevailing party in enforcing its rights against the non-prevailing party
under this Agreement.
23. Successors and Assigns. This Agreement shall inure to the benefit
of Senior Lender and Subordinated Lender, their respective successors and
assigns, and shall be binding upon the parties hereto and their respective
successors and assigns, including, without limitation, any subsequent holders
of the Subordinated Indebtedness. So long as any transferee or assignee of any
of Senior Lender and/or Subordinated Lender shall agree to be bound as an
original party to this Agreement in the capacity of the party from which such
transferree or assignee receives its rights hereunder, any of Senior Lender
and/or Subordinated Lender, without notice of any kind, may sell, assign or
transfer the Senior Indebtedness and/or the Subordinated Indebtedness,
respectively, and in such event each and every respective immediate and
successive assignee or transferee thereof may be given the right by Senior
Lender and Subordinated Lender to enforce this Agreement in full against the
other parties hereto, by suit or otherwise, for its own benefit. Each of Senior
Lender and Subordinated Lender agrees, for the benefit of any such assignee or
transferee, that its respective obligations hereunder shall not be subject to
any reduction, abatement defense, set-off, counterclaim or recoupment for any
reason whatsoever.
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24. Covenant Not to Challenge. This Agreement has been negotiated by
the parties with the expectation and in reliance upon the assumption that the
instruments and documents evidencing the Senior Indebtedness are valid and
enforceable. In determining whether to enter into this Agreement, Subordinated
Lender has assumed such validity and enforceability, and has agreed to the
provisions contained herein, without relying upon any reservation of a right to
challenge or call into question such validity or enforceability. Except as
otherwise permitted by the UCC, as between Senior Lender and Subordinated
Lender, Subordinated Lender hereby covenants and agrees, to the extent
permitted by law, that it shall not initiate in any proceeding a challenge to
the validity or enforceability of the documents and instruments evidencing the
Senior Indebtedness, nor shall Subordinated Lender instigate other parties to
raise any such challenges, nor shall Subordinated Lender participate in or
otherwise assert any such challenges which are raised by other parties.
25. Subrogation. Subject to the foregoing provisions hereof, provided
that the Senior Indebtedness has been Finally Paid, Subordinated Lender shall
be ratably subrogated, to the extent of such Senior Indebtedness so paid, to
the rights of the holder of such Senior Indebtedness to receive payments or
distributions or assets of Borrower that secure such Senior Indebtedness until
all amounts owing on the Subordinated Indebtedness shall be paid in full. For
the purpose of such subrogation, no payments or distributions to the holder of
the Senior Indebtedness by or on behalf of Borrower or by or on behalf of
Subordinated Lender by virtue of the provisions hereof which otherwise would
have been made to Subordinated Lender shall, as between Borrower, a creditor of
Borrower (other than Subordinated Lender and Senior Lender) and Subordinated
Lender, be deemed to be payment by Borrower to or on account of the Senior
Indebtedness, it being understood that the provisions of this Agreement are,
and are intended solely, for the purpose of defining the relative rights of
Subordinated Lender and Senior Lender. In the event that Subordinated Lender
turns over to Senior Lender any payment or contributions received by it in
accordance with this Agreement, Subordinated Lender shall, for purposes of
determining whether a default under the Subordinated Loan Documents has
occurred, be deemed never to have received such payment or distribution. In the
event that Borrower fails to make any payment on account of the Subordinated
Indebtedness by reason of any provision contained herein, such failure shall,
notwithstanding such provision contained herein, constitute a default with
respect to the Subordinated Loan Documents if and to the extent such failure
would otherwise constitute such a default in accordance with the terms of the
Subordinated Loan Documents.
26. Termination of Subordination, Turn Over of Collateral, Lien
Release by Junior Creditors.
(A) The subordination provided herein in respect of the
Senior Indebtedness shall continue and shall be irrevocable until the date all
of the Senior Indebtedness has been Finally Paid by Borrower or otherwise
discharged and released by Senior Lender. Upon or subsequent to the termination
of such subordination, Senior Lender shall, upon Subordinated Lender's request,
turn over to Subordinated Lender any of the Collateral then in Senior Lender's
possession, to the extent that Subordinated Lender holds any Lien on or
security interest in such Collateral. In determining whether Subordinated
Lender hold(s) any Lien on or security interest
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in any the Collateral in Senior Lender's possession, Senior Lender shall be
entitled to rely upon the certification of any officer of Subordinated Lender
confirming the existence of a Lien in favor of Subordinated Lender and Borrower
hereby releases Senior Lender from any liability or obligation arising as the
result of Senior Lender's reliance upon such certification and compliance with
the terms of this Section requiring delivery of such property to Subordinated
Lender.
(B) In the event Borrower desires to sell any of the
Collateral in an arm's length transaction and Senior Lender consents to such
sale or Senior Lender releases its Lien in connection with any sale or
disposition of the Collateral occurring in connection with any enforcement of
Senior Lender's rights, Subordinated Lender shall be deemed to have consented
to such sale and shall execute such releases with respect to the Collateral to
be sold as Senior Lender requests, so long as the net cash proceeds of such
sale are applied in accordance with the terms of the Loan Agreement, the
Preferred Stock Documents and this Agreement, as applicable. Subordinated
Lender hereby waives any rights Subordinated Lender has or may have in the
future to require Senior Lender to marshal its Collateral and agrees that
Senior Lender may proceed against its Collateral in any order that it deems
appropriate in the exercise of its absolute discretion. Subordinated Lender
hereby irrevocably appoints Senior Lender its true and lawful attorney, with
full power of substitution, in the name of Subordinated Lender or in the name
of Senior Lender, for the use and benefit of Senior Lender, without further or
additional notice to Subordinated Lender or any of its representatives,
successors or assigns, to execute such releases with respect to the Collateral
to be sold as Senior Lender requests.
27. Enforcement of Certain Rights. To enable Senior Lender to enforce
its rights and protect its interests under this Agreement, Subordinated Lender:
(A) agrees to take any and all actions necessary to preserve
any claim it may at any time have against Borrower with respect to the
Subordinated Indebtedness and to refrain from taking any action that might
prejudice any such claim, including, without limitation, the compromise
thereof, the release of any collateral therefor or the forgiveness or the
reduction of amounts owing with respect thereto;
(B) irrevocably authorizes and empowers Senior Lender and
irrevocably appoints Senior Lender its attorney in fact to take the following
actions, in Senior Lender's name or the name of the Subordinated Lender or
otherwise at any time after an Insolvency Proceeding:
(i) file and present claims and proofs of claims
with respect to the Subordinated Indebtedness that the Subordinated Lender has
not filed by the date that is forty-five days prior to the applicable filing
deadline;
(ii) vote the Subordinated Indebtedness;
(iii) demand, ▇▇▇ for, collect, receive and give
acquittance for any and all payments and other distributions with respect to
the Subordinated Indebtedness in whatever form paid or issued, to be applied to
payment or prepayment of the Senior Indebtedness if (a) Senior Lender has filed
the related claim or proof of claim pursuant to clause (i) above or (b)
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Senior Lender has requested that the Subordinated Lender take such action and,
at any time on or after the thirtieth (30th) day following such request, Senior
Lender determines that the Subordinated Lender has not taken and is not
diligently pursuing such action;
(iv) if any payment or distribution received by
Senior Lender pursuant to this Agreement is in property other than cash, sell
all or any part of such property in any commercially reasonable way as Senior
Lender, in its discretion, decides to sell; and
(v) take any and all other actions that Senior
Lender determines is advisable to minimize the likelihood that the Senior
Indebtedness will not be paid in full if (a) such action is related to any
claim or proof of claim with respect to the Senior Indebtedness that was filed
by Senior Lender pursuant to clause (i) above or (b) Senior Lender has
requested that the Subordinated Lender take such action pursuant to clause
(iii) above and, at any time on or after the thirtieth (30th) day following
such request, Senior Lender determines that the Subordinated Lender has not
taken and is not diligently pursuing such action;
(C) agrees to take any and all of the following actions, as
Senior Lender may request at any time after an Insolvency Event:
(i) collect and receive any and all payments and
distributions payable or deliverable with respect to the Subordinated
Indebtedness, all for the benefit of Senior Lender during such time as any of
the Senior Indebtedness remain unpaid;
(ii) file appropriate claims and proofs of claim
with respect to the Subordinated Indebtedness; and
(iii) execute and deliver to Senior Lender all
powers of attorney, assignments and other instruments or documents, including
notes and stock certificates (properly assigned or endorsed) that Senior Lender
may request to enforce any and all claims Senior Lender is permitted to file or
enforce under this Section 27 and to receive and collect any and all payments
and distributions with respect to the Subordinated Indebtedness.
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28. Reinstatement. The obligations of Subordinated Lender to Senior
Lender under this Agreement shall continue to be effective, or be reinstated,
as the case may be, if at any time any payment in respect of any Senior
Indebtedness is rescinded or must otherwise be restored or returned by Senior
Lender by reason of any bankruptcy, reorganization, arrangement, composition or
similar proceeding or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, Borrower or any
substantial part of its property, or otherwise, all as though such payment had
not been made.
29. Term Loan Security. On or about the maturity date of the
Subordinated C Note, Senior Lender will grant Permitted First Liens to
Subordinated Lender with respect to each parcel of Real Property that Senior
Lender does not lend against in connection with the Term Loan. In addition,
Senior Lender agrees to execute an amendment to the ▇▇▇▇▇▇▇ Guaranty to reduce
the obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ thereunder to reflect, on a pro rata basis,
any reduction in the Term Loan funded by Senior Lender.
30. Governing Law. THE VALIDITY, CONSTRUCTION AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
BORROWER AND SUBORDINATED LENDER HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS
INITIATED BY BORROWER OR SUBORDINATED LENDER AND ARISING DIRECTLY OR INDIRECTLY
OUT OF THIS AGREEMENT SHALL BE LITIGATED IN ▇▇▇▇ COUNTY, ILLINOIS CIRCUIT COURT
OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, OR,
IF SENIOR LENDER INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING COURTS,
ANY COURT IN WHICH SENIOR LENDER SHOULD INITIATE SUCH ACTION, TO THE EXTENT
SUCH COURT HAS JURISDICTION. EACH OF BORROWER AND SUBORDINATED LENDER HEREBY
EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED BY SENIOR LENDER AND HEREBY WAIVES ANY CLAIM THAT SUCH
COURTS ARE AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED UPON LACK OF VENUE.
THE EXCLUSIVE CHOICE OF FORUM AS SET FORTH IN THIS SECTION SHALL NOT BE DEEMED
TO PRECLUDE THE ENFORCEMENT, BY SENIOR LENDER, OF ANY JUDGMENT OBTAINED IN ANY
OTHER FORUM OR THE TAKING, BY SENIOR LENDER, OF ANY ACTION TO ENFORCE THE SAME
IN ANY OTHER APPROPRIATE JURISDICTION, AND EACH OF BORROWER AND SUBORDINATED
LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK SUCH JUDGMENT OR ACTION.
31. Jury Trial. SENIOR LENDER, SUBORDINATED LENDER AND BORROWER WAIVE
TRIAL BY JURY IN ANY DISPUTE ARISING FROM, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, EACH ACKNOWLEDGING AND AGREEING THAT ANY CONTROVERSY THAT MAY ARISE
HEREUNDER WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, WOULD
BE BETTER PRESENTED TO AND RESOLVED BY A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.
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32. Severability. The provisions of this Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be
held invalid or unenforceable, it is the intent of the parties that such
invalidity or unenforceability shall not affect the validity or enforceability
of any other provisions hereof, and that this Agreement shall be construed as
if such invalid or unenforceable provision had never been contained herein.
33. Counterparts. This Agreement may be executed in any number of
separate counterparts, all of which when taken together, shall constitute one
and the same instrument, notwithstanding the fact that all parties did not sign
the same counterpart.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SENIOR LENDER:
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By: /s/ ▇▇▇▇▇▇▇ ▇. DICKARO
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Dickaro
----------------------------------
Title: SUP
---------------------------------
SUBORDINATED LENDER:
TYLER CORPORATION
By: /s/ C.A. ▇▇▇▇▇▇▇, JR.
------------------------------------
Name: C.A. ▇▇▇▇▇▇▇, Jr.
----------------------------------
Title: Director
--------------------------------
BORROWER:
FOREST CITY AUTO PARTS COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: CFO
-------------------------------
[SIGNATURE PAGE TO SUBORDINATION AGREEMENT]
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