Exhibit 10.1
AMENDED AND RESTATED CREDITORS'
SUBORDINATION AGREEMENT
This Amended and Restated Creditors' Subordination Agreement (the
"Agreement") is made and entered into by ZUNICOM, INC., a Texas corporation (the
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"Creditor"), for the benefit of COMPASS BANK and its successors and assigns
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("Bank").
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WHEREAS, Universal Power Group, Inc., a Texas corporation ("Borrower")
has applied to Bank for an increased revolving line of credit in the --------
principal amount of $30,000,000.00 (the "Loan"); and
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WHEREAS, Creditor has heretofore loaned Borrower sums of money, has
agreed to forebear collection of sums owed by Borrower to Creditor, and/or may
hereafter grant further loans or forbearances to Borrower; and
WHEREAS, Creditor has previously executed that certain Creditors'
Subordination Agreement dated as of December 14, 2004 in favor of Bank; and
WHEREAS, as a condition to making the Loan, Bank has required that
Creditor continue to subordinate any and all loans and indebtedness heretofore,
now or hereafter owed or owing by Borrower to Creditor to any loan or
indebtedness heretofore, now or hereafter owed or owing from Borrower to Bank,
including without limitation, any amounts now or hereafter owed or owing under
or in connection with the Loan, as well as execute, deliver and perform this
Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned Borrower and Creditor do hereby covenant and agree
with Bank as follows:
1. Certain Definitions. Unless otherwise defined herein, the following
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terms have the following meanings: "Bank Indebtedness" means the principal of
all loans from time to time owing from Borrower to Bank, all interest, whether
now or hereafter accrued subsequent to the filing of any petition under any
bankruptcy, insolvency or similar law), on such principal amounts of such loans
and all other indebtedness, obligations and liabilities (including, without
limitation, principal, interest and fees), whether now existing or hereafter
incurred, of Borrower to Bank, including without limitation to the generality of
the foregoing, under or with respect to the Loan or any documents or instruments
executed or delivered in connection therewith.
"Bank Indebtedness" means the principal of all loans from time to time
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owing from B Borrower to Bank, all interest, whether now or hereafter accrued
(including, without limitation, interest accrued subsequent to the filing of any
petition under bankruptcy, insolvency or similar law), on such principal amounts
of such loans and all other indebtedness, obligations and liabilities
AMENDED AND RESTATED CREDITORS' SUBORDINATION AGREEMENT - Page 1
(including, without limitation, principal, interest and fees), whether now
existing or hereafter incurred, of borrower to bank, including without
limitation to the generality of the foregoing, under or with respect to the Loan
or any documents or instruments executed or delivered in onnection therewith.
"Bank Security Documents" means each and all of the mortgages, loan and
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security agreements, revolving credit and security agreements, pledges,
assignments, security agreements and other documents and instruments at any time
securing any of the Bank Indebtedness.
"Subordinated Obligations" means all indebtedness, obligations and
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liabilities, whether now or hereafter existing or incurred, owing from time to
time by Borrower to Creditor (plus any interest heretofore, now or hereafter
included therein or accrued thereon, including, without limitation, any interest
accrued subsequent to the fining of any petition under any bankruptcy,
insolvency or similar law). The Subordinated Obligations shall include the
obligations represented by the promissory notes referenced on the attached
Schedule 1.
"Subordinated Security Documents" means each and all of the mortgages,
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security agreement, pledges, assignments and other documents and instruments at
any time securing any of the subordinated obligations, subject, however, to
Bank's consent in accordance with Section 2(d) of this Agreement.
2. Subordination of Subordinated Obligations.
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(a) Creditor covenants and agrees that anything in any agreement or
instrument creating, evidencing or relating to the Subordinated
Obligations to the contrary notwithstanding, the Subordinated
obligations shall be subordinate and junior in right of payment,
distribution and lien to the Bank Indebtedness, and without limiting
the generality of the foregoing:
(i) Upon payment or distribution of all or any of the assets or
securities of Borrower of any kind or character, whether in cash,
property or securities, upon any dissolution, winding up, or total
or partial liquidation, reorganization, arrangement, adjustment,
protection, relief or composition of Borrower or its debts, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership,
arrangement, reorganization, relief or other proceeding or upon an
assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of Borrower or otherwise, all Bank
Indebtedness shall first be paid in full in cash before any payment
or distribution may be made in respect of the Subordinated
Obligations, subject to any applicable exceptions contained within
the Bank Security Documents, and
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(ii) Subject to any applicable exceptions contained within the
Bank Security Documents, no direct or indirect payment shall be made
in respect of the Subordinated Obligations if, at the time of such
payment, any Bank Indebtedness is outstanding or unpaid or Bank has
any obligation to advance funds to or for the account of Borrower
under any instrument or document.
Notwithstanding anything to the contrary contained in the foregoing
Section 2(a), the parties hereto agree that so long as no default
exists under the Bank Indebtedness, the Creditor may receive all
regularly scheduled payments, but not prepayments, of principal and
interest under the Subordinated Indebtedness.
(b) If, notwithstanding the foregoing provisions, Creditor shall
receive any payment or distribution in respect of the Subordinated
Obligations at a time when any Bank Indebtedness is outstanding or
unpaid or Bank has any obligation to advance funds to or for the
account of Borrower under any instrument or document, then such payment
or distribution shall be received and held in trust by Creditor apart
from Creditor's assets and shall be promptly paid over or delivered to
Bank for application (in the case of cash) or as collateral for (in the
case of non-cash property or securities) the payment or prepayment of
the Bank Indebtedness.
(c) Without notice to or assent by Creditor:
(i) the Bank Indebtedness and the obligations or liabilities of
any other party or parties (including without limitation any
guarantor, endorser or co-obligor) in respect of the Bank
Indebtedness may, from time to time, in whole or in part, be
renewed, extended, modified, accelerated, restated, compromised or
released; and
(ii) any and all mortgages, pledges, assignments, encumbrances,
liens or security interests (legal or equitable) at any time,
present or future, held given or intended to be given for the Bank
Indebtedness, and any rights or remedies in respect thereof, may,
from time to time, in whole or in part, be exchanged, sold,
surrendered, released, modified, waived, restated or extended by
Bank, and Bank may permit or consent to any such action or the
result of any such action.
all as Bank may deem advisable and all without impairing, abridging,
diminishing, releasing or affecting the subordination provided for herein to the
Bank Indebtedness. All rights and interests of Bank hereunder shall remain in
full force and effect irrespective of any circumstance that might constitute a
defense available to, or a discharge of, Borrower, or any lack of validity or
enforceability of any document or instrument.
(d) Creditor hereby represents and warrants to Bank that none of the
Subordinated obligations or any other obligations of Borrower to
Creditor are secured by any assets of Borrower or any other person or
entity, and covenants and agrees that, unless otherwise consented to in
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writing by Bank, none of the Subordinated Obligations or any other
obligations of Borrower to Creditor will be secured, directly or
indirectly, by any of the assets of Borrower or any other person or
entity. Without limitation to the generality of the foregoing, or any
of the other provisions hereof, in the event at any time any of the
Subordinated Obligations or any other obligations of Borrower to
Creditor are secured, it is further hereby agreed and acknowledged that
all rights, titles, liens, estates, interest and remedies accruing to
Creditor or its successors, assigns, designees, transferees, purchasers
at foreclosure and/or other purchasers, whether as mortgagee, secured
party, landlord, owner or otherwise, and whether consensual or arising
by operation of law or in equity or otherwise, are and shall be subject
and subordinate in all respects to all mortgages, security agreements,
security interests, assignments, pledges, rights, titles, interests,
estates and remedies of Bank and its successors, assigns designees,
transferees, purchasers at foreclosure and/or other purchasers, arising
in connection with any of the Bank Indebtedness, whether consensual or
arising by operation of law or in equity or otherwise. For so long as
any of the Bank Security Documents and any modifications,
consolidations, replacements or extensions thereof shall remain in
effect, the mortgages, security agreements, security interests, rights,
titles, interests, estates and remedies arising under any Subordinated
Security Documents shall be superior to any mortgages, security
agreements, security interests, rights, titles, liens, interest and
estate in favor of any person or entity other than Bank, its successors
or assigns, with respect to any collateral under the Bank Security
Documents, and Creditor agrees that it shall not voluntarily
subordinate and Subordinated Security Document or other lien or
interest to any mortgage, lease, security agreement, indenture,
agreement, contract or encumbrance in favor of any person or entity
other than Bank, its successors or assigns, respecting any such
collateral under the Bank Security Documents.
Creditor further agrees that, for so long as any Bank Indebtedness
remains outstanding, Creditor shall take no action to enforce collection of the
Subordinated Obligations (or any other obligations of Borrower to Creditor)
against Borrower or any guarantor of such Subordinated Obligations; nor shall
the Creditor take any action to foreclose or enforce its rights as a secured
creditor or lienholder or to establish its status as a lienholder under any
Subordinated Security Documents or otherwise against any assets of Borrower or
any guarantor of such Subordinated Obligations, except in accord with Section 4
below. In addition, so long as the Bank Indebtedness remains outstanding,
neither the Creditor nor the Borrower shall amend, modify, restate the terms of
the Subordinated Indebtedness without the Bank's prior written consent.
3. Subordination Absolute. Neither the subordination provided for
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herein nor the rights of Bank hereunder shall be affected, modified or impaired
by (a) any extension, renewal, modification, restatement, forbearance or waiver
of any terms of any Bank Security Documents or any other instrument or document
executed in connection herewith nor (b) any release, modification or
substitution of any collateral therefore.
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4. Further Assurances. Creditor agrees to take promptly such actions as
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Bank may reasonably request to (i) collect the Subordinated Obligations for
account of Bank and to file appropriate claims or proofs of claim in respect of
the Subordinated Obligations, (ii) execute and deliver to Bank such powers of
attorney, assignments or other instruments as Bank may reasonably request in
order to enable it to enforce any and all claims with respect to, and any
security interests and other liens securing payment of, the Subordinated
Obligations, and (iii) collect and receive any and all payments or distributions
that may be payable or deliverable upon or with respect to the Subordinated
Obligations.
5. Reinstatement. The provisions of this Agreement shall continue to be
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effective or be reinstated, as the case may be, if at any time any payment of
any of the Bank Indebtedness is rescinded or must otherwise be returned by Bank
upon the insolvency, bankruptcy or reorganization of Borrower or otherwise, all
as though such payment had not been made.
6. Enforcement. Creditor agrees to pay to Bank on demand all costs and
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expenses of any kind, including, without limitation, attorneys' fees, expenses
and disbursements whigh Bank may incur in enforcing any of its rights under this
Agreement.
7. Cumulative Rights; No Waiver: Modification. Nothing herein contained
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or arising shall limit or restrict any of the obligations or agreements of
Creditor or Borrower under any other document or instrument with or in favor of
Bank. Each and every right granted to Bank hereunder or in connection herewith,
or allowed by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of Bank to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by Bank of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. No amendment or modification of any provision
of this Agreement or any waiver thereof shall in any event be effective unless
made by an instrument in writing signed by Bank and the party to be charged
therewith.
8. Legends. Any instrument evidencing any of the Subordinated
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Obligations, or any portion thereof, shall be inscribed with a legend, or
otherwise include a reference, conspicuously indicating that payment thereof is
subordinated pursuant to the terms of this Agreement, and a copy thereof shall
be delivered to Bank. Any such instrument shall also provide in substance that
any transferee thereof shall, by acceptance thereof, assume, agree to and accept
the terms of this Agreement.
9. Governing Law. This Agreement shall be governed by, and construed
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and interpreted in accordance with, the internal laws of the State of Texas.
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10. Termination. This Agreement is a continuing agreement and shall
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remain in full force and effect until the final indefeasible payment in full of
all of the Bank Indebtedness, expiration of all commitments by Bank to make
advances to Borrower under any document or instrument and the termination of all
documents and instruments evidencing and/or securing any Bank Indebtedness.
11. Descriptive Headings. The captions in the Agreement are for
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convenience of reference only and shall not define or limit the provisions
hereof.
12. Binding Effect. Wherever in this Agreement one of the parties
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hereto is named or referred to, the heirs, administrators, executors,
successors, assigns, distributes and legal and personal representatives of such
party shall be included, and all covenants and agreements contained in this
Agreement by or on behalf of Creditor and/or Borrower or by or on behalf of Bank
shall bind and inure to the benefit of their respective heirs, administrators,
executors, successors, assigns, distributes, and legal and personal
representatives, whether so expressed or not. Notwithstanding the foregoing,
neither Creditor nor Borrower shall be entitled to assign any of their
respective rights, titles, and interest hereunder, delegate any of their
respective obligations, liabilities, duties, or responsibilities hereunder, or
permit any such assignment or delegation to occur (voluntarily or involuntarily,
or directly or indirectly), without the prior written consent of Bank.
13. Severability. If any provision of this Agreement shall be held or
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deemed to be or shall, in fact, be inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions hereof or any constitution or statute or rule of public policy, or
for any other reason, such circumstances shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatever.
14. Amendment and Restatement. This Agreement amends and restates that
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certain Creditors' Subordination Agreement executed by the parties hereto dated
as of July 30, 2007.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the 27th day of July, 2007.
BORROWER:
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UNIVERSAL POWER GROUP, INC.,
a Texas corporation
By: /s/
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Its: COO
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇, CFO
CREDITOR:
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ZUNICOM, INC., a Texas corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President & Chief
Financial Officer
BANK:
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COMPASS BANK
AMENDED AND RESTATED CREDITORS' SUBORDINATION AGREEMENT - Page 7
