SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into
this ______ day of March, 1998, among (i) ▇▇▇▇▇▇▇ COMPUTER
RESOURCES, INC., a Delaware corporation (the "Borrower"), (ii),
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ (the "Subordinated Creditor"), and (iii)
STAR BANK, N.A., an Ohio banking corporation, its successors or
assigns (the "Senior Creditor").
R E C I T A L S
WHEREAS, pursuant to an Amended and Restated Loan Agreement,
dated as of March 14, 1996, as amended by a Letter Agreement
dated June 27, 1996, as further amended by a Letter Agreement
dated June 26, 1997, as further amended by a Letter Agreement
dated December 1, 1997 and January 28, 1998, (the "Senior Loan
Agreement"), between the Borrower and the Senior Creditor, the
Senior Creditor has extended a commitment to make available to
Borrower a certain revolving credit loan in the principal amount
of Forty Million ($40,000,000.00) Dollars (the "Senior Loan");
and
WHEREAS, the Senior Loan is to be evidenced by a revolving credit
note (together with all substitutions and replacements therefor
and all amendments and supplements thereof in accordance with the
terms of this Agreement (the "Senior Note") in the maximum
aggregate principal amount not to exceed Forty Million
($40,000,000.00) Dollars.
WHEREAS, Borrower is using a portion of the proceeds of the
Senior Loan to purchase all the outstanding stock owned by
Subordinated Creditor in Global Combined Technology, Inc.; and
WHEREAS, in connection with the acquisition of all the
outstanding stock of Subordinated Creditor in Global Combined
Technologies, Inc., the Subordinated Creditor will take back a
promissory note in the principal amount of $143,780.00, as may be
adjusted pursuant to Section 2.02(b) of the Stock Purchase
Agreement, plus interest, fees, costs and other amounts payable
in respect thereof and all of the other owners of the outstanding
stock of Global Combined Technologies, Inc. will take back
respective promissory notes in the principal amount of
$1,006,460.00 in the aggregate for a total of $1,150,240.00, as
may be adjusted pursuant to Section 2.02(b) of the Stock Purchase
Agreement ("Acquisition Debt") in partial consideration of the
payment of the purchase price for such stock; and
WHEREAS, a condition under the Senior Loan is the execution and
delivery of this Subordination Agreement;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1
Certain Terms. The following terms, when used in this
Agreement, including the introductory paragraph and Recitals
hereto, shall, except where the context otherwise requires,
have the following meanings:
1.1.01 "
Acquisition Debt" has the meaning specified in
the fourth paragraph of the recitals hereto.
1.1.02 _Acquisition Note
_ means the promissory note
issued by Borrower to the Subordinated Creditor.
1.1.03 "Acquisition Notes
" collectively means the
promissory notes issued by Borrower to the
Subordinated Creditors which evidence the Acquisition
Debt.
1.1.04 "
Agreement" means this Subordination Agreement.
1.1.05 "
Applicable Law" means and includes statutes and
rules and regulations thereunder and interpretations
thereof by any governmental agency charged with the
administration or the interpretation thereof, and
orders, requests, directives, instructions and notices
of any governmental authority.
1.1.06 "
Bankruptcy or Insolvency Proceeding" means any
insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization, assignment
for the benefit of creditors or other similar case or
proceeding for the liquidation, dissolution, reorgan-
ization or winding up of the Borrower, or of all or
any portion of the property of Borrower, whether
voluntary or involuntary, partial or complete.
1.1.07 "
Borrower" has the meaning specified in the
introductory paragraph hereto.
1.1.08 "
Enforcement Action" means
(a) the acceleration of any Subordinated Debt,
(b) any realization or foreclosure upon any collateral
securing the Subordinated Debt,
(c) any demand by the Subordinated Creditor for
payment of the Subordinated Debt, or
(d) subject always to the provisions contained in the
next sentence, the enforcement of any of the
rights or remedies of the Subordinated Creditor
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against the Borrower, whether under the
Subordinated Debt Documents or otherwise, and
whether by action at law, suit in equity,
arbitration proceedings or otherwise.
The term "Enforcement Action" shall not include or be
deemed to include the giving of notices (including,
without limitation, notices of default, notices of
Events of Default, notices of demand for payment,
notices of breaches of covenants, etc.), the making of
requests or the delivery of other communications
pursuant to and upon the terms permitted or otherwise
contemplated by any of the Subordinated Debt
Documents, it being understood and agreed that any
action of the kind described above in the foregoing
sentence may be taken by the Subordinated Creditor at
any time and from time to time after the date hereof
without any limitation or restriction.
1.1.09 "Enforcement Action Notice
" has the meaning
specified in Section 3.2(b).
1.1.10 "Event of Default
" has, in connection with
permitted payments under Section 2.6 hereof, the
meaning specified in the Senior Loan Agreement and,
with respect to Standstill Events as defined herein
and as used in Section 3, has the meaning specified in
the Acquisition Note.
1.1.11 "
Extension of Credit" means any loan, letter of
credit or other extension of credit of any kind or
character and in the case of revolving credit
facilities, includes lending and relending up to the
maximum amount thereof and any Permitted Increase.
1.1.12 "
Instrument" means any contract, agreement,
indenture, mortgage or other document or writing
(whether a formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or
undertaken, or any right to any lien is granted or
perfected.
1.1.13 "
Payment in Full" and "
Paid in Full" mean payment
in full in cash.
1.1.14 "
Payment or Distribution on Account of
Subordinated Debt" or "Payment or Distribution" means
any payment or distribution of any kind or character,
whether in cash, securities or other property or any
combination thereof, and whether voluntary or
involuntary, on account of principal of, or interest
on any Subordinated Debt, or on account of any
redemption, retirement, repurchase or other
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acquisition for value of any Subordinated Debt.
1.1.15 "
Permitted Increase" means any increase in the
principal amount of the Senior Debt effected by Senior
Lender, except the aggregate amounts of any such
increases outstanding at any one time shall not exceed
the amount set forth on Exhibit A attached hereto.
1.1.16 "
Proceeds" shall have the meaning
(a) ascribed to that term under the U.C.C. and shall
in any event include any and all payments or
distributions of any kind or character received by
way of exercise of rights of set-off, counterclaim
or cross-claim, or enforcement of any claim,
against the Borrower,
(b) any and all proceeds of any insurance, indemnity,
warranty, guaranty of letter of credit payable to
the Borrower with respect to any collateral
securing the Subordinated Debt or Senior Debt, or
(c) any and all other amounts from time to time paid
or payable or distributable under or with respect
to any collateral securing the Subordinated Debt
or Senior Debt.
1.1.17 "Star Bank, N.A
_ as used in the defined terms
"Senior Debt" and "Senior Debt Documents", means and
includes Star Bank, N.A., the party executing this
Agreement as Senior Creditor, and its successors or
assigns in title and any so-called "participants"
purchasing any participating interests or so-called
"participants" in any of the rights, title or interest
of Star Bank, N.A. under any of the Senior Debt
Documents or in relation to any of the Senior Debt.
1.1.18 "Reorganization Securities
" means securities
issued by the Borrower (or any successor) in exchange
for all Subordinated Debt upon the effectiveness of a
plan of reorganization in bankruptcy of the Borrower
that are either (a) equity securities of the Borrower
having no mandatory redemption, repurchase or dividend
obligations, and that are not convertible into or
exchangeable for any securities having mandatory
payment, redemption, repurchase or dividend
obligations or (b) debt securities of the Borrower the
payment of which is subordinated, at least to the
extent provided in this Agreement with respect to the
Subordinated Debt, prior to the Payment in Full of the
Senior Debt, provided that no class of Senior Debt is
impaired (within the meaning of Section 1124 of Title
11 of the United States Code) by such plan of
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reorganization.
1.1.19 "Senior Creditor
" has the meaning specified in the
introductory paragraph hereto.
1.1.20 "Senior Debt
" means all indebtedness and other
obligations of the Borrower, contingent or otherwise,
to the Senior Creditor, now or hereafter existing,
under or with respect to:
(a) extension of Credit by the Senior Creditor under
the Senior Debt Documents in an aggregate
outstanding principal amount not exceeding Forty
Million Dollars ($40,000,000.00).
(b) interest (including interest accruing at the
contract rate after the commencement of any
Bankruptcy or Insolvency Proceeding, whether or
not such interest is an allowed claim in such
proceeding) on Extensions of Credit described in
clause (a) of this definition and on any Permitted
Increase described in clause (c) below, and fees,
costs, expenses, indemnities, reimbursements and
other amounts owing to the Senior Creditor on
Extensions of Credit described in clause (a) of
this definition; and
(c) any Permitted Increase.
1.1.21 "
Senior Debt Documents" means, collectively, (a)
the Senior Loan Agreement and (b) the Senior Note
(subject always to the provisions of the defined term
"Senior Debt") and each other Instrument executed in
connection with or evidencing, governing, guaranteeing
or securing any indebtedness under any such document
or any Permitted Increase, all as the same may be
amended, modified or supplemented pursuant to the
terms thereof in accordance with the provisions of
this Agreement.
1.1.22 "
Senior Loan" has the meaning specified in the
first paragraph of the Recitals hereto.
1.1.23 "Senior Loan Agreement
" has the meaning specified
in the first paragraph of the Recitals hereto.
1.1.24 "
Standstill Event" means the occurrence of any one
or more of the Events of Default
under the Acquisition
Note.
1.1.25 "Standstill Event Notice
" shall mean the date the
Subordinated Creditor shall have provided written
notice of such Standstill Event to the Senior Creditor
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and Borrower.
1.1.26 "Standstill Period
" means, in relation to any
Standstill Event, the period beginning on the date the
Standstill Event in relation to such Standstill Period
shall have occurred and ending on the date determined
pursuant to Section 3.1(a).
1.1.27 "
Subordinated Creditor" has the meaning specified
in the introductory paragraph hereto or any holder of
the Acquisition Note.
1.1.28 "Subordinated Debt
" means all indebtedness and
other obligations of the Borrower, contingent or
otherwise, now or hereafter existing, under or in
respect of the Acquisition Note, and interest
(including interest accruing after the occurrence of
an Event of Default as defined in the Acquisition
Note), fees, costs, expenses, indemnities,
reimbursements thereon and other amounts payable in
respect thereof (including any such obligations to
prepay, repurchase, retire, redeem or acquire for
value any such indebtedness).
1.1.29 "
Subordinated Debt Documents" means, collectively
(a) the Acquisition Notes, and
(b) each Instrument now or hereafter executed in
connection with or evidencing, governing,
guarantying or securing any indebtedness under any
such document.
1.1.30 "
U.C.C." means the Uniform Commercial Code, as in
effect from time to time in the State of Ohio.
1.2 Senior Loan Agreement
. Unless otherwise defined herein or
the context otherwise requires, terms used in this
Agreement, including the introductory paragraph and Recitals
hereto, that are defined in the Senior Loan Agreement (as in
effect on the date hereof), have the meanings given to such
terms in the Senior Loan Agreement (as in effect on the date
hereof).
1.3 U.C.C. Definitions
. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Agreement, including
the introductory paragraph and Recitals hereto, with such
meanings.
1.4 General Provisions Relating to Definitions
. Terms for which
meanings are defined in this Agreement shall apply equally
to the singular and plural forms of the terms defined.
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Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The
term "including" means including, without limiting the
generality of any description preceding such term. Except
as otherwise expressly provided herein, each reference
herein to any Person shall include a reference to such
Person's successors in title and assigns or (as the case may
be) his successors, assigns, heirs, executors,
administrators and other legal representatives. Except as
otherwise expressly provided herein, references to any
Instrument defined in this Agreement refer to such
Instrument as originally executed, or, if subsequently
varied, replaced or supplemented from time to time, as so
varied, replaced or supplemented and in effect at the
relevant time of reference thereto.
ARTICLE 2
DEBT SUBORDINATION ARRANGEMENTS
2.1 Agreement to Subordinate
. The Borrower and the Subordinated
Creditor agree with and for the benefit of the Senior
Creditor that all Subordinated Debt is hereby expressly
subordinated and made junior in right of payment, to the
extent and in the manner provided in this Agreement, to the
prior Payment in Full of all Senior Debt.
2.2 Bankruptcy or Insolvency Proceeding
. In the event of any
Bankruptcy or Insolvency Proceeding:
(a)The Senior Creditor shall first be entitled to receive
Payment in Full of all Senior Debt before the Subordi-
nated Creditor shall be entitled to receive any payment
or distribution on account of Subordinated Debt (other
than distributions in the form of Reorganization
Securities); and
(b)the Senior Creditor shall be entitled to receive (until
Payment in Full of all Senior Debt) any payment or
distribution on account of Subordinated Debt (other than
distributions in the form of Reorganization Securities)
which may be payable or deliverable to the Subordinated
Creditor (including any such payment or distribution
payable or deliverable by virtue of the provisions of,
or any security for, any Instrument governing
indebtedness which is subordinate and junior in right of
payment to the Subordinated Debt).
2.3 Delivery of Prohibited Payments or Distribu
tions on Account
of Subordinated Debt to Senior Creditor. If any Payment or
Distribution on Account of Subordinated Debt (other than
distributions in the form of Reorganization Securities or
distributions authorized by Sections 2.6 and 2.8) is
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collected or received by the Subordinated Creditor, then
such payment or distribution shall be paid over or delivered
forthwith to the Senior Creditor.
2.4
Subrogation. Upon payment in full in cash of all Senior
Debt, the Subordinated Creditor shall be immediately
subrogated to the rights of the Senior Creditor (to the
extent of the payments and distributions previously made to
the Senior Creditor pursuant to the provisions of this
Article 2) to receive payments and distributions of property
of the Borrower applicable to Senior Debt until all amounts
owing on Subordinated Debt shall be paid in full. No
payments or distributions applicable to Senior Debt which
the Subordinated Creditor shall receive by reason of its
being subrogated to the rights of the Senior Creditor
pursuant to the provisions of this Section 2.4 shall, as
between the Borrower and its creditors, other than the
Senior Creditor and the Subordinated Creditor, be deemed to
be a payment by the Borrower to or for the account of
Subordinated Debt; and, for the purposes of such
subrogation, no payments or distributions to the Senior
Creditor of any property to which the Subordinated Creditor
would be entitled except for the provisions of this
Agreement, and no payment pursuant to provisions of this
Agreement to the Senior Creditor by the Subordinated
Creditor, shall, as between the Borrower and its creditors,
if any, other than the Senior Creditor and the Subordinated
Creditor, be deemed to be a payment by the Borrower to or
for the account of Senior Debt, it being understood that the
provisions of this Agreement are intended solely for the
purpose of defining the relative rights of the Subordinated
Creditor, on the one hand, and the Senior Creditor, on the
other hand, and nothing contained in this Section 2.4 or
elsewhere in this Agreement is intended to or shall impair,
as between the Borrower and the Subordinated Creditor, the
obligation of Borrower, which is absolute and unconditional,
to pay to the Subordinated Creditor, subject to the rights
of the Senior Creditor under this Agreement, the
Subordinated Debt as and when the same shall become due and
payable in accordance with its terms.
2.5
Senior Defaults and Acceleration. In any circumstances
where Section 2.2 does not apply, the Subordinated Creditor
will not be entitled to receive or retain any direct or
indirect payment (except any payment previously made by
Borrower to the Subordinated Creditor which complied with
Sections 2.6 and 2.8) (in cash, property, by set-off or
otherwise) from the Borrower of or on account of any
Acquisition Debt if:
(a)all or any part of the Senior Debt is due and payable at
stated maturity, by acceleration or otherwise; or
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(b)at the time of making such payment and immediately after
giving effect thereto, there shall exist an Event of
Default under the Senior Loan Agreement.
2.6 Permitted
Payments. The Subordinated Creditor shall not be
entitled to receive or retain any prepayment (in cash,
property, by set-off or otherwise) of or on account of the
Acquisition Note until such time as the Senior Debt is paid
in full. Provided that there exists no Event of Default (or
event which would become and Event of Default with notice or
the passage of time) under the Senior Loan Agreement which
remains uncured, the Subordinated Creditor shall be entitled
to receive and retain interest repayment and principal
repayment, under the Acquisition Debt in accordance with the
terms of the Acquisition Note.
2.7 Turn-Over of Payments Received
. If the Subordinated
Creditor shall receive any payment with respect to the
Acquisition Note which the Subordinated Creditor is not
permitted to receive and retain pursuant to this Agreement,
such payment shall be held in trust by the Subordinated
Creditor for the benefit of, and shall be paid over promptly
on demand to the Senior Creditor or its successors and
assigns, as their respective interests may appear, for
application to the payment of all Senior Debt remaining
unpaid until the same shall have been paid in full in cash,
after giving effect to any concurrent payment or
distribution to the Senior Creditor. No such payments or
distributions to the Senior Creditor or its successors and
assigns shall be deemed to discharge the Senior Debt until
it is repaid in full.
2.8 Permitted Payments; Right to Retain Payments
.
Notwithstanding the foregoing, any payment in respect of the
Acquisition Debt made in compliance with the terms of this
Agreement and received by the Subordinated Creditor shall
become its sole and absolute property and shall not be
subject to any payment over or any distribution to or claim
by the Senior Creditor or any other person, unless at the
time of receipt of such payment (i) an event specified in
either Section 2.2, 2.5(a) or 2.5(b) shall have occurred and
be continuing and with respect to an event specified in
Section 2.5(b) only, the Senior Creditor shall have given
Subordinated Creditor notice of such event within sixty (60)
days of the occurrence of such event of default. In the
event that the Subordinated Creditor receives any payment on
the Subordinated Debt made in compliance herewith, and
Senior Creditor has not given any notice as described above,
such payment shall conclusively be determined to be a
permitted payment hereunder, otherwise, upon receipt of such
notice within such sixty (60) day period, Subordinated
Creditor shall promptly remit such payment to Senior
Creditor for application in accordance with Section 2.3
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hereof.
2.9
Borrower's Obligations Absolute. The provisions of this
Agreement are solely for the purpose of defining the
relative rights of Senior Creditor as the holder of the
Senior Debt, Borrower and the holder of the Acquisition
Note. Nothing herein shall impair, as between the Borrower
and the Senior Creditor, its successors or assigns, as the
holder of any Senior Debt, the obligations of the Borrower,
which are unconditional and absolute, to pay to the holder
thereof the Senior Debt, in accordance with the terms of the
Senior Loan Agreement. Nothing herein shall impair, as
between the Borrower and the Subordinated Creditor, the
obligations of the Borrower which are unconditional and
absolute to pay Subordinated Creditor in accordance with the
terms of the Acquisition Note, subject to the terms of this
Subordination Agreement.
ARTICLE 3
LIMITATIONS ON CERTAIN ENFORCEMENT ACTIONS
3.1 Imposition of Standstill Period.
(a)Each Standstill Period will commence on the date the
Standstill Event in relation to such Standstill Period
shall have occurred and will terminate upon the earliest
to occur of (i) the date which is 180 days after the
later of (a) occurrence of an Event of Default as
defined in the Acquisition Note or (b) the giving of the
Standstill Event Notice; (ii) the date, after such
Standstill Period shall have commenced, such Standstill
Event shall have been cured or waived or shall otherwise
have ceased to exist; or (iii) March ____, 2000.
(b)At any time during a Standstill Period, Borrower or
Senior Creditor may cause any Event of Default under the
Acquisition Debt to be cured and, in such event, the
Subordinated Creditor shall not have any right to
accelerate the principal payment of the Acquisition Debt
as relates to such Event of Default that was cured.
3.2
Limitations on Enforcement Actions. The Subordinated
Creditor will not take any Enforcement Action until such
time as:
(a)any Standstill Period is no longer continuing; and
(b)the Subordinated Creditor shall have given to the
Borrower and the Senior Creditor not less than 30 days'
prior written notice (an "Enforcement Action Notice") of
the intent of the Subordinated Creditor to take such
Enforcement Action.
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3.3
Certain Notices. The Subordinated Creditor shall not take
any action of the kind described in the second sentence of
the defined term "Enforcement Action" until the Subordinated
Creditor shall have given the Senior Creditor at least two
(2) days prior notice to the taking thereof.
3.4
Limitations on Commencement of Bankruptcy or Insolvency
Proceeding. The Subordinated Creditor will not commence or
institute, or join with any other Person or Persons in com-
mencing or instituting, any Bankruptcy or Insolvency
Proceeding.
3.5 Limitation on Remedies Upon Acceleration of Senior Debt
.
Notwithstanding any contrary provision of any Subordinated
Debt Document, the acceleration of any Senior Debt by the
commencement of legal proceedings by the Senior Creditor
against the Borrower to enforce payment of any Senior Debt
shall entitle the Subordinated Creditor to accelerate
Subordinated Debt or take other Enforcement Action (subject
to the applicable provisions of Section 2.3 of this Agree-
ment).
ARTICLE 4
WAIVERS
4.1 Waivers of Notice, etc
. The obligations of the Subordinated
Creditor under this Agreement, and the subordination
arrangements contained herein, shall not be to any extent or
in any way or manner whatsoever impaired or otherwise
affected by any of the following, whether or not the
Subordinated Creditor shall have had any notice or knowledge
of any thereof:
(a)the dissolution, termination of existence, death,
bankruptcy, liquidation, insolvency, appointment of a
receiver for all or any part of the property of,
assignment for the benefit of creditors by, or the
commencement of any Bankruptcy or Insolvency Proceeding
by or against, the Borrower;
(b)the absorption, merger or consolidation of, or the
effectuation of any other change whatsoever in the name,
membership, constitution or place of formation of, the
Borrower;
(c)any extension or postponement of the time for the
payment of any Senior Debt, the acceptance of any
partial payment thereon, any and all other indulgences
whatsoever by the Senior Creditor in respect of any
Senior Debt, the taking, addition, substitution or
release, in whole or in part, at any time or times, of
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any collateral securing any Senior Debt, or the
addition, substitution or release, in whole or in part,
of any Person or Persons primarily or secondarily liable
in respect of any Senior Debt;
(d)any action or delay in acting or failure to act on the
part of the Senior Creditor under any Senior Debt Docu-
ments or in respect of the Senior Debt or any collateral
securing any Senior Debt or otherwise, including (i) any
action by the Senior Creditor to enforce any of its
rights, remedies or claims in respect of any collateral
securing any Senior Debt, (ii) any failure by the Senior
Creditor strictly or diligently to assert any rights or
to pursue any remedies or claims against the Borrower or
any other Person or Persons under any of the Senior Debt
Documents or provided by statute or at law or in equity,
(iii) any failure by the Senior Creditor to perfect or
to preserve the perfection or priority of any of its
Liens securing any Senior Debt, or (iv) any failure or
refusal by the Senior Creditor to foreclose or to real-
ize upon any collateral securing any Senior Debt or to
take any action to enforce any of its rights, remedies
or claims under any Senior Debt Document;
(e)any modification or amendment of, or any supplement or
addition to, any Senior Debt Document;
(f)any waiver, consent or other action or acquiescence by
the Senior Creditor in respect of any default by the
Borrower in its performance or observance of or
compliance with any term, covenant or condition
contained in any Senior Debt Document; or
(g)the declaration that any Senior Debt Document or any
provision thereof is null and void or illegal, invalid,
unenforceable or inadmissible in evidence; or the
failure of any Senior Debt Document to be in full force
and effect.
The Subordinated Creditor hereby absolutely, unconditionally
and irrevocably assents to and waives notice of any and all
matters hereinbefore specified in clauses (a) through (g).
ARTICLE 5
AGREEMENT OF SENIOR CREDITOR AND BORROWER
5.1 Agreement of Senior Creditor to Provide Subordinated
Creditor with Notice. Senior Creditor agrees to provide the
Subordinated Creditor with notice of any and all written
notice(s) of an Event of Default that Senior Creditor has
provided to the Borrower declaring an Event of Default under
the Senior Loan Documents within sixty (60) days of such
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fact. Such notice shall be provided in writing to the
disbursement agent at the following address:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
or at such other address as may be provided by the
Subordinated Creditor to the Senior Creditor; and
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
McAfee & ▇▇▇▇
Tenth Floor, Two Leadership Square
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
5.2 Representations and Warranty of the Borrower
. The Borrower
hereby represents to the Senior Creditor as follows:
(a)all subordinated debt existing on the date hereof is
Subordinated Debt.
ARTICLE 6
MISCELLANEOUS
6.1 Amendments, Waivers, etc
. The provisions of this Agreement
may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and
consented to by the Subordinated Creditor, Borrower and by
the Senior Creditor. No failure or delay on the part of any
Person in exercising any power or right under this Agreement
shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any
other power or right. No notice to or demand hereunder
shall entitle any Person to any notice or demand in similar
or other circumstances, unless otherwise required by this
Agreement. The remedies herein provided are cumulative and
not exclusive of any other remedies provided at law or in
equity. No waiver or approval by a Person under this
Agreement shall, except as may be otherwise stated in such
waiver or approval, be applicable to any subsequent transac-
tions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be
granted hereunder.
6.2
Further Assurances. The Subordinated Creditor and the
Borrower will, from time to time at its own expense,
promptly execute and deliver all such further Instruments,
and take all such further action, as may be reasonably
necessary or appropriate, or as the Senior Creditor may
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reasonably request, in order to carry out the intent of this
Agreement.
6.3 Specific Performance
. Senior Creditor is hereby authorized
to demand specific performance of this Agreement at any time
when the Subordinated Creditor shall have failed to comply
with any of the provisions of this Agreement applicable to
them whether or not Borrower shall have complied with any of
the provisions hereof applicable to it, and the Subordinated
Creditor hereby irrevocably waives any defense based on the
adequacy of a remedy at law which might be asserted as a bar
to such remedy of specific performance.
6.4 Severability
. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the
validity or enforceability of any such provision in any
other jurisdiction.
6.5 Enforcement by Senior Creditor
. The Borrower and the
Subordinated Creditor acknowledge and agree that their
respective obligations hereunder are, and are intended to
be, an inducement and consideration to the Senior Creditor
to acquire and continue to hold, or to continue to hold, the
Senior Debt. The Senior Creditor shall be deemed con-
clusively to have relied upon the obligations hereunder of
the Borrower and the Subordinated Creditor in acquiring and
continuing to hold, or in continuing to hold, the Senior
Debt. The Senior Creditor is hereby made an obligee
hereunder and may enforce directly the obligations of the
Borrower and the Subordinated Creditor contained herein.
The Senior Creditor, by accepting the benefits of this
Agreement, is bound by the provisions hereof.
6.6 Continuing Agreement
. This Agreement shall in all respects
be a continuing agreement, and this Agreement and the agree-
ments and obligations of the Borrower and the Subordinated
Creditor hereunder shall remain in full force and effect
until all Senior Debt is indefeasibly paid in full or all
Subordinated Debt is paid in full in compliance with this
Agreement.
6.7 Successors and Assigns
. This Agreement shall be binding
upon, and shall inure to the benefit of, the Borrower and
the Senior Creditor and the Subordinated Creditor and their
respective successors in title and assigns. The rights and
obligations of the Subordinated Creditor under this
Agreement shall be assigned automatically to, and the term
"Subordinated Creditor" as used in this Agreement shall
automatically include, any assignee or successor of such
Subordinated Creditor, and such assignee or successor shall
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automatically become a party to this Agreement as a
Subordinated Creditor without the need for the execution of
any Instrument or the taking of any other action. The
Subordinated Creditor shall deliver a complete copy of this
Agreement to any potential assignee or successor of the
Subordinated Creditor prior to the effectiveness of any such
assignment. At the request of the Senior Creditor, the
Subordinated Creditor shall execute and deliver to the
Senior Creditor an instrument of accession hereto.
6.8 Notices
. All notices and other communications provided to a
party hereunder shall (except as otherwise specifically
provided herein) be in writing or by facsimile transmission
and addressed or delivered to it at its address designated
for notices set forth below its signature hereto; at the
addresses specified in Section 5.1 if notice is to the
Subordinated Creditor; or at such other address as may be
designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage
prepaid, and any notice, if transmitted by facsimile
transmission, shall be deemed given when received.
6.9 Entire Agreement
. This Agreement constitutes the entire
agreement among the Borrower, the Senior Creditor and the
Subordinated Creditor with respect to the subject matter
hereof and supersedes any prior or contemporaneous
agreements, representations, warranties or understandings,
whether oral, written or implied, as to the subject matter
of this Agreement.
6.10 CHOICE OF LAW
. THIS AGREEMENT HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF OHIO AND SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF SUCH STATE APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE.
6.11
Service of Process. This Subordination Agreement shall be
deemed made in the state in which the principal office of
the Senior Creditor is located, and all documents evidencing
same, and all the rights and obligations of the Subordinated
Creditor and the Senior Creditor hereunder, shall in any
respects be governed by and construed in accordance with the
laws of the state in which the principal office of the
Senior Creditor is located, including all matters of
construction, validity and performance. Without limitation
on the Senior Creditor's ability to exercise all its rights
to protect or enforce the Senior Loans and the Subordinated
Obligations, the Subordinated Creditor and the Senior
Creditor agree that in any action or proceeding commenced by
or on behalf of the parties arising out of or relating to
this Subordination Agreement and/or any documents evidencing
same, shall be commenced and maintained exclusively in the
court of applicable general jurisdiction located in the
- ▇▇ -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ of applicable general jurisdiction
located in the federal district in which the principal
office of the Senior Creditor is located or any other courts
of applicable general jurisdiction located in the district
where the Senior Creditor is located. The Subordinated
Creditor and the Senior Creditor also agree that a summons
and complaint commencing an action or proceeding in any such
courts by or on behalf of such parties shall be properly
served and shall confer personal jurisdiction on a party to
which said party consents, if (a) served personally or by
certified mail to the party at any of its addresses noted
herein, or (b) as otherwise provided under the laws of the
state in which the principal office of the Senior Creditor
is located. The loan(s) or other financial accommodation(s)
is in part related to the aforesaid provisions on
jurisdiction, which the Senior Creditor deems a vital part
of this subordination arrangement.
6.12 Waiver of Jury Trial
. To the extent not prohibited by
Applicable Law which cannot be waived, each of the parties
hereto waives, and covenants that it will not assert
(whether as plaintiff, defendant or otherwise), any right to
trial by jury in any forum in respect of any issue, claim,
demand, action or cause of action arising out of or based
upon this Agreement or the subject matter hereof, in each
case whether now existing or hereafter arising and whether
in contract or tort or otherwise. Each of the parties
hereto acknowledges that the provisions of this Section 6.12
constitute a material inducement upon which the Senior
Creditor is relying and will rely in holding Senior Debt.
Any party and the Senior Creditor may file an original
counterpart or a copy of this Section 6.12 with any court as
written evidence of the consent of each of the parties
hereto to the waiver of its right to trial by jury.
6.13 Counterparts
. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one
and the same Instrument.
6.14 Headings
. The descriptive headings in this Agreement are
inserted for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement or
any provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed under seal by their duly authorized officers as of
the day and in the year first above written.
BORROWER
:
▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC.
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By:_____________________________________
Title:____________________________________
Address:_________________________________
______________________________________
Fax:____________________________________
Attention:________________________________
SUBORDINATED CREDITOR:
________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Address:_________________________________
______________________________________
Fax:____________________________________
SENIOR CREDITOR:
STAR BANK, N.A.
By:_____________________________________
Title:____________________________________
Address:_________________________________
______________________________________
Fax:____________________________________
Attention:________________________________
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STATE OF OHIO
COUNTY OF ▇▇▇▇▇▇▇▇, ▇▇:
On this ____ day of ______, 1998, before me personally
appeared ____________ _______________, to me known, who, being by
me duly sworn, declared that he is the ______________________ of
▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC., a signatory of the foregoing
Subordination Agreement; and that, being duly authorized, he did
execute the foregoing Subordination Agreement on behalf of
▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC.; and that the foregoing
Subordination Agreement constitutes the free act and deed of
▇▇▇▇▇▇▇ COMPUTER RESOURCES, INC.
________________________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF OKLAHOMA
COUNTY OF OKLAHOMA
On this ____ day of ________, 1998, before me personally
appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, to me known, who, being by me duly
sworn, declared that he is a signatory of the foregoing
Subordination Agreement; and that he did execute the foregoing
Subordination Agreement, and that the foregoing Subordination
Agreement constitutes HIS free act and deed.
________________________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF OHIO
COUNTY OF ▇▇▇▇▇▇▇▇, ▇▇:
On this ____ day of _____, 1998, before me personally
appeared ______________ ___________________ to me known, who,
being by me duly sworn, declared that he is
the __________________ of STAR BANK, N.A., a signatory of the
foregoing Subordination Agreement; and that, being duly
authorized, he did execute the foregoing Subordination Agreement
on behalf of STAR BANK, N.A.; and that the foregoing
Subordination Agreement constitutes the free act and deed of STAR
BANK, N.A..
________________________________________
NOTARY PUBLIC
My Commission Expires:
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112887
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