EXHIBIT 10.5(f)
SUBORDINATION AGREEMENT
In consideration of the financial accommodations given, to be
given or continued by First of America Bank-Michigan, N.A. (herein termed
"Bank") to (herein termed "Borrower") and in order to induce the Bank to
extend or continue to extend credit to the Borrower upon such terms and
conditions as may from time to time be agreed upon by the Bank and the
Borrower, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (herein termed "Creditor"), Borrower and Bank
agree as follows:
1. Creditor subordinates all indebtedness, including interest thereon
(herein called "Subordinated Indebtedness") which is now or may at any time
hereafter be owing to the Creditor by the Borrower in favor of all indebtedness,
including interest thereon (herein called "Senior Indebtedness") which is now or
at any time be owing by the Borrower to the Bank whether now or hereafter
existing, absolute or contingent, secured or unsecured, due or not due, joint or
several, and however arising.
2. Unless paragraph 11 hereof is applicable, the Borrower agrees that no
payment of or on account of any Subordinated Indebtedness shall be made or any
security given therefor until such time as Bank has been paid in full and this
Agreement shall have been released in writing by Bank. Creditor further agrees
not to demand, receive or accept any such payment or security from Borrower.
3. If Creditor receives any payment from Borrower in contravention of
paragraph 2 hereof and fails to deliver same to Bank in the form received for
application on the Senior Indebtedness, the Creditor so receiving such payment
shall become liable to the Bank for the Senior Indebtedness.
4. Borrower agrees that should there be any violation of this Subordination
Agreement while the Senior Indebtedness remains unpaid, the maturity of the
Senior Indebtedness may, at Bank's option, be accelerated and the entire
principal sum shall become immediately due, together with interest and attorney
fees notwithstanding any provision in the documents evidencing the Senior
Indebtedness to the contrary.
5. In the event of any receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, readjustment of indebtedness, composition,
reorganization, whether or not pursuant to bankruptcy laws, sale of
substantially all of the assets, dissolution, winding up, liquidation or any
other marshaling of the assets or liabilities of Borrower, any payment or
distributions of assets of Borrower of any kind or character, whether in cash,
securities for other property, which would otherwise be payable to or
deliverable upon or with respect to any or all indebtedness of Borrower to the
Creditor, shall be paid or delivered directly to the Bank for application on any
Senior Indebtedness of Borrower to Bank until such Senior Indebtedness shall
have been fully paid and satisfied. Bank shall have the right to enforce,
collect and receive every such payment or distribution and given acquittance
therefor, and Bank is hereby authorized as attorney in fact for the Creditor
to
vote and approve the Subordinated Indebtedness in any of the above described
proceedings or in any meetings of creditors of Borrower relating thereto.
6. The Creditor shall not assign, transfer, hypothecate or dispose of any
claim it has or may have against Borrower while any Senior Indebtedness of
Borrower to Bank remains unpaid, without prior written consent of Bank.
7. The Creditor and Borrower represent to the Bank that the Subordinated
Indebtedness, exclusive of interest, is in the amount of $1,910,750.00 as of the
date of this Agreement without counterclaim, defense or offset. The Creditor and
Borrower represent to Bank that the Subordinated Indebtedness is not evidenced
by any notes or other negotiable instruments, except such notes or negotiable
instruments, if any, as have been endorsed and delivered by the Creditor to the
Bank simultaneously with the execution of this Agreement. To the extent that the
Subordinated Indebtedness is hereafter evidenced by a note or negotiable
instrument, Creditor agrees to promptly, upon receipt, endorse and deliver same
to Bank.
8. The Creditor agrees that so long as this Agreement is in effect each note
or negotiable instrument which evidences the Subordinated Indebtedness shall be
endorsed substantially as follows:
The indebtedness hereby evidenced has been subordinated in favor of and
assigned to First of America Bank-Michigan, by Subordination Agreement dated
October 6, 1995, to which reference is hereby made, to secure all
indebtedness now or hereafter owing by the maker or drawer hereof to said
Bank." The Borrower agrees that it will render to the Bank upon demand a
statement of borrower's account with the Creditor and that if will reflect in
its financial records the legal effect of this Agreement.
9. This Agreement shall constitute a continuing agreement of subordination,
even though at times the Borrower is not indebted to the Bank and Bank may,
without notice to the Creditor lend monies, extend credit and make other
financial accommodations to or for the account of Borrower on the faith hereof
until written notice or revocation of this Agreement as to future transactions
shall be delivered to Bank by the Creditor, and receipt thereof acknowledged by
Bank. Any such notice of revocation shall not affect this Agreement in relation
to any obligations or liabilities of Borrower then existing, or any obligations
or liabilities created thereafter pursuant to any previous commitment of the
Bank to the Borrower, or any extensions or renewals of any such obligations and
liabilities and extensions or renewals thereof.
10. Bank, at any time and from time to time either before or after such
notice of revocation, may enter into such agreement or agreements with Borrower
as Bank may deem proper, extending the time of payment or renewing or otherwise
altering the terms of all or any of the Senior Indebtedness or releasing, or
substituting or affecting any security underlying any or all of such
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Senior Indebtedness or may exchange, sell or surrender or otherwise deal with
any security, or may release any balance of funds of Borrower with Bank, without
notice to the Creditor and without in any way impairing or affecting this
Agreement.
11. If subparagraphs (a), (b), or (c) of this paragraph are marked and
initialed by Bank and notwithstanding anything to the contrary contained herein,
so long as Borrower is not in default under the terms hereof or of any document
executed in connection with the Senior Indebtedness, Borrower may make the
following payments to Creditor and such payments shall not be deemed to be
Subordinated Indebtedness:
(a) [_] Payments representing interest only not to exceed _____% per
annum or $__________ per ____________.
(b) [_] Payments representing principal and interest at _____% per
annum or $__________ per _____________.
(c) [_] Other (Specify): _______________________________________
If checked here [_], Bank requires payments made under this Paragraph 11
to be delivered in kind to Bank which will in turn deliver same to Creditor.
12. Bank's delay in or failure to exercise any right or remedy shall not be
deemed a waiver of any obligation of the Creditor or right of Bank. This
Agreement may be modified, and any of Banks' rights hereunder waived, only by
agreement in writing signed by Bank.
13. This Agreement shall inure to the benefit of Banks' successors and
assigns and binds the heirs, legatees, personal representatives, successors and
assigns of the Creditor.
14. Notice of acceptance by Bank of this Agreement is hereby waived by the
Creditor, and this Agreement and all of the terms and provisions hereof shall
immediately be binding upon the Creditor from the date of execution hereof.
15. This Agreement shall be construed and governed by the laws of the State
of Michigan.
Executed this 6th day of October, 1995.
CREDITOR:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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The Borrower hereby consents to the foregoing Agreement and agrees to be
bound by the terms and conditions thereof.
BORROWER:
Dated: October 6, 1995 ▇▇▇▇▇▇ Oil Corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Accepted by Bank:
BANK:
DATED: October 6, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Bank-Michigan, N.A.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
ITS Senior Vice President
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SCHEDULE TO
SUBORDINATION AGREEMENT
In addition to the Subordination Agreement filed as Exhibit 10.5(f),
First of America Bank-Michigan, N.A. has entered into a Subordination Agreement
dated as of October 6, 1995 with ▇▇▇▇▇▇ Oil Corporation and each of the
following individuals:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Other than with respect to different parties thereto, the Subordination
Agreements with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are
identical to the Subordination Agreement filed as Exhibit 10.5(f).
