Exhibit 10.8
SUBORDINATION AGREEMENT (Debts)
INTRINSIX CORP., a Massachusetts corporation having its principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 01581(herein called the
"Borrower") is indebted to the amount indicated to each of the following:
Xxxxxxxx Xxxxxxx, 00 Xxxx Xxxx Xxxx Xxxx, Xxxxxx, XX 00000 $174,901.43
---------------------------------------------------------- -------------
(herein called the "Creditors" whether there be one or more than one).
The Borrower and the Creditors have requested BANKBOSTON, N.A., a national
bank having offices at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (herein
called the "Bank") to grant financial accommodations to the Borrower, and the
Bank has indicated that it is unwilling to do so unless the Borrower and the
Creditors shall Join in this Agreement and the Creditors shall subordinate, to
the extent and in the manner hereinafter set forth, the indebtedness
hereinbefore referred to and also all other indebtedness (except for current or
future salaries or payments made as compensation for employment) of the Borrower
to the Creditors, direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising (herein called the "Subordinated Debt")
to all indebtedness of the Borrower to the Bank, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising (herein
called the "Bank Debt") (for the purposes of this Agreement, the term "Bank
Debt" shall include all indebtedness of the Borrower to the Bank, direct or
indirect, absolute or contingent, due or to become due, non-existing or
hereafter arising).
NOW, THEREFORE, in consideration of the premises and as an inducement to
the Bank to grant financial accommodations to the Borrower, whether by loan or
advance or extension of time for the payment of Bank Debt or otherwise, and in
consideration of the granting thereof, the Borrower and the Creditors warrant to
and covenant with the Bank as follows:
1. Provided no event of default exists under any agreement or instrument
evidencing the Bank Debt (a "Default"), the Borrower may make regularly
scheduled payments of principal and interest to the Creditors. No prepayments of
any kind, including acceleration after a default, may bc made to the Creditors.
After a Default, the Borrower shall not, directly or indirectly, make any
payment of principal or interest on account of or transfer any collateral for
any part of the Subordinated Debt, the Creditors shall not demand or accept from
the Borrower or any other person any such payment or collateral nor cancel, set
off or otherwise discharge any part of the Subordinated Debt and neither the
Borrower nor the Creditors shall otherwise take or permit any action prejudicial
to or inconsistent with the Bank's priority position over the Creditors created
by this Agreement.
2. The Creditors hereby assign, transfer and set over to the Bank the
Subordinated Debt, whether evidenced by negotiable or non-negotiable
instruments, securities or other writings, book entries or otherwise, together
with any collateral therefor, and have endorsed or assigned to the Bank and
herewith deposit with it the following:
3. The Creditors will not commence or join with any other creditor or
creditors of the Borrower in commencing any bankruptcy, reorganization or
insolvency proceedings against the Borrower. At any meeting of creditors of the
Borrower or in the event of any proceeding, voluntary or involuntary, for the
distribution, division or application of all or part of the assets of the
Borrower or the proceeds thereof, whether such proceeding be for the
liquidation, dissolution or winding up of the Borrower or its business, a
receivership, insolvency or bankruptcy proceeding, an assignment for the benefit
of creditors or a proceeding by or against the Borrower for relief under any
bankruptcy, reorganization or insolvency law or any law relating to the relief
of debtors, readjustment of indebtedness, reorganization, arrangement,
composition or extension or otherwise, if all Bank Debt has not been paid in
full at the time, the Bank is hereby irrevocably authorized at any such meeting
or in any such proceeding:
(a) To enforce claims comprising Subordinated Debt either in its own name
or the name or names of any Creditors, by proof of debt, proof of claim, suit
or otherwise;
(b) To collect, in accordance with this Agreement, any assets of the
Borrower distributed, divided or applied by way of dividend or payment, or
any such securities issued, on account of Subordinated Debt and apply the
same, or the proceeds of any realization upon the same that the Bank in its
discretion elects to effect, to Bank Debt until all Bank Debt shall have been
paid in full, rendering any surplus to the Creditors, pro rata;
(c) To vote claims comprising Subordinated Debt to accept or reject any
plan of partial or complete liquidation, reorganization, arrangement,
composition or extension; and
(d) To take generally any action in connection with any such meeting or
proceeding which the Creditors might otherwise take.
4. Should any payment on account of or any collateral for any part of the
Subordinated Debt be received by the Creditors in violation hereof, such payment
or collateral shall be delivered forthwith to the Bank by the recipient for
application to Bank Debt, in the form received except for the addition of any
endorsement or assignment necessary to effect transfer of all rights therein to
the Bank. The Bank is irrevocably authorized to supply any required endorsement
or assignment which may have been omitted. Until so delivered any such payment
or collateral shall be held by the recipient in trust for the Bank and shall not
be commingled with other funds or property of the recipient.
5. No part of the Subordinated Debt is evidenced by any instrument, security
or other writing which has not previously been or is not concurrently being
deposited with the Bank; the Creditors are the lawful owners of the Subordinated
Debt and no part thereof has been assigned to or subordinated or subjected to
any other security interest in favor of anyone
other than the Bank. Until all Bank Debt has been paid in full, the Borrower
shall not issue any instrument, security or other writing evidencing any part of
the Subordinated Debt except at the request of and in the manner requested by
the Bank; and the Creditors shall not assign or subordinate any part of the
Subordinated Debt except to or in favor of the Bank.
6. The Bank is hereby authorized to demand specific performance of this
Agreement, whether or not the Borrower shall have complied with the provisions
hereof applicable to it, at any time when the Creditors shall have failed to
comply with any provision hereof applicable to them. The Creditors hereby
irrevocably waive any defense based on the adequacy of a remedy at law which
might be asserted as a bar to the remedy of specific performance hereof in any
action brought therefor by the Bank. The Creditors further waive presentment,
notice and protest in connection with all negotiable instruments evidence Bank
Debt or Subordinated Debt to which they may be parties, notice of the acceptance
of this Agreement by the Bank, notice of any loan made, extension granted or
other action taken in reliance hereon and all demands and notices of every kind
in connection with this Agreement, Bank Debt or Subordinated Debt; assent to any
renewal, extension or postponement of the time of payment of Bank Debt or any
other indulgence with respect thereto, to any substitution, exchange or release
of collateral therefor and to the addition or release of any person primarily or
secondarily liable thereon; and agree to the provisions of any instrument,
security or other writing evidencing Bank Debt.
7. The Borrower and the Creditors shall execute and deliver to the Bank such
further instruments and shall take such further action as the Bank may at any
time or times reasonably request in order to carry out the provisions and intent
of this Agreement.
8. If all indebtedness of the Borrower to the Bank is at any time or times
hereafter paid in full and thereafter the Borrower again becomes indebted to the
Bank, the provisions of this Agreement shall apply to such new indebtedness
unless before the same is incurred the Creditors notify the Bank in writing to
the contrary. If, in reliance upon this Agreement, the Bank grants loans or
extensions or takes other action, after the death or incapacity of or the
termination of this Agreement by the Creditors, but prior to the receipt by the
Bank of written notice of such death, incapacity or termination, the Bank's
rights shall be the same as they would have been had such death, incapacity or
termination not occurred, and the Borrower and the Creditors shall indemnify the
Bank and save it harmless from and against any loss, cost, liability or expense
which it may have incurred or suffered by reason of any action so taken by it.
9. If any warranty herein contained shall prove to have been materially false
when made or in the event of a breach by the Borrower or the Creditors in the
performance of any of the terms hereof, the Bank may, at its option, declare all
Bank Debt to be forthwith due and payable, without presentment, demand, protest,
or notice of any kind, notwithstanding any time or credit otherwise allowed.
10. The rights granted to the Bank hereunder are solely for its protection
and nothing herein contained shall impose on the Bank any duties with respect to
any property of the Borrower or the Creditors received hereunder beyond
reasonable care in its custody and preservation while in the Bank's possession.
The Bank shall have no duty to preserve rights against prior parties in any
instrument or chattel paper received hereunder.
11. This Agreement is intended to take effect as a sealed instrument, shall
be binding upon the Borrower, the Creditors, their respective executors,
administrators, other legal
representatives, successors and assigns, shall inure to the benefit of the Bank,
its successors and assigns and shall be construed in accordance with the laws of
the Commonwealth of Massachusetts. The obligations hereby undertaken by the
Creditors shall be their joint and several obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed this 13th day of January, 2000.
BORROWER: CREDITOR:
--------- ---------
INTRINSIX CORP.
By: /s/ Xxx Xxxxx /s/ Xxxxxxxx Xxxxxxx
--------------------------- ---------------------------
Xxxxx Xxxxx, President Xxxxxxxx Xxxxxxx
By: /s/ Xxxxx Xxxxx
---------------------------
Xxxxx Xxxxx, Treasurer
