STATE OF SOUTH CAROLINA SUBORDINATION AGREEMENT
COUNTY OF CHARLESTON (INCLUDING SUBORDINATION OF MORTGAGES)
THIS SUBORDINATION AGREEMENT ("Agreement") is made and entered into as of
this 19th day of December, 1996, by and between ENVIROMETRICS, INC. (hereinafter
referred to as "Subordinator") and ▇▇▇▇▇ DEVELOPMENT CORPORATION, its successors
and/or assigns (hereinafter referred to as "Lender").
BACKGROUND INFORMATION
WHEREAS, Lender has agreed to loan ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Borrower") a loan (the
"Loan") in the original principal amount of up to six hundred twenty-five
thousand and no/l00 dollars ($ 625,000.00) as evidenced by a promissory note
from Borrower to Lender dated as of even date herewith (as amended or modified,
the "Promissory Note"). The proceeds of the Loan shall be used by Borrower to
purchase (i) that certain real property and improvements located at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Property"), and (ii) that
certain real property and improvements located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Charleston County Property") (the Berkeley County
Property and Charleston County Property shall collectively be referred to herein
as the "Properties");
WHEREAS, Borrower has agreed to execute and deliver as of even date
herewith to Lender a first mortgage and security agreement, an assignment of
leases and guaranties, and UCC-1 financing statements for each of the Properties
and such security documents shall be recorded in the Office of the RMC for
Berkeley County and Charleston County, respectively, (the Promissory Note, first
mortgages, first assignment of leases and guaranties, and other related
documents, as amended, modified, or extended, shall collectively be referred to
herein as "Loan Documents") (all real and personal property securing the Loan,
whether now existing or hereafter arising, shall be referred to herein as the
"Collateral");
WHEREAS, the Subordinator has made a loan in the original principal amount
of two hundred thirty thousand and no/l00 dollars ($230,000.00) as evidenced by
a promissory note dated as of even date herewith (as amended or modified, the
"Subordinated Note") and the proceeds of said Subordinated Note were or are
being delivered to Borrower to provide additional capital for the purchase of
the Properties described above. In return, Borrower has agreed to execute and
deliver to the Subordinator a second mortgage and security agreement for each of
the Properties and said second mortgages shall be recorded in the Office of the
RMC for Berkeley County and Charleston County respectively, immediately prior to
the recording of this Agreement but after the recording of the first mortgages
described above;
WHEREAS, the Lender and Subordinator now desire to evidence their
relationship with respect to the Borrower and the Collateral securing the Loan
and agree that for now and forever, the Subordinator shall subordinate its
interests in the Subordinated Debt to the interests of Lender as more
particularly described hereinbelow;
STATEMENT OF AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Subordinator, and in order to
induce Lender, at its option, now or from time to time-hereafter, to make loans
or extend credit or any other financial accommodation or benefit to or for the
account of Borrower; or to grant such renewals or extensions thereof as Lender
may deem advisable; and to better secure Lender in respect of the foregoing,
Subordinator hereby agrees with Lender as follows:
1. Subordination of Debt. Except as set forth in Section 4 hereof,
Subordinator will not ask for, demand, ▇▇▇ for, take or receive from the
Borrower, by setoff or in any other manner, the whole or any part of any monies
which may now or hereafter be owing by the Borrower to Subordinator, principal
or interest, due or not sums due, direct or indirect, absolute or contingent,
whether now existing or hereafter arising, including, without limitation, any
sums due under the Subordinated Note (all such indebtedness, obligations and
liabilities hereinafter collectively referred to as the "Subordinated Debt"),
unless and until all obligations, liabilities, and indebtedness of Borrower to
Lender arising pursuant to the Promissory Note from Borrower to Lender dated
even date herewith together with all extensions, modifications and future
advances thereunder, whether now existing or hereafter arising directly between
Borrower and Lender, or acquired outright, conditionally or as collateral
security from another by Lender, shall have been fully paid and satisfied (all
such obligations, indebtedness and liabilities of Borrower to Lender is
hereinafter collectively referred to as the "Senior Indebtedness") and all
financing arrangements between the Borrower and Lender have been terminated in
writing by Lender.
2. Subordination of Security. Notwithstanding the order of filing of any
mortgages, deeds of trust, assignments of leases, or financing statements, or
the physical possession of any of Borrower's assets by Subordinator (or any
other person, firm or corporation), or the order of granting of any security
interest in the assets of Borrower, any and all rights and security interests of
Subordinator, whether now existing or hereafter acquired or arising and
howsoever existing, in the assets of Borrower and all products and proceeds
thereof shall be and hereby are subordinated to the rights and interests of
Lender therein. Subordinator shall not ask for, demand, ▇▇▇ for, take, receive,
or possess from Borrower, by setoff or in any other manner, the whole or any
part of the assets of Borrower or any products or proceeds thereof, or foreclose
or otherwise realize upon the whole or any part of the assets of Borrower,
whether by judicial action under power of sale, by self-help repossession or
otherwise, unless and until all of the Senior Indebtedness of Borrower to Lender
has been paid and fully satisfied, and all financing arrangements between
Borrower and Lender have been terminated in writing by Lender. Subordinator
further agrees that any and all instruments, documents or agreements creating,
evidencing or perfecting any lien on or security interest in any asset of
Borrower as security for the Subordinated Debt shall expressly state that it is
subject to the terms of this Agreement.
3. Subrogation. Except as set forth in Section 4 hereof, Subordinator also
agrees that, regardless of whether the Senior Indebtedness is secured or
unsecured, Lender shall be subrogated to Subordinator with respect to
Subordinator's claims against Borrower and Subordinators' rights, liens and
security interests, if any, in the Collateral and the proceeds thereof until all
of the Senior Indebtedness of Borrower to Lender shall have been paid and fully
satisfied and all financing arrangements between Borrower and Lender have been
terminated in writing by Lender.
4. Permitted Transactions. Notwithstanding anything to the contrary set
forth herein, Borrower may make, and Subordinator may accept, the regularly
scheduled payments of interest and principal provided for in the Subordinated
Note (without giving effect to any amendment or modification thereof which would
have the effect of increasing any such payment or accelerating the maturity
thereof), provided that, at the time any such payment becomes due and owing
there does not exist any Default or Event of Default (as such terms are defined
in the Mortgages and other Loan Documents) or any event or condition which, with
the making of such payment, would constitute a Default or Event of Default.
5. Subordinated Debt Owed Only to Subordinator. Subordinator warrants and
represents that Subordinator has not previously assigned any interest in the
Subordinated Debt or Subordinated Note to any party other than Lender, that no
party owns an interest in the Subordinated Debt or Subordinated Note other than
Subordinator (whether as joint holders of the Subordinated Debt, participants or
otherwise), and that the entire Subordinated Debt is owing to the Subordinator,
subject only to the rights of Lender hereunder.
6. Priority on Distribution. In the event of any distribution, division or
application, partial of complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Borrower or readjustment of
the obligations and indebtedness of Borrower, whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding involving the readjustment of all or any of
the Subordinated Debt, or the application of the assets of Borrower to the
payment or liquidation thereof, or the dissolution or other winding up of
Borrower's business, or upon the sale or other disposition of all or
substantially all of Borrower's assets or of all of the issued and outstanding
shares of capital stock of Borrower, then, and in any such event, Lender shall
be entitled to receive payment in full of any and all of the Senior Indebtedness
then owing to it prior to the payment of all or any part of the Subordinated
Debt, and any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or with
respect to any or all of the Subordinated Debt shall be paid or delivered
directly to Lender for application on any of the Senior Indebtedness owing to
Lender, due or not due, until such Senior Indebtedness shall have first been
fully paid and satisfied.
7. Payments Received by Subordinator. Except as provided in Section 4
hereof, should any payment or distribution or security or instrument or proceeds
thereof be received by Subordinator upon or with respect to the Subordinated
Debt prior to the satisfaction of all of the Senior Indebtedness owing to Lender
and termination in writing by Lender of all financing arrangements between
Borrower and Lender, the Sub-ordinator shall receive and hold the same in trust,
as trustee, for the benefit of Lender and shall forthwith deliver the same to
Lender in precisely the form received (except for endorsement or assignment by
Sub-ordinator where necessary), for application on any of the Senior
Indebtedness of Borrower to Lender, due or not due, and, until so delivered, the
same shall be held in trust by Sub-ordinator as the property of Lender. In the
event of the failure of Sub-ordinator to make any such endorsement or assignment
to Lender, Lender, or any of its officers or employees, is hereby irrevocably
authorized to make the same.
8. Instrument Legend. Any instruments evidencing any of the Subordinated
Debt, or any portion, thereof, including, without limitation, the Subordinated
Note, will, on the date hereof or promptly hereafter, be inscribed with a legend
conspicuously indicating the payment thereof is subordinated to the claims or
Lender, pursuant to the terms of this Agreement. Any instrument evidencing any
of the Subordinated Debt, or any portion thereof, which is hereafter executed by
Borrower, will, on the date thereof, be inscribed with the aforesaid legend.
9. Transfer of Claims. Sub-ordinator agrees not to assign or transfer to
others any claims Sub-ordinator has or may have against Borrower while any of
the Senior Indebtedness remains unpaid unless such assignment or transfer is
made expressly subject to this Agreement.
10. Term. This Agreement shall constitute a continuing agreement of
subordination, and Lender may continue, without notice to Sub-ordinator, to lend
monies, extend credit and make other accommodations to or for the account of
Borrower on the faith hereof, and this Agreement shall be irrevocable by
Sub-ordinator until all Senior Indebtedness of Borrower to Lender shall have
been paid and fully satisfied, and all financing arrangements between the
Borrower and Lender have been terminated in writing by Lender.
11. Additional Agreements Between Lender and Borrower. Lender, at any time
and from time to time, and without providing notice to Borrower and without
obtaining Borrower's consent, may enter into such agreement or agreements with
Borrower as Lender may deem proper, extending the time of payment of or renewing
or otherwise altering, amending, modifying, or assigning the terms of all or any
of the Senior Indebtedness of Borrower to Lender or affecting the security
underlying any or all of the Senior Indebtedness of Borrower to Lender, or may
exchange, sell, release, surrender or otherwise deal with any such security,
without in any way impairing or affecting this Agreement thereby. Sub-ordinator
agrees to waive any rights that it may have with respect to advancing its lien
priority against the Lender as a purchase money mortgagee regardless of whether
the Loan is amended, modified, assigned or extended in any way.
12. Sub-ordinator Waivers. All of the Senior Indebtedness of Borrower to
Lender shall be deemed to have been made or incurred in reliance upon this
Agreement, and Sub-ordinator expressly waives all notice of the acceptance by
Lender of the subordination and other provisions of this Agreement, all other
notices whatsoever, and reliance by Lender upon the subordination and other
agreements as herein provided. Sub-ordinator agrees that; (a) Lender has made no
warranties or representations with respect to the due execution, legality,
validity, completeness or enforceability of the Loan Agreement between Lender
and Borrower or the other Loan Documents (as such term is defined in the Loan
Agreement), or the collectability of the Senior Indebtedness of Borrower to
Lender; (b) Lender shall be entitled to manage and supervise its loans to the
Borrower in accordance with its usual practices, modified from time to time as
it deems appropriate under the circumstances, without regard to the existence of
any rights that Sub-ordinator may now or hereafter have in or to any of the
assets of the Borrower; and (c) Lender shall have no liability to Sub-ordinator
for, and Sub-ordinator waives any claim which he may now or hereafter have
against Lender arising out of, any and all actions which Lender, in good faith,
takes or omits to take (including, without limitation, actions with respect to
the creation, perfection or continuation of liens or security interests in the
Collateral, actions with respect to the occurrence of an Event of Default,
actions with respect to the foreclosure upon, sale of, release of, depreciation
of or failure to realize upon, any of the Collateral and actions with respect to
the collection of any claim for all or any part of the Senior Indebtedness of
Borrower to Lender from any account debtor, guarantor or any other party) with
respect to the Loan Agreement or the other Loan Documents or to the collection
of the Senior Indebtedness of Borrower to Lender or the valuation, use,
protection or release of the Collateral.
13. Lender's Waivers. No waiver shall be deemed to be made by Lender of any
of its rights hereunder, unless the same shall be in writing signed by Lender,
and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of Lender or the
obligations of Sub-ordinator to Lender in any other respect at any other time.
14. Application of Payments. The Sub-ordinator hereby agrees that all
payments received by Lender from Borrower may be applied and reapplied, in whole
or in part, to any of the Senior Indebtedness of Borrower to Lender, as Lender,
in its sole discretion, deems appropriate.
1 5. Representations and Warranties. Sub-ordinator hereby represents and
warrants to Lender as follows:
A. Sub-ordinator has all requisite power and authority to execute, deliver
and perform this agreement and without other or further action or approval of
any kind;
B. This Agreement constitutes the valid and legally binding obligation of
Sub-ordinator, enforceable in accordance with its terms (except that
enforceability may be limited by bankruptcy, insolvency and other laws affecting
creditors' rights generally), and no consent or approval of any other party and
no consent, license, approval or authorization of any governmental authority,
bureau or agency is required in connection with the execution, delivery,
performance, validity and enforceability of this Agreement.
16. CONSENT TO JURISDICTION. AS PART OF THE CONSIDERATION FOR THE FINANCIAL
ACCOMMODATIONS EXTENDED TO THE BORROWER BY LENDER, SUB-ORDINATOR CONSENTS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF
SOUTH CAROLINA AND WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREUNDER, AND FURTHER AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK
OF JURISDICTION OR VENUE.
17. Governing Law. This Agreement has been delivered and accepted in and
shall be deemed to have been made in Charleston, South Carolina, and shall be
interpreted, and the rights and liabilities of the parties hereto determined, in
accordance with the laws and decisions of the State of South Carolina without
regard to its conflicts of law rules.
18. No Third Party Beneficiary. This Agreement shall inure to the sole
benefit of Lender and no other person or entity shall be entitled to rely
thereon.
19. Parties. This Agreement shall be binding upon, and shall inure to the
benefit of, Lender, Sub-ordinator and their respective successors and assigns.
The term "Borrower" as used herein shall also refer to the successors and
assigns of Borrower, including, without limitation, a receiver, trustee,
custodian, debtor in possession, or corporation created by, or surviving, a
merger or acquisition transaction with Borrower.
20. Section Titles. The section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
21. Counterparts. This Agreement may be executed in any number of
counterparts, all of which, taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
IN WITNESS WHEREOF, This instrument has been signed and sealed by the
undersigned as of the day and year first above written.
SUB-ORDINATOR:
WITNESSES:
ENVIROMETRICS, INC (SEAL)
By:
Name:
Title:
LENDER:
▇▇▇▇▇ DEVELOPMENT CORPORATION (SEAL)
By:
Name:
Title:
The undersigned Borrower hereby accepts and acknowledges receipt of a copy of
the foregoing Subordination Agreement and agrees that it will not pay any of the
Subordinated Debt (as defined in the foregoing Agreement) owing by them to
Sub-ordinator, except as the foregoing Agreement provides.
Name:
Title:
LENDER:
▇▇▇▇▇ DEVELOPMENT CORPORATION (SEAL)
Name:
Title:
The undersigned Borrower hereby accepts and acknowledges receipt of a copy
of the foregoing Subordination Agreement and agrees that it will not pay any of
the Subordinated Debt (as defined in the foregoing Agreement) owing by them to
Sub-ordinator, except as the foregoing Agreement provides. In the event of a.
breach by Borrower of any of the provisions herein, all of the Senior
Indebtedness (as defined in the foregoing Agreement) of Borrower to Lender
shall, without presentment, demand, protest or notice of any kind, become
immediately due and payable unless Lender shall otherwise elect in writing.
BORROWER:
Witnesses:
(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
STATE OF
PROBATE
COUNTY OF
PERSONALLY appeared before me the undersigned witness, who, after first
being duly sworn, deposes and says that (s)he saw the within-named
Envirometrics, Inc., by its __________, sign, seal and, as its act and deed,
deliver the within-written Subordination Agreement (including Subordination of
Mortgages) for the uses and purposes therein mentioned and that (s)he together
with the other witness whose signature appears above, witnessed the execution
thereof.
WITNESS
SWORN and subscribed to before me
this day of 1996.
Notary Public for
My commission expires:
STATE OF PROBATE
COUNTY OF
PERSONALLY appeared before me the undersigned witness, who, after first
being duly sworn, deposes and says that (s)he saw the within-named ▇▇▇▇▇
Development Corporation, by its, sign, seal and, as its act and deed, deliver
the within-written Subordination Agreement (including Subordination of
Mortgages) for the uses and purposes therein mentioned and that (s)he together
with the other witness whose signature appears above, witnessed the execution
thereof.
WITNESS
SWORN and subscribed to before me
this day of 1996.
Notary Public for
My commission expires:
B
In the event of a breach by Borrower of any of the provisions herein, all
of the Senior Indebtedness (as defined in the foregoing Agreement) of Borrower
to Lender shall, without presentment, demand, protest or notice of any kind,
become immediately due and payable unless Lender shall otherwise elect in
writing.
BORROWER:
Witnesses:
(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
STATE OF
PROBATE
COUNTY OF
PERSONALLY appeared before me the undersigned witness, who, after first
being duly sworn, deposes and says that (s)he saw the within-named ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, sign, sea[ and, as his act and deed, deliver the within-written
Subordination Agreement (Including Subordination of Mortgages) for the uses and
purposes therein mentioned and that (s)he together with the other witness whose
signature appears above, witnessed the execution thereof.
WITNESS
SWORN and subscribed to before me
this day of 1996.
(L. S.)
Notary Public for
My commission expires:
EXHIBIT A
LEGAL DESCRIPTION
All that certain unit, known as ▇▇▇▇ ▇-▇, situate, lying and being in
Trident Executive Village Horizontal property Regime as shown on the Declaration
(Master Deed), dated October 20, 1986, establishing the Trident Executive
Village Horizontal Property Regime, recorded in Deed Book R-158, at Page 497, in
the office of the Register of Mesne Conveyances for Charleston County, South
Carolina; and Expansion Amendment recorded in Deed Book J-160, at Page 727; and
Expansion Amendment recorded in Book 0-166, at Page 159; and Subdivision
Amendment recorded in Book N-168, at Page 299; and Subdivision Amendment dated
October 12, 1987, and recorded in Book 0-169, at Page 586.
