LASALLE NATIONAL BANK
AND
CHOCAMERICAN, INC.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
PRUCO LIFE INSURANCE COMPANY
CONTRARIAN CAPITAL ADVISORS, L.L.C.
XXX. XXXXXX INC.
and
XXX. XXXXXX= HOLDING COMPANY, INC.
SUBORDINATION AND INTERCREDITOR AGREEMENT
Dated as of January 31, 1997
Re:
Xxx. Xxxxxx= Original Cookies, Inc.
SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this AAgreement@) is
entered into as of January 31, 1997 among LASALLE NATIONAL BANK, a national
banking association (ALaSalle@), and CHOCAMERICAN, INC.(AChocamerican@), THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA (APrudential@), PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY (APrincipal@), PRUCO LIFE INSURANCE COMPANY (APruco@),
CONTRARIAN CAPITAL ADVISORS, L.L.C. (AContrarian@), XXX. XXXXXX INC.(AMFI@) and
XXX. XXXXXX= HOLDING COMPANY, INC. (AHolding@); collectively, Chocamerican,
Prudential, Principal, Pruco, Contrarian, MFI and Holding, together with their
respective successors and assigns, are collectively referred to herein as the
AJunior Lenders@) and any of them may be referred to as a AJunior Lender@.
RECITALS:
WHEREAS, concurrently with the execution and delivery of this
Agreement, LaSalle is entering into that certain Loan Agreement dated as of the
date hereof (as permitted hereby to be amended, restated, modified or
supplemented and in effect from time to time, the ACredit Agreement@) with XXX.
XXXXXX= ORIGINAL COOKIES, INC., a Delaware corporation (the ABorrower@),
pursuant to which LaSalle has established certain credit facilities described
therein;
WHEREAS, on September 18, 1996, the Junior Lenders entered into that
certain Senior Note and Senior Subordinated Note Agreement dated as of September
18, 1996 (as amended from time to time, the ANote Agreement@), with the
Borrower, pursuant to which the Borrower issued and sold to the Junior Lenders
(I) $2,000,000 aggregate principal amount of its MFI Series 1 Senior Notes, due
1999 (as amended, restated, modified or supplemented and in effect from time to
time, the AMFI Series 1 Notes@), (ii) $3,000,000 aggregate principal amount of
its MFI Series 2 Senior Notes, due 2001 (the AMFI Series 2 Notes@), (iii)
$10,000,000 aggregate principal amount of its MFI Series 3 Senior Notes, due
1999 (as amended, restated, modified or supplemented and in effect from time to
time, the AMFI Series 3 Notes@), (iv) $4,643,000 aggregate principal amount of
its MFI Series 4 Senior Subordinated Notes, due 1999 (as amended, restated,
modified or supplemented and in effect from time to time, the AMFI Series 4
Notes@), (v) $_________ aggregate principal amount of its Chocamerican Series 1
Senior Notes due 1996 (as amended, restated, modified or supplemented and in
effect from time to time, the AChocamerican Series 1 Notes@), (vi) $3,000,000
aggregate principal amount of its Chocamerican Series 2 Senior Notes due 1999
(as amended, restated, modified or supplemented and in effect from time to time,
the AChocamerican Series 2 Notes@), (vii) $3,000,000 aggregate principal amount
of its Chocamerican Series 3 Senior Notes due 2001 (as amended, restated,
modified or supplemented and in effect from time to time, the AChocamerican
Series 3 Notes@), (viii) $21,000,000 aggregate principal amount of its
Chocamerican Series 4 Senior Notes due 1999 (as amended, restated, modified or
supplemented and in effect from time to time, the AChocamerican Series 4
Notes@), (ix) $5,357,000 aggregate principal amount of its Chocamerican Series
5A Senior Subordinated Notes due 1999 (as amended, restated, modified or
supplemented and in effect from time to time, the AChocamerican Series 5A
Notes@), and (x) $2,000,000 aggregate principal amount of its Chocamerican
Series 5B Senior Subordinated Notes due 1999 (as amended, restated, modified or
supplemented and in effect from time to time, the AChocamerican Series 5B
Notes@) (the MFI Series 1 Notes, MFI Series 2 Notes, MFI Series 3 Notes, MFI
Series 4 Notes, Chocamerican Series 1 Notes, Chocamerican Series 2 Notes,
Chocamerican Series 3 Notes, Chocamerican Series 4 Notes, Chocamerican Series 5A
Notes and Chocamerican Series 5B Notes, and all notes which may be issued in
substitution therefor or replacement thereof, being collectively referred to
herein as the ASubordinated Notes@);
WHEREAS, Borrower has secured its obligations to LaSalle under the
Credit Agreement and its obligations to the Junior Lenders under the Note
Agreement and related documents (collectively, the AJunior Note Documents@), by
granting to the Collateral Agent, for the benefit of each of LaSalle and the
Junior Lenders a security interest in the personal property of Borrower (such
interests being hereinafter collectively referred to as "Security Interests" and
individually as a "Security Interest");
WHEREAS, LaSalle and the Junior Lenders have determined to enter
into this Agreement to provide for certain agreements between LaSalle and the
Junior Lenders with respect to their respective transactions with the Borrower;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS.
Unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned thereto in the Credit Agreement or as
hereinafter set forth, and such definitions shall be equally applicable to both
the singular and plural forms of any of the terms so defined:
ACollateral Agency Agreement@ means that certain Amended and Restated
Collateral Agency Agreement dated of even date herewith by and among the parties
to this Agreement, the Borrower and the Collateral Agent, as the same may be
amended, restated, modified or supplemented and in effect from time to time.
ACollateral Agent@ means The Bank of New York, as collateral agent
appointed pursuant to the Collateral Agency Agreement, and any successor entity
service as collateral agent thereunder from time to time.
ADebtor Party@ shall mean the Borrower and any other Person which shall
be obligated to pay any amounts constituting Senior Indebtedness Liabilities or
Subordinated Indebtedness Liabilities.
APermitted Junior Securities@ shall mean common stock of the Borrower
and other securities of the Borrower which are subordinated to the Senior
Indebtedness Liabilities to at least the same extent as the Subordinated
Indebtedness Liabilities are subordinated to the Senior Indebtedness Liabilities
at the time when such securities are issued by the Borrower.
APerson@ shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof.
ASenior Credit Agreement@ shall mean the Credit Agreement.
ASenior Indebtedness Covenant Default@ shall mean any Event of Default
other than a Senior Indebtedness Payment Default.
ASenior Indebtedness Documents@ shall mean, collectively, the Senior
Credit Agreement, the Senior Notes and the Senior Indebtedness Security
Documents.
ASenior Indebtedness Liabilities@ shall mean (a) the principal amount
of all Indebtedness of any Debtor Party existing under the Senior Credit
Agreement, (b) premium, if any, due and owing in respect of said Indebtedness,
(c) interest due and owing in respect of said Indebtedness (including, without
limitation, any such interest accruing subsequent to the filing by or against
any Debtor Party of any proceeding brought under the Bankruptcy Act of 1978,
whether or not such interest is allowed as a claim pursuant to the provisions of
said Act), (d) all claims for indemnity payments under or pursuant to the Credit
Agreement, (e) all other claims for unpaid fees, reimbursements and
out-of-pocket expenses incurred as a result of the enforcement of the Credit
Agreement and the Senior Indebtedness Security Documents; and (f) all amounts
payable under any guaranties, howsoever arising, by any Debtor Party of amounts
described in clauses (a) through (e), above; provided, however, that the
aggregate amount of the principal included in Senior Indebtedness Liabilities
pursuant to clause (a) of this definition shall not at any time exceed an amount
equal to $3,000,000.
ASenior Indebtedness Payment Default@ shall mean any default by any
Debtor Party to make any payment or mandatory prepayment of principal, premium,
if any, interest or other amounts due with respect to any Senior Indebtedness
Liabilities.
ASenior Indebtedness Security Documents@ shall mean all agreements,
instruments or documents pursuant to which any real or personal property and/or
interests in property owned by any Debtor Party are or shall be subjected to
Liens securing Senior Indebtedness Liabilities as amended, restated, modified or
supplemented and in effect from time to time.
ASubordinated Indebtedness Liabilities@ shall mean (a) the principal
amount of all Indebtedness of any Debtor Party owing in respect of the Note
Agreement or the Subordinated Notes, (b) premium, if any, due and owing in
respect of said Indebtedness, (c) interest due and owing in respect of said
Indebtedness (including, without limitation, any such interest accruing
subsequent to the filing by or against any Debtor Party of any proceeding
brought under the Bankruptcy Act of 1978, whether or not such interest is
allowed as a claim pursuant to the provisions of such Act), (d) all claims for
indemnity payments under or pursuant to the Note Agreement, the Subordinated
Notes or any other Junior Note Document, (e) all other claims for unpaid fees,
reimbursements and expenses from time to time owing to the holders of the
Subordinated Notes pursuant to the Note Agreement, the Subordinated Notes or any
other Junior Note Document, and (f) all amounts payable under any guaranties,
howsoever arising, by any Debtor Party of amounts described in clauses (a)
through (e) above.
ASenior Notes@ shall mean all promissory notes executed by any Debtor
Parties evidencing any Senior Indebtedness Liabilities, as the same may be
amended, restated, modified or supplemented and in effect from time to time.
SECTION 2. SUBORDINATION OF SUBORDINATED INDEBTEDNESS LIABILITIES.
The Subordinated Indebtedness Liabilities shall be subordinate and
junior in right of payment, to the extent and in the manner hereinafter set
forth, to all Senior Indebtedness Liabilities, whether now outstanding or
hereafter incurred:
(a) In the event of any insolvency or bankruptcy
proceedings, and any receivership, liquidation, reorganization,
arrangement or other similar proceedings in connection therewith,
relative to any Debtor Party or to its creditors, as such, or to its
property, and in the event of any proceedings, for voluntary
liquidation, dissolution or other winding-up of any Debtor Party,
whether or not involving insolvency or bankruptcy, then the holders of
Senior Indebtedness Liabilities shall be entitled to receive from said
Debtor Party payment in full of all Senior Indebtedness Liabilities
owed thereby in cash or other property acceptable to the holders of the
Senior Indebtedness Liabilities (or to have such payment duly provided
for in a manner satisfactory to the holders of said Senior Indebtedness
Liabilities) before the holders of the Subordinated Indebtedness
Liabilities shall be entitled to receive any payment from said Debtor
Party in respect of the Subordinated Indebtedness Liabilities owed
thereby (other than payment made solely by distribution of Permitted
Junior Securities), and to that end the holders of Senior Indebtedness
Liabilities shall be entitled to receive for application in payment
thereof any payment or distribution of any kind or character, whether
in cash or property or Securities (other than Permitted Junior
Securities), which may be payable or deliverable in any such
proceedings in respect of the Subordinated Indebtedness Liabilities.
(b) Upon the happening of any Senior Indebtedness
Payment Default, then upon notice thereof by LaSalle to Borrower, with
a copy to each other party to this Agreement, the holders of the
Subordinated Indebtedness Liabilities shall not be entitled to receive
any payment on account thereof (other than payment made solely by
distribution of Permitted Junior Securities) during the period
beginning on the date such Senior Indebtedness Payment Default shall
occur and ending upon the earlier of (1) the date such Senior
Indebtedness Payment Default has been waived in writing by the holders
of the related Senior Indebtedness Liabilities, (2) the date on which
notice that such Senior Indebtedness Payment Default shall have ceased
to exist is given by LaSalle to the Borrower, and (3) the date on which
such Senior Indebtedness Payment Default has been cured or shall have
ceased to exist.
(c) Upon the happening of any Senior Indebtedness
Covenant Default, the holders of the Subordinated Indebtedness
Liabilities shall not be entitled to receive any payment on account
thereof (other than payment made solely by distribution of Permitted
Junior Securities) during the period beginning on a Payment Blockage
Commencement Date, as defined below, and ending upon the earlier of (1)
the date such Senior Indebtedness Covenant Default has been waived in
writing by LaSalle, (2) the date on which notice that such Senior
Indebtedness Covenant Default shall have ceased to exist is given by
LaSalle to the Borrower, and (3) the date on which such Senior
Indebtedness Covenant Default has been cured or has ceased to exist;
provided, however, that (i) no more than three blockage periods under
this paragraph (c) shall be in effect during any period of 365
consecutive days; (ii) blockage periods under this paragraph 2(c) shall
not be in effect for more than 120 days during any period of 365
consecutive days, and (iii) no facts or circumstances constituting a
Senior Indebtedness Covenant Default existing on any Payment Blockage
Commencement Date may be used as a basis for any subsequent blockage
period unless cured or waived for a period of at least ten (10)
consecutive days. As used herein, the term APayment Blockage
Commencement Date@ shall mean the date on which written notice of a
particular Senior Indebtedness Covenant Default is given to the
Borrower, with a copy to each other party to this Agreement.
(d) In the event that any holder of Subordinated
Indebtedness Liabilities shall receive any cash or other assets of any
Debtor Party (other than Permitted Junior Securities), whether by
voluntary action of such Debtor Party, as a result of any
administrative, legal or equitable action, or otherwise, in violation
of the provisions of this Agreement or the Collateral Agency Agreement
(in any such case, at the time of such receipt), then such holder of
Subordinated Indebtedness Liabilities will be deemed to have held such
assets in trust for, and immediately upon receipt of written request
shall pay, deliver and assign to, the Collateral Agent such assets for
application in accordance with the Collateral Agency Agreement.
(e) No holder of Subordinated Indebtedness Liabilities
shall accelerate the Indebtedness evidenced by the Subordinated Notes
or initiate or maintain any suit or other legal proceeding to enforce
any rights, powers or remedies under the Note Agreement, the
Subordinated Notes or any other Junior Note Document, unless prior
thereto (1) a period of not less than five (5) days shall have expired
commencing one day following the date on which such holder of
Subordinated Indebtedness Liabilities shall have provided LaSalle with
written notice specifying its intention to accelerate all or any part
of the Subordinated Indebtedness Liabilities or to initiate such suit
or other legal proceeding and the basis giving rise to the proposed
acceleration or initiation of such suit or other legal proceeding and
(2) no blockage period pursuant to subsection 2(c) above is then in
effect; provided, however, that the restrictions contained in this
paragraph (e) shall not apply with respect to any Debtor Party (I) to
the extent necessary to prevent the expiration of any applicable
statute of limitations or similar law, or (ii) upon the earliest to
occur of (x) the commencement by anyone not a holder of Subordinated
Indebtedness Liabilities of any insolvency, bankruptcy, receivership,
liquidation or reorganization proceedings or arrangements relative to
such Debtor Party, (y) the acceleration of all or any portion of the
Senior Indebtedness Liabilities or (z) the initiation by any holder of
Senior Indebtedness Liabilities of any suit, action or proceeding to
enforce any rights, powers or remedies of the holders of the Senior
Indebtedness Liabilities with respect thereto, including, without
limitation, under any Senior Indebtedness Documents.
SECTION 3. RELATIVE RIGHTS.
No right of any present or future holder of any Senior Indebtedness
Liabilities of the Debtor Parties to enforce subordination as herein provided
shall at any time or in any way be prejudiced or impaired by any failure to act
on the part of any Debtor Party, or by any noncompliance by any Debtor Party
with the terms, provisions and covenants of the Note Agreement or other Junior
Note Document, regardless of any knowledge thereof that any such holder of
Senior Indebtedness Liabilities may have or be otherwise charged with. The
provisions hereof are solely for the purpose of defining the relative rights of
the holders of Senior Indebtedness Liabilities on the one hand, and the holders
of the Subordinated Indebtedness Liabilities on the other hand, and nothing
herein shall impair, as between any Debtor Party and the holders of the
Subordinated Indebtedness Liabilities, the obligation of any Debtor Party, which
is unconditional and absolute, to pay to the holders of the Subordinated
Indebtedness Liabilities the entire amount thereof in accordance with the terms
of the Subordinated Notes, the Note Agreement and the other Junior Note
Documents, nor, except for the provisions contained in Section 2(e) hereof,
shall anything herein prevent the holder of any Subordinated Indebtedness
Liabilities from exercising all remedies otherwise permitted by applicable law
or under the Note Agreement, the Subordinated Notes or the other Junior Note
Documents upon default under the Note Agreement, the Subordinated Notes or the
other Junior Note Documents, subject to the rights, if any, of holders of Senior
Indebtedness Liabilities as herein provided.
SECTION 4. SUBROGATION.
Upon payment in full of the Senior Indebtedness Liabilities in cash or
other property acceptable to the holders of the Senior Indebtedness Liabilities,
the holders of the Subordinated Indebtedness Liabilities shall be subrogated to
the rights of the holders of the Senior Indebtedness Liabilities to receive
payments or distributions of assets of the Debtor Parties made on or in respect
of Senior Indebtedness Liabilities until all amounts constituting Subordinated
Indebtedness Liabilities and all other amounts payable to the holders of the
Subordinated Indebtedness Liabilities shall be paid in full, and, for the
purposes of such subrogation, no payments to the holders of Senior Indebtedness
Liabilities of any cash, property, stock or obligations to which the holders of
the Subordinated Indebtedness Liabilities would (but for this Agreement) be
entitled shall, as between the Debtor Parties, their creditors (other than the
holders of Senior Indebtedness Liabilities) and the holders of the Subordinated
Indebtedness Liabilities, be deemed to be a payment by the Debtor Parties to or
on account of Senior Indebtedness Liabilities.
SECTION 5. PROOFS OF CLAIM, ETC.
In the event of any of the proceedings referred to in Section 2(a)
above, if any holder of Subordinated Indebtedness Liabilities has not filed any
claim, proof of claim or other instrument of similar character necessary to
enforce the obligations of the Debtor Parties in respect of the Subordinated
Indebtedness Liabilities held by such holder within thirty (30) days before the
expiration of the time to file the same, then and in such event, but only in
such event, any holder of the Senior Indebtedness Liabilities may notify such
holder in the manner provided in Section 8 hereof of such fact and that such
holder of the Senior Indebtedness Liabilities shall, if such claim, proof of
claim or other instrument of similar character is not so filed by such holder of
Subordinated Indebtedness Liabilities at least fifteen (15) days before the
expiration of the time to file the same, as an attorney-in-fact for such holder
of Subordinated Indebtedness Liabilities, file any claim, proof of claim or such
other instrument of similar character on behalf of such holder of Subordinated
Indebtedness Liabilities. At any time within fifteen (15) days prior to the
expiration of the time to file such claim, proof of claim or other instrument,
if such holder of Subordinated Indebtedness Liabilities has not so filed the
same, such holder of the Senior Indebtedness Liabilities then, as
attorney-in-fact for such holder of Subordinated Indebtedness Liabilities, may,
at its sole expense, file such claim, proof of claim or other instrument and
such holder of Subordinated Indebtedness Liabilities, by such holder=s
acceptance of such holder=s Subordinated Notes, appoints such holder of the
Senior Indebtedness Liabilities as an attorney-in-fact for such holder of
Subordinated Indebtedness Liabilities, to so file any claim, proof of claim or
such other instrument of similar character.
In the event that any holder of Subordinated Indebtedness Liabilities
has failed to vote any claim thereof in connection with any proceedings referred
to in subparagraph (a) above within thirty (30) days before the expiration of
the time to vote said claim, then and in such event, but only in such event, any
holder of the Senior Indebtedness Liabilities may notify such holder in the
manner provided in Section 8 hereof of such fact and that such holder of the
Senior Indebtedness Liabilities shall request that such holder of Subordinated
Indebtedness Liabilities vote said claim at least fifteen (15) days before the
expiration of the time to do so. At any time within fifteen (15) days prior to
the expiration of the time to vote such claim, if such holder of Subordinated
Indebtedness Liabilities has not so voted the same, such holder of the
Subordinated Indebtedness Liabilities shall, at the sole expense of such holder
of the Senior Indebtedness Liabilities, execute, verify and deliver any such
instruments which any holder of Senior Indebtedness Liabilities may at any time
require in order to cause said holder of Subordinated Indebtedness Liabilities
to vote said claim.
If such holder of Subordinated Indebtedness Liabilities does not elect
to so enforce such obligations of the Debtor Parties, then and in such event,
but only in such event, such holder of the Senior Indebtedness Liabilities, may
thereafter request, and such holder of Subordinated Indebtedness Liabilities
shall, at the sole expense of such holder of the Senior Indebtedness
Liabilities, execute, verify and deliver, any such instruments which any holder
of Senior Indebtedness Liabilities may at any time require in order to prove and
realize upon any rights or claims pertaining to the Subordinated Indebtedness
Liabilities and to effectuate the full benefit of the subordination contained
herein, in any such case at the expense of such holder of the Senior
Indebtedness Liabilities.
SECTION 6. JUNIOR LENDERS' CONSENT TO LASALLE SECURITY INTERESTS.
Junior Lenders hereby consent to the Security Interests granted by the
Borrower to LaSalle in the Credit Agreement and the other Senior Indebtedness
Security Documents, and waive any default under the Note Agreement, the
Subordinated Notes and any other Junior Note Document that would otherwise occur
as a result thereof.
SECTION 7. COLLATERAL ISSUES.
(a) Notice and Cure Rights. LaSalle agrees that it shall not, nor
will it cause the Collateral Agent to, dispose of or otherwise exercise remedies
in respect of any Collateral, unless prior thereto:
(1) a period of not less than fifteen (15) days shall have
expired commencing one day following the date on which LaSalle
shall have provided the Junior Lenders with written notice
specifying LaSalle's intent to take or cause the Collateral
Agent to take such action and the basis for the Senior
Indebtedness Payment Default or Senior Indebtedness Covenant
Default giving rise to the proposed action; and
(2) at the end of such fifteen (15) day period, the Junior
Lenders shall not have exercised their right, set forth in
subsection 7(b) below, to purchase the Senior Indebtedness
Liabilities and such Senior Indebtedness Payment Default or
Senior Indebtedness Covenant Default remains uncured;
provided, however, that, so long as no disposition of Collateral occurs during
such fifteen (15) day period, this sentence shall not be deemed to prevent (i)
the mere filing of an action to foreclose upon Collateral in order to commence
the running of time during which any answer of any Debtor Party thereto must be
filed, or (ii) the mere giving of a notice of intent to dispose of Collateral at
a sale under the UCC to be held after the running of such fifteen (15) day
period; and provided further that the restrictions contained in this sentence
shall not apply with respect to any Debtor Party (x) to the extent necessary to
prevent the expiration of any applicable statute of limitations or similar law,
or (y) after the commencement relative to such Debtor Party of any proceedings
described in Section 2(a).
(b) Right to Purchase Senior Indebtedness Liabilities. LaSalle
agrees that the Junior Lenders, or any of them, shall have the right to purchase
the Senior Indebtedness Liabilities from LaSalle upon LaSalle's giving of the
notice described in subsection 7(a)(1) above or upon LaSalle's determination
that a proposed amendment, modification or supplement to any of the Subordinated
Indebtedness Documents shall not be permitted pursuant to the terms of section
11.3 of the Senior Credit Agreement. Such right shall be exercisable by the
Junior Lenders, or any of them, by giving written notice to LaSalle (which
notice shall be given within fifteen (15) days after the date upon which LaSalle
shall have provided such notice to the Junior Lenders under subsection 7(a)(1)
above or of its determination pursuant to section 11.3 or section 11.4 of the
Senior Credit Agreement (the "Exercise Notice"). To be effective, the Exercise
Notice must state that the parties issuing the same are exercising the rights of
the Junior Lenders to purchase the Senior Indebtedness Liabilities, must specify
the closing date for the purchase (which date shall be not later than twenty
days from the date upon which LaSalle gave the notice described in the preceding
sentence) and must state that 100% of the Senior Indebtedness Liabilities will
be purchased for a purchase price equal to the aggregate amount of Senior
Indebtedness Liabilities as of the date of closing of such purchase. In the
event that the Exercise Notice is given by less than all of the Junior Lenders,
the purchasing Junior Lenders shall be those Junior Lenders which elect to
participate in such purchase, and the allocation of purchase interests shall be
as agreed among such purchasing Junior Lenders; provided that each Junior Lender
shall have the right to participate in such purchase in an amount equal to such
Junior Lender's pro rata share of the Subordinated Indebtedness Liabilities then
outstanding.
Upon receipt of the Exercise Notice, LaSalle shall promptly
notify the Junior Lenders of the purchase price for the Senior Indebtedness
Liabilities in reasonable detail. At the closing of the such purchase (which may
be in person or by exchange of documents through courier), LaSalle will assign
to the purchasing Junior Lenders, and the purchasing Junior Lenders shall assume
from LaSalle, the Senior Indebtedness Liabilities under a written assignment and
assumption agreement in form and substance reasonably satisfactory to LaSalle
and such purchasing Junior Lenders, except that LaSalle shall make such
assignment on a non-recourse basis and without warranty except as to due
authorization and execution of the documents and as to LaSalle having good and
unencumbered title thereto. Concurrently with execution of such assignment and
assumption, (1) the purchasing Junior Lenders shall deliver the purchase price
to LaSalle by wire transfer of immediately available funds or other payment
means acceptable to LaSalle; (2) LaSalle will deliver to such purchasing Junior
Lenders the originals of any promissory notes or other instruments evidencing
any of the Senior Indebtedness Liabilities, duly endorsed by LaSalle on a
non-recourse basis except as to such due authorization and execution and
LaSalle's unencumbered title thereto; and (3) LaSalle will execute and deliver
to the purchasing Junior Lenders, also on a non-recourse basis, such other
agreements and instruments of assignment as are necessary or appropriate or
reasonably requested by the purchasing Junior Lenders to transfer to the
purchasing Junior Lenders all of LaSalle's right, title and interest in and to
the Senior Indebtedness Liabilities.
In the event that one or more of the Junior Lenders exercise
the right to purchase the Senior Indebtedness Liabilities pursuant to this
subsection 7(b) by giving an Exercise Notice but the purchase pursuant thereto
shall not be closed on or before the date which is twenty days after the date
upon which LaSalle provided its notice under subsection 7(a)(1) hereof or
section 11.3 of the Senior Credit Agreement, as applicable, such right to
purchase in favor of the Junior Lenders shall thereupon terminate and be of no
further force or effect. The foregoing sentence shall be without prejudice,
however, to the Junior Lenders' rights in respect of (I) any subsequent giving
by LaSalle of a Notice under subsection 7(a)(I) hereof, or (ii) any subsequent
proposed amendment, modification or supplement to the Subordinated Indebtedness
Documents which LaSalle determines not to permit pursuant to section 11.3 of the
Senior Credit Agreement.
(c) Receipt of Moneys. Each Junior Lender agrees that should it
receive any moneys from the sale, liquidation, casualty or other disposition of
any Collateral at any time when an Event of Default exists other than in
accordance with the Collateral Agency Agreement, it will (unless then otherwise
restricted by law) hold the same in trust for and promptly pay over the same,
upon demand, to the Collateral Agent for application in accordance with the
Collateral Agency Agreement.
(d) Provisions Concerning Insurance. Each Junior Lender agrees
with LaSalle and LaSalle agrees with the Junior Lenders that the other and the
Collateral Agent shall be entitled to obtain loss payee endorsements and/or
additional insured status with respect to any and all policies of insurance now
or thereafter obtained by the Borrower insuring casualty or other loss to any
property of Borrower and, in connection therewith, to file claims, settle
disputes, make adjustments and take any and all other actions otherwise then
permitted to each party hereto in regard thereto which it may then deem
advisable with respect to its collateral; provided that all proceeds of casualty
insurance with respect to the Collateral shall be applied in accordance with the
Collateral Agency Agreement..
SECTION 8. NOTICES.
(a) Notices of Default. Each of LaSalle and the Junior Lenders
agrees to give to the other copies of any written notices of default,
termination, demand, acceleration, foreclosure, exercise of remedies and any
other written notice which is of a like nature, including, without limitation,
any of such which may be given under or pursuant to the terms of the Credit
Agreement or the Junior Note Documents, either concurrently with, or as soon as
practicable after, the giving of any such notice to Borrower (any such notice
being hereinafter referred to as a "Notice of Default");
(b) All communications provided for herein shall be in writing,
delivered or mailed prepaid by registered or certified mail or overnight air
courier, or by facsimile communication (with a copy sent on the same day by
overnight air courier) at the addresses set forth below, or to such other
address as such person may designate to the other persons named below by notice
given in accordance with this Section:
If to LaSalle: LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
If to Chocamerican: Chocamerican, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx xx Xxxxxxxxx
Fax: (000) 000-0000
If to Prudential: The Prudential Insurance Company of America
c/o Prudential Financial Restructuring Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attn: Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Principal: Investment Securities Department
The Principal Financial Group
000 Xxxx Xxxxxx
Xxxx: Xxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
If to Pruco: Pruco Life Insurance Company
c/o Prudential Financial Restructuring Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attn: Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Contrarian: Contrarian Capital Advisors, L.L.C., as agent
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
If to MFI: Xxx. Xxxxxx Inc.
000 Xxxx Xxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Holding: Xxx. Xxxxxx= Holding Company, Inc.
c/o Capricorn Investors II, L.P.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Borrower: Xxx. Xxxxxx' Original Cookies, Inc. c/o
Capricorn Investors II, L.P. 00 Xxxx Xxx Xxxxxx Xxxxxxxxx,
Xxxxxxxxxxx 00000 Attn: Xxxxxxx X. Xxxxxxx, Xx. Telephone:
(000) 000-0000 Fax: (000) 000-0000
SECTION 9. MODIFICATIONS TO SENIOR INDEBTEDNESS DOCUMENTS.
The holders of the Senior Indebtedness Liabilities may at any time and from time
to time without the consent of or notice to any Junior Lenders or other holders
of Subordinated Indebtedness Liabilities, without incurring liability to any
Junior Lender or other holder of Subordinated Indebtedness Liabilities and
without impairing or releasing the obligations of any Junior Lender or holder of
Subordinated Indebtedness Liabilities under this Agreement amend or modify the
Senior Indebtedness Documents; provided that any such action shall not (I)
increase the aggregate principal amount of loans made to the Borrower in excess
of $3,000,000; (ii) extend the final maturity date of the Senior Indebtedness
Liabilities beyond December 31, 1997; or (iii) increase the interest rate
payable on any of the Senior Indebtedness Liabilities (excluding any increase
provided for in the Senior Indebtedness Documents as in effect on the date
hereof and constituting a default rate of interest).
SECTION 10. CHANGES TO JUNIOR NOTE DOCUMENTS.
Until the Senior Indebtedness Liabilities have been paid in full in
cash or other property acceptable to the holders of the Senior Indebtedness
Liabilities and notwithstanding anything contained in the Junior Note Documents,
the Junior Lenders shall not, without the prior written consent of the holders
of the Senior Indebtedness Liabilities, agree to any amendment, modification or
supplement to the Junior Note Documents in violation of Section 11.3 of the
Senior Credit Agreement as in effect on the date hereof.
Section 11.
Sale or Transfer of Subordinated Indebtedness Liabilities. No Junior Lender
shall sell, assign, pledge, dispose of or otherwise transfer all or any portion
of the Subordinated Notes or the other Subordinated Indebtedness Liabilities (a)
without giving prior written notice of such action to LaSalle, and (b) unless
prior to the consummation of any such action, the transferee thereof shall
execute and deliver to LaSalle a written acknowledgment providing for the
continued subordination of such Subordinated Indebtedness Liabilities on the
terms provided herein and confirming the continued effectiveness of all of the
rights of the holders of the Senior Indebtedness Liabilities arising under this
Agreement and the Collateral Agency Agreement, in form and substance reasonably
satisfactory to LaSalle. Notwithstanding the failure to execute or deliver any
such acknowledgment, the subordination effected hereby shall survive any sale,
assignment, pledge, disposition or other transfer of all or any portion of the
Subordinated Indebtedness Liabilities, and the terms of this Agreement shall be
binding upon the successors and assigns of each Junior Lender.
SECTION 12. LEGENDS.
Until the Senior Indebtedness Liabilities are paid in full in cash or
other property acceptable to the holders of the Senior Indebtedness Liabilities,
Junior Lenders each agree that either (a) each Subordinated Note shall contain
in a conspicuous manner the following legend:
"Payment of the obligation represented by this instrument is
subordinate to the Senior Indebtedness Liabilities
pursuant to, and is subject to, the terms of a
Subordination and Intercreditor Agreement, dated as
of January 31, 1997, among LaSalle National Bank,
Chocamerican, Inc., The Prudential Insurance
Company of America, Principal Mutual Life Insurance
Company, Pruco Life Insurance Company, Contrarian
Capital Advisors, L.L.C., Xxx. Xxxxxx Inc. and Xxx.
Xxxxxx= Holding Company, Inc."
or (b) the Junior Lenders will affirmatively notify any prospective assignees,
purchasers or transferees of any Subordinated Indebtedness Liabilities of the
existence and import of this Agreement prior to any proposed assignment, sale or
transfer of any Subordinated Indebtedness Liabilities.
SECTION 13. REPRESENTATIONS AND WARRANTIES OF JUNIOR LENDERS.
(a) Each Junior Lender hereby represents and
warrants to LaSalle that such Junior Lender has full power
and authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all requisite action on its
part, and that this Agreement has been duly executed and delivered by it and
constitutes its valid and binding obligation, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by equitable principles.
(b) LaSalle hereby represents and warrants to each
Junior Lender party hereto that LaSalle has full power
and authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all requisite action on
LaSalle's part, and that this Agreement has been duly executed and delivered by
LaSalle and constitutes its valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by equitable
principles.
SECTION 14. CONTINUED EFFECTIVENESS OF THIS AGREEMENT.
The terms of this Agreement, the subordination effected hereby, and the
rights and the obligations of holders of the Subordinated Indebtedness
Liabilities and the Senior Indebtedness Liabilities arising hereunder, shall not
be affected, modified or impaired in any manner or to any extent by: (a) any
amendment or modification of or supplement to the Senior Credit Agreement, any
of the other Senior Indebtedness Documents or any of the Junior Note Documents
permitted hereby; (b) the validity or enforceability of any of such documents;
or (c) any exercise or non-exercise of any right, power or remedy under or in
respect of the Senior Indebtedness Liabilities or the Subordinated Indebtedness
Liabilities or any of the instruments or documents referred to in clause (a)
above. Each Junior Lender hereby acknowledges that the provisions of this
Agreement are intended to be enforceable at all times, whether before the
commencement of, after the commencement of, in connection with or premised on
the occurrence of any proceeding described in Section 2(a) hereof.
SECTION 15. EXCLUSIVE INTERCREDITOR PROVISIONS.
As between the holders of the Subordinated Indebtedness Liabilities and
the holders of the Senior Indebtedness Liabilities, this Agreement, taken
together with the Collateral Agency Agreement, constitute the whole agreement
among the parties.
SECTION 16. AMENDMENTS AND MODIFICATIONS.
This Agreement may be amended and/or modified only by an instrument in
writing signed by each of the parties hereto. No such amendment or modification
shall extend to or affect any obligation not expressly amended or modified or
impair any right consequent thereon.
SECTION 17. SEVERABILITY.
In case any one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
SECTION 18. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon each party hereto and its
respective successors and assigns and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
SECTION 19. CHOICE OF LAW.
This Agreement, and any instrument or agreement required hereunder,
shall be governed by and construed in accordance with New York law without
regard to principles of conflicts of laws.
SECTION 20. COUNTERPARTS.
This Agreement, and any modifications or amendments hereto, may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original for all purposes, but all such
counterparts shall constitute but one and the same instrument.
[Balance of page intentionally left blank; signature pages follow.]
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed by an authorized officer on this ____
day of January, 1997.
LASALLE NATIONAL BANK
By:/s/Xxx X. Xxxxx
Name:Xxx X. Xxxxx
Its:Asst. Vice President
CHOCAMERICAN, INC.
By:/s/Xxxxxxxx X. xx Xxxxxxxxx
Name:Xxxxxxxx X. xx Xxxxxxxxx
Its:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:/s/Xxxx X. Xxxxxx
Name:Xxxx X. Xxxxxx
Its:Vice President
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:/s/Xxxx X. Gleavenger
Name:Xxxx X. Gleavenger
Its:Counsel
PRUCO LIFE INSURANCE COMPANY
By:/s/Xxxx X. Xxxxxx
Name:Xxxx X. Xxxxxx
Its:Asst. Vice President
CONTRARIAN CAPITAL ADVISERS, L.L.C.,
As Agent for the Entities Listed Below:
XXXXXXXXXXX & CO., INC.
OPPENHEIMER HORIZON PARTNERS, X.X.
XXXXXXXXXXX INSTITUTIONAL HORIZON PARTNERS, X.X.
XXXXXXXXXXX INSTITIONAL HORIZON FUND II, L.P.
THE & TRUST
By
Its
XXX. XXXXXX INC.
By:/s/Xxxxxxx X. Xxxxxxx
Name:Xxxxxxx X. Xxxxxxx
Its:President
XXX. XXXXXX' HOLDING COMPAY, INC.
By:/s/Xxxxxxx X.Xxxxxxx
Name:Xxxxxxx X. Xxxxxxx
Its:President
The undersigned hereby acknowledges and agrees to the above Agreement
as of the date first aforesaid.
XXX. XXXXXX' ORIGINAL COOKIES, INC.
By:/s/L. Xxx Xxxxxx
Name:L. Xxx Xxxxxx
Its:SVP and CFO
