Attached files
| file | filename |
|---|---|
| 8-K - INERGETICS INC | v166856_8k.htm |
| EX-4.4 - INERGETICS INC | v166856_ex4-4.htm |
| EX-4.2 - INERGETICS INC | v166856_ex4-2.htm |
| EX-4.3 - INERGETICS INC | v166856_ex4-3.htm |
| EX-10.9 - INERGETICS INC | v166856_ex10-9.htm |
| EX-10.10 - INERGETICS INC | v166856_ex10-10.htm |
SUBORDINATION
AGREEMENT
THIS SUBORDINATION AGREEMENT (this
“Agreement”)
dated August __, 2009, is made by Ventiv Commercial Services, LLC, a New Jersey
limited liability company, having a place of business at 500 Atrium Drive,
Somerset, New Jersey 08873 (“Creditor”),
Millennium Biotechnologies Group, Inc., a Delaware corporation having its place
of business at 665 Martinsville Road, Basking Ridge, New Jersey (the “Parent”), Millennium
Biotechnologies, Inc., a Delaware corporation having its place of business at
665 Martinsville Road, Basking Ridge, New Jersey (the “Subsidiary” and
together with Parent the “Debtors”); and the
holders of Parent’s Senior Secured 12% Notes (collectively the “Lenders”).
RECITALS
A. Lender
represents that it has extended and/or will extend a loan (the “Loan”) to Parent in
the aggregate principal amount of up to $7,800,000.00. The Loan is
evidenced by certain promissory notes in the principal amount of up to
$7,800,000.00 by Borrower and payable to the order of Lenders (as amended or
modified from time to time, the "Unit
Notes"). The Loan is secured by a certain Security Agreement
dated as of the date hereof (the "Security Agreement")
and certain other documents which have been executed in connection with the Loan
by Parent and Subsidiary (such documents, as the same may have been amended from
time to time, are collectively referred to herein as the “Security
Documents”). The payment of the Unit Notes is unconditionally
guaranteed by Subsidiary. The Unit Notes, the Security Agreement, the
Security Documents and the Guaranty, are collectively called the “Loan
Documents”.
B. Creditor
previously extended a loan to Debtors as evidenced by a Note dated September 27,
2009 in the original principal amount of $2,710,563, which principal amount,
following amendment dated as of August 1, 2009, has been reduced to $400,000
(the “Subordinate
Loan”) in accordance with the terms and conditions set forth in the
second Amendment to Security Agreements and Convertible promissory Note made
effective as of August 1, 2009. The Subordinate Loan is
secured by a security agreement made by each of the Debtors creating a lien on
all of their property and assets (the “Subordinate Security
Agreement’). The payment of the Subordinate Notes is unconditionally
guaranteed by Parent as set forth in the Subordinate Note. The
Subordinate Note and the Subordinate Security Agreement are hereinafter called
the “Subordinate Loan
Documents”.
C. As
a condition to Lenders making the Loan to Parent, and with the knowledge that
Lenders would not make the Loan without Creditor’s execution and delivery of
this Agreement, Creditor has agreed to execute and deliver this
Agreement.
NOW THEREFORE, in consideration of the
foregoing, the sum of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties hereto do hereby agree as follows:
1. Subordination of Subordinate
Loan. Creditor and Debtors each agree that the Subordinate
Loan is, and shall continue to be, subordinate in right of payment to the prior
payment in full of the indebtedness of Debtors to Lenders as specifically
identified in the Unit Notes (the “Obligations”).
2. Conditional Non-Payment on
the Subordinate Loan. Creditor agrees not to ask, demand, sue
for, take, or receive from Debtors , directly or indirectly, in cash or other
property, by set-off or in any other matter, payment of all, or any part of, the
Subordinate Loan unless and until the Debtors are in Default under the terms of
the Subordinate Loan Documents and such default has not been cured for a period
of six months following the occurrence of such default (the “Six Month Default
Date”), Debtor shall provide Creditor with written notice in the event it
receives a default notice from the Unit Note holders. Notwithstanding
the foregoing, so long as there is no default or event of default under any of
the Unit Notes, Creditor may receive a payment of principal and/or interest from
the Debtors in accordance with the terms of the Subordinate Loan
Documents.
3. Priority. Debtor’s
represents and warrant that except to the extent subordinated to the Lenders to
the extent set forth in this Agreement, Creditor has a priorty lien
position.
4. Subordination of
Documents. All of the Subordinate Loan Documents are hereby
subordinated and made subject to the Loan Documents. Without
limitation of the foregoing, the liens, provisions and security interests of the
Subordinate Security Agreement are hereby subordinated to the Security
Agreement. Creditor further agrees not to exercise any of its rights
or remedies against Debtors under the Subordinate Loan Documents (including, but
not limited to, the commencement of or participation in any Enforcement Action
(as defined below)) without the prior written consent of Lenders, which may be
granted or denied in Lenders’ sole and absolute discretion provided such consent
shall not be required following the Six Month Default Date. As used
herein, “Enforcement
Action” shall mean, without limitation, any action or proceeding to
recover the indebtedness evidenced by the Subordinate Loan Documents, the
commencement of a foreclosure proceeding, the exercise of a statutory power of
sale, the taking of a deed or assignment in the manner of a deed in lieu of
foreclosure, the obtaining of a receiver or the taking of any other enforcement
action whatsoever against, or the taking of possession or control of, the
Property or any other collateral securing the Subordinate Loan or the Loan, as
the case may be, or otherwise the exercise of any of the rights or remedies
available to Lenders under the Loan Documents upon the occurrence of a default
or event of default under the Loan Documents or to Creditor under the
Subordinate Loan Documents or as permitted by applicable law, as the case may
be. Notwithstanding anything contained herein to the contrary, any
Enforcement Action by the Creditor shall be subject and subordinate to the
superior lien of Lenders.
5. Amendments,
etc. No amendment or waiver of any provision of this Agreement
shall in any event be effective unless the same shall be in writing and signed
by Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
6. Notices. All
notices, requests and other communications to either party hereunder shall be in
writing and shall be given to such party at its address set forth below or at
such other address as such party may hereafter specify for the purpose of notice
to Creditor, Borrower or Lender. Each such notice, request or other
communication shall be effective (a) if given by mail, when such notice is
deposited in the United States Mail with first class postage prepaid, addressed
as aforesaid, provided that such mailing is by registered or certified mail,
return receipt requested, or (b) if given by overnight delivery, when deposited
with a nationally recognized overnight delivery service such as Federal Express
or Airborne with all fees and charges prepaid, addressed as provided
below.
|
If
to Creditor:
|
Ventiv
Commercial Services, LLC,
|
|
500
Atrium Drive
|
|
|
Somerset,
New Jersey 08873
|
|
|
Attention: Michael
Ryan
|
|
|
With
a copy to:
|
David
S. Blatteis, Esq.
|
|
Norris,
McLaughlin & Marcus, P.A.
|
|
|
721
Route 202-206
|
|
|
P.O.
Box 5933 Bridgewater, NJ 08807-5933
|
|
|
If
to Debtors:
|
Millennium
Biotechnologies Group, Inc.
|
|
Attn:
President
|
|
|
665
Martinsville
Road
|
|
Basking
Ridge, New Jersey 07920
|
|
|
If
to Lender:
|
2
Notices
to Debtors shall be copied to Peter R. Silverman, Silverman Sclar Shin &
Byrne PLLC, 381 Park Avenue South, 16th Floor,
New York, New York 10016.
7. Continuing and Binding
Agreement. This Agreement is a continuing agreement and
shall: (a) remain in full force and effect until the Obligations
shall have been paid in full; (b) be binding upon Creditor, Debtors, and their
respective heirs, successor and assigns; and (c) inure to the benefit of and be
enforceable by Lender and its heirs, successors, transferees, and
assigns.
8. Assignment. This
Agreement may be endorsed, assigned and transferred in whole or in part by
Lender, and any such holder and assignee of this Agreement shall succeed to and
be possessed of the rights of Lender under this Agreement to the extent
transferred and assigned.
9. Entire
Agreement. This Agreement contains the entire terms of the
Agreement between the parties with respect to the subject matter
hereof. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof, and
all prior drafts of this Agreement as if such discussions, agreements and drafts
never existed.
10. Headings. The
headings of the Sections of this Agreement are for the convenience of reference
only, are not to be considered a part hereof and shall not limit or otherwise
affect any of the terms hereof.
11. Partial
Invalidity. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
12. Gender. Whenever
the singular or plural number, or the masculine, feminine or neuter gender is
used herein, it shall legally include the other.
13. Governing Law;
Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey; provided, however, that if
any applicable conflict or choice of law rules would choose the law of another
state, Borrower and Creditor each hereby waive such rules and agree that New
Jersey substantive, procedural and constitutional law shall nonetheless
govern. Any action brought by Crediotr or Debtors relating to this
Agreement shall be broughtin the State or federal courts located in the State of
New Jersey.
IN WITNESS WHEREOF, each party hereto
has caused this Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written, to be effective
for all purposes as of such date.
|
Ventiv
Commercial Services, LLC
|
|||
|
By:
|
/s/ Michael P. Ryan
|
||
|
Print:
|
Michael P. Ryan
|
||
|
Its:
|
Chief Financial Officer
|
||
3
|
Millennium
Biotechnologies, Inc. a Delaware Corp.
|
|
|
By:
|
/s/ Mark C. Mirken
|
|
Name: Mark
C. Mirken
|
|
|
Title: Chief
Executive Officer
|
|
|
Millennium
Biotechnologies Group, Inc.
|
|
|
By:
|
/s/ Mark C. Mirken
|
|
Name: Mark
C. Mirken
|
|
|
Title: Chief
Executive Officer
|
|
|
LENDERS
|
|
|
/s/ Leon Frenkel
|
,
as representative
|
|
of
the Unit Note Holders
|
|
|
/s/ Seahorse Enterprises,
LLC.
|
,
as representative
|
|
of
the Unit Note Holders
|
|
|
/s/ Kenneth Sadowsky
|
,
as representative
|
|
of
the Unit Note Holders
|