Debt Subordination. The indebtedness evidenced by the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within the meaning of the Purchase Agreement (“Senior Indebtedness”). The Note is subordinate to Senior Indebtedness only to the extent and in the manner hereinafter set forth. (a) During the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder of the Senior Indebtedness under which the Company Default arises, no payment of principal or interest shall be made on the Note, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, (ii) no Company Default that is a default in the payment of any principal, interest or any other amount on the Senior Indebtedness has occurred (each, a “Payment Default”), and (iiii)(A) the holder(s) of the Note have not received a written notice (a “Senior Non-Payment Default Notice”) that a Company Default (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) each such Company Default has not been waived or cured in accordance with the terms of the Senior Documents, and (C) 180 days have not elapsed (each such 180 day period shall be referred to herein as a “Blockage Period”) since the date the Senior Non-Payment Default Notice was received. Notwithstanding any provision in this Section 4.1(a) to the contrary (x) the Company shall not be prohibited from making, and the holder(s) of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless the same shall have ceased to exist for a period of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of the Company to make any payment with respect to the Note by reason of the operation of this Section 4.1(a) shall not be construed as preventing the occurrence of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing the Note.
Appears in 1 contract
Debt Subordination. (a) The indebtedness evidenced by Series A Claims and all obligations of the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within Parties under the meaning of the Purchase Agreement (“Senior Indebtedness”). The Series A Note is subordinate to Senior Indebtedness only Documents shall, to the extent and in the manner hereinafter herein set forth.
(a) During , be subordinated and junior in right of payment to the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder prior Payment in Full of the Senior Indebtedness under which the Company Default arisesSeries B Claims. Except as set forth in subsection (b) below, no payment of principal or interest shall be made on the Noteuntil all Series B Claims have been Paid in Full, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, Series A Holder shall be entitled to receive or retain payment of any kind in respect of any Series A Claim and (ii) no Company Default that is a default each Series A Holder agrees not to ask for, demand, accept or receive any payment in the payment respect of any principalSeries A Claim. Nothing in this clause (a) or clause (b), interest below, will serve to prohibit payment to or receipt by the Collateral Agent of amounts to which it is entitled in respect of expense reimbursement or indemnification pursuant to this Agreement or any other amount on the Senior Indebtedness has occurred Note Document.
(each, a “Payment Default”b) Except as otherwise provided in this clause (b), and only to the extent provided for in the Series A Note Documents in their form existing on the date hereof (iiii)(Awithout giving effect to any modification thereof), Series A Holders may receive payments of interest on the Series A Notes, expense reimbursements and indemnification payments. Upon the happening of any Series B Payment Default, no Note Party shall be permitted to make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest to occur of (i) the holder(s) of the Note have not received a written notice (a “Senior Non-date such Series B Payment Default Notice”) that a Company Default has been waived, cured or otherwise ceases to exist (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) in each such Company Default has not been waived or cured case in accordance with the terms of the Senior Series B Note Documents), and (Cii) 180 days the date on which all Series B Claims shall have not elapsed been Paid in Full. Upon (each such 180 day period 1) the happening of any Series B Covenant Default and (2) the giving of written notice thereof specifying that it is a “Payment Blockage Notice” under this Section 2.1(b) by the Series B Administrative Holder to the Series A Administrative Holder and the Issuer, no Note Party shall be referred permitted to herein as a “Blockage Period”make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest of (i) since the 180th day from and including the date the Senior NonPayment Blockage Notice is delivered, (ii) the date such Series B Covenant Default has been waived or cured or shall otherwise cease to exist (in each case in accordance with the terms of the Series B Note Documents) and (iii) the date on which all Series B Claims shall have been Paid in Full. No more than one Payment Blockage Notice may be delivered pursuant to the preceding sentence during any 360-day period. No facts or circumstances constituting a Series B Covenant Default existing on or prior to the date any Payment Blockage Notice is given may be used as a basis for any subsequent Blockage Notice, unless such Series B Covenant Event of Default Notice was receivedhas been in the interim cured or waived for a period of not less than 90 consecutive days and subsequently recurs. Notwithstanding anything to the contrary in the foregoing, during any such blockage period described in this clause (b) Series A Holders shall be entitled to (i) add accrued and unpaid interest under the Series A Notes to principal on the Series A Notes, (ii) convert the principal of and accrued interest on the Series A Notes into equity of Parent, if such conversion is made prior to the commencement of any Insolvency Proceeding with respect to any Note Party and (iii) receive Reorganization Securities. Notwithstanding anything to the contrary contained in this Agreement (including any provision of Section 2), any Series A Holder may satisfy all or any portion of its indemnification obligations under Section 11.4 of the Merger Agreement by delivering to the Parent or any of its Affiliates one or more Series A Notes owned by it (or any portion thereof) having an aggregate principal amount equal to the amount of the indemnification payment required to be made by the Sellers’ Representative (as defined in this the Merger Agreement) under Section 4.1(a11.4 of the Merger Agreement.
(c) Without diminishing the foregoing prohibitions, in the event that any Note Party shall make any payment to any Series A Holder in respect of Series A Claims not expressly authorized by subsection (b) above, such payment shall be held in trust by such Series A Holder, for the benefit of the Series B Holders, and shall be paid over immediately (without necessity of demand) to the contrary (x) Series B Administrative Holder, for application in accordance with the Company shall not be prohibited from making, and Series B Note Documents to the holder(s) payment of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless Series B Claims until the same shall have ceased to exist for a period been Paid in Full. In the event of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of any Series A Holder to endorse any instrument for the Company payment of money so received by such Series A Holder, the Series B Administrative Holder is irrevocably appointed attorney-in-fact for the Series A Holders with full power to make such endorsement and with full power of substitution.
(d) Subject to the prior Payment in Full of all Series B Claims, the Series A Holders shall be subrogated to the rights of the holders of Series B Claims to receive payments or distributions of cash, property or securities of the Issuer applicable to the Series B Claims until the Series A Claims shall be Paid in Full; and, for the purposes of such subrogation, no such payments or distributions to the Series B Holders by or on behalf of the Issuer or by or on behalf of the Series A Holders by virtue of this Section 2 which otherwise would have been made to the Series A Holders shall, as between the Issuer and the Series A Holders, be deemed to be a payment by the Issuer to or on account of the Series B Claims, it being understood that the provisions of this Section 2 are and are intended solely for the purpose of defining the relative rights of the Series A Holders, on the one hand, and the Series B Holders, on the other hand. No Series B Holder shall by virtue of this subrogation (i) owe any payment fiduciary or similar obligation to any Series A Holder and (ii) be liable to such Series A Holders for any action taken or omitted to be taken by the Series B Holders.
(e) The provisions of this Agreement are for the purpose of defining the relative rights of the Series A Holders on the one hand and the Series B Holders on the other hand with respect to the Note by reason enforcement of rights and remedies and priority of payment of the operation various obligations of the Issuers and the other Note Parties to each of them. Nothing herein shall impair, as between the Issuer and each Noteholder, the obligations of the Issuer, which are unconditional and absolute, to pay to the Noteholder thereof the principal and interest on the Notes and any other liabilities encompassed in the Claims, all in accordance with their respective terms, subject to the prior Payment in Full of the Series B Claims as provided for herein.
(f) Notwithstanding any Default or Event of Default in respect of the Series A Claims, until the Series B Claims have been Paid in Full, no Series A Holder shall, without the prior written consent of the Series B Administrative Holder, until the expiration of any applicable Standstill Period: (1) accelerate all or any portion of the Series A Claims; (2) commence or join (unless the Series B Holders shall also join) in any involuntary proceeding against Issuer or any other Note Party under any bankruptcy, reorganization, readjustment of debt, arrangement of debt, receivership, liquidation or insolvency law or statute of any federal or state government; or (3) pursue any remedy or commence any action or proceeding against Issuer or any other Note Party to enforce payment of all or any part of the Series A Claims. Notwithstanding the foregoing, the restrictions in this clause (f) shall cease to apply upon (a) the commencement of any Insolvency Proceeding, (b) the acceleration of the Series B Claims, (c) institution or commencement by the Series B Administrative Holder or any holder of Series B Claims of any remedies against any Note Party in respect of the Series B Claims to enforce payment of, or foreclose upon or exercise other remedies with respect to Collateral or any deed or conveyance of any Collateral to any Series B Creditor in lieu of foreclosure thereof, (d) the final maturity of the Series A Claims or the Series B Claims, or (e) the date that all of the Series B Claims has been Paid in Full.
(g) To the extent that any payment made on the Series B Claims is subsequently invalidated, declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or Federal law, common law or equitable cause or otherwise, and whether as a result of any demand, settlement, litigation or otherwise (such payment being hereinafter referred to as a “Voided Payment”), then to the extent of such Voided Payment that portion of the Series B Claims which had been previously satisfied by such Voided Payment shall be revived and continue in full force and effect as if such Voided Payment had never been made, and this Section 2 shall be reinstated with respect to such Voided Payment.
(h) Without the necessity of any reservation of rights against or any notice to or further assent by any Series A Holder, (i) any demand for payment of any Series B Claims made by the Series B Holders may be rescinded in whole or in part by the Series B Holders, (ii) the Series B Holders may exercise or refrain from exercising any rights and/or remedies against any Note Party and others, if any, liable under the Series B Claims, and (iii) the Series B Claims and any agreement or instrument evidencing, securing, or otherwise relating to the Series B Claims (including, without limitation, the Series B Note Documents), or any collateral security therefor or guaranty thereof or other right of any nature with respect thereto, may be amended, extended, modified, continued, accelerated, compromised, waived, surrendered or released by the Series B Holders in any manner the Series B Holders deem in their best interests, all without impairing, abridging, releasing or affecting in any manner the subordination of the Series A Claims to the Series B Claims provided for herein. Without limiting the foregoing, each Series A Holder waives any and all notice of the creation, amendment, restatement, extension, acceleration, compromise, continuation, waiver, surrender, release or modification of any nature of the Series B Claims, or the Series B Note Documents, and notice of or proof of reliance by any Series B Holder upon the subordination provided for herein.
(i) All Series A Note Documents shall bear a legend disclosing the existence of this Agreement in form and substance substantially similar to the following; provided that any such legend shall be removed following the Repriority Event: REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 21, 2007 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG TRIARC DEERFIELD HOLDINGS, LLC, JXXXXXXX X. XXXXXXX, PXXXX XXXX AND THE JXXX X. XXXXXXXXXXXX AND LXXXX X. XXXXXXXXXXXX REVOCABLE TRUST, AS HOLDERS OF THE SERIES A NOTES (AS DEFINED THEREIN), SACHS CAPITAL MANAGEMENT LLC, SPENSYD ASSET MANAGEMENT LLLP AND SXXXX X. XXXXXXX, AS HOLDERS OF THE SERIES B NOTES (AS DEFINED THEREIN), TRIARC DEERFIELD HOLDINGS, LLC, AS COLLATERAL AGENT, DEERFIELD & COMPANY LLC AND DEERFIELD CAPITAL CORP. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THIS INSTRUMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS INSTRUMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.
(j) Any financing statements filed while this Section 4.1(a) 2 is in effect shall not be construed as preventing filed for purposes of perfecting the occurrence Series B Liens before any financing statement is filed for purposes of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing perfecting the NoteSeries A Liens.
Appears in 1 contract
Samples: Collateral Agency and Intercreditor Agreement (Deerfield Capital Corp.)
Debt Subordination. The indebtedness evidenced by the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within the meaning of the Purchase Agreement (“Senior Indebtedness”). The Note is subordinate to Senior Indebtedness only to the extent and in the manner hereinafter set forth.
(a) During the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder of the Senior Indebtedness under which the Company Default arises, no payment of principal or interest shall be made on the Note, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, (ii) no Company Default that is a default in the payment of any principal, interest or any other amount on the Senior Indebtedness has occurred (each, a “Payment Default”), and (iiii)(A) the holder(s) of the Note have not received a written notice (a “Senior Non-Payment Default Notice”) that a Company Default (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) each such Company Default has not been waived or cured in accordance with the terms of the Senior Documents, and (C) 180 days have not elapsed (each such 180 day period shall be referred to herein as a “Blockage Period”) since the date the Senior Non-Payment Default Notice was received. Notwithstanding any provision in this Section 4.1(a) to the contrary (x) the Company shall not be prohibited from making, and the holder(s) of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless the same shall have ceased to exist for a period of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of the Company to make any payment with respect to the Note by reason of the operation of this Section 4.1(a) shall not be construed as preventing the occurrence of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing the Note.
(b) If any cash payment is made on the Note at a time when the holders are not entitled to receive cash payments on the Note, the payment or distribution shall be delivered directly to the Agent for application against the Senior Indebtedness, unless and until all principal and interest on the Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, except that
(i) no such delivery shall be made of stock or obligations issued by the Company or any corporation succeeding to the Company or acquiring its property and assets, pursuant to reorganization proceedings or dissolution or liquidation proceedings or upon any merger, consolidation, sale, lease, transfer or other disposal, if such stock or obligations are subordinate and junior at least to the extent provided hereunder to the payment of Senior Indebtedness to the extent then outstanding and to the payment of any stock or obligations which are concurrently therewith issued in exchange for Senior Indebtedness to the extent then outstanding, and
(ii) if any holder of Senior Indebtedness receives any payment or distribution that, except for the provisions of this Section 4.1, would have been payable or deliverable with respect to the Note, the holders of the Note shall (after all principal and interest owing on such Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired) be subrogated to the rights of such holders of such Senior Indebtedness against the Company.
(c) Until all Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, the holders of the Note shall not, without the prior written consent of the Agent, take any Enforcement Action with respect to the Notes or any Collateral, until the earlier to occur of the following and in any event no earlier than ten (10) days after the Agent’s receipt of written notice from such holder of the Note of its intention to take such Enforcement Action (which notice may be issued during the 180 day period referred to in clause (iii) below with respect to an Enforcement Action that such holder of the Note has the right to commence upon the expiration of said 180 day period):
(i) acceleration of the Senior Indebtedness;
(ii) the occurrence of an Insolvency Proceeding with respect to the Company; or
(iii) the passage of 180 days from the delivery by the holder of a Note to the Agent of notice of an event of default under the Subordinated Documents if any default described therein shall not have been cured or waived within such period. Notwithstanding the foregoing, but subject in all events to the provisions of Section 4.4, any holder of the Note may file proofs of claim against the Company in any Insolvency Proceeding involving the Company. Except for distributions of the type specified in Section 4(b)(i), any distributions or other proceeds of any Enforcement Action obtained by any holder of the Note shall in any event be held in trust by it for the benefit of the holders of the Senior Indebtedness and promptly paid or delivered to the Agent in the form received until all Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired. Notwithstanding anything contained herein to the contrary, if following the acceleration of the Senior Indebtedness, such acceleration is rescinded (whether or not any existing Company Default has been cured or waived), then all Enforcement Actions taken by any holder of the Note shall likewise be rescinded if such Enforcement Action is based solely on clause (i) of this Section 4.1(c). Notwithstanding anything herein to the contrary, no provision herein shall prevent any holder of the Note from initiating a legal action or proceeding solely to the extent necessary to prevent the running of any applicable statute of limitation or similar restriction on claims.
(d) Each holder of the Note waives notice of the creation of the Senior Indebtedness and notice of acceptance by the holder(s) of Senior Indebtedness of the subordination and other provisions set forth herein. The holder of the Note agrees that, so long as the Credit Agreement remains in effect, the subordination provisions of the Note and the Purchase Agreement may not be modified or amended without the prior written consent of the Agent and that any amendment or modification entered into without such consent shall be null and void and that it will not agree to:
(i) any amendment of the Note or the Purchase Agreement that would shorten the due dates of any principal or interest payments upon the Note;
(ii) any amendment of the covenants, events of default or other material provisions of the Note or the Purchase Agreement to make them more restrictive for or burdensome on the Company (except for financial covenants which the holder(s) of the Note may amend to the extent that holders of the Bank Indebtedness have amended the corresponding financial covenants in the Credit Agreement);
(iii) any amendment increasing the interest rate payable with respect to the Note to an interest rate that is 200 basis points more than the interest rate applicable to the Note on the date of issuance of the Note, except in connection with the imposition of a default rate of interest in accordance with the terms of the Note or the Purchase Agreement as they are in effect on the date hereof.
(e) Each holder of the Note agrees that each holder of Senior Indebtedness may, at any time and from time to time hereafter without the consent of or notice to any holder of the Note, change the manner or time of payment or renew or alter any of the terms of such Senior Indebtedness, or amend in any manner any agreement, note, guaranty or other instrument evidencing or securing or otherwise relating to such Senior Indebtedness, provided that no holder of Senior Indebtedness shall (or shall not have the benefit of this Article IV to the extent it shall):
(i) increase the principal amount of such Senior Indebtedness to an amount that would cause the sum of the total Senior Indebtedness to exceed $35,000,000,
(ii) increase the interest rate margins or any fixed interest rate with respect to such Senior Indebtedness by more than 200 basis points above the margin currently in effect under such Senior Indebtedness, except in connection with the imposition of a default rate of interest in accordance with the terms of such Senior Indebtedness as in effect on the date hereof,
(iii) add or modify any existing restrictions on the ability of Quantum, the Company, any guarantor or any subsidiary to repay the Note in addition to those set forth in such Senior Indebtedness as in effect on the date hereof (provided that any modification of any existing covenants or defaults, which has the effect of making them more restrictive, shall not be deemed, in and of itself, to be an additional restriction on the payment of the Note), or
(iv) shorten the final scheduled maturity dates of any portion of such Senior Indebtedness, except to the extent permissible under such Senior Indebtedness as a consequence of a default thereunder, or
(v) extend the final scheduled maturity dates of such Senior Indebtedness by more than one year beyond those set forth in such Senior Indebtedness in effect on the date hereof.
(f) Each holder of the Note consents and agrees that all Senior Indebtedness shall be deemed to have been made, incurred and/or continued in reliance upon the subordination provisions set forth herein and in the Purchase Agreement and each holder of any Senior Indebtedness is an intended third party beneficiary of the subordination and other provisions of this Article 4. This Article IV shall bind and enure to the benefit of all holders of the Note and the Senior Indebtedness existing on the date of the Note or arising after such date (and all holders of Senior Indebtedness, by extending such Senior Indebtedness, shall be deemed to be bound by this Article IV)
(g) Each holder of the Note agrees that it shall not accept any prepayment of the Note until the Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i) above) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9).
(h) Subject to Section 4.1(e) hereof, all rights and interest of the holders of the Senior Indebtedness hereunder, and all agreements and obligations of the holder of the Note hereunder, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of any document evidencing Senior Indebtedness;
(ii) any change in the time, manner or place of payment of, or any other term of, all of any of the Senior Indebtedness, or any other amendment or waiver of or any consent to departure from any of the documents evidencing or relating to the Senior Indebtedness;
(iii) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guaranty or loan document, for all or any of the Senior Indebtedness;
(iv) any failure of any holder of Senior Indebtedness to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of the Notes or the Credit Agreement;
(v) any reduction, limitation, impairment or termination of the Senior Indebtedness for any reason (other than the defense of payment in full of the Senior Indebtedness), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense (other than the defense of payment in full of the Senior Indebtedness) or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability, or any other event or occurrence affecting, any Senior Indebtedness; and
(vi) any other circumstance which might otherwise constitute a defense (other than the defense of payment in full of the Senior Indebtedness) available to, or a discharge of, the Company in respect of the Senior Indebtedness or the holder of the Note in respect of the Note.
Appears in 1 contract
Debt Subordination. The indebtedness evidenced by the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within the meaning of the Purchase Agreement (“Senior Indebtedness”). The Note is subordinate to Senior Indebtedness only to the extent and in the manner hereinafter set forth.
(a) During the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder of the Senior Indebtedness under which the Company Default arises, no payment of principal or interest shall be made on the Note, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, (ii) no Company Default that is a default in the payment of any principal, interest or any other amount on the Senior Indebtedness has occurred (each, a “Payment Default”), and (iiii)(A) the holder(s) of the Note have not received a written notice (a “Senior Non-Payment Default Notice”) that a Company Default (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) each such Company Default has not been waived or cured in accordance with the terms of the Senior Documents, and (C) 180 days have not elapsed (each such 180 day period shall be referred to herein as a “Blockage Period”) since the date the Senior Non-Payment Default Notice was received. Notwithstanding any provision in this Section 4.1(a) to the contrary (x) the Company shall not be prohibited from making, and the holder(s) of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless the same shall have ceased to exist for a period of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of the Company to make any payment with respect to the Note by reason of the operation of this Section 4.1(a) shall not be construed as preventing the occurrence of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing the Note.
(b) If any cash payment is made on the Note at a time when the holders are not entitled to receive cash payments on the Note, the payment or distribution shall be delivered directly to the Agent for application against the Senior Indebtedness, unless and until all principal and interest on the Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, except that no such delivery shall be made of stock or obligations issued by the Company or any corporation succeeding to the Company or acquiring its property and assets, pursuant to reorganization proceedings or dissolution or liquidation proceedings or upon any merger, consolidation, sale, lease, transfer or other disposal, if such stock or obligations are subordinate and junior at least to the extent provided hereunder to the payment of Senior Indebtedness to the extent then outstanding and to the payment of any stock or obligations which are concurrently therewith issued in exchange for Senior Indebtedness to the extent then outstanding, and if any holder of Senior Indebtedness receives any payment or distribution that, except for the provisions of this Section 4.1, would have been payable or deliverable with respect to the Note, the holders of the Note shall (after all principal and interest owing on such Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired) be subrogated to the rights of such holders of such Senior Indebtedness against the Company.
(c) Until all Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, the holders of the Note shall not, without the prior written consent of the Agent, take any Enforcement Action with respect to the Notes or any Collateral, until the earlier to occur of the following and in any event no earlier than ten (10) days after the Agent’s receipt of written notice from such holder of the Note of its intention to take such Enforcement Action (which notice may be issued during the 180 day period referred to in clause (iii) below with respect to an Enforcement Action that such holder of the Note has the right to commence upon the expiration of said 180 day period):
(i) acceleration of the Senior Indebtedness;
(ii) the occurrence of an Insolvency Proceeding with respect to the Company; or
(iii) the passage of 180 days from the delivery by the holder of a Note to the Agent of notice of an event of default under the Subordinated Documents if any default described therein shall not have been cured or waived within such period. Notwithstanding the foregoing, but subject in all events to the provisions of Section 4.4, any holder of the Note may file proofs of claim against the Company in any Insolvency Proceeding involving the Company. Except for distributions of the type specified in Section 4(b)(i), any distributions or other proceeds of any Enforcement Action obtained by any holder of the Note shall in any event be held in trust by it for the benefit of the holders of the Senior Indebtedness and promptly paid or delivered to the Agent in the form received until all Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired. Notwithstanding anything contained herein to the contrary, if following the acceleration of the Senior Indebtedness, such acceleration is rescinded (whether or not any existing Company Default has been cured or waived), then all Enforcement Actions taken by any holder of the Note shall likewise be rescinded if such Enforcement Action is based solely on clause (i) of this Section 4.1(c). Notwithstanding anything herein to the contrary, no provision herein shall prevent any holder of the Note from initiating a legal action or proceeding solely to the extent necessary to prevent the running of any applicable statute of limitation or similar restriction on claims.
(d) Each holder of the Note waives notice of the creation of the Senior Indebtedness and notice of acceptance by the holder(s) of Senior Indebtedness of the subordination and other provisions set forth herein. The holder of the Note agrees that, so long as the Credit Agreement remains in effect, the subordination provisions of the Note and the Purchase Agreement may not be modified or amended without the prior written consent of the Agent and that any amendment or modification entered into without such consent shall be null and void and that it will not agree to:
(i) any amendment of the Note or the Purchase Agreement that would shorten the due dates of any principal or interest payments upon the Note;
(ii) any amendment of the covenants, events of default or other material provisions of the Note or the Purchase Agreement to make them more restrictive for or burdensome on the Company (except for financial covenants which the holder(s) of the Note may amend to the extent that holders of the Bank Indebtedness have amended the corresponding financial covenants in the Credit Agreement);
(iii) any amendment increasing the interest rate payable with respect to the Note to an interest rate that is 200 basis points more than the interest rate applicable to the Note on the date of issuance of the Note, except in connection with the imposition of a default rate of interest in accordance with the terms of the Note or the Purchase Agreement as they are in effect on the date hereof.
(e) Each holder of the Note agrees that each holder of Senior Indebtedness may, at any time and from time to time hereafter without the consent of or notice to any holder of the Note, change the manner or time of payment or renew or alter any of the terms of such Senior Indebtedness, or amend in any manner any agreement, note, guaranty or other instrument evidencing or securing or otherwise relating to such Senior Indebtedness, provided that no holder of Senior Indebtedness shall (or shall not have the benefit of this Article IV to the extent it shall):
(i) increase the principal amount of such Senior Indebtedness to an amount that would cause the sum of the total Senior Indebtedness to exceed $35,000,000,
(ii) increase the interest rate margins or any fixed interest rate with respect to such Senior Indebtedness by more than 200 basis points above the margin currently in effect under such Senior Indebtedness, except in connection with the imposition of a default rate of interest in accordance with the terms of such Senior Indebtedness as in effect on the date hereof,
(iii) add or modify any existing restrictions on the ability of Quantum, the Company, any guarantor or any subsidiary to repay the Note in addition to those set forth in such Senior Indebtedness as in effect on the date hereof (provided that any modification of any existing covenants or defaults, which has the effect of making them more restrictive, shall not be deemed, in and of itself, to be an additional restriction on the payment of the Note), or
(iv) shorten the final scheduled maturity dates of any portion of such Senior Indebtedness, except to the extent permissible under such Senior Indebtedness as a consequence of a default thereunder, or
(v) extend the final scheduled maturity dates of such Senior Indebtedness by more than one year beyond those set forth in such Senior Indebtedness in effect on the date hereof.
(f) Each holder of the Note consents and agrees that all Senior Indebtedness shall be deemed to have been made, incurred and/or continued in reliance upon the subordination provisions set forth herein and in the Purchase Agreement and each holder of any Senior Indebtedness is an intended third party beneficiary of the subordination and other provisions of this Article 4. This Article IV shall bind and enure to the benefit of all holders of the Note and the Senior Indebtedness existing on the date of the Note or arising after such date (and all holders of Senior Indebtedness, by extending such Senior Indebtedness, shall be deemed to be bound by this Article IV)
(g) Each holder of the Note agrees that it shall not accept any prepayment of the Note until the Senior Indebtedness has been paid in full and the commitments, if any, of the holders of the Senior Indebtedness to extend credit accommodations to Quantum or the Company have expired, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i) above) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9).
(h) Subject to Section 4.1(e) hereof, all rights and interest of the holders of the Senior Indebtedness hereunder, and all agreements and obligations of the holder of the Note hereunder, shall remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of any document evidencing Senior Indebtedness;
(ii) any change in the time, manner or place of payment of, or any other term of, all of any of the Senior Indebtedness, or any other amendment or waiver of or any consent to departure from any of the documents evidencing or relating to the Senior Indebtedness;
(iii) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guaranty or loan document, for all or any of the Senior Indebtedness;
(iv) any failure of any holder of Senior Indebtedness to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of the Notes or the Credit Agreement;
(v) any reduction, limitation, impairment or termination of the Senior Indebtedness for any reason (other than the defense of payment in full of the Senior Indebtedness), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense (other than the defense of payment in full of the Senior Indebtedness) or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability, or any other event or occurrence affecting, any Senior Indebtedness; and
(vi) any other circumstance which might otherwise constitute a defense (other than the defense of payment in full of the Senior Indebtedness) available to, or a discharge of, the Company in respect of the Senior Indebtedness or the holder of the Note in respect of the Note.
Appears in 1 contract
Debt Subordination. The indebtedness evidenced by the Note is subordinate and junior to any and (a) Except as set forth in subsection (b) below, Creditor hereby agrees that all Indebtedness constituting Senior Indebtedness within the meaning of the Purchase Agreement (“Senior Indebtedness”). The Note is Obligations to Creditor are subordinate to Senior Indebtedness only the Obligations to Lender, and Creditor hereby subordinates payment and performance by Borrower and any other Obligor of all Obligations to Creditor in favor of payment and performance by Borrower and any other Obligor of all Obligations to Lender. Creditor further agrees that it will not demand, accept, or receive from Borrower or any other Obligor any payment or performance of any Obligations to Creditor (except for Permitted Payments, as defined in subsection (b) below) until all of Obligations to Lender have been indefeasibly paid in full in cash, and performed in favor of Lender, and Lender’s Documents have been terminated. If any payments in violation of the foregoing sentence are remitted to Creditor by Borrower or any other Obligor, Creditor will receive them in trust for Lender and will forward to Lender the same forthwith.
(b) Notwithstanding the foregoing, so long as no Event of Default exists under Lender’s Documents and no default has occurred under the Creditor’s Documents, Borrower may pay Creditor (I) regularly scheduled monthly or quarterly payments of interest and principal as set forth (and to the extent and set forth) in the manner hereinafter set forth.
Creditor’s Documents (a) During the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder of the Senior Indebtedness under which the Company Default arises, no payment of principal or interest shall be made on the Note, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, (ii) no Company Default that is a default in the payment of any principal, interest or any other amount on the Senior Indebtedness has occurred (each, a “Payment DefaultRegular Periodic Payments”), and (iiii)(AII) the holder(sentire principal amount and all accrued and unpaid non-default interest thereon as set forth (and to the extent set forth) in the Creditor’s Documents on the earlier of the Note have not received a written notice (a “Senior Non-Payment Default Notice”A) that a Company Default (other than a Payment Default) has occurred and is continuing June 11, 2020 or will occur as a result of or immediately following such payment, (B) each such Company Default has not been waived the closing date of any public or cured in accordance with the terms private offering of equity or debt of the Senior Documents, and (C) 180 days have not elapsed (each such 180 day period shall be referred Borrower for gross proceeds to herein as a “Blockage Period”) since the date the Senior Non-Payment Default Notice was received. Notwithstanding any provision in this Section 4.1(a) to the contrary (x) the Company shall not be prohibited from making, and the holder(s) of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless the same shall have ceased to exist for a period Borrower of at least 30 consecutive days$1,000,000.00 (the “Gross Offering Proceeds”). For the avoidance of doubt, be used as Regular Periodic Payments shall not include any prepayments of principal or interest. For the basis for any subsequent such notice; and avoidance of doubt, permitted payments under the foregoing clause (zII) (collectively with Regular Periodic Payments, “Permitted Payments”) shall not exceed the failure amount of Gross Offering Proceeds received by Borrower.
(c) Upon a distribution of the Company to make assets or readjustment of the indebtedness of any payment with respect to the Note Obligor by reason of liquidation, composition, bankruptcy, arrangement, receivership, assignment for the operation benefit of this Section 4.1(a) creditors or any other action or proceeding involving the readjustment of all or any of the debts of such Obligor, or the application of the assets of such Obligor to the payment or liquidation thereof, Creditor acknowledges that the payment and satisfaction of the Obligations to Lender in full, in cash, shall have priority over the payment and satisfaction of the Obligations to Creditor. Lender is irrevocably authorized and empowered to receive and collect any and all dividends, payments and distributions made on account of any proof of claim relating to the Obligations to Creditor in whatever form the same may be paid or issued until the Obligations to Lender is irrevocably paid in full in cash and the Lender’s Documents are terminated. Creditor agrees that if Creditor does not be construed as preventing file a proof of claim, Lender may do so on behalf of Creditor. If Creditor does file a proof of claim in respect of the occurrence of a default under any loan agreementObligations to Creditor, credit agreement, security agreement, letter of credit, reimbursement agreement Creditor shall execute and deliver to Lender such assignments or other document or instrument evidencing or securing instruments as Lender may require to enable Lender to collect all dividends, payments and distributions which may be made at any time on account of the NoteObligations to Creditor until the Obligations to Lender are irrevocably paid in full in cash and the loan documents are terminated.
Appears in 1 contract
Samples: Subordination and Intercreditor Agreement (TRANS LUX Corp)
Debt Subordination. (a) The indebtedness evidenced by Series A Claims and all obligations of the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within Parties under the meaning of the Purchase Agreement (“Senior Indebtedness”). The Series A Note is subordinate to Senior Indebtedness only Documents shall, to the extent and in the manner hereinafter herein set forth.
(a) During , be subordinated and junior in right of payment to the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder prior Payment in Full of the Senior Indebtedness under which the Company Default arisesSeries B Claims. Except as set forth in subsection (b) below, no payment of principal or interest shall be made on the Noteuntil all Series B Claims have been Paid in Full, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, Series A Holder shall be entitled to receive or retain payment of any kind in respect of any Series A Claim and (ii) no Company Default that is a default each Series A Holder agrees not to ask for, demand, accept or receive any payment in the payment respect of any principalSeries A Claim. Nothing in this clause (a) or clause (b), interest below, will serve to prohibit payment to or receipt by the Collateral Agent of amounts to which it is entitled in respect of expense reimbursement or indemnification pursuant to this Agreement or any other amount on the Senior Indebtedness has occurred Note Document.
(each, a “Payment Default”b) Except as otherwise provided in this clause (b), and only to the extent provided for in the Series A Note Documents in their form existing on the date hereof (iiii)(Awithout giving effect to any modification thereof), Series A Holders may receive payments of interest on the Series A Notes, expense reimbursements and indemnification payments. Upon the happening of any Series B Payment Default, no Note Party shall be permitted to make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest to occur of (i) the holder(s) of the Note have not received a written notice (a “Senior Non-date such Series B Payment Default Notice”) that a Company Default has been waived, cured or otherwise ceases to exist (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) in each such Company Default has not been waived or cured case in accordance with the terms of the Senior Series B Note Documents), and (Cii) 180 days the date on which all Series B Claims shall have not elapsed been Paid in Full. Upon (each such 180 day period 1) the happening of any Series B Covenant Default and (2) the giving of written notice thereof specifying that it is a “Payment Blockage Notice” under this Section 2.1(b) by the Series B Administrative Holder to the Series A Administrative Holder and the Issuer, no Note Party shall be referred permitted to herein as a “Blockage Period”make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest of (i) since the 180th day from and including the date the Senior NonPayment Blockage Notice is delivered, (ii) the date such Series B Covenant Default has been waived or cured or shall otherwise cease to exist (in each case in accordance with the terms of the Series B Note Documents) and (iii) the date on which all Series B Claims shall have been Paid in Full. No more than one Payment Blockage Notice may be delivered pursuant to the preceding sentence during any 360-day period. No facts or circumstances constituting a Series B Covenant Default existing on or prior to the date any Payment Blockage Notice is given may be used as a basis for any subsequent Blockage Notice, unless such Series B Covenant Event of Default Notice was receivedhas been in the interim cured or waived for a period of not less than 90 consecutive days and subsequently recurs. Notwithstanding anything to the contrary in the foregoing, during any such blockage period described in this clause (b) Series A Holders shall be entitled to (i) add accrued and unpaid interest under the Series A Notes to principal on the Series A Notes, (ii) convert the principal of and accrued interest on the Series A Notes into equity of Parent, if such conversion is made prior to the commencement of any Insolvency Proceeding with respect to any Note Party and (iii) receive Reorganization Securities. Notwithstanding anything to the contrary contained in this Agreement (including any provision of Section 2), any Series A Holder may satisfy all or any portion of its indemnification obligations under Section 11.4 of the Merger Agreement by delivering to the Parent or any of its Affiliates one or more Series A Notes owned by it (or any portion thereof) having an aggregate principal amount equal to the amount of the indemnification payment required to be made by the Sellers’ Representative (as defined in this the Merger Agreement) under Section 4.1(a11.4 of the Merger Agreement.
(c) Without diminishing the foregoing prohibitions, in the event that any Note Party shall make any payment to any Series A Holder in respect of Series A Claims not expressly authorized by subsection (b) above, such payment shall be held in trust by such Series A Holder, for the benefit of the Series B Holders, and shall be paid over immediately (without necessity of demand) to the contrary (x) Series B Administrative Holder, for application in accordance with the Company shall not be prohibited from making, and Series B Note Documents to the holder(s) payment of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless Series B Claims until the same shall have ceased to exist for a period been Paid in Full. In the event of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of any Series A Holder to endorse any instrument for the Company payment of money so received by such Series A Holder, the Series B Administrative Holder is irrevocably appointed attorney-in-fact for the Series A Holders with full power to make such endorsement and with full power of substitution.
(d) Subject to the prior Payment in Full of all Series B Claims, the Series A Holders shall be subrogated to the rights of the holders of Series B Claims to receive payments or distributions of cash, property or securities of the Issuer applicable to the Series B Claims until the Series A Claims shall be Paid in Full; and, for the purposes of such subrogation, no such payments or distributions to the Series B Holders by or on behalf of the Issuer or by or on behalf of the Series A Holders by virtue of this Section 2 which otherwise would have been made to the Series A Holders shall, as between the Issuer and the Series A Holders, be deemed to be a payment by the Issuer to or on account of the Series B Claims, it being understood that the provisions of this Section 2 are and are intended solely for the purpose of defining the relative rights of the Series A Holders, on the one hand, and the Series B Holders, on the other hand. No Series B Holder shall by virtue of this subrogation (i) owe any payment fiduciary or similar obligation to any Series A Holder and (ii) be liable to such Series A Holders for any action taken or omitted to be taken by the Series B Holders.
(e) The provisions of this Agreement are for the purpose of defining the relative rights of the Series A Holders on the one hand and the Series B Holders on the other hand with respect to the Note by reason enforcement of rights and remedies and priority of payment of the operation various obligations of the Issuers and the other Note Parties to each of them. Nothing herein shall impair, as between the Issuer and each Noteholder, the obligations of the Issuer, which are unconditional and absolute, to pay to the Noteholder thereof the principal and interest on the Notes and any other liabilities encompassed in the Claims, all in accordance with their respective terms, subject to the prior Payment in Full of the Series B Claims as provided for herein.
(f) Notwithstanding any Default or Event of Default in respect of the Series A Claims, until the Series B Claims have been Paid in Full, no Series A Holder shall, without the prior written consent of the Series B Administrative Holder, until the expiration of any applicable Standstill Period: (1) accelerate all or any portion of the Series A Claims; (2) commence or join (unless the Series B Holders shall also join) in any involuntary proceeding against Issuer or any other Note Party under any bankruptcy, reorganization, readjustment of debt, arrangement of debt, receivership, liquidation or insolvency law or statute of any federal or state government; or (3) pursue any remedy or commence any action or proceeding against Issuer or any other Note Party to enforce payment of all or any part of the Series A Claims. Notwithstanding the foregoing, the restrictions in this clause (f) shall cease to apply upon (a) the commencement of any Insolvency Proceeding, (b) the acceleration of the Series B Claims, (c) institution or commencement by the Series B Administrative Holder or any holder of Series B Claims of any remedies against any Note Party in respect of the Series B Claims to enforce payment of, or foreclose upon or exercise other remedies with respect to Collateral or any deed or conveyance of any Collateral to any Series B Creditor in lieu of foreclosure thereof, (d) the final maturity of the Series A Claims or the Series B Claims, or (e) the date that all of the Series B Claims has been Paid in Full.
(g) To the extent that any payment made on the Series B Claims is subsequently invalidated, declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or Federal law, common law or equitable cause or otherwise, and whether as a result of any demand, settlement, litigation or otherwise (such payment being hereinafter referred to as a “Voided Payment”), then to the extent of such Voided Payment that portion of the Series B Claims which had been previously satisfied by such Voided Payment shall be revived and continue in full force and effect as if such Voided Payment had never been made, and this Section 2 shall be reinstated with respect to such Voided Payment.
(h) Without the necessity of any reservation of rights against or any notice to or further assent by any Series A Holder, (i) any demand for payment of any Series B Claims made by the Series B Holders may be rescinded in whole or in part by the Series B Holders, (ii) the Series B Holders may exercise or refrain from exercising any rights and/or remedies against any Note Party and others, if any, liable under the Series B Claims, and (iii) the Series B Claims and any agreement or instrument evidencing, securing, or otherwise relating to the Series B Claims (including, without limitation, the Series B Note Documents), or any collateral security therefor or guaranty thereof or other right of any nature with respect thereto, may be amended, extended, modified, continued, accelerated, compromised, waived, surrendered or released by the Series B Holders in any manner the Series B Holders deem in their best interests, all without impairing, abridging, releasing or affecting in any manner the subordination of the Series A Claims to the Series B Claims provided for herein. Without limiting the foregoing, each Series A Holder waives any and all notice of the creation, amendment, restatement, extension, acceleration, compromise, continuation, waiver, surrender, release or modification of any nature of the Series B Claims, or the Series B Note Documents, and notice of or proof of reliance by any Series B Holder upon the subordination provided for herein.
(i) All Series A Note Documents shall bear a legend disclosing the existence of this Agreement in form and substance substantially similar to the following; provided that any such legend shall be removed following the Repriority Event: REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF DECEMBER [__], 2007 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG TRIARC DEERFIELD HOLDINGS, LLC, XXXXXXXX X. XXXXXXX, AS HOLDERS OF THE SERIES A NOTES (AS DEFINED THEREIN), SACHS CAPITAL MANAGEMENT LLC AND XXXXX X. XXXXXXX [AND DEERFIELD PARTNERS FUND III LLC], AS HOLDERS OF THE SERIES B NOTES (AS DEFINED THEREIN), TRIARC DEERFIELD HOLDINGS, LLC, AS COLLATERAL AGENT, DEERFIELD & COMPANY LLC AND DEERFIELD CAPITAL CORP. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THIS INSTRUMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS INSTRUMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.
(j) Any financing statements filed while this Section 4.1(a) 2 is in effect shall not be construed as preventing filed for purposes of perfecting the occurrence Series B Liens before any financing statement is filed for purposes of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing perfecting the NoteSeries A Liens.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Deerfield Triarc Capital Corp)
Debt Subordination. (a) The indebtedness evidenced by Series A Claims and all obligations of the Note is subordinate and junior to any and all Indebtedness constituting Senior Indebtedness within Parties under the meaning of the Purchase Agreement (“Senior Indebtedness”). The Series A Note is subordinate to Senior Indebtedness only Documents shall, to the extent and in the manner hereinafter herein set forth.
(a) During , be subordinated and junior in right of payment to the continuance of any Company Default and so long as any Company Default remains which has not been cured or waived by the holder prior Payment in Full of the Senior Indebtedness under which the Company Default arisesSeries B Claims. Except as set forth in subsection (b) below, no payment of principal or interest shall be made on the Noteuntil all Series B Claims have been Paid in Full, unless (and, if applicable, to the extent permitted by clause 4.1(b)(i), below) such payment is made in kind in the form of Common Shares as provided in Article 6 or Article 9; provided, that the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, Series A Holder shall be entitled to receive or retain payment of any kind in respect of any Series A Claim and (ii) no Company Default that is a default each Series A Holder agrees not to ask for, demand, accept or receive any payment in the payment respect of any principalSeries A Claim. Nothing in this clause (a) or clause (b), interest below, will serve to prohibit payment to or receipt by the Collateral Agent of amounts to which it is entitled in respect of expense reimbursement or indemnification pursuant to this Agreement or any other amount on the Senior Indebtedness has occurred Note Document.
(each, a “Payment Default”b) Except as otherwise provided in this clause (b), and only to the extent provided for in the Series A Note Documents in their form existing on the date hereof (iiii)(Awithout giving effect to any modification thereof), Series A Holders may receive payments of interest on the Series A Notes, expense reimbursements and indemnification payments. Upon the happening of any Series B Payment Default, no Note Party shall be permitted to make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest to occur of (i) the holder(s) of the Note have not received a written notice (a “Senior Non-date such Series B Payment Default Notice”) that a Company Default has been waived, cured or otherwise ceases to exist (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) in each such Company Default has not been waived or cured case in accordance with the terms of the Senior Series B Note Documents), and (Cii) 180 days the date on which all Series B Claims shall have not elapsed been Paid in Full. Upon (each such 180 day period 1) the happening of any Series B Covenant Default and (2) the giving of written notice thereof specifying that it is a “Payment Blockage Notice” under this Section 2.1(b) by the Series B Administrative Holder to the Series A Administrative Holder and the Issuer, no Note Party shall be referred permitted to herein as a “Blockage Period”make, and no Series A Holder shall be entitled to receive from any Note Party, any payment on account of any Series A Claims until the earliest of (i) since the 180th day from and including the date the Senior NonPayment Blockage Notice is delivered, (ii) the date such Series B Covenant Default has been waived or cured or shall otherwise cease to exist (in each case in accordance with the terms of the Series B Note Documents) and (iii) the date on which all Series B Claims shall have been Paid in Full. No more than one Payment Blockage Notice may be delivered pursuant to the preceding sentence during any 360-day period. No facts or circumstances constituting a Series B Covenant Default existing on or prior to the date any Payment Blockage Notice is given may be used as a basis for any subsequent Blockage Notice, unless such Series B Covenant Event of Default Notice was receivedhas been in the interim cured or waived for a period of not less than 90 consecutive days and subsequently recurs. Notwithstanding anything to the contrary in the foregoing, during any such blockage period described in this clause (b) Series A Holders shall be entitled to (i) add accrued and unpaid interest under the Series A Notes to principal on the Series A Notes, (ii) convert the principal of and accrued interest on the Series A Notes into equity of Parent, if such conversion is made prior to the commencement of any Insolvency Proceeding with respect to any Note Party and (iii) receive Reorganization Securities. Notwithstanding anything to the contrary contained in this Agreement (including any provision of Section 2), any Series A Holder may satisfy all or any portion of its indemnification obligations under Section 11.4 of the Merger Agreement by delivering to the Parent or any of its Affiliates one or more Series A Notes owned by it (or any portion thereof) having an aggregate principal amount equal to the amount of the indemnification payment required to be made by the Sellers’ Representative (as defined in this the Merger Agreement) under Section 4.1(a11.4 of the Merger Agreement.
(c) Without diminishing the foregoing prohibitions, in the event that any Note Party shall make any payment to any Series A Holder in respect of Series A Claims not expressly authorized by subsection (b) above, such payment shall be held in trust by such Series A Holder, for the benefit of the Series B Holders, and shall be paid over immediately (without necessity of demand) to the contrary (x) Series B Administrative Holder, for application in accordance with the Company shall not be prohibited from making, and Series B Note Documents to the holder(s) payment of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless Series B Claims until the same shall have ceased to exist for a period been Paid in Full. In the event of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of any Series A Holder to endorse any instrument for the Company payment of money so received by such Series A Holder, the Series B Administrative Holder is irrevocably appointed attorney-in-fact for the Series A Holders with full power to make such endorsement and with full power of substitution.
(d) Subject to the prior Payment in Full of all Series B Claims, the Series A Holders shall be subrogated to the rights of the holders of Series B Claims to receive payments or distributions of cash, property or securities of the Issuer applicable to the Series B Claims until the Series A Claims shall be Paid in Full; and, for the purposes of such subrogation, no such payments or distributions to the Series B Holders by or on behalf of the Issuer or by or on behalf of the Series A Holders by virtue of this Section 2 which otherwise would have been made to the Series A Holders shall, as between the Issuer and the Series A Holders, be deemed to be a payment by the Issuer to or on account of the Series B Claims, it being understood that the provisions of this Section 2 are and are intended solely for the purpose of defining the relative rights of the Series A Holders, on the one hand, and the Series B Holders, on the other hand. No Series B Holder shall by virtue of this subrogation (i) owe any payment fiduciary or similar obligation to any Series A Holder and (ii) be liable to such Series A Holders for any action taken or omitted to be taken by the Series B Holders.
(e) The provisions of this Agreement are for the purpose of defining the relative rights of the Series A Holders on the one hand and the Series B Holders on the other hand with respect to the Note by reason enforcement of rights and remedies and priority of payment of the operation various obligations of the Issuers and the other Note Parties to each of them. Nothing herein shall impair, as between the Issuer and each Noteholder, the obligations of the Issuer, which are unconditional and absolute, to pay to the Noteholder thereof the principal and interest on the Notes and any other liabilities encompassed in the Claims, all in accordance with their respective terms, subject to the prior Payment in Full of the Series B Claims as provided for herein.
(f) Notwithstanding any Default or Event of Default in respect of the Series A Claims, until the Series B Claims have been Paid in Full, no Series A Holder shall, without the prior written consent of the Series B Administrative Holder, until the expiration of any applicable Standstill Period: (1) accelerate all or any portion of the Series A Claims; (2) commence or join (unless the Series B Holders shall also join) in any involuntary proceeding against Issuer or any other Note Party under any bankruptcy, reorganization, readjustment of debt, arrangement of debt, receivership, liquidation or insolvency law or statute of any federal or state government; or (3) pursue any remedy or commence any action or proceeding against Issuer or any other Note Party to enforce payment of all or any part of the Series A Claims. Notwithstanding the foregoing, the restrictions in this clause (f) shall cease to apply upon (a) the commencement of any Insolvency Proceeding, (b) the acceleration of the Series B Claims, (c) institution or commencement by the Series B Administrative Holder or any holder of Series B Claims of any remedies against any Note Party in respect of the Series B Claims to enforce payment of, or foreclose upon or exercise other remedies with respect to Collateral or any deed or conveyance of any Collateral to any Series B Creditor in lieu of foreclosure thereof, (d) the final maturity of the Series A Claims or the Series B Claims, or (e) the date that all of the Series B Claims has been Paid in Full.
(g) To the extent that any payment made on the Series B Claims is subsequently invalidated, declared to be fraudulent or preferential, set aside or is required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or Federal law, common law or equitable cause or otherwise, and whether as a result of any demand, settlement, litigation or otherwise (such payment being hereinafter referred to as a “Voided Payment”), then to the extent of such Voided Payment that portion of the Series B Claims which had been previously satisfied by such Voided Payment shall be revived and continue in full force and effect as if such Voided Payment had never been made, and this Section 2 shall be reinstated with respect to such Voided Payment.
(h) Without the necessity of any reservation of rights against or any notice to or further assent by any Series A Holder, (i) any demand for payment of any Series B Claims made by the Series B Holders may be rescinded in whole or in part by the Series B Holders, (ii) the Series B Holders may exercise or refrain from exercising any rights and/or remedies against any Note Party and others, if any, liable under the Series B Claims, and (iii) the Series B Claims and any agreement or instrument evidencing, securing, or otherwise relating to the Series B Claims (including, without limitation, the Series B Note Documents), or any collateral security therefor or guaranty thereof or other right of any nature with respect thereto, may be amended, extended, modified, continued, accelerated, compromised, waived, surrendered or released by the Series B Holders in any manner the Series B Holders deem in their best interests, all without impairing, abridging, releasing or affecting in any manner the subordination of the Series A Claims to the Series B Claims provided for herein. Without limiting the foregoing, each Series A Holder waives any and all notice of the creation, amendment, restatement, extension, acceleration, compromise, continuation, waiver, surrender, release or modification of any nature of the Series B Claims, or the Series B Note Documents, and notice of or proof of reliance by any Series B Holder upon the subordination provided for herein.
(i) All Series A Note Documents shall bear a legend disclosing the existence of this Agreement in form and substance substantially similar to the following; provided that any such legend shall be removed following the Repriority Event: REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 21, 2007 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG TRIARC DEERFIELD HOLDINGS, LLC, XXXXXXXX X. XXXXXXX, XXXXX XXXX AND THE XXXX X. XXXXXXXXXXXX AND XXXXX X. XXXXXXXXXXXX REVOCABLE TRUST, AS HOLDERS OF THE SERIES A NOTES (AS DEFINED THEREIN), SACHS CAPITAL MANAGEMENT LLC, SPENSYD ASSET MANAGEMENT LLLP AND XXXXX X. XXXXXXX, AS HOLDERS OF THE SERIES B NOTES (AS DEFINED THEREIN), TRIARC DEERFIELD HOLDINGS, LLC, AS COLLATERAL AGENT, DEERFIELD & COMPANY LLC AND DEERFIELD CAPITAL CORP. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THIS INSTRUMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS INSTRUMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.
(j) Any financing statements filed while this Section 4.1(a) 2 is in effect shall not be construed as preventing filed for purposes of perfecting the occurrence Series B Liens before any financing statement is filed for purposes of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing perfecting the NoteSeries A Liens.
Appears in 1 contract
Samples: Collateral Agency and Intercreditor Agreement (Triarc Companies Inc)
Debt Subordination. (a) The indebtedness evidenced Junior Creditor hereby agrees that the Junior Debt is subordinate, and the payment thereof, directly or indirectly, by any means whatsoever, is deferred, to the Note is subordinate and junior to any and prior payment in full of all Indebtedness constituting Senior Indebtedness within the meaning of the Purchase Agreement (“Senior Indebtedness”). The Note is subordinate to Senior Indebtedness only Debt, to the extent and in the manner hereinafter set forthforth in this Agreement.
(ab) During Except as set forth in Section 4 below, unless and until the continuance Senior Debt shall have been fully paid and the Senior Creditor Documents and all outstanding commitments of each Senior Creditor for the incurring of additional Senior Debt shall have been irrevocably terminated in writing, the Junior Creditor will not:
(i) Accelerate, ask, demand, xxx for, take or receive from or on behalf of any Company Default and so long as Company, by setoff or in any other manner, the whole or any part of any monies which may now or hereafter be owing to the Junior Creditor on the Junior Debt; or
(ii) Initiate or participate with others in any suit, action or proceeding against any Company, or otherwise take action against any Company Default remains which has not been cured or waived by any of its assets, to enforce payment of or to collect the holder whole or any part of the Junior Debt; or
(iii) Commence any bankruptcy, arrangement, reorganization or insolvency proceeding against any Company; or
(iv) Ask, demand, take or receive any security for any of the Junior Debt other than that granted pursuant to the LJH Documents.
(c) The provisions of this Agreement shall apply with respect to all of the Senior Indebtedness under which Debt, regardless of whether the Senior Debt has already been incurred or may be incurred in the future by future advances or other financial accommodations made or extended by a Senior Creditor to a Company Default arises, no payment of principal or interest shall be made on the Note, unless (and, if applicable, pursuant to the extent permitted by clause 4.1(b)(i)Senior Creditor Documents.
(d) If the Junior Creditor in violation of this Agreement shall commence, below) prosecute or participate in any suit, action or proceeding against any Company or shall attempt to enforce, foreclose or realize upon any security for the Junior Debt, including, without limitation, the Senior Creditor Collateral, such payment is made Company or any Senior Creditor may interpose as a defense or plea the making of this Agreement and any Senior Creditor may intervene and interpose such defense in kind its name or in the form name of Common Shares as provided in Article 6 such Company, and such Company or Article 9; provided, that such Senior Creditor may by virtue of this Agreement restrain the Company may pay and the holder(s) of the Note may accept scheduled payments of interest upon the Note so long as (i) no Insolvency Proceeding has occurred, (ii) no Company Default that is a default enforcement thereof in the payment name of any principal, interest or any other amount on the Senior Indebtedness has occurred (each, a “Payment Default”), and (iiii)(A) the holder(s) of the Note have not received a written notice (a “Senior Non-Payment Default Notice”) that a Company Default (other than a Payment Default) has occurred and is continuing or will occur as a result of or immediately following such payment, (B) each such Company Default has not been waived or cured in accordance with the terms of the such Senior Documents, and (C) 180 days have not elapsed (each such 180 day period shall be referred to herein as a “Blockage Period”) since the date the Senior Non-Payment Default Notice was received. Notwithstanding any provision in this Section 4.1(a) to the contrary (x) the Company shall not be prohibited from making, and the holder(s) of the Note shall not be prohibited from receiving, payments of interest upon the Note under clause (iii) of the preceding sentence for more than aggregate of 180 days within any period of 365 consecutive days; (y) no Company Default existing on the date any Senior Non-Payment Default Notice is given pursuant to this Section 4.1(a) shall, unless the same shall have ceased to exist for a period of at least 30 consecutive days, be used as the basis for any subsequent such notice; and (z) the failure of the Company to make any payment with respect to the Note by reason of the operation of this Section 4.1(a) shall not be construed as preventing the occurrence of a default under any loan agreement, credit agreement, security agreement, letter of credit, reimbursement agreement or other document or instrument evidencing or securing the NoteCreditor.
Appears in 1 contract
Samples: Intercreditor and Subordination Agreement (Timco Aviation Services Inc)
