Common use of Subordination and Postponement Clause in Contracts

Subordination and Postponement. The Subordinate Lender hereby subordinates and postpones the Subordinate Indebtedness and the Subordinate Security to the Senior Indebtedness and the Senior Security and agrees with the Senior Lender that the Senior Security shall be a first priority mortgage, security interest, lien and charge against the Property and all present and after-acquired personal property charged by the Senior Security, and all of the right, title and interest of the Covenantors therein, for the full amount of the Senior Indebtedness in full priority to the Subordinate Indebtedness and the Subordinate Security. The foregoing subordination and postponement of the Subordinate Indebtedness and the Subordinate Security to the Senior Indebtedness and the Senior Security shall include the subordination and postponement of the Subordinate Indebtedness to the Senior Indebtedness only to the extent required to make the Senior Security a first priority mortgage, security interest, lien and charge against the Property and all present and after-acquired personal property charged by the Senior Security, and all of the right, title and interest of the Covenantors therein, for the entire amount of the Senior Indebtedness at all times that any of the Senior Indebtedness remains outstanding. No discharge, release or waiver by the Senior Lender of any of the Senior Security against or in respect of any part of the Property or any person shall require notice to or the consent of the Subordinate Lender or otherwise affect the subordination and postponement of the Subordinate Indebtedness and the Subordinate Security hereby granted by the Subordinate Lender other than with respect to the Property or person in respect of which or whom the Senior Security is so discharged, released or waived. No amendment, renewal, extension, replacement, modification, supplement or restatement of any Senior Indebtedness and/or the Senior Security (each, a "Modification") shall require the consent of the Subordinate Lender or otherwise affect the subordination and postponement of the Subordinate Indebtedness and the Subordinate Security hereby granted by the Subordinate Lender. No amendment, renewal, extension, replacement, modification, supplement or restatement of any Subordinate Indebtedness and/or the Subordinate Security (each, a "Subordinate Modification") shall require the consent of the Senior Lender or otherwise affect the subordination and postponement of the Subordinate Indebtedness and the Subordinate Security hereby granted by the Subordinate Lender, except for any Subordinate Modification which is intended to increase the amount of the Subordinate Indebtedness (either by increasing the principal amount of the Subordinate Indebtedness or a change in the interest rate or the method of calculating the interest rate applicable thereto which results in an increase in the amount of interest payable during the term of the Subordinate Loan or to accelerate the final repayment of the Subordinate Indebtedness by a time period greater than three (3) months, (each, a "Material Subordinate Modification") in which case, the prior written consent of the Senior Lender shall only be required with respect to, and only to the extent of, such Material Subordinate Modification. To the extent that any consent of the Senior Lender is required hereunder, the Senior Lender shall have five (5) Business Days to respond to the Subordinate Lender, failing which, it shall be deemed to have granted its consent. The subordinations and postponements contained herein shall apply in all events and circumstances regardless of: the date of execution, delivery, attachment, filing, registration, perfection or enforcement of any of the Senior Security or the Subordinate Security; the date of any loan, advance, advances or other accommodation under the Senior Indebtedness or under the Subordinate Indebtedness; the date of any default under or in respect of any of the Senior Indebtedness or the Senior Security or the Subordinate Indebtedness or the Subordinate Security, or the date of any crystallization of any floating charges constituted by the Senior Security or the Subordinate Security; any priority granted by any applicable principle of law or statute; the failure of the Senior Lender to register, maintain, renew or keep current any registration of or pertaining to the Senior Security ; or any exercise or non-exercise of any right or remedy in respect of the Senior Security . Any insurance proceeds received in respect of the Property or the collateral or assets, which are the subject of the Senior Security granted by the Covenantor in respect thereof, shall be dealt with in accordance with the preceding provisions as though such insurance proceeds were paid or payable as proceeds of realization of the collateral for which they compensate.

Subordination and Postponement. 2.1 The Subordinate Lender hereby subordinates and postpones the Subordinate Indebtedness Subordinated Debt and the Subordinate BDC Security herein are hereby fully subordinated to the Senior Indebtedness prior repayment in full of the Bank Debt, and the Senior Bank Security will have priority to the full extent of the Bank Debt over the BDC Security and the Subordinated Debt in all respects and at all times, save and except that: 2.1.1 The BDC Security shall rank in priority to the Bank Security in all respects on the Life Insurance Policy in the event that the Bank Security affects the Life Insurance Policy. 2.2 BDC agrees with the Senior Lender that Bank that, at any time, the Senior Security shall be a first priority mortgage, security interest, lien and charge against the Property and all present and after-acquired personal property charged by the Senior Security, and all of the right, title and interest of the Covenantors therein, for the full amount of the Senior Indebtedness in full priority to the Subordinate Indebtedness Borrower may make and the Subordinate Security. The foregoing subordination and postponement of the Subordinate Indebtedness and the Subordinate Security to the Senior Indebtedness and the Senior Security shall include the subordination and postponement of the Subordinate Indebtedness to the Senior Indebtedness only to the extent required to make the Senior Security a first priority mortgage, security interest, lien and charge against the Property and all present and after-acquired personal property charged by the Senior Security, and all of the right, title and interest of the Covenantors therein, for the entire amount of the Senior Indebtedness at all times that Bank may accept any of the Senior Indebtedness remains outstanding. No discharge, release payment or waiver by the Senior Lender of any of the Senior Security against or prepayment in respect of the Bank Debt; or any part thereof, whether or not any Default has occurred, all in accordance with the Bank Loan Documents. Nothing herein contained will prevent, limit or restrict the Bank in any manner from exercising all or any of its rights or remedies otherwise permitted under the terms of the Property Bank Security in connection with the Bank Debt. 2.3 For greater certainty, the subordination herein provided shall apply to any guarantee granted now or hereafter by any Subsidiary Body Corporate, any Affiliate of the Borrower or any person shall require notice Additional Guarantor to or the consent of Lenders. 2.4 Unless otherwise acknowledged in writing by BDC, the Subordinate Lender or otherwise subordination herein provided does not affect the subordination and postponement rights of BDC in any suretyship granted in its favour by any person, related or not to the Subordinate Indebtedness and Borrower, other than the Subordinate Security hereby suretyship granted by a Subsidiary Body Corporate, any Affiliate or any Additional Guarantors, nor the Subordinate Lender other than rights of BDC in any Security held in connection with respect such suretyship. 2.5 Subject to the Property or person in respect of which or whom the Senior Security is so discharged, released or waived. No amendment, renewal, extension, replacement, modification, supplement or restatement of any Senior Indebtedness and/or the Senior Security (each, a "Modification") shall require the consent of the Subordinate Lender or otherwise affect the subordination and postponement of the Subordinate Indebtedness and the Subordinate Security hereby granted by the Subordinate Lender. No amendment, renewal, extension, replacement, modification, supplement or restatement of any Subordinate Indebtedness and/or the Subordinate Security (each, a "Subordinate Modification") shall require the consent of the Senior Lender or otherwise affect the subordination and postponement of the Subordinate Indebtedness and the Subordinate Security hereby granted by the Subordinate Lender, except for any Subordinate Modification which is intended to increase the amount of the Subordinate Indebtedness (either by increasing the principal amount of the Subordinate Indebtedness or a change in the interest rate or the method of calculating the interest rate applicable thereto which results in an increase in the amount of interest payable during the term of the Subordinate Loan or to accelerate the final repayment of the Subordinate Indebtedness by a time period greater than three (3) months, (each, a "Material Subordinate Modification") in which caseforegoing provisions, the prior written consent of the Senior Lender shall only be required with respect to, and only to the extent of, such Material Subordinate Modification. To the extent that any consent of the Senior Lender is required hereunder, the Senior Lender shall have five (5) Business Days to respond to the Subordinate Lender, failing which, it shall be deemed to have granted its consent. The subordinations and postponements contained herein provided shall remain in force for as long as the Borrower has not repaid its indebtedness in full to either of the Bank and BDC, and neither Lender has cancelled the Bank Credit or the BDC Offer and Loan Agreement, as the case may be, and shall apply in all events and circumstances regardless of: : 2.5.1 any priority otherwise given by law to the BDC Security in connection with the Borrower Group Assets (except for the BDC Security on the Life Insurance Policy as more particularly described herein); 2.5.2 the respective dates of execution and registration attachment or perfection of the BDC Security as well as the Bank Security; 2.5.3 the date of execution, delivery, attachment, filing, registration, perfection or enforcement dates of any of advances made or that will be made to the Senior Security Borrower by the Bank or the Subordinate Security; BDC; 2.5.4 the date or dates of any loan, advance, advances or Event of Default; 2.5.5 any other accommodation under the Senior Indebtedness or under the Subordinate Indebtedness; the date cause of any default under or in respect of any of the Senior Indebtedness or the Senior Security or the Subordinate Indebtedness or the Subordinate Security, or the date of any crystallization of any floating charges constituted by the Senior Security or the Subordinate Security; any priority granted by any applicable principle of law or any statute; , including the failure of Personal Property Security Act, between the Senior Lender to register, maintain, renew or keep current any registration of or pertaining Bank and BDC. 2.6 Subject to the Senior Security ; or any exercise or non-exercise provisions of any right or remedy in respect of this Agreement, including without limitation, all provisions relating to the Senior Security . Any insurance proceeds received in respect of restrictions imposed on BDC during a Standstill Period, the Property or subordination and postponement herein: 2.6.1 shall not prevent BDC from obtaining the collateral or assetsprincipal, which are the subject of the Senior Security granted by the Covenantor in respect thereofinterest, shall be dealt with additional interest, bonus, fee, cost and expense payments in accordance with the preceding provisions terms and conditions of the Loan Agreement; 2.6.2 shall not prevent BDC from exercising its right under any suretyship held by it with respect to the Subordinated Debt, other than a suretyship by a Subsidiary Body Corporate of the Borrower (other than the Guarantor), Affiliate of the Borrower or any Additional Guarantors; 2.6.3 shall not prevent BDC from exercising its right under any Security on the Life Insurance Policy; 2.6.4 shall be effective only with respect to the Subordinated Debt, excluding any Purchase Money Obligation incurred by any member of the Borrower Group to BDC, as though well as any Purchase Money Security granted to BDC in connection thereto; 2.6.5 shall not prevent BDC from filing a proof of claim with any trustee in bankruptcy in the case of any (i) bankruptcy or assignment of property by any member of the Borrower Group, or (ii) filing by any member of the Borrower Group of a notice of intention or a proposal pursuant to the Bankruptcy and Insolvency Act or filing of an arrangement under the Companies’ Creditors Arrangement Act (R.S.C., c. C-36); 2.6.6 shall not prevent BDC from invoking an Event of Default with respect to the Subordinated Debt nor to exercise its rights and remedies in such insurance proceeds were paid circumstances, whether by judicial means or payable as proceeds of otherwise. On the other hand, the realization of the collateral BDC Security remains subject to the subordination provided by the present Agreement as long as it remains in force. 2.7 Notwithstanding anything to the contrary contained herein, if a BDC Event of Default pursuant to the Subordinated Debt occurs and BDC wishes to call its loan, initiate enforcement proceedings in view of obtaining repayment of same or realizing upon the BDC Security, including without limitation upon the filing of a proof of claim as more particularly described in section 2.6.5. above where a standstill period has not already been triggered, BDC must give a written notice to the Bank informing the Bank of its intention to do so (the “BDC Notice of Intention”). If the Bank does not notify BDC in writing that it avails itself of the provisions regarding the implementation of a Standstill Period within a period of ten (10) Business Days from the receipt of the BDC Notice of Intention, BDC may then realize upon the BDC Security and take any measures deemed useful or necessary to protect its rights with respect to the Borrower as if this Agreement had not been executed. 2.8 For greater certainty, the priority of repayment and distribution of Cash Proceeds of Realization set out in Section 9 shall continue in force. In addition, and for which they compensategreater certainty, a BDC Notice of Intention shall constitute an immediate Event of Default entitling the Bank, in its discretion, to implement a One Hundred and Eighty Day (180) Standstill Period, provided it so advises BDC within the time period set out in section 2.7.