Subordination of Guaranty. (a) The Guarantied Obligations shall be subordinated to Senior Debt to the extent set forth in this Section 4. (b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities: (1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect to the Debentures (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and (2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear. (c) Guarantor shall not make any payment or distribution to the Trustee or any Holder in respect of the Debentures and shall not acquire from the Trustee or any Holder for cash or property (other than Permitted Junior Securities) any Debenture or other obligation arising under the Indenture until all principal and other obligations with respect to the Senior Debt have been paid in full if: (1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Senior Debt; or (2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days. (d) Guarantor may and will resume payments on and distributions in respect of the Debentures and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of: (1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or (2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated. (e) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee and each Holder agrees that in the event it receives any payment of any obligations with respect to the Debentures (other than Permitted Junior Securities) at a time when the Trustee or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. (f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into the Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders of Senior Debt if the Trustee pays over or distributes to or on behalf of the Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Section 4 shall impose upon Trustee any obligations other than those expressly provided for herein, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. (g) The Guarantor will promptly notify the Trustee of any facts known to the Issuer that would cause a payment of any obligations with respect to the Debentures to violate this Section 4, but failure to give such notice will not affect the subordination of the Debentures to the Senior Debt as provided in this Section 4. (h) After all Senior Debt is paid in full and until the Debentures are paid in full, Holders will be subrogated (equally and ratably with all other indebtedness pari passu with the Debentures) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the Debentures. (i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture will: (1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures in accordance with their terms; (2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or (3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture on the due date, the failure is still a Default or Event of Default. (j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the Indenture. (k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee and the Holders will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4. (l) Notwithstanding the provisions of this Section 4 or any other provision of the Indenture, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee may continue to make payments on the Debentures, unless the Trustee has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 of the Indenture. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. (m) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 of the Indenture at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders. (n) The provisions of this Section 4 may not be amended or modified without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior Debt.
Appears in 2 contracts
Samples: Subordinated Guaranty (Alcatel Lucent), Subordinated Guaranty (Alcatel)
Subordination of Guaranty. (a) The Guarantied Obligations shall be subordinated to Senior Debt to the extent set forth in this Section 4.
(b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect to the Debentures Bonds (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee Agent or any Holder in respect of the Debentures Bonds and shall not acquire from the Trustee Agent or any Holder for cash or property (other than Permitted Junior Securities) any Debenture Bond or other obligation arising under the Indenture Bond Agreement until all principal and other obligations with respect to the Senior Debt have been paid in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee Agent receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee Agent receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee Agent may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures Bonds and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture Bond following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee Agent and each Holder agrees that in the event it receives any payment of any obligations with respect to the Debentures Bonds (other than Permitted Junior Securities) at a time when the Trustee Agent or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee Agent or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
(f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into the Indenture Bond Agreement against the TrusteeAgent. The Trustee Agent will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders of Senior Debt if the Trustee Agent pays over or distributes to or on behalf of the Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Section 4 shall impose upon Trustee Agent any obligations other than those expressly provided for herein, except if such payment is made as a result of the willful misconduct or gross negligence of the TrusteeAgent.
(g) The Guarantor will promptly notify the Trustee Agent of any facts known to the Issuer that would cause a payment of any obligations with respect to the Debentures Bonds to violate this Section 4, but failure to give such notice will not affect the subordination of the Debentures Bonds to the Senior Debt as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures Bonds are paid in full, Holders will be subrogated (equally and ratably with all other indebtedness pari passu with the DebenturesBonds) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the DebenturesBonds.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture Bond Agreement will:
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures Bonds in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee Agent or any Holder from exercising its available remedies upon a Default default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture Bond on the due date, the failure is still a Default default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures Bonds may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the IndentureBond Agreement.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee Agent and the Holders will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee Agent or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the IndentureBond Agreement, the Trustee Agent will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the TrusteeAgent, and the Trustee Agent may continue to make payments on the DebenturesBonds, unless the Trustee Agent has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures Bonds to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee Agent under or pursuant to Section 7.07 of the IndentureBond Agreement. The Trustee Agent in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not TrusteeAgent.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture Bond following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee Agent and the Representatives on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee Agent to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does Representatives do not file a proper proof of claim or proof of debt in or other documentation to defend the form required in any proceeding referred to in Section 6.09 common interests of the Indenture Holders as required by the Bond Agreement, at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior Debt.
Appears in 1 contract
Subordination of Guaranty. (a) The Guarantied Obligations shall be Guarantor agrees, and each Holder by accepting a Security agrees, that the obligations of Guarantor under this Guaranty, are subordinated to Senior Debt and junior in right of payment to the extent set forth prior payment of all Senior Indebtedness of each Subsidiary Guarantor on the same basis as the obligations on, or relating to the Securities, are subordinated and junior in this Section 4.
(b) Upon any right of payment or distribution to the prior payment of all Senior Indebtedness of the assets or securities Company pursuant to creditors Article Thirteen of the Indenture, including, without limitation, the obligations of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcyunder that certain guaranty, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its propertyGBS canadian guaranty (Exh. 4.3) dated the date hereof, in an assignment for favor of the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect Banks pursuant to the Debentures (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee or any Holder in respect Credit Agreement. In furtherance of the Debentures and shall not acquire from the Trustee or any Holder for cash or property (other than Permitted Junior Securities) any Debenture or other obligation arising under the Indenture until all principal and other obligations with respect to the Senior Debt have been paid in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreementforegoing, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity Guarantor agrees, and the Guarantor or the Trustee receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee and each Holder agrees by accepting a Security agrees, that in the event it receives any payment of any obligations with respect subordination and related provisions applicable to the Debentures (other than Permitted Junior Securities) at a time when obligations of Guarantor under this Guaranty by virtue of the Trustee or such Holder, preceding sentence shall be as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
(f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders Article Thirteen of Senior Debt will be read into the Indenture against the Trustee. The Trustee will not be deemed as if each reference to owe any fiduciary duty "Company" therein were instead a reference to the holders of "New Brunswick", each reference to "Senior Debt, and will not be liable to any such holders of Senior Debt if the Trustee pays over or distributes to or on behalf Indebtedness of the Holders or Company" therein were instead a reference to "Senior Indebtedness of Guarantor" and each reference to "Securities" therein were instead a reference to "this Guaranty", with such appropriate modifications as the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Section 4 shall impose upon Trustee any obligations other than those expressly provided for herein, except if such payment is made as a result context may require. For the purposes of the willful misconduct or gross negligence of the Trustee.
(g) The Guarantor will promptly notify the Trustee of any facts known to the Issuer that would cause a payment of any obligations with respect to the Debentures to violate this Section 4, but failure to give such notice will not affect the subordination of the Debentures to the Senior Debt as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures are paid in full, Holders will be subrogated (equally and ratably with all other indebtedness pari passu with the Debentures) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the Debentures.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture will:
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture on the due date, the failure is still a Default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the Indenture.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4foregoing sentence, the Trustee and the Holders will be entitled shall have the right to rely upon any order or decree made receive and/or retain payments by any court of competent jurisdiction or upon any certificate of Guarantor only at such Senior Debt Representative or times as they may receive and/or retain payments in respect of the liquidating trustee or agent or other Person making any distribution New Brunswick Guaranty pursuant to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the Indenture, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee may continue to make payments on the Debentures, unless the Trustee has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 of the Indenture. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trusteeincluding Article Thirteen thereof.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 of the Indenture at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior Debt.
Appears in 1 contract
Samples: Guaranty (510152 N B LTD)
Subordination of Guaranty. (a) The Guarantied Obligations shall be subordinated to Senior Debt to the extent set forth in this Section 4.
(b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect to the Debentures Notes (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee Agent or any Holder in respect of the Debentures Notes and shall not acquire from the Trustee Agent or any Holder for cash or property (other than Permitted Junior Securities) any Debenture Note or other obligation arising under the Indenture Note Agreement until all principal and other obligations with respect to the Senior Debt have been paid in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee Agent receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee Agent receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee Agent may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures Notes and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture Note following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee Agent and each Holder agrees that in the event it receives any payment of any obligations with respect to the Debentures Notes (other than Permitted Junior Securities) at a time when the Trustee Agent or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee Agent or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
. (f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into the Indenture Note Agreement against the TrusteeAgent. The Trustee Agent will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders of Senior Debt if the Trustee Agent pays over or distributes to or on behalf of the Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Section 4 shall impose upon Trustee Agent any obligations other than those expressly provided for herein, except if such payment is made as a result of the willful misconduct or gross negligence of the TrusteeAgent.
(g) The Guarantor will promptly notify the Trustee Agent of any facts known to the Issuer that would cause a payment of any obligations with respect to the Debentures Notes to violate this Section 4, but failure to give such notice will not affect the subordination of the Debentures Notes to the Senior Debt as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures Notes are paid in full, Holders will be subrogated (equally and ratably with all other indebtedness pari passu with the DebenturesNotes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the DebenturesNotes.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture Note Agreement will:
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee Agent or any Holder from exercising its available remedies upon a Default default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture Note on the due date, the failure is still a Default default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures Notes may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the IndentureNote Agreement.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee Agent and the Holders will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee Agent or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the IndentureNote Agreement, the Trustee Agent will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the TrusteeAgent, and the Trustee Agent may continue to make payments on the DebenturesNotes, unless the Trustee Agent has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures Notes to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee Agent under or pursuant to Section 7.07 of the IndentureNote Agreement. The Trustee Agent in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not TrusteeAgent.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture Note following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee Agent and the Representatives on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee Agent to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does Representatives do not file a proper proof of claim or proof of debt in or other documentation to defend the form required in any proceeding referred to in Section 6.09 common interests of the Indenture Holders as required by the Note Agreement, at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior Debt.
Appears in 1 contract
Subordination of Guaranty. (a) The Guarantied Obligations shall be subordinated to Senior Debt to the extent set forth in this Section 4.
(b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect to the Debentures Bonds (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee Agent or any Holder in respect of the Debentures Bonds and shall not acquire from the Trustee Agent or any Holder for cash or property (other than Permitted Junior Securities) any Debenture Bond or other obligation arising under the Indenture Bond Agreement until all principal and other obligations with respect to the Senior Debt have been paid in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee Agent receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee Agent receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee Agent may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures Bonds and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture Bond following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee Agent and each Holder agrees that in the event it receives any payment of any obligations with respect to the Debentures Bonds (other than Permitted Junior Securities) at a time when the Trustee Agent or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee Agent or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
. (f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into the Indenture Bond Agreement against the TrusteeAgent. The Trustee Agent will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders of Senior Debt if the Trustee Agent pays over or distributes to or on behalf of the Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of this Section 4 shall impose upon Trustee Agent any obligations other than those expressly provided for herein, except if such payment is made as a result of the willful misconduct or gross negligence of the TrusteeAgent.
(g) The Guarantor will promptly notify the Trustee Agent of any facts known to the Issuer that would cause a payment of any obligations with respect to the Debentures Bonds to violate this Section 4, but failure to give such notice will not affect the subordination of the Debentures Bonds to the Senior Debt as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures Bonds are paid in full, Holders will be subrogated (equally and ratably with all other indebtedness pari passu with the DebenturesBonds) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the DebenturesBonds.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture Bond Agreement will:
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures Bonds in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee Agent or any Holder from exercising its available remedies upon a Default default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture Bond on the due date, the failure is still a Default default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures Bonds may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the IndentureBond Agreement.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee Agent and the Holders will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee Agent or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the IndentureBond Agreement, the Trustee Agent will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the TrusteeAgent, and the Trustee Agent may continue to make payments on the DebenturesBonds, unless the Trustee Agent has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures Bonds to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee Agent under or pursuant to Section 7.07 of the IndentureBond Agreement. The Trustee Agent in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not TrusteeAgent.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture Bond following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee Agent and the Representatives on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee Agent to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does Representatives do not file a proper proof of claim or proof of debt in or other documentation to defend the form required in any proceeding referred to in Section 6.09 common interests of the Indenture Holders as required by the Bond Agreement, at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior Debt.
Appears in 1 contract
Subordination of Guaranty. Notwithstanding anything to the contrary contained in this Guaranty or in the Loan Documents, Lender agrees that until Borrower’s obligations to Laurus Master Fund, Ltd., a Cayman Islands company (a“Laurus”) The Guarantied Obligations have been paid in full under (i) that certain Securities Purchase Agreement dated as of February 22, 2005 by and between Laurus and the Guarantor (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Purchase Agreement”) regarding the purchase and sale of a Secured Convertible Term Note issued to Laurus by Guarantor on February 22, 2005, (ii) the “Related Agreements” under and as defined in the February 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Related Agreements” and together with the February 2005 Purchase Agreement, the “February 2005 Laurus Documents), (iii) that certain Securities Purchase Agreement, dated as of May 31, 2005, by and between Laurus and the Guarantor (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Purchase Agreement”) regarding the purchase and sale of a Secured Convertible Term Note issued to Laurus by Guarantor on May 31, 2005 and (iv) the “Related Agreements” under and as defined in the May 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Related Agreements” and together with the May 2005 Purchase Agreement, the “May 2005 Laurus Documents) (the February 2005 Laurus Documents and the May 2005 Laurus Documents shall collectively be referred to as the “Laurus Debt Documents”), this Guaranty granted by Guarantor to Lender shall be subordinated to Senior Debt subordinate in all respects to the extent liens, security interest, and rights of Laurus under the Laurus Debt Documents (which liens, security interests and rights do not include a lien, security interest or right in or to the Collateral) regardless of the order or time of UCC filings or any other filings or recordings, the order or time of granting of any such security interests or rights, or the physical possession of any assets of Guarantor or Arius Pharmaceuticals, Inc. (“Arius”), in each case until the obligations under the Laurus Debt Documents have been paid in full. In addition, until the obligations under the Laurus Debt Documents have been paid in full, Lender shall not take any enforcement action, or exercise any other right or remedy, available to Lender with respect to this Guaranty, whether available pursuant to law, equity or contract; provided, however, that, notwithstanding the foregoing, the subordination of Lender’s rights under this Guaranty to the liens, security interests and rights of Laurus under the Laurus Debt Documents, as set forth in this Section 4.
(b) Upon any payment or distribution of the assets or securities to creditors of Guarantor in a liquidation or dissolution of Guarantor or in a bankruptcy2.11, reorganization, insolvency, receivership or similar proceeding relating to Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of Guarantor’s assets and liabilities:
(1) holders of Senior Debt will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt whether or not a claim for such interest would be allowed in such proceeding) before the Holders will be entitled to receive any payment with respect to the Debentures (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear; and
(2) until all obligations with respect to Senior Debt (as provided in clause (1) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Section 4 will be made to holders of Senior Debt (except that Holders may receive and retain Permitted Junior Securities), as their interests may appear.
(c) Guarantor shall not make any payment or distribution to the Trustee or any Holder in respect of the Debentures and shall not acquire from the Trustee or any Holder for cash or property (other than Permitted Junior Securities) any Debenture or other obligation arising under the Indenture until all principal and other obligations with respect to the Senior Debt have been paid in full if:
(1) a payment default on any Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Senior Debt; or
(2) any other default occurs and is continuing on any series of Senior Debt that permits holders of that Senior Debt to accelerate its maturity and the Guarantor or the Trustee receives a notice of such default (a “Payment Blockage Notice”) from the holders of any Senior Debt or any trustee, agent or other representative thereof. If the Guarantor or the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 4(c) unless and until at least 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Guarantor or the Trustee may be, or may be made, the basis for a subsequent Payment Blockage Notice unless such default has been waived for a period of not less than 90 days.
(d) Guarantor may and will resume payments on and distributions in respect of the Debentures and may acquire them (so long as this Section 4 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition) upon the earlier of:
(1) in the case of a payment default on any Senior Debt, upon the date upon which such default is cured or waived, or
(2) in the case of a nonpayment default on any Senior Debt, upon the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of such Senior Debt has been accelerated.
(e) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty or acceptance of any payment thereunder, Trustee and each Holder agrees that in the event it receives any payment of any obligations with respect to the Debentures (other than Permitted Junior Securities) at a time when the Trustee or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 4(c) hereof, such payment will be held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Senior Debt Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.
(f) Nothing set forth in this Section 4, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into the Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders of Senior Debtprohibit Lender from, and will not be liable Lender shall have the right to, (1) declare a breach or default of BDSI under this Guaranty and (2) exercise any right or remedy available to any such holders of Senior Debt if Lender, whether available pursuant to law, equity or contract, under the Trustee pays over or distributes to or on behalf of the Holders or the Issuer or any other Person money or assets to which any holders of Senior Debt are then entitled by virtue of Collateral Documents, excluding this Section 4 shall impose upon Trustee any obligations other than those expressly provided for hereinGuaranty, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee.
(g) The Guarantor will promptly notify the Trustee of any facts known to the Issuer that would cause a payment of any obligations with respect to Borrower. The Lender and the Debentures to violate this Section 4Guarantor hereby agree that no amendment, but failure to give such notice will not affect the subordination of the Debentures to the Senior Debt as provided in this Section 4.
(h) After all Senior Debt is paid in full and until the Debentures are paid in full, Holders will be subrogated (equally and ratably with all supplementation or other indebtedness pari passu with the Debentures) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Debt. A payment or distribution made under this Section 4 to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on the Debentures.
(i) This Section 4 defines the relative rights of Holders and holders of Senior Debt. Nothing in the Indenture will:
(1) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, premium and interest on, the Debentures in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the Issuer other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders. If the Issuer fails because of this Section 4 to pay principal of, premium or interest on, a Debenture on the due date, the failure is still a Default or Event of Default.
(j) No right of any holder of Senior Debt to enforce the subordination of the obligations evidenced by the Debentures may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with the Indenture.
(k) Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution modification may be made and the notice given to their Senior Debt Representative. Upon any payment or distribution of assets of the Issuer referred to in this Section 4, the Trustee and the Holders will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Senior Debt Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 4.
(l) Notwithstanding the provisions of this Section 4 or any other provision of the Indenture, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee may continue to make payments on the Debentures, unless the Trustee has received at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Debentures to violate this Section 4. Only the Issuer or a Senior Debt Representative may give the notice. Nothing in this Section 4 will impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 of the Indenture. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee.
(m) By its acceptance of this Guaranty or the acceptance of a Debenture following the effectiveness of this Guaranty, each Holder shall be deemed to authorize and direct the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Section 4, and appoints the Trustee to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 of the Indenture at least 30 days before the expiration of the time to file such claim, the Senior Debt Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders.
(n) The provisions of this Section 4 may not be amended or modified 2.11 without the prior written consent of the holders of a majority of all Senior Debt other than clarifying changes or changes that do not have an adverse impact upon holders of Senior DebtLaurus.
Appears in 1 contract
