DEBT SUBORDINATION AND INTERCREDITOR AGREEMENT
Exhibit
10.16
This
Debt
Subordination and Intercreditor Agreement (as the same may from time to time
be
amended, modified or restated, the “Agreement”)
is
dated as of November __, 2008, and is entered into by and among (a) CAPITAL
GROWTH SYSTEMS, INC., a Florida corporation (“Parent”),
(b)
GLOBAL CAPACITY GROUP, INC., a Texas corporation (“GCG”),
(c)
CENTREPATH, INC., a Delaware corporation (“Centrepath”),
(d)
20/20 TECHNOLOGIES, INC., a Delaware corporation (“20/20
Inc.”),
(e)
20/20 TECHNOLOGIES I, LLC, a Delaware limited liability company (“20/20
LLC”),
(f)
NEXVU TECHNOLOGIES, LLC, a Delaware limited liability company (“Nexvu”),
(g)
FNS 2007, INC., a Delaware corporation (“FNS”),
(h)
VANCO DIRECT USA, LLC, a Delaware limited liability company (“Vanco”),
(i)
MAGENTA NETLOGIC LIMITED, a company incorporated in England and Wales
(“Magenta”),
(j)
CAPITAL GROWTH ACQUISITION, INC., a Delaware corporation (“Acquisition”;
Parent, GCG, Centrepath, 20/20 Inc., 20/20 LLC, Nexvu, FNS, Vanco, Magenta
and
Acquisition are referred to herein individually as a “Debtor”
and
collectively as the “Debtors”),
(k)
ENABLE GROWTH PARTNERS, L.P., a Delaware limited partnership, in its capacity
as
agent for the Debenture Purchasers under and as defined in the Subordinated
Debenture Agreements described below (in such capacity, the “Junior
Agent”),
(l)
the Purchasers under and as defined in the
Subordinated Debenture Agreements (Junior Agent and such Purchasers are
sometimes referred to herein as a “Junior
Creditor”
and
collectively as the “Junior
Creditors”),
(m)
each Lender under and as defined in the Senior Loan Agreement described below
(each a “Senior
Lender”),
and
(n) ACF CGS, L.L.C., a Delaware limited liability company, as administrative
agent for each of the Senior Lenders under the Senior Loan Agreement (together
with each such Senior Lender, collectively, the “Senior
Creditor”).
WITNESSETH:
WHEREAS,
Certain Junior Creditors have provided financing to Parent pursuant to that
certain Securities Purchase Agreement dated as of March 11, 2008 (as amended,
restated or otherwise modified from time to time, the “Original
Subordinated Debenture Agreement”),
as
further evidenced by those certain Variable Rate Senior Secured Convertible
Debentures due March 11, 2013, made by Parent payable to such Junior Creditors
in the aggregate original principal amount of $19,000,000 (collectively,
the
“Original
Debentures”).
WHEREAS,
pursuant to the terms of that certain Consent, Waiver, Amendment and Exchange
Agreement dated as of even date herewith, by and among the Parent and the
Junior
Creditors holding Original Debentures identified therein, the Parent and
the
holders of the Original Debentures have agreed to exchange the Original
Debentures for new Amended and Restated Original Issue Discount Secured
Convertible Debentures due March 11, 2015, made by Parent to such Junior
Creditors in the aggregate original principal amount of $30,847,551 (the
“Amended
and Restated Debentures”).
WHEREAS,
on the date hereof, Junior Creditors will provide additional financing to
Parent
in the aggregate principal amount of $14,891,250 pursuant to that certain
Securities Purchase Agreement dated
on
or about the date hereof among Junior Creditors and Parent (the “New
Subordinated Debenture Agreement”,
and,
together with the Original Subordinated Debenture Agreement, the “Subordinated
Debenture Agreements”),
as
further evidenced by those certain Original Issue Discount Secured Convertible
Debentures due November __, 2015, made by Parent payable to Junior Creditors
in
the aggregate principal amount of $14,891,250 (each debenture issued under
any
Subordinated Debenture Agreement, as such debenture may be amended, restated
or
otherwise modified from time to time, is hereafter referred to as a
“Subordinated
Debenture”).
WHEREAS,
each Debtor other than Parent has guaranteed the obligations of Parent with
respect to the Subordinated Debentures pursuant to (i) that certain Subsidiary
Guarantee dated as of March 11, 2008, by such Debtors in favor of the holders
of
the Original Debentures, and (ii) that certain Subsidiary Guaranty dated
on or
about the date hereof, by such Debtors in favor of the Junior Creditors
(collectively, the “Subordinated
Debenture Guarantees”),
and
the obligations of Debtors to Junior Creditors are secured by substantially
all
assets of Debtors pursuant to (i) that certain Security Agreement dated as
of
March 11, 2008, by Debtors in favor of the holders of the Original Debentures,
and (ii) that certain Security Agreement dated on or about the date hereof,
by
Debtors in favor of the Junior Creditors (collectively, the “Subordinated
Debenture Security Agreements”).
All
current and future documents relating to the Junior Debt (as hereinafter
defined), including without limitation the Subordinated Debentures, the
Subordinated Debenture Agreements, the Subordinated Debenture Guarantees,
the
Subordinated Debenture Security Agreements and any other guaranty, security
agreement, pledge agreement, control agreement, mortgage, deed of trust or
other
instrument, document or agreement executed and/or delivered in connection
with
any of the foregoing (including any share of stock or other security into
which
any Subordinated Debenture has been or may be converted), as the same may
be
amended, modified or restated, are referred to herein as the “Subordinated
Debenture Documents”.
WHEREAS,
Senior Creditor and Debtors are parties to that certain Loan and Security
Agreement dated on or about the date hereof (as amended, restated, or otherwise
modified from time to time, and including any Refinancing thereof, the
“Senior
Loan Agreement”),
pursuant to which Senior Creditor has made a loan to the Debtors in the
principal amount of $8,500,000. All current and future documents relating
to the
Senior Debt, as hereafter defined, including without limitation the Senior
Loan
Agreement and any guaranty, security agreement, pledge agreement, control
agreement, mortgage, or deed of trust, and any documents evidencing or relating
to any Additional Senior Loans, as the same may be amended, modified or
restated, are herein and now referred to collectively and individually as
the
“Senior
Loan Documents”.
WHEREAS,
the Senior Debt is secured by the Collateral, as hereafter defined.
WHEREAS,
in order to induce Senior Creditor to enter into the Senior Loan Agreement
and
to provide financing to Debtors thereunder, Junior Creditors and Debtors
have
agreed to enter into this Agreement in order to subordinate the Junior Debt
to
the Senior Debt and to subordinate the security interest and other rights
of
Junior Creditors in the Collateral to the security interest and other rights
of
Senior Creditor with respect thereto.
NOW,
THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Junior Creditors and Debtors hereby agree with Senior Creditor
as
follows:
1. Certain
Defined Terms.
In
addition to the terms defined above and elsewhere in this Agreement, the
following terms used in this Agreement will have the following meanings,
applicable both to the singular and the plural forms of the terms
defined:
“Bankruptcy
Code”:
Title
11 of the United States Code (11 U.S.C. § 101 et seq.).
“Bankruptcy
Event”:
(a)
any insolvency or bankruptcy case or proceeding (including any case under
the
Bankruptcy Code), or any receivership, custodianship, liquidation,
reorganization, administration, administrative receivership, arrangement
or
other similar case or proceeding, relative to any Debtor, or to the assets
of
any Debtor, (b) any liquidation, dissolution, reorganization or winding up
of
any Debtor, whether voluntary or involuntary and whether or not involving
solvency or bankruptcy, (c) any assignment for the benefit of creditors or
any
other marshalling of assets and liabilities of any Debtor, (d) any sale,
transfer or other disposition of all or substantially all of the assets of
any
Debtor in connection with any of the foregoing, or (e) any application, notice,
resolution or order made, passed or given for or in connection with any of
the
foregoing or any event analogous to any of the foregoing.
“Blockage
Notice”:
a
written notice from Senior Creditor to Junior Agent that a Non-Payment Default
or Payment Default has occurred and is continuing. Any Blockage Notice shall
specify the nature of the applicable Payment Default(s) and Non-Payment
Default(s).
“Blockage
Period”:
any
period commencing on the date a Blockage Notice is given and ending (a) with
respect to a Blockage Period in connection with a Payment Default, on the
earliest to occur of (i) the date when such Payment Default has been cured
or
waived in writing by Senior Creditor, or (ii) 180 days from the date a Blockage
Notice is given if prior to such date the Senior Creditor has not formally
accelerated the Senior Debt and undertaken good faith proceedings to effect
such
acceleration; (b) with respect to a Class 1 Non-Payment Default, on the earliest
to occur of (i) the date when such Class-1 Non-Payment Default has been cured
or
waived in writing by Senior Creditor, or (ii) 180 days from the date a Blockage
Notice is given if prior to such date the Senior Creditor has not formally
accelerated the Senior Debt and undertaken good faith proceedings to effect
such
acceleration; and (c) with respect to a Class 2 Non-Payment Default, on the
earliest to occur of (i) the date when such Class-2 Non-Payment Default has
been
cured or waived in writing by Senior Creditor, or (ii) 60 days from the date
a
Blockage Notice is given if prior to such date the Senior Creditor has not
formally accelerated the Senior Debt and undertaken good faith proceedings
to
effect such acceleration.
“Class
1 Non-Payment Default”:
each
of the Non-Payment Defaults under the Senior Loan Documents described on
Schedule
1
attached
hereto.
“Class
2 Non-Payment Default”:
each
of the Non-Payment Defaults under the Senior Loan Documents described on
Schedule
2
attached
hereto.
“Collateral”:
any
and all of the assets now owned or hereafter acquired by any Debtor, together
with all proceeds, products, accessions and additions thereto from time to
time,
including without limitation any insurance proceeds.
“Debtor”:
has
the meaning ascribed to such term in the introductory paragraph of this
Agreement and shall include any successor assign or assign of any Debtor,
including, without limitation, a receiver, trustee or
debtor-in-possession.
“Deed
of Priority”:
means
that certain Deed of Priority dated as of the date hereof, by and among Magenta
and 20/20 LLC, as chargors, Senior Agent, the Junior Creditors, and Parent,
Centrepath, GCG, 20/20 Inc., FNS, Nexvu, Acquisition and Vanco.
“Default”:
any
“Default”, as such term is defined in the Senior Loan Agreement, together with
any other default, event of default or other breach of any Senior Loan Document
(after giving effect to any applicable notice and cure periods) that entitles
Senior Creditor to accelerate the Senior Debt or exercise any other right
or
remedy against any Debtor.
“Enforcement
Action”
shall
mean (a) the commencement of legal proceedings by Senior Creditor against
the
Debtors for the collection of all or substantially all of the indebtedness
owed
pursuant to the Senior Loan Agreement, whether pursuant to institution of
a
lawsuit or the taking of actions to foreclose on substantially all of the
collateral securing Senior Debt, including, without limitation, the institution
of any enforcement or foreclosure proceedings, the noticing of any public
or
private sale or other disposition pursuant to the United States Bankruptcy
Code,
or any diligently pursued attempt to vacate or obtain relief from a stay
or
other injunction restricting any other action described in this definition,
(b)
the exercise of any right or remedy in connection with a Default as provided
under the Senior Loan Documents (including delivery of any notice to seek
to
obtain payment directly from any account debtor of any Debtor or the taking
of
any action or the exercise of any right or remedy in respect of the setoff
or
recoupment against the Collateral or proceeds of Collateral), under applicable
law, at equity, in a Bankruptcy Event or otherwise, (c) the sale, assignment,
transfer, lease, or other disposition of all or substantially all of the
Collateral, by private or public sale or any other means as permitted under
the
Senior Loan Documents, (d) the engagement or retention of sales brokers,
marketing agents, investment bankers, accountants, appraisers, auctioneers
or
other third parties for the purpose of marketing or disposing of all or
substantially all of the Collateral, provided that any such engagement or
retention shall require the applicable party to obtain letters of intent
with
regard to a transaction within a commercially reasonable period of time and
in
any event within sixty (60) days following the date of the engagement of
such
person, or (e) the commencement of, or the joinder with any creditor in
commencing, any Bankruptcy Event against any Debtor or any assets of any
Debtor,
including the appointment of a receiver, interim receiver, trustee or similar
official over any Debtor of any assets of any Debtor.
“Junior
Agent”:
has
the meaning set forth in the introductory paragraph of this
Agreement.
“Junior
Creditor”:
has
the meaning set forth in the introductory paragraph of this
Agreement.
“Junior
Debt”:
all
indebtedness, fees, expenses, obligations and liabilities of each Debtor
to any
Junior Creditor, whether now existing or hereafter incurred or created, under
or
with respect to the Subordinated Debenture Documents, in each case, whether
such
amounts are due or not due, direct or indirect, absolute or
contingent.
“Lien”:
any
interest in property securing an obligation owed to, or a claim by, a Person
other than the owner of such property, whether such interest is based on
the
common law, equity, statute or contract, and including a security interest,
charge, claim or lien arising from a mortgage, deed of trust, encumbrance,
pledge, hypothecation, assignment, deposit arrangement, agreement, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes.
“New
Subordinated Debenture Agreement”:
has
the meaning set forth in the recitals of this Agreement.
“Non-Payment
Default”:
any
Default (other than a Payment Default), or any other event (other than a
Payment
Default) the occurrence of which (after giving effect to any applicable notice
and cure periods) entitles the Senior Creditor to accelerate the maturity
of any
of the Senior Debt, and including all Class 1 Non-Payment Defaults and Class
2
Non-Payment Defaults.
“Original
Subordinated Debenture Agreement”:
has
the meaning set forth in the recitals of this Agreement.
“Payment
Default”:
any
default in the payment of any Senior Debt (whether upon maturity, mandatory
prepayment, acceleration or otherwise) beyond any applicable grace period
with
respect thereto.
“Person”:
any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
“Refinancing”:
any
replacement or refinancing of the Senior Debt, provided that such replacement
or
refinancing indebtedness does not (i) increase the principal amount of the
Senior Debt beyond the limits described in clause (a) of the definition of
“Senior Debt”, (ii) extend the stated maturity date of some or all of the Senior
Debt beyond the maturity date of the Senior Debt as of the date of this
Agreement, or (iii) add any additional events of default or financial covenants
such that such refinancing indebtedness is materially more restrictive to
the
Debtors than the Senior Debt as of the date of this Agreement.
“Senior
Creditor”:
means
the Senior Creditor referred to in the introductory paragraph of this Agreement
and any other holder of Senior Debt from time to time.
“Senior
Creditor Repayment”:
the
circumstance in which (a) subject to Section 12(a), the Senior Debt has been
paid in full in cash, and (b) the commitment of Senior Creditor to make loans
under the Senior Loan Agreement has been terminated.
“Senior
Debt”:
all
liabilities of any Debtor to Senior Creditor from time to time outstanding
pursuant to or in connection with the Senior Loan Documents (including, without
limitation, all principal, interest, fees, reimbursement obligations with
respect to letters of credit, indemnities, costs and expenses) up to an
aggregate amount not to exceed the sum of (a) up to $8,500,000 of loans at
any time outstanding pursuant to the Senior Loan Agreement plus, subject
to
Senior Creditor’s compliance with Section 13(a) of this Agreement, up to an
additional $2,000,000 of loans under the Senior Loan Agreement (“Additional
Senior Loans”);
plus
(b) all
interest arising under or with respect to the Senior Loan Documents, including,
in the event of a Bankruptcy Event, any and all post-petition interest and
costs
from and after the date of filing of a petition by or against any Debtor
or its
bankruptcy estate, whether or not such amounts are allowed as a claim against
any Debtor in any Bankruptcy Event; plus
(c) all
costs and expenses incurred by Senior Creditor in connection with its
enforcement of any rights or remedies under the Senior Loan Documents, the
collection of any of the Senior Debt, or the protection of, or realization
upon,
any Collateral, including, by way of example, court costs, appraisal and
consulting fees, reasonable attorneys’ fees, auctioneers’ fees, rent, storage,
insurance premiums and like items, and whether or not such amounts are allowed
as a claim against any Debtor in connection with any Bankruptcy Event;
plus
(d) all
fees, charges, and indemnities owing by any Debtor to Senior Creditor under
or
in connection with the Senior Loan Documents; plus
(e) all
principal, interest, fees, costs and expenses in connection with any
debtor-in-possession financing provided by Senior Creditor to one or more
Debtors in connection with a Bankruptcy Event.
“Senior
Loan Agreement”:
has
the meaning set forth in the recitals of this Agreement.
“Senior
Loan Documents”:
has
the meaning set forth in the recitals of this Agreement.
“Subordinated
Debenture”:
has
the meaning set forth in the recitals of this Agreement.
“Subordinated
Debenture Agreement”:
has
the meaning set forth in the recitals of this Agreement.
“Subordinated
Debenture Documents”:
has
the meaning set forth in the recitals of this Agreement.
“Subordinated
Debenture Guarantees”:
has
the meaning set forth in the recitals of this Agreement.
“Subordinated
Debenture Security Agreements”:
has
the meaning set forth in the recitals of this Agreement.
2. Subordination
of Debt.
(a) Debtors
may pay, and Junior Creditors may retain, Permitted Payments (as defined
below)
with respect to the Junior Debt, provided that following the commencement
of an
Enforcement Action and for so long as an Enforcement Action remains ongoing,
Junior Creditors shall be entitled to no Permitted Payments until the Senior
Creditor Repayment shall have occurred, other than Permitted Payments described
in Section 2(c)(i). Unless and until the Senior Creditor Repayment shall
have
occurred, no Junior Creditor will ask for, demand, xxx for, take or receive
from
any Debtor, by setoff or in any other manner, the whole or any part of the
Junior Debt which does not constitute a Permitted Payment, including, without
limitation, the taking of any negotiable instruments evidencing such amounts
(other than debentures now or hereafter issued in connection with Junior
Debt
which are subordinated pursuant to the terms and conditions hereof and which
contain the subordination legend required hereby), or the taking of any security
for any of the Junior Debt (other than security interests in the Collateral
pursuant to the Subordinated Debenture Documents in effect on the date hereof
unless permitted by Section 8 hereof), and while an Enforcement Action is
outstanding, the holders of the Junior Debt will not accept any Permitted
Payments (other than Permitted Payments described in Section 2(c)(i)) (or
if
received will pay them over to Senior Lender).
(b) Subject
to the terms of Section 2(a) above, unless and until the Senior Creditor
Repayment shall have occurred, in the event that any Junior Creditor shall
receive any cash payment or distribution with respect to the Junior Debt
which
does not constitute a Permitted Payment, then, in such event, such payment
or
distribution (other than a Permitted Payment described in Section 2(c)(i))
shall
be deemed to have been paid to such Junior Creditor in trust for the benefit
of
Senior Creditor and shall be immediately paid over to Senior Creditor in
the
form received by such Junior Creditor (with proper endorsements or assignments,
if necessary) to the extent necessary to pay the Senior Debt after giving
effect
to any concurrent payment to Senior Creditor from other sources.
(c) As
used
herein, the term “Permitted
Payment”
shall
mean any of the following:
(i) non-cash
payments of principal, interest or other amounts due to one or more Junior
Creditors pursuant to and in accordance with the Subordinated Debenture
Documents via the issuance of Parent’s capital stock;
(ii) so
long
as no Blockage Period is in effect and no Enforcement Action has been commenced
and is continuing, cash payments of liquidated damages made pursuant to the
Subordinated Debenture Documents as in effect on the date hereof or as amended
as permitted by this Agreement;
(iii)
so
long
as no Blockage Period is in effect and no Enforcement Action has been commenced
and is continuing, cash payments on account of Quarterly Redemption Amounts
(as
defined in the Subordinated Debentures) due under the Subordinated Debenture
Documents in an amount not to exceed 25% of the Debtors’ Excess Cash Flow (as
defined in the Senior Loan Agreement), contemporaneously with the payment
of
Excess Cash Flow to the Senior Creditor pursuant to Section 2(c)(v) of the
Senior Loan Agreement;
(iv)
so
long
as the outstanding principal balance of the Senior Debt is no more than
$2,500,000 and so long as no Blockage Period is in effect and no Enforcement
Action has been commenced and is continuing, cash payments on account of
Quarterly Redemption Amounts due under the Subordinated Debentures, provided
that no such payment shall be made unless (x) as of the end of the month
immediately preceding payment of any proposed Quarterly Redemption Amount
the
Debtors are in compliance with each of the financial covenants set forth
in the
Senior Loan Agreement required to be complied with as of the end of such
preceding month, and (y) no less than ten (10) days prior to the proposed
date
of payment of such Quarterly Redemption Amount, Debtors shall have delivered
to
Senior Creditor and Junior Creditor Agent written certification of such
compliance, together, in the case of Senior Creditor, with calculations in
reasonable detail evidencing compliance with such financial covenants (if
requested in writing, and only if requested in writing, subject to Section
4.8
of the Original Subordinated Debenture Agreement, the Debtors shall deliver
calculations in reasonable detail evidencing compliance with such financial
covenants to the Junior Creditor Agent); and
(v) so
long
as no Blockage Period is in effect an no Enforcement Action has been commenced
and is continuing, reimbursement of out of pocket expenses (including, if
applicable, legal fees and expenses) payable to Junior Creditors pursuant
to the
Subordinated Debenture Documents (as in effect as of the date of this Agreement)
and Section 32 of this Agreement.
(d) The
rights of each Junior Creditor to receive any payments with respect to the
Subordinated Debenture Documents (other than Permitted Payments described
in
Section 2(c)(i)) will be suspended upon delivery of a Blockage Notice to
Junior
Agent. Upon the termination of any Blockage Period, each Junior Creditor’s right
to receive Permitted Payments as provided above shall be reinstated, and
Debtors
may resume making such payments to Junior Creditors (including any payments
that
were deferred as a result thereof). The aggregate number of days in any
consecutive 365-day period during which Blockage Periods may be in effect
solely
as a result of Non-Payment Defaults shall be 180 days. No Blockage Period
may be
imposed by Senior Creditor as a result of any Non-Payment Default existing
on
the date that any previous Blockage Notice was given and of which an officer
of
Senior Creditor had actual knowledge on the date such Blockage Notice was
given.
3. Subordination
of Liens.
Unless
and until the Senior Creditor Repayment shall have occurred, each
Debtor, for itself and its successors and assigns, covenants and agrees,
and
each Junior Creditor, for itself and its successors and assigns, hereby
covenants and agrees, that all Liens now or hereafter acquired by Senior
Creditor in any or all of the Collateral shall at all times be prior and
superior to any Lien now held or hereafter acquired by any Junior Creditor
in
the Collateral. Said priority shall be applicable irrespective of the time
or
order of attachment or perfection of any Lien or the time or order of filing
of
any financing statements or other documents, or any statutes, rules or law,
or
court decisions to the contrary. The Lien subordination provisions in this
Agreement are for the benefit of and shall be enforceable directly by Senior
Creditor, and Senior Creditor shall be deemed to have acquired the Senior
Debt
in reliance upon this Agreement.
4. Disposition
of Collateral.
(a) Each
Junior
Creditor hereby agrees that, until the Senior Creditor Repayment, Senior
Creditor may dispose of, and exercise any other rights with respect to, any
or
all of the Collateral, free of the Liens of such Junior Creditor, provided
that
such Junior Creditor retains any rights it may have as a junior secured creditor
with respect to the Junior Debt with respect to the surplus, if any, arising
from any such disposition or enforcement. Upon any disposition of any of
the
Collateral by Senior Creditor, each Junior Creditor (i) agrees, if requested,
to
execute and immediately deliver any and all releases or other documents or
agreements which Senior Creditor deems reasonably necessary to accomplish
a
disposition thereof free of the Liens of such Junior Creditor, and (ii)
authorizes Senior Creditor to record, or cause to have recorded, any UCC
financing statements which Senior Creditor deems reasonably necessary to
accomplish a disposition thereof free of the Liens of such Junior Creditor
(it
being understood that Senior Creditor shall not release any Liens of any
Junior
Creditor in any Collateral which is not the subject of such disposition).
Each
Junior Creditor agrees that any funds of any Debtor which it obtains through
the
exercise of any right of setoff or other similar right constitute Collateral,
and each Junior Creditor shall immediately pay such funds to Senior Creditor
to
be applied to the outstanding Senior Debt. Senior Creditor agrees to act
in a
commercially reasonable fashion in connection with any disposition of any
Collateral by Senior Creditor.
(b) In
the
event of a sale or other disposition by any Debtor of some or all of the
Collateral in connection with the liquidation or winding up of its business,
each Junior Creditor agrees to release its Lien on such Collateral promptly
(and
in any event within three business days) upon the request of Senior Creditor,
whether or not such Junior Creditor will receive any proceeds from such sale,
but only if the net proceeds are used to pay the Senior Debt in cash and,
if
such net proceeds are sufficient to repay the Senior Debt in full, if the
remaining proceeds are used to pay the Junior Debt in cash (unless otherwise
required by applicable law). Should any Junior Creditor fail to provide a
release of its Lien in any such Collateral sold or agree in writing to release
its Lien contemporaneously with any such sale in accordance with the provisions
of the preceding sentence (including the application of proceeds) within
three
(3) business days after its receipt of Senior Creditor’s written request, Senior
Creditor may, acting as such Junior Creditor’s attorney-in-fact, do so itself in
such Junior Creditor’s name. Such power of attorney is coupled with an interest
and is irrevocable until the Senior Creditor Repayment shall have
occurred.
5. Limitations
on Rights and Remedies.
(a) So
long
as a Blockage Period is in effect or if Senior Lender has commenced and is
diligently pursuing an Enforcement Action, each Junior
Creditor hereby agrees, severally and not jointly with the other Junior
Creditors, that it shall not exercise any rights or remedies with respect
to any
Debtor or any Collateral, including, without limitation, the right to (a)
enforce any Liens or repossess, sell or otherwise foreclose on any portion
of
the Collateral, or (b) request any action, institute litigation or other
proceedings, give any instructions, make any election, notice account debtors
or
make collections with respect to any portion of the Collateral; provided,
however,
that if
Debtors or Senior Creditor shall cure the applicable event of default under
the
Subordinated Debenture Documents prior to the taking of such remedial action
by
any Junior Creditor, no Junior Creditor will take or continue any remedial
action with respect to such event of default after the date of such cure;
and,
until the Senior Creditor Repayment, any payments, distributions or proceeds
resulting from the exercise of any such remedial action received by any Junior
Creditor shall be subject to the terms of this Agreement and shall be paid
or
delivered to Senior Creditor as provided in this Agreement; provided,
further,
notwithstanding anything to the contrary contained herein, Junior Creditors
shall not be prohibited (at any time, with or without notice, even during
a
Blockage Period or while an Enforcement Action is outstanding) from taking
action against the Debtors to (x) collect Permitted Payments described in
Section 2(c)(i) including, without limitation, seeking specific performance
or
taking action against the Borrowers to collect capital stock of the Parent
at
any time any Debtor is obligated to issue the same to the extent such obligation
is a non-cash obligation that would constitute a Permitted Payment under
Section
2(c)(i), or (y) seeking specific performance against the Debtors to enforce
the
provisions of the Subordinated Debenture Documents described on Schedule
3
attached
hereto.
(b) To
the
extent that any Default under the Senior Loan Documents gives rise to a “cross
default” under the Subordinated Debenture Documents (a “Junior
Cross Default”),
the
cure or waiver of such Default under the Senior Loan Documents shall be deemed
to automatically cure or waive such Junior Cross Default under the Subordinated
Debenture Documents. To the extent that any default or event of default under
the Subordinated Debenture Documents gives rise to a “cross default” under the
Senior Loan Documents (a “Senior
Cross Default”),
the
cure or waiver of such default or event of default under the Subordinated
Debenture Documents shall be deemed to automatically cure or waive such Senior
Cross Default under the Senior Loan Documents.
6. Intercreditor
Arrangements in Bankruptcy.
(a) Notwithstanding
any Bankruptcy Event, this Agreement shall remain in full force and effect
and
enforceable pursuant to its terms in accordance with Section 510(a) of the
Bankruptcy Code, and all references herein to any Debtor shall be deemed
to
apply to such entity as debtor in possession and to any trustee in bankruptcy
for the estate of such entity.
(b) Except
as
otherwise specifically permitted in this Section 6, until the Senior Creditor
Repayment, no Junior Creditor shall assert, without the written consent of
Senior Creditor, which consent may be granted or withheld in Senior Creditor’s
sole discretion, any claim, motion, objection, or argument in respect of
any
Collateral in connection with any Bankruptcy Event which could otherwise
be
asserted or raised in connection with such Bankruptcy Event by such Junior
Creditor as a secured creditor of the applicable Debtor, including without
limitation any claim, motion, objection or argument seeking adequate protection
or relief from the automatic stay in respect of any Collateral.
(c) Without
limiting the generality of the foregoing, each Junior Creditor agrees that
if a
Bankruptcy Event occurs, (i) Senior Creditor may consent to the use of cash
collateral on such terms and conditions and in such amounts as Senior Creditor,
in its discretion, may decide without seeking or obtaining the consent of
such
Junior Creditor as holder of an interest in the Collateral; (ii) Senior Creditor
may (A) provide financing to any Debtor or (B) consent to the granting of
a
priming Lien to secure postpetition financing, in each case pursuant to Section
364 of the Bankruptcy Code or other applicable law and on such terms and
conditions and in such amounts as Senior Creditor, in its sole discretion,
may
decide without seeking or obtaining the consent of such Junior Creditor as
holder of an interest in the Collateral; (iii) such Junior Creditor shall
not
oppose any Debtor’s use of cash collateral to the extent such use has been
approved by Senior Creditor; (iv) such Junior Creditor shall not oppose any
sale
or other disposition of any Collateral free and clear of Liens or other claims
of any Person, including such Junior Creditor, under Section 363 of the
Bankruptcy Code if Senior Creditor has consented to such sale or disposition
of
such assets.
(d) Each
Junior Creditor agrees that it will not initiate, prosecute, encourage, or
assist with any other Person to initiate or prosecute any claim, action or
other
proceeding (i) challenging the validity or enforceability of this Agreement,
(ii) challenging the validity or enforceability of Senior Creditor’s claim
against any of the Debtors, (iii) challenging the perfection or enforceability
of any of Senior Creditor’s Liens, or (iv) asserting any claims which any Debtor
may hold with respect to Senior Creditor or the Senior Debt, if
any.
(e) Notwithstanding
any other provision of this Section 6, (i) each Junior Creditor shall be
entitled to file any necessary responsive or defensive pleadings in opposition
to any motion, claim, adversary proceeding or other pleading made by any
Person
objecting to or otherwise seeking the disallowance of the claims of such
Junior
Creditor, including without limitation any claims secured by the Collateral,
and
(ii) each Junior Creditor shall be entitled to file any pleadings, objections,
motions or agreements which (y) assert rights or interests available to
unsecured creditors of the applicable Debtor arising under either the Bankruptcy
Code or applicable non-bankruptcy law or (z) which preserve Junior Creditors’
rights to the Collateral after giving effect to the Senior Creditor Repayment
which do not adversely affect the rights of Senior Creditor.
7. Bankruptcy
Event.
In the
event of any Bankruptcy Event, as between Senior Creditor and Junior Creditors,
the following shall apply:
(a) Upon
any
payment or distribution of assets or securities of any kind or character,
whether in cash, securities or other property, of any Debtor or the estate
created by the commencement of any such Bankruptcy Event, the Senior Debt
shall
first be paid irrevocably in full in cash before any Junior Creditor shall
be
entitled to receive any payment or distribution of any cash, securities or
other
property on account of the Junior Debt.
(b) Senior
Creditor shall be entitled to receive from Debtors and any other Person making
any distribution in accordance with clause (a) above any payment or distribution
of any kind or character, whether in cash, securities or other property which
may be payable or deliverable in respect of the Junior Debt in connection
with
any such Bankruptcy Event for application to the payment of the Senior Debt
(to
the extent necessary to pay such Senior Debt after giving effect to any
concurrent payment to Senior Creditor). To facilitate the foregoing, each
Junior
Creditor irrevocably authorizes, empowers and directs any Debtor, debtor
in
possession, receiver, liquidator, custodian, conservator, trustee or other
Person having authority to pay or otherwise deliver all such payments or
distributions to Senior Creditor as required by this clause (b).
(c) In
the
event that, notwithstanding the foregoing provisions of clause (b) above,
any
Junior Creditor receives any payment from or distribution of assets or
securities of any Debtor or the estate created by the commencement of any
such
Bankruptcy Event, of any kind or character in respect of the Junior Debt,
whether in cash, securities or other property before the Senior Creditor
Repayment shall have occurred, then, and in such event, such payment or
distribution shall be received and held in trust by such Junior Creditor
for the
benefit of Senior Creditor and shall be promptly paid over or delivered by
such
Junior Creditor to Senior Creditor to the extent necessary to pay the Senior
Debt in full after giving effect to any concurrent payment to Senior Creditor.
In addition, to the extent that Senior Creditor receives a payment in excess
of
the amount required to effectuate the Senior Creditor Repayment, then Senior
Creditor shall, unless otherwise required by applicable law or court order,
hold
such excess amount in trust for the Junior Creditors and promptly pay such
excess amount to Junior Agent for the benefit of Junior Creditors, and Junior
Agent and Junior Creditors shall allocate such amount among themselves in
such
manner as they elect.
(d) Each
Junior Creditor covenants and agrees to provide Senior Creditor with a copy
of
any proof of claim filed by such Junior Creditor in connection with any
Bankruptcy Event, and Senior Creditor agrees to provide Junior Creditors
with a
copy of any proof of claim filed by Senior Creditor in connection with any
Bankruptcy Event.
(e) In
connection with any Bankruptcy Event, each Junior Creditor agrees that it
shall
not vote to accept or approve any plan of partial or complete liquidation,
reorganization, arrangement, composition or extension (nor shall it provide
any
financing to any Debtor or its affiliates under any such plan) that would
(i)
not provide for the payment in full of all Senior Debt in cash, unless Senior
Creditor has voted to accept such plan (which vote shall be within Senior
Creditor’s sole and absolute discretion), or (ii) cause such Junior Creditor or
any affiliate thereof to receive any payment in respect of Junior Debt (other
than current interest in connection with any debt owing to such Junior Creditor
pursuant to a plan of reorganization, provided that the payment of such current
interest is subordinated to the Senior Debt on substantially the terms set
forth
herein) prior to the Senior Creditor Repayment.
8.
No
Additional Liens.
Other
than as set forth in the Subordinated Debenture Security Agreements, each
Junior
Creditor hereby represents, severally, and not jointly with the other Junior
Creditors, that such Junior Creditor has not been granted or obtained any
Liens
in any assets of any Debtor or any other assets securing the Senior Debt.
Each
Junior Creditor agrees that, without the prior written consent of Senior
Creditor, no Junior Creditor will take any other Liens on any assets of any
Debtor or any other assets as security for the Junior Debt unless Senior
Creditor also has a Lien on such assets which is senior to that of the
applicable Junior Creditor, and no Junior Creditor shall obtain any additional
guarantees for the Junior Debt unless the Person obligated under such guaranty
also guarantees the Senior Debt and such guaranty in favor of Junior Creditor(s)
is subordinated to such guaranty in favor of Senior Creditor in a manner
consistent with the terms and conditions of this Agreement pursuant to
documentation reasonably acceptable to Senior Creditor.
9.
Junior
Debt Owed Only to Junior Creditors; Restrictions on
Transfer.
(a) Each
Junior Creditor represents and warrants severally, and not jointly with the
other Junior Creditors that: (a) no Junior Creditor has previously assigned
any
interest in the Junior Debt or any Lien in connection therewith, if any;
(b) no
Person other than Junior Creditors owns an interest in any Junior Debt or
security therefor (whether as joint holders of the Junior Debt, participants
or
otherwise); and (c) the entire Junior Debt is owing only to Junior Creditors.
Each Junior Creditor covenants that, in the event that such Junior Creditor
wishes to transfer, in whole or in part, all or any part of the Junior Debt
or
any Lien therefor to another Person, then the terms and conditions of this
Agreement will be and remain binding upon the Junior Debt and all Liens
therefor, and such Junior Creditor shall cause such proposed transferee,
before
any such transfer is made, to execute and deliver to Senior Creditor a written
acknowledgment in form and substance reasonably acceptable to Senior Creditor,
pursuant to which such proposed transferee acknowledges that it will constitute
a Junior Creditor hereunder and be bound by the terms and conditions hereof.
(b) Senior
Creditor covenants that, in the event that the Senior Creditor wishes to
transfer, in whole or in part, all or any part of the Senior Debt or any
Lien
therefor to another Person, then the terms and conditions of this Agreement
will
be and remain binding upon the Senior Debt and all Liens therefor, and Senior
Creditor shall cause such proposed transferee, before any such transfer is
made,
to execute and deliver to the Junior Creditors a written acknowledgment that
such proposed transferee acknowledges that it will constitute a Senior Creditor
hereunder and be bound by the terms and conditions hereof. Senior Creditor
agrees that (i) in the event of any transfer by Senior Creditor of less than
all
of the Senior Debt, ACF CGS, L.L.C. shall continue to serve as administrative
agent for the holder(s) of Senior Debt (including for purposes of administering
and enforcing this Agreement), and (ii) in the event of the transfer by Senior
Creditor of all of the Senior Debt then held by Senior Creditor, prior to
consummating any such transfer, Senior Creditor shall notify Junior Agent
of
such proposed transfer (the “Transfer
Notice”)
(which
notice shall include the identity of the proposed transferee(s) and the
scheduled date of closing of the transfer to such person(s) (the “Scheduled
Transfer Date”)),
and
Junior Creditors shall have the right to exercise the Purchase Option with
respect to all, but not less than all of the Senior Debt, upon the terms
and
conditions described in Section 10 below; provided,
however,
that in
such event Junior Creditors desiring to exercise the Purchase Option shall
deliver a Purchase Option Notice to ACF CGS, L.L.C. within two (2) days
following delivery of the Transfer Notice by ACF CGS, L.L.C., and shall
consummate the Purchase Option and pay the Option Purchase Price no later
than
the later of (A) the Scheduled Transfer Date identified in the Transfer Notice,
or four (4) business days following the date of delivery of the Purchase
Option
Notice.
10.
Purchase
Option.
(a) Senior
Creditor shall give Junior Agent a copy of any written notice of acceleration
of
any Senior Debt given by Senior Creditor to one or more Debtors, concurrently
with, or as soon as practicable after, the giving of such notice to such
Debtors. For a period of 10 calendar days following receipt of such notice
by
Junior Agent (the “Option
Period”),
Junior Creditors shall have the option (the “Purchase
Option”)
to
purchase from Senior Creditor (i) all, but not less than all, of the Senior
Debt
owed to Senior Creditor at the time of purchase (excluding the Retained Debt,
as
defined below) and (ii) all of Senior Creditor’s right, title and interest in
and to, and all of Senior Creditor’s obligations under, the Senior Loan
Documents (excluding the Retained Interests, as defined below, and excluding
all
rights and remedies of Senior Creditor under and with respect to any warrant,
registration rights agreement, capital stock of any Debtor and other similar
equity investments) (all such property referred to in clauses (i) and (ii)
being
collectively called the “Assigned
Interests”).
At
any time during the Option Period, Junior Creditors may exercise the Purchase
Option by causing Junior Agent to deliver to Senior Creditor a written notice
of
intent to exercise the Purchase Option (the “Purchase
Option Notice”),
in
which notice Junior Agent shall specify the date of closing (which shall
be a
business day within the Option Period). On the closing date specified in
the
Purchase Option Notice, Senior Creditor shall, pursuant to an assignment
agreement in form and substance satisfactory to Senior Creditor and Junior
Creditors, assign all of its right, title and interest in and to the Assigned
Interests to Junior Creditors, without
representation, recourse or warranty (except
as expressly set forth below), upon Senior Creditor’s receipt of payment, in
cash (and in immediately available federal funds by wire transfer to a bank
account designated by Senior Creditor), of the purchase price (the “Option
Purchase Price”),
which
shall be an amount equal to 100% of the Senior Debt owed on the date of payment
to Senior Creditor (it being understood and agreed to by all parties that
any
purchase and sale consummated pursuant to this Section 10 shall be deemed
to be
a prepayment of all of the Senior Debt for all purposes of the Senior Loan
Documents), including, without limitation, (w) all unpaid interest, fees
and any
other charges, without regard to whether or not such amounts are allowed
or are
recoverable pursuant to Section 506 of the Bankruptcy Code or otherwise,
(x) any
prepayment fee or early termination fee set forth in the Senior Loan Documents,
and (y) any amounts that are due and payable to Senior Creditor in respect
of
claims for which Senior Creditor is entitled to indemnification under the
Senior
Loan Documents, but excluding the Retained Debt. Without duplication of any
amounts to be paid as part of the Option Purchase Price, Junior Creditor
shall
furnish to Senior Creditor on the date of closing on the Purchase Option
cash
collateral as security to Senior Creditor for the payment of all Asserted
Known Indemnification Claims, as defined below, such cash collateral to be
an
amount equal to 100% of such claims. The
election to exercise the Purchase Option pursuant to the Purchase Option
Notice
shall be irrevocable and shall fully obligate and commit Junior Creditors
to
acquire the Assigned Interests as herein provided. The amount of and payment
of
the Option Purchase Price or any other sum required to be paid by Junior
Creditors to Senior Creditor pursuant to this Section 10 shall not be subject
to
any defense, reduction, recoupment or offset, for any reason, including,
without
limitation, any breach or alleged breach by Senior Creditor at any time of
any
provision of this Agreement. The failure of Junior Agent to deliver the Purchase
Option Notice so that it is received by Senior Creditor prior to expiration
of
the Option Period or to consummate the purchase pursuant to the Purchase
Option
as provided herein prior to the expiration of the Option Period shall result
in
the forfeiture of the Purchase Option, unless otherwise agreed by Senior
Creditor in its sole discretion. As used herein, the term “Retained
Debt”
shall
mean any and all amounts required to be paid by any Debtor to Senior Creditor
pursuant to any indemnity provisions contained in any of the Senior Loan
Documents, the claim for which arises or becomes due and payable after the
consummation of the purchase by Junior Creditor pursuant to the Purchase
Option;
the term “Retained
Interests”
shall
mean the rights and interest retained by Senior Creditor under all of the
Senior
Loan Documents, notwithstanding the sale and the assignment of the Assigned
Interests, in respect of the Retained Debt and in respect of indemnification
obligations of Debtors in accordance with the Senior Loan Documents (all
of
which shall survive the sale and assignment of the Assigned Interests and
continue to benefit Senior Creditor); and the term “Asserted
Known Indemnification Claim”
means
any matters or circumstances for which notice or demand has been made or
asserted against Senior Creditor in writing that at the time of determination
could reasonably be expected to result in direct or actual damages and expenses
(including, without limitation, reasonable and documented attorneys' fees
and
disbursements but excluding special, indirect,
consequential or punitive damages to Senior Creditor)
to
Senior Creditor and which are subject to indemnification by any Debtor pursuant
to the terms of the Senior Loan Documents. Any reference to the amount of
any
Asserted Known Indemnification Claim shall mean that amount as reasonably
determined by Senior Creditor in light of the facts and circumstances of
the
underlying claim. In connection with any such sale or assignment, each Debtor
agrees to execute and deliver to Senior Creditor all such agreements,
instruments or documents as Senior Creditor may reasonably request to evidence
the survival of such rights, interest and obligations. The grant of the Purchase
Option shall not operate to restrict Senior Creditor from assigning or
transferring to any Person any or all of its loan commitments under the Senior
Loan Documents or any Senior Debt owing to it or any of its rights or other
interests under the Senior Loan Documents, so long as such Person agrees
to be
bound by the terms of this Section 10.
(b) The
purchase price and any cash collateral shall be remitted by wire transfer
of
immediately available funds to such bank account of Senior Creditor as Senior
Creditor may designate in writing to Junior Agent for such purpose. Interest
shall be calculated to but excluding the business day on which such purchase
and
sale shall occur if the amounts so paid by Junior Creditors to the bank account
designated by Senior Creditor are received in such bank account prior to
1:00
p.m. Central time. Interest shall be calculated to and including the business
day on which such purchase and sale shall occur if the amounts so paid by
Junior
Creditors to the bank account designated by Senior Creditor are received
in such
bank account after 1:00 p.m. Central time.
(c) The
obligation of Senior Creditor to consummate any sale pursuant to the Purchase
Option shall be subject to (i) obtaining any required approval of any applicable
governmental authority and (ii) Senior Creditor’s receipt of an undertaking (in
form and substance satisfactory to Senior Creditor) from Junior Creditors
to
reimburse Senior Creditor for any loss, cost or expense (including interest
at
the rate applicable under the Senior Loan Agreement) outstanding on the date
the
Purchase Option is exercised and reasonable attorney’s fees and other legal
expenses) relating to any payment items that have been provisionally credited
to
any of the Senior Debt and that are returned unpaid or are otherwise dishonored
or charged back.
(d) Any
purchase pursuant to the Purchase Option shall be without any representation
or
warranty of any kind by Senior Creditor as to any of the Assigned Interests
or
otherwise and without recourse to Senior Creditor, except that Senior Creditor
shall represent and warrant to Junior Creditors: (i) the
amount of the Senior Debt being purchased from Senior Creditor,
(ii)
that Senior Creditor owns such Senior Debt free and
clear
of any Liens and (iii) that Senior Creditor has the right
to
assign such Senior Debt and the assignment is duly authorized.
(e) Upon
the
consummation of any purchase and sale pursuant to the Purchase Option, Junior
Creditors (and not Senior Creditor) shall thereafter be obligated pursuant
to
the terms of the Senior Loan Documents with respect to the Assigned Interests
and responsible for the discharge and performance of all of the duties,
responsibilities and obligations of Senior Creditor under the loan commitments
included within the Assigned Interests, with the Junior Creditors thereafter
being deemed to be the “Lender” for all purposes under the Senior Loan Documents
(except with respect to the Retained Debt and Retained Interests) and with
Senior Creditor thereafter being released from its duties, responsibilities
and
obligations under the Senior Loan Documents.
(f) All
Retained Debt shall remain secured by the Collateral, Junior Agent shall
act as
collateral agent for Senior Creditor in connection with all Retained Debt
and
Senior Creditor shall have the benefits of the Retained Interests in the
Senior
Loan Documents. Senior Creditor shall be entitled to payment in respect of
such
Retained Debt on the due date of any such Retained Debt.
(g) Each
Debtor agrees that any such sale and assignment by Senior Creditor of the
Assigned Interests shall not operate to terminate or impair such Debtor’s
obligations to indemnify Senior Creditor or the obligations of such Debtor
with
respect to any Retained Rights under the Senior Loan Documents or otherwise,
all
of which indemnity and other obligations with respect to the Retained Rights
shall survive any such sale and assignment. Nothing in this Section 10 shall
be
deemed to require Senior Creditor to extend any credit to any Debtor during
the
Option Period.
(h) Junior
Creditors agree that, after consummation of any purchase of the Assigned
Interests in accordance with this Section 10, Junior Creditors will not
authorize or allow any amendment to be made to any of the provisions of the
Senior Loan Documents in a manner that would restrict or otherwise adversely
effect the Retained Interests or the security for the Retained
Debt.
(i) For
avoidance of doubt, Junior Creditors agree and acknowledge that Senior Creditor
shall not be required to provide any prior notice to Junior Creditor of Senior
Creditor’s commencement of, or intent to commence, any enforcement action
against or with respect to any Debtor or any of the Collateral, and Senior
Creditor shall not be obligated to forbear from taking any such enforcement
action during the Option Period.
(j) Notwithstanding
anything herein to the contrary, the rights and obligations of each Junior
Creditor hereunder are several and not joint with the rights and obligations
of
any other Junior Creditor and no Junior Creditor shall have liability or
obligations hereunder unless and until such Junior Creditor duly exercises
its
rights hereunder in its sole discretion.
11.
Continuing
Nature of Subordination.
This
Agreement will be effective and may not be terminated or otherwise revoked
by
any Junior Creditor until the Senior Creditor Repayment shall have occurred.
Each Junior Creditor hereby waives to the fullest extent permitted by applicable
law any right it may have to terminate or revoke this Agreement or any of
the
provisions of this Agreement. In the event that any Junior Creditor has any
right under applicable law otherwise to terminate or revoke this Agreement
which
right cannot be waived, such termination or revocation will not be effective
until written notice of such termination or revocation, signed by such Junior
Creditor, is actually received by Senior Creditor’s officer responsible for such
matters. In the absence of the circumstances described in the immediately
preceding sentence, this is a continuing agreement of subordination and Senior
Creditor may continue, at any time and without notice to any Junior Creditor,
to
extend credit or other financial accommodations and loan monies to or for
the
benefit of Debtors on the faith hereof. Any termination or revocation described
hereinabove will not affect this Agreement in relation to any of the Senior
Debt
which arose or was committed to prior to receipt thereof.
12.
Invalidated
Payments; Waivers by Junior Creditors.
(a) To
the
extent that Senior Creditor receives payments or transfers on the Senior
Debt or
proceeds of the Collateral which are subsequently invalidated, declared to
be
fraudulent or preferential, set aside, avoided and/or required to be repaid
to a
trustee, receiver or any other Person under any bankruptcy law, state or
federal
law, common law, or equitable cause or pursuant to the Senior Loan Documents,
then, to the extent of such payment or proceeds received, the Senior Debt,
or
part thereof, intended to be satisfied shall be revived and continue in full
force and effect as if such payments or proceeds had not been received by
Senior
Creditor.
(b) Each
Junior Creditor hereby waives and releases, to the fullest extent permitted
by
applicable law, any claim which such Junior Creditor may now or hereafter
have
against Senior Creditor arising out of any and all actions which Senior Creditor
takes or omits to take with respect to any Debtor, any Collateral or any
Senior
Loan Document, including, without limitation: (a) any action or inaction
with
respect to the creation, perfection or continuation of Liens on the Collateral
and other security for the Senior Debt, (b) any action or inaction with respect
to the occurrence of any Default, (c) any action or inaction with respect
to the
foreclosure upon, repossession, sale, release or depreciation of, or failure
to
realize upon, any of the Collateral, (d) any action or inaction with respect
to
the collection of any claim for any part of the Senior Debt from any account
debtor, guarantor, or any other Person, (e) any other action or inaction
with
respect to the enforcement of the Senior Loan Documents or the valuation,
use,
protection or disposition of the Collateral or any other security for the
Senior
Debt, (f) the election of Senior Creditor, in any proceeding instituted under
Chapter 11 of the Bankruptcy Code, for application of Section 1111(b) of
the
Bankruptcy Code; provided,
however,
that
the foregoing shall not apply to any actions or omissions of Senior Creditor
constituting a violation of applicable law or a violation of this Agreement
or,
with respect to matters relating to the realization, foreclosure or other
disposition of Collateral, the failure of Senior Creditor to act in a
commercially reasonable manner.
13. Additional
Senior Debt; Amendments to Loan Documents.
(a) Senior
Creditor may from time to time in its discretion make Additional Senior Loans
to
the Debtors, provided, that prior to making any such Additional Senior Loan
Senior Creditor shall notify Junior Agent in writing (an “Additional
Senior Loan Notice”)
of the
proposed terms and conditions thereof (including, without limitation, the
proposed amount, ranking, pricing, date of funding (the “Proposed
Additional Senior Loan Funding Date”),
and
all other material terms relating to such proposed Additional Senior Loan),
which notice shall be accompanied by the definitive agreements that Senior
Creditor would propose to use in connection with such Additional Senior Loan
(the “Proposed
Additional Senior Loan Documents”),
and
Junior Creditors shall have the option to provide all but not less than all
of
such Additional Senior Loan on the terms set forth in the Additional Senior
Loan
Notice and the Proposed Additional Senior Loan Documents. Junior Agent shall
notify Senior Creditor in writing (the “Junior
Creditor Commitment Notice”)
within
three (3) business days following receipt of an Additional Senior Loan Notice
of
Junior Creditors’ election whether or not to provide the Additional Senior Loan
to the Debtors on the terms described in the Additional Senior Loan Notice
and
the Proposed Additional Senior Loan Documents (provided that the failure
of
Junior Agent to respond within such time period shall be deemed to be an
election of Junior Creditors not to provide such Additional Senior Loan),
which
notice shall (i) identify the applicable Junior Creditor(s) electing to make
the
Additional Senior Loan, (ii) indicate the date on which such Junior Creditors
propose to fund such Additional Senior Loan to the Borrowers, which shall
be no
later than seven (7) days following the date of the Junior Creditor Commitment
Notice, and (iii) serve as such Junior Creditors’ commitment to make such
Additional Senior Loan on the applicable terms and conditions. If requested
by
Borrowers, Senior Creditor may, in its sole discretion, elect to fund the
Additional Senior Loan prior to the agreed date of funding by Junior Creditors,
in which event Senior Creditor shall so notify Junior Agent, and the applicable
Junior Creditors shall, no later than the date seven (7) days following the
date
of the Junior Creditor Commitment Notice, fund such Additional Senior Loan
to
Borrowers with the proceeds to be used to repay the amount advanced by Senior
Creditor. If Junior Creditors elect to make the Additional Senior Loan, Junior
Creditors shall execute and deliver the Additional Senior Loan Documents
and, if
applicable, enter into an appropriate amendment of this Agreement.
Notwithstanding anything to the contrary set forth herein, the Senior Creditor
shall not make Additional Senior Loans in an amount such that the aggregate
amount of Senior Debt would exceed the amount described in clause (a) of
the
definition of “Senior Debt”.
(b) Senior
Creditor, at any time and from time to time, may enter into such agreements,
amendments and modifications with any Debtor as Senior Creditor may deem
proper,
extending the time of payment of or renewing or otherwise altering the terms
and
conditions of all or any portion of the Senior Debt or affecting the security
underlying any or all of the Senior Debt, all without affecting the rights
of
Senior Creditor hereunder; provided, however, that Senior Creditor shall
not,
without the prior written consent of Junior Creditors holding at least 67%
of
the outstanding principal amount of Debentures, agree to any such amendment
or
modification which (i) increases the principal amount of the Senior Debt
beyond
the limits described in the definition of “Senior Debt” set forth herein, (ii)
extends the stated maturity date of some or all of the Senior Debt; or (iv)
adds
any additional events of default or financial covenants.
(c) Junior
Creditors agree with Senior Creditor that the Subordinated Debenture Documents
may not be materially modified or amended without the prior written consent
of
Senior Creditor (including, without limitation, any amendment which has the
effect of shortening the maturity of the Junior Debt, accelerating the due
date
of any payment with respect thereto, increasing the interest rate or any
fees or
liquidated damages payable in cash with respect thereto, requiring any amount
not required to be paid in cash thereunder to be paid in cash, or making
any
covenant more restrictive on any Debtor); provided,
however,
that
Junior Creditors and Debtors may amend the terms and conditions of any non-cash
payment obligations pursuant to the Subordinated Debenture Documents without
the
consent of Senior Creditor.
14. No
Waiver by Senior Creditor.
No
right of Senior Creditor to enforce the subordination or other terms as provided
in this Agreement will at any time in any way be prejudiced or impaired by
any
act or failure to act on the part of any Debtor or by any act or failure
to act
by Senior Creditor, or by any noncompliance by any Debtor with the terms,
provisions and covenants of this Agreement, the Senior Loan Documents or
the
Subordinated Debenture Documents, regardless of any knowledge thereof which
Senior Creditor may have or be otherwise charged with. No waiver will be
deemed
to be made by Senior Creditor of any of Senior Creditor’s rights hereunder,
unless the same will be in writing signed on behalf of Senior Creditor, and
each
waiver, if any, will be a waiver only with respect to the specific instance
involved and will in no way impair the rights of Senior Creditor or the
obligations of any Junior Creditor to Senior Creditor in any other respect
at
any other time. The failure of Senior Creditor to enforce at any time any
provision of this Agreement will not be construed to be a waiver of such
provisions, nor in any way to affect the validity of this Agreement or any
part
hereof or the right of Senior Creditor thereafter to enforce each and every
such
provision. No waiver by Senior Creditor of any breach of this Agreement will
be
held to constitute a waiver of any other or subsequent breach.
15. Certain
Stock Certificates.
Junior
Agent hereby represents and warrants to Senior Creditor that Junior Agent
is in
possession of the stock certificates and membership interest certificates
of
Debtors described on Exhibit
A
attached
hereto (the “Certificates”). Promptly following the closing of the transactions
contemplated by the Senior Loan Agreement (and in any event within 5 business
days), Junior Agent shall provide the Certificates to Senior Creditor, and
Junior Agent hereby agrees that, until such time, Junior Agent shall hold
such
Certificates as Senior Creditor’s agent for purposes of perfection. Within 5
business days following the date that the Senior Creditor Repayment occurs,
Senior Creditor shall redeliver the Certificates to the Junior Agent, subject
to
the undertaking by the Junior Creditors that if a Bankruptcy Event occurs
within
90 days following the date of the Senior Creditor Repayment, then the Junior
Agent shall promptly return the Certificates to Senior Creditor and, until
such
return, Junior Agent shall hold such Certificates as Senior Creditor’s agent for
purposes of perfection.
16.
Information
Concerning Financial Condition of Debtors; Notices of
Default.
(a) Each
Junior Creditor hereby assumes responsibility for keeping informed of the
financial condition of Debtors, any and all endorsers and any and all other
guarantors of the Junior Debt and/or the Senior Debt and of all other
circumstances bearing upon the risk of nonpayment of the Senior Debt and/or
Junior Debt, and each Junior Creditor hereby agrees that Senior Creditor
will
not have any duty to advise such Junior Creditor of any information regarding
such condition or any such circumstances. In the event that Senior Creditor,
in
its sole discretion, undertakes, at any time or from time to time, to provide
any such information to any Junior Creditor, Senior Creditor will be under
no
obligation (i) to provide any such information to any Junior Creditor on
any
subsequent occasion, or (ii) to undertake any investigation or to disclose
any
information which Senior Creditor wishes to maintain as
confidential.
(b) Senior
Creditor hereby assumes responsibility for keeping informed of the financial
condition of Debtors, any and all endorsers and any and all other guarantors
of
the Senior Debt and/or the Junior Debt and of all other circumstances bearing
upon the risk of nonpayment of the Senior Debt and/or Junior Debt, and Senior
Creditor hereby agrees that no Junior Creditor will have any duty to advise
Senior Creditor of any information regarding such condition or any such
circumstances. In the event that any Junior Creditor, in its sole discretion,
undertakes, at any time or from time to time, to provide any such information
to
Senior Creditor, such Junior Creditor will be under no obligation (i) to
provide
any such information to Senior Creditor on any subsequent occasion, or (ii)
to
undertake any investigation or to disclose any information which such Junior
Creditor wishes to maintain as confidential.
(c) Each
Junior Creditor agrees to make reasonable efforts to provide Senior Creditor
with a copy of any notice of default to any Debtor within three business
days of
such notice to such Debtor, but any failure of any Junior Creditor to provide
such notice to Senior Creditor shall not result in any liability of such
Junior
Creditor to Senior Creditor or limit any rights of such Junior Creditor
hereunder.
(d) Without
limiting the obligation of Senior Creditor to provide Junior Agent with a
copy
of any notice of acceleration as set forth in Section 10(a), Senior Creditor
agrees to make reasonable efforts to provide Junior Agent with a copy of
any
notice of default to any Debtor within three business days of such notice
to
such Debtor, but any failure of Senior Creditor to provide such notice to
Junior
Agent shall not result in any liability of Senior Creditor to Junior Agent
or
any Junior Creditor or limit any rights of Senior Creditor
hereunder.
17. Payments
to Senior Creditor Do Not Reduce Junior Debt.
Each
Debtor acknowledges and agrees that any payment by or on behalf of any Debtor
with respect to any Junior Debt which is paid over to Senior Creditor pursuant
to the terms and conditions hereof shall not be deemed to reduce the Junior
Debt.
18. Cure
of Payment Default.
If a
Payment Default exists at any time, Senior Creditor agrees that any Junior
Creditor may cure such Payment Default by paying to Senior Creditor, in
immediately available funds, the amount necessary to cure such Payment Default,
and Senior Creditor agrees to accept such payment from such Junior Creditor
for
application to the Senior Debt. Nothing contained herein shall be deemed
to
obligate Senior Creditor to notify Junior Creditor of the existence of any
Default.
19. Relationship
Among Junior Creditors and Junior Agent, Waiver of
Marshalling.
Each
Debtor, Junior Agent and each Junior Creditor acknowledges and agrees that
Senior Creditor has no knowledge of, and shall not have any duty or
responsibility for determining, the relative rights and obligations of Junior
Agent or any Junior Creditor on one hand, to Junior Agent or any other Junior
Creditor, on the other hand, with respect to any Subordinated Debt, any
Collateral, any Subordinated Debenture Document, the Subordinated Debt Control
Account or otherwise
Each
Debtor and each Junior Creditor hereby waives any right to require marshalling
of any assets by Senior Creditor and any similar rights.
20. Confirmation
of Appointment of Junior Agent.
Each of
the undersigned Junior Creditors hereby designates Enable Growth Partners,
LP
(“EGP”) as Junior Agent under this Agreement (including for purposes of
receiving notices on behalf of each Junior Creditor), and agrees that EGP’s
rights, responsibilities and immunities as Junior Agent shall be as set forth
in
Annex B to the Subordinated Debenture Security Agreement.
21. CONSENT TO JURISDICTION; SERVICE OF
PROCESS; NO JURY TRIAL.
(a) EACH
PARTY HERETO CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
IN NEW YORK, NEW YORK AND WAIVES ANY OBJECTION BASED UPON FORUM NON CONVENIENS
AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER. NOTHING IN THIS SECTION
WILL AFFECT THE RIGHT OF SENIOR CREDITOR TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY OTHER PARTY HERETO OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION. ANY
JUDICIAL PROCEEDING COMMENCED BY ANY DEBTOR OR ANY JUNIOR CREDITOR AGAINST
SENIOR CREDITOR OR ANY OTHER HOLDER OF ANY SENIOR DEBT INVOLVING, DIRECTLY
OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED
WITH
THIS AGREEMENT SHALL BE BROUGHT ONLY IN A UNITED STATES FEDERAL COURT OR
NEW
YORK STATE COURT SITTING IN NEW YORK, NEW YORK.
(b) EACH
OF
THE PARTIES REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS
AGREEMENT WITH COUNSEL OF ITS CHOICE AND IS FULLY AWARE OF THE LEGAL
CONSEQUENCES AND EFFECTS HEREOF AND HAS KNOWINGLY AGREED TO THE PROVISIONS
HEREOF.
(c) EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION
OR PROCEEDING (i) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION
WITH
THIS AGREEMENT, OR (ii) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION
WITH OR RELATED TO THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
22. ARM’S
LENGTH AGREEMENT.
EACH OF
THE PARTIES TO THIS AGREEMENT AGREES AND ACKNOWLEDGES THAT THIS AGREEMENT
HAS
BEEN NEGOTIATED IN GOOD FAITH, AT ARM’S LENGTH, AND NOT BY ANY MEANS FORBIDDEN
BY LAW.
23. INJUNCTIVE
RELIEF.
EACH
JUNIOR CREDITOR AND EACH DEBTOR ACKNOWLEDGES AND AGREES THAT ITS COVENANTS
AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER DOCUMENTS, INSTRUMENTS AND
AGREEMENTS EXECUTED IN CONNECTION HEREWITH ARE INTEGRAL TO SENIOR CREDITOR’S
REALIZATION OF ITS RIGHTS AGAINST, AND THE VALUE OF ITS INTEREST IN, THE
ASSETS
OF DEBTORS AND THEIR AFFILIATES, THAT A BREACH OF ANY OF THE COVENANTS AND
OBLIGATIONS OF SUCH JUNIOR CREDITOR, SUCH DEBTOR HEREUNDER OR UNDER THE OTHER
DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION HEREWITH WILL
ENTITLE SENIOR CREDITOR TO INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE WITHOUT
THE NECESSITY OF PROVING IRREPARABLE INJURY TO SENIOR CREDITOR OR THAT SENIOR
CREDITOR DOES NOT HAVE AN ADEQUATE REMEDY AT LAW IN RESPECT OF SUCH BREACH
(EACH
OF WHICH ELEMENTS SUCH JUNIOR CREDITOR, SUCH DEBTOR ADMITS EXIST) AND, AS
A
CONSEQUENCE, SUCH JUNIOR CREDITOR, SUCH DEBTOR AGREES THAT EACH AND EVERY
COVENANT AND OBLIGATION APPLICABLE TO IT AND CONTAINED IN THIS AGREEMENT
OR THE
OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION HEREWITH
WILL
BE SPECIFICALLY ENFORCEABLE AGAINST IT. EACH JUNIOR CREDITOR, EACH DEBTOR
HEREBY
WAIVES AND AGREES NOT TO ASSERT ANY DEFENSES AGAINST AN ACTION FOR SPECIFIC
PERFORMANCE OF ITS RESPECTIVE COVENANTS AND OBLIGATIONS HEREUNDER AND/OR
UNDER
THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN CONNECTION
HEREWITH.
SENIOR
CREDITOR ACKNOWLEDGES AND AGREES THAT ITS COVENANTS AND OBLIGATIONS UNDER
THIS
AGREEMENT AND THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
CONNECTION HEREWITH ARE INTEGRAL TO EACH JUNIOR CREDITOR’S REALIZATION OF ITS
RIGHTS AGAINST, AND THE VALUE OF ITS INTEREST IN, THE ASSETS OF DEBTORS AND
THEIR AFFILIATES, THAT A BREACH OF ANY OF THE COVENANTS AND OBLIGATIONS OF
SUCH
SENIOR CREDITOR HEREUNDER OR UNDER THE OTHER DOCUMENTS, INSTRUMENTS AND
AGREEMENTS EXECUTED IN CONNECTION HEREWITH WILL ENTITLE EACH JUNIOR CREDITOR
TO
INJUNCTIVE RELIEF AND SPECIFIC PERFORMANCE WITHOUT THE NECESSITY OF PROVING
IRREPARABLE INJURY TO JUNIOR CREDITORS OR THAT ANY JUNIOR CREDITOR DOES NOT
HAVE
AN ADEQUATE REMEDY AT LAW IN RESPECT OF SUCH BREACH (EACH OF WHICH ELEMENTS
SENIOR CREDITOR ADMIT EXIST) AND AS A CONSEQUENCE, SENIOR CREDITOR AGREES
THAT
EACH AND EVERY COVENANT AND OBLIGATION APPLICABLE TO IT AND CONTAINED IN
THIS
AGREEMENT OR THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
CONNECTION HEREWITH WILL BE SPECIFICALLY ENFORCEABLE AGAINST IT. EACH JUNIOR
CREDITOR HEREBY WAIVES AND AGREES NOT TO ASSERT ANY DEFENSES AGAINST AN ACTION
FOR SPECIFIC PERFORMANCE OF ITS RESPECTIVE COVENANTS AND OBLIGATIONS HEREUNDER
AND/OR UNDER THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS EXECUTED IN
CONNECTION HEREWITH.
24. Notices.
Except
as otherwise provided for herein, whenever it is provided herein that any
notice, demand, request, consent, approval, declaration or other communication
will or may be given to or served upon either of the parties by the other,
or
whenever either of the parties desires to give or serve upon the other
communication with respect to this Agreement, such notice, demand, request,
consent, approval, declaration or other communication will be in writing
(including, but not limited to, facsimile communication), and will either
be
delivered in person, telecopied, sent by reputable overnight courier or mailed
by first class mail, or registered or certified mail, return receipt requested,
postage prepaid or provided for, addressed as follows:
(a) If
to
Senior Creditor at:
Xxxxxx
Capital Management, L.P.
000
Xxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx
Attn.:
Mr. Xxxx Xxxx
Fax:
(0000) 000-0000
With
a
copy to:
Xxxxxxxxx
Xxxxxxx, LLP
Xxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attn:
Xxxxxxx X. Xxxx,. Esq.
Fax:
(000) 000-0000
(b) If
to
Junior Agent at:
Enable
Growth Partners, L.P.
Xxx
Xxxxx
Xxxxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX 00000
Attn.:
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxxx
Xxxxxxxxx & Xxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn.:
Xxxxxxx X. Xxxxxxx, esquire
Fax:
(000) 000-0000
(c) If
to any
other Junior Creditor, at its address or facsimile number set forth beneath
its
signature block on the signature pages to this Agreement.
(d) if
to any
Debtor at:
Capital
Growth Systems, Inc.
000
X.
Xxxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxxx 00000
Attn.:
Xxxxxxx X. Xxxxx, CEO
Fax:
000-000-0000
or
to
such other address as any party designates to the other parties in the manner
herein prescribed. Any such notice shall be deemed to have been duly given
or
made (w) when delivered by hand against acknowledgment of receipt or (x)
three
business days after being deposited in the mail, postage prepaid or (y) one
business day after being sent by priority overnight mail with an internationally
recognized overnight delivery carrier or (z) if by telecopy or facsimile,
when
confirmed in writing by the sender’s facsimile device if sent on business day at
the office of the recipient, otherwise on the next business
day.
25. GOVERNING
LAW.
ANY
DISPUTE BETWEEN TWO OR MORE PARTIES HERETO ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, INSTRUMENTS
OR
AGREEMENTS EXECUTED IN CONNECTION HEREWITH AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, WILL BE RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS (OTHER THAN CONFLICT OF LAW PROVISIONS AND PRINCIPLES, BUT INCLUDING
SECTION 5-1401 AND SECTION 5-1402 OF THE GENERAL OBLIGATIONS LAW) OF THE
STATE
OF NEW YORK.
26. Counterparts;
Facsimile or E-mail Effectiveness.
This
Agreement may be executed in one or more counterparts, each of which will
be
considered an original counterpart, and will become a binding agreement when
Senior Creditor, Junior Creditors and Debtors have each executed one
counterpart. Each of the parties hereto agrees that a signature transmitted
to
Senior Creditor or its counsel by facsimile transmission or by electronic
mail
will be effective to bind the party so transmitting its signature.
27. Deed
of Priority.
Senior
Creditor and Junior Creditors hereby acknowledge and agree that the Deed
of
Priority is intended to supplement this Agreement, and no party shall take
any
action relative to the Deed of Priority that is inconsistent with the terms
of
this Agreement. In the event that any provision of the Deed of Priority
conflicts with any provision of this Agreement, the terms of this Agreement
shall control over the Deed of Priority in all respects.
28. Complete
Agreement; Merger.
This
Agreement, including the schedules and exhibits hereto, contains the entire
understanding of the parties hereto with regard to the subject matter contained
herein. This Agreement supersedes all prior or contemporaneous negotiations,
promises, covenants, agreements and representations of every nature whatsoever
with respect to the matters referred to in this Agreement, all of which have
become merged and finally integrated into this Agreement. Each of the parties
understands that in the event of any subsequent litigation, controversy or
dispute concerning any of the terms, conditions or provisions of this Agreement,
no party will be entitled to offer or introduce into evidence any oral promises
or oral agreements between the parties relating to the subject matter of
this
Agreement not included or referred to herein and not reflected by a writing
included or referred to herein.
28. No
Third Party Beneficiaries.
This
Agreement is solely for the benefit of Senior Creditor and its respective
successors and assigns and Junior Creditors and their respective successors
and
assigns and is not intended to confer upon any Debtor or any other third
party
any rights or benefits.
30. Severability.
Wherever possible, each provision of this Agreement will be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement will be prohibited by or invalid under applicable law,
such
provision will be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
31. Section
Titles.
The
section titles contained in this Agreement are and will be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto.
32. No
Strict Construction.
The
parties (directly and through their counsel) hereto have participated jointly
in
the negotiation and drafting of this Agreement. In the event an ambiguity
or
question of intent or interpretation arises, this Agreement will be construed
as
if drafted jointly by the parties hereto and no presumption or burden of
proof
will arise favoring or disfavoring any party by virtue of the authorship
of any
provisions of this Agreement.
33. Further
Assurances.
Each
party hereto will, at the expense of Debtors, and at any time and from time
to
time, promptly execute and/or authorize and deliver all further instruments
and
documents, and take all further action, that any other party hereto may
reasonably request in order to perfect or otherwise protect any right or
interest granted or purported to be granted hereby or to enable any party
to
exercise and enforce its rights and remedies hereunder, including, without
limitation, appropriate amendments to financing statements authorized by
any
Debtor in favor of any Junior Creditor in order to refer to this Agreement
(but
this Agreement shall remain fully effective notwithstanding any failure to
execute any additional documents or instruments).
34. Expenses.
Debtors
shall pay to Senior Creditor, upon demand, the amount of any and all reasonable
expenses, including, without limitation, the reasonable fees and expenses
of
counsel for Senior Creditor, which Senior Creditor may incur in connection
with
the exercise or enforcement of any of its rights or interests vis-à-vis any
Debtor or any Junior Creditor, and all such amounts shall constitute part
of the
Senior Debt. Debtors shall pay to each Junior Creditors, upon demand, the
amount
of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of counsel for such Junior Creditor, which such
Junior Creditor may incur in connection with the exercise or enforcement
of any
of its rights or interests vis-à-vis any Debtor or Senior Creditor, and all such
amounts shall constitute part of the Junior Debt.
35. Termination.
This
Agreement shall terminate on the date that the Senior Creditor Repayment.
36. Independent
Nature of Junior Creditors’ Obligations and Rights.
The
obligations of each Junior Creditor hereunder are several and not joint with
the
obligations of any other Junior Creditor, and no Junior Creditor shall be
responsible in any way for the performance or non-performance of the obligations
of any other Junior Creditor hereunder. Nothing contained herein, and no
action
taken by any Junior Creditor pursuant hereto, shall be deemed to constitute
the
Junior Creditors as a partnership, an association, a joint venture or any
other
kind of entity, or create a presumption that the Junior Creditors are in
any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement. Each Junior Creditor shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement, and it shall not be
necessary for any other Junior Creditor to be joined as an additional party
in
any proceeding for such purpose.
[SIGNATURES
BEGIN ON NEXT PAGE]
-22-
IN
WITNESS WHEREOF, this Debt Subordination and Intercreditor Agreement has
been
executed and delivered as of the date first written above
Senior
Creditor: ACF
CGS, L.L.C., as
Agent
under the Senior Loan Agreement and as Senior Lender
By:
Name:
Title:
[Signature
Page to Debt Subordination and Intercreditor Agreement]
-23-
Junior
Agent: ENABLE
GROWTH PARTNERS, L.P.
By:
Name:
Title:
[Signature
Page to Debt Subordination and Intercreditor Agreement]
-24-
Junior
Creditors: MIDSUMMER
INVESTMENT, LTD.
By:
Name:
Title:
Notice
Address:
Attn:
______________________
[Signature
Page to Debt Subordination and Intercreditor
Agreement]
