Exhibit 10.11
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement"), is entered
into as of December ___, 1998 between FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill") and NATIONAL MEDIA CORPORATION, a Delaware corporation
("Holdings"), with reference to the following recitals of fact:
WHEREAS, Quantum North America, Inc., a Delaware corporation
("Debtor") and Foothill have entered into that certain Loan and Security
Agreement dated as of the date hereof (as amended, modified, renewed, extended,
or replaced from time to time, the "Loan Agreement"), pursuant to which Foothill
has agreed to make certain loans to Debtor;
WHEREAS, Holdings has made or hereafter may make loans and
other advances to Debtor; and
WHEREAS, Holdings has agreed to the subordination of such
indebtedness to it, upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, conditions, representations, and warranties set forth herein and for
other good and valuable consideration, the parties hereto agree as follows:
SECTION 1 Definitions; Interpretation.
(a) TERMS DEFINED IN LOAN AGREEMENT. All capitalized terms
used in this Agreement and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.
(b) CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings:
"Dollars" means and refers to United States of America dollars
or such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts in the
United States of America.
"Insolvency Event" has the meaning set forth in SECTION 3.
"Senior Debt" shall mean all indebtedness and liabilities
(including all principal, interest (including interest accruing after the
commencement of a Proceeding whether or not such interest is allowed as a claim
therein), default interest, fees, charges, and collection expenses) now or
hereafter owed by Debtor under the Loan Agreement or any other Loan Document.
"Subordinated Debt" means all indebtedness, liabilities and
other monetary obligations of Debtor owing to Holdings, whether now existing or
hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or
undetermined, including all principal, all interest accrued thereon, all fees,
and all other amounts payable by Debtor to Holdings.
"Subordinated Debt Documents" means any agreement, note, or
other document evidencing the Subordinated Debt.
"Subordinated Debt Payment" means any payment or distribution
by or on behalf of Debtor, directly or indirectly, of assets of Debtor of any
kind or character, whether in cash, property or securities, including on account
of the purchase, redemption or other acquisition of Subordinated Debt, as a
result of any collection, sale or other disposition of collateral, or by setoff,
exchange or in any other manner, for or on account of the Subordinated Debt.
"Subordinated Lender Remedies" means any action which results
in (i) the sale, foreclosure, realization on or liquidation of any of Debtor's
assets or properties (ii) the execution on any judgment obtained against Debtor,
(iii) the acceleration of the Subordinated Debt, (iv) the filing of any petition
or lien under any bankruptcy, insolvency or creditors' rights laws with respect
to Debtor, or (v) the institution or exercise against Debtor of any suit, legal
action, arbitration or other enforcement remedy.
(c) INTERPRETATION. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection, clause, schedule, and exhibit references are to this
Agreement unless otherwise specified. References to agreements and other
contractual instruments shall be deemed to include all subsequent amendments and
other modifications thereto. References to statutes or regulations are to be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation referred to. The captions and
headings are for convenience of reference only and shall not affect the
construction of this Agreement.
SECTION 2 SUBORDINATION TO PAYMENT OF SENIOR DEBT.
All payments on account of the Subordinated Debt shall be
subject, subordinate and junior, in right of payment and exercise of remedies,
to the extent and in the manner set forth herein, to the prior payment, in full,
in cash (or other consideration acceptable to Foothill in its sole discretion
and agreed to by Foothill) of the Senior Debt.
SECTION 3 SUBORDINATION UPON ANY DISTRIBUTION OF ASSETS OF DEBTOR.
In the event of any payment or distribution of assets or
properties of Debtor of any kind or character, whether in cash, property, or
securities, upon the dissolution, winding up, or total or partial liquidation or
reorganization, readjustment, arrangement, or similar proceeding relating to
Debtor or its property, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership, arrangement or similar proceedings or upon an
assignment for the benefit of
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creditors, or upon any other marshaling or composition of the assets and
liabilities of Debtor, or otherwise (such events, collectively, the "Insolvency
Events"): (i) all amounts owing on account of the Senior Debt shall first be
paid, in full, in cash, or payment provided for in cash (or other consideration
acceptable to Foothill in its sole discretion and agreed to by Foothill), before
any Subordinated Debt Payment is made; and (ii) to the extent permitted by
applicable law, any Subordinated Debt Payment to which Holdings would be
entitled except for the provisions hereof, shall, in the event of any such
Insolvency Event, be paid or delivered by the trustee in bankruptcy, receiver,
assignee for the benefit of creditors, or other liquidating agent making such
payment or distribution directly to Foothill for application to the payment of
the Senior Debt in accordance with clause (i), after giving effect to any
concurrent payment or distribution or provision therefor to Foothill in respect
of such Senior Debt.
SECTION 4 PAYMENTS ON SUBORDINATED DEBT.
(a) PERMITTED PAYMENTS. So long as (i) no Event of Default has
occurred and is continuing or would result therefrom, and (ii) after giving
effect to such Subordinated Debt Payments Debtor shall have Excess Availability
of not less than $3,000,000, Debtor may make, and Holdings shall be entitled to
receive, Subordinated Debt Payments made in the ordinary course of business.
(b) PROHIBITION ON PAYMENTS. Notwithstanding the provisions of
SUBSECTION 4(A) above, (i) upon the occurrence and during the continuation of
any Event of Default, or (ii) if, after giving effect to such Subordinated Debt
Payment, Debtor shall have Excess Availability of less than $3,000,000 then, in
either case, no Subordinated Debt Payment shall be made or agreed to be made by
Debtor or accepted by Holdings on account of the principal of, premium or
interest on, or any other amounts in respect of the Subordinated Debt, and
Debtor shall not segregate or hold in trust money for any such payment or
distribution
SECTION 5 SUBORDINATION OF REMEDIES.
As long as any Senior Debt shall remain outstanding and
unpaid, Holdings shall not, without the prior written consent of Foothill:
(i) accelerate, make demand, or otherwise make due and payable
prior to the original stated maturity thereof any Subordinated Debt or bring
suit or institute any other actions or proceedings to enforce its rights or
interests in respect of the obligations of Debtor owing to Holdings;
(ii) exercise any rights under or with respect to guaranties
of the Subordinated Debt, if any;
(iii) exercise any rights to setoffs and counterclaims in
respect of any indebtedness, liabilities or obligations of Holdings to Debtor
against any of the Subordinated Debt; or
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(iv) commence, or cause to be commenced, or join with any
creditor other than Foothill in commencing, any bankruptcy, insolvency or
receivership proceeding against Debtor.
SECTION 6 PAYMENT OVER TO FOOTHILL.
Notwithstanding the provisions of SECTIONS 3, 4, AND 5, in the
event that any Subordinated Debt Payments shall be received in contravention of
such SECTIONS 3, 4, AND 5 by Holdings before all Senior Debt is paid, in full,
in cash (or other consideration acceptable to Foothill in its sole discretion
and agreed to by Foothill), such Subordinated Debt Payments shall be held in
trust for the benefit of Foothill and shall be paid over or delivered to
Foothill for application to the payment, in full, in cash (or other
consideration acceptable to Foothill in its sole discretion and agreed to by
Foothill) of all Senior Debt remaining unpaid to the extent necessary to give
effect to such SECTIONS 3, 4, AND 5, after giving effect to any concurrent
payments or distributions to Foothill in respect of the Senior Debt.
SECTION 7 AUTHORIZATION TO FOOTHILL.
If, while any Subordinated Debt is outstanding, any Insolvency
Event shall occur relating to Debtor or its property: (i) Foothill is hereby
irrevocably authorized and empowered (in the name of Holdings or otherwise), but
shall have no obligation, to demand, xxx for, collect, and receive every payment
or distribution in respect of the Subordinated Debt and give acquittance
therefor and to file claims and proofs of claim (if Holdings refuses to file, or
does not timely file, such claims or proofs of claims) and take such other
action as it may deem necessary or advisable for the exercise or enforcement of
any of the rights or interests of Foothill; and (ii) Holdings shall promptly
take such action as Foothill reasonably may request (A) to collect the
Subordinated Debt for the account of Foothill and to file appropriate claims or
proofs of claim in respect of the Subordinated Debt, (B) to execute and deliver
to Foothill such powers of attorney, assignments, and other instruments as it
may request to enable it to enforce any and all claims with respect to the
Subordinated Debt, and (C) to collect and receive any and all Subordinated Debt
Payments to the extent permitted by applicable law.
SECTION 8 CERTAIN AGREEMENTS OF HOLDINGS.
(a) NO BENEFITS. Holdings understands that there may be
various agreements among Foothill and Debtor evidencing and governing the Senior
Debt, and Holdings acknowledges and agrees that such agreements are not intended
to confer any benefits on Holdings and that Foothill shall have no obligation to
Holdings or any other Person to exercise any rights, enforce any remedies, or
take any actions which may be available to them under such agreements.
(b) NO INTERFERENCE. Holdings acknowledges that Debtor has
granted Foothill a security interest in all of Debtor's assets, and agrees that,
so long as Holdings holds Subordinated Debt, Holdings will not interfere with or
in any manner oppose a disposition of any Collateral by Foothill in accordance
with the terms of the agreements governing such grants and applicable law.
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(c) RELIANCE BY FOOTHILL. Holdings acknowledges and agrees
that Foothill will have relied upon and will continue to rely upon the
subordination provisions provided for herein and the other provisions hereof in
entering into the Loan Documents and making or making the Advances thereunder.
(d) WAIVERS. Holdings waives any and all notice of the
incurrence of the Senior Debt or any part thereof and any right to require
marshaling of assets.
(e) OBLIGATIONS OF HOLDINGS NOT AFFECTED. Holdings agrees that
at any time and from time to time, without notice to or the consent of Holdings,
without incurring responsibility to Holdings, and without impairing or releasing
the subordination provided for herein or otherwise impairing the rights of
Foothill hereunder: (i) the time for Debtor's performance of or compliance with
any of its agreements contained in the Loan Documents may be extended or such
performance or compliance may be waived by Foothill; (ii) the agreements of
Debtor with respect to the Loan Documents may from time to time be modified by
Debtor and Foothill for the purpose of adding any requirements thereto or
changing in any manner the rights and obligations of Debtor or Foothill
thereunder; (iii) the manner, place or terms for payment of Senior Debt or any
portion thereof may be altered or the terms for payment extended, or the Senior
Debt may be renewed in whole or in part; (iv) the maturity of the Senior Debt
may be accelerated in accordance with the terms of any present or future
agreement by Debtor and Foothill; (v) any Collateral may be sold, exchanged,
released or substituted in accordance with the Loan Documents and any Lien in
favor of Foothill may be terminated, subordinated, or fail to be perfected or
become unperfected; (vi) any Person liable in any manner for Senior Debt may be
discharged, released, or substituted; and (vii) all other rights against Debtor,
any other Person, or with respect to any Collateral may be exercised (or
Foothill may waive or refrain from exercising such rights) in accordance with
the Loan Documents.
(f) RIGHTS OF FOOTHILL NOT TO BE IMPAIRED. No right of
Foothill to enforce the subordination provided for herein or to exercise its
other rights hereunder shall at any time in any way be prejudiced or impaired by
any act or failure to act by Debtor hereunder or under or in connection with the
other Loan Documents or by any noncompliance by Debtor with the terms and
provisions and covenants herein or in any other Loan Document, regardless of any
knowledge thereof Foothill may have or otherwise be charged with.
(g) FINANCIAL CONDITION OF DEBTOR. Holdings shall not have any
right to require Foothill to obtain or disclose any information with respect to:
(i) the financial condition or character of Debtor or the ability of Debtor to
pay and perform Senior Debt; (ii) the Senior Debt; (iii) the Collateral or other
security for any or all of the Senior Debt; (iv) the existence or nonexistence
of any guarantees of, or any other subordination agreements with respect to, all
or any part of the Senior Debt; (v) any action or inaction on the part of
Foothill or any other Person; or (vi) any other matter, except as otherwise
expressly required by any provision of any Loan Document or law (except to the
extent that any otherwise applicable requirement of law has been waived by
Holdings pursuant to a legally enforceable waiver).
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(h) ACQUISITION OF LIENS OR GUARANTIES. Unless otherwise
expressly permitted under the Loan Documents, Holdings shall not, without the
prior consent of Foothill, acquire any right or interest in or to any Collateral
or accept any guaranties for the Subordinated Debt.
SECTION 9 SUBROGATION.
(a) SUBROGATION. Until the payment and performance in full of
all Senior Debt, Holdings shall not have, and shall not directly or indirectly
exercise, any rights that it may acquire by way of subrogation under this
Agreement, by any payment or distribution to Foothill hereunder or otherwise.
(b) PAYMENTS OVER TO HOLDINGS. If any payment or distribution
to which Holdings would otherwise have been entitled but for the provisions of
SECTION 3, 4, OR 5 shall have been applied pursuant to the provisions of SECTION
3, 4, OR 5 to the payment of all amounts payable under the Senior Debt, Holdings
shall be entitled to receive from Foothill any payments or distributions
received by Foothill in excess of the amount sufficient to pay in full all
amounts payable under or in respect of the Senior Debt. If any such excess
payment is made to Foothill, Foothill shall promptly remit such excess to
Holdings and until so remitted shall hold such excess payment for the benefit of
Holdings.
SECTION 10 CONTINUING AGREEMENT; REINSTATEMENT.
(a) CONTINUING AGREEMENT. This Agreement is a continuing
agreement of subordination and shall continue in effect and be binding upon
Holdings until payment and performance in full of the Senior Debt. The
subordinations, agreements, and priorities set forth herein shall remain in full
force and effect regardless of whether any party hereto in the future seeks to
rescind, amend, terminate, or reform, by litigation or otherwise, its respective
agreements with Debtor.
(b) REINSTATEMENT. This Agreement shall continue to be
effective or shall be reinstated, as the case may be, if, for any reason, any
payment of the Senior Debt by or on behalf of Debtor shall be rescinded or must
otherwise be restored by Foothill, whether as a result of an Insolvency Event or
otherwise.
SECTION 11 TRANSFER OF SUBORDINATED DEBT.
Holdings may not assign or transfer its rights and obligations
in respect of the Subordinated Debt or any interest in the Subordinated Debt
without the prior written consent of Foothill (which consent shall not be
unreasonably withheld), and any such transferee or assignee, as a condition to
acquiring an interest in the Subordinated Debt shall agree to be bound hereby,
in form reasonably satisfactory to Foothill.
SECTION 12 OBLIGATIONS OF DEBTOR NOT AFFECTED.
The provisions of this Agreement are intended solely for the
purpose of defining the relative rights against Debtor of Holdings, on the one
hand, and Foothill, on the other hand.
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Nothing contained in this Agreement shall (i) impair, as between Debtor and
Holdings, the obligation of Debtor to pay its obligations with respect to the
Subordinated Debt as and when the same shall become due and payable in
accordance with the terms thereof, or (ii) otherwise affect the relative rights
against Debtor of Holdings, on the one hand, and the creditors of Debtor (other
than Foothill), on the other hand.
SECTION 13 FURTHER ASSURANCES AND ADDITIONAL ACTS.
(a) ENDORSEMENT OF SUBORDINATED DEBT DOCUMENTS. At the request
of Foothill, all documents and instruments evidencing any of the Subordinated
Debt shall be endorsed with a legend noting that such documents and instruments
are subject to this Agreement, and Holdings shall promptly deliver to Foothill
evidence of the same.
(b) FURTHER ASSURANCES AND ADDITIONAL ACTS. Each of Holdings
and Debtor shall execute, acknowledge, deliver, file, notarize and register at
its own reasonable expense all such further agreements, instruments,
certificates, financing statements, documents and assurances, and perform such
acts as Foothill reasonably shall deem necessary or appropriate to effectuate
the purposes of this Agreement, and promptly provide Foothill with evidence of
the foregoing reasonably satisfactory in form and substance to Foothill.
SECTION 14 NOTICES.
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by facsimile
transmission) and shall be mailed, sent, or delivered at or to the address or
facsimile number of the respective party or parties set forth below:
If to Foothill: FOOTHILL CAPITAL CORPORATION
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division Manager
Telecopier: 310.478.9788
With a copy to: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 X. Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Telecopier: 213.239.1324
If to Holdings: NATIONAL MEDIA CORPORATION
00000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Telecopies: 818.461.6530
With a copy to: BUCHALTER, NEMER, FIELDS & YOUNGER
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
Telecopier: 213.896-0400
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The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other parties. All notices and communications sent in accordance with this
section shall be effective (i) if delivered by hand, when delivered; (ii) if
sent by mail, upon the earlier of the date of receipt or five (5) Business Days
after deposit in the mail, first class (or air mail, with respect to
communications to be sent to or from the United States), postage prepaid; and
(iii) if sent by facsimile transmission, when sent.
SECTION 15 NO WAIVER; CUMULATIVE REMEDIES.
No failure on the part of Foothill to exercise, and no delay
in exercising, any right, remedy, power, or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power, or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power, or privilege. The rights and
remedies under this Agreement are cumulative and not exclusive of any rights,
remedies, powers, and privileges that may otherwise be available to Foothill.
SECTION 16 COSTS AND EXPENSES.
(a) PAYMENTS BY DEBTOR. Debtor agrees to pay to Foothill on
demand the reasonable out-of-pocket costs and expenses of Foothill, and the
reasonable fees and disbursements of counsel to Foothill, in connection with the
negotiation, preparation, execution, and delivery of this Agreement, and any
amendments, modifications, or waivers of the terms thereof.
(b) PAYMENTS BY DEBTOR AND HOLDINGS. Each of Debtor and
Holdings jointly and severally agrees to pay to Foothill on demand all
reasonable out-of-pocket costs and expenses of Foothill, and the fees and
disbursements of counsel, in connection, following a breach hereof, with the
enforcement or attempted enforcement of, and preservation of rights or interests
under, this Agreement, including any reasonable out-of-pocket losses, costs and
expenses sustained by Foothill as a result of any failure by any of Holdings to
perform or observe its obligations contained in this Agreement.
SECTION 17 SURVIVAL.
All covenants, agreements, representations and warranties made
in this Agreement shall, except to the extent otherwise provided herein, survive
the execution and delivery of this Agreement, and shall continue in full force
and effect so long as any Senior Debt remains unpaid. Without limiting the
generality of the foregoing, the obligations of Debtor and Holdings under
SECTION 16 shall survive the satisfaction of the Senior Debt.
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SECTION 18 BENEFITS OF AGREEMENT.
This Agreement is entered into for the sole protection and
benefit of the parties hereto and their successors and assigns, and no other
Person shall be a direct or indirect beneficiary of, or shall have any direct or
indirect cause of action or claim in connection with, this Agreement.
SECTION 19 BINDING EFFECT.
This Agreement shall be binding upon, inure to the benefit of
and be enforceable by Debtor, Holdings, and Foothill and their respective
successors and assigns.
SECTION 20 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
SECTION 21 SUBMISSION TO JURISDICTION.
HOLDINGS HEREBY (i) SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF CALIFORNIA AND THE FEDERAL COURTS OF THE UNITED
STATES SITTING IN THE STATE OF CALIFORNIA FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, (ii) AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH COURTS, (iii) IRREVOCABLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY OBJECTION WHICH THEY NOW OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE
OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY OF THE FOREGOING COURTS, AND ANY
OBJECTION ON THE GROUND THAT ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM AND (iv) AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 22 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of Debtor, Foothill, and Holdings with respect to the matters set
forth herein and supersedes any prior agreements, commitments, drafts,
communications, discussions, and understandings, oral or written, with respect
thereto.
(b) AMENDMENTS AND WAIVERS. No amendment to any provision of
this Agreement shall in any event be effective unless the same shall be in
writing and signed by Debtor, Holdings, and Foothill; and no waiver of any
provision of this Agreement, or consent to any departure by Debtor or Holdings
therefrom, shall in any event be effective unless the same
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shall be in writing and signed by Foothill. Any such amendment, waiver, or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 23 CONFLICTS.
In case of any conflict or inconsistency between any terms of
this Agreement, on the one hand, and any documents or instruments in respect of
the Subordinated Debt, on the other hand, then the terms of this Agreement shall
control.
SECTION 24 SEVERABILITY.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under all applicable
laws and regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement or the validity or effectiveness of such provision in any other
jurisdiction.
SECTION 25 INTERPRETATION.
This Agreement is the result of negotiations between, and has
been reviewed by counsel to, Foothill, Holdings, and Debtor and is the product
of all parties hereto. Accordingly, this Agreement shall not be construed
against Foothill merely because of Foothill's involvement in the preparation
hereof.
SECTION 26 COUNTERPARTS; TELEFACSIMILE EXECUTION.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile shall be equally as effective as delivery of
an original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
SECTION 27 TERMINATION OF AGREEMENT.
Upon payment and performance in full of the Senior Debt, this
Agreement shall terminate and Foothill shall promptly execute and deliver to
Debtor and Holdings such documents and instruments as shall be necessary to
evidence such termination; provided, however, that the obligations of Debtor and
Holdings under SECTION 16 shall survive such termination.
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SECTION 28 AGREEMENTS RELATIVE TO A BANKRUPTCY PETITION.
If, while any Subordinated Debt is outstanding, a petition
under chapter 11 of the Bankruptcy Code shall be filed by or against Debtor,
Holdings shall not accept a plan under chapter 11 of the Bankruptcy Code if the
class in which Foothill's claim is placed (i) is an impaired class under such
plan, and (ii) has not accepted such plan.
Holdings shall have the right, for 90 days after the
confirmation of a plan under chapter 11 of the Bankruptcy Code to purchase all
of the Stock and other securities of Borrower received by Foothill pursuant to
such plan for total consideration, in cash, equal to (a) the difference between
(i) the dollar amount of the Obligations, MINUS (ii) the cash received by
Foothill pursuant to such plan; PLUS (b) interest on such difference (at the
rate then applicable to Advances under the Loan Agreement).
[Remainder of page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
FOOTHILL CAPITAL CORPORATION,
a California Corporation
By:
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Name:
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Title
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NATIONAL MEDIA CORPORATION,
a Delaware corporation
By:
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Name:
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Title:
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DEBTOR ACKNOWLEDGEMENT
Debtor has received a copy of, and has read, the foregoing Subordination
Agreement. Debtor agrees to be bound by such agreement, and not to take any
action that would breach or violate the terms thereof. Debtor consents to the
execution, delivery, and performance of such agreement by Foothill and Holdings,
and agrees that Debtor's obligations to Foothill and Holdings are not diminished
by such agreement. Debtor acknowledges that it has no rights under the foregoing
agreement and is not a third party beneficiary of such agreement.
Dated as of the date first set forth above:
QUANTUM NORTH AMERICA, INC.
a Delaware corporation
By:
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Name:
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Title:
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