SUBORDINATION AND INTERCREDITOR AGREEMENT
Exhibit 10.5
THIS SUBORDINATION AND INTERCREDITOR
AGREEMENT (as amended, restated, supplemented or otherwise
modified, this “Agreement”) is entered
into as of this February ___, 2018, by and among (i) GPB Debt
Holdings II, LLC, a Delaware limited liability company, in its
capacity as collateral agent for each of the investors listed on
Schedule I hereto under and pursuant to the Senior Security
Agreement and the Purchase Agreement (each as hereinafter defined)
(in such capacity, together with its successors and assigns in such
capacity, the “Senior Agent”), (ii) each
of the investors listed on Schedule I attached hereto designated as
“Subordinated Creditors” (collectively, the
“Subordinated
Creditors”), and (iii) MEDITE Cancer Diagnostics, Inc.
(“Borrower”).
R E C I T A L S
A.
The Senior Creditor
and the Borrower are entering into that certain Securities Purchase
Agreement of even date herewith (as the same may be amended,
supplemented or otherwise modified from time to time as permitted
hereunder, the “Purchase Agreement”),
pursuant to which, among other things, the Senior Creditor has
agreed, subject to the terms and conditions set forth in the
Purchase Agreement, to purchase the Note (as defined therein) to be
issued by the Borrower. The Senior Debt of the Borrower under the
Purchase Agreement and Note is secured by security interests in and
liens on substantially all of the assets of the Obligors (as
defined herein) pursuant to that certain Security Agreement, dated
as of the date hereof, to be entered into by and among the Senior
Agent as a debtor and collateral agent, the Borrower and the other
Obligors parties thereto (the “Senior Security
Agreement”, together with the other collateral and
transaction documents executed and delivered in connection with the
Purchase Agreement and the Note, the “Senior Documents”).
Capitalized terms used but not defined herein shall have the
meanings set forth in the Purchase Agreement.
B.
As an inducement to
and as one of the conditions precedent to the agreement of the
Senior Creditor to consummate the transactions contemplated by the
Purchase Agreement, the Senior Creditor has required the execution
and delivery of this Agreement by the Subordinated Creditors and
the Company in order to set forth the relative rights and
priorities of the Senior Agent under the Transaction Documents (as
defined below) and the Subordinated Creditors under the
Subordinated Debt Transaction Documents (as defined
below).
NOW, THEREFORE, in order to induce the
Senior Creditor to consummate the transactions contemplated by the
Purchase Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, the
parties hereto hereby agree as follows:
1.
Definitions.
The following terms shall have the following meanings in this
Agreement:
“Bankruptcy
Code” shall mean Title 11 of the United
States Code, as amended from time to time and any successor statute
and all rules and regulations promulgated thereunder.
“Distribution”
means, with
respect to any indebtedness or obligation: (a) any payment or
distribution by any Person of cash, securities (other than (i)
Common Stock issued pursuant to a conversion by the Subordinated
Creditors pursuant to the 12% Secured Convertible Notes or
hereunder or (ii) any penalty incurred by the Company as a result
of its failure to timely deliver Common Stock pursuant to the terms
of the 12% Secured Convertible Notes) or other property, by set-off
or otherwise, on account of such indebtedness or obligation; (b)
any redemption, purchase or other acquisition of such indebtedness
or obligation by any Person; or (c) the granting of any lien or
security interest to or for the benefit of the holders of such
indebtedness or obligation in or upon any property of any
Person
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“Enforcement
Action” shall mean: (a) to take from or for the
account of the Company or any Obligor or any other guarantor of the
Subordinated Debt, by set-off or in any other manner, the whole or
any part of any moneys which may now or hereafter be owing by the
Company, any other obligor or or any such guarantor with respect to
the Subordinated Debt; (b) to ask for, demand or xxx for payment
of, or to initiate or participate with others in any suit, action
or proceeding against the Company, any other Obligor or any such
guarantor to (i) enforce payment of or to collect the whole or any
part of the Subordinated Debt or (ii) commence judicial enforcement
of any of the rights and remedies under the Subordinated Debt
Documents or applicable law with respect to the Subordinated Debt;
(c) to accelerate the Subordinated Debt; (d) to exercise any put
option or to cause the Company, any other Obligor or any such
guarantor to honor any redemption or mandatory prepayment
obligation under any Subordinated Debt Transaction Document; (e) to
notify account debtors or directly collect accounts receivable or
other payment rights of the Company, any other Obligor or any such
guarantor; or (f) take any action under the provisions of any state
or federal law, or under any contract or agreement, to enforce,
foreclose upon, take possession of or sell any property or assets
of the Company, any other Obligor or any such
guarantor.
“Obligor”
means each of the Borrower, the Borrower’s direct and
indirect subsidiaries and any other Person that now or hereafter
is, or whose assets now or hereafter are, liable for all or any
portion of the Senior Debt.
“Paid in
Full” of “Payment in
Full” means that: (a) all Senior Debt has been
indefeasibly paid in full in cash or converted to shares of Common
Stock pursuant to the terms of the Note (in each case, other than
contingent indemnification obligations for which no claim yet has
been asserted in writing); (b) all commitments to lend or purchase
any Note under the Transaction Documents have been terminated and
no Person has any further right to obtain loans or other extensions
of credit under the Transaction Documents; and (c) any costs,
expenses and contingent indemnification obligations which are not
yet due and payable but with respect to which a claim is pending or
may reasonably be expected to be asserted under the Transaction
Documents have been paid in full in cash.
“Permitted
Refinancing” shall mean any refinancing of the
Senior Debt under the Transaction Documents, provided that the
financing documentation entered into by the Borrower in connection
with such Permitted Refinancing constitutes Permitted Refinancing
Senior Debt Documents.
“Permitted
Refinancing Senior Debt Documents” shall mean any financing
documentation which replaces the Transaction Documents and pursuant
to which the Senior Debt under the Transaction Documents is
refinanced, as such financing documentation may be amended,
supplemented or otherwise modified from time to time in accordance
with the terms of this Agreement.
“Permitted
Subordinated Debt Payments” means the regularly scheduled
payments of principal and interest in respect of the Subordinated
Note (as in effect on the date hereof), provided that no Senior
Payment Default, Senior Covenant Default or Equity Conditions
Failure (as defined in the Notes) has occurred and is
continuing.
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“Person” means
any natural person, corporation, general or limited partnership,
limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity.
“Proceeding”
shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution,
reorganization, assignment for the benefit of creditors,
appointment of a custodian, receiver, trustee or other officer with
similar powers or any other proceeding for the liquidation,
dissolution or other winding up of a Person.
“Senior Covenant
Default” shall mean any “Event of Default”
(other than a Senior Payment Default) under the Note, or any
condition or event that, after notice or lapse of time or both,
would constitute such an Event of Default (other than a Senior
Payment Default) if that condition or event were not cured or
removed within any applicable grace or cure period set forth
therein.
“Senior
Creditor” shall mean the holders of the
Senior Debt from time to time party to the Purchase
Agreement.
“Senior
Debt” shall mean all obligations, liabilities and
indebtedness of every nature of any Obligor or guarantor from time
to time owed to the Senior Creditor and Senior Agent under the
Transaction Documents, including, without limitation, the principal
amount of all debts, claims and indebtedness, accrued and unpaid
interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now
and from time to time hereafter owing, due or payable, whether
before or after the filing of a Proceeding under the Bankruptcy
Code together with (a) any amendments, modifications, renewals or
extensions thereof to the extent in accordance with the terms of
this Agreement and (b) any interest accruing thereon after the
commencement of a Proceeding, without regard to whether or not such
interest is an allowed claim.
“Senior
Default” shall mean any Senior Payment Default or
Senior Covenant Default.
“Senior Default
Notice” shall mean a written notice from
the Senior Agent or any Senior Creditor pursuant to which the
Subordinated Creditors are notified of the occurrence of a Senior
Default, which notice incorporates a reasonably detailed
description of such Senior Default.
“Senior Payment
Default” shall mean any “Event of Default”
under the Note resulting from the failure of the Borrower to pay to
any Senior Creditor, on a timely basis, any principal, interest,
fees or other obligations under the Transaction Documents,
including, without limitation, any default in payment of Senior
Debt after acceleration thereof or the delivery of any Redemption
Notice (as defined in the Senior Note) with respect
thereto.
“Subordinated
Debt” shall mean all of the obligations of the
Obligors or any other guarantor to each Subordinated Creditor
evidenced by or incurred pursuant to the Subordinated Debt
Transaction Documents.
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“Subordinated Debt
Default” shall mean a default in the payment of the
Subordinated Debt or in the performance of any term, covenant or
condition contained in the Subordinated Debt Transaction Documents
(other than the Note) or any other occurrence permitting the
Subordinated Creditors to accelerate the payment of, put or cause
the redemption of all or any portion of the Subordinated Debt or
any Subordinated Debt Transaction Document.
“Subordinated Debt
Transaction Documents” shall mean the Subordinated Note
and the Subordinated Security Documents.
“Subordinated Debt
Default Notice” shall mean a written notice from the
Subordinated Creditors or the Company to the Senior Creditor and
the Senior Agent pursuant to which the Senior Creditor and Senior
Agent are notified of the occurrence of a Subordinated Debt
Default, which notice incorporates a reasonably detailed
description of such Subordinated Debt Default.
“Transaction
Documents” shall mean the Purchase Agreement,
the Transaction Documents and all other agreements, documents and
instruments executed from time to time in connection therewith, as
the same may be amended, supplemented or otherwise modified from
time to time subject to the terms of this Agreement.
2.
Subordination.
2.1
Subordination of
Subordinated Debt to Senior Debt. The Borrower covenants and
agrees, and each Subordinated Creditor by its execution of this
Agreement likewise covenants and agrees, notwithstanding anything
to the contrary contained in any of the Transaction Documents, that
the payment of any and all of the Subordinated Debt shall be
subordinate and subject in right and time of payment, to the extent
and in the manner hereinafter set forth, to the prior Payment in
Full of all Senior Debt. Each holder of Senior Debt, whether now
outstanding or hereafter created, incurred, assumed or guaranteed,
shall be deemed to have acquired Senior Debt in reliance upon the
provisions contained in this Agreement.
2.2
Liquidation,
Dissolution, Bankruptcy. In the event of any Proceeding
involving the Borrower or any Obligor:
(a)
All Senior Debt
shall first be Paid in Full before any Distribution, whether in
cash, securities or other property, shall be made to the
Subordinated Creditors on account of any Subordinated
Debt.
(b)
Any Distribution,
whether in cash, securities or other property which would
otherwise, but for the terms hereof, be payable or deliverable in
respect of the Subordinated Debt shall be paid or delivered
directly to the Senior Agent (for the benefit of the Senior
Creditor and to be applied to the outstanding amount of Senior Debt
held by the Senior Creditor) until all Senior Debt is Paid in Full.
Until the Senior Debt is Paid in Full, (i) each Subordinated
Creditor irrevocably authorizes, empowers and directs any debtor,
debtor in possession, receiver, trustee, liquidator, custodian,
conservator or other Person having authority, to pay or otherwise
deliver all such Distributions to the Senior Agent for the benefit
of the Senior Creditor, and (ii) each Subordinated Creditor also
irrevocably authorizes and empowers the Senior Agent, in the name
of Subordinated Creditor, to demand, xxx for, collect and receive
any and all such Distributions.
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(c)
Each Subordinated
Creditor agrees not to initiate, prosecute or participate in any
claim, action or other proceeding challenging the enforceability,
validity, perfection or priority of the Senior Debt or any liens
and security interests securing the Senior Debt.
(d)
Each Subordinated
Creditor agrees that the Senior Creditor may consent to the use of
cash collateral or provide financing to the Borrower on such terms
and conditions and in such amounts as the Senior Creditor, in its
sole discretion, may decide. Each Subordinated Creditor agrees not
to object to any of the foregoing. Each Subordinated Creditor
agrees that it will: (i) not seek to provide financing to the
Borrower in any Proceeding; (ii) support, and not object to or
oppose, any sale or other disposition of any property under Section
363 of the Bankruptcy Code or any other provision of the Bankruptcy
Code or applicable law if the Senior Creditors have consented to
such sale or disposition; and (iii) not propose, seek and/or
support confirmation of any plan to which the Senior Creditor has
not consented in writing; each Subordinated Creditor agrees to
object to and vote to reject confirmation of any plan which the
Senior Creditor has objected to and/or rejected in writing. Each
Subordinated Creditor waives any claim it may now or hereafter have
arising out of the Senior Creditor’s election, in any
Proceeding instituted under the Bankruptcy Code, of the application
of Section 1111(b)(2) of the Bankruptcy Code, and/or any borrowing
or grant of a security interest under Section 364 of the Bankruptcy
Code by the Borrower, as debtor in possession.
(e)
Each Subordinated
Creditor hereby irrevocably authorizes, empowers and appoints the
Senior Agent as its agent and attorney-in-fact to (i) execute,
verify, deliver and file proofs of claim in respect of the
Subordinated Debt upon the failure of any Subordinated Creditor
promptly to do so prior to ten (10) Business Days before the
expiration of the time to file any such proof of claim, and (ii)
vote such claim in any such Proceeding upon the failure of any
Subordinated Creditor to do so prior to five (5) Business Days
before the expiration of the time to vote any such claim;
provided,
however, that the
Senior Agent shall not have any obligation to execute, verify,
deliver, file and/or vote any such proof of claim. In the event
that the Senior Agent votes any claim in accordance with the
authority granted hereby, no Subordinated Creditor shall be
entitled to change or withdraw such vote.
(f)
The Senior Debt
shall continue to be treated as Senior Debt and the provisions of
this Agreement shall continue to govern the relative rights and
priorities of the Senior Agent (for the benefit of the Senior
Creditors) and the Subordinated Creditors even if all or part of
the Senior Debt are subordinated, set aside, avoided, invalidated
or disallowed in connection with any such Proceeding, and this
Agreement shall be reinstated if at any time any payment of any of
the Senior Debt is rescinded or must otherwise be returned by any
holder of Senior Debt or any representative of such
holder.
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2.3
Subordinated Debt
Payment Restrictions.
(a)
Notwithstanding the
terms of the Subordinated Debt Transaction Documents, the Borrower
hereby agrees that it may not make, directly or indirectly, and
each Subordinated Creditor hereby agrees that it will not accept,
any Distribution with respect to the Subordinated Debt until the
Senior Debt is Paid in Full other than, subject to the terms of
Section 2.2 of this Agreement, Permitted Subordinated Debt
Payments, which shall continue unabated in the absence of a Senior
Default or a Proceeding; provided, however, that the Borrower and
each Subordinated Creditor further agree that no Permitted
Subordinated Debt Payment or any other Distribution may be made by
the Borrower, directly or indirectly, or accepted by such
Subordinated Creditor if, at the time of such payment, any Senior
Default exists; provided, further, that, in the event
that a Senior Default exists but a Subordinated Creditor has not
received any notice of such Senior Default and accepts a Permitted
Subordinated Debt Payment or any other Distribution, then and in
such event the Subordinated Creditor, upon receiving a notice of
such Senior Default, shall immediately deliver such Permitted
Subordinated Debt Payment or other Distribution, as the case may
be, to Senior Agent as set forth in Section 2.5 of this
Agreement.
(b) The
Borrower may resume Permitted Subordinated Debt Payments (and may
make any Permitted Subordinated Debt Payments missed due to the
application of paragraph (a) of this Section 2.3) upon the earliest
to occur of:
(i) in
the case of a Senior Payment Default or a Senior Covenant Default,
as applicable, upon a cure or waiver thereof; or
(ii) all
of the Senior Debt being Paid in Full.
(c) No
Senior Default shall be deemed to have been waived for purposes of
this Section 2.3 unless and until the Borrower shall have received
a written waiver from the Senior Agent.
(d) Notwithstanding
any provisions to the contrary, the failure of the Borrower to make
any payment with respect to the Subordinated Debt by reason of the
operation of Section 2.3 shall not be construed as preventing the
occurrence of a Subordinated Debt Default under the applicable
Subordinated Debt Documents.
The
provisions of this Section 2.3 shall not apply to any payment with
respect to which Section 2.2 would be applicable.
2.4
Subordinated Debt
Standstill Provisions. Until the Senior Debt is Paid in
Full, no Subordinated Creditor shall, without the prior written
consent of the Senior Creditor take any Enforcement Action with
respect to the Subordinated Debt.
2.5
Incorrect
Payments. If any Distribution on account of the Subordinated
Debt not permitted to be made by an Obligor or accepted by any
Subordinated Creditor under this Agreement is made and received by
such Subordinated Creditor, such Distribution shall not be
commingled with any of the assets of such Subordinated Creditor,
shall be deemed to be held in trust by such Subordinated Creditor
for the benefit of the Senior Agent and shall be promptly paid over
to the Senior Agent (for the benefit of the Senior Creditor for
application pro rata against the outstanding amount of Senior Debt
held by the Senior Creditor) to the payment of the Senior Debt then
remaining unpaid, until all of the Senior Debt is Paid in
Full.
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2.6
Seniority of Liens
Securing the Senior Debt. Each Subordinated Creditor by its
execution of this Agreement covenants and agrees, notwithstanding
anything to the contrary contained in any of the Subordinated Debt
Transaction Documents, that prior to the Payment in Full of the
Senior Debt, each Subordinated Creditor’s security interest
in and Lien (as defined in the Senior Security Agreement) on the
Collateral (as defined in the Senior Security Agreement) to secure
the Subordinated Debt shall be and hereby are subordinate for all
purposes and in all respects to the Senior Agent's security
interests in and Liens on the Collateral to secure the Senior Debt,
regardless of the order or time of attachment, or the order, time
or manner of perfection, or the order or time of filing or
recordation of any document or instrument, or other method of
perfecting a Lien. The Lien priorities set forth in the immediately
preceding sentence shall not be altered or otherwise affected by
any amendment, modification, supplement, extension, renewal,
restatement, replacement or refinancing of any of the Senior Debt
or the Subordinated Debt, by any failure to perfect the Senior
Agent's security interest in the Collateral, the subordination of
the Senior Agent's Lien on the Collateral, the avoidance or
invalidation of the Senior Agent's Lien or by any other action or
inaction which any Senior Creditor may take or fail to take with
respect to the Collateral. The Subordinated Creditor shall not
contest the validity, priority or perfection of the Senior
Creditor’s security interest in any collateral in which the
Subordinated Creditor may also have an interest. For the avoidance
of doubt, notwithstanding anything to the contrary contained in any
of the Subordinated Debt Transaction Documents, the Subordinated
Creditors by their execution of this Agreement consent to the
Senior Agent’s filing of Liens (including, without
limitation, UCC-1 financing statements) against the assets of the
Obligors. The Senior Creditor may take action to foreclose or
otherwise realize upon, or protect its interest in, the collateral,
in accordance with its agreements with the Obligors, at any time,
without the consent of the Subordinated Creditor, and the
Subordinated Creditor agrees not to interfere in a manner which
would defeat the purpose of this Agreement in connection therewith.
So long as any part of the Senior Debt is outstanding, if the
Senior Creditor has agreed to release its security interest in any
of the collateral in connection with the realization of any of its
rights with respect to such collateral in any commercially
reasonable disposition, the Senior Creditor is hereby authorized as
the Creditor’s attorney in fact to execute releases and
discharges of the Subordinated Creditor’s liens and security
interests in such collateral.
2.7
Sale,
Transfer or other Disposition of Subordinated
Debt.
(a)
No Subordinated
Creditor shall sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Debt held by it or
any Subordinated Debt Transaction Document: (i) without giving prior written notice of
such action to the Senior Agent; and (ii) unless, prior to the
consummation of any such action, the transferee thereof shall
execute and deliver to the Senior Agent an agreement substantially
identical to this Agreement, providing for the continued
subordination of the Subordinated Debt to the Senior Debt as
provided herein and for the continued effectiveness of all of the
rights of the Senior Agent and the Senior Creditor arising under
this Agreement.
(b)
Notwithstanding the
failure of any transferee to execute or deliver an agreement
substantially identical to this Agreement, the subordination
effected hereby shall survive any sale, assignment, pledge,
disposition or other transfer of all or any portion of the
Subordinated Debt, and the terms of this Agreement shall be binding
upon the successors and assigns of the Subordinated Creditors, as
provided in Section 10 hereof.
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2.8
Legends.
Until the termination of this Agreement in accordance with Section
16 hereof, each Subordinated Creditor will cause to be clearly,
conspicuously and prominently inserted on the face of the
Subordinated Note, as well as any renewals or replacements thereof,
the following legend:
“This
instrument and the rights and obligations evidenced hereby are
subordinate in the manner and to the extent set forth in that
certain Subordination and Intercreditor Agreement (the
“Subordination
Agreement”) dated as of [__], 2018 by and among the holders of Note
(as such term is defined in the Subordination Agreement)
(collectively, the “Senior Creditor”) issued
by the Borrower (as defined below) pursuant to that certain
Securities Purchase Agreement dated as of [___], 2018, by and among the Borrower and the Senior
Creditor from time to time party thereto (as the same may be
amended, supplemented or otherwise modified from time to time
subject to the terms of the Subordination Agreement, the
“Securities Purchase
Agreement”), the holders of the Subordinated Note (as
such term is defined in the Subordination Agreement) (collectively,
the “Subordinated
Creditors”), and the Borrower to the indebtedness
(including interest) owed by the Borrower to the Senior Creditor
under the Note and to indebtedness refinancing the indebtedness
originally issued in connection therewith, subject to the terms of
the Subordination Agreement; and each holder of this instrument, by
its acceptance hereof, irrevocably agrees to be bound by the
provisions of the Subordination Agreement.”
3.
Modifications to
Transaction Documents; Subordinated Debt Transaction
Documents. The Transaction Documents may be amended,
restated, supplemented or otherwise modified in accordance with,
and to the extent permitted by, the terms and provisions contained
in the Transaction Documents. The Subordinated Debt Transaction
Documents may not be amended, restated, supplemented or otherwise
modified without the prior consent of all of the Note
holders.
4.
Waiver of Certain
Rights by Subordinated Creditor. Each Subordinated Creditor hereby
waives any rights it may have under applicable law to assert the
doctrine of marshaling or to otherwise require the Senior Agent or
the Senior Creditors to marshal any property of the Borrower or any
other Obligor of the Senior Debt for the benefit of such
Subordinated Creditor or to pursue any other remedy in its power.
The Subordinated Creditors waive notice of acceptance of this
Agreement and presentment, demand, protest, notice of protest,
dishonor, notice of dishonor, notice of default, notice of intent
to accelerate or demand payment of any Senior Debt any and all
other notices to which the Subordinated Creditor might otherwise be
entitled, and diligence in collecting any Senior Debt, and agrees
that the Senior Creditor may, once or any number of times, modify
the terms of any Senior Debt, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all
Senior Debt, , all without notice to the Subordinated Creditor and
without affecting in any manner the unconditional obligations of
the Subordinated Creditor under this Agreement
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5.
Representations and
Warranties.
5.1
Representations and
Warranties of Each Subordinated Creditor. Each Subordinated
Creditor hereby represents and warrants to the Senior Creditors
that as of the date hereof: (a) if such Subordinated Creditor is a
corporation, limited liability company, limited partnership or
partnership, as applicable, it is duly formed and validly existing
under the laws of the state of its organization or formation; (b)
such Subordinated Creditor has the power and authority and, in the
case of any Subordinated Creditor that is a natural person, the
legal capacity, to enter into, execute, deliver and carry out the
terms of this Agreement, all of which have been duly authorized by
all proper and necessary action; (c) the execution of this
Agreement by such Subordinated Creditor will not violate or
conflict with the organizational documents of such Subordinated
Creditor, (if other than a natural person) any material agreement
binding upon such Subordinated Creditor or any law, regulation or
order or require any consent or approval which has not been
obtained; (d) this Agreement is the legal, valid and binding
obligation of such Subordinated Creditor, enforceable against such
Subordinated Creditor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by equitable
principles; (e) such Subordinated Creditor is the sole owner,
beneficially and of record, of the Subordinated Debt Transaction
Documents and the Subordinated Debt; and (f) the Subordinated Debt
is, and at all times prior to the termination of this Agreement
shall remain, an unsecured obligation of the Borrower. The
Subordinated Creditors deliver this Agreement based solely on their
independent investigation of (or decision not to investigate) the
financial condition of the Borrower and are not relying on any
information furnished by the Senior Creditor. The Subordinated
Creditor assumes full responsibility for obtaining any further
information concerning the Borrower’s financial condition,
the status of the Senior Debt or any other matter which the
Subordinated Creditor may deem necessary or appropriate now or
later.
5.2
Representations and
Warranties of Senior Agent. The Senior Agent hereby
represents and warrants to the Subordinated Creditors that as of
the date hereof: (a) the Senior Agent is a limited liability
company duly formed and
validly existing under the laws of the state of its organization or
formation; (b) the Senior Agent has the power and authority to
enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and
necessary action; (c) the execution of this Agreement by Senior
Agent will not violate or conflict with the organizational
documents of the Senior Agent, any material agreement binding upon
the Senior Agent or any law, regulation or order or require any
consent or approval which has not been obtained; and (d) this
Agreement is the legal, valid and binding obligation of the Senior
Agent, enforceable against the Senior Agent in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or
by equitable principles.
6.
Subrogation. Until
all Senior Debt is Paid in Full, each Subordinated Creditor shall
be subrogated to the rights of the Senior Agent (for the benefit of
the Senior Creditors) to receive Distributions with respect to the
Senior Debt until the Subordinated Debt is paid in full. Each
Subordinated Creditor agrees that in the event that all or any part
of a payment made with respect to the Senior Debt is recovered from
the holders of the Senior Debt in a Proceeding or otherwise, any
Distribution received by such Subordinated Creditor with respect to
the Subordinated Debt at any time after the date of the payment
that is so recovered, whether pursuant to the right of subrogation
provided for in this Agreement or otherwise, shall be deemed to
have been received by such Subordinated Creditor in trust as
property of the holders of the Senior Debt, and such Subordinated
Creditor shall forthwith deliver the same to the Senior Agent for
application to the Senior Debt until the Senior Debt is Paid in
Full. A Distribution made pursuant to this Agreement to the Senior
Agent for the benefit of the Senior Creditors which otherwise would
have been made to the Subordinated Creditors is not, as between the
Borrower and the Subordinated Creditors, a payment by the Borrower
to or on account of the Senior Debt.
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7.
Modification.
Any modification or waiver of any provision of this Agreement, or
any consent to any departure by any party from the terms hereof,
shall not be effective in any event unless the same is in writing
and signed by the Senior Agent and the Subordinated Creditors, and
then such modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose given. Any
notice to or demand on any party hereto in any event not
specifically required hereunder shall not entitle the party
receiving such notice or demand to any other or further notice or
demand in the same, similar or other circumstances unless
specifically required hereunder.
8.
Further
Assurances. Each party to this Agreement promptly shall
execute and deliver such further instruments and agreements and do
such further acts and things as may be reasonably requested in
writing by any other party hereto that may be necessary or
desirable in order to effect fully the purposes of this
Agreement.
9.
Notices. Any
notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon
receipt, if delivered personally; (ii) when sent, if sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party);
(iii) when sent, if sent by e-mail (provided that such sent e-mail
is kept on file (whether electronically or otherwise) by the
sending party and the sending party does not receive an
automatically generated message from the recipient’s e-mail
server that such e-mail could not be delivered to such recipient)
and (iv) if sent by overnight courier service, one (1) Business Day
after deposit with an overnight courier service with next day
delivery specified, in each case, properly addressed to the party
to receive the same. The addresses, facsimile numbers and e-mail
addresses for such communications shall be:
If to
the Borrower:
______________________
______________________
______________________
______________________
If to
the Senior Agent:
GPB
Debt Holdings II, LLC
000
Xxxx 00Xx
Xxxxxx, Xxxxx 0
Xxx
Xxxx, XX 00000
Attn: Evan
Myrianthropoulos
Xxx
Cruetz
-10-
If to a
Senior Creditor or a Subordinated Creditor, to its address,
facsimile number set forth on the Schedule I, with copies to such
Senior Creditor’s or Subordinated Creditor’s
representatives as set forth on the Schedule of
Buyers,
with a
copy (for informational purposes only) to:
Gracin
& Xxxxxx, LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxx
Xxxxxx, Esq.
or to
such other address, facsimile number or e-mail address and/or to
the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days
prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the
time, date and recipient facsimile number or (C) provided by an
overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iv) above,
respectively. A copy of the e-mail transmission containing the
time, date and recipient e-mail address shall be rebuttable
evidence of receipt by e-mail in accordance with clause (iii)
above.
10.
Successors and
Assigns. This Agreement shall inure to the benefit of, and
shall be binding upon, the respective successors and permitted
assigns of the Senior Agent, the Subordinated Creditors and the
Borrower, in each case to the extent permitted under this
Agreement, the Subordinated Debt Transaction Documents and the
Securities Purchase Transaction Documents. Notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer,
the Senior Debt shall, subject to the terms hereof, be and remain
Senior Debt for purposes of this Agreement, and every permitted
assignee or transferee of any of the Senior Debt or of any interest
therein shall, to the extent of the interest of such permitted
assignee or transferee in the Senior Debt, be entitled to rely upon
and be the third party beneficiary of the subordination provided
under this Agreement and shall be entitled to enforce the terms and
provisions hereof to the same extent as if such assignee or
transferee were initially a party hereto.
11.
Relative
Rights. This
Agreement shall define the relative rights of the Senior Agent (for
the benefit of the Senior Creditors) and the Subordinated
Creditors. Nothing in this Agreement shall: (a) impair, as among
the Obligors and the Senior Creditors and as between the Borrower
and the Subordinated Creditors, the obligation of the Obligors with
respect to the payment of the Senior Debt and the obligation of the
Borrower with respect to the payment of the Subordinated Debt in
accordance with their respective terms; or (b) affect the relative
rights of the Senior Agent (for the benefit of the Senior Creditor)
or the Subordinated Creditors with respect to any other creditors
of the Borrower.
12.
Conflict. In
the event of any conflict between any term, covenant or condition
of this Agreement and any term, covenant or condition of any of the
Subordinated Debt Transaction Documents and/or the Transaction
Documents, the provisions of this Agreement shall control and
govern.
-11-
13.
Headings.
The paragraph headings used in this Agreement are for convenience
only and shall not affect the interpretation of any of the
provisions hereof.
14.
Counterparts. This
Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission or in a
pdf or similar electronic file shall be effective as delivery of a
manually executed counterpart hereof.
15.
Severability. In
the event that any provision of this Agreement is deemed to be
invalid, illegal or unenforceable by reason of the operation of any
law or by reason of the interpretation placed thereon by any court
or governmental authority, the validity, legality and
enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby, and the affected
provision shall be modified to the minimum extent permitted by law
so as most fully to achieve the intention of this
Agreement.
16.
Continuation of
Subordination; Termination of Agreement. This Agreement
shall remain in full force and effect until the Senior Debt is Paid
in Full after which this Agreement shall terminate without further
action on the part of the parties hereto.
17.
Governing Law;
Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of
New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws
of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough
of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by
law. Nothing contained herein shall be deemed or operate to
preclude the Senior Agent or any Subordinated Creditor from
bringing suit or taking other legal action against the Obligors or
the Original Obligors, as the case may be, in any other
jurisdiction to collect on the Obligors or the Senior
Obligors’, as the case may be, obligations to such Senior
Agent or Subordinated Creditor or to enforce a judgment or other
court ruling in favor of such Senior Agent or Subordinated
Creditor. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
[Signatures Immediately Follow]
-12-
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date first
above written.
|
BORROWER
|
|
By: Name:
Title:
|
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date first
above written.
SENIOR AGENT :
GPB
DEBT HOLDINGS II, LLC By:
Name:
Title:
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date first
above written.
SUBORDINATED CREDITORS :
____________________________________
SCHEDULE I
|
Senior Creditors
|
|
|
Name:
|
Address:
|
|
GPB
Debt Holdings II, LLC
|
000
Xxxx 00Xx
Xxxxxx, Xxxxx 0
Xxx
Xxxx, XX 00000
|
|
Subordinated Creditors
|
|
|
Name:
|
Address and Facsimile Number:
|
|
|
|
|
|
|
-16-
