SUBORDINATED NOTE
Exhibit 99.2
| U.S. $25,000,000.00 |
May [__],
2018
|
FOR VALUE RECEIVED, the undersigned, [BORROWER], an exempted company
incorporated with limited liability under the laws of the Cayman
Islands (the "Maker"),
hereby promises to pay, subject to the provisions set forth on
Annex A hereto (the "Subordination
Provisions"), to the order of FUSION CONNECT, INC., a corporation
organized under the laws of Delaware (together with any subsequent
permitted holder hereof, the "Payee"), the principal sum of TWENTY
FIVE MILLION AND NO/100 UNITED STATES DOLLARS (U.S. $25,000,000.00)
not later than [May [__], 2024] or, if less, the unpaid principal
amount hereof on such date.
Terms
used herein have the meanings assigned to them on Annex A hereto.
In addition, terms not otherwise defined herein have the meanings
given to them in the Senior Credit Agreement (and, if any term is
used after the Senior Obligations have been Paid-in-Full, such term
shall have the meaning assigned to such term in the Senior Credit
Agreement as in effect when such Payment-in-Full
occurred).
By its
signature below and by its payment of the purchase price for this
Subordinated Note, the Payee hereby acknowledges and agrees that
the Subordination Provisions are an integral part of this
Subordinated Note, and irrevocably agrees to be bound by the terms
of this Subordinated Note, including the Subordination
Provisions.
1.
Interest;
Prepayments; Payment On Demand.
(a)
Subject in each
case to the Subordination Provisions, the Maker promises to pay
interest on the unpaid principal amount hereof on each Payment Date
from the date hereof until such principal amount is paid in full in
an amount, in U.S. Dollars, equal to the Subordinated Note Interest
Payment Amount for such Payment Date.
(b)
Subject in each
case to the Subordination Provisions, the Maker shall repay
outstanding principal of this Subordinated Note on each Payment
Date to the extent amounts are available for such payment under and
in accordance with the Priority of Payments (except that payments
on this Subordinated Note that may be made under clause (11) of the
Phase II Priority of Payments may be made solely at the option of
the Maker).
(c)
Following the
Payment-in-Full of the Senior Obligations, the outstanding
principal amount of this Subordinated Note, and accrued and unpaid
interest thereon, shall be payable UPON DEMAND of the
Payee.
2.
Use of Proceeds.
The
Maker shall use the proceeds of the issuance of this Subordinated
Note and of the Loans made under the Credit Agreement solely as
provided in Section 2.3 of the Senior Credit
Agreement.
3.
Representations and
Warranties.
(a)
Maker Representations,
Etc. The Maker hereby represents and warrants to the Payee
and the Senior Credit Agreement Holders as follows:
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(1)
Existence. The Maker is an exempted
company duly incorporated with limited liability under the laws of
the Cayman Islands, has all requisite corporate power, and has all
material governmental licenses, authorizations, consents and
approvals, necessary to own its assets and carry on its business as
now being or as proposed to be conducted and is qualified to do
business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where
the failure to be so qualified would not reasonably be expected to
have a material adverse effect on the business, operations,
properties, assets or financial condition of the
Maker.
(2)
No Breach. None of the execution and
delivery of this Subordinated Note, the making of the extension of
credit evidenced hereby, the consummation of the transactions
contemplated and compliance with the terms and provisions hereof
will conflict with or result in a breach of, or require any consent
under, its Organizational Documents, or any applicable law or
regulation, or any order, writ, injunction or decree of any court
or Governmental Authority, or any agreement or instrument to which
the Maker is a party or by which the Maker is bound or to which the
Maker is subject, or constitute a default under, or result in the
creation of any lien under, any such agreement or
instrument.
(3)
Action; Execution and Delivery;
Enforceability. The Maker has all necessary corporate power
and authority to execute, deliver and perform its obligations under
this Subordinated Note; the execution, delivery and performance by
the Maker of this Subordinated Note have been duly authorized by
all necessary corporate action on its part; and this Subordinated
Note has been duly and validly executed and delivered by the Maker
and constitutes its legal, valid and binding obligation,
enforceable against the Maker in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limited creditors' rights
generally or by equitable principles relating to
enforceability.
(4)
Approvals. No Governmental
Authorizations and no notices, filings or registrations with, any
Governmental Authority are necessary for the execution, delivery or
performance by the Maker of this Subordinated Note or for the
validity or enforceability hereof against the Maker.
(5)
Solvency. The Maker is, both before and
immediately after giving effect to the issuance of this
Subordinated Note and the borrowing of the Loans under the Senior
Credit Agreement, Solvent.
(6)
Consideration. The Maker acknowledges
and agrees that the issuance of this Subordinated Note to the Payee
on the terms set forth herein and in the Senior Credit Agreement is
an express condition to the making of the Loans by the Senior
Lenders under the Senior Credit Agreement and, accordingly, to the
acquisition of the Collateral Obligation by the Maker; that the
Senior Lenders would not otherwise extend credit to the Maker in
the transactions contemplated hereby and by the Senior Credit
Agreement; and, accordingly, that the Maker would not otherwise
extend credit under the Underlying Credit Agreement.
(b)
Payee Representations,
Etc. The Payee hereby represents and warrants to the Maker
and the Senior Credit Agreement Holders as follows:
(1)
Existence. The Payee is a corporation
duly organized and validly existing under the laws of the State of
Delaware, has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals,
necessary to own its assets and carry on its business as now being
or as proposed to be conducted and is qualified to do business in
all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary except where the failure to
be so qualified would not reasonably be expected to have a material
adverse effect on the business, operations, properties, assets or
financial condition of the Payee.
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(2)
No Breach. None of the execution and
delivery of this Subordinated Note, the making of the extension of
credit evidenced hereby, the consummation of the transactions
herein contemplated and compliance with the terms and provisions
hereof will conflict with or result in a breach of, or require any
consent under, its Organizational Documents, or any applicable law
or regulation, or any order, writ, injunction or decree of any
court or Governmental Authority, or any agreement or instrument to
which the Payee is a party or by which the Payee is bound or to
which the Payee is subject, or constitute a default under, or
result in the creation of any lien under, any such agreement or
instrument.
(3)
Action; Execution and Delivery;
Enforceability. The Payee has all necessary corporate power
and authority to execute, deliver and perform its obligations under
this Subordinated Note; the execution, delivery and performance by
the Payee of this Subordinated Note have been duly authorized by
all necessary corporate action on its part; and this Subordinated
Note has been duly and validly executed and delivered by the Payee
and constitutes its legal, valid and binding obligation,
enforceable against the Payee in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limited creditors' rights
generally or by equitable principles relating to
enforceability.
(4)
Approvals. No Governmental
Authorizations, and no notices, filings or registrations with any
Governmental Authority are necessary for the execution, delivery or
performance by the Payee of this Subordinated Note or for the
validity or enforceability hereof against the Payee.
(5)
Solvency. The Payee is, both before and
immediately after giving effect to its acquisition of this
Subordinated Note, Solvent.
(6)
Consideration. The Payee acknowledges
and agrees that it has received substantial benefit in the series
of related transactions entered into in connection with the
Underlying Credit Agreement; that the purchase of this Subordinated
Note by the Payee on the terms set forth herein and in the Senior
Credit Agreement is an express condition to the making of the Loans
by the Senior Lenders under the Senior Credit Agreement and,
accordingly, to the acquisition of the Collateral Obligation by the
Maker; that the Senior Lenders would not otherwise extend credit to
the Maker in the transactions contemplated hereby and by the Senior
Credit Agreement; that the Maker would not otherwise extend credit
under the Underlying Credit Agreement; and that, accordingly, the
transactions under the Underlying Credit Agreement would not occur
without the Payee's purchase of this Subordinated Note on the terms
and conditions set forth herein, in the Underlying Credit Agreement
and in the Credit Agreement.
(7)
Use of Proceeds. The Payee hereby
expressly consents to the use of proceeds of this Subordinated Note
and of the Loans made under the Senior Credit Agreement as set
forth in Section 2 above for all purposes, and acknowledges and
agrees that all such proceeds may be used, pledged, invested, used,
commingled or otherwise disposed of by the Maker, or otherwise used
in the Maker's business, in accordance with the terms set forth in
the Senior Credit Agreement, the Pledge and Security Agreement and
the other Transaction Documents referred to therein.
(8)
ERISA. No portion of this Subordinated
Note has been funded by the Payee with "plan assets" for purposes
of Section 3(42) of ERISA.
4.
Covenants.
The
Maker covenants and agrees with the Payee that, until payment in
full of all amounts payable by the Maker hereunder:
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(a)
Conduct of Business.
The Maker will (1) comply with applicable laws, rules, regulations,
writs, judgments, injunctions, decrees, awards and orders with
respect to it, its business and its properties, in each case except
where such non-compliance could not reasonably be expected to
result in a Material Adverse Effect, (2) comply in all material
respects with all Material Contracts and (3) keep and maintain, or
cause its Board of Directors to keep or maintain at all times, or
cause to be kept and maintained at all times in the registered
office of the Maker specified in its respective Constitutive
Documents, all documents, books, records, accounts and other
information as are required under applicable law.
(b)
Existence and Corporate
Formalities. The provisions of Section 5.3 of the Senior
Credit Agreement, as in effect as of the date hereof, are
incorporated herein by reference and made a part of this
Subordinated Note (provided
that references to "Borrower" and "Administrative Agent" shall for
purposes of this Section 4(b) be deemed to refer to Maker and
Payee, respectively).
(c)
Notification of
Payment-In-Full. The Maker shall notify the Payee in writing
of the Payment-in-Full of the Senior Obligations on the date such
Payment-in-Full occurs.
5.
Events
of Default
(a)
Each of the
following events shall constitute an "Event of Default" under this
Subordinated Note:
(1)
failure of Maker to
pay any principal, interest or other amount due to Payee hereunder
when and where due;
(2)
any written
representation, warranty or covenant made at any time by Maker to
Payee in this Subordinated Note or any other Subordinated Debt
Document shall prove to have been incorrect or misleading in any
material respect when made; or
(3)
an "Event of
Default" under and as defined in the Senior Credit Agreement shall
have occurred and be continuing, provided, for the avoidance of doubt,
that to the extent the Administrative Agent under the Senior Credit
Agreement waives any Default or Event of Default thereunder, Payee
will be deemed to have also granted a waiver for the resulting
Event of Default under this Section 5(a)(3) and no Event of Default
shall be outstanding.
(b)
Subject in each
case to the Subordination Provisions:
(1)
upon the occurrence
of an Event of Default (other than a Senior Default described in
clauses (e) or (f) of the definition of "Event of Default" in the
Senior Credit Agreement), any and all of the obligations hereunder,
at the option of Payee, may be immediately declared due and
payable, and thereupon shall immediately become in default and due
and payable, and Payee may exercise any and all rights and remedies
available to it at law, in equity or otherwise; and
(2)
upon the occurrence
of a Senior Default described in clauses (e) or (f) of the
definition of "Event of Default" in the Senior Credit Agreement,
any and all of the obligations hereunder shall immediately become
in default and due and payable, and Payee may exercise any and all
rights and remedies available to it at law, in equity or
otherwise.
6.
Notices.
All
notices and other communications in respect of this Subordinated
Note (including, without limitation, any modifications of, or
requests, waivers or consents under, this Subordinated Note) shall
be given or made in writing (including, without limitation, by
telecopy) to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to
either the Maker or the Payee, at such other address as shall be
designated by such party in a notice to the other party. Except as
otherwise provided in this Subordinated Note, all such
communications shall be deemed to have been duly given when
transmitted by electronic mail or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
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7.
Judgment Currency.
(a)
The Maker's
obligations hereunder to make payments in U.S. Dollars (each, for
purposes herein, the "Obligation
Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the
effective receipt by the Payee entitled thereto of the full amount
of the Obligation Currency expressed to be payable to it under this
Subordinated Note. If for the purpose of obtaining or enforcing
judgment against the Maker in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than
the Obligation Currency (such other currency being hereinafter
referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the
conversion shall be made, at the applicable exchange rate thereof
as of the day on which the judgment is given (such day being
hereinafter referred to as the "Judgment Currency Conversion
Date").
(b)
If there is a
change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the
amount due, the Maker covenants and agrees to pay, or cause to be
paid, and indemnifies the Payee for such additional amounts, if any
(but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency that
could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate or
exchange prevailing on the Judgment Currency Conversion Date. The
foregoing indemnity shall constitute a separate and independent
obligation of the Maker and shall survive any termination of this
Subordinated Note, and shall continue in full force and effect
notwithstanding any such judgment or order as
aforesaid.
(c)
For purposes of
determining any rate of exchange for this Section 7, such amounts
shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
8.
Amendments; Successors.
(a)
This Subordinated
Note may not be amended except by an instrument in writing signed
by each of the Maker and the Payee and (if prior to the
Payment-in-Full of the Senior Obligations) consented to in writing
by the Senior Administrative Agent (which the Senior Administrative
Agent may withhold in its sole and absolute discretion). This
Subordinated Note shall be binding upon and inure to the benefit of
the Maker and the Payee and their respective successors and
permitted assigns.
(b)
The Maker shall not
assign any of its rights or obligations under this Subordinated
Note without the prior written consent of the Payee and (if prior
to the Payment-in-Full of the Senior Obligations) the written
consent of the Senior Administrative Agent (which the Senior
Administrative Agent may withhold in its sole and absolute
discretion).
(c)
The Payee not shall
sell, assign, pledge, dispose of or otherwise transfer all or any
portion of this Subordinated Note, the Subordinated Obligations or
any Subordinated Note Document:
(1)
without the prior
written consent of the Maker; and
(2) if
prior to the Payment-in-Full of the Senior
Obligations:
(x)
without the prior
written consent of the Senior Administrative Agent (which the
Senior Administrative Agent may withhold in its sole and absolute
discretion); and
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(y)
unless, prior to
the consummation of any such action, the transferee thereof shall
execute and deliver to the Senior Administrative Agent a joinder
agreement in the form required by the Senior Administrative Agent
(a "Joinder Agreement") and
shall thereafter for all purposes be a party hereto and have the
same rights, benefits and obligations as a Subordinated Creditor
hereunder;
provided that Payee may pledge this
Subordinated Note, and all rights of the Payee hereunder and all
proceeds hereof, to (i) the Collateral Agent (as such term is
defined in the Underlying Credit Agreement) to secure the
Obligations (as such term is defined in the Underlying Credit
Agreement) and to (ii) the collateral agent under that certain
Second Lien Credit and Guaranty Agreement dated as of May [ ], 2018
(the "Second Lien Credit Agreement"), among Fusion, as borrower,
the guarantor subsidiaries party thereto, the lenders party thereto
and Wilmington Trust, National Association, as administrative agent
and collateral agent, to secure the Obligations (as such term is
defined in the Second Lien Credit Agreement).
9.
Governing Law; Submission to Jurisdiction;
Venue.
This
Subordinated Note and any right, remedy, obligation, claim,
controversy, dispute or cause of action (whether in contract, tort
or otherwise) based upon, arising out of or relating to this
Subordinated Note shall be governed by, and construed in accordance
with, the law of the State of New York without regard to conflicts
of law principles that would lead to the application of laws other
than the law of the State of New York. Each of the Maker and Payee
hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court for the Southern District of New York
and of any New York State court sitting in New York County for the
purposes of all legal proceedings arising out of or relating to
this Subordinated Note and the transactions contemplated hereby.
Each of the Maker and the Payee hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it
may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an
inconvenient forum.
10.
Usury Savings Clause.
Notwithstanding
any other provision herein, the aggregate interest rate charged
with respect to any of the obligations under this Subordinated
Note, including all charges or fees in connection therewith deemed
in the nature of interest under applicable law shall not exceed the
Highest Lawful Rate. If the rate of interest (determined without
regard to the preceding sentence) under this Subordinated Note at
any time exceeds the Highest Lawful Rate, this Subordinated Note
shall bear interest at the Highest Lawful Rate until the total
amount of interest due hereunder equals the amount of interest
which would have been due hereunder if the stated rates of interest
set forth in this Subordinated Note had at all times been in
effect. In addition, if when this Subordinated Note has been
Paid-in-Full the total interest due hereunder (taking into account
the increase provided for above) is less than the total amount of
interest which would have been due hereunder if the stated rates of
interest set forth in this Subordinated Note had at all times been
in effect, then to the extent permitted by law, the Maker shall pay
to the Payee an amount equal to the difference between the amount
of interest paid and the amount of interest which would have been
paid if the Highest Lawful Rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Payee and
the Maker to conform strictly to any applicable usury laws.
Accordingly, if the Payee contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at the Payee's option be applied to
the outstanding principal amount of this Subordinated Xxx or be
refunded to the Maker.
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11.
Waiver of Jury Trial.
EACH OF
THE MAKER AND THE PAYEE, BY ITS ACCEPTANCE OF THE BENEFITS OF THIS
SUBORDINATED NOTE, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
SUBORDINATED NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
12.
Expenses.
The
Maker shall promptly pay all reasonable and documented
out-of-pocket costs and expenses, including attorneys' fees and
costs of settlement, incurred by the Payee in enforcing any
obligations of or in collecting any payments due from the Maker
hereunder or in connection with any refinancing or restructuring of
the credit arrangements provided hereunder in the nature of a "work
out" or pursuant to any insolvency or bankruptcy cases or
proceedings. This Section 12 shall survive payment of this
Subordinated Note and termination of the Subordinated Debt
Documents.
13.
No Waiver; Remedies
Cumulative.
No
failure or delay on the part of the Payee in the exercise of any
power, right or privilege hereunder or under any other Subordinated
Debt Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right
or privilege preclude other or further exercise thereof or of any
other power, right or privilege. The rights, powers and remedies
given to the Payee hereby are cumulative and shall be in addition
to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other
Subordinated Debt Documents. Any forbearance or failure to
exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
14.
Headings.
Section
headings herein are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.
15.
Effectiveness;
Counterparts.
This
Subordinated Note shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the
Maker, the Payee and the Senior Administrative Agent of written
notification of such execution and authorization of delivery
thereof. This Subordinated Note may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall
constitute but one and the same instrument. Delivery by the Payee
or the Senior Administrative Agent of an executed counterpart of a
signature page of this Subordinated Note by facsimile or in
electronic format (i.e., "pdf" or "tif") shall be effective as
delivery of a manually executed counterpart of this Subordinated
Note.
[remainder
of page intentionally blank]
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IN WITNESS WHEREOF, the Maker has caused
this Subordinated Note to be executed and delivered by its duly
authorized officers as of the date first above
written.
[BORROWER]
By:
____________________________
Name:
Title:
Address for
Notices:
[Address]
E-mail
[ ]
Attention [
]
ACCEPTED AND AGREED:
FUSION CONNECT, INC.
By:
___________________________
Name:
Title:
Address for Notices:
Fusion
Connect, Inc.
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Attention:
Xxxxx X. Xxxxxxxx, Xx.
Email:
xxxxxxxxx@xxxxxxxxxxxxx.xxx
ACKNOWLEDGED:
XXXXXXX XXXXX LENDING PARTNERS LLC,
as
Senior Administrative Agent
By:
___________________________
Name:
Title:
Address for Notices:
Xxxxxxx
Xxxxx Lending Partners LLC
c/o
Goldman, Xxxxx & Co.
00
Xxxxxx Xxxxxx, 0xx Floor
Jersey
City, NJ 07302
Facsimile:
000-000-0000
E-mail:
xx-xxx-xx-xxxxxxxxxxxx@xx.xxx
Attention:
Operations
ANNEX
A
SUBORDINATION PROVISIONS
1.
Subordination.
(a)
Until the
Payment-in-Full of the Senior Obligations, all payment obligations
of the Maker under this Subordinated Note shall in all cases be
subject to the Priority of Payments specified in the Senior Credit
Agreement.
(b)
The obligations of
the Maker under this Subordinated Note are obligations only of the
Maker, payable solely from the assets of the Maker and from
realization of the assets and application of the proceeds thereof
(which, until the Payment-in-Full of the Senior Obligations, shall
be made in accordance with the Priority of Payments). No recourse
shall be had for the payment of any amount owing in respect of this
Subordinated Note against any officer, member, director, employee,
securityholder or incorporator of the Maker or its successors or
assigns for any amounts payable under this Subordinated Note. No
action may be brought against any officer, member, director,
employee, securityholder or incorporator of the Maker. It is
understood that the foregoing provisions of this Section 1(b) shall
not, subject to the remainder of the Subordination Provisions,
constitute a waiver, release or discharge of any indebtedness or
obligation evidenced by this Subordinated Note.
(c)
Notwithstanding
anything to the contrary contained in any Subordinated Note
Document, the Maker and the Payee covenant and agree that the
Subordinated Obligations are subordinated and subject in right of
payment to the Senior Obligations such that holders of the Senior
Obligations shall be entitled to be Paid-in-Full before any
Subordinated Creditor is entitled to receive any Distribution on
account of the Subordinated Obligations and, in that connection,
unless and until the principal of, premium, and interest on, and
all other amounts in respect of, all Senior Obligations shall have
been Paid-in-Full:
(1)
no Distribution on
account of the principal of, premium or interest on, or any other
amount in respect of, the Subordinated Obligations shall be made by
or on behalf of the Maker; and
(2)
no Subordinated
Creditor shall accept any Distribution or take any Enforcement
Action with respect to the Subordinated Obligations,
provided that the Maker shall pay, and
each Subordinated Creditor shall be entitled to receive and retain
from time to time, principal of and interest on this Subordinated
Note on each Payment Date to the extent amounts are available for
such payment under and in accordance with the Priority of Payments
(except that payments on this Subordinated Note that may be made
under clause (11) of the Phase II Priority of Payments may be made
solely at the option of the Maker).
2.
Insolvency.
(a)
In the event of any
Insolvency Proceeding, the Senior Obligations shall first be
Paid-in-Full before any Distribution (whether by purchase,
acquisition or otherwise), whether in cash, securities or other
Property, shall be made to any Subordinated Creditor on account of
such Subordinated Obligations;
A-1
(b)
during any
Insolvency Proceeding, any Distribution prior to the
Payment-in-Full of the Senior Obligations which would otherwise
(but for these Subordination Provisions) be payable or deliverable
in respect of Subordinated Obligations shall be paid or delivered
directly to the Senior Credit Agreement Holders until all Senior
Obligations shall have been Paid-in-Full;
(c)
each Subordinated
Creditor hereby agrees to file or cause to be filed on its behalf
an appropriate proof of claim in respect of such Subordinated
Creditor and take such action, to the extent commercially
reasonable, to cause such proof of claim to be approved in such
Insolvency Proceeding;
(d)
each Subordinated
Creditor, at any time prior to the Payment-in-Full of the Senior
Obligations:
(1)
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 Administrative Agent for the
application to the Senior Obligations until all Senior Obligations
have been Paid-in-Full, and
(2)
irrevocably
authorizes and empowers the Senior Administrative Agent, in the
name of each such Subordinated Creditor, to demand, sue for,
collect and receive any and all such Distributions until all Senior
Obligations shall have been Paid-in-Full;
(e)
each Subordinated
Creditor hereby agrees not to initiate, prosecute or participate in
any claim, action or other proceeding challenging the
enforceability, validity, perfection or priority of the Senior
Obligations or any liens and security interests securing, or
purporting to secure, the Senior Obligations;
(f)
no Subordinated
Creditor will object to, or otherwise contest (or support any other
Person contesting), any motion for relief from the automatic stay
or from any injunction against foreclosure or enforcement in
respect of Senior Obligations made by any holder of the Senior
Obligations; and
(g)
no Subordinated
Creditor will object to, or otherwise contest (or support any other
Person contesting), (1) any request by the Maker to provide the
holders of the Senior Obligations with adequate protection or (2)
any objection by the holders of the Senior Obligations to any
motion, relief, action or proceeding based on the holders of the
Senior Obligations claiming a lack of adequate
protection.
3.
Sale, Transfer or other Disposition of
Subordinated Obligations.
Notwithstanding
the failure of any transferee of this Subordinated Note, the
Subordinated Obligations or any Subordinated Note Document to
execute or deliver a Joinder Agreement in accordance with the
requirements of this Subordinated Note, the subordination effected
hereby shall survive any sale, assignment, pledge, disposition or
other transfer of all or any portion of this Subordinated Note or
the Subordinated Obligations, these Subordination Provisions shall
be binding upon the successors and assigns of each Subordinated
Creditor, and any liabilities incurred by any holder of the Senior
Obligations arising out of any transferee's failure to execute or
deliver a Joinder Agreement in accordance herewith shall be for the
account of, and be owing by, the transferor to such holder of
Senior Obligations.
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4.
Subrogation.
Upon
the Payment-in-Full of all Senior Obligations, the Subordinated
Creditors shall be subrogated to all rights of any holder of Senior
Obligations to receive any further Distributions applicable to the
Senior Obligations, until the Subordinated Obligations shall have
been Paid-in-Full, and such Distributions received by the
Subordinated Creditors by reason of such subrogation, of cash,
securities or other Property which otherwise would be paid or
distributed to the holders of Senior Obligations, shall, as between
the Maker and its creditors other than the holders of Senior
Obligations, on the one hand, and the Subordinated Creditors, on
the other hand, be deemed to be a payment by the Maker on account
of Senior Obligations and not on account of Subordinated
Obligations. All rights of subrogation (whether arising under these
Subordination Provisions, by contract, in law, in equity or
otherwise) of the holders of the Subordinated Obligations are
subordinated and subject in right of payment to the Senior
Obligations in the same manner as the Subordinated Obligations is
subordinated to the Senior Obligations under these Subordination
Provisions.
5.
Turnover by the Subordinated
Creditor.
If any
Distribution in respect of any Subordinated Debt Document shall be
received by a Subordinated Creditor in contravention of these
Subordination Provisions, then such Subordinated Creditors will
promptly deliver such Distribution, to the extent necessary to
indefeasibly Pay-in-Full all such Senior Obligations, to the Senior
Credit Agreement Holders.
6.
No Petition.
No
Subordinated Creditor shall, prior to the date which is one year
and one day (or, if longer, any applicable preference period plus
one day) after the Payment-in-Full of the Senior Obligations,
commence, or join with any creditor (other than any Person to whom
Senior Obligations are owed) in commencing, or directly or
indirectly cause the Maker to commence, or assist the Maker in
commencing, any Insolvency Proceeding.
7.
No Waiver.
These
Subordination Provisions shall not be affected by (a) any amendment
or modification of, or addition or supplement to, the Senior Credit
Agreement or any other document or agreement evidencing or securing
any Senior Obligations, (b) any exercise or non-exercise of any
right, power or remedy under or in respect of the Senior Credit
Agreement or any other document or agreement evidencing or securing
any Senior Obligations, or (c) any waiver, consent, release,
extension, renewal, modification, delay, or other action, inaction
or omission in respect of the Senior Credit Agreement or any other
document or agreement evidencing or securing any Senior
Obligations.
The
Subordinated Creditors acknowledge that Senior Credit Agreement or
any other document or agreement evidencing or securing any Senior
Obligations may be amended, restated, refinanced, supplemented or
otherwise modified without the consent of or notice to any
Subordinated Creditor, provided that:
(1)
the Payee shall not
be bound by any amendment, supplement or other modification to
Section 7 of the Senior Credit Agreement (or any definition of any
term used therein) that materially and adversely affects the Payee
unless the Payee has provided its prior written consent thereto;
and
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(2)
amendments,
supplements or other modifications to the Specified Provisions (or
the addition of any other provision to the Senior Credit Agreement
after the Closing Date) (other than any amendment, supplement or
other modification that would be necessary or desirable in the sole
discretion of the Senior Creditor for the Maker to comply with and
otherwise perform the Maker's obligations under the Senior Credit
Agreement or any or any other document or agreement evidencing or
securing any Senior Obligations) that would have a material adverse
effect on the ability of the Maker to the make payments on this
Subordinated Note in accordance with its terms, or otherwise would
have a material adverse effect on the rights or remedies of the
Payee hereunder, shall require the prior written consent of the
Payee (not to be unreasonably withheld or delayed); provided any
amendments, supplements or other modifications to the Specified
Provisions shall not require the consent of the Payee to the extent
the purpose of any such amendments, supplements or modifications
would be necessary or desirable for the compliance with or
performance of Maker’s obligations under the Underlying
Credit Agreement or any other Underlying Instrument.
8.
Continuation; Third Party
Beneficiary.
These
Subordination Provisions constitute a continuing agreement and (a)
shall remain in full force and effect until the Senior Credit
Agreement has been terminated and all Senior Obligations have been
Paid-in-Full, (b) shall be binding upon each Subordinated Creditor
and Maker and their respective successors, transferees and
assignees, and (c) are intended for the benefit of, and will be
enforceable as express third party beneficiaries by, the holders of
the Senior Obligations and by the Senior Administrative Agent on
their behalf.
9.
No Impairments; Automatic
Restoration.
These
Subordination Provisions are solely for the purpose of defining the
relative rights of the Senior Credit Agreement Holders on the one
hand and the Subordinated Creditors on the other hand, and nothing
herein shall impair, as between the Maker and the Subordinated
Creditors, the obligation of the Maker, which is unconditional and
absolute, to pay to the Subordinated Creditors the principal of and
interest owing hereunder in accordance with the terms hereof. These
Subordination Provisions shall be automatically reinstated if and
to the extent that for any reason any payment by or on behalf of
the Maker in respect of the Senior Obligations is rescinded or must
be otherwise restored by any holder of the Senior Obligations,
whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
10.
Amendments.
Prior
to the Payment-in-Full of the Senior Obligations, no Subordinated
Debt Document shall be amended, restated, supplemented or otherwise
modified without the prior written consent of the Senior
Administrative Agent.
11.
Subordination Agreement.
These
Subordination Provisions shall be applicable both before and after
the commencement of any Insolvency Proceeding and all converted or
succeeding cases in respect thereof. Accordingly, these
Subordination Provisions are intended to be and shall be
enforceable as a subordination agreement within the meaning of
Section 510 of the Bankruptcy Code.
12.
Definitions.
As used
in these Subordination Provisions (and as otherwise used in this
Subordinated Note), the following terms have the respective
meanings set forth below:
"Bankruptcy
Code" means Title 11 of the United States Code entitled
"Bankruptcy".
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"Debtor
Relief Laws" means, collectively:
(a)
the Bankruptcy
Code;
(b)
with respect to any
Person organized or domiciled in the Cayman Islands, Part V of the
Companies Law (2016 Revision) of the Cayman Islands, the Bankruptcy
Law (1997 Revision) of the Cayman Islands, the Foreign Bankruptcy
Proceedings (International Cooperation) Rules 2008 of the Cayman
Islands and the Companies Winding Up Rules 2008 of the Cayman
Islands; and
(c)
all other
liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief laws of the
United States, any state thereof, the Cayman Islands or any other
applicable jurisdictions from time to time in effect.
"Distribution"
means, with respect to any indebtedness or Obligation, (a) any
direct or indirect payment or distribution (whether in respect of
principal, interest, fees or otherwise) by any Person of cash,
securities 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.
"Enforcement
Action" means (a) to take from or for the account of the
Maker, 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 Maker, (b) to
sue for payment of, or to initiate or participate with others in
any suit, action or proceeding against the Maker to (1) enforce
payment of or to collect the whole or any part of the Subordinated
Obligations or (2) commence judicial enforcement of any of the
rights and remedies under the Subordinated Debt Documents or
applicable law with respect to the Subordinated Obligations, (c) to
accelerate the Subordinated Obligations, (d) to exercise any put
option or to cause the Maker to honor any redemption or mandatory
prepayment obligation under any Subordinated Debt Document or (e)
take any action under the provisions of any state or federal law,
including, without limitation, the Uniform Commercial Code, or
under any contract or agreement, to enforce, foreclose upon, take
possession of or sell any property or assets of the
Maker.
"Insolvency
Proceeding" means:
(a)
any insolvency,
bankruptcy, receivership, liquidation, moratorium, reorganization,
readjustment, arrangement, composition or other similar proceeding
relating to the Maker or any Property of the Maker;
(b)
any proceeding for
the liquidation, dissolution or other winding-up of the Maker,
voluntary or involuntary, regardless of whether involving
insolvency or bankruptcy proceedings;
(c)
any general
assignment by the Maker for the benefit of creditors;
or
(d)
any other
marshaling of the assets of the Maker,
in each
case whether under any Debtor Relief Law, other similar laws or
otherwise.
"Obligations"
means any principal, interest (including any interest accruing on
or subsequent to the filing of a petition in bankruptcy,
reorganization or similar proceeding at the rate provided for in
the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable state, federal or
foreign law and including an default interest), premium, penalties,
fees, indemnifications and reimbursements, and guarantees of
payment of such principal, interest, penalties, fees,
indemnifications and reimbursements, and all other amounts, payable
under the documentation governing such Obligations.
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"Payment
Date" means:
(a)
until the
Payment-in-Full of the Senior Obligations, a "Payment Date" under
and as defined in the Senior Credit Agreement; and
(b)
thereafter, each
three month anniversary of the immediately preceding Payment Date
(or, if any such anniversary day is not a Business Day, the
immediately succeeding Business Day).
"Payment-in-Full"
means, with respect to any outstanding Obligations, shall mean the
(a) termination or expiration of all commitments of the holders of
such Obligations to extend credit or make loans or other credit
accommodations to the Maker under the documents governing such
Obligations, (b) the payment in full, in cash in immediately
available funds, of all of such Obligations and (c) the termination
or expiration of all of the documents governing such Obligations.
"Paid-in-Full" and
"Pay-in-Full" shall have
corresponding meanings.
"Property"
means, with respect to any Person, any interests of such Person in
any kind of property or asset, whether real, personal or mixed, or
tangible or intangible.
"Senior
Administrative Agent" means the "Administrative Agent" as
such term is defined in the Senior Credit Agreement.
"Senior
Credit Agreement" means the Credit Agreement dated as of May
[__], 2018 by and among the Maker, as Borrower; Xxxxxxx Xxxxx
Lending Partners LLC ("GS"),
as Lender; GS, as Administrative Agent, and U.S. Bank National
Association, as Collateral Agent and Collateral Custodian,
including any amendment, extension, renewal, increase, modification
or restatement thereof or supplement thereto, or any agreement
refinancing any of the indebtedness thereunder, in each case as the
same shall from time to time be successively amended, extended,
renewed, increased, modified, restated, supplemented or
refinanced.
"Senior
Credit Agreement Holders" means the Senior Lenders, the
Senior Administrative Agent and the other "Agents" as defined in
the Senior Credit Agreement.
"Senior
Default" means a "Default" or "Event of Default" under and
as defined in the Senior Credit Agreement.
"Senior
Lenders" means the "Lenders" under and as defined in the
Senior Credit Agreement.
"Senior
Obligations" means the "Obligations" as such term is defined
in the Senior Credit Agreement.
"Specified
Provisions" means the following provisions of the Senior
Credit Agreement: Sections 2.9, 5.3, 5.7, 5.8, 5.9, 5.10, 5.11 and
9 (and any definition of any term used in such
Sections).
"Subordinated
Creditor" means the Payee and any other permitted holder of
the Subordinated Obligations.
"Subordinated
Debt Documents" means this Subordinated Note and all other
agreements, documents and instruments evidencing the Subordinated
Obligations, as the same may be amended, restated, refinanced,
supplemented or otherwise modified from time to time as permitted
hereunder.
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"Subordinated
Note Interest Payment Amount" means, with respect to any
Payment Date:
(a)
until the
Payment-in-Full of the Senior Obligations, the "Subordinated Note
Interest Payment Amount" for such Payment Date under and as defined
in the Senior Credit Agreement; and
(b)
thereafter, the
aggregate amount of interest earnings on amounts on deposit in the
"Primary Reserve Account" under and as defined in the Credit
Agreement during the period from the immediately preceding Payment
Date to but excluding such Payment Date.
"Subordinated
Obligations" means and includes all Obligations of the Maker
now or hereafter existing, whether fixed or contingent, in respect
of principal, interest (including interest accruing after the
filing of a petition under any Debtor Relief Law, to the extent
allowed), fees, indemnification or any other amount in respect of
the Subordinated Debt Documents.
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