this intercreditor agreement, dated as of _________(m,d,y) (this "agreement"), is among aaa (the "subordinating creditor"), bbb, a _________(placename) corporation (the "debtor"), and ccc llc, as agent for the ddd (the "senior creditor").
recitals
a the senior creditor has or expects to acquire a security interest in assets of the debtor in which the subordinating creditor has an interest, including but not limited to the senior creditor collateral.
b the debtor and subordinating creditor are parties to the subordinating creditor agreements. the creditors are executing this agreement to set forth their lien priorities with respect to the senior creditor collateral.
now, therefore, in consideration of the premises, and intending to be legally bound hereby, the creditors hereby agree as follows:
agreement
1. definitions. the following terms used herein shall have the following meaning. all capitalized terms not herein defined shall have the meaning set forth in the uniform commercial code:
. "bankruptcy code" - title11of the united states code.
. "chosen state" - _________(placename).
. "creditors" -the subordinating creditor and the senior creditor.
. "debtor" - see preamble.
. "interest payments" - regularly scheduled interest payments pursuant to the subordinating creditor agreements.
. "party" - each of the subordinating creditor, the debtor, and the senior creditor.
. "permitted payments" - (i) interest payments, and (ii) $,_________,of the subordinating creditor obligations.
. "secondary collateral" - collateral of a creditor holding a security interest which is inferior to the priority of the other creditor.
. "senior creditor" - see preamble.
. "senior creditor collateral" - all debtor"s present and future accounts, instruments, documents, chattel paper, general intangibles, inventory, equipment, letter of credit rights, and investment property and the direct and indirect proceeds thereof. . "senior creditor obligations" - obligations of the debtor to the senior creditor secured by the senior creditor collateral.
. "subordinating creditor" - see preamble.
. "subordinating creditor agreements" - the note and warrant purchase agreement, dated _________(m,d,y), between debtor and subordinating creditor, and related documents thereto.
. "subordinating creditor obligations" - indebtedness owed by the debtor to the subordinating creditor secured by senior creditor collateral.
2. priority. notwithstanding the terms or provisions of any agreement or arrangement which either creditor may now or hereafter have with the debtor or any rule of law, and irrespective of the time, order, or method of attachment or perfection of any security interest or the recordation or other filing in any public record of any financing statement, any security interests in the senior creditor collateral held by the senior creditor, whether or not perfected, are and shall remain senior to any lien now or hereafter held by the subordinating creditor and, any present and future guaranties relating to the senior creditor obligations.
3. permitted payments.
. notwithstanding anything to the contrary contained herein, debtor may make and subordinating creditor may retain permitted payments; provided, that with respect to any permitted payments other than interest payments (a) subordinating creditor shall provide senior creditor with30 days" written notice prior to such payment, and (b) such notice is not given prior to _________(m,d,y).
. any payments received by subordinating creditor on account of the subordinating creditor obligations, other than permitted payments, shall be held by subordinating creditor in trust for the benefit of senior creditor, and shall be delivered to senior creditor in kind, immediately upon receipt by subordinating creditor to be held by senior creditor as cash collateral securing the senior creditor obligations.
. subordinating creditor may request and receive payment of the remaining subordinating creditor obligations with the prior written consent of senior creditor, which consent shall not be unreasonably withheld or delayed, so long as such repayment does not cause subordinating creditor (as chief executive officer and director) to breach his fiduciary duties to the debtor and its shareholders.
. the provision set forth in section above permitting permitted payments shall terminate and be of no further force and effect upon the occurrence and during the continuance of a default in the performance of the senior creditor obligations.
4. enforcement of security interest.
. the subordinating creditor shall have no right to take any action with respect to the senior creditor collateral, whether by judicial or non-judicial foreclosure, notification to the debtor"s account debtors, the seeking of the appointment of a receiver for any portion of the debtor"s assets, setoff, or otherwise, unless and until the senior creditor has received payment of all senior creditor obligations in immediately available funds.