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Exhibit 10.44
SUBORDINATION AND INTERCREDITOR
AGREEMENT
This
SUBORDINATION AND INTERCREDITOR AGREEMENT (this "
Agreement "), dated as of January 5, 2007 is among
TERREMARK WORLDWIDE, INC. , a Delaware corporation (" the
Company "); NAP OF THE AMERICAS, INC.; NAP OF THE
AMERICAS/WEST, INC.; OPTICAL COMMUNICATIONS, INC.; PARK WEST
TELECOMMUNICATIONS INVESTORS, INC.; SPECTRUM TELECOMMUNICATIONS
CORP.; TECOTA SERVICES CORP.; TERREMARK FINANCIAL SERVICES, INC.;
TERREMARK FORTUNE HOUSE #1, INC.; TERREMARK LATIN AMERICA, INC.;
TERREMARK MANAGEMENT SERVICES, INC.; TERREMARK REALTY, INC.;
TERREMARK TECHNOLOGY CONTRACTORS, INC.; TERRREMARK TRADEMARK
HOLDINGS, INC.; TERRENAP DATA CENTERS, INC. ; TERRENAP
SERVICES, INC.; TERREMARK FEDERAL GROUP, INC. ; and
TERREMARK EUROPE, INC. (each, a " Guarantor " and,
collectively, the " Guarantors "), FALCON MEZZANINE
PARTNERS, LP (" Falcon "), STICHTING PENSIOENFONDS
VOOR DE GEZOND-HEID, GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
(" SPM "), STICHTING PENSIOENFONDS ABP ("
ABP " and, together with Falcon and SPM, the " Senior
Creditors "), FMP AGENCY SERVICES, LLC (the "Senior Agent") and
CREDIT SUISSE, CAYMAN ISLANDS BRANCH (the " Subordinated
Agent " and the " Subordinated Creditor ").
R E C I T A L S
A. The
Company, Senior Agent and the Senior Creditors have entered into a
Purchase Agreement dated December 31, 2004 (as the same may be
amended, supplemented, restated or otherwise modified and in effect
from time to time including, without limitation, as amended on the
date hereof, the " Senior Purchase Agreement "), pursuant to
which, among other things, Senior Creditors have purchased
$30,000,000 aggregate principal amount of Senior Secured Notes due
2009 (as the same may be amended, supplemented, restated or
otherwise modified and in effect from time to time as permitted
hereunder and including any notes issued in exchange or
substitution therefore or replacement thereof, each individually a
" Senior Note " and collectively the " Senior Notes
").
B. The
Company, Subordinated Agent, Subordinated Creditor and Credit
Suisse, International have entered into a Purchase Agreement of
even date herewith (as the same may be amended, supplemented,
restated or otherwise modified and in effect from time to time as
permitted hereunder, the " Subordinated Purchase Agreement
") pursuant to which, among other things, the Subordinated Creditor
has extended credit to the Company as evidenced by certain Senior
Subordinated Secured Notes due 2009 issued by the Company in favor
of the Subordinated Creditor in the original aggregate principal
amount of $10,000,000 (as the same may be amended, supplemented,
restated or otherwise modified and in effect from time to time as
permitted hereunder and including any notes issued in exchange or
substitution therefor or replacement thereof, each individually a "
Subordinated Note " and collectively the " Subordinated
Notes ").
C. As
an inducement to and as one of the conditions precedent to the
agreement of the Senior Creditors to consent to the transactions
contemplated by the Subordinated
Purchase Agreement, Senior Agent and Senior Creditors have
required the execution and delivery of this Agreement by the
Subordinated Creditor, Subordinated Agent and Obligors.
NOW,
THEREFORE, in order to induce Senior Agent and Senior Creditors to
consent to the transactions contemplated by the Subordinated
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
. All capitalized terms used but not elsewhere defined in this
Agreement (including the preamble and recitals hereto) shall have
the respective meanings ascribed to such terms in the Senior
Purchase Agreement as in effect on the date hereof. The following
terms shall have the following meanings in this Agreement:
Bankruptcy Code
shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended and in effect from time to time and
the regulations issued from time to time thereunder.
Basic Documents
shall have (and each capitalized term used therein shall have) the
meaning ascribed to such term in the Senior Purchase Agreement, as
in effect on the date hereof.
Enforcement Action
is defined in subsection 2.7(b) .
Excluded Collateral
shall mean Receivables Proceeds (as such term is defined in the
Subordination Agreement dated as of December 31, 2004 among
the Company, Citigroup Global Markets Realty Corp. as senior
creditor, and the holders of the Senior Notes as of such date, as
Subordinated Creditor).
Lien shall mean any
mortgage, deed of trust, pledge, hypothecation, assignment, charge
or deposit arrangement, encumbrance, lien (statutory or otherwise)
or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever and any contingent or
other agreement to provide any of the foregoing.
Obligor shall mean
the Company and each other Person that guarantees or grants a Lien
on any of its Property to secure the payment, observance or
performance of all or any part of the Senior Indebtedness,
including, without limitation, the Guarantors.
Paid in Full or
Payment in Full shall mean the payment in full in
cash of all Senior Indebtedness and termination of all commitments
to lend under the Basic Documents and Permitted Refinancing Debt
Documents. Senior Indebtedness shall be considered to be
outstanding whenever any commitment to make loans or otherwise
extend credit under the Senior Purchase Agreement or Permitted
Refinancing Debt Documents is outstanding.
Permitted
Refinancing shall mean any refinancing of the Senior
Indebtedness under the Basic Documents; provided , that the
financing documentation entered into by Obligors in connection with
such Permitted Refinancing constitutes Permitted Refinancing Debt
Documents and the aggregate principal amount of such refinancing
does not
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exceed the maximum principal amount of Senior Indebtedness
permitted under the definition thereof.
Permitted Refinancing Debt
Documents shall mean any financing documentation which
replaces the Basic Documents and pursuant to which the Senior
Indebtedness under the Basic Documents is refinanced, as such
financing documentation may be amended, supplemented, restated or
otherwise modified and in effect from time to time as permitted
hereunder, but specifically excluding any such financing
documentation to the extent that it contains, either initially or
by amendment or other modification, any terms, conditions,
covenants or defaults other than those which (a) then exist in
the Basic Documents or (b) could be included in the Basic
Documents by an amendment or other modification that would not be
prohibited by the terms of this Agreement.
Permitted Subordinated
Indebtedness Payments shall mean:
(a) interest payments on account
of the Subordinated Indebtedness evidenced by the Subordinated
Notes but only to the extent made on a paid-in-kind or accretion
basis (and not made in cash);
(b) the accrual (and not payment
in cash) of default interest on Subordinated Indebtedness evidenced
by the Subordinated Notes;
(c) reimbursement under the
Subordinated Purchase Agreement for the reasonable and documented
out-of-pocket costs and expenses of the holders of the Subordinated
Notes pursuant to the terms of the Subordinated Purchase Agreement
either (1) incurred in connection with the negotiation,
execution or delivery of the Subordinated Purchase Agreement and
paid within 30 days of the date hereof or (2) incurred in
connection with the enforcement of the Subordinated Purchase
Agreement or otherwise in an aggregate not to exceed $100,000;
in each instance, to the extent then due and payable in
accordance with the terms of the Subordinated Indebtedness
Documents.
Person shall mean
an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
Proceeding is
defined in subsection 2.3.
Property shall
mean, with respect to any Person, all property and interests in
property of such Person, whether real, personal or mixed, whether
now owned or existing or hereafter acquired or arising and
wheresoever located.
Related Fund shall
mean, with respect to any holder of Subordinated Indebtedness,
(a) any fund, trust or similar entity that invests in
commercial loans in the ordinary course of business and is advised,
managed or serviced by (i) such holder, (ii) an affiliate
of such holder, (iii) the same investment advisor that manages
such holder or (iv) an affiliate of an investment advisor that
manages such holder, or (b) any finance company,
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insurance company or other financial institution which
temporarily warehouses loans for such holder or any Person
described in clause (a) above.
Reorganization Subordinated
Securities shall mean any (a) equity securities of the
Company or any of its subsidiaries and (b) notes or other debt
securities issued in substitution of all or any portion of the
Subordinated Indebtedness that are subordinated, including in right
of payment, to the Senior Indebtedness (or any notes or other
securities issued in substitution of all or any portion of the
Senior Indebtedness) at least to the same extent and, in the case
of clause (b), on substantially the same terms that the
Subordinated Indebtedness is subordinated to the Senior
Indebtedness pursuant to the terms of this Agreement, and which
securities have maturities and other terms no less advantageous to
Obligors and Senior Creditors than the terms contained in the
Subordinated Indebtedness Documents.
Required Holders
shall have the meaning ascribed to such term in the Senior Purchase
Agreement; provided , that, after the consummation of any
Permitted Refinancing, the term "Required Holders" shall mean the
holders of Senior Indebtedness having the right and/or ability
under the Permitted Refinancing Debt Documents to effectuate the
waiver, amendment, granting of consent or other matter in
question.
Senior Agent shall
have the meaning ascribed to such term in the preamble of this
Agreement; provided , that, after the consummation of any
Permitted Refinancing, the term "Senior Agent" shall refer to any
Person appointed by the holders of the Senior Indebtedness as agent
for themselves for the purposes of this Agreement.
Senior Covenant
Default shall mean any "Default" or "Event of Default"
under the Senior Purchase Agreement or Permitted Refinancing Debt
Documents, other than a Senior Payment Default.
Senior Creditor or Senior
Creditors shall mean any "Noteholder" or the "Noteholders,"
respectively, as such terms are defined in the Senior Purchase
Agreement; provided , that, after the consummation of any
Permitted Refinancing, such terms shall refer to any holder or all
of the holders, respectively, of the Senior Indebtedness.
Senior Creditor
Collateral shall mean all of the assets and property of any
Obligor, whether real, personal. mixed, with respect to which a
Lien is granted or purported to be granted as security for any
Senior Indebtedness.
Senior Default
Notice shall mean a written notice from Senior Agent or any
Senior Creditor to Subordinated Agent and the Company pursuant to
which the Subordinated Creditor is notified of the existence of a
Senior Covenant Default.
Senior Indebtedness
shall mean all Indebtedness, liabilities and other obligations of
any and every kind and nature now existing or hereafter arising,
contingent or otherwise, of any Obligor or any other Person under,
in connection with, or evidenced or secured by the Senior Purchase
Agreement or any of the other Basic Documents, including, without
limitation, all such Obligations to pay (i) principal,
(ii) interest or premium (including interest accruing after
the commencement of any Proceeding, whether or not con
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stituting an allowed claim in such Proceeding), (iii) fees,
(iv) costs, expenses and other amounts related to any
indemnity against loss, damage or liability, (v) any other
monetary obligation, and all such Indebtedness, obligations and
liabilities incurred with respect to Permitted Refinancings,
together with any amendments, restatements, modifications, renewals
or extensions of any thereof permitted hereunder; provided ,
that, in no event shall the principal amount of the Senior
Indebtedness exceed the sum of (a) $30,000,000, reduced by the
amount of any principal repayments and permanent commitment
reductions under the Senior Purchase Agreement or any Permitted
Refinancing Debt Documents, to the extent that such repayments and
reductions may not be reborrowed (specifically excluding, however,
any such repayments and commitment reductions occurring in
connection with any Permitted Refinancing), plus
(b) costs and expenses incurred following the occurrence of a
Senior Payment Default or Senior Covenant Default, as the case may
be, by or for the account of the holders of Senior Indebtedness (or
any representatives thereof) to preserve or protect any Senior
Creditor Collateral, plus (c) the amount of interest
that is capitalized and added to the principal amount of the Senior
Notes in accordance with the terms thereof.
Senior Payment
Default shall mean a Default or Event of Default described
in Section 10.01(a) or (b) of the Senior Purchase
Agreement or any corresponding provision in the Permitted
Refinancing Debt Documents or any other Default or Event of Default
resulting from the failure of any Obligor to pay, on a timely
basis, any principal interest, premium, fees or other obligations
under any Basic Document or Permitted Refinancing Debt Document,
including, without limitation, in each case, any default in payment
of Senior Indebtedness after acceleration thereof.
Shared Collateral
shall mean all of the assets and property of any Obligor, whether
real, personal, mixed, constituting either Senior Creditor
Collateral or Subordinated Creditor Collateral, but specifically
excluding the Excluded Collateral.
Subordinated
Creditor shall mean the Subordinated Creditor that is a
signatory to this Agreement and any other holder of the
Subordinated Note(s) or any other Subordinated Indebtedness from
time to time.
Subordinated Creditor
Collateral shall mean all of the assets and property of any
Obligor, whether real, personal. mixed, with respect to which a
Lien is granted or purported to be granted as security for any
Subordinated Indebtedness.
Subordinated
Default shall mean a default in the payment of the
Subordinated Indebtedness, or performance of any term, covenant or
condition contained in the Subordinated Indebtedness Documents or
the occurrence of any other event or condition constituting a
default or event of default under the Subordinated Indebtedness
Documents.
Subordinated Default
Notice shall mean a written notice to Senior Agent and the
Company from Subordinated Agent or the Subordinated Creditor
pursuant to which Senior Agent is notified of the existence of a
Subordinated Default, which notice incorporates a reasonably
detailed description of such Subordinated Default.
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Subordinated
Indebtedness shall mean all Indebtedness, liabilities and
other obligations of any and every kind and nature now existing or
hereafter arising, contingent or otherwise, of any Obligor or any
other Person under, in connection with, or evidenced or secured by
any of the Subordinated Indebtedness Documents, in each case
including, without limitation, obligations to pay
(i) principal, (ii) interest or premium (including
interest accruing after the commencement of any Proceeding, whether
or not constituting an allowed claim in such Proceeding, and any
premium payable with respect to any prepayment of the Subordinated
Indebtedness pursuant to the Subordinated Indebtedness Documents),
(iii) fees, (iv) costs, expenses and other amounts
related to any indemnity against loss, damage or liability, and
(v) any other monetary obligation.
Subordinated Indebtedness
Documents shall mean the Subordinated Notes, Subordinated
Purchase Agreement, any guaranty with respect to the Subordinated
Indebtedness, and all other agreements, documents and instruments
evidencing, securing or pertaining to any portion of the
Subordinated Indebtedness, as amended, supplemented, restated or
otherwise modified and in effect from time to time as permitted
hereunder.
UCC shall mean the
Uniform Commercial Code, as in effect from time to time in any
applicable jurisdiction.
The definitions in Section 1
shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words "include", "includes" and "including", and words of similar
import, shall not be limiting and shall be deemed to be followed by
the phrase "without limitation". The word "will" shall be construed
to have the same meaning and effect as the word "shall". The words
"asset" and "property" shall be construed as having the same
meaning and effect and to refer to any and all rights and interests
in tangible and intangible assets and properties of any kind
whatsoever, whether real, personal or mixed, including cash,
securities, equity interests, accounts and contract rights. The
words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision of this Agreement
unless the context shall otherwise require. Any reference to a
Person, shall be deemed to include a reference to such
Person’s successors and assigns (including any debtor in
possession and any other Person to which substantially all of the
assets of such Person are transferred). All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require.
2. Subordination of
Subordinated Indebtedness to Senior Indebtedness .
2.1 Subordination .
The payment of any and all of the Subordinated Indebtedness hereby
expressly is subordinated, to the extent and in the manner set
forth herein, to the Payment in Full of the Senior Indebtedness.
Each holder of Senior Indebtedness, whether now outstanding or
hereafter arising, shall be deemed to have acquired Senior
Indebtedness in reliance upon the provisions contained herein.
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2.2 Restriction on
Payments . Notwithstanding any provision of the
Subordinated Indebtedness Documents to the contrary and in addition
to any other limitations set forth herein or therein, no payment
(whether made in cash, securities, other than any Reorganization
Subordinated Securities, or other Property or by set-off) of
principal, interest, premium or any other amount due with respect
to the Subordinated Indebtedness shall be made or received, and
neither Subordinated Agent nor the Subordinated Creditor shall
exercise any right of set-off or recoupment with respect to any
Subordinated Indebtedness, until all of the Senior Indebtedness is
Paid in Full; provided , that, except as provided in the
immediately succeeding sentence or in subsection 2.3 , the
Company may make and Subordinated Agent and the Subordinated
Creditor may accept and retain Permitted Subordinated Indebtedness
Payments. Notwithstanding the foregoing, no Obligor may make, and
neither Subordinated Agent nor the Subordinated Creditor may accept
or retain, any payment of principal, interest, premium or any other
amount with respect to the Subordinated Indebtedness (other than
any payment made solely in Reorganization Subordinated Securities)
if, at the time of such payment or, with respect to clause
(a) below, immediately after giving effect thereto:
(a) a Senior Payment Default
exists; or
(b) subject to the penultimate
sentence of this subsection 2.2 , the Subordinated Agent or
the Subordinated Creditor shall have received a Senior Default
Notice from Senior Agent or any Senior Creditor stating that a
Senior Covenant Default exists or would be created by the making of
such payment.
The
Company may resume Permitted Subordinated Indebtedness Payments
(and may make any Permitted Subordinated Indebtedness Payments
missed due to the application of clauses (a) or (b)
of this subsection 2.2 ), and Subordinated Agent and
Subordinated Creditor may accept and retain such Permitted
Subordinated Indebtedness Payments:
(1) in the case of a Senior
Payment Default referred to in clause (a) of this
subsection 2.2 , upon a cure or waiver (as evidenced by a
written waiver from Senior Agent or the Senior Creditors to the
Company) thereof in accordance with the terms of the Senior
Purchase Agreement or Permitted Refinancing Debt Documents; or
(2) in the case of a Senior
Covenant Default referred to in clause (b) of this
subsection 2.2 , upon the earlier to occur of (x) the
cure or waiver (as evidenced by a written waiver from Senior Agent
or the Senior Creditors to the Company) of all such Senior Covenant
Defaults in accordance with the terms of the Senior Purchase
Agreement or Permitted Refinancing Debt Documents, and (y) the
expiration of 180 days from the date on which the Senior
Default Notice was received.
Notwithstanding any provision of
this subsection 2.2 to the contrary:
(A) the Company shall not be
prohibited from making, and Subordinated Agent and Subordinated
Creditor shall not be prohibited from accepting and retaining,
Permitted Subordinated Indebtedness Payments by virtue of the
payment blockage effected by clause (b) of this
subsection 2.2 for more than an aggregate of 180 days
within any period of 360 consecutive days;
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(B) no Senior Covenant Default
existing on the date any notice is given pursuant to clause
(b) of this subsection 2.2 shall, unless the same shall
have ceased to exist for a period of at least 60 consecutive days,
be used as a basis for any subsequent such notice (for purposes of
this paragraph, breaches of the same financial covenant for
consecutive periods shall constitute separate and distinct Senior
Covenant Defaults); and
(C) Senior Agent and the Senior
Creditors shall not deliver more than three (3) Senior Default
Notices, in the aggregate, prior to the termination of this
Agreement.
The
provisions of this subsection 2.2 shall not apply to any
payment with respect to which subsection 2.3 would be
applicable.
2.3 Proceedings . In
the event of any insolvency, bankruptcy, receivership,
custodianship, liquidation, reorganization, assignment for the
benefit of creditors or other proceeding for the liquidation,
dissolution or other winding up of any Obligor or any of its
Subsidiaries or any of their respective Property (a "
Proceeding "): (i) all Senior Indebtedness first shall
be Paid in Full before any payment (whether made in cash,
securities or other Property) of or with respect to the
Subordinated Indebtedness shall be made in such Proceeding (other
than a distribution of Reorganization Subordinated Securities);
(ii) any payment which, but for the terms hereof, otherwise
would be payable or deliverable in such Proceeding in respect of
the Subordinated Indebtedness (other than a distribution of
Reorganization Subordinated Securities), shall be paid or delivered
directly to Senior Agent (to be held and/or applied by Senior Agent
in accordance with the terms of the Senior Purchase Agreement or
the Permitted Refinancing Debt Documents) until all Senior
Indebtedness is Paid in Full, and Subordinated Agent and the
Subordinated Creditor each irrevocably authorizes, empowers and
directs all receivers, trustees, liquidators, custodians,
conservators and others having authority in the premises to effect
all such payments and deliveries, and Subordinated Agent and the
Subordinated Creditor each also irrevocably authorizes, empowers
and directs Senior Agent to demand, sue for, collect and receive
every such payment or distribution; (iii) Subordinated Agent
and the Subordinated Creditor each agrees to execute and deliver to
Senior Agent or its representative all such further instruments
confirming the authorization referred to in the foregoing clause
(ii) as Senior Agent may reasonably request; and
(iv) Subordinated Agent and the Subordinated Creditor each
hereby irrevocably authorizes, empowers and appoints Senior Agent
its agent and attorney-in-fact to execute, verify, deliver and file
any proofs of claim (but not vote such claims) in respect of the
Subordinated Indebtedness in connection with any such Proceeding
upon the failure of such Person to do so 15 days before the
expiration of the time to file any such proof of claim;
provided , that Senior Agent shall have no obligation to
execute, verify, deliver, and/or file any such proof of claim. The
Senior Indebtedness shall continue to be treated as Senior
Indebtedness and the provisions of this Agreement shall continue to
govern the relative rights and priorities of Senior Agent, Senior
Creditors, Subordinated Agent and Subordinated Creditor even if all
or part of the Senior Indebtedness or the Liens securing the Senior
Indebtedness are subordinated, set aside, avoided or disallowed in
connection with any such proceeding. This Agreement shall be
reinstated if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by any
holder of the Senior Indebtedness or any representative of such
holder and the Senior Indebtedness, or portion thereof, intended to
have been satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
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2.4 Incorrect
Payments . If any payment (whether made in cash, securities
or other Property) not permitted to be accepted by Subordinated
Agent or Subordinated Creditor under this Agreement is received by
Subordinated Agent or the Subordinated Creditor on account of any
Subordinated Indebtedness before all Senior Indebtedness is Paid in
Full, such payment shall not be commingled with any asset of such
Person, shall be held in trust by such Person for the benefit of
Senior Agent and Senior Creditors and shall be paid over to Senior
Agent, or its designated representative, for application (in
accordance with the Senior Purchase Agreement or the Permitted
Refinancing Debt Documents, as the case may be) to the payment of
the Senior Indebtedness then remaining unpaid, until all of the
Senior Indebtedness is Paid in Full.
2.5 Sale, Transfer .
The Subordinated Creditor shall not sell, assign, dispose of or
otherwise transfer all or any portion of the Subordinated
Indebtedness unless following such sale, assignment, disposition or
other transfer, there shall either be (i) no more than two
(2) holders of Subordinated Indebtedness ( provided ,
that each holder of Subordinated Indebtedness and its respective
affiliates and Related Funds shall be counted as a single holder
for purposes of determining compliance with the foregoing
limitation), or (ii) one Person acting as agent for all
holders of the Subordinated Indebtedness pursuant to documentation
reasonably satisfactory to Senior Agent such that any Senior
Default Notices and other notices and communications to be
delivered to the Subordinated Creditor hereunder and any consents
required by the Subordinated Creditor shall be made to or obtained
from such agent and shall be binding on the Subordinated Creditor
as if directly delivered to or obtained from such Subordinated
Creditor. In the event of a permitted sale, assignment, disposition
or other transfer, prior to or substantially contemporaneously with
the consummation of any such action, the transferee thereof shall
execute and deliver to Senior Agent a joinder to this Agreement, or
an agreement substantially identical to this Agreement, in either
case providing for the continued subordination and forbearance of
the Subordinated Indebtedness to the Senior Indebtedness as
provided herein and for the continued effectiveness of all of the
rights of Senior Agent and Senior Creditors arising under this
Agreement. Notwithstanding the failure to execute or deliver any
such agreement, the subordination effected hereby shall survive any
sale, assignment, disposition or other transfer of all or any
portion of the Subordinated Indebtedness, and the terms of this
Agreement shall be binding upon the successors and assigns of the
Subordinated Creditor, as provided in Section 10
below.
2.6 Legends . Until
the Senior Indebtedness is Paid in Full, the Subordinated Purchase
Agreement, each of the Subordinated Notes and all other
Subordinated Indebtedness Documents evidencing or otherwise
containing the grant of any Lien on any Shared Collateral at all
times shall contain in a conspicuous manner the following
legend:
"This Note [or other Subordinated Indebtedness Document] and the
indebtedness 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 January 5, 2007 among Terremark Worldwide, Inc. as
the Issuer, the Subsidiary Guarantors named therein, FMP Agency
Services, LLC, as the Senior Agent to the Senior Creditors named
therein, and Credit Suisse, Cayman Islands Branch, as the
Subordinated Creditor named therein and each holder of this Note,
by its acceptance hereof, shall be bound by the provisions of the
Subordination and Intercreditor Agreement."
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2.7 Restriction on Action by
the Subordinated Creditor .
(a) Until the Senior
Indebtedness is Paid in Full and notwithstanding anything contained
in the Subordinated Indebtedness Documents, the Senior Purchase
Agreement, the other Basic Documents or the Permitted Refinancing
Debt Documents to the contrary, neither Subordinated Agent nor the
Subordinated Creditor shall, without the prior written consent of
Senior Agent and each Senior Creditor, agree to any amendment,
modification or supplement to the Subordinated Indebtedness
Documents, the effect of which is to (i) increase the maximum
principal amount of the Subordinated Indebtedness,
(ii) increase the rate of interest on any of the Subordinated
Indebtedness, except in connection with the imposition of a default
rate of interest to the extent provided for in the Subordinated
Indebtedness Documents on the date hereof, (iii) shorten the
dates upon which payments of principal or interest on the
Subordinated Indebtedness are due, (iii) change in a manner
adverse to any Obligor or add any event of default, or add or make
more restrictive any covenant with respect to the Subordinated
Indebtedness, (iv) change the redemption, prepayment or put
provisions of the Subordinated Indebtedness in a manner adverse to
any Obligor, (v) alter the subordination provisions with
respect to the Subordinated Indebtedness or any Lien securing the
same, including, without limitation, subordinating the Subordinated
Indebtedness or any Lien securing the same to any other
indebtedness, (vi) alter the repayment terms of the
Subordinated Indebtedness, (vii) take any Liens on any
Property of any Obligor, any Subsidiary of any Obligor or any other
Person, except to the extent that Senior Agent shall have been
granted a Lien on such Property, (viii) obtain any guaranties
or credit support from any Person, unless Senior Agent and Senior
Creditors have obtained a guaranty or credit support, as the case
may be, in respect of the Senior Indebtedness from such Person and
such Person’s obligations in respect of such guaranty or
credit support, as the case may be, in favor of Subordinated Agent
and Subordinated Creditor in respect of the Subordinated
Indebtedness are subordinated to its obligations in respect of the
Senior Indebtedness on the same terms and to the same extent that
the Subordinated Indebtedness is subordinated to the Senor
Indebtedness pursuant the terms of this Agreement, or
(ix) change or amend any other term of the Subordinated
Indebtedness Documents if such change or amendment would increase
the obligations of any Obligor or confer additional material rights
on Subordinated Agent or the Subordinated Creditor or any other
holder of the Subordinated Indebtedness in a manner adverse to any
Obligor, Senior Agent or Senior Creditors; provided , that,
notwithstanding the foregoing, if the Senior Purchase Agreement or
any of the other Basic Documents are amended (x) to change any
existing or include any additional financial covenants thereunder,
Subordinated Creditor may amend the Subordinated Indebtedness
Documents to reflect such changes, so long as the relative
difference between such covenants as reflected in the Subordinated
Indebtedness Documents and the Basic Documents, in each case as of
the date hereof, shall be maintained, or (y) to include any
additional covenants or defaults, the Subordinated Creditor may
include such covenants and defaults under the applicable
Subordinated Indebtedness Documents, so long as monetary
thresholds, if any, referenced therein shall be adjusted ratably to
incorporate the same relative difference as reflected generally
between monetary amounts set forth in the Subordinated Indebtedness
Documents and the Basic Documents, in each case as of the date
hereof.
(b) Until the Senior
Indebtedness is Paid in Full, neither Subordinated Agent nor
Subordinated Creditor shall, without the prior written consent of
Senior Agent, take any action to collect, or enforce payment of the
Subordinated Indebtedness, exercise any of the remedies with
respect to the Subordinated Indebtedness set forth in any of the
Subordinated Indebtedness
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Documents or that otherwise may be available to Subordinated
Agent or the Subordinated Creditor, either at law or in equity, by
judicial proceedings (including by filing a Proceeding) or
otherwise including, without limitation, taking any action under
state or Federal law (including the UCC) to foreclose upon, take
possession of or sell any Shared Collateral (an " Enforcement
Action "), except as provided in the following sentence.
Subject in any event to the terms and provisions of
Section 21 , upon the earliest to occur of:
(i) the passage of 180 days
from the date of Senior Agent’s and each Senior
Creditor’s receipt of a Subordinated Default Notice that
includes a statement that Subordinated Creditor is commencing the
180-day standstill period provided for herein if the Subordinated
Default described therein shall not have been cured or waived
within such period;
(ii) acceleration of the Senior
Indebtedness ( provided , that if, following any such
acceleration of the Senior Indebtedness, such acceleration in
respect of the Senior Indebtedness is rescinded, then all
Enforcement Actions taken by Subordinated Agent or the Subordinated
Creditor shall likewise be rescinded if (A) such Enforcement
Actions are based on this clause (ii) and (B) neither
Subordinated Agent nor the Subordinated Creditor shall have any
right under any other clause of this subsection 2.7(b) to
take any Enforcement Actions).
(iii) the occurrence of a
Proceeding ( provided , that if such Proceeding is
dismissed, the corresponding prohibition against Subordinated Agent
or Subordinated Creditor taking any Enforcement Action shall
automatically be reinstated as of the date of dismissal as if such
Proceeding had not been initiated, unless Subordinated Agent and
Subordinated Creditor shall have the right to take any Enforcement
Action under another clause of this subsection 2.7(b) ;
provided , further , that such reinstatement shall
not affect the running of the 180 day period under clause
(a) above to the extent the Subordinated Default giving rise
thereto is not based on an acceleration of the Senior Indebtedness
or the initiation of such Proceeding);
Subordinated Agent and Subordinated Creditor may, upon five
(5) Business Days’ prior written notice to Senior Agent,
take Enforcement Actions; provided , that no such notice
shall be required in the case of any Enforcement Action permitted
to be taken under clauses (ii) or (iii) of this
subsection 2.7(b).
3. Continued
Effectiveness of this Agreement; Modifications to Senior
Indebtedness .
(a) The terms of this
Agreement, the subordination effected hereby, and the rights and
the obligations of Subordinated Agent, Subordinated Creditor,
Senior Agent and Senior Creditors arising hereunder, shall not be
affected, modified or impaired in any manner or to any extent by:
(i) any amendment or modification of or supplement to the
Senior Purchase Agreement, any other Basic Document or any
Permitted Refinancing Debt Document (to the extent such amendment,
modification or supplement is not prohibited under the terms of
this Agreement) or any Subordinated Indebtedness Document;
(ii) the validity or enforceability of any of such documents;
or (iii) any exercise or non-exercise of any right, power or
remedy under or in
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respect of the Senior Indebtedness or the Subordinated
Indebtedness or any of the instruments or documents referred to in
clause (i) above.
(b) Senior Agent and Senior
Creditors may at any time and from time to time without the consent
of or notice to Subordinated Agent or the Subordinated Creditor,
without incurring liability to Subordinated Agent or the
Subordinated Creditor and without impairing or releasing the
obligations of Subordinated Agent or the Subordinated Creditor
under this Agreement, change the manner or place of payment or
extend the time of payment of or renew or alter any Senior
Indebtedness, or amend, supplement, restate or otherwise modify in
any manner any Basic Document or Permitted Refinancing Debt
Document; provided , that Senior Creditors shall not amend
or otherwise modify the terms of the Senior Indebtedness if the
effect of such amendment or modification is to (i)&nb
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