Exhibit 10.5
SUBORDINATION AND
INTERCREDITOR AGREEMENT
This Subordination and Intercreditor Agreement (the "Agreement")
is made this 26th day of March, 2009, between RICHARD
PARRILLO (the "Subordinated Lender"), a New York resident, and
KELTIC FINANCIAL PARTNERS, LP , a Delaware limited
partnership ("Keltic"), and BRIDGE HEALTHCARE FINANCE, LLC ,
a Delaware limited liability company ("Bridge", and together with
Keltic, individually and collectively, "Senior Lender").
WITNESSETH
WHEREAS, Hudson Technologies Company, a Tennessee corporation
("Borrower"), has executed and delivered to Senior Lender one or
more revolving notes and/or term notes (the "Senior Notes")
evidencing all of Borrower's obligations, liabilities and
indebtedness to Senior Lender, as set forth in an Amended and
Restated Loan Agreement dated June 26, 2007 among Borrower and
Senior Lender (as amended, modified or supplemented from time to
time, the "Loan Agreement"), and as secured by a General Security
Agreement made by Borrower in favor of Senior Lender (the "Security
Agreement") (the Loan Agreement, the Security Agreement and the
Senior Notes together with the other documents, instruments and
agreements executed in connection therewith, as they may from time
to time be modified, amended, restated or replaced are hereinafter
collectively referred to as, the "Senior Loan Documents"), pursuant
to which Senior Lender has agreed to make certain loans and
advances to Borrower (collectively, the "Loans"), upon and subject
to the terms of the Senior Loan Documents, which Loans will
directly benefit Subordinated Lender. Capitalized terms used and
not otherwise defined herein shall have the meanings given to such
terms in the Senior Loan Documents.
WHEREAS, all of the indebtedness, liabilities and obligations of
Borrower to Senior Lender, whether now existing or hereafter
arising, including, without limitation, the Loans and all other
present and future Obligations of Borrower to Senior Lender are
hereinafter collectively called the "Senior Debt."
WHEREAS, the payment and performance of the Senior Debt is
secured by a security interest in, among other things, all of the
present and future goods, equipment, inventory, investment
property, instruments, chattel paper, documents, letter-of-credit
rights, accounts, deposit accounts, commercial tort claims and
general intangibles of Borrower, wherever located, and the products
and proceeds thereof (collectively, the "Collateral").
WHEREAS, Subordinated Lender is or may be the holder of certain
indebtedness and liabilities owing from Borrower to Subordinated
Lender from time to time or may have made a loan or loans to
Borrower, including under that certain Note Purchase Agreement
dated on or about the date hereof between Borrower and Subordinated
Lender (the "Subordinated Note Purchase Agreement") and that
certain promissory note dated on or about the date hereof given by
Borrower to Subordinated Lender in the principal amount of
$1,000,000 (the "Subordinated Note"). The Subordinated Note
Purchase Agreement, the Subordinated Note and the Subordinated
Security Agreement referenced below, together with all other
documents, agreements, instruments and/or certificates relating
thereto, are hereinafter collectively referred to as the
"Subordinated Debt Documents."
WHEREAS, all indebtedness, liabilities and obligations of
Borrower to Subordinated Lender, whether now existing or hereafter
arising, including, without limitation, all indebtedness,
liabilities and obligations under the Subordinated Debt Documents,
together with all interest and other monies due or to become due
thereunder, and any fees, costs and expenses in connection
therewith, are hereinafter referred to as the "Subordinated
Debt."
WHEREAS, the payment and performance of the Subordinated Debt is
secured by a security interest in certain assets of the Borrower,
some or all of which constitute the Collateral, pursuant to a
General Security Agreement given by Borrower in favor of
Subordinated Lender (as amended, the "Subordinated Security
Agreement").
WHEREAS, it is a condition precedent to the obligation of Senior
Lender to continue to make the Loans provided for in the Senior
Loan Documents that Subordinated Lender and Borrower execute and
deliver this Agreement to and with Senior Lender.
NOW, THEREFORE, in order to induce Senior Lender to make the
Loans provided for in the Senior Loan Documents and in
consideration therefor, and in consideration of the mutual
covenants set forth herein, the parties hereto hereby agree as
follows:
1.
CONSENT . Subordinated Lender hereby consents to and
approves of the execution, delivery and performance by Borrower of
the Senior Loan Documents and the consummation of the transactions
contemplated thereby, notwithstanding anything to the contrary
contained in any of the agreements, instruments and documents
executed in connection with the Subordinated Debt.
2.
SUBORDINATION .
2.1 Subordination of
Payment . Except as set forth in Section 2.2 below, the
payment of any and all of the principal amount of, interest on and
any fees, costs and expenses on the Subordinated Debt is hereby
expressly subordinated and made junior to the payment of the
principal amount, all interest, all liquidated damages, fees,
costs, expenses and any other amounts due on the Senior Debt.
2.2 Payments .
Anything in any other agreement, instrument or document executed
and delivered in connection with the Subordinated Debt to the
contrary notwithstanding, Borrower shall not make, and Subordinated
Lender shall not receive, accept or retain, any direct or indirect
payment, or prepayment on account, or any reduction (whether by way
of loan, set-off or otherwise) in respect of the principal of,
premium on, or interest on the Subordinated Debt until the
Termination Date (as defined in Section 6.11); provided, however,
that so long as (a) on the date such proposed payment is to be made
(a) no Default or Event of Default has occurred and is continuing,
or shall occur as a result of such payment, and (b) on the date
such proposed payment is to be made and after giving effect to such
proposed payment, Borrower shall have availability of not less than
$500,000 under the Revolving Loan (calculated on average for the
thirty (30) days prior to the date of such proposed payment, with
expenses, liabilities and trade payables being paid in the ordinary
course of business), Borrower may make, and Subordinated Lender may
accept, (i) monthly payments of interest on the Subordinated Debt
(with interest not to exceed ten percent (10%) per annum), without
acceleration, and (ii) payment of principal on the Subordinated
Debt on September 30, 2009.
2.3 Subordination of
Lien . Notwithstanding the date, manner or order of
creation, attachment or perfection of those security interests and
liens in favor of Subordinated Lender now or hereafter existing in
the Collateral, and notwithstanding any provisions of the Uniform
Commercial Code or other applicable law or of any agreement(s)
granting such security interests or liens to Subordinated Lender
and Senior Lender, the security interests and liens held by
Subordinated Lender in the Collateral shall be, in all respects,
subject to and subordinate to the security interests and liens of
Senior Lender in the Collateral to the full extent of the Senior
Debt secured thereby. Subordinated Lender will indicate in any
financing statement filed (whether before or after the date hereof)
in connection herewith that its security interests and liens in the
Collateral are subordinated to the security interests and liens of
Senior Lender in the Collateral.
2.4
Default/Remedies . In the event of (a) any insolvency,
bankruptcy, receivership, custodianship, liquidation,
reorganization, readjustment of debt, arrangement, composition,
assignment for the benefit of creditors, or other similar
proceeding relative to Borrower or its creditors, as such, or its
property, or (b) any proceeding of Borrower for voluntary
liquidation, dissolution, winding down or bankruptcy proceedings
(collectively, an "Insolvency Event"), then and in any such
event:
(i) All of the
Senior Debt shall first be paid in full before any payment or
distribution of any character, whether in cash, securities,
obligations or other property, shall be made in respect of the
Subordinated Debt;
(ii) Any payment or
distribution of any character, which would otherwise (but for the
terms hereof) be payable or deliverable in respect of the
Subordinated Debt (including any payment or distribution of any
other indebtedness of Borrower being subordinated to the
Subordinated Debt), shall be paid or delivered directly to Senior
Lender, or its representative, until the Termination Date, and
Subordinated Lender irrevocably authorizes, empowers and directs
all receivers, custodians, trustees, liquidators, conservators and
others having authority in the property and premises of
Subordinated Lender to effect all such payments and deliveries;
and
(iii) Notwithstanding any
statute, including, without limitation, the United States
Bankruptcy Code (the "Bankruptcy Code"), any rule of law or
bankruptcy procedures to the contrary, the right of Senior Lender
hereunder to have all of the Senior Debt paid and satisfied in full
prior to the payment of any of the Subordinated Debt shall include,
without limitation, the right of Senior Lender to be paid in full
all interest accruing on the Senior Debt due to it after the filing
of any petition by or against Borrower in connection with any
bankruptcy or similar proceeding or any other proceeding referred
to in this paragraph, hereof, prior to the payment of any amounts
in respect to the Subordinated Debt, including, without limitation,
any interest due to Subordinated Lender accruing after such
date.
2.5 Turnover to Senior
Lender; Senior Lender's Rights .
(a) Subordinated Lender
will, upon the written request of Senior Lender, prove, enforce and
endeavor to obtain payment of the aggregate outstanding amount of
all unpaid Subordinated Debt payments due and payable, or
thereafter becoming due and payable from Borrower to Subordinated
Lender, and will turn over to Senior Lender in precisely the form
received, any payment of any kind or character on account of the
Subordinated Debt for application to the payment of any
indebtedness, liabilities or obligations of Borrower to Senior
Lender then existing. In the event that Subordinated Lender shall
fail to take any such action requested by Senior Lender, Senior
Lender may, as attorney-in-fact for Subordinated Lender, take such
action on behalf of Subordinated Lender but for the use and benefit
of Senior Lender. Subordinated Lender hereby authorizes and
empowers (without imposing any obligation on) Senior Lender, under
the circumstances referred to in this Paragraph 2.5(a) to
demand, sue for, collect and receive every such payment and
distribution and give acquittance therefor, and to file claims and
to take such other proceedings in Senior Lender's own name or in
the name of Subordinated Lender or otherwise, and to vote, give
consent and take any other steps with regard thereto, all as Senior
Lender may deem necessary or advisable for the enforcement of this
Agreement, including without limitation, the right of Senior Lender
in its own name or in the name of Subordinated Lender, to vote the
full amount of the Subordinated Debt in its sole discretion in
connection with any resolution, arrangement, plan of
reorganization, compromise, settlement or extension, and to take
all such other action (including, without limitation, the right to
participate in any composition of creditors and the right to vote
the Subordinated Debt at creditors' meetings for the election of
trustees, acceptance of plans and otherwise), as Senior Lender may
deem necessary or advisable for the enforcement of this Agreement;
and
(b) Subordinated Lender
or any other holder of the Subordinated Debt shall execute and
deliver to Senior Lender or its representative all such further
instruments confirming the authorization referred to in the
Paragraph 2.5(a) , and any powers of attorney specifically
confirming the rights of Senior Lender arising hereunder, and all
such proofs of claim, assignments of claim and other instruments
and shall take all such other actions as may be requested by Senior
Lender or its representative in order to enable Senior Lender or
its representative to enforce any and all claims upon or in respect
of such Subordinated Debt and to collect and give any and all
payments of distributions which may be payable or deliverable at
any time upon or with respect to the Subordinated Debt.
(c) Notwithstanding
anything contained in this Paragraph 2.5 to the contrary,
the respective rights and obligations of the parties hereto under
this Paragraph 2.5 shall be applicable only at such time as
Senior Lender has accelerated the Senior Debt.
2.6 Payments in
Trust . If, notwithstanding the provisions of this
Agreement, any payment or distribution of any character (whether in
cash, securities, or othe
