This
Subordination Agreement (this “Agreement”) dated _____ __, 201_, is between
_________, _________ and
__________, individually (the “Subordinated Creditor(s)”), and
Massachusetts Life Sciences
Center (“Senior Creditor”).
Recitals
A.
[Insert Accelerator Company
Name] (“Borrower”) has obtained credit from Senior
Creditor.
B.
[Insert Subordinated
Creditors’ names], individually (“Subordinated
Creditor(s)”)
have extended credit to Borrower and/or may later extend other credit to
Borrower.
C.
To induce Senior Creditor to
extend credit to Borrower and make further extensions of credit to or for
Borrower, or to purchase or extend credit pursuant to any instrument or writing
on which Borrower is liable or to grant renewals or extensions of any loan,
extension of credit, purchase, or other accommodation each Subordinated
Creditor will subordinate all of Borrower's indebtedness and obligations to
such Subordinated Creditor with respect to such indebtedness, existing now or
later (the “Subordinated Debt”), to all of Borrower's indebtedness and
obligations to Senior Creditor (the “Senior Debt”) pursuant to a certain Life
Sciences Accelerator Funding Agreement dated _____ __, 201_ by and between
Borrower
and Senior Creditor (the “Loan Agreement”), as further amended from time to
time.
THE PARTIES AGREE AS
FOLLOWS:
1. All
Subordinated Debt payments are subordinated to Senior Creditor’s right to full
payment and performance of the Senior Debt and all of Borrower’s other
obligations to Senior Creditor existing now or later, together with collection
costs of the Loan (as defined in the Loan Agreement), including attorneys'
fees, and including any interest accruing after any bankruptcy, reorganization
or similar proceeding and all obligations under the Loan Agreement.
2.
No Subordinated Creditor
will:
a)
demand or receive from
Borrower (and Borrower will not pay any part of the Subordinated Debt, by
payment, prepayment, or otherwise, which may now or hereafter be owing by
Borrower to either Subordinated Creditor, or
b)
accelerate the Subordinated
Debt, or begin to or participate in any action against Borrower with respect to
such Subordinated Debt, until all the Senior
Debt is paid, or
c)_ assign any of the Subordinated Debt or any
collateral security therefore without notice to or consent of Senior Creditor
and unless assigned pursuant to an assignment made expressly subject to this
Agreement.
This
does not prohibit each such Subordinated Creditor from converting any
Subordinated Debt into equity securities of Borrower or exercising any rights
as a stockholder of the Borrower.
3.
Each Subordinated Creditor
must deliver to Senior Creditor in the form received (except for endorsement or
assignment by each Subordinated Creditor) any payment, distribution, security
or
proceeds
it receives on the Subordinated Debt other than according to this Agreement.
4.
These provisions remain in
full force and effect, despite Borrower's insolvency, reorganization or any
case or proceeding under any bankruptcy or insolvency law, and Senior
Creditor's claims against Borrower and Borrower’s estate will be fully paid
before any payment is made to any Subordinated Creditor with respect to the
Subordinated Debt.
5.
Until the Senior Debt is
paid, each Subordinated Creditor irrevocably appoints Senior Creditor as its
attorney-in-fact, with power of attorney with power of substitution, in each
such
Subordinated
Creditor’s name or in Senior Creditor’s name, for Senior Creditor’s use and
benefit without notice to each such Subordinated Creditor, to do the following
in any bankruptcy, insolvency or similar
proceeding involving Borrower:
a)
File any claims for the
Subordinated Debt for each such Subordinated Creditor if such
Subordinated
Creditor does not do so at least 30 days before the time to file claims
expires, and
b)
Accept or reject any plan of
reorganization or arrangement for each such Subordinated Creditor and vote each
such Subordinated Creditor's claims in respect of the Subordinated Debt in any
way it chooses.
6.
Each Subordinated Creditor
will immediately put a legend on the Subordinated Debt instruments that the
instruments are subject to this Agreement. No amendment of the Subordinated
Debt documents will modify this Agreement in any way that terminates or impairs
the subordination of the Subordinated Debt or the subordination of the security
interest or lien that Senior Creditor has in Borrower’s property.
7.
This Agreement shall be
binding upon each Subordinated Creditor, their respective successors or
assigns, and shall inure to the benefit of and be enforceable by each Senior
Creditor and its successors or assigns.
8.
This Agreement shall
terminate upon the date on which the Senior Debt shall have been paid in cash
in full.
9.
Senior Creditor may
administer and manage its credit and other relationships with Borrower in its
own best interest, without notice or consent of either Subordinated Creditor.
At any time and from time to time, Senior Creditor may enter into any amendment
or agreement with Borrower as Senior Creditor may deem proper.
10.
All conditions, covenants,
duties and obligations contained in this Agreement can be waived only by
written agreement. Forbearance or indulgence in any form or manner by a party
shall not be construed as a waiver, nor in any way limit the remedies available
to that party.
11.
All communications to the
Senior Creditor shall be mailed or delivered to the following address, or sent
by facsimile to the following number with confirmation of receipt by voice:
All
communications to each Subordinated Creditor shall be mailed or delivered to
the following address:
[insert name]
Chief Executive Officer [or
other title]
[insert
address of Accelerator company]
12.
If one or more provisions of
this Agreement are held to be unenforceable under applicable law, such
provision shall be excluded from this Agreement, and the balance of the
Agreement shall be interpreted as if such provision were so excluded, and shall
be enforceable in accordance with its terms.
13.
This Agreement may be
executed in two or more counterparts, each of which is an original and all of
which together constitute one instrument.
14.
Massachusetts law governs
this Agreement without giving effect to conflicts of laws principles. Each
Subordinated Creditor and the Senior Creditor submit to the exclusive
jurisdiction of the State courts. EACH SUBORDINATED
CREDITOR
AND THE SENIOR CREDITOR WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION FROM THIS AGREEMENT.
15.
If there is an action to
enforce the rights of a party under this Agreement, the party prevailing will
be entitled, in addition to other relief, all reasonable costs and expenses,
including reasonable attorneys' fees, incurred in the action. [Signatures on
Following Page]
Subordinated Creditor(s):
_______________________________
[insert name]
_______________________________
[insert name]
_____________________________
[insert
name]
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