|PERNIX THERAPEUTICS HOLDINGS, INC. filed this Form 8-K on 02/27/2019|
(b) Construction. The construction provisions set forth in Section 1.4 of the Credit Agreement shall apply mutatis mutandis to this Agreement as if expressly set forth therein and herein. Without limitation of the foregoing, the captions and headings of this Agreement are for convenience of reference only and shall not affect the construction of this Agreement.
Section 2. Subordination to Payment of Senior Debt. All payments on account of the Subordinated Debt shall be subject, subordinate, and junior, in right of payment and exercise of remedies, to the extent and in the manner set forth herein, to the Discharge of Senior Debt.
Section 3. Subordination upon Any Distribution of Assets of the Obligors. In the event of any payment or distribution of assets of any Debtor Obligor of any kind or character, whether in cash, property, or securities, upon the dissolution, winding up, or total or partial liquidation or reorganization, readjustment, arrangement, or similar proceeding relating to such Debtor Obligor or its property, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership, arrangement, or similar proceedings or upon an assignment for the benefit of creditors, or upon any other marshaling or composition of the assets and liabilities of such Debtor Obligor, or upon the occurrence of an Insolvency Proceeding, or otherwise (such events, collectively, the “Insolvency Events”): (a) the Discharge of Senior Debt must have occurred before any Subordinated Debt Payment is made; and (b) any Subordinated Debt Payment to which any Creditor Obligor would be entitled except for the provisions hereof, shall be paid or delivered by the trustee in bankruptcy, receiver, assignee for the benefit of creditors, or other liquidating lender making such payment or distribution directly to Agent for application to the payment of the Senior Debt until the Discharge of Senior Debt has occurred, after giving effect to any concurrent payment or distribution or provision therefor to Agent or any member of the Lender Group in respect of such Senior Debt.
Section 4. Payments on Subordinated Debt. (a) Permitted Payments. So long as no Event of Default has occurred and is continuing, each Debtor Obligor may make, and each Creditor Obligor shall be entitled to accept and receive Subordinated Debt Payments permitted by Section 6.6(a) of the Credit Agreement, to the extent such payments are made in the Ordinary Course of Business; provided that, notwithstanding anything to the contrary herein or in any Loan Document, without the express written consent of the Agent (at the direction of the Required Lenders), (i) none of the Debtor Obligors that are Loan Parties shall at any time make any Subordinated Debt Payments to any Creditor Obligor that is not a Loan Party and (ii) none of the Creditor Obligors that are not Loan Parties shall be at any time entitled to accept or receive any Subordinated Debt Payments from or on behalf of any Debtor Obligor that is a Loan Party.
(b) No Payment upon Senior Debt Defaults. Upon the occurrence and during the continuance of any Event of Default, and until such Event of Default is waived in accordance with the Credit Agreement, no Debtor Obligor shall make, and no Creditor Obligor shall accept or receive, any Subordinated Debt Payment. For the avoidance of doubt, once such Event of Default is cured or waived, and so long as no other Event of Default has occurred and is continuing, any Debtor Obligor may make and any Creditor Obligor may accept or receive, in the Ordinary Course of Business any Subordinated Debt payment, including payments scheduled for the period of time when such Event of Default existed to the extent permitted by Section 6.6(a) of the Credit Agreement, but subject in all respects to the proviso to Section 4(a) set forth above.
Section 5. Subordination of Remedies. Until the Discharge of Senior Debt has occurred, whether or not any Insolvency Event has occurred, no Creditor Obligor will:
(a) accelerate, make demand, or otherwise make due and payable prior to the original due date thereof any Subordinated Debt;