Exhibit 10.24

 

SUBORDINATION AGREEMENT

 

THIS SUBORDINATION AGREEMENT (this “Agreement”) is made as of November 3, 2016
by and among Rodney Spriggs, in his capacity as the representative of the
holders of certain outstanding capital stock of Vintage Stock, Inc. that are
named as a party to this Agreement (each holder, a “Seller”; and, collectively,
the “Sellers”), the Sellers, Wilmington Trust, National Association, as
administrative agent and collateral agent (in either or both such capacities,
and including any successor agent together with any future administrative and
collateral agent upon a refinancing or otherwise, “Agent” discretionary rights
of the Agent contained herein shall be at the direction of the Required Lenders)
for the Lenders, and the other Secured Parties (as defined in the Security
Agreement), and acknowledged and agreed to by the Borrowers (as hereinafter
defined).

 

INTRODUCTION

 

A.       Vintage Stock, Inc. (“VSI”), Vintage Stock Affiliated Holdings LLC
(“Holdings”, and together with VSI, each a “Borrower” and collectively, the
“Borrowers”), each other Loan Party party thereto, Agent and Lenders have
entered into a Loan Agreement of even date herewith (as the same may be amended,
supplemented, restated, or otherwise modified from time to time, the “Loan
Agreement”) pursuant to which, among other things, Lenders have agreed, subject
to the terms and conditions set forth in the Loan Agreement, to make certain
loans and financial accommodations to the Borrowers.

 

B.       Pursuant to that certain Pledge and Security Agreement dated as of the
date hereof entered into by and among each Loan Party and Agent (as the same may
be reaffirmed, amended, supplemented, restated or otherwise modified from time
to time, and, collectively with the Loan Agreement and the other agreements,
documents and instruments executed from time to time in connection therewith, as
any of the same may be amended, supplemented, restated, or otherwise modified
from time to time, the “Loan Documents”), each of the Loan Parties (other than a
Borrower) has guaranteed the Borrowers’ obligations under the Loan Agreement.

 

C.       In connection with that certain Stock Purchase Agreement dated as of
the date hereof among the Borrowers, the holders of all of the outstanding
capital stock of VSI, and Rodney Spriggs, as Sellers’ representative (in such
capacity, “Sellers’ Representative “), Sellers are receiving a seller note from
Holdings for a portion of the purchase price thereunder, as evidenced by that
certain Subordinated Promissory Note of even date herewith by Holdings in favor
of Sellers in the original aggregate principal amount of $10,000,000 (as the
same may be amended, supplemented, restated or otherwise modified from time to
time as permitted hereunder and including any notes issued in exchange or
substitution therefor, the “Junior Note”), and pursuant to which Holdings has
incurred obligations and liabilities to Sellers.

 

D.       As an inducement to and as one of the conditions precedent to the
agreement of Agent and Lenders to consummate the transactions contemplated by
the Loan Agreement, Agent and Lenders have required the execution and delivery
of this Agreement by Sellers and the acknowledgment and agreement hereof by the
Loan Parties.

 

 

 

 

 

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NOW, THEREFORE, in order to induce Agent and Lenders to consummate the
transactions contemplated by the Loan 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. Capitalized terms used but not otherwise
defined in this Agreement (including in the recitals) shall have the meanings
assigned to such terms in the Loan Agreement. As used in this Agreement, the
following terms have the following meanings:

 

Agent shall have the meaning ascribed to such term in the preamble of this
Agreement.

 

Bankruptcy Code shall mean Chapter 11 of Title 11 of the United States Code, as
amended from time to time and any successor statutes and all rules and
regulations promulgated thereunder.

 

Collateral shall mean all assets of the Loan Parties that secure, or purport to
secure, the Senior Debt.

 

Collection Action shall mean, with respect to the Junior Debt, any action (a) to
sue for, take or receive from or on behalf of any Loan Party, by set-off or in
any other manner, the whole or any part of any moneys which may now or hereafter
be owing by any Loan Party with respect to the Junior Debt, (b) to initiate or
participate with others in any suit, action or Proceeding against any Loan Party
or its property to (i) enforce payment of or to collect the whole or any part of
the Junior Debt or (ii) commence judicial enforcement of any of the rights and
remedies under the Junior Debt Documents or applicable law with respect to the
Junior Debt, (c) to accelerate any Junior Debt, (d) to cause any Loan Party to
honor any redemption, put or mandatory payment obligation with respect to the
Junior Debt or any other equity interests of any Loan Party, (e) to notify
account debtors or directly collect accounts receivables or other payment rights
of any Loan Party, (f) to take any action under the provisions of any state,
local, federal or foreign law, including, without limitation, the UCC, or under
any contract or agreement, to enforce, take possession of or sell any property
or assets of any Loan Party or (g) to exercise in any other manner any remedies
with respect to the Junior Debt set forth in any Junior Debt Document or that
otherwise might be available to Sellers with respect to the Junior Debt at law,
in equity, pursuant to judicial proceeding or otherwise.

 

Debtor Relief Law shall mean the Bankruptcy Code, or any and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency or similar laws
for debtor relief from time to time in effect and affecting the rights of
creditors generally or otherwise.

 

DIP Financing shall have the meaning specified therefor in Section 2.2(e).

 

Junior Debt shall mean, collectively, all of the obligations, liabilities and
indebtedness of Holdings to the Sellers evidenced by the Junior Note, and all
other amounts now or hereafter owed by Holdings to any Seller under or in
respect of any of the Junior Debt Documents, including, without limitation, any
amendments, restatements, modifications, renewals or extensions of any thereof
permitted hereunder.

 

 

 

 

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Junior Debt Document or Junior Debt Documents shall mean the Junior Note and all
other documents, agreements and instruments evidencing the foregoing and/or
executed and delivered in connection therewith, as amended, supplemented,
restated, or otherwise modified from time to time as permitted hereunder.

 

Junior Default shall mean a default in the payment of the Junior Debt or in the
performance of any term, covenant or condition contained in any of the Junior
Debt Documents, permitting any one or more Sellers to accelerate the payment of,
or put or cause the redemption of, all or any portion of the Junior Debt or any
of the Junior Debt Documents.

 

Lender or Lenders shall mean any holder or all of the holders of Senior Debt
including, without limitation, any “Lender” or the “Lenders,” respectively, as
such terms are defined in the Loan Agreement.

 

Paid in Full or Payment in Full shall mean the (a) irrevocable payment in full
in cash of all Senior Debt and (b) termination of all commitments to lend under
the Loan Documents,

 

Permitted Junior Debt Payments shall mean, without duplication, (i) regularly
scheduled payments of interest on the Junior Debt payable in cash at a rate not
to exceed eight percent (8.00%) per annum, (ii) payment of reasonable and
documented out-of-pocket costs and expenses incurred in connection with any
actions taken not in contravention of the terms and conditions of this
Agreement, to the extent due and owing to any Seller in accordance with the
terms of the Junior Debt Documents, but in any event, not to exceed $25,000 in
the aggregate, and (iii) “catch up payments” to the extent permitted by Section
2.3(b).

 

Person shall mean any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity

 

Proceeding shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person, including, without
limitation, any of the foregoing under any Debtor Relief Law.

 

Required Lenders shall have the meaning ascribed to such term in the Loan
Agreement.

 

Seller shall mean each Seller which is a signatory to this Agreement and any
other holder of a Junior Note or any other Junior Debt from time to time.

 

 

 

 

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Sellers shall mean all signatories to this Agreement and holders of the Junior
Note or any other Junior Debt from time to time, collectively.

 

Sellers’ Repr esentativ e shall have the meaning ascribed to such term in the
preamble of this Agreement.

 

Senior Creditor shall mean any holder of the Senior Debt from time to time.

 

Senior Creditors shall mean all holders of Senior Debt, collectively.

 

Senior Debt shall mean the “Obligations,” as such term is defined in the Loan
Agreement, including, without limitation, all principal, interest, fees,
expenses, indemnities, reimbursement obligations, cash management obligations
and swap obligations, in each instance, whether before or after the commencement
of a Proceeding and without regard to whether or not an allowed claim, and all
obligations and liabilities incurred under the Loan Documents, together with any
amendments, restatements, modifications, renewals or extensions of any thereof.

 

Senior Default shall mean any “Event of Default” (or other term of similar
import or meaning) under the Loan Agreement or excess Availability pursuant to
the Borrowing Base under the ABL Facility Documents is less than $2,000,000.

 

UCC shall mean the Uniform Commercial Code of any applicable jurisdiction and,
if the applicable jurisdiction shall not have any Uniform Commercial Code, the
Uniform Commercial Code as in effect from time to time in the State of New York.

 

2.                  Subordination.

 

2.1       Subordination of Junior Debt to Senior Debt. Each of the Loan Parties
by their acknowledgment and agreement hereto covenants and agrees, and the
Sellers by its acceptance of the Junior Note (whether upon original issue or
upon transfer or assignment) covenant and agree, that the payment of any and all
of the Junior Debt is subordinate and subject in right of payment, to the extent
and in the manner hereinafter set forth, to the prior Payment in Full of the
Senior Debt.

 

2.2       Proceedings.

 

(a)               Payments and Distributions. In the event of any Proceeding
involving any Loan Party or any property of any Loan Party or any payment or
distribution in respect of any such property in any Proceeding, (i) all Senior
Debt first shall be Paid in Full before any payment of, or payment or
distribution with respect to, the Junior Debt shall be made, including, without
limitation reorganization securities; (ii) any payment or distribution, whether
in cash, property or securities which, but for the terms hereof, otherwise would
be payable or deliverable in respect of the Junior Debt, shall be paid or
delivered directly to Agent (to be held and/or applied by Agent in accordance
with the terms of the Loan Agreement) until all Senior Debt is Paid in Full, and
each Seller irrevocably authorizes, empowers and directs all receivers,
trustees, liquidators, custodians, conservators and others having authority in
the premises to effect all such payments and distributions, and each Seller also
irrevocably authorizes, empowers and directs Agent to demand, sue for, collect
and receive every such payment or distribution; and (iii) each Seller agrees to
execute and deliver to Agent or its representative all such further instruments
confirming the authorization referred to in the foregoing clause.

 

 

 

 

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(b)               Proofs of Claim; Claims; Voting; and Other Matters. At any
meeting of creditors or in the event of any Proceeding involving any Loan Party
or any property of any Loan Party, Sellers shall retain the right to file a
proof of claim and otherwise act with respect to the Junior Debt in a manner not
inconsistent with the terms of this Agreement. Until all Senior Debt is Paid in
Full, Sellers shall not vote in support or in favor of any plan of partial or
complete liquidation, reorganization, arrangement, composition or extension
unless such plan pays off in full in cash the Senior Debt; provided that,
Sellers shall not initiate, prosecute or participate in any claim or action in
such Proceeding challenging the enforceability, validity, perfection, priority
or extent of the Senior Debt, this Agreement or any liens and security interests
securing the Senior Debt. In the event Sellers fail to execute, verify, deliver
and/or file any proofs of claim in respect of the Junior Debt in connection with
any such Proceeding prior to the date that is ten (10) days before the
expiration of the time to file any such proof of claim, each Seller hereby
irrevocably authorizes, empowers and appoints Agent its agent and
attorney-in-fact to execute, verify, deliver and file such proofs of claim in
any such Proceeding; provided, (i) Agent shall have no obligation to exercise
any such authority with respect to a Seller’s claim, and (ii) Agent shall notify
Sellers’ Representative of any filing of a proof of claim on behalf of Sellers
hereunder; and in addition, each Seller hereby irrevocably authorizes, empowers
and appoints Agent its agent and attorney-in-fact to vote any such claim in any
such Proceeding. In the event that Agent votes any claim in accordance with the
authority granted hereby, on behalf of a Seller, such Seller shall not be
entitled to change or withdraw such vote.

 

(c)               Reinstatement. The Senior Debt shall continue to be treated as
Senior Debt and the provisions of this Agreement shall continue to govern the
relative rights and priorities of the Senior Creditors and Sellers even if all
or part of the Senior Debt or the security interests securing the Senior Debt
are subordinated, set aside, avoided or disallowed in connection with any
Proceeding. This Agreement shall be reinstated, revived and continue in full
force and effect if at any time any payment of any of the Senior Debt is
rescinded, declared to be fraudulent or preferential, set aside, required to be
paid to any receiver, trustee in bankruptcy, insolvency, receivership,
fraudulent conveyance, preference or similar law, or must otherwise be returned
by any Senior Creditor or any representative of such Person. To the extent that
any Senior Creditor receives payments (whether in cash, property or securities)
on the Senior Debt that are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, receiver
or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or proceeds received, the
Senior Debt, or part thereof, intended to be satisfied shall be revived and
continue in full force and effect as if such payments or proceeds had not been
received by such Senior Creditor.

 

 

 

 

 

 

 

 

 

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(d)               Applications under Debtor Relief Law. None of the Loan Parties
or Sellers shall file any plan or arrangement under any Debtor Relief Law that
provides for, or would permit directly or indirectly, Agent or any Senior
Creditor to be classified with any other creditor of any Loan Party for the
purposes of any Debtor Relief Law or otherwise, and each Seller acknowledges and
agrees that such Seller shall not endeavor to so classify Agent or any Senior
Creditor.

 

(e)               DIP Financing. Until the Payment in Full of the Senior Debt
has occurred, each Seller agrees that it will not provide, support, offer, or
consent to, any post-petition financing under Section 364 of the Bankruptcy
Code, or any comparable provision of any other Bankruptcy Law (a “DIP
Financing”) unless such DIP Financing is consented to by the Agent. Sellers
shall not object to or contest any DIP Financing consented to or provided by the
Agent and shall not object to any sale under Section 363 of the Bankruptcy Code
consented to by the Agent.

 

2.3       Junior Debt Payments.

 

(a)               Restrictions on Payments; Commencement of Payment Blockage.
The terms of the Junior Debt Documents to the contrary notwithstanding, each
Loan Party by its acknowledgment and agreement hereto hereby agrees that it may
not make, and each Seller hereby agrees that it will not accept from any Person,
any payment or distribution on account of, or any redemption, purchase or
acquisition of, the Junior Debt (by set off or otherwise) until the Senior Debt
is Paid in Full, other than, except as otherwise prohibited herein, Permitted
Junior Debt Payments. Subject to Section 2.3(b) herein, the Loan Parties and
Sellers further agree that no Permitted Junior Debt Payments may be made by any
Loan Party or any other Person or accepted by Sellers from any Person if, at the
time of such payment or immediately after giving effect thereto, a Senior
Default exists.

 

(b)               Termination of Payment Blockage. The Loan Parties may resume
and Sellers may accept Permitted Junior Debt Payments; provided that, the Loan
Parties may only make and the Sellers may only accept such payment(s) if at the
time of and after giving effect to such payment(s) no Senior Default would be
created on a Pro Forma Basis, assuming for purposes hereof that any such missed
payment was made on the last day of the most recent fiscal quarter for which
financial statements are available and that any applicable financial covenants
were accordingly recomputed to give effect to any such missed payment in respect
of the Junior Debt, and upon a written waiver by Agent thereof in accordance
with the terms of the Loan Agreement. No Senior Default shall be deemed to have
been waived for purposes of this Section 2.3(b) unless and until the Loan
Parties and Sellers’ Representative shall have received a written waiver thereof
from Agent. For the avoidance of doubt, Permitted Junior Debt Payments that are
blocked pursuant to this Section 2.3(b) shall accrue and constitute Junior Debt,
but such amounts shall not increase the principal amount of the Junior Debt for
purposes of calculating any future interest payments on the Junior Debt pursuant
to clause (i) of the definition of “Permitted Junior Debt Payments”.

 

 

 

 

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(c)               Non-Applicability to Proceeding. The provisions of this
Section 2.3 shall not apply to any payment with respect to which Section 2.2
would be applicable.

 

2.4       Restriction on Action by the Sellers. Until the Senior Debt is Paid in
Full, Sellers shall not take any Collection Action with respect to the Junior
Debt.

 

2.5       No Liens.

 

(a)               Sellers shall not seek to obtain, and shall not take, accept,
obtain or have, any lien or security interest in any Collateral or other assets
as security for all or any part of the Junior Debt, and in the event that
Sellers obtains any such liens or security interests in any Collateral or other
assets, Sellers shall (or shall cause its agent to) promptly execute and deliver
to Agent such documents, agreements and instruments, and take such other
actions, as Agent shall request to release such liens and security interests in
such Collateral or other assets.

 

(b)               In furtherance of this Section 2.5, each Seller hereby
irrevocably appoints Agent its attorney-in-fact, with full authority in the
place and stead of Sellers and in the name of Sellers or otherwise, to execute
and deliver any document, agreement or instrument which Sellers may be required
to deliver pursuant to this Section 2.5. Agent and the Senior Creditors shall
have no responsibility for or obligation or duty with respect to any of the
Collateral or any matter or proceeding arising out of or relating thereto,
including, without limitation, any obligation or duty to collect any sums due in
respect thereof or to protect or preserve any rights pertaining thereto.

 

2.6       Amendment of Junior Debt Documents. Until the Senior Debt has been
Paid in Full, the Sellers may at any time and from time to time without the
consent of or notice to the Agent, without incurring liability to the Agent or
any Senior Creditor and without impairing or releasing the obligations of the
Sellers under this Agreement, change the place of payment (but not the manner of
payment) or extend the time of payment of the Junior Debt; provided, however,
Sellers may not, directly or indirectly, amend, restate or otherwise modify, in
any manner any terms of any Junior Debt Documents or enter into any additional
Junior Debt Documents.

 

2.7       Amendments to the Loan Documents. The Agent may at any time and from
time to time without the consent of or notice to the Sellers or Sellers’
Representative, without incurring liability to the Sellers and without impairing
or releasing the obligations of the Sellers under this Agreement, change the
manner or place of payment or extend the time of payment of or renew or alter
any of the terms of the Senior Debt, or amend, restate, modify, or refinance in
any manner any Loan Document or other instrument evidencing or securing or
otherwise relating to the Senior Debt; provided, however, that no such
amendment, restatement, modification or refinance shall defer or cause the
suspension of the payment of the Permitted Junior Debt Payments, except as
contemplated and set forth in this Agreement.

 

 

 

 

 

 

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2.8       Incorrect Payments. If any payment or distribution on account of the
Junior Debt not permitted to be made by the Loan Parties or received by Sellers
under this Agreement is received by any Seller before all Senior Debt is Paid in
Full, such payment or distribution shall not be commingled with any asset of
Sellers, shall be held in trust by Sellers for the benefit of all holders of
Senior Debt and shall be promptly paid over to Agent, or its designated
representative, for application in accordance with the Loan Agreement to the
payment of the Senior Debt then remaining unpaid, until all of the Senior Debt
is Paid in Full; provided, however, that the foregoing shall not apply to
Permitted Junior Debt Payments to the extent permitted at the time made pursuant
to Section 2.3(a) hereof.

 

2.9       Transfer. No Seller shall sell, assign, pledge, dispose of or
otherwise transfer all or any portion of their respective percentage interest of
the Junior Debt. If any Seller makes any assignment in violation of this Section
2.9, such assignment shall be null and void, and the assignment shall be of no
effect.

 

2.10       Legends. Until the Senior Debt is Paid in Full, each of the Junior
Debt Documents at all times shall contain in a conspicuous manner the following
legend:

 

“This Subordinated Promissory Note and the rights and obligations evidenced
hereby, including the payment of all amounts hereunder, are expressly
subordinate in the manner and to the extent set forth in that certain
Subordination Agreement (as amended, the “Subordination Agreement”) dated as of
November 3, 2016 among (i) Rodney Spriggs, in his capacity as the representative
of the holders of all of the outstanding capital stock of Vintage Stock, Inc.
(collectively, the “Sellers”), (ii) the Sellers, and (iii) Wilmington Trust,
National Association, as Agent and acknowledged and agreed to by the Loan
Parties (as defined therein) to the Senior Debt (as defined therein) and as more
particularly described in the Subordination Agreement. Each holder of this Note,
by its acceptance hereof, shall be bound by the provisions of the Subordination
Agreement.”

 

3.                  Representations and Warranties. The Sellers represent and
warrant to the Agent, as of the date hereof, that the Junior Note is the sole
Junior Debt Document evidencing the Junior Debt.

 

 

 

 

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4.                  Continued Effectiveness of this Agreement. The terms of this
Agreement, the subordination effected hereby, and the rights and the obligations
of the Sellers, the Loan Parties, Agent and the Senior Creditors shall not be
affected, modified or impaired in any manner or to any extent by the validity or
enforceability of any of the Loan Documents or the Junior Debt Documents, or any
exercise or non-exercise of any right, power or remedy under or in respect of
the Senior Debt, the Loan Documents, the Junior Debt or the Junior Debt
Documents. Each Seller and each holder of Junior Debt hereby acknowledges that
the provisions of this Agreement are intended to be enforceable at all times,
whether before the commencement of, after the commencement of, in connection
with or premised on the occurrence of a Proceeding.

 

5.                  No Contest by Sellers or Senior Creditor. Sellers agree that
it will not at any time contest the validity, perfection, priority, extent or
enforceability of the Senior Debt, the Loan Documents, or the liens and security
interests of Agent and the Senior Creditors in any Collateral. Each Senior
Creditor agrees that it will not at any time contest the validity or
enforceability of the Junior Debt or the Junior Debt Documents.

 

6.                  Notice of Junior Default. The Sellers shall promptly, and in
any event within three (3) Business Days, provide Agent with a written notice of
the occurrence of each Junior Default and shall notify Agent in writing in the
event such Junior Default is cured or waived; provided that, any failure to
deliver any such notices shall not otherwise affect the subordination provisions
or other obligations of the Sellers hereunder.

 

7.                  Notice of Senior Default. The Loan Parties shall provide
Sellers’ Representative with a written notice of the occurrence of each Senior
Default and shall notify Sellers’ Representative in writing in the event such
Senior Default is cured or waived; provided that, any failure to deliver any
such notices shall not otherwise affect the subordination provisions or other
obligations of the Loan Parties hereunder.

 

8.                  Cumulative Rights, No Waivers. Each and every right, remedy
and power granted to Agent or Senior Creditors shall be cumulative and in
addition to any other rights, remedy or power specifically granted herein or in
the Loan Documents or now or hereafter existing in equity, at law, by virtue of
statute or otherwise, and may be exercised by Agent or Senior Creditors from
time to time, concurrently or independently and as often and in such order as
Agent may deem expedient. Any failure or delay on the part of Agent or Senior
Creditors in exercising any such right, remedy or power, or abandonment or
discontinuance of steps to enforce the same, shall not operate as a waiver
thereof or affect the rights of Agent or Senior Creditors thereafter to exercise
the same, and any single or partial exercise of any such right, remedy or power
shall not preclude any other or further exercise thereof or the exercise of any
other right, remedy or power, and no such failure, delay, abandonment or single
or partial exercise of the rights of Agent or Senior Creditors shall be deemed
to establish a custom or course of dealing or performance among the parties
hereto.

 

9.                  Modification. Any modification or waiver of any provision of
this Agreement, or any consent to any departure therefrom, shall not be
effective in any event unless the same is in writing and signed by Agent and
Sellers, and then such modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose given. Any notice or
demand given to Sellers or Sellers’ Representative by Agent shall not entitle
Sellers to any other or further notice or demand in the same, similar or other
circumstances unless specifically required hereunder.

 

 

 

 

 

 

 

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10.              Additional Documents and Actions. The Sellers at any time, and
from time to time, after the execution and delivery of this Agreement, promptly
will execute and deliver such further documents and do such further acts and
things as Agent reasonably may request in order to effect fully the purposes of
this Agreement.

 

11.              Notices. Unless otherwise specifically provided herein, any
notice or other communication required or permitted to be given shall be in
writing addressed to the respective party as set forth below and shall be given
only by, and shall be deemed to have been received upon: (a) registered or
certified mail, return receipt requested, on the date on which such notice was
received as indicated in such return receipt; (b) delivery by a nationally
recognized overnight courier, one Business Day after deposit with such courier;
or (c) facsimile or electronic transmission, in each case upon telephone or
further electronic communication from the recipient acknowledging receipt
(whether automatic or manual from recipient), as applicable.

 

Notices shall be addressed as follows:

 

If to any Sellers or Sellers’ Representative:

Rodney Spriggs

202 East 32nd Street

Joplin, MO 64804

Email: rodney.spriggs@vintagestock.com

 

 

Mann Conroy, LLC

1316 Saint Louis Avenue, 2nd Floor Kansas City, Missouri 64101

Attn: Kyle Conroy, Esq.

Email: kconroy@mannconroy.com

          with copies to: Mann Conroy, LLC
1316 Saint Louis Avenue,
2nd Floor
Kansas City, Missouri, 64101
Attn: Kyle Conroy, Esq.
Email: kconroy@mannconroy.com    

If to Agent:

Wilmington Trust, National Association
Suite 1290, 50 South Sixth Street

Minneapolis, MN 55402 Attention: Josh James Phone: 612-217-5637

Fax: 612-217-5651

Email: JJames@WilmingtonTrust.com

 

 

 

 

 

 

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    with copies to:

Paul Hastings LLP
200 Park Avenue
New York, NY 10166

Attn: William Brady, Esq.

Fax: 212-303-7066

 

Paul Hastings LLP

200 Park Avenue

New York, NY 10166

Attn: Michael Chernick, Esq. Fax: 212- 230-7639

    If to the Loan Parties: Vintage Stock, Inc.
202 East 32nd Street
Joplin, Missouri 64804

and:

Vintage Stock Affiliated Holdings LLC
325 East Warm Springs Road
Suite 102
Las Vegas, Nevada 89119
Attn:  Jon Isaac
Email:  j.isaac@isaac.com
Facsimile No.:  858-259-6661     with copies to: Baker & Hostetler LLP
600 Anton Boulevard
Suite 900
Costa Mesa, California 92626
Attn:  Randolf W. Katz, Esq.
Email:  rwkatz@bakerlaw.com
Facsimile No.:  714-966-8802

 

or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section 11. A notice not given as provided above shall, if
it is in writing, be deemed given if and when actually received by the party to
whom given.

 

12.              Severability. In the event that any provision of this Agreement
is deemed to be invalid, illegal or unenforceable by reason of the operation of
any law or by reason of the interpretation placed thereon by any court or
governmental authority, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby, and the affected provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Agreement.

 

 

 

 

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13.              Successors and Assigns. This Agreement shall inure to the
benefit of the successors and assigns of Agent and the Senior Creditors and
shall be binding upon the respective successors and assigns of the Sellers and
the Loan Parties. Agent and Senior Creditors, without notice to or consent of
any Seller, may assign or transfer any or all of the Senior Debt or any interest
therein to any Person and, notwithstanding any such assignment or transfer, or
any subsequent assignment or transfer, the Senior Debt shall, subject to the
terms hereof, be and remain Senior Debt for purposes of this Agreement, and
every permitted assignee or transferee of any of the Senior Debt or of any
interest therein shall, to the extent of the interest of such permitted assignee
or transferee in the Senior Debt, be entitled to rely upon and be the third
party beneficiary of the subordination provided under this Agreement and shall
be entitled to enforce the terms and provisions hereof to the same extent as if
such assignee or transferee were initially a party hereto. THE SELLERS AND THE
LOAN PARTIES ACKNOWLEDGE AND AGREE THAT AGENT AND THE SENIOR CREDITORS AT ANY
TIME AND FROM TIME TO TIME MAY DIVIDE AND REISSUE (WITHOUT SUBSTANTIVE CHANGES
OTHER THAN THOSE RESULTING FROM SUCH DIVISION) THE NOTES EVIDENCING THE SENIOR
DEBT, THE OBLIGATIONS UNDER THE LOAN AGREEMENT, THE COLLATERAL AND THE LOAN
DOCUMENTS TO ONE OR MORE OTHER PERSONS, IN EACH CASE ON THE TERMS AND CONDITIONS
CONTAINED IN THE LOAN DOCUMENTS. Each transferee and participant of the Senior
Debt (to the extent provided in the Loan Agreement), shall have all of the
rights and benefits with respect to the Secured Obligations under the Loan
Agreement, the notes evidencing Senior Debt, the Collateral, this Agreement and
the Loan Documents held by it as fully as the original holder thereof. No Seller
shall sell, assign, pledge, dispose of or otherwise transfer all or any portion
of the Junior Debt or any Junior Debt Document except as permitted by Section
2.8 of this Agreement.

 

14.              Counterparts. This Agreement may be executed in one or more
counterpart originals, which, taken together, shall constitute one
fully-executed instrument. Any signature delivered by facsimile or electronic
transmission shall be deemed to be a counterpart original hereto.

 

15.              Defines Rights of Creditors; Loan Par ties’ O bligations
Unconditional . The provisions of this Agreement are solely for the purpose of
defining the relative rights of the Sellers, Agent and Senior Creditors and
shall not be deemed to create any rights or priorities in favor of any other
Person, including, without limitation, any Loan Party. As between the Loan
Parties and the Sellers, nothing contained herein shall impair the obligation of
the Loan Parties to the Sellers to pay the Junior Debt as such Junior Debt shall
become due and payable in accordance with the Junior Debt Documents. The failure
of any Loan Party to make any payment to Sellers due to the operation of this
Agreement shall not be construed as prohibiting the occurrence of a Junior
Default.

 

 

 

 

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16.              Subrogation. After and subject to the Payment in Full of the
Senior Debt, and prior to the irrevocable repayment in full in cash of the
Junior Debt, each Seller shall be subrogated to the rights of the Senior
Creditors to the extent that payments and distributions otherwise payable to
such Seller have been applied to the Senior Debt in accordance with the
provisions of this Agreement. For purposes of such subrogation, no payments or
distributions to Senior Creditors of any cash, property or securities to which
any Seller would be entitled except for the provisions of this Agreement, and no
payments pursuant to the provisions of this Agreement to the Senior Creditors by
any Seller, shall, as among the Loan Parties, their creditors (other than the
Senior Creditors) and such Seller be deemed to be a payment or distribution by
any such Loan Party to or on account of the Senior Debt; it being understood
that the provisions of this Agreement are and are intended solely for the
purpose of defining the relative rights of the Sellers, on the one hand, and
Agent and the Senior Creditors, on the other hand. Agent and Senior Creditors
shall have no obligation or duty to protect the Sellers’ rights of subrogation
arising pursuant to this Agreement or under any applicable law, nor shall Agent
or Senior Creditors be liable for any loss to, or impairment of, any subrogation
rights held by the Sellers.

 

17.              Conflict. In the event of any conflict between any term,
covenant or condition of this Agreement and any term, covenant or condition of
any of the Junior Debt Documents or the Loan Documents, the provisions of this
Agreement shall control and govern.

 

18.              Headings. The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

 

19.              Termination. This Agreement shall terminate upon the Payment in
Full of the Senior Debt.

 

20.              Applicable Law. This Agreement shall be governed by and shall
be construed and enforced in accordance with the internal laws of the State of
New York, without regard to conflicts of law principles.

 

21.              Submission to Jurisdiction. Any legal action or proceeding with
respect to this Agreement shall be brought exclusively in the courts of the
State of New York located in the City of New York, Borough of Manhattan, or of
the United States of America sitting in the Southern District of New York and,
by execution and delivery of this Agreement, each party hereto (including each
Loan Party by its acknowledgment and agreement hereto) hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Such parties hereby irrevocably waive any objection,
including any objection to the laying of venue or based on the grounds of forum
non conveniens, that any of them may now or hereafter have to the bringing of
any such action or proceeding in such jurisdictions.

 

22.              WAIVER OF JURY TRIAL. THE PARTIES HERETO (INCLUDING THE LOAN
PARTIES BY THEIR ACKNOWLEDGMENT AND AGREEMENT HERETO), TO THE EXTENT PERMITTED
BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT AND ANY OTHER
TRANSACTION CONTEMPLATED HEREBY AND THEREBY. THIS WAIVER APPLIES TO ANY ACTION,
SUIT OR PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.

 

 

 

 

 

 13 

 

 

23.              Defense to Enforcement Provision. If any Seller, in
contravention of the terms of this Agreement, shall commence, prosecute or
participate in any Collection Action against any Loan Party, then Agent or any
Senior Creditor may (i) intervene and interpose such defense or pleas in its
name, and/or (ii) by virtue of this Agreement, restrain the enforcement thereof
in the name of Agent or any Senior Creditor. If any Seller, in contravention of
the terms of this Agreement, obtains any cash or other assets of any Loan Party
as a result of any Collection Action, such Seller agrees forthwith to pay,
deliver and assign to Agent, with appropriate endorsements, any such cash or
other assets for application to the Senior Debt owing to Agent and Senior
Creditors until the Senior Debt has been Paid in Full.

 

(Signatures appear on the following page.)

 

 

 

 

 

 

 

 

 

 

 

 

 14 

 

 

IN WITNESS WHEREOF, the Sellers, Sellers’ Representative , and the Agent have
caused this Subordination Agreement to be executed as of the date first above
written.

 

 

By: /s/ Rodney D. Spriggs                            

Printed Name: Rodney D. Spriggs

Trustee, Rodney and Sherry Spriggs

Living Trust, dated April 18, 2012

 

By: /s/ Sherry Spriggs                            

Printed Name: Sherry Spriggs

Trustee, Rodney and Sherry Spriggs

Living Trust, dated April 18, 2012

                  By: /s/ Ken Caviness                             By: /s/
Deanna L. Caviness                      Printed Name: Ken Caviness   Printed
Name: Deanna L. Caviness Trustee, Ken and Deanna Living Trust,   Trustee, Ken
and Deanna Living Trust, dated July 12, 2002   dated July 12, 2002              
    By: /s/ Steven Wilcox                            By: /s/ Anna V.
Wilcox                          Printed name: Steven Wilcox   Printed Name: Anna
V. Wilcox Trustee, Steven and Anna Wilcox Living   Trustee, Steven and Anna
Wilcox Living Trust, dated May 15, 2012   Trust, dated may 15, 2012

 

 

By the Sellers’ Representative:

 

/s/ Rodney Spriggs                                    

Rodney Spriggs

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO SUBORDINATION AGREEMENT

   

 

 

WILMINGTON TRUST, NATIONAL

ASSOCIATION, as Agent for the Senior Creditors

 

 

By: ______________________________

Name: ____________________________

Title: _____________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO SUBORDINATION AGREEMENT

   

 

 

ACKNOWLEDGEMENT AND AGREEMENT

 

Each of the undersigned Loan Parties hereby acknowledges and agrees to adhere to
the foregoing terms and provisions. Each of the undersigned Loan Parties further
acknowledges and agrees that: (i) although it has signed this acknowledgment and
agreement, it is not a party to the Subordination Agreement, and does not, and
will not, receive any right, benefit, priority or interest under or because of
the existence of the Subordination Agreement and (ii) it will cause any party
that becomes a Loan Party under the Loan Documents or Junior Debt Documents to
deliver a similar acknowledgment to this Subordination Agreement.

 

LOAN PARTIES:

 

VINTAGE STOCK, INC.

 

By: /s/ Rodney Spriggs                           

Name: Rodney Spriggs

Title: President and Chief Executive Officer

 

 

 

VINTAGE STOCK AFFILIATED HOLDINGS LLC

 

By: /s/ Jon Isaac                                  

Name: Jon Isaac

Title: President and Chief Executive Officer