INTER-CREDITOR AGREEMENT
EXHIBIT
10.7
This
INTER-CREDITOR AGREEMENT
(the “Agreement”) is made
and effective as of January 28, 2009, by and between the holders of
the Celsia Technologies, Inc. 8% Secured Convertible Debentures due December 31,
2010 (the “Existing
Creditors”) and the New Creditors (as defined below), (the Existing
Creditors and the New Creditors are collectively referred to as the “Creditors”).
RECITALS
WHEREAS,
the Existing Creditors are the parties to that certain Securities Purchase
Agreement dated May 25, 2007 (such securities purchase agreement the “Existing Purchase
Agreement”) by and between each Existing Creditors signatory thereto and
Celsia Technologies, Inc. (the “Company”) and are the
holders of those certain 8% Secured Convertible Debentures due December 31,
2010, for an aggregate principal amount of $8,897,783 (the “Existing
Indebtedness”), and the Existing Creditors are the beneficiaries of that
certain Security Agreement dated May 25, 2007 (the “Existing Security
Agreement”) entered into in connection with the Existing Purchase
Agreement;
WHEREAS,
pursuant to that certain Securities Purchase Agreement dated on or about the
date hereof (the “New
Purchase Agreement”, together with the “Existing Purchase
Agreement,” the “Purchase Agreements”
), the investors signatory thereto (the “New Creditors”,
together with the Existing Creditors, the “Creditors”) have
agreed to loan the Company $2,000,000 evidenced by Original Issue Discount
Senior Secured Convertible Debentures due December 31, 2010 with an aggregate
principal amount of up to $2,631,578 (the “New Debentures,” the
amounts owed pursuant to such New Debentures, the “New Indebtedness,”
and together with the Existing Indebtedness, the “Indebtedness”);
WHEREAS,
the New Creditors and the Company have entered into that certain Security
Agreement dated on or about the date hereof (the “New Security
Agreement”, together with the Existing Security Agreement, the “Security
Agreements”);
WHEREAS,
the Existing Indebtedness is secured by all assets of the Company and certain
Subsidiaries (as defined in the New Debentures);
WHEREAS,
New Indebtedness will also be secured by all assets of the Company and certain
Subsidiaries;
WHEREAS, the Creditors wish to
memorialize their agreements concerning their respective rights, duties and
obligations to one another with respect to the security interests granted under
the Indebtedness.
NOW, THEREFORE, in consideration of
the mutual covenants herein, their respective performances and benefits
pertaining to the Indebtedness, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Ranking.
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1.1
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The
Indebtedness shall rank in the following order of
priority:
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(1) The
full principal amount of the New Indebtedness (the “New Indebtedness Principal
Payment”) shall be paid in full to the New Creditors before (i) the
Existing Creditors shall be entitled to receive and to retain any payment or
distribution in respect of any Existing Indebtedness and (ii) any New Creditors
shall be entitled to receive and to retain any payment or distribution in
respect of any other amounts owed to such New Creditors;
(2) thereafter
and before (i) any New Creditor shall be entitled to receive and to retain any
payment or distribution under the New Indebtedness other than in respect of the
New Indebtedness Principal Payment and (ii) any Existing Creditor shall be
entitled to receive and to retain any payment in respect of any Existing
Indebtedness other than as described in this Section 1.1(2), the Existing
Creditors that are also New Creditors (the “Participating Existing
Creditors”) shall be entitled to receive the full principal amount of the
Existing Indebtedness then held by such Participating Existing
Creditors;
(3) thereafter
and before any Existing Creditor that is not a Participating Existing Creditor
(the “Non-Participating Existing
Creditors”) shall be entitled to receive any payments, the Participating
Existing Creditors and the New Creditors shall be entitled to receive any and
all other amounts owed to such Creditors under the Existing Indebtedness and the
New Indebtedness (including, without limitation, any and all accrued but unpaid
interest, if applicable, repayment premiums and default amounts), pari passu and pro-rata in proportion to
each such Creditor’s outstanding Indebtedness at any given time that a
determination needs to be made of pro-rata holdings;
(4) lastly,
the Non-Participating Existing Creditors shall be entitled to receive payments
and distributions in respect of the Existing Indebtedness owed to such
Creditors.
The Creditors authorize the Agent (as
defined in the Security Agreements) to perform its obligations under the
respective Security Agreements pursuant to this provision. The
Company and each Subsidiary acknowledge and agrees with the relative priorities
and proportions set forth herein, and that all payments under the New
Indebtedness and Existing Indebtedness shall be made in accordance
herewith. In addition, the Company hereby agrees to cause all
direct and indirect subsidiaries hereafter formed or acquired to agree to be
bound by the terms of this Agreement, other than as described in Section 4.18 of
the New Purchase Agreement.
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1.2
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If
an Event of Default (as defined under any Indebtedness) occurs and any
party hereto receives payment from the Company not in compliance with this
Agreement, the other parties hereto shall be immediately notified and such
payment shall be shared with all of the other Creditors in accordance
with, and in proportion to their respective priorities and pro-rata
holdings as set forth above.
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1.3
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If
an Event of Default occurs and any party hereto collects proceeds pursuant
to its rights under any Indebtedness, the other parties shall be
immediately notified and such payment shall be shared with all of the
other Creditors as set forth above.
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1.4
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Notwithstanding
any other provision in this Agreement, adjustments shall be made between
the Creditors from time to time to reflect the fact that any contingent
obligation taken into account as an obligation under the Indebtedness
becomes satisfied or incapable of maturing into an actual
obligation.
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1.5
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Each
Existing Creditor and New Creditor is hereby authorized to file a UCC-1
financing statement in the jurisdictions set forth in, and pursuant to the
terms of, their respective Security Agreement. To the extent that the
Company (or any Subsidiary thereof) delivers Pledged Securities (as
defined in the Security Agreements) pursuant to the Security Agreements,
the New Creditors and the Existing Creditors acknowledge and agree that
the Agent shall take and maintain possession of such Pledged Collateral
for the ratable benefit of all
Creditors.
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1.6
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Notwithstanding
anything to the contrary contained in the Existing Purchase Agreement
or any document executed in connection with the New
Indebtedness or the Existing Indebtedness and irrespective of: (i) the
time, order or method of attachment or perfection of the security
interests created in favor of Existing Creditors and the New Creditors,
(ii) the time or order of filing or recording of financing statements or
other documents filed or recorded to perfect security interests in any
Collateral (as defined in the Security Agreements); (iii) anything
contained in any filing or agreement to which any Creditor now or
hereafter may be a party; and (iv) the rules for determining perfection or
priority under the Uniform Commercial Code or any other law governing the
relative priorities of secured creditors, each Creditor and the Company
acknowledge that (x) all other Creditors have a valid security interest in
the Collateral and (y) the security interests of the New Creditors and the
Existing Creditors in such Collateral securing the Indebtedness shall rank
pari-passu with each other.
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1.7
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(a)
So
long as any Indebtedness remains outstanding, each of the undersigned
Creditors agrees, severally and not jointly, not to commence or
threaten to commence any action or proceeding, xxx upon any claim or
claims now or hereafter existing which such Creditor may hold against the
Company or any of its Subsidiaries, and not to sell, assign, transfer,
pledge, hypothecate, or encumber such claim or claims, and not to enforce
or apply any security now or hereafter existing therefor, nor to file or
join in any petition to commence any proceeding under any bankruptcy,
reorganization or insolvency proceedings with respect to the Company
or any of its Subsidiaries or exercise or seek to exercise any rights or
remedies (including, without limitation, setoff) with respect to any
Collateral or institute or commence, or join with any Person (other than
the other Creditors) in commencing any action or proceeding with respect
to such rights or remedies (including any action of foreclosure),
enforcement, collection or execution; provided, however, (x) that a
Creditor may exercise any or all of such rights (I) with the written
consent of the Creditors holding 50% or more of the principal amount of
Indebtedness then outstanding or (II) after the passage of a period of 365
days from the date such Creditor provides the Company notice of the
default, breach or violation giving rise to any such claim and (y) the
provisions of this Section shall not prohibit a Creditor that is a
Qualified Purchaser (as defined in the debentures evidencing the Existing
Indebtedness) from exercising any or all of such
rights.
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(b)
Notwithstanding anything to the contrary set forth in Section 1.7(a) above, each
Creditor:
(1) with
the consent of the Agent, may take any action in order to preserve or protect
its Lien (as defined in the New Purchase Agreement) on the
Collateral;
(2) shall
be entitled to file any necessary responsive or defensive pleadings in
opposition to any motion, claim, adversary proceeding or other pleading made by
any Person objecting to or otherwise seeking the disallowance of the claims of
the Creditors, in each case in accordance with the terms of this
Agreement;
(3) shall
be entitled to vote on any plan of reorganization and file any proof of claim in
any insolvency, bankruptcy or liquidation proceeding or otherwise and other
filings and make any arguments and motions that are, in each case, in accordance
with the terms of this Agreement, with respect to the
Collateral.
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(c)
Notwithstanding anything herein to the contrary, including, without limitation
anything set forth in Sections 1.7(a) and 1.7(b) above, nothing in this
Agreement shall: (i) restrict the Company from making, and a Creditor from
receiving, regularly scheduled principal and interest payments (if applicable)
made to the Creditors pursuant to the terms of the transaction documents
relating to the New Indebtedness and Existing Indebtedness, as applicable (in
each case, the “Transaction Documents”); (ii) restrict the Creditors’ right to
receive shares of Common Stock (as defined in the New Purchase Agreement) upon
conversion or exercise of securities of the Company, (iii) restrict the
Creditors’ right to seek specific performance therefor to cause the Company to
satisfy its non-cash obligations under the Transaction Documents; or (iv)
restrict a Creditor’s right to receive payment of liquidated damages and other
fees pursuant to the terms of the Transaction Documents.
2.
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Indemnification by
Existing Creditors. Existing Creditors shall, severally,
and not jointly, indemnify, defend, and hold harmless New Creditors
against and in respect of any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, and deficiencies,
including interest, penalties, and reasonable professional and attorneys’
fees, including those arising from settlement negotiations, that New
Creditors shall incur or suffer, which arise, result from, or relate to a
breach of, or failure by Existing Creditors to perform under this
Agreement.
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3.
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Indemnification by New
Creditors. New Creditors shall, severally, and not
jointly, indemnify, defend, and hold harmless Existing Creditors against
and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, and reasonable professional and attorneys’ fees,
including those arising from settlement negotiations,
that Existing Creditors shall incur or suffer, which arise,
result from, or relate to a breach of, or failure by New Creditors to
perform under this Agreement.
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4.
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Amendment of Existing
Security Agreement. Each Existing Creditor hereby agrees
that Section 21(c) of the Existing Credit Agreement shall be deleted and
replaced in its entirety with the following
text:
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“This
Agreement, together with the exhibits and schedules hereto, contain the
entire understanding of the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have
been merged into this Agreement and the exhibits and schedules hereto. No
provision of this Agreement may be waived, modified, supplemented or
amended except in a written instrument signed, in the case of an
amendment, by the Debtors and the Secured Parties holding 60% or more of
the principal amount of Debentures then outstanding (provided that such an
amendment shall be effective against Secured Parties holding 100% of the
principal amount of Debentures then outstanding), or, in the case of a
waiver, by the party against whom enforcement of any such waived provision
is sought.”
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5. Miscellaneous.
5.1 Assignment. The
rights and obligations of the Creditors under this Agreement may only be
assigned to or assumed by a transferee of the debentures evidencing Indebtedness
.. In connection with the transfer of debentures evidencing any
Indebtedness (in addition to other requirements as provided for in each Purchase
Agreement), the transferring Creditor shall cause such transferee to execute a
joinder to this Agreement.
5.2 Binding
Effect. This Agreement shall be binding on, and shall inure to
the benefit of, the parties to it and their respective heirs, legal
representatives, and successors.
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5.3 Parties in
Interest. Except as expressly provided in this Agreement,
nothing in this Agreement, whether express or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on any persons other
than the parties to it and their respective successors and assigns, nor is
anything in this Agreement intended to relieve or discharge the obligation or
liability of any third persons to any party to this Agreement, nor shall any
provision give any third persons any right to subrogation or action over against
any party to this Agreement.
5.4 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties.
5.5 Amendment. No
supplement, modification, or amendment of this Agreement shall be binding unless
executed in writing by the holders of 60% or more of the then outstanding
principal amount of the Indebtedness.
5.6 Waiver. No waiver
of any of the provisions of this Agreement shall be deemed, or shall constitute,
a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
5.7 Notices. Notices
given under this Agreement shall be delivered as set forth in the New Purchase
Agreement.
5.8 Governing Law and
Venue. This Agreement shall be construed in accordance with,
and governed by, the laws of the State of New York, and any action or
proceeding, including arbitration, brought by any party in which this Agreement
is a subject, shall be brought in New York County, New York.
5.9 Effect of
Headings. The headings of the Sections of this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of its provisions.
5.10 Invalidity. Any
provision of this Agreement which is invalid, void, or illegal, shall not
affect, impair, or invalidate any other provision of this Agreement, and such
other provisions of this Agreement shall remain in full force and
effect.
5.11 Counterparts. This
Agreement may be executed in multiple counterparts, each of which may be
executed by less than all of the parties and shall be deemed to be an original
instrument which shall be enforceable against the parties actually executing
such counterparts and all of which together shall constitute one and the same
instrument. In lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original.
5.12 Number and
Gender. When required by the context of this Agreement, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders.
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5.13 Further
Assurances. Each party to this Agreement agrees to execute
further instruments as may be necessary or desirable to carry out this
Agreement, provided the party requesting such further action shall bear all
related costs and expenses.
5.14 Professional Fees and
Costs. If any legal or equitable action, arbitration, or other
proceeding, whether on the merits or on motion, are brought or undertaken, or an
attorney retained, to enforce this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, then the successful or prevailing party or parties in such
undertaking (or the party that would prevail if an action were brought) shall be
entitled to recover reasonable attorney's fees and other professional fees and
other costs incurred in such action, proceeding, or discussions, in addition to
any other relief to which such party may be entitled. The parties
intend this provision to be given the most liberal construction possible and to
apply to any circumstances in which such party reasonably incurs
expenses.
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[SIGNATURE
PAGE TO CSAT INTERCREDITOR AGREEMENT]
IN
WITNESS WHEREOF, this Agreement has been duly executed by the Creditors as of
the day and year first written above.
CREDITORS:
Print Name:
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By:
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Name:
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Title:
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Address for
Notice:
ACKNOWLEDGED
AND AGREED TO:
By:
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/s/
Xxxxx Xxxxxxxxx
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Name: |
Xxxxx
Xxxxxxxxx
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Title: |
CFO
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CELSIA
TECHNOLOGIES TAIWAN, INC.
By:
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/s/
Xxxxxx X. Xxxxx XX
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Name: |
Xxxxxx
X. Xxxxx XX
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Title: |
Chairman
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Address for Notice:
0000
Xxxxxxxx Xxxxxx, Xxxxx 000
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Xxxxx, Xxxxxxx 00000 |
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