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EXHIBIT 10.14
THE SECURITY OR SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED,
PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER
SUCH ACT, OR SUCH STATE LAW, OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AND THEN ONLY IN ACCORDANCE WITH THE RESTRICTIONS ON TRANSFER SET
FORTH HEREIN.
HEDSTROM HOLDINGS, INC.
SUBORDINATED NOTE
New York, New York
$1,370,775.00 October 27, 1995
HEDSTROM HOLDINGS, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to ARNOLD E. DITRI (the "Holder"), the
principal amount of One Million Three Hundred Seventy Thousand Seven Hundred
Seventy-Five and 00/100 Dollars ($1,370,775.00), plus interest on the principal
amount due of this Note as hereinafter provided in Section 2. The principal
amount of this Note and all interest accrued and unpaid thereon shall be
payable in full on April 30, 2002. Unless defined in Section 1 of this Note,
capitalized terms used in this Note without definition shall have the
respective meanings given them in the Stock Purchase Agreement, dated as of
October 27, 1995, among the Company, Arnold E. Ditri, Alastair H. McKelvie,
John H. Hurshman and the Purchasers (as defined therein). This Note is one of
the Subordinated Notes referred to in the Stock Purchase Agreement.
1. Definitions. The following terms shall have the following
respective meanings when used in this Note:
A "Change in Control" shall be any of the following: (i) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
and its subsidiaries to any person or group of related persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), other than to Hicks, Muse, Tate
& Furst Incorporated or any of their Affiliates, officers and directors (the
"Permitted Holders"); or (ii) a majority of the Board of Directors of the
Company shall consist of persons who are not Continuing Directors; (iii) the
acquisition by any person or Group (other than the Permitted Holders) of the
power, directly or indirectly, to vote or direct the voting of securities
having more than 50% of the ordinary voting power for the election of directors
of the Company, or (iv) Hicks, Muse, Tate & Furst Equity Fund II, L.P. ("HMTF
LP") or its Affiliates ceases to own 100% of the number of shares of the
Company Common Stock (adjusted for stock splits, dividends, exchanges and
similar transactions) that it owned on the date hereof.
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"Continuing Director" means, as of the date of determination,
any person who (i) was a member of the Board of Directors of the Company on the
date hereof, (ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election or (iii) is a representative of a Permitted Holder.
"Event of Default" shall mean any of the events referred to in
Section 5.
"Senior Loan Agreement" shall mean the Credit Agreement, dated
as of October 27,1995, among the Company, Hedstrom Corporation and Bankers
Trust Company, as agent for the lenders named therein, as amended from time to
time.
2. Interest. Subject to the provisions of the next-to-last
sentence of this Section 2, interest at the rate of ten percent (10%) per
annum, computed on the basis of a 360-day year of twelve 30-day months, shall
be payable on the unpaid principal amount of the Note. The Company will pay
interest hereunder quarterly in arrears to the Holder in accordance with
Section 7(a) on the last day of each October, January, April and July of each
year, until this Note shall have been paid in full. To the extent permitted by
law, interest hereon which is not paid when due shall bear interest from the
day when due until paid in full at a rate of twelve percent (12%) per annum.
Notwithstanding any other provisions of this Note, interest paid or becoming
due hereunder shall in no event be in an amount prohibited by applicable law.
3. Subordination This Note, and the obligations of the Company
hereunder, shall be subordinate and junior in right of payment to all Senior
Indebtedness (as defined in Section 1.07 of Annex A hereto) on the terms and
conditions set forth in Annex A hereto, which Annex A is herein incorporated by
reference and made a part hereof as if set forth herein in its entirety.
4. Mandatory Prepayment. The Company shall be obligated to
prepay this Note, together with accrued and unpaid interest thereon, as
follows:
(a) In full, whenever there occurs a public offering by
the Company of any of its equity securities, but only if in such offering
shares of the Company's capital stock are sold by HMTF LP or its direct or
indirect assigns;
(b) Within 106 days after the end of each fiscal year
while this Note is outstanding, to the fullest extent possible using 100% of
the Excess Cash Flow of the Company for the immediately preceding fiscal year
(as such term is defined in the Senior Loan Agreement); and
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(c) In full, whenever any Event of Default shall occur and be
continuing.
5. Events of Default. It shall constitute an Event of Default
under this Note if any one or more of the following events shall occur for any
reason:
(a) The Company shall fail to perform or observe any
term, covenant or condition on its part to be performed or observed under this
Note and such failure shall continue for 30 days after written notice thereof
is given to the Company, other than the due and punctual payment of this Note
at its maturity as to which no notice shall be required to be given and the
Company shall have no right to cure any such default;
(b) The Company shall make a general assignment for the
benefit of creditors, or any procedure shall be instituted by the Company or
any of its Subsidiaries seeking to adjudicate it as bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, adjustment, protection, relief
or composition of it or its debts under law relating to bankruptcy, insolvency
or reorganization or relief of debtors or seeking entry of an order for relief
or the appointment of a receiver, trustee, or other similar official or for any
substantial part of its property or the Company or any of its Subsidiaries
shall take any corporate action to authorize any of the actions set forth
above in this clause (b);
(c) A court of competent jurisdiction shall enter a
judgment, decree or order for relief in respect of the Company or any of its
Subsidiaries in an involuntary case under any bankruptcy law which shall (i)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any of its Subsidiaries,
(ii) appoint a custodian of the Company or any of its Subsidiaries or for any
of their respective property or (iii) order the winding-up or liquidation of
the affairs of the Company or any, of its Subsidiaries, and such judgment,
decree or order shall remain unstayed and in effect for 60 consecutive days; or
any bankruptcy or insolvency petition, application or proceeding is commenced
against the Company or any of its Subsidiaries, and such petition, application
or proceeding is not dismissed within 60 days; or any warrant of attachment is
issued against any portion of the property of the Company or any of its
Subsidiaries which is not released within 60 days of service;
(d) The Company shall (i) default in the payment of any
debt or other financial obligation (other than the Earnout Note B) having a
principal amount of at least $7,500,000, (ii) default in the performance or
observance of any term, covenant or condition on its part to be performed or
observed under any other Subordinated Note, under any, Earnout Note A or under
any Earnout Note B, and any such default has resulted in the acceleration
thereof, and such default shall not have been cured and such acceleration
rescinded after a 20-day) grace period; and
(e) A Change in Control shall have occurred.
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6. Covenants of the Company
(a) Until this Note shall have been paid in full, the
Company will promptly upon learning of the same, notify the Holder of any event
which constitutes, or which with notice or lapse of time, or both, would
constitute, an Event of Default.
(b) Until this Note shall have been paid in full, the
Company will not:
(i) enter into any agreements with, on behalf
of, or granting credit support to, an Affiliate of the Company, except
on an arms' length basis; provided, that any such transaction shall be
conclusively deemed to be on terms which are on an arms' length basis
if a majority of the Company's board of directors (including a
majority of the Company's directors who are not Affiliates of HMTF LP,
if any) have approved the transaction; and, provided, further, that if
such transaction shall involve more than $5,000,000, in addition to
the approval of the board of directors, the Company shall obtain the
report of an independent investment banker stating that the
transaction has been priced at fair market value; and
(ii) incur or create any indebtedness for
borrowed money which by its terms is subordinate to the indebtedness
under the Senior Loan Agreement (or any other senior bank debt of the
Company) unless such indebtedness ranks pari passu with or is
subordinate to the indebtedness represented hereby.
7. Method of Payment.
(a) Both principal and interest hereon are payable in
legal tender of the United States by wire transfer to the following account of
the Holder maintained by the Holder Representative pursuant to the
Participants' Payment and Indemnification Agreement, dated the date hereof,
among the Company, the Existing Stockholders and the Participants named
therein: Account No. 921500696065, Chemical Bank, 488 Madison Avenue, New York,
New York, ABA No. 021000128, or at such other account as shall be designated by
the Holder Representative. If any payment on this Note becomes due and payable
on a Saturday, Sunday or other day on which commercial banks in New York, New
York are authorized or required by law to close, the maturity thereof shall be
extended to the next succeeding business day and, with respect to payments of
principal, interest thereon shall be payable during such extension.
(b) As used herein, the "Holder Representative" shall
mean Alan Plotkin, Esq., until such time as Mr. Plotkin shall decease or resign
and, following either such event, such other person as shall be appointed by
the Sellers acting unanimously; provided, that the rights of the Holder
Representative under this Note shall not be exercisable by any person other
than the Holder Representative validly appointed under
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these provisions. The Holder Representative shall have the authority to take
such actions and exercise such discretion as are required of the Holder
Representative pursuant to the terms of this Note (and any such actions shall
be binding on the Holder).
8. Waiver of Presentment. Except as otherwise expressly provided
herein, the parties hereto waive presentment for payment, notice of nonpayment,
demand, protest, notice of protest, notice of dishonor and diligence in
enforcing payment.
9. Costs of Collection. In the event of default under this Note,
the Holder Representative shall have all rights and remedies provided at law
and equity. All costs and expenses of collection, including attorneys' fees,
shall be added to and become part of the principal of this Note and shall be
collectable as part of such principal and interest shall be payable thereon as
set forth above.
10. Governing Law. This Note shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of New York,
without regard to conflict of laws principles.
11. Headings. The headings of the sections of this Note are
inserted for convenience only and shall not be deemed to constitute a part
hereof. Unless otherwise stated, all references to Sections shall be to the
Sections of this Note.
12. Amendment Without Consent of Holders. The Company and the
Holder Representative may from time to time and at any time amend the terms of
this Note to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision contained herein; or to make such other provisions in regard to
matters or questions arising under this Note as the Company may deem necessary
or desirable and which shall not adversely affect the interests of the Holders.
13. Amendments With Consent of Holders. With the consent of the
Holders of a majority in aggregate principal amount of the Subordinated Notes
at the time outstanding, the Company and the Holder Representative may, from
time to time and at any time, enter into an amendment or supplement hereto for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Note or modifying in any manner the
rights of the Holders of the Notes; provided, that no such supplements or
amendment shall extend the final maturity of any Note, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
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thereon, or reduce any amount payable on redemption thereof, or impair or
affect the right of any Holder to institute suit for the payment thereof.
14. Right of Setoff. Notwithstanding any other provision of this
Note to the contrary, the Company shall have the right to set off against the
principal amount hereof as permitted under, and in accordance with the terms
and conditions of, Article X of the Stock Purchase Agreement.
15. Restriction on Transfer. In addition to any other applicable
restrictions on the transfer of this Note, whether pursuant to federal or state
securities laws or otherwise, this Note and any interest herein shall not
(without the consent of the Company) be sold, transferred, assigned, pledged,
or hypothecated by the Holder (other than by the laws of descent and
distribution). Any such sale, transfer, assignment, pledge or hypothecation in
violation hereof shall be null and void.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
and delivered on its behalf by its duly authorized officers to be dated as of
the day and year first above written.
HEDSTROM HOLDINGS, INC.
By:/s/ ARNOLD E. DITRI
-----------------------------------
Name: Arnold E. Ditri
Title: President
[Corporate Seal]
ATTEST:
/s/ [ILLEGIBLE]
- ----------------------------
Assistant Secretary
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ANNEX A TO NOTE
Section 1.01. Subordination of Liabilities, HEDSTROM HOLDINGS,
INC. (the "Payor"), for itself, its successors and assigns, covenants and
agrees and each holder of the promissory note to which this Annex A is attached
(the "Note") by its acceptance thereof likewise covenants and agrees that the
payment of the principal of, and interest on, and all other amounts owing in
respect of, the Note is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior payment in full of all Senior
Indebtedness (as defined in Section 1.07) in cash. The provisions of this Annex
A shall constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder the same as if their names
were written herein as such, and they and/or each of them may proceed to
enforce such provisions.
Section 1.02. Payor Not to Make Payments with Respect to Note
in Certain Circumstance. (a) Upon the maturity of any Senior Indebtedness
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity by acceleration or otherwise, all
Obligations (as defined in Section 1.07) owing in respect thereof, in each case
to the extent due and owing, shall first be paid in full, in cash, or such
payment duly provided for in cash in a manner satisfactory to the holder or
holders of such Senior Indebtedness, before any payment is made on account of
the principal of (including installments thereof), or interest on, or any
amount otherwise owing in respect of, the Note. Payor may not, directly or
indirectly, make any payment of any principal of, and interest on, or any other
amount owing in respect of, the Note and may not acquire all or any part of the
Note for cash or property until all Senior Indebtedness has been paid in full
in cash if any Event of Default (as defined below), or event which with notice
or lapse of time or both would constitute an Event of Default in respect of any
Senior Indebtedness is then in existence. Each holder of the Note hereby agrees
that, so long as an Event of Default, or event which with notice or lapse of
time or both would constitute an Event of Default, in respect of any Senior
Indebtedness exists, it will not ask, demand, sue for, or otherwise take, accept
or receive, any amounts owing in respect of the Note. As used herein, the term
"Event of Default" shall mean any Event of Default, under and as defined in,
the relevant documentation governing any Senior Indebtedness and in any event
shall include any payment default with respect to any Senior Indebtedness.
(b) In the event that notwithstanding the provisions of
the preceding subsection (a) of this Section 1.02, any payment shall be made on
account of the principal of, or interest on, or amounts otherwise owing in
respect of, the Note, at a time when payment is not permitted by the terms of
the Note or by said subsection (a), such payment shall be held by the holder of
the Note, in trust for the benefit of, and shall be paid forthwith over and
delivered to, the holders of Senior Indebtedness or their representative or
representatives under the agreements pursuant to which the Senior Indebtedness
may
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ANNEX A TO NOTE
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have been issued, as their respective interests may appear, for application pro
rata to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in cash in accordance with the
terms of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness. Without
in any way modifying the provisions of this Annex A or affecting the
subordination effected hereby if such notice is not given, Payor shall give the
holder of the Note prompt written notice of any maturity of Senior Indebtedness
after which such Senior Indebtedness remains unsatisfied.
Section 1.03. Note Subordinated to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Payor. Upon any
distribution of assets of Payor upon any dissolution, winding up, liquidation
or reorganization of Payor (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, postpetition interest) before the
holder of the Note is entitled to receive any payment on account of
the principal of or interest on or any other amount owing in respect
of the Note;
(b) any payment or distributions of assets of Payor of
any kind or character, whether in cash, property or securities to
which the holder of the Note would be entitled except for the
provisions of this Annex A, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether
a trustee in bankruptcy, a receiver or liquidating trustee or other
trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives under the agreements pursuant
to which the Senior Indebtedness may have been issued, to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of assets
of Payor of any kind or character, whether in cash, property or
securities, shall be received by the holder of the Note on account of
principal of, or interest or other amounts due on, the Note before all
Senior Indebtedness is paid in full in cash, or effective provision
made for its payment in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders
of the Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives under the agreements
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ANNEX A TO NOTE
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pursuant to which the Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of
such Senior indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, if such notice is not given Payor
shall give prompt written notice to the holder of the Note of any dissolution,
winding up, liquidation or reorganization of Payor (whether in bankruptcy,
insolvency or receivership proceedings or upon assignment for the benefit of
creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in
full of all Senior Indebtedness in cash, the holder of the Note shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of Payor applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of Payor or by or on behalf of the
holder of the Note by virtue of this Annex A which otherwise would have been
made to the holder of the Note shall, as between Payor, its creditors other
than the holders of Senior Indebtedness, and the holder of the Note, be deemed
to be payment by Payor to or on account of the Senior Indebtedness, it being
understood that the provisions of this Annex A are and are intended solely for
the purpose of defining the relative rights of the holder of the Note, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of Payor Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between Payor and the holder of the Note, the obligation of Payor, which is
absolute and unconditional, to pay to the holder of the Note the principal of
an interest on the Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of Payor other than the holders
of the Senior Indebtedness, nor shall anything herein or therein, except as
expressly provided, prevent the holder of the Note from exercising all remedies
otherwise permitted by applicable law, subject to the rights, if any, under
this Annex A of the holders of Senior Indebtedness in respect of cash,
property, or securities of Payor received upon the exercise of any such remedy.
Upon any distribution of assets of Payor referred to in this Annex A, the
holder of the Note shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
holder of the Note, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness
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ANNEX A TO NOTE
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and other indebtedness of Payor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Annex A.
Section 1.06. Subordination Rights not Impaired by Acts or
Omissions of Payor or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of Payor or by any act or failure to act in good
faith by any such holder, or by any noncompliance by Payor with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect thereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
extend the time of payment of, or renew or alter, any Senior Indebtedness, or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default thereunder
and the release of any collateral securing such Senior Indebtedness, all
without notice to or assent from the holder of the Note.
Section 1.07. Definitions. As used in this Annex, the terms
set forth below shall have the respective meanings provided below:
"Borrower" shall mean Hedstrom Corporation, and its successors
and permitted assigns.
"Credit Agreement" shall mean the Credit Agreement, dated as
of October 27, 1995, among Holdings, the Borrower, the lending institutions
from time to time party thereto (the "Banks"), and Bankers Trust Company, as
Agent (the "Agent"); as the same may be amended, modified, extended, renewed,
restated, supplemented, restructured or refinanced from time to time, and
including any agreement extending the maturity of, refinancing or restructuring
(including but not limited to the inclusion of additional borrowers thereunder
that are Subsidiaries of the Borrower and whose obligations are guaranteed by
the Borrower thereunder or any increase in the amount borrowed) all or any
portion of, the indebtedness under such agreement or any successor agreements;
provided that with respect to any agreement providing for the refinancing of
indebtedness under the Credit Agreement, such agreement shall only be treated
as, or as part of, the Credit Agreement hereunder if (i) either (A) all
obligations under the Credit Agreement being refinanced shall be paid in full
at the time of such refinancing, and all commitments and
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ANNEX A TO NOTE
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letters of credit issued pursuant to the refinanced Credit Agreement shall have
terminated in accordance with their terms or (B) the Required Banks shall have
consented in writing to the refinancing indebtedness being treated, along with
their indebtedness, as indebtedness pursuant to the Credit Agreement, (ii) the
refinancing indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced (if such Credit Agreement is to remain outstanding)
and (iii) a notice to the effect that the refinancing indebtedness shall be
treated as issued under the Credit Agreement shall be delivered by the Borrower
to the Agent.
"Credit Documents" shall have the meaning provided in the
Credit Agreement.
"Holdings" shall mean Hedstrom Holdings, Inc., and its
successors and permitted assigns.
"Interest Rate Protection Agreement" shall have the meaning
provided in the Credit Agreement.
"Obligation" shall mean any principal, interest, premium,
penalties, fees, indemnities and other liabilities and obligations payable
under the documentation governing any Senior Indebtedness (including, without
limitation, all interest after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided in the governing
documentation, whether or not such interest is an allowed claim in such
proceeding).
"Other Creditors" shall mean each of Bankers Trust Company, in
its individual capacity, the Banks party from time to time to the Credit
Agreement, and their affiliates and their respective subsequent assigns, if
any, and any other institution which participates with Bankers Trust Company,
such Banks or affiliates in the extension of Interest Rate Protection
Agreements or Other Hedging Agreements and their subsequent assigns, if any, in
all such cases in their capacity as creditors with respect to Interest Rate
Protection Agreements or other Hedging Agreements.
"Other Hedging Agreements" shall have the meaning provided in
the Credit Agreement.
"Required Banks" shall have the meaning provided in the Credit
Agreement.
"Senior Indebtedness" shall mean all Obligations of (i)
Holdings, the Borrower and/or any of their Subsidiaries under the Credit
Agreement and the other Credit Documents and any renewal, extension,
restatement, refinancing or refunding thereof; and
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ANNEX A TO NOTE
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(ii) Holdings, the Borrower and/or any of their Subsidiaries in respect of
all Interest Rate Protection Agreements or Other Hedging Agreements with Other
Creditors.
"Subsidiaries" shall have the meaning provided in the Credit
Agreement.
Section 1.08. Miscellaneous. If, at any time, all or part of
any payment with respect to Senior Indebtedness theretofore made by Payor or
any other Person is rescinded or must otherwise be returned by the holders of
Senior Indebtedness for any reason whatsoever (including, without limitation,
the Insolvency, bankruptcy or reorganization of Payor or such other Persons),
the subordination provisions set forth herein shall continue to be effective or
be reinstated, as the case may be, all as though such payment had not been
made.