EXHIBIT 10.50
SILICON VALLEY BANK
SUBORDINATION AGREEMENT
CREDITOR(S): BORROWER:
MTI TECHNOLOGY CORPORATION, A MTI TECHNOLOGY CORPORATION, A
DELAWARE CORPORATION DELAWARE CORPORATION
ADDRESS:
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ GUARANTOR:
MTI TECHNOLOGY B.V., A COMPANY MTI TECHNOLOGY B.V., A COMPANY
ORGANIZED UNDER THE LAWS OF THE ORGANIZED UNDER THE LAWS OF THE
NETHERLANDS AND NETHERLANDS AND
SUCCESSOR-IN-INTEREST TO SUCCESSOR-IN-INTEREST TO
SUBSTANTIALLY ALL OF THE ASSETS AND SUBSTANTIALLY ALL OF THE ASSETS AND
LIABILITIES OF MTI TECHNOLOGY LIABILITIES OF MTI
IRELAND, LTD. TECHNOLOGY IRELAND, LTD.
ADDRESS:
C/O MTI TECHNOLOGY CORPORATION
▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED AS OF NOVEMBER 7, 2001
THIS SUBORDINATION AGREEMENT is entered into between SILICON VALLEY BANK
("Silicon"), whose address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
and the creditor(s) named above (individually and collectively, and jointly and
severally, the "Creditor").
1. SUBORDINATION. To induce Silicon in its discretion to extend credit to
the above-named borrower (the "Borrower") at any time, in such manner, upon such
terms and for such amounts as may be mutually agreeable to Silicon and the
Borrower (but without obligation on Silicon's part to do so), which credit is
guarantied by the above-named guarantor (the "Guarantor"; the Borrower and the
Guarantor are referred to herein, collectively, as the "Obligor"), the Creditor
hereby agrees to subordinate and does hereby subordinate payment by the Obligor
of any and all indebtedness of the Obligor, now or hereafter incurred, created
or evidenced, to the Creditor, however such indebtedness may be hereafter
extended, renewed or evidenced (together with all collateral, security and
guarantees, if any, for the payment of any such indebtedness) (collectively, the
"Junior Debt"), to the payment in full in cash to Silicon of any and all present
and future indebtedness, liabilities, guarantees and other obligations, of every
kind and description (including without limitation any interest, charges and
other sums
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SILICON VALLEY BANK SUBORDINATION AGREEMENT
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accruing after the filing of a petition by or against Obligor under the
Bankruptcy Code), of the Obligor to Silicon (collectively, the "Senior Debt"),
and the Creditor agrees not to ask for, demand, ▇▇▇ for, take or receive any
payments with respect to all or any part of the Junior Debt or any security
therefor, unless and until all of the Senior Debt have been paid and performed
in full, except that if no default or event of default and no event which, with
notice or passage of time or both, would constitute a default or event of
default, has occurred under any documents or instruments evidencing or relating
to the Senior Debt, both before and after giving effect to the following
payments, then regularly scheduled payments with respect to the Junior Debt may
be made in the ordinary course of business.
The word "indebtedness" is used herein in its most comprehensive sense and
includes without limitation any and all present and future loans, advances,
credit, debts, obligations, liabilities, representations, warranties, and
guarantees, of any kind and nature, absolute or contingent, liquidated or
unliquidated, and individual or joint. Creditor represents and warrants to
Silicon that the Obligor is now indebted to the Creditor in the amounts set
forth on Schedule 1 attached hereto and under the notes and/or documents (if
any) described on Schedule 1 attached hereto and that the same is all
outstanding indebtedness owing from the Obligor to the Creditor (but the
subordination set forth herein shall not be affected by any lack of any such
attached Schedule 1).
2. DISTRIBUTION OF ASSETS. The Creditor further agrees that upon any
distribution of the assets or readjustment of the indebtedness of the Obligor
whether by reason of liquidation, composition, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustment of all or any of the Junior Debt, or the
application of the assets of the Obligor to the payment or liquidation thereof,
Silicon shall be entitled to receive payment in full in cash of all of the
Senior Debt prior to the payment of all or any part of the Junior Debt, and in
order to enable Silicon to enforce its rights hereunder in any such action or
proceeding, Silicon is hereby irrevocably authorized and empowered in its
discretion (but without any obligation on Silicon's part) to make and present
for and on behalf of the Creditor such proofs of claim against the Obligor on
account of the Junior Debt as Silicon may deem expedient or proper and to vote
such proofs of claim in any such proceeding and to receive and collect any and
all dividends or other payments or disbursements made thereon in whatever form
the same may be paid or issued and to apply same on account of the Senior Debt.
The Creditor further agrees to execute and deliver to Silicon such assignments
or other instruments as may be required by Silicon in order to enable Silicon to
enforce any and all such claims and to collect any and all dividends or other
payments or disbursements which may be made at any time on account of all and
any of the Junior Debt.
3. TRANSFER OF SUBORDINATED DEBT. The Creditor shall not sell, pledge,
assign or otherwise transfer, at any time while this Agreement remains in
effect, any rights, claim or interest of any kind in or to any of the Junior
Debt, either principal or interest, without first notifying Silicon and making
such transfer expressly subject to this Subordination Agreement in form and
substance satisfactory to Silicon. The Creditor represents and warrants to
Silicon that the Creditor has not sold, pledged, assigned or otherwise
transferred any of the Junior Debt, or any interest therein or collateral or
security therefor to any other person. The Creditor will concurrently endorse
all notes and other written evidence of the Junior Debt with a statement that
they are subordinated to the Senior Debt pursuant to the terms of this
Agreement, in such form as Silicon shall require, and the Creditor will exhibit
the originals of such notes and other written evidence of the Junior Debt to
Silicon so that Silicon can confirm that such endorsement has been made (but no
failure to do any of the foregoing shall affect the subordination of the Junior
Debt provided for herein, which shall be fully effective upon execution of this
Agreement).
4. SILICON'S RIGHTS. This is a continuing agreement of subordination and
Silicon may continue, without notice to the Creditor, to extend credit or other
accommodation or benefit and loan monies to or for the account of the Obligor in
reliance hereon. Silicon may at any time, in its discretion, renew or extend the
time of payment of all or any Senior Debt, modify the Senior Debt and any terms
or provisions thereof or of any agreement relating thereto, waive or release any
collateral which may be held therefor at any time, and make and enter into any
such agreement or agreements as Silicon may deem proper or desirable relating to
the Senior Debt, without notice to or further consent from the Creditor and
without any manner impairing or affecting this Agreement or any of Silicon's
rights hereunder. The Creditor waives notice of acceptance hereof, notice of the
creation of any Senior Debt, the giving or extension of any credit by Silicon to
the Obligor, or the taking, waiving or releasing of any security therefor, or
the making of any modifications, and the Creditor waives presentment, demand,
protest, notice of protest, notice of default, and all other notices to which
the Creditor might otherwise be entitled.
5. REVIVOR. If, after payment of the Senior Debt, the Obligor thereafter
becomes liable to Silicon on account of the Senior Debt, or any payment made on
the Senior Debt shall for any reason be returned by Silicon, this Agreement
shall thereupon in all respects become effective with respect to such subsequent
or reinstated Senior Debt, without the necessity of any further act or agreement
between Silicon and the Creditor.
6. GENERAL. This Agreement sets forth in full all of the representations
and agreements of the parties with
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respect to the subject matter hereof and supersedes all prior discussions,
representations, agreements and understandings between the parties. This
Agreement may not be modified or amended, nor may any rights hereunder be
waived, except in a writing signed by the parties hereto. In the event of any
litigation between the parties based upon, arising out of, or in any way
relating to this Agreement, the prevailing party shall be entitled to recover
all of his costs and expenses (including without limitation attorneys' fees)
from the non-prevailing party. The parties agree to cooperate fully with each
other and take all further actions and execute all further documents from time
to time as may be reasonably necessary to carry out the purposes of this
Agreement. At Silicon's option, all actions and proceedings based upon, arising
out of or relating in any way directly or indirectly to, this Agreement shall be
litigated exclusively in courts located within Santa ▇▇▇▇▇ County, California,
and Creditor consents to the jurisdiction of any such court and consents to the
service of process in any such action or proceeding by personal delivery,
first-class mail, or any other method permitted by law, and waives any and all
rights to transfer or change the venue of any such action or proceeding to any
court located outside Santa ▇▇▇▇▇ County, California. This Agreement is being
entered into, and shall be governed by the laws of the State of California. This
Agreement shall be binding upon the Creditor and its successors and assigns and
shall inure to the benefit of Silicon and Silicon's successors and assigns.
7. MUTUAL WAIVER OF JURY TRIAL. SILICON AND CREDITOR EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO: (I) THIS AGREEMENT; OR (II) ANY OTHER PRESENT OR
FUTURE INSTRUMENT OR AGREEMENT BETWEEN SILICON AND CREDITOR; OR (III) ANY
CONDUCT, ACTS OR OMISSIONS OF SILICON OR CREDITOR OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
SILICON OR CREDITOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.
[remainder of column and page intentionally left blank; signature page
immediately follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.
CREDITOR:
MTI TECHNOLOGY CORPORATION, A
DELAWARE CORPORATION
BY /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
--------------------------------
TITLE: Chief Operating Officer
-----------------------------
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
TITLE: President and Chief Executive
Officer
-----------------------------
MTI TECHNOLOGY B.V., A COMPANY
ORGANIZED UNDER THE LAWS OF THE
NETHERLANDS AND SUCCESSOR-IN-INTEREST
TO SUBSTANTIALLY ALL OF THE ASSETS
AND LIABILITIES OF MTI TECHNOLOGY
IRELAND, LTD.
BY /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
TITLE: Director and Secretary
-----------------------------
BY /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
TITLE: Director
-----------------------------
SILICON:
SILICON VALLEY BANK
BY /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
-----------------------------------
TITLE: Vice President and Regional
Market Manager
--------------------------------
OBLIGOR'S AGREEMENT
The undersigned Obligor hereby acknowledges receipt of a copy of the
foregoing Subordination Agreement and agrees not to pay any Junior Debt, except
as provided therein. In the event Obligor breaches this Agreement or any of the
provisions of the foregoing Subordination Agreement, Obligor agrees that, in
addition to all other rights and remedies Silicon has, all of the Senior Debt
shall, at Silicon's option and without notice or demand, become immediately due
and payable, unless Silicon expressly agrees in writing to waive such breach. No
waiver by Silicon of any breach shall be effective unless in writing signed by
one of Silicon's authorized officers, and no such waiver shall be deemed to
extend to or waive any other or subsequent breach. Obligor further agrees that
any default or event of default by Obligor on the Junior Debt or under any
present or future instrument or agreement between Obligor and the Creditor shall
constitute a default and event of default under all present and future
instruments and agreements between Obligor and Silicon. Obligor further agrees
that, at any time and from time to time, the foregoing Subordination Agreement
may be altered, modified or amended by Silicon and the Creditor without notice
to Obligor and without further consent by Obligor.
OBLIGOR:
MTI TECHNOLOGY CORPORATION, A DELAWARE CORPORATION
BY /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
--------------------------------
TITLE: Chief Operating Officer
-----------------------------
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
TITLE: President and Chief
Executive Officer
-----------------------------
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MTI TECHNOLOGY B.V., A COMPANY
ORGANIZED UNDER THE LAWS OF THE
NETHERLANDS AND SUCCESSOR-IN-INTEREST
TO SUBSTANTIALLY ALL OF THE ASSETS
AND LIABILITIES OF MTI TECHNOLOGY
IRELAND, LTD.
BY /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
TITLE: Director and Secretary
-----------------------------
BY /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
TITLE: Director
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SCHEDULE 1
None.
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