SESSION 9 SUBORDINATION TERMS: S*U*B*O*R*D*I*N*A*T*I*O*N 13 LETTERS

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1 2013 ANNUAL SPRING INVESTMENT FORUM American College of Investment Counsel Chicago, IL SESSION 9 SUBORDINATION TERMS: S*U*B*O*R*D*I*N*A*T*I*O*N 13 LETTERS A COINCIDENCE OR JUST A GAME OF CRAPS? SUBORDINATION TERMS AND HOW TO IMPROVE YOUR ODDS. April 26, :30 a.m. 12:30 p.m. Nicole L. Rives Sullivan & Worcester LLP (Moderator) Andrew M.A Gould Babson Capital Management LLC Michael Gustafson Bingham McCutchen LLP Andrew A. Kling Schiff Hardin LLP

2 S*U*B*O*R*D*I*N*A*T*I*O*N 13 letters a coincidence or a just a game of craps? Andrew Gould, Babson Capital Michael Gustafson, Bingham McCutchen LLP Andrew A. Kling, Schiff Hardin LLP Nicole Rives, Sullivan & Worcester LLP

3 TYPES OF SUBORDINATION Contractual a separate agreement between the senior and junior creditor Payment subordination: senior lender has first right to payment regardless of source of funds How deeply subordinated depends on the transaction: market terms differ for seller paper v. equity/affiliate debt v. financial lenders Lien subordination: senior lender has first right to payment from proceeds of shared collateral; otherwise junior lender is pari passu (or has priority as to other non-shared collateral) Structural a creditor of a parentco is subordinated to the creditors of a subsidiary as to the subsidiary s assets since a parentco creditor can gain access to those assets only through parentco s equity in the subsidiary Equitable Subordination statutory and equitable doctrine that allows a creditor s claim to be subordinated in certain circumstances to claims of other creditors (in some jurisdictions, just holding equity can be enough) 2

4 FOCUS OF PRESENTATION CONTRACTUAL PAYMENT SUBORDINATION IN MEZZANINE LOANS BY FINANCIAL LENDERS HOW TO IMPROVE YOUR ODDS! 3

5 TYPICAL US (NON-REAL ESTATE) MEZZANINE LOAN Is at the same level as the Senior Debt Has a higher coupon (12-15%) of which 2-3% will be PIK d Has some equity return (either through warrants (now rare) or a co-investment opportunity) Bullet maturity with a no call period and prepayment premium Has the same covenants as the Senior Lender but with a stepback (10-15%) on financial covenants and most cases basket amounts and EODs Has only cross-acceleration to the Senior Debt to prevent backdoor benefit of the Senior Debt covenants Generally unsecured; although some have the benefit of a silent second lien, Mezz Lenders often choose to be unsecured so not to have to give up various rights (e.g., in bankruptcy proceedings) that are generally required of a second lien holder 4

6 TYPICAL UK/EU MEZZANINE LOAN Is at the same level as the Senior Debt, other than Senior Debt loaned directly to an OpCo for working capital purposes Guaranteed by each of the guarantors of the Senior Debt Shares one set of security documents with the Senior Debt (with a joint Security Trustee appointed under the Intercreditor Agreement) In the context of an LBO, the security/guarantee position of the Mezz Debt may be worse than that of the Senior Debt by virtue of financial assistance rules or other local law limitations. Has a higher coupon, often floating (LIBOR or EURIBOR), and with a PIK component May (but will not necessarily) come with warrants or some other equity return Bullet maturity with a redemption premium in the first one or two years, but no no call period Has the same covenants as the Senior Lender but with a negotiated stepback on financial covenants and in some cases basket amounts and EODs Cross-default as to the Senior Debt is typically limited to prevent indirect benefit of tighter Senior Debt covenants Subordination arrangements are typically documented using an intercreditor agreement based on the Loan Market Association s form; that form has been recently updated to reflect evolving market practice 5

7 NEGOTIATED TERMS The payment subordination terms that get negotiated are fairly standard. How they get resolved depends on Level of sophistication of the parties Relative size of senior/junior debt Availability of deals/strength of issuer or sponsor Sometimes just what was the last form used by the Senior Lender or its counsel 6

8 KEY TOPICS Definition of Senior Debt Definition of Senior Debt Cap Definition of Subordinated Obligations Definition of Paid in Full Definition of Permitted Payments Definition of Enforcement Action Payment Blockage Periods and Non-Blockable Permitted Payments Remedies Standstill Periods Permitted Amendments of Subordinated Loan Documents Prohibited Amendments of Senior Loan Documents Rights in Bankruptcy Other Rights for the Subordinated Lender 7

9 SENIOR DEBT Senior Debt means all obligations, liabilities and indebtedness of every nature of the Obligors from time to time owed to the Agent or any Senior Lender under any Senior Debt Documents [including, without limitation, Hedging Obligations and Cash Management Obligations], the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding under the Bankruptcy Code together with (a) any amendments, modifications, refinancings, renewals or extensions thereof to the extent not prohibited by the terms of this Agreement and (b) any interest accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest is an allowed claim; provided, however, that (i) the aggregate principal amount of any Obligations under the Senior Agreements (including the maximum aggregate amount of all commitments to extend any revolving credit, letter of credit or similar credit facility in connection therewith), [plus the principal amount of all the funded loans and any unfunded commitments under the Senior Credit Agreement pursuant to Section [ ] of the Senior Credit Agreement {i.e., the Accordion Facility, if any}], plus the face amount of all letters of credit from time to time outstanding at any time plus the aggregate amount of Cash Management Obligations [plus the aggregate amount of Hedging Obligations] shall not exceed the Senior Debt Cap, and any such excess amounts and any interest or fees thereon shall not constitute Senior Debt under this Agreement, and shall be expressly subordinate and junior in right of payment to the Subordinated Debt and (ii) Senior Debt shall not include any indebtedness, liability or other obligation of any Obligor owed to any other Obligor or any subsidiary or other Affiliate of any Obligor, and any Obligations (as defined in the Senior Credit Agreement) held by any Obligor or any subsidiary or other Affiliate of any Obligor (notwithstanding prohibitions thereon) shall be expressly subordinate and junior in right of payment to the Subordinated Debt. Senior Debt shall be considered to be outstanding whenever any loan commitment under the Senior Debt Document is outstanding. 8

10 DEFINITION OF SENIOR DEBT All obligations under the Senior Loan Documents Additional Obligations: Post-closing Permitted Incremental Facilities Cash Management Obligations Hedging Obligations Permitted Refinancing Debt Can t include terms/debt that would not be permitted as an amendment to the current Senior Debt Subject to a cap Is Debt incurred after a breach of the Senior Loan Amendment covenant Senior Debt? Is otherwise Senior Debt held by the issuer or an affiliate (including the Sponsor) Senior Debt? 9

11 DEFINITION OF SENIOR DEBT UK/EU standard: Include all obligations under the Senior Loan Documents, subject to a cap, and include all Hedging Obligations Cash Management Obligations often provided as ancillary facilities under the Senior Loan Documents and consequently will effectively be subject to the cap Include these amounts whether or not enforceable or allowed in an insolvency 10

12 SENIOR DEBT CAP Senior Debt Cap means, as of any date of determination, (i) [$ ], [plus (ii) the principal amount of the Acquisition Loans (as defined on the date hereof in the Senior Credit Agreement) made under the Senior Credit Agreement in an aggregate amount not to exceed {$ } (but only to the extent that, {the Agent and the Subordinated Creditors shall have received a written certification from the Obligors substantially contemporaneously with the making of such Acquisition Loans, that} {insert applicable conditions; e.g.: (1) the proceeds of such Acquisition Loans shall be used by the Obligors only to finance the purchase price payable in respect of Permitted Acquisitions (as defined on the date hereof in the Senior Credit Agreement) and costs and expenses reasonably related thereto, (2) each of the conditions set forth in Section of the Senior Credit Agreement (as in effect on the date hereof) have been satisfied, and (3) without limiting the foregoing, after giving effect to such Acquisition Loans and the consummation of any Permitted Acquisition to be financed with the proceeds thereof, (a) the Senior Debt to EBITDA Ratio (as defined in the Senior Credit Agreement as in effect on the date hereof, or amended with the prior written consent of the Required Holders), determined on a pro forma basis in a manner satisfactory to the Required Holders, shall be less than or equal to the lesser of (x) { } to 1.0 and (y) the maximum Senior Debt to EBITDA Ratio permitted at such time under Section of the Senior Credit Agreement as in effect on the date hereof less and (b), the Total Debt to EBITDA Ratio (as defined in the Senior Credit Agreement as in effect on the date hereof, or amended with the prior written consent of the Required Holders), determined on a pro forma basis in a manner satisfactory to the Required Holders, shall be less than or equal to the lesser of (x) { } to 1.0 and (y) the maximum Total Debt to EBITDA Ratio permitted at such time under Section of the Senior Credit Agreement as in effect on the date hereof less )}, {plus (iii) % of the amounts included as Senior Debt pursuant to the preceding clause (ii)}, {plus (iv) the principal amount of any Incremental Loans (as defined on the date hereof in the Senior Credit Agreement) made under the Senior Credit Agreement in an aggregate amount not to exceed {$ } (but only to the extent that, {the Agent and the Subordinated Creditors shall have received a written certification from the Obligors substantially contemporaneously with the making of such Incremental Loans, that} {insert applicable conditions; e.g.: (1) the proceeds of such Incremental Loans shall be used by the Obligors only to finance the purchase price payable in respect of Permitted Acquisitions (as defined on the date hereof in the Senior Credit Agreement) and costs and expenses reasonably related thereto, (2) each of the conditions set forth in Section of the Senior Credit Agreement (as in effect on the date hereof) have been satisfied, and (3) without limiting the foregoing, after giving effect to such Incremental Loans and the consummation of any Permitted Acquisition to be financed with the proceeds thereof, (a) the Senior Debt to EBITDA Ratio (as defined in the Senior Credit Agreement as in effect on the date hereof, or amended with the prior written consent of the Required Holders), determined on a pro forma basis in a manner satisfactory to the Required Holders, shall be less than or equal to the lesser of (x) { } to 1.0 and (y) the maximum Senior Debt to EBITDA Ratio permitted at such time under Section of the Senior Credit Agreement as in effect on the date hereof less and (b), the Total Debt to EBITDA Ratio (as defined in the Senior Credit Agreement as in effect on the date hereof, or amended with the prior written consent of the Required Holders), determined on a pro forma basis in a manner satisfactory to the Required Holders, shall be less than or equal to the lesser of (x) { } to 1.0 and (y) the maximum Total Debt to EBITDA Ratio permitted at such time under Section of the Senior Credit Agreement as in effect on the date hereof less )}, {plus (v) % of the amounts included as Senior Debt pursuant to the preceding clause (iv)},] and minus [(vi)] the sum of (1) all repayments and prepayments applied to any term loan constituting Senior Debt and (2) any other repayments and commitment reductions under the Senior Credit Agreement to the extent that such payments and reductions may not be reborrowed (in each case under this clause (vi) specifically excluding, however, any such prepayments, repayments and commitment reductions occurring as part of any Permitted Senior Refinancing). 11

13 DEFINITION OF SENIOR DEBT CAP A cap on the amount of Senior Debt is customary but not everything is under the cap. Generally cap is amount of current outstanding loans and unfunded commitments with an additional headroom of [10-15%] Headroom for Permitted Incremental Facilities open to negotiation Hedging Obligations generally not under the cap rely on limits as to what types of these obligations that can be Senior Debt; extent to which Cash Management Obligations are excluded from the cap is negotiated Principal payments (mandatory or otherwise) on term loans and permanent reductions of other commitments reduce the cap (though a permitted refinancing does not) Effect of currency exchange rate fluctuations multi-currency transaction What happens to the excess? 12

14 DEFINITION OF SUBORDINATED OBLIGATIONS All obligations under the Subordinated Debt Documents other than.. Generally equity payments/rights are excluded, but warrant / equity put rights are negotiated 13

15 PAID IN FULL OR PAYMENT IN FULL Paid in Full or Payment in Full means at any time (a) the payment in full in cash or Cash Alternatives of all Senior Debt (other than (i) contingent obligations and (ii) Cash Management Obligations [and Hedging Obligations], in each case to the extent not then due and payable), (b) the termination of all commitments of Senior Lenders to lend or otherwise extend credit under the Senior Debt Documents and, if applicable, (c) all letters of credit issued under the applicable Senior Debt Documents have been cancelled and/or terminated (or (i) backed by one or more standby letters of credit (issued by a bank, and in form and substance, acceptable to the Agent) or (ii) cash collateralized, in each case in an amount reasonably required by the Agent (it being agreed that an amount in excess of 105% of the face amount of such continuing letters of credit shall not be deemed to be reasonable)); provided that Senior Debt shall be deemed to be Paid in Full at such time as the Agent has expressly acknowledged in a payoff letter or other written document the termination of the Senior Debt Documents, the payment in full of all outstanding obligations thereunder (other than (i) contingent obligations to the extent no claim giving rise thereto has been asserted and (ii) and Cash Management Obligations not then due and payable) and, if applicable, all letters of credit issued under the applicable Senior Debt Documents have been cancelled and/or terminated (or (i) backed by one or more standby letters of credit (issued by a bank, and in form and substance, acceptable to the Agent) or (ii) cash collateralized, in each case in an amount reasonably required by the Agent (it being agreed that an amount in excess of 105% of the face amount of such continuing letters of credit shall not be deemed to be reasonable)). 14

16 DEFINITION OF PAID IN FULL Indefeasibly paid in full not market or practical Outstanding LOCs (if cash collateralized), Contingent Obligations, Cash Management Obligations, Hedging Obligations if not then due should not prevent Paid in Full ; but outstanding unfunded commitments to lend do Cash or Cash Equivalents? But in any event, whenever the Agent for the Senior Lenders says so in a payoff letter The occurrence of the Senior Discharge Date in the UK/EU typically requires repayment of both liabilities under senior loans and discharge of all Hedging Obligations; repayment must be to the satisfaction of the relevant senior creditors 15

17 PERMITTED SUBORDINATED DEBT PAYMENTS Permitted Subordinated Debt Payments means (a) regularly scheduled payments of interest on the Subordinated Debt due and payable on a non-accelerated basis in accordance with the terms of the Subordinated Debt Documents as in effect on the date hereof or as modified in accordance with the terms of this Agreement (including interest at the default rate), (b) Past Due Permitted Payments, (c) Subordinated PIK Payments, (d) Restructuring Securities, (e) fees and expenses that are payable on the Closing Date pursuant to Paragraph[s] [ ] of the Subordinated Note Purchase Agreement, (f) payment of the amounts due under Paragraph [ ] 4 and Paragraph [ ] 5 of the Subordinated Note Purchase Agreement (as in effect on the date hereof), (g) payment of Subordinated Debt Costs and Expenses, (h) payment of the amount of the Subordinated Debt that has become due upon a Change of Control (as defined on the date hereof in the Subordinated Note Purchase Agreement) pursuant to Paragraph [ ] of the Subordinated Note Purchase Agreement (provided, that the Senior Lenders have waived or consented to such Change of Control (or any cross default relating to such Change of Control) in accordance with the terms of the Senior Credit Agreement) and no Senior Default is continuing at the time of such payment or after giving effect thereto, (i) payment of amendment, waiver, consent and/or forbearance fees in connection with the execution of an amendment, waiver, consent and/or forbearance permitted under Section 3.2 hereof and (j) payment of the Subordinated Debt on or after the Subordinated Debt Maturity Date. 4 Insert AHYDO clause, if applicable. 5 Insert mandatory prepayment provisions, if applicable (e.g., mandatory prepayments for asset sales, casualty events, ECF, etc. to the extent not applied to pay down the senior debt). 16

18 DEFINITION OF PERMITTED PAYMENTS Regularly scheduled payments of cash interest PIK payments (including capitalized default interest) Mandatory prepayments of principal (if any) from proceeds of asset sales, casualty events and excess cash flow to the extent payments waived by Senior Lender Principal and other amounts due on maturity AHYDO payments if applicable All fees, expenses and indemnification payments importantly, legal and financial advisory fees (sometimes capped) Customary amendment fees Restructuring Securities (more on this to follow) Principal and other amounts due on exercise of a change of control put provided Senior Lender has waived the change of control or has not blocked the payment within [10] days of notice of exercise of such put Other put right payments (OFAC/illegality puts?) 17

19 ENFORCEMENT ACTION Enforcement Action means (a) to take from or for the account of any Obligor, 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 such Obligor with respect to the Subordinated Debt (it being understood and agreed that the receipt and retention of Permitted Subordinated Debt Payments not in contravention of Section 2.2 or 2.3 of this Agreement and of Non-Blockable Amounts shall not be deemed to be an Enforcement Action ), (b) to initiate, or participate with others in, any suit, action or proceeding against any Obligor to (i) enforce payment of or to collect the whole or any part of the Subordinated Debt or (ii) commence judicial enforcement of any of the rights and remedies under the Subordinated Debt Documents or applicable law with respect to the Subordinated Debt (in each case other than in connection with payments permitted to be made hereunder), (c) to accelerate the Subordinated Debt, (d) to exercise any put option with respect to any Subordinated Debt, or to cause any Obligor to honor any redemption or mandatory prepayment obligation with respect to any Subordinated Debt, under any Subordinated Debt Document (in each case other than in connection with payments permitted to be made hereunder) or (e) to take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce any lien on, foreclose upon, take possession of or sell any property or assets of any Obligor; provided, however, that the term Enforcement Action shall not include (i) any suit or action initiated or maintained to prevent the loss of a claim as a result of the running of any applicable statute of limitations or other similar restriction on claims, (ii) any counterclaim or comparable action brought by a Subordinated Creditor in an action commenced against such Subordinated Creditor by an Obligor, (iii) any exercise of rights and remedies for specific performance or equitable relief to compel any Obligor to comply with any non-payment obligations under the Subordinated Debt Documents, (iv) any non-judicial actions that may be required or desired as a precondition to acceleration or relating to preservation of rights (such as giving a notice of default or reservation of rights (including the right of acceleration in accordance with this Agreement)), (v) any imposition of a default rate of interest that is otherwise permitted pursuant to the terms of this Agreement or (vi) any action to enforce the terms of any subordination agreement with respect to any indebtedness or other obligation subordinated to the Subordinated Debt. 18

20 DEFINITION OF ENFORCEMENT ACTION Actions by the Mezz Lender prohibited during the Remedies Standstill Period. Mezz Lenders still want the right to: Take actions to prevent running of the SOL Assert compulsory cross-claims and counterclaims Seek specific performance/injunctive relief for non-monetary obligations Give notices of default and acceleration/other procedural actions Exercise of change of control (or other negotiated) puts even if not then payable Demand and collect otherwise Permitted Payments Take actions to enforce the subordination agreement Impose default interest even if not currently payable in cash 19

21 PAYMENT BLOCKAGES-WHEN AND FOR HOW LONG? Payment Default v. Covenant Default Notice v. automatic for a Payment Default negotiated point If Payment Default triggers an automatic Payment Blockage, Mezz Lenders must give back payments received when they didn t know of the block. Mezz Lenders need some cutoff period for a clawback All failures to pay when due or a minimum amount to trigger a Payment Default? Only payment/cure lifts a Payment Blockage triggered by a Payment Default Certain payments should be non-blockable Indemnities, costs and expenses importantly, legal and financial advisory fees (sometimes capped, and in the UK/EU sometimes conditioned on there being no senior payment default) PIK d payments Restructuring Securities 20

22 PAYMENT BLOCKAGES-WHEN AND FOR HOW LONG? Covenant Defaults Usually all covenants but Payment Blockage not triggered until notice is given A Payment Blockage triggered by a covenant default lifts automatically after [ ] days if no Payment Default block instituted, even if not cured or waived Number of days in any 360 that a Payment Blockage triggered by a Covenant Default can be imposed is also limited to [ ] days Cannot put up more than 2 blocks per year Cannot put a subsequent block up for the same violation within [45-90] days (and UK/EU standard is to limit to one block in respect of any one violation) Total number of blocks limited to [3-5] over life of deal we often argue about this, but note that the senior bank often attempts to reset or deem a block to not count if you ever get close to the limit; a limit on total number of blocks is often not found in UK/EU transactions 21

23 PAYMENT BLOCKAGES-WHEN AND FOR HOW LONG? What rights does the Mezz Lender have when block is lifted? 22

24 REMEDIES STANDSTILL-WHEN AND FOR HOW LONG? Not coterminous with Payment Blockage Mezz Lenders have to have a default to commence the running of the Remedies Standstill. Mezz Lenders trigger the Standstill Period; the Senior Lenders trigger the Payment Blockage Standstill Periods to expire [90-180] days after the Mezz Lenders give the Senior Lenders a notice of their intention to take Enforcement Action or if sooner Acceleration of any [material] portion of the Senior Debt Initiation of a bankruptcy proceeding Sale of any [material] portion of the Borrower s assets Any foreclosure action with respect to a Borrower or Guarantor s assets A Change of Control Maturity of the Subordinated Debt UK/EU approach is similar, though often fewer early termination events and the length of the Standstill Period is typically determined by severity of Mezz Default - [90] days for a payment default, [120] days for a financial covenant default and [150] days for any other default, for instance Expiration of a Remedies Standstill Period does not in and of itself terminate a Payment Blockage. Why do Mezz Lenders want the right to take enforcement action if they can t keep what they collect? 23

25 AMENDMENTS OF SUBORDINATED LOAN DOCUMENTS Senior Lenders will try to restrict any amendments that increase or accelerate payments to the Mezz Lenders or otherwise trip an earlier EOD under the Subordinated Loan 24 But limits on amendments to the Subordinated Loan Documents should permit: Capitalization of all interest, expenses, fees and indemnities as a permitted increase to the principal of the Subordinated Debt Increases in total PIK interest [note that a cap (e.g., [ ] bps) may be required particularly as to PIK interest that is capitalized and thereafter accrues interest that is payable in part in cash], other than the imposition of default interest; whether cash interest can be increased is a negotiated point Subordinated Debt often get gets amendment provisions that mirror the senior amendment provisions Extensions for dates of payment Permit conforming amendment to changes in Senior Debt subject to same stepbacks Judgment liens pursuant to permitted Enforcement Actions

26 25 AMENDMENTS OF SENIOR LOAN DOCUMENTS Senior Lenders will want to have flexibility to amend their documents without Mezz Lender consent But limits on amendments to Senior Loan Documents should include: No increase in principal over the Maximum Senior Debt Cap No increase in interest rate or interest rate spreads by more than [200] bps (excluding imposition of a default rate) Extension of final maturity to within six months of the Subordinated Debt maturity No decrease of the weighted average life to maturity and no shortening of scheduled maturity No further restrictions on Borrower s ability to repay the Subordinated Debt or amend the Subordinated Loan Documents No new recurring fees or increases to any existing fees (other than one-time amendment or waiver fees) No sales to Borrower or Sponsor or their affiliates No amendments that make covenants or EODs more restrictive or onerous unless the Mezz Lenders are given the opportunity to conform Actions that would be contrary to the Anti-Layering Covenant (such as tranching or retranching the Senior Debt)

27 BANKRUPTCY RIGHTS In a bankruptcy, the Subordination Agreement will be respected as to priority with respect to distributions. Other provisions, particularly waivers of rights by the Mezz Lenders, may not be. But the Senior Lender may still seek to enforce the Subordination Agreement outside of the bankruptcy In a bankruptcy, the Senior Debt must be Paid in Full before the Subordinated Debt receives any distributions Mezz Lenders should still be entitled to payment of expenses, PIK d payments and Restructuring Securities Restructuring Securities can be equity or debt. Senior Lenders will want to impose limitations on what constitutes a Restructuring Security to ensure the continued relative priorities of the Senior Debt and Subordinated Debt 26

28 BANKRUPTCY RIGHTS If no second lien involved, Senior Lenders generally do not ask for extensive waivers of rights but Generally get the right to file a proof of claim in respect of the Subordinated Debt if Mezz Lenders fail to do so Right to vote Mezz Lenders claim open to negotiation: bankruptcy courts split on enforceability of the right to vote. Generally Mezz Lenders resist any limitation on voting rights Mezz Lenders should not be prohibited from participating in the Unsecured Creditors Committee Mezz Lender agree not to contest the validity of the Senior Debt, but if the Senior Debt is otherwise uncollectible or equitably subordinated in the bankruptcy, should it still be Senior Debt? 27 UK/EU approach is much more focused on out-of-court restructurings, including right of the Security Agent to release Mezzanine security and claims on a distressed disposal, subject to meeting (negotiated) valuation requirements.

29 OTHER PROVISIONS/TRENDS Purchase Options Cure Rights 28