EXHIBIT 4.10
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS AGREEMENT is made this 25th day of July, 1997 by and between
BANKERS TRUST COMPANY ("BTCo"), as Agent (the "Agent") for the Banks under the
Credit Agreement (as defined herein and DEUTSCHE FINANCIAL SERVICES CORPORATION,
a Nevada corporation, for itself and doing business as Resellers Credit Corp.
("DFS").
RECITALS
1. The Banks are parties to that certain Credit Agreement, dated as of
July 25, 1997 (as amended, modified or supplemented from time to time, the
"Credit Agreement") by and among the Banks and Federal Data Corporation, a
Delaware corporation ("FDC"). All of FDC's obligations under the Credit
Agreement are guaranteed by its various subsidiaries, including Xxxxxxx
Management Systems Corporation ("Xxxxxxx"), pursuant to a Subsidiary Guaranty
(as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty").
2. All of Xxxxxxx obligations under the Subsidiary Guaranty (the
"Obligations") are, or are to be secured, by a security interest granted to BTCo
as Collateral Agent pursuant to a security agreement (as amended, modified or
supplemented from time to time, the "Security Agreement") in all the Collateral
(as defined therein) of the various assignor parties thereto, including Xxxxxxx.
3. Pursuant to the Credit Agreement, Xxxxxxx is not permitted to incur
Indebtedness (as defined in the Credit Agreement) or create Liens (as defined in
the Credit Agreement) in its assets except as expressly permitted under the
Credit Agreement.
4. Xxxxxxx desires to obtain financing from DFS (as the same shall be
amended, renewed, extended, supplemented or otherwise modified from time to
time, the "DFS Financing").
5. As security for the DFS Financing, DFS has been or is to be granted a
security interest in all or a portion of the Collateral.
6. The Agent, on behalf of the Banks, is willing to consent to Xxxxxxx'x
incurring of Indebtedness and creation of the Liens in connection with the DFS
Financing and DFS is willing to consent to the existence of the Obligations and
the security interest of the Collateral Agent on behalf of the Banks in the
Collateral, in each case, on the terms set forth in this Agreement.
7. The parties hereto desire hereby to establish the relative rights and
priorities of the Banks and DFS in and as to the Collateral.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and in order to induce the Agent to make advances to Xxxxxxx under the
Credit Agreement, the parties hereto do agree as follows:
1. a. The terms defined below shall have the meanings assigned wherever
the terms appear in this Agreement. These meanings are also applicable to the
singular and plural forms of the terms defined.
"Bank First Priority Collateral" means all Collateral except the DFS
First Priority Collateral.
"Bank First Priority Security Interest" means the security interest of
the Collateral Agent on behalf of the Banks in the Bank First Priority
Collateral.
"Bank General Security Interest" means the security interest of the
Collateral Agent on behalf of the Banks in the DFS First Priority Collateral.
"DFS First Priority Collateral" means, whether now owned or hereafter
acquired or existing and wherever located:
i) Inventory;
ii. all cash and insurance proceeds arising from Inventory, but
not any other proceeds of Inventory, except for the Included Accounts;
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iii. and all substitutions, repossessions, exchanges,
replacements and returns of Inventory;
iv. all parts thereof, attachments, additions, accessories and
accessions of Inventory;
v. all price protection credits, rebates, discounts, and
incentive payments relating to any of the foregoing;
vi. the Included Accounts; and
vii. all proceeds of the Included Accounts.
"DFS First Priority Security Interest" means the security interest of
DFS in the DFS First Priority Collateral.
"DFS General Security Interest" means the security interest of DFS in
the Bank First Priority Collateral.
"First Priority Security Interest" means either the Bank First
Priority Security Interest or the DFS First Priority Security Interest,
depending upon the context in which such term is used.
"Included Accounts" means all accounts, contract rights, chattel
paper, security agreements, instruments, deposit accounts, reserves, documents
and general intangibles of Xxxxxxx, whether now owned or hereafter acquired,
arising from or related to any sale or lease of any goods or services
("Accounts") by Xxxxxxx to: (i) the Boeing Company; (ii) the Defense
Information Systems Agency, pursuant to contract order number DCA100-97-F-0117,
dated as of January 9, 1997, as amended from time to time; (iii) the Defense
Information Systems Agency, pursuant to contract order number DCA100-97-F-0108,
dated as of January 3, 1997, as amended from time to time; (iv) the Bureau of
the Census, pursuant to contract number 40YABC710511, dated as of January 15,
1997, as amended from time to time; (v) the Federal Emergency Management Agency,
pursuant to contract order number EMW-97-DO-0198, dated as of March 17, 1997, as
amended from time to time; (vi) the Federal Emergency Management Agency,
pursuant to contract order number EMW-97-DO-0200, dated as of March 15, 1997, as
amended from time to time; (vii) the Tennessee Valley Authority, pursuant to
contract order number P-96PYL-188515-000, dated as of February 28, 1997, as
amended from time to time, and each and
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every release or order thereunder; (viii) the Defense Information Systems
Agency, pursuant to contract number NAS5-96012, Delivery Order Number VP01,
dated as of May 20, 1997, as amended from time to time, and each and every
additional release or order thereunder; and (ix) each and every additional
contract to the extent specified in writing to the Agent by Xxxxxxx and DFS
prior to any Accounts arising thereunder.
"Inventory" means collectively and includes all of the following,
whether now owned or hereafter acquired by Xxxxxxx: all goods held or intended
for sale or lease by Xxxxxxx, or furnished or to be furnished under contracts of
services, all raw materials, work in process, finished goods, materials and
supplies of every nature used or usable in connection with the manufacture,
packing, shipping, advertising or sale of any such goods, together with all
property included within the definition of "inventory" set forth in the UCC.
"UCC" means the Uniform Commercial Code as adopted and in effect in
the State of New York.
b. Subject to the continued existence of this Agreement and DFS's
compliance with its obligations hereunder, the Agent hereby consents to the
existence of the DFS Financing, the DFS First Priority Security Interest
and the DFS General Security Interest. Subject to the continued existence
of this Agreement and the Agent's compliance with its obligations
hereunder, DFS hereby consents to the existence of the Obligations, the
Bank First Priority Security Interest and the Bank General Security
Interest.
c. All provisions of this Agreement shall apply notwithstanding the
date, time, manner or order of perfection of any security interest of DFS
or the Banks in the Collateral; provided, however, that nothing contained
herein shall affect the relative priorities of any security interest of the
Banks or DFS or the Collateral Agent to perfect or continue the perfection
of any security interest.
2. DFS agrees that, except as provided in Section 1.c. above with respect
to any failure of DFS or the Collateral Agent to perfect or to continue the
perfection of any security interest, the DFS General Security Interest and all
rights, powers and authorities of DFS in connection therewith are hereby
subordinated to the Bank First Priority Security Interest and all rights, powers
and authorities of the Agent in connection therewith. In consideration of the
Agent's agreements in Section 3 below, unless and until the Agent has issued a
notice to DFS that the Obligations have been fully satisfied and discharged, DFS
agrees with the Agent as follows:
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a. DFS will not enforce or apply the DFS General Security Interest
or in any manner interfere with the Bank First Priority Security Interest.
b. DFS will not notify account debtors or other obligors of the DFS
General Security Interest.
c. DFS (i) will not assert any claim for marshaling with respect to
the Bank First Priority Collateral; (ii) consents to the collection or
disposition of the Bank First Priority Collateral free of the DFS General
Security Interest therein by the Collateral Agent, and, if the Agent
requests, by Xxxxxxx or any successor to it, including a trustee in
bankruptcy; (iii) until the Agent notifies DFS that Xxxxxxx is in default
under the Credit Agreement, will not knowingly receive the proceeds of any
Bank First Priority Collateral and, upon becoming aware that DFS has
received any such proceeds, will turn or pay over to the Agent, without the
necessity of demand or request by the Agent, any such proceeds which DFS
has not yet applied to reduce the outstanding balance of the DFS Financing;
(iv) following notice from the Agent that Xxxxxxx is in default under the
Credit Agreement but without the necessity of demand or request by the
Agent, will turn or pay over to the Agent the proceeds of any Bank First
Priority Collateral coming into DFS's possession, custody or control, and
until such delivery, shall hold any such proceeds in trust for the Agent;
and (v) shall notify the Agent if DFS receives possession or control of any
books, records or similar data which contain information identifying or
pertaining to the Bank First Priority Collateral and, at the Agent's
request and expense will, as promptly as practical thereafter in the
circumstances, make copies of such data available to the Agent, provided,
however, that the failure of DFS to comply with this subsection (v) shall
not create a cause of action against it by the Agent.
d. DFS will take any and all such action as the Agent may request to
facilitate the collection or disposition of any Bank First Priority
Collateral, including, without limitation, the agreement to permit such
Bank First Priority Collateral to be sold or otherwise disposed of free of
the DFS General Security Interest in such Bank First Priority Collateral,
provided that the Agent certifies in writing that such request is based on
the Agent's good faith belief that such release is necessary or desirable
to enhance its recovery.
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DFS acknowledges that the intent of the foregoing is to place the Agent in
the same position as if the Bank First Priority Collateral was not subject to
the DFS General Security Interest, and agrees that it will assert no claims
against the Agent, the Collateral Agent or the Banks with respect to the Bank
First Priority Collateral. Subject to all of the foregoing, nothing herein
contained shall be deemed to prohibit DFS from intervening or participating in
any judicial proceeding to the extent necessary to preserve or protect the DFS
General Security Interest.
3. The Agent on behalf of the Collateral Agent and the Banks agree that,
except as provided in Section 1.c. with respect to any failure of DFS or the
Agent to perfect or to continue the perfection of any security interest, the
Bank General Security Interest and all rights, powers and authorities of the
Agent, the Collateral Agent and the Banks in connection therewith are hereby
subordinated to the DFS First Priority Security Interest and all rights, powers
and authorities of DFS in connection therewith. In consideration of DFS's
agreements in Section 2 above, unless and until DFS has issued a notice to the
Agent that Xxxxxxx'x obligations with respect to the DFS Financing have been
fully satisfied and discharged, the Agent agrees with DFS as follows:
a. Neither the Agent nor the Collateral Agent will enforce or apply
the Bank General Security Interest or in any manner interfere with the DFS
First Priority Security Interest.
b. Neither the Agent nor the Collateral Agent will notify account
debtors or other obligors of the Bank General Security Interest.
c. The Agent agrees on behalf of the Collateral Agent and the Banks
that it (i) will not assert any claim for marshaling with respect to the
DFS First Priority Collateral; (ii) consents to the collection or
disposition of the DFS First Priority Collateral free of the Bank General
Security Interest therein by DFS and, if DFS requests, by Xxxxxxx or any
successor to it, including a trustee in bankruptcy; (iii) until DFS
notifies the Agent that Xxxxxxx is in default under the DFS Financing, will
not knowingly receive any proceeds of the DFS First Priority Collateral
which also constitute DFS First Priority Collateral and, upon becoming
aware that the Agent has received such proceeds, will turn or pay over to
DFS, without the necessity of demand or request by DFS, any such proceeds
which the Agent has not yet applied to Xxxxxxx'x obligations under the
Credit Agreement; (iv) following notice from DFS that Xxxxxxx is in default
under the DFS Financing but without the necessity of demand or request by
DFS, will turn or pay over to DFS the
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proceeds of any DFS First Priority Collateral coming into the Agent's
possession, custody or control (but only if such proceeds also constitute
DFS First Priority Collateral), and until such delivery, shall hold any
such proceeds in trust for DFS; and (v) notify DFS if the Agent receives
possession or control of any books, records or similar data which contain
information identifying or pertaining to the DFS First Priority Collateral
and, at DFS's request and expense will, as promptly as practical thereafter
in the circumstances, make copies of such data available to DFS, provided,
however, that the failure of the Agent to comply with this subsection (v)
shall not create a cause of action against it by DFS.
d. The Agent will take any and all such action as DFS may request to
facilitate the collection or disposition of any DFS First Priority
Collateral, including without limitation, the agreement to permit such DFS
First Priority Collateral to be sold or otherwise disposed of free of the
Bank General Security Interest in such DFS First Priority Collateral,
provided that DFS certifies in writing that such request is based on DFS's
good faith belief that such release is necessary or desirable to enhance
its recovery.
The Agent acknowledges that the intent of the foregoing is to place DFS in
the same position as if the DFS First Priority Collateral was not subject to the
Bank General Security Interest, and agrees on behalf of the Collateral Agent and
the Banks that they will assert no claims against DFS with respect to the DFS
First Priority Collateral. Subject to the foregoing, nothing herein contained
shall be deemed to prohibit the Agent from intervening or participating in any
judicial proceeding to the extent necessary to preserve or protect the Bank
General Security Interest.
4. DFS and the Agent shall each use their respective best efforts to
provide the other party with at least one (1) business day prior written notice
before taking any action to enforce or foreclose the respective First Priority
Security Interests; provided, however, that the failure to provide any such
notice shall not impair or restrict the rights of the party seeking to foreclose
or enforce its First Priority Security Interest.
5. This Agreement shall constitute a continuing agreement, and both the
Agent and/or the Banks and DFS may continue, without notice to the other, to
lend monies, extend credit and make other accommodations to or for the account
of Xxxxxxx and its affiliates in reliance hereon. The Agent and DFS agree that,
at any time and from time to time, they may enter into such agreement or
agreements with Xxxxxxx and its affiliates as they may deem advisable extending
the time of payment or
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renewing or otherwise altering the terms of all or of any indebtedness owed
them, respectively, or affecting any security for any or all of such
indebtedness, or may exchange, sell or surrender or otherwise deal with any
such security, without notice to the other party and without in any way
impairing or affecting their rights and benefits under this Agreement.
6. This Agreement shall be binding upon and shall inure to the benefit of
the Agent and DFS and their respective successors and assigns.
7. The interpretation and performance of this Agreement shall be governed
by the internal laws of the New York; provided, however, that the Federal
Arbitration Act, to the extent consistent with such laws, will supersede such
laws and govern. All terms used herein which are defined by the UCC shall have
the meaning assigned to them by the UCC unless and to the extent varied by this
Agreement.
8. Notices under this Agreement shall be given in writing sent to the
recipient at the respective addresses set forth below by hand delivery or by
deposit in the U.S. Mail with sufficient postage thereon for first class
certified or registered delivery service and shall be deemed duly given upon the
date of receipt as indicated by the receipt signed by the recipient or its
agent.
The Agent: c/o Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DFS: c/o Deutsche Financial Services Corp.
00000 Xxxxxxxxx Xxxxx
Xxxxx 000X
Xxxxx Xxxxxx, XX 00000
Attention: Regional Vice President
9. This Agreement shall remain in effect until the expiration of ninety
(90) days following receipt by the Agent or DFS, as the case may be, of written
notice from the other party terminating this Agreement, but the termination of
this Agreement shall not affect or impair any of the rights or interests of the
parties, including any security interest in assets of Xxxxxxx, created or
acquired hereunder prior to the effective date of such termination.
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10. The Recitals hereto are hereby incorporated into and made a part of
this Agreement.
11. Any controversy or claim arising out of or relating to this Agreement,
the relationship resulting in or from this Agreement, the breach of any duties
hereunder or any other relationship, transaction or dealing between the parties
will be settled by binding arbitration in accordance with the Commercial
Arbitration Rules of The American Arbitration Association, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000. The parties agree that all arbitrators selected
will be attorneys with at least five (5) years secured transactions experience.
Any award rendered by the arbitrator(s) may be entered as a judgment or order
and confirmed or enforced by either party in any state or federal court having
competent jurisdiction thereof. If either party brings or appeals any judicial
action to vacate or modify any award rendered pursuant to arbitration or opposes
the confirmation of such award and the party bringing or appealing such action
or opposing confirmation of such award does not prevail, such party will pay all
of the costs and expenses (including, without limitation, court costs,
arbitrators' fees and expenses and attorneys' fees) incurred by the other party
in defending such action. The arbitrators will not be empowered to award
punitive damages.
12. IF THIS AGREEMENT IS FOUND TO BE NOT SUBJECT TO ARBITRATION, EACH
PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS LOCATED WITHIN THE
STATE OF NEW YORK AND AGREES THAT ALL LEGAL PROCEEDINGS WILL BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. EACH PARTY WAIVES ANY
RIGHT TO A JURY TRAIL IN ANY SUCH PROCEEDING.
13. This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. In addition, this Agreement may contain more than one counterpart
of the signature page and this Agreement may be executed by the affixing of the
signatures of each of the parties to one such counterpart Agreement; all of such
signature pages shall be read as though one, and they shall have the same force
and effect as though all of the signers had a single signature page.
14. This Agreement contains the entire agreement between the parties with
respect to the matters addressed herein.
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WITNESS the following signatures and seals.
THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE
WAIVER PROVISIONS.
BANKERS TRUST COMPANY, as Agent
By /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
DEUTSCHE FINANCIAL SERVICES
CORPORATION, a Nevada Corporation
By /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: VP-Area General Manager
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ACKNOWLEDGMENT BY XXXXXXX
Xxxxxxx acknowledges receiving a copy of this Agreement and agrees not to
take or consent to any action in violation of this Agreement.
XXXXXXX MANAGEMENT SYSTEMS
CORPORATION
By /s/ Authorized Signatory
---------------------------------------
Name:
Title:
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