INTERCREDITOR AND SETTLEMENT AGREEMENT
THIS INTERCREDITOR AND SETTLEMENT AGREEMENT ("Agreement"), dated as of June
21, 2002, is by and among LaSalle Business Credit, Inc., individually ("LBCI")
and as Agent ("Agent"), all other U.S. Lenders (as defined below), and LaSalle
Business Credit, a division of ABN AMRO Bank N.V., Canada Branch ("Canadian
Lender").
W I T N E S S E T H
WHEREAS, Cantar/Polyair Corporation, a Delaware corporation ("Cantar
U.S."), Mabex Universal Corporation, a California corporation ("Mabex"),
Performa Corp., an Ohio corporation ("Performa", together with Cantar U.S. and
Mabex, each individually a "U.S. Borrower" and collectively, "U.S. Borrowers"),
Cantar/Polyair of Illinois, Inc., an Illinois corporation ("Cantar Illinois"),
C/P International Corp., Inc., an Illinois corporation ("CPIC"; together with
U.S. Borrowers and Cantar Illinois, each individually a "U.S. Company" and,
collectively, the "U.S. Companies"), Cantar/Polyair, Inc., an Ontario
corporation ("Parent") and Cantar/Polyair Canada Limited, an Ontario corporation
("Cantar Canada"; together with Parent, each individually a "Canadian Company"
and collectively, "Canadian Companies"; together with U.S. Companies, each
individually a "Company" and collectively, "Companies") have entered into that
certain Loan and Security Agreement of even date herewith (the "U.S. Loan
Agreement") with LBCI, as agent and the financial institutions from time to time
parties thereto as lenders ("U.S. Lenders");
WHEREAS, Cantar Canada and Canadian Lender (U.S. Lenders and Canadian
Lender are referred to collectively as "Lenders" and individually as a "Lender")
have entered into a Credit Agreement of even date herewith ("Canadian Credit
Agreement");
WHEREAS, each U.S. Company has guaranteed the obligations of Cantar Canada
to Canadian Lender pursuant to that certain Guarantee of even date herewith (the
"Canadian Guaranty");
WHEREAS, Parent has guaranteed the obligations of Cantar Canada to Canadian
Lender pursuant to that certain Guarantee of even date herewith (the "Parent
Guaranty");
WHEREAS, each Company has guaranteed the obligations of each U.S. Borrower
owing to U.S. Agent and U.S. Lenders pursuant to the U.S. Loan Agreement;
WHEREAS, pursuant to the Loan Documents (as hereinafter defined), each U.S.
Company has granted a security interest in substantially all of its property
("U.S. Collateral") and each Canadian Company has granted a security interest in
substantially all of its property ("Canadian Collateral"), in each case, to
secure, among other things, (i) the loans and other financial accommodations
made to such Company pursuant to the U.S. Loan Agreement or Canadian Credit
Agreement, as the case may be, and (ii) the guaranty by such Company of the
obligations of each U.S. Borrower and Cantar Canada; and
WHEREAS, the security interests described in the foregoing recital have
been granted to LBCI, as agent for itself, U.S. Lenders and Canadian Lender;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, it is hereby
agreed as follows:
1. Definitions.
Terms defined in the U.S. Loan Agreement and not otherwise defined herein
shall have the respective meanings provided in the U.S. Loan Agreement. The
following terms, as used herein, have the meanings set forth below:
1.1. "Aggregate Commitment" shall mean the "Aggregate Commitment" (as defined in
the Canadian Credit Agreement).
1.2. "Event of Default" shall mean any "Event of Default" as defined in the
Canadian Credit Agreement and in the U.S. Loan Agreement.
1.3. "Collateral" shall mean all of the real and personal property of any
Company now or hereafter pledged to LBCI, as agent for itself and the
Lenders, to secure, either directly or indirectly, repayment of any of the
Liabilities.
1.4. "Enforcement Action" shall mean, collectively or individually for one or
all of Canadian Lender, Agent and/or any U.S. Lender, to make demand for
payment or accelerate the indebtedness of any Company, repossess Collateral
or take any action to enforce any of the rights and remedies under the
Canadian Credit Agreement, the U.S. Loan Agreement, the Loan Documents, or
applicable law.
1.5. "Insolvency Proceeding" shall mean (i) any bankruptcy, reorganization or
insolvency proceeding with respect to any Company, (ii) the appointment of
a custodian, receiver, receiver and manager, liquidator, assignee, trustee
or sequestrator for any Company or any Company's assets, and/or (iii) any
assignment by a Company for the benefit of its creditors.
1.6. "Liabilities" shall mean the "Liabilities" as defined in the Canadian
Credit Agreement and in the U.S. Loan Agreement and all obligations,
liabilities and indebtedness of a Company as debtor-in-possession to
Canadian Lender or any U.S. Lender.
1.7. "Liquidation Event" shall mean any of the following: (i) the 360th day
after the commencement of an Enforcement Action, (ii) the commencement of
an Insolvency Proceeding, (iii) the dissolution, liquidation, winding up
and/or cessation of business of any Company not permitted under the Loan
Documents or consented to by the Lenders, and (iv) the disposition of
substantially all of the Collateral.
1.8. "Loan Documents" shall mean the U.S. Loan Agreement, the Other Agreements,
the Canadian Credit Agreement and the "Other Agreements" (as defined in the
Canadian Credit Agreement).
1.9. "Original Pro Rata Share" shall mean at any time, with respect to any
Lender, a fraction (expressed as a percentage in no more than nine (9)
decimal places), the numerator of which shall be, in the case of any U.S.
Lender, the sum of the Revolving Loan Commitment, Term Loan A Commitment,
Term Loan B Commitment, Term Loan C Commitment, Capital Expenditure Loan
Commitment and Acquisition Loan Commitment of such U.S. Lender and, in the
case of the Canadian Lender, the Aggregate Commitment of the Canadian
Lender at such time, as applicable, and in each case, the denominator of
which shall be the sum of the Commitments and the Aggregate Commitment as
of such time.
1.10."Pro Rata Share" shall mean at any time, with respect to any Lender, a
fraction (expressed as a percentage in no more than nine (9) decimal
places), the numerator of which shall be the Liabilities owing to such
Lender by U.S. Borrowers and Cantar Canada at such time and the denominator
of which shall be Liabilities owing to all Lenders by U.S. Borrowers and
Cantar Canada at such time.
2. Intercreditor Agreement.
2.1. Lien Priorities. Notwithstanding the date, manner or order of perfection of
the security interests and liens granted to Agent, and notwithstanding any
provisions of the Uniform Commercial Code, the Ontario Personal Property
Security Act, or any other applicable law or decision or the U.S. Loan
Agreement, the Canadian Credit Agreement or the Loan Documents, or whether
either Agent, Canadian Lender or any U.S. Lender holds possession of all or
any part of the Collateral, subject to Section 2.2, the rights of Canadian
Lender, U.S. Lenders and Agent in the security interests and liens of Agent
in the Collateral shall have equal priority.
2.2. Distribution of Proceeds of Collateral. Unless Lenders otherwise agree, all
proceeds of Collateral shall be distributed in the following manner:
(a) Prior to the occurrence of Enforcement Action by Agent, any U.S.
Lender or Canadian Lender or the commencement of an Insolvency
Proceeding:
(i) all proceeds of U.S. Collateral shall be applied, first, to the
Liabilities under the U.S. Loan Agreement in accordance with the
terms of the U.S. Loan Agreement until repaid in full and,
second, to the Liabilities under the Canadian Credit Agreement in
accordance with the terms of the Canadian Credit Agreement;
(ii) all proceeds of Canadian Collateral shall be applied, first, to
the Liabilities under the Canadian Credit Agreement in accordance
with the terms of the Canadian Credit Agreement until repaid in
full and, second, to the Liabilities under the U.S. Loan
Agreement in accordance with the terms of the U.S. Loan
Agreement;
(b) After the occurrence of Enforcement Action by Agent, any U.S. Lender
or Canadian Lender or the commencement of an Insolvency Proceeding,
all proceeds of Collateral shall be paid to Agent for application to
the Liabilities of each Lender based upon such Lender's Pro Rata Share
to be applied against the Liabilities in accordance with the U.S. Loan
Agreement or the Canadian Credit Agreement, as applicable.
If any party receives proceeds of Collateral which are payable to another party
pursuant to the terms hereof, such party shall hold such proceeds in trust for
the other party and promptly turn over such proceeds to the appropriate party.
3. Settlement.
After the occurrence of a Liquidation Event, if the Liabilities owing to
any U.S. Lender have not been paid in full, upon request of such U.S. Lender,
Canadian Lender shall irrevocably and unconditionally purchase and receive from
such U.S. Lender, without recourse or warranty, an undivided interest and
participation in the Liabilities to the extent of the Canadian Lender's Original
Pro Rata Share of such unpaid amount of the Liabilities owed to such U.S.
Lender. After the occurrence of a Liquidation Event, if the Liabilities owing to
the Canadian Lender have not been paid in full, upon request of Canadian Lender,
the U.S. Lenders shall irrevocably and unconditionally purchase and receive from
the Canadian Lender, without recourse or warranty, an undivided interest and
participation in the Liabilities to the extent of such U.S. Lender's Original
Pro Rata Share of such unpaid amount of the Liabilities owed to Canadian Lender.
4. Amendments to Canadian Loan Documents.
Except as required by law, the Canadian Lender shall not enter into any
amendment or waiver of any provision of the Canadian Credit Agreement or any of
the "Other Agreements" (as defined in the Canadian Credit Agreement), nor
consent to any departure by any Company therefrom, unless the same shall be
consented to by the Requisite Lenders or, if a corresponding amendment, waiver
or consent under the U.S. Loan Agreement or the "Other Documents" (as defined in
the U.S. Loan Agreement) would require the consent of all U.S. Lenders, all
Lenders.
5. Miscellaneous.
5.1. No Benefit to Third Parties. The terms and provisions of this Agreement
shall be for the sole benefit of Canadian Lender, Agent and the U.S.
Lenders and their respective successors and assigns, and no other person,
firm, entity or corporation shall have any right, benefit, priority or
interest under or because of this Agreement.
5.2. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of each of the parties
hereto, but does not otherwise create, and shall not be construed as
creating, any rights enforceable by any Company or any other person not a
party to this Agreement.
5.3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
5.4. Counterparts. This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original hereof submissible into
evidence and all of which together shall be deemed to be a single
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
LASALLE BUSINESS CREDIT, INC., individually and as Agent
By_________________________________________________________
Its________________________________________________________
LASALLE BUSINESS CREDIT, a division of ABN AMRO BANK N.V.,
CANADA BRANCH
By_________________________________________________________
Its________________________________________________________
ACKNOWLEDGMENT
To: LaSalle Business Credit, Inc., as Agent
LaSalle Business Credit, a division of ABN
AMRO Bank N.V., Canada Branch
Each of the undersigned hereby acknowledges and agrees to the foregoing
terms and provisions. By executing this Agreement, each of the undersigned
agrees to be bound by the provisions hereof as they relate to the relative
rights of Agent, U.S. Lenders and Canadian Lender as between such parties. Each
of the undersigned further agrees that the terms of this Agreement shall not
give the undersigned any substantive rights vis-a-vis Agent, Canadian Lender or
any U.S. Lender.
Each of the undersigned consents to the provision of information relating
to any of the undersigned between any of the Lenders and between any of the
Lenders and Agent.
If any party shall enforce its rights or remedies in violation of the terms
of this Agreement, each of the undersigned agrees that it shall not use such
violation as a defense to the Enforcement Action by either party under the Loan
Documents nor assert such violation as a counterclaim or basis for set-off or
recoupment against any party.
The undersigned shall not be liable to Agent or any Lender for any breach
of this Agreement by any Lender or Agent.
Dated: June __, 2002
CANTAR/POLYAIR INC. CANTAR/POLYAIR CORPORATION
By___________________________________ By______________________________________
Its__________________________________ Its_____________________________________
CANTAR/POLYAIR CANADA LIMITED CANTAR/POLYAIR OF ILLINOIS, INC.
By___________________________________ By______________________________________
Its__________________________________ Its_____________________________________
C/P INTERNATIONAL CORP., INC. MABEX UNIVERSAL CORPORATION
By___________________________________ By______________________________________
Its__________________________________ Its_____________________________________
PERFORMA CORP.
By___________________________________
Its__________________________________
