INTERCREDITOR AGREEMENT
Exhibit
10.26
THIS
INTERCREDITOR AGREEMENT is entered into as of January 4, 2008 (this
“Agreement”), by and among, the investors signatory hereto
(each sometimes referred to herein individually as an
“Investor” and, collectively, as
“Investors”)
RECITALS
A. The
Investors have entered into that certain Convertible Note Purchase Agreement,
dated as of the date hereof (as amended, modified or otherwise supplemented
from
time to time, the “Purchase Agreement”), with Avistar
Communications Corporation, a Delaware corporation (the
“Company”) pursuant to which the Company has issued 4.5%
Convertible Subordinate Secured Notes Due 2010, dated as of the date hereof
(as
amended, modified or otherwise supplemented from time to time, each a
“Note” and collectively, the “Notes”) in favor
of the Investors.
B. In
order to induce each Investor to purchase the Notes, the Company entered into
that certain Security Agreement, dated as of the date hereof (as amended,
modified or otherwise supplemented from time to time, the “Security
Agreement”), to secure its obligations under the Notes.
C. The
Investors have agreed to enter into this Agreement to allocate their respective
rights with respect to the Collateral under the Security
Agreement. Capitalized terms not otherwise defined in this Agreement
shall have the meaning given to such terms in the Security
Agreement.
AGREEMENT
The
parties agree as follows:
1. DEFINITIONS
AND CONSTRUCTION
1.1 Definitions. As
used in this Agreement, the following terms shall have the following
definitions:
“Bankruptcy
Code” means the federal bankruptcy law of the United States as from time to time
in effect, currently as Title 11 of the United States Code. Section
references to current sections of the Bankruptcy Code shall refer to comparable
sections of any revised version thereof if section numbering is
changed.
“Collateral”
has the meaning given to such term in the Security Agreement.
“Claim”
means any and all present and future “claims” (used in its broadest sense, as
contemplated by and defined in Section 101(5) of the Bankruptcy Code, but
without regard to whether such claim would be disallowed under the Bankruptcy
Code) of each Investor now or hereafter arising or existing under or relating
to
its Note and the Credit Documents, whether joint, several, or joint and several,
whether fixed or indeterminate, due or not yet due, contingent or
non-contingent, matured or unmatured, liquidated or unliquidated, known or
unknown, or disputed or undisputed, and whether arising under contract, in
tort,
by law, or otherwise, any interest or fees thereon (including interest or fees
that accrue after the filing of a petition by or against the Company under
the
Bankruptcy Code, irrespective of whether allowable under the Bankruptcy Code),
any costs of Enforcement Actions, including reasonable attorneys’ fees and
costs, and any prepayment or termination premiums.
“Credit
Documents” means the Purchase Agreement, the Notes and the Security
Agreement.
“Enforcement
Action” means, with respect to any Investor and with respect to any Claim of
such Investor or any item of Collateral in which such Investor has or claims
a
security interest, lien or right of offset, any action, whether judicial or
nonjudicial, to repossess, collect, accelerate, offset, recoup, give
notification to third parties with respect to, sell, dispose of, foreclose
upon,
give notice of sale, disposition, or foreclosure with respect to, or obtain
equitable or injunctive relief with respect to, such Claim or
Collateral. The filing by any Investor of, or the joining in the
filing by any Investor of, an involuntary bankruptcy or insolvency proceeding
against the Company also is an Enforcement Action.
“Event
of
Default” has the meaning given to such term in the Security
Agreement.
“Insolvency
Event” has the meaning given to such term in Section 3.3.
“Investor”
or “Investors” have the meanings given to such terms in the introductory
paragraph hereof.
“Xxxxxxx”
means Xxxxxxx Enterprises, Inc.
“Proceeds
of Collection” has the meaning given to such term in Section 3.2.
“Pro
Rata
Share” has the meaning given to such term in the Security
Agreement.
“Royalty
Payments” means the Company’s right, title and interest in the royalties or
other funds or assets under that certain Patent License Agreement, dated July
17, 2006, by and among, the Company, Sony Corporation and Sony Computer
Entertainment, Inc., as amended, modified, supplemented or extended from time
to
time, or as any provision thereof may be waived, and any patent license
agreement executed by the parties or their respective affiliates in substitution
or replacement therefor, and the Company’s rights to enforce payment or delivery
of such royalties or other funds or assets.
“UCC”
means the Uniform Commercial Code as in effect in the State of New York from
time to time (except to the extent that the UCC requires the application of
the
Uniform Commercial Code of another jurisdiction, in which case, the UCC shall
mean such other jurisdiction’s Uniform Commercial Code).
1.2 Other
Interpretive Provisions. References in this Agreement to
“Recitals,” “Sections,” and “Exhibits” are to recitals, sections, and exhibits
herein and hereto unless otherwise indicated. References in this
Agreement to any document, instrument or agreement shall include (a) all
exhibits, schedules, annexes and other attachments thereto, (b) all documents,
instruments or agreements issued or executed in replacement thereof, and (c)
such document, instrument or agreement, or replacement or predecessor thereto,
as amended, modified and supplemented from time to time and in effect at any
given time. The words “include” and “including” and words of similar
import when used in this Agreement shall not be construed to be limiting or
exclusive.
2. INTERCREDITOR
ARRANGEMENTS
2.1 Security
Interest and Lien Priorities.
(a) Priority. Notwithstanding
the time, order or method of attachment or perfection of security interests,
or
the time or order of filing or recording of financing statements or the
provisions of the UCC or any applicable law or decision or any provision of
the
Credit Documents, the relative priority of the security interest and liens
of
the Investors arising under the Credit Documents shall be pari passu,
provided, however, that Xxxxxxx’x security interest in the Royalty Payments
shall be senior in priority to the security interest in favor of the Investors
(other than Xxxxxxx).
(b) Distribution
of Proceeds of Royalty Payments. Upon the occurrence and during
the continuance of any Event of Default under any of the Credit Documents,
as
among the Investors, all proceeds of any sale, exchange, collection or other
disposition of any Royalty Payments shall be distributed as
follows:
(i) first,
to Xxxxxxx in an amount up to its Claim under its Note (taking into account
the
satisfaction or partial satisfaction of such Claim with the proceeds of
Collateral other than Royalty Payments); and
(ii) second,
to the Investors (other than Xxxxxxx) to be distributed pari passu based upon
such Investors’ Pro Rata Share, in an amount up to their respective Claims under
their Notes (taking into account the satisfaction or partial satisfaction of
such Claims with the proceeds of Collateral other than Royalty
Payments).
(c) Distribution
of Proceeds of Collateral Generally. Upon the occurrence and
during the continuance of any Event of Default under any of the Credit
Documents, as among the Investors, all proceeds of any sale, exchange,
collection or other disposition of any Collateral (other than the Royalty
Payments) shall be distributed pari passu to each Investor based upon its Pro
Rata Share, but which amount shall not exceed such Investor’s Claim under its
respective Note. To the extent that Xxxxxxx’x Claim under its Note is
satisfied in full with less than its Pro Rata Share, such amount in excess
of
such Claim shall be redistributed to the other Investors based on their
respective Pro Rata Shares to the extent necessary to satisfy the Claims of
such
Investors.
(d) Possession
of Royalty Payments. If any Investor (other than Xxxxxxx) shall
obtain possession of any Royalty Payments, it shall hold such Royalty Payments
in trust for Xxxxxxx and shall promptly deliver such Royalty Payments to Xxxxxxx
pursuant to the terms of distribution set forth in Section 2.1(b) of this
Agreement.
2.2 Transfer
of Interest in Loans.
(a) Consent. No
Investor may sell or otherwise transfer any of its interest in the Credit
Documents, including without limitation, any loans or advances made under the
Credit Documents without satisfying the terms and conditions of Section 2.2(b)
hereof.
(b) Assumption
of Obligations. The transferee shall assume all obligations of
the transferring Investor with respect to the portion of the transferor’s
interest under this Agreement and the applicable Credit Document.
(c) Voidability. Any
sale or transfer of an interest in this Agreement shall be voidable at the
option of the remaining Investor unless the provisions of this Section 2.2
are
satisfied.
(d) Collateral
Agent. The Collateral Agent under the Security Agreement is
authorized and directed by the Investors to take all actions which may be
necessary or desirable to give effect to this Agreement and the relative
priorities of the Investors set forth herein.
3. REPRESENTATIONS
AND WARRANTIES
3.1 Due
Organization and Qualification. Each Investor that is an
organization represents and warrants that it is duly existing and in good
standing under the laws of its jurisdiction of formation.
3.2 Authority. Each
Investor that is an organization represents and warrants that it has all
necessary power and authority to execute, deliver and perform this Agreement
in
accordance with the terms hereof and that it has all requisite power and
authority to own and operate its properties and to carry on its business as
now
conducted.
3.3 Authorization;
Enforceability. Each Investor represents and warrants that (a)
the execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have each been duly authorized by all necessary
action on the part of such Investor and (b) this Agreement has been duly
executed and delivered and constitutes a legal, valid and binding obligation
of
such Investor, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
4. NOTICES.
Unless
otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement shall be made in the manner provided in the Purchase
Agreement.
5. NO
BENEFIT TO THIRD PARTIES.
The
terms
and provisions of this Agreement shall be for the sole benefit of Investors
and
their respective successors and assigns, and no other person or entity
(including the Company) shall have any right, benefit, priority, or interest
under, or because of this Agreement.
6. GENERAL
PROVISIONS
6.1 Successors
and Assigns. This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties;
provided, however, that neither this Agreement nor any rights hereunder may
be
assigned by an Investor unless such assignment is made in compliance with
Section 2.2.
6.2 Severability
of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
6.3 Entire
Agreement; Construction; Amendments and Waivers.
(a) This
Agreement and the Credit Documents, constitutes and contains the entire
agreement among the Investors and supersedes any and all prior agreements,
negotiations, correspondence, understandings and communications between the
parties, whether written or oral, respecting the subject matter
hereof.
(b) This
Agreement is the result of negotiations between and has been reviewed by each
of
the Investors executing this Agreement as of the date hereof and their
respective counsel; accordingly, this Agreement shall be deemed to be the
product of the parties hereto, and no ambiguity shall be construed in favor
of
or against either Investor. Investors agree that they intend the
literal words of this Agreement and that no parol evidence shall be necessary
or
appropriate to establish any Investor's actual intentions.
(c) Any
and
all amendments, modifications, discharges or waivers of, or consents to any
departures from any provision of this Agreement shall not be effective without
the written consent of each Investor. Any waiver or consent with
respect to any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which it was
given. Any amendment, modification, waiver or consent effected in
accordance with this Section 6.3 shall be binding upon each
Investor.
6.4 Counterparts. This
Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, shall
be
deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement.
6.5 Termination. With
respect to any particular Credit Document and the obligations thereunder, upon
payment in full to any Investor of all amounts owing to such Investor with
respect to such Credit Document, this Agreement shall terminate as to such
Credit Document.
6.6 Reinstatement. Notwithstanding
any provision of this Agreement to the contrary, the rights and obligations
of
the parties hereunder shall be reinstated and revived if and to the extent
that
for any reason any payment by or on behalf of the Company is rescinded, or
must
be otherwise restored by Investors, whether as a result of any proceedings
in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid.
6.7 Survival. All
covenants, representations and warranties made in this Agreement shall continue
in full force and effect so long as any obligations remain outstanding
hereunder.
7. RELATIONSHIP
OF PARTIES.
Investors
shall not under any circumstances be construed to be partners or joint venturers
of each other; nor shall the Investors under any circumstances be deemed to
be
in a relationship of confidence or trust or a fiduciary relationship with each
other, or to owe any fiduciary duty to each other. Investors do not
undertake or assume any responsibility or duty to each other to select, review,
inspect, supervise, pass judgment upon or otherwise inform each other of any
matter in connection with the Company’s property, any collateral held by any
Investor or the operations of the Company. Each Investor shall rely
entirely on its own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by any Investor in connection with such matters is solely
for the protection of such Investor.
8. CHOICE
OF
LAW AND VENUE; JURY TRIAL WAIVER
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW,
EACH OF THE INVESTORS HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY AND STATE OF NEW
YORK. LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.
[Remainder
of page intentionally left blank.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the date first above written.
XXXXXXX
ENTERPRISES,
INC.
By: /s/
Xxxxxx X.
Orlando
Name:
Xxxxxx X.
Orlando
Title:
Vice
President
THE
XXXXXX X. XXXXXXX AND XXXXXXXX X. XXXXXXX REVOCABLE TRUST FOR THE BENEFIT OF
XXXXXX X. AND XXXXXXXX X. XXXXXXX
By:
/s/
X.X.
Xxxxxxx
Name:
Xxxxxx X.
Xxxxxxx
Title:
Trustee
XXXXXXXXX
REVOCABLE TRUST
By: /s/
R. Xxxxxxx
Xxxxxxxxx
Name:
R. Xxxxxxx
Xxxxxxxxx
Title:
Trustee
THE
XXXXXXXX FAMILY 2001 TRUST DATED 2/07/01
By: /s/
Xxxxxxx X.
Xxxxxxxx
Name:
Xxxxxxx X.
Xxxxxxxx
Title:
Trustee
/s/
Xxxxx Xxxx
XXXXX
XXXX
/s/
Xxxxx Xxxxxxx
XXXXX
XXXXXXX
/s/
Xxxxxx Xxxxx
XXXXXX
XXXXX
WS
INVESTMENT COMPANY, LLC (2007A)
By:
/s/
Xxxxx X.
Xxxxxxxxx
Name:
Xxxxx X.
Xxxxxxxxx
Title:
WS
INVESTMENT COMPANY, LLC (2007D)
By: /s/
Xxxxx X.
Xxxxxxxxx
Name:
Xxxxx X.
Xxxxxxxxx
Title:
