Execution Copy
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is made as of this 27th day of
July, 1998 by and among BANKBOSTON, N.A., as "Agent" for itself and the other
"Lenders" party to the Revolving Credit Agreement referred to below (in such
capacity, the "Lender Agent"), OUTSOURCE FUNDING CORPORATION, a Delaware
corporation (the "Xxxxx"), OUTSOURCE INTERNATIONAL, INC., a Florida corporation
("OutSource International"), OUTSOURCE FRANCHISING, INC., a Florida corporation
("OutSource Franchising"), CAPITAL STAFFING FUND, INC., a Florida corporation
("CSF"), SYNADYNE I, INC., a Florida corporation ("Synadyne I"), SYNADYNE II,
INC., a Florida corporation ("Synadyne II"), SYNADYNE III, INC., a Florida
corporation ("Synadyne III"), SYNADYNE IV, INC., a Florida corporation
("Synadyne IV"), SYNADYNE V, INC., a Florida corporation ("Synadyne V"), and
OUTSOURCE INTERNATIONAL OF AMERICA, INC., a Florida corporation ("OutSource
America") (sometimes hereinafter referred to each as an "Originator" and,
collectively, as the "Originators"), OutSource International, in its separate
capacity as "Servicer" (as defined below), EAGLEFUNDING CAPITAL CORPORATION, a
Delaware corporation ("EagleFunding"), and BANCBOSTON SECURITIES INC., a
Delaware corporation ("BSI"), individually and as the "Deal Agent" for
EagleFunding (in such capacity, the "Purchaser Agent").
W I T N E S S E T H:
WHEREAS, the Originators have agreed to sell, transfer and
assign to the Xxxxx, and the Xxxxx has agreed to purchase and assume from the
Originators, all of the right, title and interest of the Originators in the
"Receivables" and "Related Security" now existing or hereafter created until the
"Purchase Termination Date") (as each of such terms is hereinafter defined)
pursuant to that certain Receivables Purchase and Sale Agreement of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the "Originator Sale Agreement") among the Originators, the Xxxxx and the
Servicer;
WHEREAS, OutSource International, the financial institutions
from time to time parties thereto as Lenders and the Lender Agent thereunder are
parties to that certain Third Amended and Restated Credit Agreement dated as of
July 27, 1998 (as amended, restated, supplemented or otherwise modified from
time to time, the "Revolving Credit Agreement");
WHEREAS, to secure the loans and other extensions of credit
made by the Lenders under the Revolving Credit Agreement, (i) OutSource
International pursuant to that certain Security Agreement dated as of February
21, 1997, as reaffirmed and amended (as amended, restated, supplemented or
otherwise modified from time to time, the "OutSource International Security
Agreement"), has granted to the Lender Agent for the benefit of the Lender Agent
and the ratable benefit of the Lenders a security interest in substantially all
of its personal property, including, its inventory, the Receivables and Related
Security, and all proceeds of the foregoing, and (ii) each of OutSource
Franchising, CSF, Synadyne I, Synadyne II, Synadyne III, Synadyne IV, Synadyne V
and OutSource America, among others, pursuant to that certain Security Agreement
dated as of February 21, 1997, as reaffirmed and amended (as amended,
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restated, supplemented or otherwise modified from time to time, the "Subsidiary
Security Agreement", and together with the OutSource International Security
Agreement, the "Security Agreements"), has granted to the Lender Agent for the
benefit of the Lender Agent and the ratable benefit of the Lenders a security
interest in substantially all of its personal property, including, its
inventory, the Receivables and Related Security, and all proceeds of the
foregoing;
WHEREAS, the Xxxxx, EagleFunding, the Purchaser Agent and the
Servicer have entered into that certain Receivables Purchase Agreement of even
date herewith (as amended, restated, supplemented, or otherwise modified from
time to time, the "Investor Purchase Agreement") pursuant to which EagleFunding
has agreed to purchase from the Xxxxx an undivided percentage ownership interest
in the Receivables and Related Security which the Xxxxx purchases from the
Originators; and
WHEREAS, the parties hereto wish to set forth certain
agreements with respect to the Purchased Property and with respect to the
"Collateral" (as hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants contained herein, and for other good and valuable
consideration, receipt of which is hereby acknowledged, it is hereby agreed as
follows:
ARTICLE 1. DEFINITIONS.
1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such Person.
"Agent" means the Purchaser Agent or the Lender Agent, as
applicable, and "Agents" means both the Purchaser Agent and the Lender Agent.
"Claim" means the Lender Claim or the Purchaser Claim, as
applicable.
"Collateral" means all property and interests in property now
owned or hereafter acquired by the Originators or any of their Affiliates and in
which a security interest, lien or mortgage is granted by any such party to the
Lender Agent or the Lenders under any of the Loan Documents.
"Collection Date" has the meaning ascribed to such term in the
Investor Purchase Agreement.
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"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable.
"Contract" means an agreement (including, but not limited to,
a written contract or an open account agreement evidenced by invoices) between
an Originator and an Obligor pursuant to which such Obligor shall be obligated
to pay for merchandise sold or services rendered from time to time.
"CSF Advance" has the meaning ascribed to such term in the
Originator Sale Agreement.
"Enforcement" means, collectively or individually, for (i)
EagleFunding, the Purchaser Agent and/or the Xxxxx to declare an "Event of
Termination" under the Originator Sale Agreement or the Investor Purchase
Agreement and to cease the purchase of Receivables under the Originator Sale
Agreement; and/or (ii) the Lenders and/or the Lender Agent to declare an "Event
of Default" under the Revolving Credit Agreement and/or demand payment in full
of or accelerate the indebtedness of any Originator to the Lenders, and to
commence the judicial or nonjudicial enforcement of any of the rights and
remedies under the Loan Documents.
"Enforcement Notice" means a written notice delivered in
accordance with Section 2.5 which notice shall (i) if delivered by the Purchaser
Agent, state that an "Event of Termination" has occurred, specify the nature of
such event, and announce that an Enforcement Period has commenced and (ii) if
delivered by the Lender Agent, state that an "Event of Default" under the
Revolving Credit Agreement has occurred, specify the nature of such event, and
announce that an Enforcement Period has commenced.
"Enforcement Period" means the period of time following the
earlier of (x) two Business Days after receipt by the Deal Agent of an
Enforcement Notice delivered by the Lender Agent or (y) the receipt by the
Lender Agent of an Enforcement Notice delivered by the Deal Agent until the
earliest of the following: (1) the Collection Date shall have occurred; (2) the
Lender Claim has been satisfied in full; and (3) the parties hereto agree in
writing to terminate the Enforcement Period.
"Lender Claim" means all of the indebtedness, obligations and
other liabilities of any Originator and its Affiliates arising under, or in
connection with, the Loan Documents, including, but not limited to, all sums now
or hereafter loaned or advanced thereunder, any interest thereon, any
reimbursement or other obligations in respect of letters of credit issued
thereunder, any fees or expenses due thereunder, and any costs of collection or
enforcement.
"Lender Collateral" means all Collateral which does not
constitute Purchased Property.
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"Lenders" means the financial institutions party to the
Revolving Credit Agreement as "Lenders" from time to time, together with their
successors and assigns.
"Liquidity Agent" means the financial institution then acting
as "Liquidity Agent" under the Purchaser Documents.
"Liquidity Providers" has the meaning ascribed to such term in
the Investor Purchase Agreement.
"Loan Documents" means the Revolving Credit Agreement, the
Security Agreements and all other instruments, agreements or other documents
executed by any Originator or any Affiliate of the foregoing and delivered to
the Lenders and/or the Lender Agent in connection therewith, as any of the same
may be amended, supplemented, modified or restated from time to time.
"Lock-Box Account" has the meaning ascribed to such term in
the Originator Sale Agreement.
"Lock-Box Bank" has the meaning ascribed to such term in the
Originator Sale Agreement.
"Obligor" means a Person obligated to make payments pursuant
to a Contract.
"Originator Claim" means all of the indebtedness, obligations
and other liabilities of the Xxxxx to any Originator or OutSource International
as Servicer arising under, or in connection with, the Originator Sale Agreement,
including, but not limited to, the purchase price owed for sales of Receivables,
any obligations evidenced by the Originator Notes and any fees owed to any
Originator or OutSource International as Servicer.
"Originator Note" has the meaning ascribed to such term in the
Originator Sale Agreement.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Purchase Termination Date" means the earliest to occur of (i)
the date on which the Xxxxx ceases to purchase Receivables and Related Security
from the Originators and (ii) the commencement of an Enforcement Period.
"Purchased Property" means (i) the Purchased Receivables, (ii)
the Related Security and Collections related to such Purchased Receivables,
(iii) any Lock-Box Accounts to which any Collections of such Purchased
Receivables are sent and (iv) all other proceeds of the foregoing.
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"Purchased Receivables" means now owned or hereafter existing
Receivables sold, assigned, transferred or contributed or purported to be sold,
assigned, transferred or contributed to the Xxxxx under the Originator Sale
Agreement.
"Purchaser" means any of (A) the Xxxxx, as the purchaser of
Receivables under the Originator Sale Agreement; (B) EagleFunding or BSI, in
each case as assignee of the Xxxxx'x interests in the Purchased Property; (C)
the Purchaser Agent, as representative of EagleFunding or (D) the Liquidity
Agent or any Liquidity Provider as assignee of EagleFunding, in each case
together with their successors and assigns.
"Purchaser Claim" means all obligations of the Originators to
the Xxxxx and of the Xxxxx to the other Purchasers arising under the Purchaser
Documents, including, but not limited to, all right of the Purchasers to receive
the Collections of the Purchased Receivables and all recourse claims of the
Purchasers arising thereunder.
"Purchaser Documents" means the Originator Sale Agreement, the
Investor Purchase Agreement and any other agreements, instruments or documents
(i) executed by, among other Persons, the Originators and delivered to the Xxxxx
or (ii) executed by, among other Persons, the Xxxxx and delivered to any of the
other Purchasers, in each case pursuant to or in connection with the Originator
Sale Agreement or the Investor Purchase Agreement, as any of the same may be
amended, supplemented, modified or restated from time to time.
"Receivable" means the indebtedness of any Obligor under a
Contract whether constituting an account, chattel paper, instrument, general
intangible or any other type of property, (a) which arises from a sale of
merchandise or the performance of services by an Originator or (b) which is a
CSF Advance, and including the right to payment of any interest or finance
charges and other obligations of such Obligor with respect thereto.
"Records" means all Contracts and other documents, books,
records and other information (including without limitation, computer programs,
tapes, discs, punch cards, data processing software and related property and
rights) maintained with respect to Receivables and the related Obligors which
the applicable Originator has itself generated or in which such Originator has
otherwise obtained an interest.
"Related Security" means with respect to any Receivable, as
applicable:
(i) all of the Originators' right and title to and interest in
the merchandise (including Returned Goods) if any, relating to the sale
which gave rise to such Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable
or otherwise;
(iii) the assignment for the benefit of the Purchasers of all
UCC financing statements covering any collateral securing payment of
such Receivable; and
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(iv) all of the Originators' right and title to and interest
in, all guarantees, indemnities, warranties, letters of credit,
insurance policies and proceeds and premium refunds thereof and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise.
"Returned Goods" means all right, title and interest of the
Originators or the Purchasers, as applicable, in and to returned, repossessed or
foreclosed goods and/or merchandise.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction.
"Unmatured Default" means:
(i) with respect to the Purchaser Documents (as in effect at
any time), (A) any event or condition which, with the giving of notice
or the passage of time or both, would then constitute an "Event of
Termination" under either the Originator Sale Agreement or the Investor
Purchase Agreement and (B) any such "Event of Termination" which is not
waived and with respect to which the Purchaser Agent has not commenced
Enforcement; and
(ii) with respect to the Loan Documents (as in effect at any
time), (A) any event or condition which, with the giving of notice or
the passage of time or both, would then constitute an "Event of
Default" thereunder and (B) any "Event of Default" thereunder which is
not waived and with respect to which the Lender Agent has not commenced
Enforcement.
"Unsold Receivables" means any Receivables which have arisen
on or after the Purchase Termination Date.
1.2. References to Terms Defined in the Purchaser Documents
and the Loan Documents. Whenever in Section 1.1 a term is defined by reference
to the meaning ascribed to such term in any of the Purchaser Documents or in any
of the Loan Documents, then, unless otherwise specified herein, such term shall
have the meaning ascribed to such term in the Purchaser Documents or Loan
Documents, respectively, as in existence on the date hereof, without giving
effect to any amendments of such term as may hereafter be agreed to by the
parties to such documents, unless such amendments have been consented to in
writing by all of the parties hereto.
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ARTICLE 2. INTERCREDITOR PROVISIONS.
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2.1. Priorities with Respect to Purchased Property.
(a) Notwithstanding any provision of the UCC, any applicable law or
decision or any of the Loan Documents or the Purchaser Documents, the Lender
Agent hereby agrees that, upon the sale, assignment, transfer or contribution or
purported sale, assignment, transfer or contribution of each Receivable and
Related Security by an Originator to the Xxxxx, any lien, claim, encumbrance,
security interest or other interest acquired by the Lender Agent in such
Receivable, the Related Security and proceeds thereof shall automatically and
without further action cease and be released and the Lender Agent shall have no
lien, claim, encumbrance, security interest or other interest therein; provided,
however, that:
(i) nothing in this Section 2.1 shall be deemed to constitute
a release by the Lender Agent of: (A) its lien on and security interest
in the proceeds received or receivable by the Originators from the
Xxxxx for the sale or purported sale of the Receivables (including,
without limitation, cash payments made by the Xxxxx, payments made
under the Originator Notes and any indebtedness owed to the Originators
evidenced thereby); (B) any lien on, security interest in or assignment
of the Originator Claim; (C) any lien, claim, encumbrance or security
interest the Lender Agent may have in any Unsold Receivables and
Related Security therefor, including, without limitation, Collections
of Unsold Receivables which are at any time deposited in the Lock-Box
Accounts; (D) any lien, claim, encumbrance or security interest the
Lender Agent may have as against any interest of the Originators in
Returned Goods, provided, however, that any lien the Lender Agent has
against any interest of the Originators in such Returned Goods shall be
junior in interest to that of the Purchasers unless and until the
Originators shall have made all adjustments required to be made under
the Originator Sale Agreement on account of the reduction of the
outstanding balance of any Receivable related to such Returned Goods;
and (E) any lien on, security interest in or pledge or assignment the
Lender Agent may have on or in the capital stock of the Xxxxx; and
(ii) if any goods or merchandise, the sale of which has given
rise to a Purchased Receivable, are returned to or repossessed by the
Originators, then such Returned Goods shall constitute Purchased
Property, provided, however, that upon payment by the Originators of
all adjustments required on account thereof under the Originator Sale
Agreement, the Purchaser's interest in such Returned Goods shall
automatically and without further action cease to exist and be released
and extinguished and such Returned Goods shall thereafter not
constitute Purchased Property for purposes of this Agreement unless and
until such Returned Goods have been resold so as to give rise to a
Receivable and such Receivable has been sold, assigned, transferred or
contributed or purported to be sold, assigned, transferred or
contributed to the Xxxxx.
(b) The Lender Agent hereby acknowledges that the Originator
Notes and the indebtedness evidenced thereby are subordinated to the Purchaser
Claim pursuant to the terms of the Originator Notes and the Purchaser Documents.
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2.2 Respective Interests in Purchased Property and Collateral.
Except for (i) the specific interests in Purchased Property described in Section
2.1 above and (ii) all rights of access to and use of Records and related
Collateral described in Section 2.6 below, each Purchaser agrees that it does
not have and shall not have any security interest in, lien upon or interest in
the Collateral. Except for (i) the specific retained rights described in Section
2.1 above and (ii) all rights of access to and use of Records described in
Section 2.6 below, the Lender Agent agrees that it does not have and shall not
have any security interest in, lien upon or interest in the Purchased Property.
2.3. Distribution of Proceeds -- Enforcement Period. During
any Enforcement Period, all proceeds of Collateral and/or Purchased Property
shall be distributed in accordance with the following procedure:
(a) Except as otherwise provided in clause (c) or in Section
2.4 below, (i) all proceeds of the Lender Collateral shall be paid to
the Lender Agent for application on the Lender Claim; and (ii) any
remaining proceeds shall be paid to the Originators, their Affiliates
or as otherwise required by applicable law.
(b) Except as otherwise provided in clause (c) or Section 2.4
below, (i) all proceeds of the Purchased Property shall be paid to the
Purchasers for application against the Purchaser Claim; provided,
however, that all proceeds of the Purchased Property which, pursuant to
the Purchaser Documents, are to be paid to the Originators for
application against the Originator Claim shall be paid directly to the
Lender Agent (if and to the extent that the Lender Agent has retained a
lien against such Originator Claim pursuant to Section 2.1 above) for
application against the Lender Claim before being paid to the
Originators or the Xxxxx; and (ii) any remaining proceeds shall be paid
to the Xxxxx or as otherwise required by applicable law.
(c) If any inventory of the Originators has been commingled
with Returned Goods in which the Purchaser Agent continues to have an
interest as provided in Section 2.1 above, and any of the Lenders (or
the Lender Agent) receives any proceeds on account of such inventory
(whether by reason of sale or by reason of insurance payments on
account thereof) prior to release of such interest, then: (i) all
proceeds of such inventory received by a Lender shall be paid to the
Lender Agent and the Lender Agent shall, immediately upon receipt of
such proceeds, pay to the Purchaser Agent for application against the
Purchaser Claim a share of such proceeds equal to the dollar amount
thereof times a fraction, the numerator of which equals the book value
of the Returned Goods that had been so commingled and constituting
Purchased Property and the denominator of which equals the book value
of all of the commingled inventory on account of which the Lender Agent
has received such cash proceeds; and (ii) any remaining proceeds shall
be paid to the Lender Agent for application against the Lender Claim.
The Lender Agent agrees that it shall not, without the prior written
consent of the Purchaser Agent, sell any Returned Goods in which the
Purchaser Agent continues to have an interest at a price below book
value.
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2.4 Lock-Box Accounts.
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(a) The Lender Agent, on behalf of itself and each of the
Lenders, hereby releases, relinquishes and disclaims any and all of its right,
title and interest in, to and under each of the Lock-Box Accounts, which release
shall become effective with respect to each such LockBox Account upon the
effectiveness of the corresponding "Lock-Box Agreement" (as such term is defined
in the Originator Sale Agreement) in favor of the Xxxxx and the Deal Agent and
relating to such Lock-Box Account; provided, however, that each of the
Originators, the Purchasers and the Purchaser Agent hereby acknowledges that the
Lender Agent shall have a senior security interest in Collections of Unsold
Receivables which may be deposited in the Lock-Box Accounts. The Purchaser Agent
agrees, upon the Lender Agent's request from and after the Purchase Termination
Date, to notify the Lock-Box Banks of the Lender Agent's interest in and to such
Lock-Box Accounts in order to perfect the Lender Agent's interest in such
Lock-Box Accounts as against the Lock-Box Banks.
(b) Each of the Originators, the Purchasers and the Lender
Agent hereby acknowledges and agrees that the Purchasers own the Purchased
Receivables, and shall be entitled to Collections or other proceeds received on
account of the Purchased Receivables which may be deposited in the Lock-Box
Accounts.
(c) The Originators, the Purchasers and the Lender Agent
hereby agree that all Collections or other proceeds received on account of
Purchased Receivables shall be paid or delivered to the Purchasers for
application against the Purchaser Claim and all Collections or other proceeds
received on account of Unsold Receivables shall be paid or delivered to the
Lender Agent for application against the Lender Claim. For purposes of
determining whether specific Collections have been received on account of
Purchased Receivables or on account of Unsold Receivables, the parties hereto
agree as follows:
(i) All payments made by an Obligor which is
obligated to make payments on Purchased Receivables but is not
obligated to make any payments on Unsold Receivables shall be
conclusively presumed to be payments on account of Purchased
Receivables and all payments made by an Obligor which is
obligated to make payments on Unsold Receivables but is not
obligated to make any payments on Purchased Receivables shall
be conclusively presumed to be payments on account of Unsold
Receivables.
(ii) All payments made by an Obligor which is
obligated to make payments with respect to both Purchased
Receivables and Unsold Receivables shall be applied against
the specific Receivables, if any, which are designated by such
Obligor by reference to the applicable invoice as the
Receivables with respect to which such payments should be
applied. In the absence of such designation, such payments
shall be applied against the oldest outstanding Receivables
owed by such Obligor.
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(d) Subject to the second sentence of this Section 2.4(d),
each of the Xxxxx and the Purchaser Agent agrees that it shall transfer prior
ownership and control over the Lock-Box Accounts to the Lender Agent upon the
Collection Date; provided, however, that any Collections of Purchased Property
which are then on deposit in the Lock-Box Account and are not required to be
paid to the Lender Agent pursuant to Section 2.3(b) above shall be delivered to
the Xxxxx before the foregoing transfer of ownership and control of the Lock-Box
Accounts. Any such transfer shall be without representation, recourse or
warranty of any kind on the part of the Purchaser Agent. Notwithstanding any
such transfer, all Collections and other proceeds subsequently deposited into
the Lock-Box Accounts on account of the Purchased Property shall continue to be
delivered and applied as provided in Section 2.3(b) above.
(e) In order to effect more fully the provisions of this
Agreement, each Agent hereby agrees that neither Agent shall, without the
consent of the other Agent, send any notices to the Obligors directing them to
remit Collections of any Receivables other than to a Lock-Box Account except as
may be necessary in connection with the enforcement of any delinquent or
defaulted Receivable as against the Obligor thereof (in which case, the Agent
receiving such Collections shall deliver and apply such Collections in
accordance with the terms of Section 2.3).
(f) The Lender Agent agrees that it shall not, at any time
prior to the Collection Date, exercise any rights it may have under the Loan
Documents to send any notices to Obligors (i) informing them of the Lenders' or
the Lender Agent's interest in the Receivables, or (ii) directing such Obligors
to make payments in any particular manner of any amounts due under the
Receivables. The Lender Agent further agrees that, in the event it shall receive
payments directly from any Obligor on account of an Unsold Receivable, at any
time prior to the Collection Date, it shall immediately forward such payment to
the Purchaser Agent (or, if a successor Servicer has been appointed, to such
successor Servicer) in order that the Purchaser Agent or such successor
Servicer, as applicable, may determine whether such payment was, in fact,
properly allocated to such Unsold Receivable consistent with the terms of this
Section 2.4 and, if necessary pursuant to the terms hereof, re-allocate such
payment.
(g) The Xxxxx and the Originators hereby irrevocably direct
EagleFunding, the Purchaser Agent, the Liquidity Providers and the Liquidity
Agent to pay directly to the Lender Agent, for application by the Lender Agent
in accordance with the Loan Documents, all proceeds of the Purchased Property
which, pursuant to the Purchaser Documents, are to be paid by the Xxxxx to the
Originators, and until so paid to the Lender Agent all such amounts shall be
held in trust for the Lender Agent. The foregoing instruction shall not be
amended, modified or revoked without the prior written consent of the Lender
Agent.
2.5. Enforcement Actions. Each of the Lender Agent and the
Purchaser Agent agrees to use its best efforts to give an Enforcement Notice to
the other prior to commencement of Enforcement and further agrees, that, during
the period, if any, between the giving of such Enforcement Notice and the
commencement of Enforcement thereunder, the Agent receiving such notice shall
have the right (but not the obligation) to cure the "Event of Default" or "Event
of Termination" which has occurred under the Loan Documents or the Purchaser
Documents,
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respectively, and to which such Enforcement Notice relates. Subject to the
foregoing, the parties hereto agree that during an Enforcement Period:
(a) Subject to any applicable restrictions in the Purchaser
Documents, the Purchaser Agent may, at its option, take any action to
liquidate the investment of the Purchasers in the Purchased Property
and/or to foreclose or realize upon or enforce any of their rights with
respect to the Purchased Property without the prior written consent of
any Originator or the Lender Agent; provided, however, that the
Purchasers shall not take any action to foreclose or realize upon or to
enforce any rights they may have with respect to any Purchased Property
constituting Returned Goods which have been commingled with the Lender
Collateral, unless the Purchaser Agent, pursuant to the last sentence
of Section 2.3(c), has withheld consent to a sale or other disposition
of such inventory.
(b) Subject to any applicable restrictions in the Loan
Documents, the Lender Agent may, at its option and without the prior
written consent of the Purchasers, take any action to accelerate
payment of the Lender Claim and to foreclose or realize upon or enforce
any of its rights with respect to (i) the Lender Collateral and (ii)
except as otherwise provided in Section 2.3(c), with respect to any
Purchased Property constituting Returned Goods which have been
commingled with the Lender Collateral; provided, however, that the
Lender Agent shall not otherwise take any action to foreclose or
realize upon or to enforce any rights it may have with respect to any
of the Purchased Property without the Purchaser Agent's prior written
consent unless the Purchaser Claim shall have been first paid and
satisfied in full and the Lender Agent shall apply the proceeds of any
Purchased Property consisting of Returned Goods as provided in Section
2.3(c) above.
2.6 Access to and Use of Collateral and Purchased Property.
The Purchasers and the Lender Agent hereby agree that, notwithstanding the
priorities set forth in this Agreement, the Purchasers and the Lender Agent
shall have the following rights of access to and use of the Collateral and
Purchased Property respectively:
(a) Only to the extent such rights are granted in the
Purchaser Documents and subject to any applicable restrictions therein,
the Purchasers may enter one or more premises of the Originators,
whether leased or owned, at any time during reasonable business hours,
without force or process of law and without obligation to pay rent or
compensation to the Originators, the Xxxxx, the Lender Agent or the
Lenders, whether before, during or after an Enforcement Period, and may
use any Lender Collateral constituting computer equipment located
thereon and may have access to and use of all books, records and
computer software located thereon (whether the same constitute Records)
and may have access to and use of any other property to which such
access and use are granted under the Purchaser Documents, in each case
provided that such use is for the purposes of enforcing the Purchasers'
rights with respect to the Purchased Property.
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(b) Only to the extent such rights are granted in the Loan
Documents and subject to any applicable restrictions therein, the
Lender Agent may enter one or more premises of the Originators or the
Xxxxx, whether leased or owned, at any time during reasonable business
hours, without force or process of law and without obligation to pay
rent or compensation to the Originators, the Xxxxx, the Purchasers or
the Purchaser Agent, whether before, during or after an Enforcement
Period, and may have access to and use of all Records located thereon,
provided that such use is for the purposes of enforcing the Lender
Agent's rights with respect to the Lender Collateral (including any
interests in Unsold Receivables and other interests in property
retained by the Lender Agent as described in Section 2.1 above).
(c) In order to facilitate the purposes of this Section 2.6,
the Lender Agent and the Purchasers hereby agree as follows: (1) any
mortgage of, assignment of, security interest in or lien upon any real
property and interests in real property of the Originators or their
Affiliates (whether leased or owned) and any of the Collateral in favor
of the Lender Agent shall be subject to the Purchasers' rights of
access and use described above; and (2) any ownership interest of the
Purchasers in the Records shall be subject to the Lender Agent's right
of access and use described above.
2.7. Accountings. The Lender Agent agrees to render statements
of the Lender Claim to the Purchaser Agent upon request, giving effect to the
application of proceeds of Purchased Property and Collateral as hereinbefore
provided. The Purchaser Agent agrees to render statements to the Lender Agent
upon request, which statements shall identify in reasonable detail the Purchased
Receivables and shall render an account of the Purchaser Claim, giving effect to
the application of proceeds of Purchased Property and Collateral as hereinbefore
provided.
2.8. Notice of Defaults. The Lender Agent agrees to use
reasonable efforts to give to the Purchaser Agent copies of any notice sent to
an Originator with respect to the occurrence or existence of an Unmatured
Default under the Loan Documents, and the Purchaser Agent agrees to use
reasonable efforts to give to the Lender Agent copies of any notice sent to the
Originators or the Xxxxx with respect to the occurrence or existence of an
Unmatured Default under the Purchaser Documents, in each case simultaneously
with the sending of such notice to the Originators or the Xxxxx as applicable;
provided, however, that any failure to give such notice shall not create a cause
of action against any party failing to give such notice or create any claim or
right on behalf of any third party. In each of the above cases, the Agent
receiving such notice shall have the right (but not the obligation) to cure the
Unmatured Default which gave rise to the sending of such notice.
2.9. Agency for Perfection. The Purchasers and the Lender
Agent hereby appoint each other as agent for purposes of perfecting by
possession their respective security interests and ownership interests and liens
on the Collateral and Purchased Property described hereunder. In the event that
any Purchaser obtains possession of any of the Lender Collateral (including
Collections of Unsold Receivables), such Purchaser shall notify the Lender Agent
of such fact, shall hold such Collateral in trust and shall deliver such
Collateral to the Lender Agent upon request. In the event that the Lender Agent
obtains possession of any of the Purchased Property
12
(including Collections of Purchased Receivables), the Lender Agent shall notify
the Purchaser Agent of such fact, shall hold such Purchased Property in trust
and shall deliver such Purchased Property to the Purchaser Agent upon request.
2.10. UCC Notices. In the event that any party hereto shall be
required by the UCC or any other applicable law to give notice to the other of
intended disposition of Purchased Property or Collateral, respectively, such
notice shall be given in accordance with Section 3.1 hereof and ten (10) days'
notice shall be deemed to be commercially reasonable.
2.11. Independent Credit Investigations. Neither the
Purchasers nor the Lender Agent nor any of their respective directors, officers,
agents or employees shall be responsible to the other or to any other person,
firm or corporation for the solvency, financial condition or ability of the
Originators or the Xxxxx to repay the Purchaser Claim or the Lender Claim, or
for the worth of the Purchased Property or the Collateral, or for statements of
any Originator or the Xxxxx, oral or written, or for the validity, sufficiency
or enforceability of the Purchaser Claim, the Lender Claim, the Purchaser
Documents, the Loan Documents, the Purchaser's interest in the Purchased
Property or the Lender Agent's interest in the Collateral. Each of the Lender
Agent and the Purchasers has entered into its respective financing agreements
with the Originators and/or the Xxxxx, as applicable, based upon its own
independent investigation, and makes no warranty or representation to the other
nor does it rely upon any representation of the other with respect to matters
identified or referred to in this Section 2.11.
2.12. Limitation on Obligations of Parties to Each Other.
Except as expressly provided in this Agreement, neither the Lenders nor the
Lender Agent shall have any duties to the Purchasers and the Purchasers shall
have no duties to the Lender Agent. Nothing in this Section 2.12 shall be deemed
to relieve the Xxxxx from liability on any Originator Claim to the extent such
Originator Claim has been assigned to the Lender Agent (as Collateral or
otherwise).
2.13. Amendments to Financing Arrangements or to this
Agreement. The Lender Agent agrees to use reasonable efforts to, concurrently
with any written amendment or modification in the Loan Documents, give prompt
notice to the Purchaser Agent of the same and the Purchaser Agent agrees to use
reasonable efforts to, concurrently with any written amendment or modification
in the Purchaser Documents, notify the Lender Agent of the same; provided,
however, that the failure to do so shall not create a cause of action against
any party failing to give such notice or create any claim or right on behalf of
any third party. Notwithstanding the foregoing, each party hereto agrees not to
amend any of the Loan Documents or Purchaser Documents so as to materially alter
the rights and benefits intended hereunder to be enjoyed by the respective
Agents and the other parties hereto. Each party hereto shall, upon request of
any other party hereto, provide copies of all such modifications or amendments
and copies of all other documentation relevant to the Purchased Property or the
Collateral. All modifications or amendments of this Agreement must be in writing
and duly executed by an authorized officer of each party hereto to be binding
and enforceable.
2.14. Marshaling of Assets. Nothing in this Agreement will be
deemed to require either Agent (i) to proceed against certain property securing
the Lender Claim or the Purchaser
13
Claim, as applicable, prior to proceeding against other property securing such
Claim or (ii) to xxxxxxxx the Lender Collateral or the Purchased Property (as
applicable) upon the enforcement of such Agent's remedies under the Purchaser
Documents or Loan Documents, as applicable.
2.15. Relative Rights of Purchasers as Among Themselves. The
relative rights of the Purchasers, each as against the other, with respect to
the exercise of the rights and the receipt of the benefits granted by the Lender
Agent hereunder shall be determined by mutual agreement among such parties in
accordance with the terms of the Purchaser Documents. The Lender Agent shall be
entitled to rely on the power and authority of the Purchaser Agent to act on
behalf of all of the Purchasers. The Purchaser Agent shall be entitled to rely
on the power and authority of the Lender Agent to act on behalf of all of the
Lenders.
2.16. Effect Upon Loan Documents and Purchaser Documents. By
executing this Agreement, each of the Originators and the Xxxxx agrees to be
bound by the provisions hereof (i) as they relate to the relative rights of the
Lender Agent, the Purchaser Agent and EagleFunding with respect to the property
of the Originators; (ii) as they relate to the relative rights of the
Originators, Purchaser Agent and EagleFunding with respect to the property of
the Xxxxx; and (iii) as they relate to the relative rights of the Lender Agent
and the Xxxxx as creditors of the Originators. Each Originator acknowledges
that, except as otherwise provided in Section 2.1, the provisions of this
Agreement shall not give it any substantive rights as against the Lender Agent
or the Lenders nor otherwise amend, modify, change or supersede the terms of the
Loan Documents as among the parties thereto. Each of the Originators and the
Xxxxx acknowledges that, except as otherwise provided in Section 2.1, the
provisions of this Agreement shall not give the Originators any substantive
rights as against the Purchasers nor give the Xxxxx any substantive rights as
against the other Purchasers nor otherwise amend, modify, change or supersede
the terms of the Purchaser Documents as among the parties thereto.
Notwithstanding the foregoing, each of EagleFunding and the Agents hereby
agrees, that, as among themselves and their successors and assigns, to the
extent the terms and provisions of the Loan Documents or the Purchaser Documents
are inconsistent with the terms and provisions of this Agreement, the terms and
provisions of this Agreement shall control.
2.17. Further Assurances. Each of the Agents hereto agrees (i)
to take such actions as may be reasonably requested by the other Agent, whether
before, during or after an Enforcement Period, in order to effect the rules of
distribution and allocation set forth above in this Article 2 and (ii) not to
amend the Loan Documents or the Purchaser Documents, as applicable, in any
manner which would materially alter such rules of distribution and allocation
set forth herein.
ARTICLE 3. MISCELLANEOUS.
-------------
3.1. Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telecommunications and communication by facsimile copy) and mailed, telexed,
transmitted or delivered, as to each party hereto, at its address set forth
under its name on the signature pages hereof or at such other address as shall
be
14
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective upon receipt, or, in the case
of notice by mail, five days after being deposited in the mails, postage
prepaid, or in the case of notice by telex, when telexed against receipt of the
answerback, or in the case of notice by facsimile copy, when verbal confirmation
of receipt is obtained, in each case addressed as aforesaid.
3.2. Agreement Absolute. Each of the Purchasers shall be
deemed to have entered into the Purchaser Documents in express reliance upon
this Agreement and the Lender Agent and the Lenders shall be deemed to have
entered into the Revolving Credit Agreement in express reliance upon this
Agreement. This Agreement shall be and remain absolute and unconditional under
any and all circumstances, and no acts or omissions on the part of any party to
this Agreement shall affect or impair the agreement of any party to this
Agreement, unless otherwise agreed to in writing by all of the parties hereto.
This Agreement shall be applicable both before and after the filing of any
petition by or against the Originators or the Xxxxx under the Bankruptcy Code
and all references herein to the Originators or the Xxxxx shall be deemed to
apply to a debtor-in-possession for such party and all allocations of payments
between the Lender Agent and the Purchasers shall, subject to any court order to
the contrary, continue to be made after the filing of such petition on the same
basis that the payments were to be applied prior to the date of the petition.
3.3. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and their respective
successors and assigns. The successors and assigns for any Originator and/or the
Xxxxx shall include a debtor-in-possession or trustee of or for such party. The
successors and assigns for the Agents shall include any successor Agents
appointed under the terms of the Loan Documents or the Purchaser Documents, as
applicable. Each of the Agents agrees not to transfer any interest it may have
in the Loan Documents or the Purchaser Documents unless such transferee has been
notified of the existence of this Agreement and has agreed to be bound hereby.
3.4. Third-Party Beneficiaries. The terms and provisions of
this Agreement shall be for the sole benefit of the Agents, the Purchasers and
the Lenders and their respective successors and assigns and no other Person
shall have any right, benefit, or priority by reason of this Agreement.
3.5. Governing Law. This Agreement shall be governed by and
construed in accordance with, the internal laws (as opposed to conflicts of law
provisions) of the State of New York.
3.6. Section Titles. The article and section headings
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
3.7. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such
15
prohibition or unenforceability without invalidating the remaining provisions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
3.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
3.9. No Petition. Each party hereto (including each Lender, by
the Lender Agent on its behalf) hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all outstanding
senior indebtedness of EagleFunding, it will not institute against, or join any
other Person in instituting against, EagleFunding any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States. Each party hereto (including each Lender, by the Lender Agent on
its behalf) hereby covenants and agrees that prior to the date which is one year
and one day after the payment in full of all outstanding senior indebtedness of
the Xxxxx, it will not institute against, or join any other Person in
instituting against, the Xxxxx any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States. The Lenders and the
Lender Agent agree that, in the event they shall at any time have the right to
exercise or otherwise control, directly or indirectly, any voting rights in
respect of any person or entity owning voting capital of the Xxxxx, the Lenders
and the Lender Agent shall cause such person or entity to comply with the terms
of this Section 3.9 as if such person or entity were a party to this Agreement.
16
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
OUTSOURCE FUNDING CORPORATION
By:/s/ Xxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0X
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
OUTSOURCE INTERNATIONAL, INC.,
individually and as Servicer
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
OUTSOURCE FRANCHISING, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to the Intercreditor Agreement
17
CAPITAL STAFFING FUND, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SYNADYNE I, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SYNADYNE II, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to the Intercreditor Agreement
18
SYNADYNE III, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SYNADYNE IV, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SYNADYNE V, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Signature Page to the Intercreditor Agreement
19
OUTSOURCE INTERNATIONAL
OF AMERICA, INC.
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
EAGLEFUNDING CAPITAL CORPORATION,
By: BANCBOSTON SECURITIES INC., its
attorney-in-fact
By:/s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
EagleFunding Capital Corporation
c/o BancBoston Securities Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
c/o Lord Securities Corporation
Two Wall Street, 19th Floor
New York, New York 10005
Attention: Xxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Signature Page to the Intercreditor Agreement
20
BANKBOSTON, N.A.,
as the Lender Agent
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Director
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopy: 860-7276576
BANCBOSTON SECURITIES INC.,
as Purchaser Agent
By:/s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
21
