1
EXHIBIT 99.9
INTERCREDITOR SUBORDINATION AGREEMENT
THIS INTERCREDITOR SUBORDINATION AGREEMENT (this "Agreement"), made and
entered into as of the 26th day of September, 1997, by and among FLEET BANK
(formerly NORSTAR BANK OF UPSTATE NY), a banking corporation organized and
existing under the laws of the State of New York with a business address at 00
Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 and a mailing address of Xxxxx X. Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Corporate Banking
(hereinafter, together with any "Affiliate" thereof, as that term is defined
below, as and where the context of this Agreement so requires, called "Fleet");
PURCHASERS more particularly defined on Schedule A attached hereto and made a
part hereof, with business addresses and mailing addresses as more particularly
set forth on said Schedule A (hereinafter, together with any "Affiliate"
thereof, as that term is defined below, as and where the context of this
Agreement so requires, collectively called "Purchasers"); DECORA, INCORPORATED,
a Delaware corporation authorized to do business in the State of New York as
Decora Manufacturing, with its principal place of business at 0 Xxxx Xxxxxx,
Xxxx Xxxxxx, Xxx Xxxx 00000 (hereinafter called the "Borrower") and DECORA
INDUSTRIES, INC., a Delaware corporation, with its principal place of business
at 0 Xxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000 (the "Corporate Guarantor").
W I T N E S S E T H:
WHEREAS, Fleet has extended credit and hereafter may extend additional
credit to Borrower upon the security of a lien upon, and security interest in,
all, or substantially all, assets of Borrower, as more particularly described
below, all pursuant to those certain loan agreements more particularly described
on Exhibit "A" attached hereto and made a part hereof between Borrower and
Fleet, as heretofore modified and amended (hereinafter, as they may be further
modified or amended hereafter collectively called the "Fleet Loan Agreements");
and
WHEREAS, Purchasers have extended credit to Borrower and hereafter may
extend additional credit to Borrower, upon the security of a lien upon, and
security interest in, all, or substantially all, assets of Borrower, as more
particularly described below, all pursuant to a certain Note and Warrant
Purchase Agreement, dated as of even date herewith, between Borrower, Decora
Industries, Inc., Xxxxxxxx Street Capital Advisors, L.L.C., as Agent (the
"Agent") and Purchasers (hereinafter, as it may be modified or amended
hereafter, called the "Purchasers Loan Agreement"); and
WHEREAS, the repayment of all of the obligations of the Borrower to
both Fleet and the Purchasers are unconditionally guaranteed by the Corporate
Guarantor; and
1
2
WHEREAS, Fleet and Purchasers have agreed to enter into this Agreement
in order to establish, as between themselves, the relative priority of their
respective liens and security interests in the assets of Borrower and the
Corporate Guarantor and to evidence certain other understandings and agreements
they have reached between themselves in regard thereto; and
WHEREAS, Borrower and Corporate Guarantor have agreed to join in the
execution of this Agreement in order to acknowledge their consent to the terms
hereof and their agreement to be bound hereby, and to make certain other
agreements with Fleet and Purchasers in connection therewith;
NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Fleet, Purchasers,
Borrower and Corporate Guarantor hereby agree as follows:
1. DEFINITIONS
1.1 Affiliate shall mean, with respect to any person or entity, any other
person or entity (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, such person or entity, (ii) which directly or indirectly, of record
or beneficially, owns or holds five percent (5%) or more of the shares of
any class of the capital stock of such person or entity having voting
powers, or (iii) five percent (5%) or more of the shares of such stock of
which are owned or held, directly or indirectly, of record or beneficially,
by or for such person or entity. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
management and policies of a person or entity, whether through ownership of
common stock, by contract or otherwise.
1.2 Purchasers Claim shall mean all "Purchasers Obligations", as that term is
defined below, whether now or hereafter existing, including, particularly,
but without limitation, all such "Purchasers Obligations" as are evidenced
by the "Notes", as that term is defined in the Purchasers Loan Agreement,
and any and all subsequent loans, leases, letters of credit and other
financial accommodations made by Purchasers or any of Purchasers'
Affiliates to or on behalf of Borrower, together with accrued interest
thereon, fees chargeable in connection therewith and costs of collection
and enforcement of rights and remedies in regard thereto which are
chargeable to Bor rower, in each instance in accordance with, and pursuant
to, the terms and conditions of such "Notes", the Purchasers Loan Agreement
and any other "Loan Documents" as that term is defined in the Purchasers
Loan Agreement, pertinent thereto.
1.3 Purchasers Documents shall mean any and all documents, whether now or
hereafter existing, which evidence, pertain to or secure the Purchasers
Claim, or any portion thereof,
2
3
including, without limitation, the Purchasers Loan Agreement, the "NoteS"
(as that term is defined therein) and all those other "Loan Documents" (as
that term is defined therein) executed by Borrower and/or Corporate
Guarantor to or with Purchasers in connection therewith.
1.4 Purchasers Obligations shall mean and include all loans, advances, debts,
liabilities, obligations, covenants and du ties owing by Borrower or
Corporate Guarantor to Purchasers or to any of Purchasers Affiliates of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Purchasers Loan
Agreement or under any other agreement, instrument or document, whether or
not for the payment of money, whether arising by reason of an extension of
credit, opening of a letter of credit, loan, lease, guaranty,
indemnification or in any other manner, whether direct or indirect
(including, without limitation, those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and
however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and any other sums chargeable to
Borrower and/or Corporate Guarantor under the Purchasers Loan Agreement or
any other agreement of Borrower and/or Corporate Guarantor with Purchasers
or any of Purchasers' Affiliates.
1.5 Claims shall mean, collectively, the Fleet Claim and the Purchasers Claim.
1.6 Collateral shall mean all property, and interests in property, of Borrower
and/or Corporate Guarantor, whether real or personal, tangible or
intangible, now existing or hereafter existing, and wherever located, in
which, now or hereafter, a security interest or lien is granted to either
Lender to secure the repayment, in whole or in part, either directly or
indirectly, of the whole, or any portion of the Claim of such Lender,
together with all proceeds and the products thereof.
1.7 Event of Default shall mean any event which, pursuant to the operative
terms of the Purchasers Documents or the Fleet Documents, as the case may
be, permits the Lender thereunder to accelerate the payment of, and take
enforcement actions with respect to the collection of its Claim.
1.8 Fleet Claim shall mean all of "Fleet Obligations", as that term is defined
below, whether now or hereafter existing, including, particularly, but
without limitation, such "Fleet Obligations" as are evidenced by the Fleet
Notes, as that term is defined below, and any and all subsequent loans,
leases, letters of credit and other financial accom modations made by Fleet
or any of Fleet's Affiliates to or on behalf of Borrower, together with
accrued interest thereon, fees chargeable in connection therewith and cost
of collection and enforcement of rights and remedies in regard thereto
which are chargeable to Borrower, in each instance in
3
4
accordance with, and pursuant to, the terms and conditions of the Fleet
Notes, the Fleet Loan Agreements and any of the Fleet Documents.
1.09 Fleet Documents shall mean any and all documents whether now or hereafter
existing, which evidence, pertain to or secure the Fleet Claim, or any
portion thereof, including, without limitation, the Fleet Loan Agreements,
the Fleet Notes and each of the other documents, instruments and agreements
referred to in the Fleet Loan Agreements or contemplated thereby to which
Borrower and/or Corporate Guarantor is a party or which Borrower and/or
Corporate Guarantor is obligated to deliver pursuant thereto, together with
all such documents, instruments and agreements as are hereafter executed
and/or delivered by Borrower and/or Corporate Guarantor to Fleet.
1.10 Fleet Notes shall mean those notes, guarantees and credit and reimbursement
agreements more particularly described on Exhibit "B" attached hereto and
made a part hereof, executed by Borrower to Fleet, together with any
extensions or renewals thereof, or any amendments thereto.
1.11 Fleet Obligations shall mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties owing by Borrower and/or
Corporate Guarantor to Fleet or to any of Fleet's Affiliates (as that term
is defined above) of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising under
the Fleet Loan Agreements or under the Fleet Notes (as that term is defined
above) or under any other agreement, instrument or document, whether or not
for the payment of money, whether arising by reason of an extension of
credit, opening of a letter of credit, loan, lease, guaranty,
indemnification or in any other manner, whether direct or indirect
(including, without limitation, those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and
however acquired. The term includes, without limitation, all interest,
charges, expenses, fees, attorneys' fees and any other sums chargeable to
Borrower and/or Corporate Guarantor under the Fleet Loan Agreements or any
other agreement of Borrower and/or Corporate Guarantor with Fleet or any of
Fleet's Affiliates.
1.12 Fleet Senior Collateral shall mean all that Collateral set forth and
described on Exhibit "C" attached hereto and made a part hereof, in which,
as between Purchasers and Fleet, Fleet is to have a senior lien or security
interest as described in and provided by paragraph 2.1(a) hereof.
1.13 Lender shall mean Purchasers or Fleet, or both, as the context shall
require.
1.14 Purchasers Subordinate Collateral shall mean all that Collateral set forth
and described on Exhibit "C" attached
4
5
hereto and made a part hereof, in which, as between Purchasers and Fleet,
Purchasers are to have a subordinate lien or security interest as described
in and provided by paragraph 2.1(a) hereof.
2. INTERCREDITOR SUBORDINATION AGREEMENT
2.1 Lien Priorities. Notwithstanding the date, manner or order of perfection of
any security interests and liens now or hereafter granted in any Collateral
by Borrower and/or Corporate Guarantor to Purchasers or Fleet, any
provisions of any applicable Uniform Commercial Code or any applicable
statute, law or decision or any term of any of the Purchasers Documents or
the Fleet Documents, or whether either Purchasers or Fleet now or hereafter
holds possession of all or any part of any Collateral of Borrower and/or
Corporate Guarantor, or any other matter whatsoever, the following, as
between Purchasers and Fleet, shall be the relative priority of their
respective security interests and liens:
(a) To the extent necessary to pay in full the Fleet Claim, Fleet shall
have a first and prior security interest in and lien upon the
Collateral; and Purchasers shall have a second and subordinate
security interest therein;
(b) The priorities established hereunder are only as between Fleet and
Purchasers and are expressly conditioned upon the proper perfection,
and non-avoidibility by a bankruptcy trustee, of the security
interests and liens which have been accorded priority pursuant hereto.
If any security interest or lien of either Lender in any Collateral
which, pursuant hereto, has been accorded priority hereafter ceases to
be perfected, or is avoid able by a bankruptcy trustee, such lien
priority established pursuant hereto shall cease to be effective;
(c) The relative priorities of any security interests or liens in any
Collateral which are not established, altered or specified herein (or
which, hereafter, by operation of the foregoing subparagraph or any
other provision of this Agreement, cease to be effective), shall exist
and continue in accordance with, and subject to, applicable law.
2.2 Distribution of Proceeds of Collateral - Unless otherwise expressly agreed
to the contrary by each Lender or then prohibited by applicable law, all
proceeds of the Collateral shall be paid to Fleet for application to the
Fleet Claim, until it is fully satisfied, with any residual proceeds after
satisfaction of the Fleet Claim being paid to Purchasers for application to
the Purchasers Claim.
2.3 Enforcement Actions.
5
6
(a) Subject to the terms of Section 2.5 below, so long as any portion of
the Fleet Claim remains outstanding, Purchasers may not take any
action to accelerate payment of the Purchasers Claim and/or to
foreclose or realize upon or enforce any of its rights with respect to
the Collateral, if such acceleration, foreclosure and realization
and/or enforcement occurs within one hundred eighty (180) days of
either (i) the date of the Purchasers receipt of a notice of an
occurrence of an Event of Default from Fleet or (ii) the date of the
giving by the Purchasers to the Borrower of a notice of an occurrence
of an Event of Default (said 180 day period being hereinafter referred
to as the "Standstill Period"), without first giving notice to, and
obtaining the prior written consent of Fleet; provided, however, that
a) nothing contained herein shall be deemed to prohibit Purchasers
from intervening or participating in or commencing any judicial
proceeding to the extent necessary to preserve or protect its
interests in any such Collateral and/or its rights against the
Borrower and/or Corporate Guarantor, b) the Purchasers shall not be
required to observe more than one Standstill Period in any twelve
month period during the term of this Agreement, and c) no such consent
shall be needed and any such Standstill Period will be deemed
terminated if Fleet accelerates payment of one or more of the notes
evidencing its Claim and takes any action to foreclose or --- realize
upon or enforce any of its rights with respect to the Collateral;
(b) Subject to the terms of Section 2.5 below, Fleet may, at its option,
take any action to accelerate payment of the Fleet Claim, and/or to
foreclose or realize upon or enforce any of its rights with respect to
the Collateral, upon giving notice to, but without any necessity for
obtaining the prior written consent of, Purchasers; provided, however,
that nothing contained herein shall be deemed to prohibit Fleet from
intervening or participating in or commencing any judicial proceeding
to the extent necessary to preserve or protect its interests in any
such Collateral and/or its rights against the Borrower and/or the
Corporate Guarantor.
2.4 Additional Credit Extensions. Subject to any contrary provisions of
Sections 3.5 and 3.9 below, each of Purchasers and Fleet shall have the
right, upon giving notice to, but without the necessity of first obtaining
the consent of, the other, to enter into additional, supplemental or
replacement Purchasers Documents or the Fleet Documents, as the case may
be, or to modify or amend, or waive any provision of, the Purchasers
Documents or the Fleet Documents, as the case may be, or to extend credit
or other financial accommodations (or increase any existing credit or
financial accommodation) to Borrower hereafter pursuant to the Purchasers
Documents or the Fleet Documents in such amounts and subject to such terms
and
6
7
conditions as each Lender elects, and to secure the repayment thereof with
any or all of the Collateral; provided, however, that nothing contained
herein shall constitute a waiver of any right of either Lender, pursuant to
any agreement between such Lender and Borrower, to require Borrower to
obtain such Lender's prior written consent to any such credit or pledge
made by or to the other Lender.
2.5 Notices of Defaults. Each Lender agrees to give to the other Lender a copy
of any notice of the occurrence or existence of an Event of Default given
to Borrower by such Lender hereafter concurrently with the sending of such
notice to Borrower; thereafter, but within a period equal to the greater of
(i) ten (10) days after receipt of such notice or (ii) the cure period (if
any) granted to the Borrower in such notice or otherwise to cure such Event
of Default, the Lender receiving any such notice shall have the right,
without obligation to do so, to cure (or cause the cure) of such Event of
Default (to the extent such Event of Default can be cured by the payment of
money) before the Lender giving such notice shall take any enforcement
actions with respect to its Claim.
2.6 Agency for Perfection. To the extent that Purchasers now has possession of,
or hereafter obtains possession of any Collateral including, without
limitation, any proceeds thereof which may be collected by operation of any
lockbox, blocked account reserve account or other collection method
instituted by Purchasers on which Fleet has a prior security interest or
lien pursuant hereto the Purchasers having possession of such Collateral
shall deliver such Collateral to Fleet, and pending such delivery, such
Purchasers shall hold such Collateral in trust, as trustee and agent for
the benefit of Fleet; and Fleet shall hold such Collateral as bailee and
agent of the Purchasers for the purposes of facilitating the perfection of
such Purchasers' security interest therein so long as such Collateral
remains in its possession pending application to the Fleet Claim, and
thereafter, pending distribution of any surplusage to the Purchasers
pursuant hereto. Purchasers designate Fleet pursuant to section 8-313(1)(a)
of the Uniform Commercial Code to hold certificates representing all of the
common stock of the Borrower (the "Stock") and the notes of the Corporate
Guarantor to the Borrower identified as item 9 in Exhibit "C" hereof (the
"Pledged Notes") on its own behalf and on behalf of the Purchasers, and
Fleet acknowledges that it so holds the Stock and the Pledged Notes;
provided that this sentence shall not limit Fleet's ability to exercise
remedies against the Stock and the Pledged Notes in accordance with this
Agreement.
2.7 Actions Upon Repayment of Fleet. If the Fleet Claim is paid in full, but
not the Purchasers Claim, and, in connection therewith, the Fleet Documents
are terminated, then Fleet, if and to the extent it then or thereafter has
no other claim against Borrower, shall, at the Purchasers' request transfer
any such Collateral held by it to the Purchasers and shall
7
8
assign its security interest therein and all of its rights under financing
statements to Purchasers; provided however, that any such transfer or
assignment shall be without recourse to Fleet and at the Purchasers'
expense.
2.8 Insurance. Notwithstanding anything to the contrary herein, Fleet, having a
senior security interest or lien in any Collateral the value of which is
insured by any hazard or casualty or similar insurance maintained by
Borrower shall, subject to Fleet's rights under its agreements with
Borrower, have the sole and exclusive right, as against the Purchasers to
adjust settlement of insurance claims in the event of any covered loss,
theft or destruction of such Collateral so long as Fleet does so in good
faith, in a commercially reasonable manner. All proceeds of such insurance
shall be paid to Fleet, as named in the mortgagee or loss payable
endorsement corresponding to such insurance in the same manner as
hereinabove prescribed with respect to other proceeds of Collateral.
2.9 UCC Notices. In the event that either Lender shall be required by the
Uniform Commercial Code or any other ap plicable law to give notice to the
other of intended disposi tion of Collateral, such-notice shall be given in
accordance with paragraph 3.1 hereof and ten (10) days' notice shall be
deemed to be commercially reasonable.
2.10 Payment of Purchasers Claim in the Event of a Default Under any of the
Fleet Documents and/or the Purchasers Documents.
(a) In the event that Fleet should send a Notice of Default to the Borrower
and the Purchasers (as set forth in Section 2.5 hereof) specifying a
payment default by the Borrower, the Purchasers agree not to accept
payments of principal or interest upon the Purchasers Claim, without the
prior written consent of the Fleet, until the earlier to occur of (i) the
payment Event of Default set forth in the aforementioned Notice of Default
is cured, or (ii) the Fleet Claim is paid in full. During any such period,
Purchasers also agree to hold any and all such payments received by
Purchasers without demand, in trust for Fleet in the same medium in which
received, not to commingle the same with any of the assets of Purchasers,
to immediately notify Fleet on the receipt of the same and to dispose of
the same as Fleet shall direct.
(b) In the event that Fleet should send a Notice of Default to the Borrower
and the Purchasers (as set forth in Section 2.5 hereof) specifying a
default by the Borrower other than a payment default, and as a result of
said non-payment default, Fleet elects to accelerate payment of the Fleet
Claim and to foreclose or realize upon or enforce any of its rights with
respect to the Collateral, the Purchasers agree not to accept payments of
principal or interest upon the Purchasers Claim, without the prior written
consent of the Fleet, until the earlier to occur of (i) the non-payment
Event of Default set
8
9
forth in the aforementioned Notice of Default is cured and Fleet elects to
cancel its payment acceleration of the Fleet Claim and cancel its
foreclosure or realization upon or enforcement of its rights with respect
of the Collateral, or (ii) the Fleet Claim is paid in full. During any such
period, Purchasers also agree to hold any and all such payments received by
Purchasers without demand, in trust for Fleet in the same medium in which
received, not to commingle the same with any of the assets of Purchasers,
to immediately notify Fleet on the receipt of the same and to dispose of
the same as Fleet shall direct.
(c) In the event that Fleet should send a Notice of Default to the Borrower
and the Purchasers (as set forth in Section 2.5 hereof) specifying a
default by the Borrower other than a payment default, and as a result of
said non-payment default, Fleet, does not elect to accelerate payment of
the Fleet Claim and to foreclose or realize upon or enforce any of its
rights with respect to the Collateral, the Purchasers may accept payments
of principal or interest upon the Purchasers Claim, without the prior
written consent of the Fleet, until such time, if any, that Fleet elects to
accelerate payment of the Fleet Claim and to foreclose or realize upon or
enforce any of its rights with respect to the Collateral; in which event
the provisions of subparagraph (b) above shall control.
(d) In the event that Purchasers should send a Notice of Default to the
Borrower and Fleet (as set forth in Section 2.5 hereof) specifying a
default by the Borrower and, after receipt of said Notice of Default,
Fleet, at its option, elects not to declare a cross-default and send a
Notice of Default to the Borrower and Purchasers (as set forth in Section
2.5 hereof), the Purchasers may accept payments of principal or interest
upon the Purchasers Claim, without the prior written consent of the Fleet,
until such time, if any, that Fleet elects to accelerate payment of the
Fleet Claim and to foreclose or realize upon or enforce any of its rights
with respect to the Collateral; in which event the provisions of
subparagraph (b) above shall control.
3. MISCELLANEOUS
3.1 Notices. All notices hereunder shall be effective upon receipt and shall be
in writing and sent by personally delivered mail or sent by express mail or
overnight mail delivery, to the addresses as first set in the opening
paragraph to this Agreement, in the case of Fleet, and as set forth on
Schedule A hereof, in the case of the Purchasers, or to such other address
or person as either of the parties hereto may designate in writing to the
other party. Notice shall be deemed received when hand delivered or when
deposited in a United States express mail post office box, postage prepaid
or delivered to the overnight mail delivery service properly addressed.
9
10
3.2 Contesting Liens or Security Interests. Neither Lender shall contest the
validity, perfection, priority or enforceability of any lien or security
interest granted to the other Lender, and each of the Lenders hereby agrees
to cooperate in the defense of any action contesting the validity,
perfection, priority or enforceability of such liens or security interest.
Each Lender shall also use its best efforts to notify the other Lender of
any change in the location of any of the Collateral or the business
operations of Borrower, or of any change in law which would make it
necessary or advisable for the other Lender to file additional financing
statements in another location as against Borrower but the failure to do so
shall not create a cause of action against the party failing to give such
notice or create any claim or right on behalf of any third party.
3.3 Independent Credit Investigations. Neither of the Lenders, 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 Borrower's
solvency, financial condition or ability to repay the Purchasers Claim or
the Fleet Claim, as the case may be, or for any statements of Borrower,
oral or written, or for the validity, sufficiency or enforceability of the
Purchasers Claim or the Fleet Claim, as the case may be, or the Purchasers
Documents or the Fleet Documents, or any liens or security interests
granted by Borrower to the Lenders in connection therewith. Each Lender has
entered into its respective financing agreements with Borrower based upon
its own independent investigation and makes no warranty or representation
to the other Lender nor does it rely upon any representation of the other
Lender with respect to matters identified or referred to in this paragraph.
3.4 Limitation on Liability of Lenders to Each Other. Fleet shall not have any
liability to the Purchasers with respect to the exercise of its rights and
remedies in any Collateral on which it has retained a first priority
security interest or lien pursuant hereto so long as such exercise is
conducted in the same manner and with the same degree of care as Fleet then
is using with respect to the exercise of its rights and remedies in any
other, similar collateral securing any loan which is not the subject of
this Agreement, and, then, such liability shall extend only to the extent
that the Purchasers' loss, damage or expenses is proximately caused by the
gross negligence or willful misconduct of Fleet in exercising such rights
and remedies.
3.5 Amendments to Financing Arrangements or to this Agreement. Subject to any
contrary provisions of Section 3.9 below, each Lender shall use its best
efforts to notify the other Lender of any amendment or modification in the
Purchasers Documents or the Fleet Documents, as the case may be, but the
failure to do so shall not create a cause of action against the party
failing to give such notice or create any claim or right on
10
11
behalf of any third party; and each Lender shall, upon request of the other
Lender, provide copies of all such modifications or amendments and copies
of all other documentation relevant to the Collateral. All modifications or
amendments of this Agreement must be in writing and duly executed by an
authorized officer of each Lender to be binding and enforceable.
3.6 Marshalling of Assets. Purchasers hereby waive any and all rights to have
the Collateral, or any part thereof, marshalled by Fleet upon any
foreclosure of any security interest in, or lien on, such Collateral.
3.7 Further Assurances. If, at any time or from time to time hereafter, it
becomes necessary or advisable in connection with the foreclosure,
liquidation or disposition of any Col lateral by Fleet, as a result of an
Event of Default, to obtain a subordination, release or discharge of the
Purchasers' lien or security interest in any such Collateral in order to
convey good and marketable title to such Collateral, then, so long as such
foreclosure, liquidation or disposition, and the application of the
proceeds derived therefrom, have been accomplished in conformity herewith,
the Purchasers, upon the request of Fleet, shall execute such instruments
of subordination, release or discharge of such liens or security interests,
in recordable form, as may be reasonable and appropriate in the
circumstances; provided, however, that in no event shall any such
subordination, release or discharge alter, impair, release, discharge or
otherwise modify the liens and security interests of the Purchasers in and
to any other portion of the Collateral then existing or the claim of
Purchasers against the Borrower for any obligations due them.
3.8 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respec tive successors and assigns
of each of the parties hereto. Neither Lender shall assign or transfer any
interest in its Claim to any third party unless such assignee or transferee
shall have executed and delivered to the other Lender, not later than the
date of such assignment or transfer, an instrument in form and substance
satisfactory to the other Lender, pursuant to which the assignee or
transferee agrees to be bound by this Agreement. Notwithstanding the above,
however, nothing in this Agreement shall be construed as restricting the
right of either Lender to participate an interest in its Claim out to
another lender or third party.
3.9 Additional Documents or Security Interests. In the event that, from and
after the date hereof, either Lender shall obtain or negotiate to obtain
any additional document guaranteeing, confirming, perfecting or otherwise
affecting its Claim or any security interest or lien in Borrower's as sets,
it shall: (a) promptly thereafter notify the other Lender that such
document has been obtained or that it is
11
12
negotiating to obtain such document; (b) either directly or by
incorporation by reference, cause any such document to reflect the relative
priorities of the Lenders with respect to the Collateral; and (c) provide a
copy of the document to the other Lender.
3.10 Borrower's and Corporate Guarantor's Agreement. Borrower and Corporate
Guarantor each hereby consent to the foregoing arrangements and agree to be
bound by the provisions hereof as they relate to the relative rights of
Fleet and Purchasers as between such Lenders with respect to such parties
and the Collateral; provided, however, that Borrower and Corporate
Guarantor further acknowledge and agree that nothing in this Agreement
shall amend, modify, change or supersede the respective terms of the Fleet
Documents or the Purchasers Documents as between each Lender and Borrower
and/or each Lender and Corporate Guarantor, as the case may be; and
provided, further, however, that, as among Purchasers, Fleet, Corporate
Guarantor and Borrower, in the event of any conflict or inconsistency
between the terms of this Agreement and the Fleet Documents or the
Purchasers Documents, as the case may be, the terms of this Agreement shall
govern and Borrower and Corporate Guarantor each shall govern itself
accordingly in connection therewith. Borrower and Corporate Guarantor
further agree that the terms of this Agreement shall not give either
Borrower or Corporate Guarantor any substantive rights vis-a-vis either
Fleet or Purchasers. Without limiting the generality of the foregoing, and
as further inducement to the Lenders to enter into this Agreement, Borrower
and Corporate Guarantor each further (i) recognizes and agrees if either
Lender shall enforce its rights or remedies in violation of the terms of
this Agreement, Borrower and Corporate Guarantor each agrees that it shall
not use such violation as a defense to the enforcement by either Lender of
any rights or remedies under the Purchasers Documents and/or the Fleet
Documents, as the case may be, nor assert such violation as a counterclaim
or basis for set-off or recoupment against either Lender; (ii) authorizes
and directs each Lender to assign its security interest to the other in
accordance with and subject to the terms and limitations of Section 2.7
above; and (iii) nominates and appoints each Lender to serve as the bailee
of the other Lender with respect to any Collateral now or hereafter in the
custody, control or possession of such Lender as security for the payment
of any Claim in accordance with Section 2.7 above.
3.11 Governing Law. This Agreement shall be governed as to valid ity,
interpretations, enforcement and effect by the laws of the State of New
York.
3.12 Consent to Jurisdiction and Service of Process. The Borrower and each
Lender hereby consent to the jurisdiction of any state or federal court
located within the County of Albany, State of New York and irrevocably
agree that, subject to the election of Fleet, all actions and proceedings
relating to
12
13
this Agreement may be litigated in such courts. The Borrower, Corporate
Guarantor and each Lender accept generally and unconditionally the
nonexclusive jurisdiction of the aforesaid courts and waive any defense of
forum non conveniens, and irrevocably agree to be bound by any judgment
rendered thereby in connection with this Agreement. The Borrower, Corporate
Guarantor and each Lender agree that service upon it at its address
provided in the opening paragraph to this Agreement, in the case of Fleet,
Borrower and Corporate Guarantor, and as set forth on Schedule A hereof, in
the case of the Purchasers shall constitute sufficient notice and service
of process. Nothing herein shall affect the right of either Lender to serve
process in any other manner permitted by law or shall limit the right of
Fleet to bring proceedings or obtain or enforce judgments against the
Purchasers in the courts of any other jurisdictions or the right of
Purchasers to enforce judgments against Fleet in other jurisdictions.
3.13 Waiver of Trial By Jury. THE BORROWER, THE CORPORATE GUARANTOR AND EACH
LENDER HEREBY WAIVES ITS RESPECTIVE RIGHT TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND ALSO
WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF EITHER LENDER AND/OR BORROWER AND/OR CORPORATE
GUARANTOR. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THE BORROWER, CORPORATE GUARANTOR AND EACH LENDER FURTHER
REPRESENT THAT THEY HAVE REVIEWED THIS WAIVER WITH THEIR RESPECTIVE LEGAL
COUNSEL, AND THAT THEY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RESPECTIVE
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR OTHER MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written individually and as agent for, and on behalf of,
each party's Affiliates.
"Purchasers"
By:____________________
Name:__________________
Title:_________________
By:____________________
Name:__________________
Title:_________________
13
14
"Fleet"
FLEET BANK
By:__________________
Xxxxx X. Xxxxxx
Vice President
14
15
"Borrower"
DECORA, INCORPORATED
By:____________________
Name:__________________
Title:_________________
15
16
"Corporate Guarantor"
DECORA INDUSTRIES, INC.
By:____________________
Name:__________________
Title:_________________
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this ____ day of September, 1997, before me personally appeared Xxxxx X.
Xxxxxx, to me known, who being by me duly sworn, did depose and say that he
resides in Valatie, New York, that he is a Vice President of Fleet Bank, the
corporation described in and which executed the above instrument; and that he
signed his name thereto by order of the Board of Directors of said corporation.
------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this ____ day of September, 1997, before me personally appeared
________________________________, to me known, who being by me duly sworn, did
depose and say that _he resides in _____________________________, that _he is
the __________________ of Decora, Incorporated, the corporation described in and
which executed the above instrument; and that _he signed _____ name thereto by
order of the Board of Directors of said corporation.
------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this ____ day of September, 1997, before me personally appeared
________________________________, to me known, who being by me duly sworn, did
depose and say that _he resides in _____________________________, that _he is
the __________________ of Decora Industries, Inc., the corporation described in
and which executed the above instrument; and that _he signed _____ name thereto
by order of the Board of Directors of said corporation.
------------------------------
Notary Public
16
17
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this ____ day of September, 1997, before me personally appeared
________________________________, to me known, who being by me duly sworn, did
depose and say that _he resides in _____________________________, that _he is
the __________________ of __________________________________________, the
corporation described in and which executed the above instrument; and that _he
signed _____ name thereto by order of the Board of Directors of said
corporation.
------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF )
On this ____ day of September, 1997, before me personally appeared
________________________________, to me known, who being by me duly sworn, did
depose and say that _he resides in _____________________________, that _he is
the __________________ of __________________________________________, the
corporation described in and which executed the above instrument; and that _he
signed _____ name thereto by order of the Board of Directors of said
corporation.
------------------------------
Notary Public
17
18
Schedule A
(List of Purchasers and their Addresses)
18
19
EXHIBIT A
LOAN AGREEMENTS
1. Loan and Security Agreement executed by the Borrower, the Corporate
Guarantor and Fleet on April 18, 1990 as modified pursuant to the terms of (i)
Loan and Security Agreement Amendment No. 1 by and between the Borrower, the
Corporate Guarantor and Fleet dated July 19, 1994, (ii) Loan and Security
Agreement No. 2 by and between the Borrower, the Corporate Guarantor and Fleet
dated August 13 1996, (iii) Note and Loan and Security Agreement Amendment No. 3
by and between the Borrower, the Corporate Guarantor and Fleet dated March 27,
1997, and (iv) Note and Loan and Security Agreement Amendment No. 4 by and
between the Borrower, the Corporate Guarantor and Fleet dated as of even date
herewith and those Instruments of Collateral Security identified in paragraph 3.
(k) thereof.
2. Secured Revolving Line of Credit Agreement by and between the
Borrower and Fleet dated April 18, 1990 as amended by (i) Amendment to Secured
Revolving Line of Credit Agreement effective and dated as at July 31, 1992 by
and between the Borrower and Fleet, (ii) Second Amendment to Secured Revolving
Line of Credit Agreement effective and dated as of July 29, 1993 by and between
the Borrower and Fleet, (iii) Third Amendment to Secured Revolving Line of
Credit Agreement effective and dated as of July 19, 1994 by and between the
Borrower and Fleet, (iv) Fourth Amendment to Secured Revolving Line of Credit
Agreement effective and dated as of the 13th day of August, 1996 by and between
the Borrower and Fleet, (v) Fifth Amendment to Secured Revolving Line of Credit
Agreement effective and dated as at the 27th day of March, 1997 by and between
the Borrower and Fleet, and (iv) Sixth Amendment to Secured Revolving Line of
Credit Agreement dated as at even date herewith by and between the Borrower and
Fleet.
3. Loan and Security Agreement executed by the Borrower and Fleet on
July 19, 1994, as modified pursuant to the terms of (i) First Amendment to Loan
and Security Agreement by and between the Borrower and Fleet dated March 27,
1997, and (ii) Second Amendment to Loan and Security Agreement by and between
the Borrower and Fleet dated as at even date herewith, and the Security
Documents defined therein.
4. ISDA Master Agreement dated as of March 21, 1997 by and between
Fleet National Bank and the Borrower, plus that certain Assignment, Pledge and
Security Agreement dated as of March 27, 1997, executed by the Borrower in favor
of Fleet, assigning to Fleet all of the Borrower's right, title and interest in
and to the aforementioned ISDA Master Agreement.
5. Export-Import Bank of the United States Notification by Insured of
Amounts Payable under Multi-Buyer Export Credit
19
20
Insurance Policy assignment, pledge and security agreement executed by the
Borrower in favor of Fleet on March 27, 1997.
6. The Security Documents defined in that certain Credit and
Reimbursement Agreement executed by the Borrower in favor of Fleet on November
1, 1996 in connection with that certain Letter of Credit issued by Fleet in
favor of Mellon Bank, FSB as Trustee, concerning the issuance by the counties of
Xxxxxx and Washington Industrial Development Agency of Two Million Four Hundred
Sixty Thousand and no/100 Dollars ($2,460,000.00) aggregate principal amount
Industrial Development Revenue Bonds (Decora, Incorporated Project Series 1996)
as modified by (i) Credit and Reimbursement Agreement Modification Agreement No.
1 dated as of March 27, 1997 and (ii) Credit and Reimbursement Agreement
Modification Agreement No. 2 dated as of even date herewith.
20
21
EXHIBIT B
NOTES
1. Credit and Reimbursement Agreement executed by the Borrower in favor
of Fleet on November 1, 1996 in connection with that certain Letter of Credit
issued by Fleet in favor of Mellon Bank, FSB as Trustee, concerning the issuance
by the counties of Xxxxxx and Washington Industrial Development Agency of Two
Million Four Hundred Sixty Thousand and no/100 Dollars ($2,460,000.00) aggregate
principal amount Industrial Development Revenue Bonds (Decora, Incorporated
Project Series 1996) as modified by (i) Credit and Reimbursement Agreement
Modification Agreement No. 1 dated as of March 27, 1997 and (ii) Credit and
Reimbursement Agreement Modification Agreement No. 2 dated as of even date
herewith.
2. Five Million One Hundred and Sixty Nine Thousand and no/100 Dollar
($5,169,000.00) Amended and Restated Term Note dated as at March 27, 1997 and
executed by the Borrower on said date in favor of Fleet.
3. One Million and no/100 Dollar ($1,000,000.00) Line of Credit Note
dated March 27, 1997 and executed by the Borrower on said date in favor of
Fleet, as amended by that certain First Amendment to Note executed by the
Borrower and Fleet on even date.
4. Six Million and no/100 Dollar ($6,000,000.00) Restated Promissory
("Grid") Note dated as at the 13th day of August, 1996 and executed by the
Borrower on said date in favor of Fleet.
5. Three Million Three Hundred Fifty Four Thousand One Hundred Sixty
Six and 69/100 Dollars ($3,354,166.69) Consolidated and Restated Promissory Note
dated March 27, 1997 and executed by the Borrower on said date in favor of
Fleet.
21
22
EXHIBIT C
COLLATERAL
1. All of Borrower's now and hereafter owned and acquired, wherever
located: machinery, equipment, furniture, fixtures, goods, inventory, accounts
receivable, instruments, contract rights, general intangibles, chattel paper and
choses in action, including but not limited to, those items set forth on Exhibit
C-1 attached hereto and made a part hereof.
2. All that property, or interest in property, of Borrower constituting
the "mortgaged premises" as that term is defined and described in that certain
Mortgage in the amount of Four Million and no/100 Dollars ($4,000,000.00) dated
April 18, 1990 made by Borrower to Fleet, which Mortgage was recorded in the
Office of the Washington County Clerk on April 23, 1998 in Liber 601 at page
291. Said Mortgage was modified by Mortgage Modification Agreement dated July
19, 1994 and recorded July 25, 1994 in the Washington County Clerk's office in
Liber 846 at page 199, and further modified by Mortgage Modification Agreement
dated March 27, 1997 and recorded March 28, 1997 in the Washington County
Clerk's office in Liber 995 at page 213.
3. Unconditional Guaranty of Corporate Guarantor.
4. All issued and outstanding shares of capital stock of the Borrower,
which shares of stock are owned by the Corporate Guarantor and are pledged to
Fleet to secure the guaranty of the Corporate Guarantor to Fleet as referenced
in 3 above.
5. All of Borrower's right, title and interest in that certain ISDA
Master Agreement executed by the Borrower in favor of Fleet National Bank on
March 27, 1997 and each transaction entered into thereunder (including, without
limitation, all amounts payable or deliverable thereunder).
6. All of Borrower's interest to claim payments which may become due
under policy number ESC-147470 issued by Export-Import Bank of the United States
to Borrower, as insured.
7. All machinery and equipment leases received by Borrower from United
Merchant's and Manufacturers, Inc. pursuant to that certain Asset Purchase
Agreement dated November 28, 1989.
8. All of Borrower's United States Letters Patent.
9. All of Borrower's right, title and interest in and to (i) that
certain promissory note in the face amount of $15,207,000.00 to be executed by
the Corporate Guarantor in favor of the Borrower on even date herewith and (ii)
that certain promissory note in the
22
23
face amount of $6,000,000.00 to be executed by the Corporate Guarantor in favor
of the Borrower on July 19, 1994.
10. All books and records of Borrower pertaining to the foregoing or
any thereof.
11. All products and proceeds (including, without limitation, insurance
proceeds) pertaining to the foregoing or any thereof.
23
24
EXHIBIT "C-1"
DECORA INCORPORATED EXPANSION/RENOVATION PROJECT
DETAILED ASSET LISTING
Asset Asset ADS In-Service
Number Description Utility Life (1) Date
------ ----------- ------- -------- ----------
1 347 Computer Tracks production data and flow 5 9/30/95
2 348 Oven exhaust system Required to vent air from machinery oven 10 9/30/95
3 000 XX Xxxxx system Required to improve reliability and efficiency of #1 coater 10 9/30/95
4 350 Heat Exchanger Xxxxx toxic production emissions prior to venting to outside 10 9/30/95
5 351 Explosion proof containment area Required on production machine to run solvent-based coated
products 10 9/30/95
6 352 Monorail beams Transports work-in-process goods on and off machines 10 9/30/95
7 353 Trim removal system Transports waste trimmings from production machines
to compactor 10 9/30/95
8 354 Xxxxxxx floor cleaner Removes dust and other contaminants from finish packaging
work area 10 9/30/95
9 355 Cad-cam engineering software Required to perform engineering drawings for machinery
installation/maintenance 5 9/30/95
10 356 Underground storage tank removal Required per EPA regulations 40 9/30/95
11 357 Shipping dock truck locks Holds trucks against shipping docks while loading (safety) 40 9/30/95
12 358 Xxxxxxx embosser Embosses vinyl film with woodgrain texture 10 9/30/95
13 359 Concrete truck shipping pad Required to support weight of shipping trucks 40 9/30/95
14 360 Floor sealing Required under installed machinery for removal of contaminants
and safety 40 9/30/95
15 361 Roof modifications Required to protect new machinery and insert venting ducts 40 9/30/95
16 362 Machine winng Required to operate production machinery 40 9/30/95
17 363 Work area lighting Required to operate production machinery 40 9/30/95
18 364 Air piping Required to operate production machinery 40 9/30/95
19 365 Air compressor Required to operate production machinery 10 9/30/95
20 366 HVAC Required for machine operator comfort 40 9/30/95
21 367 WIP Racking Required for staging of work-in-process goods during
production flow 10 9/30/95
22 368 Emission controls Required for EPA compliance 10 9/30/95
23 369 Narrow-aisle lift truck Required to handle work-in-process goods 10 9/30/95
24 370 Lift truck Required to handle work-in-process goods 10 9/30/95
25 371 Bar code hardware/installation Required to track work-in-process goods through production 10 9/30/95
26 372 Voice mail switch Required for internal and external communications 10 9/30/95
27 373 Fork lift truck batteries Required to power fork-lift trucks noted above 10 9/30/95
28 374 Corone treatment head Required to surface treat products to improve applied adhesive
performance 10 9/30/95
29 375 Lift truck batteries Required to power fork-lift trucks noted above 10 9/30/95
30 246 Operations supplies Hand tools and other supplies necessary to operate production
machines 10 9/30/95
24
