INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT is executed as of September 11, 1997, between
BANKERS TRUST COMPANY, a New York Banking Corporation, as agent under the BT
Facility described below (in such capacity, "AGENT", and NATIONSCREDIT
COMMERCIAL CORPORATION OF AMERICA, a North Carolina corporation
("NATIONSCREDIT").
RECITALS
WHEREAS, FEDERAL DATA CORPORATION ("FEDERAL DATA"), has established a
revolving credit facility with a syndicate of lenders ("BT LENDERS" and together
with NationsCredit, the "LENDERS") for which Agent acts as agent ("BT
FACILITY"), which provides for borrowing under a borrowing base formula and is
used, in part, for working capital purposes;
WHEREAS, Federal Data, FDC TECHNOLOGIES, INC. and XXXXXXX MANAGEMENT
SYSTEMS CORPORATION (collectively, "DEALER") desire to establish a revolving
credit facility with NationsCredit ("NATIONSCREDIT FACILITY" and together with
the BT Facility, the "FACILITIES"), which will be used to finance Dealer's
purchase of inventory; and
WHEREAS, Agent and NationsCredit wish to enter into this Agreement to
define their respective rights and obligations relating to collateral pledged by
Dealer as security for the credit facilities;
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:
1. DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the following terms have the meanings set forth below:
"ACCOUNTS" means Dealer's rights to payment for the sale or lease of goods
or provision of services in the course of its business; all other rights to
payments of any kinds, including under present and future contracts, instruments
and general intangibles; all instruments, documents or chattel paper evidencing
or relating to any accounts; all rights which Dealer may have at any time
against any account debtor, including liens and contract rights; and all
proceeds and products of the foregoing.
"DEFAULT RESPONSE" means a direction by Required Lenders to Agent and
NationsCredit to commence realization upon Shared Collateral pursuant to Section
3 hereof, in response to the occurrence of a default by Dealer under its
agreements with Agent and/or NationsCredit.
"INVENTORY" means all inventory of Dealer of every type and description,
wherever located, and whether now owned or hereafter acquired; all documents of
title and trust receipts relating to any inventory; all price protection
credits, rebates, discounts and incentive payments relating to the foregoing
from time to time; all cash proceeds arising from and directly traceable to
inventory; all present and future rights, claims and causes of action of Dealer
in connection with contracts for the purchase of, or warranties relating to, or
damages to, goods held or to be
held by Dealer as inventory; all warranties, manuals and other written materials
relating to the foregoing; and all insurance proceeds relating to any inventory.
"REQUIRED LENDERS" means, as of any Default Response, those Lenders holding
indebtedness under the Facilities aggregating more than 50% of all indebtedness
under the Facilities.
"SHARED COLLATERAL" means all the Accounts and all the Inventory.
2. PRIORITY OF SECURITY INTERESTS. Each party shall a PARI PASSU
security interest in all Inventory and Accounts, in accordance with the sharing
arrangement set forth in Section 4 hereof. Agent shall have a first priority
security interest in all assets of Dealers in which Agent has a perfected
security interest, other than Inventory and Accounts.
3. COLLATERAL SHARING AGREEMENT.
(a) If Agent or NationsCredit take any action to accelerate sums due under
their applicable Facilities and/or to terminate any additional funding to Dealer
thereunder, in each case as a result of a default by Dealer, then Agent or
NationsCredit, as applicable, will deliver concurrent notice thereof to the
other party. Each party agrees to use its best efforts to notify the other
party of any material default by Dealer under its credit facility (but, in the
case of Agent, only to the extent such default has been made known to all BT
Lenders), but failure to give such notice shall not be affect the party's rights
against Dealer nor either party's rights or obligations hereunder. Agent shall
give prompt notice to NationsCredit of any modification in Dealer's borrowing
base definition under the BT Facility, but failure to do so will not affect
either party's rights or obligations hereunder.
(b) Upon any realization on the Shared Collateral, through foreclosure or
other enforcement of the parties' security interests and/or in any bankruptcy or
insolvency proceeding relating to Dealer (a "BANKRUPTCY PROCEEDING"), the BT
Lenders and NationsCredit will share in all amounts collected or realized from,
and/or paid or payable in respect of the security interests in, the Shared
Collateral, net of reasonable out-of-pocket costs and expenses incurred by the
applicable party in making any such collections or dispositions. Such sharing
will be on a pro rata basis, expressed as percentages ("PRO RATA SHARES"),
determined under the following formula: (i) all amounts (whether for principal,
interest, fees, charges or other) owing by Dealer under the BT Facility or
NationsCredit Facility, as applicable, on the date of the Default Response,
divided by (ii) the total amount owing by Dealer under both the BT Facility and
NationsCredit Facility on the date of the Default Response. For purposes of
such calculation, amounts owing by Dealer under the NationsCredit Facility shall
include all unfunded commitments to inventory vendors that were outstanding as
of the date of the Default Response.
(c) If (a) notice of a Default Response is given, and (b) Required Lenders
have directed NationsCredit so to act, and any in any event prior to the
commencement of a Bankruptcy Proceeding, NationsCredit will promptly make all
reasonable diligent efforts to repossess, on behalf of itself and the BT
Lenders, any Inventory still in Dealer's possession ("REPOSSESSED INVENTORY"),
to return any Repossessed Inventory that qualifies for repurchase by
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a manufacturer or vendor to same for cash or credit, and to sell any Repossessed
Inventory that is not subject to repurchase. Within 10 days following the end
of each month, NationsCredit will send to Agent an accounting for such month of
all credit and amounts received from a manufacturer or vendor due to repurchase
of Repossessed Inventory, and all cash arising from the sale of Repossessed
Inventory, as well as a calculation of Agent's Pro Rata Share of such credits
and amounts. NationsCredit will concurrently wire transfer such Pro Rata Share
to an account specified by Agent.
(d) If notice of a Default Response is given, then Agent will take such
actions, as directed by Required Lenders and as are provided for in its security
agreements, to realize upon and enforce its security interests in the Accounts,
on behalf of the BT Lenders and NationsCredit. The parties acknowledge that in
taking any assignments of governmental Accounts, Agent will act as agent for BT
Lenders and NationsCredit in perfecting their security interests in such
Accounts to the extent Agent is directed to perfect same by the Required Lenders
or otherwise under the BT Facility. Within 10 days following the end of each
month, Agent will send to NationsCredit an accounting for all collections on the
Accounts for such month and a calculation of NationsCredit's Pro Rata Share of
such collections. Agent will concurrently wire transfer such Pro Rata Share to
an account specified by NationsCredit.
(e) If NationsCredit receives any payments on any Accounts following a
Default Response, it will promptly remit same to Agent in the form received,
with all necessary endorsements. Amounts to be wire transferred by each party
to the other hereunder will be netted against each other and only the net amount
will be sent by the appropriate party.
(f) In no event will Agent or NationsCredit be required to take any action
hereunder that violates any applicable law, including any bankruptcy, insolvency
or other laws relating to the relief of debtors.
(g) Agent and NationsCredit each agree to pay their respective Pro Rata
Shares of all costs and expenses incurred by either party in its collection of
Accounts or disposition of Inventory pursuant to this Section. If any payment
or proceeds collected and shared by the parties under this Section is rescinded
or must be returned to any person for any reason, including as a result of a
bankruptcy filing by or against Dealer, than both parties will promptly pay
their Pro Rata Shares of the amounts so rescinded or required to be returned.
4. POSSESSION OF COLLATERAL. If any Accounts consist of notes,
instruments or other collateral with respect to which a security interest may be
perfected only by possession, and if any such collateral is in the possession of
Agent, NationsCredit hereby appoints Agent as agent to hold such collateral for
the purpose of perfecting the lien of NationsCredit in such collateral to the
extent of its interests therein. If such Accounts are in the possession of
NationsCredit, Agent hereby appoints NationsCredit as agent to hold such
collateral for the purpose of perfecting the lien of Agent in such collateral to
the extent of its interest therein. NationsCredit will cooperate with Agent in
making any such collateral available to Agent in connection with its collection
of Accounts under Section 4 hereof.
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5. PERFECTION OF LIENS. The subordination and priorities set forth
herein are applicable regardless of the time or order of the attachment or
perfection of security interests, or the time or order of the filing of
financing statements, or the giving or failure to give notice of acquisition or
expected acquisition of purchase money or other security interests. Such
subordinations and priorities are, however, conditioned upon the perfection and
validity of each party's liens; if the security interest in any assets to which
another security interest is subordinated is not perfected or is avoidable for
any reason, then the subordinations and relative priorities provided herein will
not be effective as to such assets.
6. FURTHER ASSURANCES. Agent and NationsCredit agree to execute and
deliver all such further documents and instruments and to take all such further
actions as any party might reasonably request in order to give effect to this
Agreement.
7. NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been given when sent
by telecopy (answerback received) or by certified or registered mail, return
receipt requested, or when personally delivered, in each case sent to the other
parties hereto at the addresses or telecopy numbers indicated below, or at such
other address or numbers as any party may indicate from time to time in writing
to the other.
8. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
No other persons (including Dealer) shall have any right, benefit or interest
under or because of the existence of this Agreement.
(b) Agent and NationsCredit each warrant that it has not heretofore
assigned any of its respective right, title or security interest in or to any of
Dealer's assets, and agrees that any assignment hereafter will be made subject
to this Agreement.
(c) This Agreement is a continuing Agreement and shall remain in full
force and effect in all respects until all amounts owing under the BT Facility
or NationsCredit Facility have been indefeasibly paid in full and the respective
Facility has been terminated. Any termination of this Agreement, however, shall
not impair any rights or priorities created hereunder with respect to amounts
advanced to Dealer or committed by NationsCredit to inventory vendors prior to
the effective date of termination.
(d) This Agreement may be modified only in writing signed by both parties.
No provision hereof shall be deemed waived by either party, unless it is in
writing and signed by an officer of the applicable party. Each waiver, if any,
shall apply only with respect to the specific instance involved, and shall in no
way impair any rights or obligations of any party in any other respect at any
other time.
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(e) TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES WAIVE ANY RIGHT TO
A TRIAL BY JURY FOR DISPUTES RELATING TO THIS AGREEMENT OR ANY RELATED MATTERS.
IN WITNESS WHEREOF, this Intercreditor Agreement is executed as of the date
first set forth above.
Address: BANKERS TRUST COMPANY, as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx By: /s/ Xxxxx X. Xxxx
Attn: Xxxxx Xxxx ------------------------------
Fax: (000) 000-0000 Title: VICE PRESIDENT
Address: NATIONSCREDIT COMMERCIAL
CORPORATION OF AMERICA
000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxxxxx 00000
Attn: Credit Manager By: /s/ Authorized Signatory
Fax: (000) 000-0000 ------------------------------
Title: VP Credit
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