EXHIBIT 10.86
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of October 23, 2006, between Xxxxx
X. Xxx, an individual ("Vey"), and Oak Harbor Investment Properties, L.L.C., a
Louisiana limited liability company ("Oak Harbor").
WHEREAS, Oak Harbor has extended loan, to Sedona Corporation
("Sedona"), as evidenced by a certain promissory note of dated August 17, 2006
herewith from Sedona to Oak Harbor in the principal sum of ONE MILLION FORTY
THOUSAND FOUR HUNDRED TWO and 22 /100 Dollars ($1,040.402.22), (the "Oak Harbor
Note"), which note is secured by a first priority lien and pledge of Receivables
and certain other assets of Sedona pursuant to the terms and provisions of an
Amended and Restated Security Agreement of even date herewith between Sedona and
Oak Harbor (the "Oak Harbor Security Agreement"); and
WHEREAS, Vey has also extended loans to Sedona evidenced by: (i) a
convertible promissory note of even date herewith in the aggregate principal sum
of TWO MILLION SIX HUNDRED NINETY ONE THOUSAND TWO HUNDRED SIXTY THREE and
36/100 Dollars ($2,691,263.36) (the "Convertible Note"); and (ii) a promissory
note of even date herewith in the principal sum of ONE MILLION TWO HUNDRED
THIRTEEN THOUSAND NINE HUNDRED FIFTY TWO and 81/100 Dollars ($1,213,952,81) (the
"Bridge Note), which such notes are secured by a subordinate lien and pledge of
the Receivables and certain other assets of Sedona pursuant to the terms of the
Vey Security Agreement; and
WHEREAS, Vey has also extended loans and has made sums available to
Sedona pursuant to the terms of a revolving promissory note of September 26,
2006 herewith from Sedona to Vey, (the "Revolving Note") in the maximum
principal amount of FIVE HUNDRED THOUSAND and 00/100 Dollars ($500,000.00) (the
"Line of Credit"), which note is secured by a subordinate lien and pledge of the
Receivables and certain other assets of Sedona pursuant to the terms of a
Security Agreement of even date herewith between Sedona and Vey (the "Vey
Security Agreement"); and
WHEREAS, in order to induce Vey to extend the Line of Credit to
Sedona, Sedona has agreed to repay the advances made under the Revolving Note
from the proceeds of the Receivables, and
WHEREAS, Oak Harbor has consented to the distribution of the proceeds
of the Receivables to Vey pursuant to the Revolving Notes;
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
Section 1. CERTAIN DEFINED TERMS. As used in this Agreement, the
following capitalized terms shall have the meanings respectively assigned to
them below.
"AGREEMENT" shall mean this Intercreditor Agreement, as the same may
be amended, supplemented, modified, amended or restated from time to
time in the manner provided herein.
"NOTES" shall collectively mean the Oak Harbor Note, the Revolving
Note, the Convertible Note and the Bridge Note.
"RECEIVABLES" shall mean accounts, accounts receivable, rights to
receive payment existing or hereafter arising and all rights, remedies
and privileges additions and accessions to the foregoing, and all
increases, substitutions, replacements and substitutions thereof and
all cash and non-cash proceeds and products of the foregoing, whether
now owned or hereafter, acquired or created by Sedona, including but
not limited to those resulting from the sale, exchange, collection or
other disposition of Sedona's inventory or assets, along with the
proceeds from any future sales of debt or equity securities of Sedona,
less any costs or expenses incurred with respect to the collection of
the sums owed to Sedona.
"SECURITY AGREEMENTS" shall collectively mean the Oak Harbor Security
Agreement and the Vey Security Agreement.
Section 2. SUBORDINATION OF THE REVOLVING NOTE, BRIDGE NOTE AND THE
CONVERTIBLE NOTE. Vey hereby postpones and subordinates, to the extent and in
the manner provided in this Agreement, any and all obligations of Sedona
pursuant to the Revolving Note, the Bridge Note and the Convertible Note
(collectively the "Vey Notes") to the obligations arising under the Oak Harbor
Note and any renewals, extensions, increases or modifications to such note.
Until the Oak Harbor Note has been fully and finally paid, neither Sedona nor
Vey shall take or permit any action prejudicial to or inconsistent with Oak
Harbor's priority position over Vey that is created by this Agreement. Vey
agrees that the Oak Harbor Note may, in whole or in part, be renewed, extended,
increased, modified, accelerated, compromised, settled or released and that any
collateral security or liens for the Oak Harbor Note may, from time to time in
whole or in part, be exchanged, sold, released or surrendered, as Oak Harbor may
deem advisable, all without impairing the subordination contained in this
Agreement.
Section 3. FORBEARANCE OF ENFORCEMENT. So long as Oak Harbor has not
received notice of default under any of the Notes, and until such time as the
Revolving Note has been satisfied and paid in full, the proceeds of the
Receivables may be applied, as and when same are collected, to payment of the
principal sums, accrued interest, and any late charges under the Revolving Note.
Section 4. PRIOR PAYMENT OF THE OAK HARBOR NOTE UPON ACCELERATION OF
THE VEY NOTES. In the event that any of the Vey Notes are declared due and
payable before their stated maturity, then and in such event no payment or
distribution of any kind or character shall be made in respect of the Vey Notes
and Oak Harbor shall be entitled to receive payment in full in cash of all
amounts due or to become due or in respect of the Oak Harbor Note (whether or
not an event of default has occurred thereunder or such Oak Harbor Note has been
declared due and payable prior to the date on which it would otherwise have
become due and payable), before Vey is entitled to receive any payment or
distribution of any kind or character (including any payment which may be
payable by reason of the payment of any other indebtedness of Sedona being
subordinate to the payment of the Vey Notes by Sedona).
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Section 5. PRIORITY. As long as notice of an event of default has not
been received pursuant to the terms of any of the Notes, payments shall be made
and received by Vey or Oak Harbor or their successors or assigns in accordance
with the terms and conditions of such Notes. Except as otherwise set forth in
this Agreement, Vey and Oak Harbor and their successors and assigns hereby agree
that as between themselves, if notice of an event of default has been received
under any of the Notes: (a) all payments received thereafter pursuant to the
Notes shall be applied in accordance with the following order of priority: (i)
payment in full of the Oak Harbor Note; (ii) payment in full of the Bridge Note;
(iii) payment in full of the Convertible Note; and (iv) payment in full of the
Revolving Note; and (b) except as expressly provided herein, if Vey or Oak
Harbor shall collect or receive any sums or any collateral for any party they
shall forthwith deliver such sums to the proper party in the form received.
Until such delivery, the sums shall be held in trust for the benefit of the
proper party and shall not be commingled with other funds or property.
Section 6. SUBORDINATION ABSOLUTE. The parties hereto covenant and
agree that their subordinations and other covenants and agreements under this
Agreement shall: (i) be absolute and unconditional, irrespective of the
validity, legality, binding effect or enforceability of any terms and provisions
of the Notes or the Security Agreements; and (ii) remain and continue in full
force and effect without regard to any waiver of any term or provision of the
Notes and Security Agreement.
Section 7. VALIDITY OF JUNIOR DEBT. The provisions of this Agreement
subordinating the Vey Notes are solely for the purpose of defining the relative
rights of Oak Harbor and Vey and shall not impair, as between Vey and Sedona,
the obligation of Sedona, which is unconditional and absolute, to pay the Vey
Notes in accordance with its terms, nor shall any such provisions prevent Vey
from exercising all remedies otherwise permitted by applicable law or under any
instrument or agreement evidencing the Vey Notes upon default thereunder,
subject to the terms hereof and the rights of Oak Harbor hereunder to receive
cash, property or securities otherwise payable or deliverable to Vey until the
Oak Harbor Note is paid in full.
Section 8. DURATION AND TERMINATION. This Agreement shall constitute a
continuing agreement of subordination, and shall remain in effect until the
Notes have been fully and finally paid. Neither the death, nor the bankruptcy of
Vey shall effect a termination hereof. Oak Harbor may, without notice to Vey,
extend or continue credit and make other financial accommodations to, or for the
account of Sedona in reliance upon this Agreement. The obligations of Vey under
this Agreement shall continue to be effective, or be reinstated, as the case may
be, if at any time any payment in respect of the Oak Harbor Note is rescinded or
must otherwise be restored or returned by Oak Harbor by reason of any
bankruptcy, reorganization, arrangement, composition or similar proceeding or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, Sedona or any substantial part of its property,
or otherwise, all as though such payment had not been made.
Section 9. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Louisiana without regard to the choice of law or conflicts of law provisions
thereof. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the non-exclusive jurisdiction of the courts of the State
of Louisiana and of the United States of America, located in the State of
Louisiana, for any action, proceeding or investigation in any court or before
any governmental authority ("Litigation") arising out of or relating to this
Agreement and the transactions contemplated hereby, and further agrees that
service of any process, summons, notice or document by U.S. registered mail
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to its respective address set forth in this Agreement shall be effective service
of process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transaction contemplated hereby in the courts of the State of Louisiana or the
United States of America, located in the State of Louisiana, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such Litigation brought in any such court has been brought
in an inconvenient forum.
Section 10. COUNTERPARTS/FACSIMILE/AMENDMENTS. This Agreement may be
executed in multiple counterparts, each of which may be executed by less than
all of the parties and shall be deemed to be an original instrument which shall
be enforceable against the parties actually executing such counterparts and all
of which together shall constitute one and the same instrument. Except as
otherwise stated herein, in lieu of the original documents, a facsimile
transmission or copy of the original documents shall be as effective and
enforceable as the original. This Agreement may be amended only by a writing
executed by all parties.
Section 11. ENTIRE AGREEMENT. This Agreement, sets forth the entire
agreement and understanding of the parties relating to the subject matter hereof
and supersedes all prior and contemporaneous agreements) negotiations and
understandings between the parties, both oral and written relating to the
subject matter hereof.
Section 12. SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
Section 13. HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
Section 14. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of Oak Harbor and its successors and its assigns, and to
Vey and his heirs, legal representatives, administrators, executors, successors
and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by the undersigned, thereunto duly authorized, as of the date first
set forth above.
Oak Harbor Investment Properties LLC
By:
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____________President
By:
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Xxxxx X. Xxx
The undersigned hereby agrees to comply with all of the terms and
provisions of this Agreement in all respects.
Sedona Corporation
By:
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Xxxxx X. Xxxxxx
President and CEO
By:
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Xxxxx X. Xxxxx
Vice President and CFO
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