INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT ("Agreement") is made and entered into as of
this 24th day of January 1995, by and between FOXMEYER DRUG COMPANY, a Kansas
corporation (together with its successors and assigns, the "Creditor"), COMERICA
BANK, a Michigan banking corporation (together with its successors and assigns,
the "Lender") and CONTINENTAL PHARMACY, INC., an Ohio corporation together with
its successors and assigns, the "Borrower").
RECITALS:
A. Creditor is a Supplier of pharmaceutical drugs and other goods
(collectively, the "Inventory") to Borrower. Creditor supplies such Inventory to
Borrower on an open account basis, pursuant to which Borrower is indebted to the
Creditor from time to time (all such indebtedness, together with all interest
and other charges payable in connection therewith, from time to time owing by
the Borrower to the Creditor being referred to herein as the "Supplier
Indebtedness"). Payment of the Supplier Indebtedness is secured by a security
interest (such security interest, as the same may be renewed, extended or
modified, and any security interest granted in replacement thereof or
substitution therefor, being referred to herein as the "Supplier Security
Interest") in certain assets of the Borrower, including without limitation,
Borrower's accounts, inventory and equipment.
B. Lender has agreed, and may otherwise hereafter agree, to extend credit
and other financial accommodations to Borrower secured by a security interest in
certain of Borrower's assets, including, without limitation, substantially all
of the assets subject to the Supplier Security Interest. In connection
therewith, Borrower and Lender have entered into a certain Letter Agreement
dated January _, 1995 which, together with certain of the other "Loan Documents"
(as defined herein) sets forth the terms and conditions pursuant to which Lender
will make certain of such credit and other financial accommodations available to
the Borrower (said Letter Agreement, together with all promissory notes and
security agreements related thereto, in each instance as amended, supplemented
or modified from time to time, are collectively referred to herein as the "Loan
Agreement" and, together with each other agreement, instrument or other document
executed in connection with any such financing arrangements as may exist from
time to time to which Lender and Borrower are parties, are referred to herein as
the "Loan Documents").
C. Lender, as a condition precedent to extending to Borrower the credit and
other financial accommodations provided for pursuant to the Loan Agreement,
requires the execution of this Agreement by Creditor and Borrower so as to
establish the relative priorities, rights and claims of the Creditor and Lender
in and to the assets of the Borrower otherwise subject to the Supplier Security
Interest and the amounts realized from the collection, sale, liquidation or
other disposition thereof.
D. It is to the direct benefit and advantage of Creditor for Lender to
enter into the Loan Agreement with Borrower and to extend to Borrower the credit
and other financial accommodations contemplated thereby.
PROVISIONS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged, in order to induce
Lender, at its option now and from time to time hereafter, to make loans or
extend credit or any other financial accommodations to or for the benefit of
Borrower, including, without limitation, under or pursuant to the provisions of
the Loan Agreement and the other Loan Documents, and to better secure Lender in
respect of the foregoing, the parties hereby agree as follows:
1. Certain Definitions. In addition to the terms defined in the recitals
hereto, the terms set forth below shall have the following meanings for the
purposes of this Agreement:
"Lender Collateral" shall mean the "Collateral" as defined in the
Loan Agreement.
"Lender Lien" shall mean the security interest in and lien upon
the Lender Collateral to the extent granted by Borrower in favor of
Lender pursuant to the Loan Agreement or any of the other Loan Documents.
"Lien" shall mean, in the case of the Lender, the Lender Lien and,
in the case of the Creditor, the Supplier Lien.
"Liens" shall mean the Lender Lien and Supplier Lien, collectively.
"Supplier Lien" shall mean the Supplier Security Interest and any
other security interest in or lien upon any property of the Borrower, or
Borrower's interest in any property, howsoever arising, securing the
repayment of the Supplier Indebtedness, or any part thereof.
"Senior Debt" shall mean all indebtedness, obligations and
liabilities of Borrower (including, without limitation, principal,
interest, fees, costs, expenses and reasonable attorneys' fees),
howsoever arising or incurred, now or hereafter owed by Borrower to
Lender.
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2. Enforcement Standstill Provisions.
(a) Creditor agrees that, notwithstanding any default by Borrower with
respect to payment of any Supplier Indebtedness, it will not attempt to levy
foreclose or otherwise realize upon, or otherwise exercise any right or remedy
that it may have with respect to, any of the Lender Collateral, unless and until
the Senior Debt shall have been fully paid and satisfied and all financing
arrangements between Borrower and Lender have been terminated in writing,
provided, however, that the foregoing shall not in any manner be deemed to
preclude the Creditor from otherwise exercising any such other rights, or taking
such other action, as it may deem necessary or appropriate to enforce payment of
the Supplier Indebtedness to the extent not involving recourse of any nature
against the Lender Collateral.
(b) If the Creditor takes, commences or otherwise initiates any action in
violation of Section 2(a) above, including, without limitation, any action to
enforce the Supplier Lien or otherwise realize upon any of the Lender
Collateral, Borrower or Lender may interpose as a defense or plea the making of
this Agreement and Lender may intervene and interpose such defense in its name
or in the name of Borrower, and either Borrower or Lender may by virtue of this
Agreement restrain the enforcement thereof in the name of Borrower or Lender.
3. Agreements Concerning Lender collateral.
(a) The Supplier Lien in or with respect to any Lender Collateral shall, so
long as any Senior Debt remains outstanding and until all of the financing
arrangements between Borrower and Lender have been terminated in writing, be
fully subordinate in all respects, and junior in right and priority, to the
Lender Lien. In furtherance of the foregoing, the Creditor acknowledges and
agrees that all amounts realized from the enforcement of any Lien against the
Lender Collateral shall be subject to application to the payment in full of the
Senior Debt prior to the application of any part thereof to the payment of the
Supplier Indebtedness in accordance with the provisions of Section 4 hereof.
(b) The priorities specified in Section 3(a) are applicable irrespective of
the time or order of attachment or perfection of the Liens or the time or order
of recording or filing of security agreements, other agreements or financing
statements, the giving or failure to give notice of the attachment of either
Lien and the taking of any other steps to perfect the Liens. Each of the Lender
and the Creditor consents to the filing or recording by the other of financing
statements with respect to its Lien.
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(c) The Creditor agrees that, so long as any Senior Debt remains
outstanding and until all financing arrangements between the Borrower and Lender
have been terminated in writing, the Lender may, without the requirement of any
notice to Creditor, other than as may be provided in subsection (e) below, make
all determinations and take or omit to take all actions and exercise or refrain
from exercising all rights and remedies that the Lender is permitted to make or
take under the Loan Agreement or any of the other Loan Documents or by law with
respect to the Lender Collateral, without any participation by or joinder or
consent of the Creditor, without any consideration of the interest of the
Creditor and without Liability to the Creditor. Without limiting the foregoing,
Creditor acknowledges and agrees that Lender shall, except as above provided
have the full right and authority, without requirement of any notice to, or the
consent of, the Creditor, to settle, compromise or waive any claims made with
respect to amounts due in respect of any accounts receivable of the Borrower, as
Lender may, in its sole and absolute discretion, determine appropriate,
including, without limitation, to discount any amounts due in respect thereof to
the extent deemed appropriate by Lender for any reason whatsoever, including for
purposes of facilitating payment and avoiding the costs of litigation or
collection efforts.
(d) If the Lender determines to exercise any right or remedy with respect
to the Lender Collateral as permitted by paragraph (c) of this Section 3, the
Creditor will take all action requested by the Lender to assist the Lender in
exercising such right or remedy, including, but not limited to, executing and
delivering such agreements, documents, instruments and releases as shall be
required to permit the collection, settlement, compromise, release, foreclosure,
sale or other disposition of the Lender Collateral free and clear of the
Supplier Lien.
(e) If, following the occurrence of any event of default under the Loan
Documents and Lender's making of demand for repayment of the Senior Debt, Lender
elects to terminate its financing arrangements with the Borrower and exercise
its rights to foreclose on the Lender Collateral and apply the proceeds thereof
to the payment of the Senior Debt, Lender will give Creditor prompt written
notice of its exercise of such right, provided, however, that the foregoing
provisions shall not be deemed to require such notice to creditor merely by
reason of Lender's collection, and application to payment of the Senior Debt, of
amounts payable in respect or accounts receivable of the Borrower received by
Lender, so long as Lender has not expressly agreed to discount or otherwise
compromise the amounts due in respect thereof and release the account debtor
from any further liability thereon.
(f) The Creditor hereby expressly waives any and all right, or rights, to
contest the validity, perfection, priority or enforceability of the Lender Lien
and any and all rights to affect the method, or to challenge the appropriateness
or commercial
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reasonableness, of any action taken, or omitted to be taken, by the Lender with
respect to the Lender Collateral and the enforcement of the rights of the Lender
therein, including, but not limited to, any right, objection or challenge based
upon or involving the marshalling of assets or liens. Without limiting the
foregoing, Creditor acknowledges and agrees that (i) Lender shall not have any
duty to the Creditor as to any Lender Collateral in its possession or control or
in the possession or control of any agent or nominee of it or as to any proceeds
therefrom or income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto and (ii) Lender shall be under no
duty to take any action or measures to protect the value of the Lender
Collateral for the benefit of the Creditor, including, without 1imitation, any
duty to commence, institute or otherwise pursue any litigation, collection
proceedings or other collection measures, including the engagement of any
collection agency, for the purpose of collecting amounts due in respect of, or
otherwise realizing upon, any Lender Collateral.
(g) Each of the Lender and the Creditor acknowledges that this Agreement
shall constitute notice of their respective interests in the Lender Collateral
as provided in Section 9-504 of the Uniform Commercial Code. The Creditor agrees
to execute, and deliver to Lender, such instruments or documents as Lender may
reasonably require to evidence the subordinated nature of the Supplier Lien,
including, if required by Lender, the execution of appropriate forms of UCC
financing statements, or amendments to existing financing statements of record
in favor of Creditor, evidencing the subordination of the Supplier Lien to the
Lender Lien for filing in the appropriate UCC filing records.
4. Payments or Distributions Received. So long as this Agreement is in
effect and until all of the Senior Debt has been fully paid and satisfied and
all of the financing arrangements between the Borrower and Lender have been
terminated in writing, all sums of money and property realized upon the
enforcement of any Lien against the Lender Collateral, and all distributions
which may be made in connection therewith, shall be paid or distributed directly
to the Lender. Should any such payment or distribution be received by Creditor
prior to the satisfaction of all Senior Debt and the termination of all
financing arrangements between Borrower and Lender, Creditor shall receive and
hold the same in trust, as trustee, for the benefit of Lender and shall
forthwith deliver the same to Lender in precisely the same form received (except
for the endorsement or assignment of Creditor where necessary). The Lender shall
apply all such sums of money and property, together with any sums of money and
property which may otherwise be realized upon the enforcement of the Lender Lien
on the Lender Collateral, as provided in the Loan Agreement.
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5. Assignment of Supplier Lien. Creditor agrees that, until the Senior Debt
has been paid in full and satisfied and all financing arrangements between
Borrower and Lender have been terminated in writing, the existence of this
Agreement shall be fully disclosed in connection with any assignment or transfer
by Creditor of the Supplier Lien, whether in whole or in part, and the rights of
any such assignee shall be made expressly subject to this Agreement in a manner
reasonably satisfactory to Lender.
6. Term. This Agreement shall constitute a continuing agreement between
Borrower, Creditor and Lender, and Lender may continue, without notice to the
Creditor, to lend monies, extend credit and make other accommodations to or for
the account of Borrower on the face hereof. This Agreement shall be irrevocable
by Creditor until all of the Senior Debt shall have been paid and fully
satisfied and all financing arrangements between Borrower and Lender have been
terminated in writing.
7. Additional Agreements Between Lender and Borrower. Lender, at any time
and from time to time, may enter into such agreement or agreements with Borrower
as Lender may deem proper, extending the time of payment of or renewing or
otherwise altering the terms of all or any of the Senior Debt or affecting the
security underlying any or all of the Senior Debt, and may exchange, sell,
release, surrender or otherwise deal with any such security without in any way
impairing or affecting this Agreement.
8. Waivers of Creditor. All of the Senior Debt shall be deemed to have been
made or incurred in reliance upon this Agreement, and Creditor expressly waives
all notice of the acceptance by Lender of the subordination and other provisions
of this Agreement, notice of the incurring of Senior Debt from time to time and
all other notices not specifically required pursuant to the terms of this
Agreement or by law. Creditor expressly waives reliance by Lender upon the
subordination and other provisions as herein provided.
9. Waivers of Parties. No waiver shall be deemed to be made by any party of
any of its rights hereunder, unless the same shall be in writing signed in
behalf of such party, and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of such party or the obligations of the other parties in any other respect at
any other time.
10. Borrower's Agreement. The Borrower hereby acknowledges its consent to
the intercreditor and subordination arrangements effected hereby and agrees to
be bound by the terms hereof.
11. Benefit of Agreement. Except as otherwise expressly set forth herein,
the provisions of this Agreement are solely for the benefit of the parties
hereto and are intended to regulate their
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rights and obligations between themselves, and said provisions shall not limit,
enlarge or in any way affect the obligations of the Borrower to any person not a
party hereto.
12. Notices. Any notice, demand or other communication required or
permitted under the terms of this Agreement shall be in writing and shall be
made by telegram, telex or electronic transmitter or certified or registered
mail, return receipt requested, and shall be deemed to be received by the
addressee one (1) business day after sending, if sent by telegram, telex or
electronic transmitter, and three (3) business days after mailing, if sent by
certified or registered mail. Notices shall be addressed as provided below:
(a) If to Creditor: Foxmeyer Drug Company
0000 Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxx Xxxxx
(b) If to Lender: Comerica Bank
One Detroit Center
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Mr. Xxxxxx Xxxxxx
(c) If to Borrower: Continental Pharmacy, Inc.
0000 X. Xxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
or at such other address as any party may designate by notice to the other
parties in accordance with the provisions hereof.
13. No Partnership. Neither the execution of this Agreement, nor any action
or transaction contemplated hereby, shall be construed to be the formation or
creation of a partnership or joint venture between or among the Lender and the
Creditor or the Borrower.
14. No Oral Modification. None of the terms and provisions of this
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by each of the Lender and the Creditor and, if its rights
would be adversely affected thereby, the Borrower.
15. 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 prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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16. Counterparts. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
17. Waiver of Trial by Jury. EACH PARTY HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING
UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
18. Governing Law. This Agreement shall be interpreted, and the rights and
liabilities of the parties hereto determined, in accordance with the laws and
decisions of the State of Ohio.
19. Parties. This Agreement shall be binding upon, and inure to the benefit
of, the Creditor, the Lender and the Borrower and their respective heirs,
personal representatives, successors and assigns, including, without limitation,
any subsequent holder of Senior Debt. Successors and assigns of Borrower shall
include, but not be limited to, a receiver, trustee, custodian or debtor-in-
possession.
20. Section Titles. The section titles 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
FOXMEYER DRUG COMPANY COMERICA BANK
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------ ---------------------------
Title: Senior Vice President Title: Vice President
--------------------------- ------------------------
CONTINENTAL PHARMACY, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
------------------------------
Title: Executive Vice President
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mee2861 (Comerica/CPI)
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