EXHIBIT 10.17
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of April 17, 1997 (this "Agreement"), by
and among each of DayStar Partners, L.P., a California limited partnership,
("DayStar"), acting as Agent for the DayStar Lenders (as such term is defined
herein), QPS Bridge, LLC, a New York limited liability company ("QPS Bridge")
acting as Agent (the "Agent") for the purchasers (the "Bridge Lenders") of
Senior Secured Notes (the "Bridge Notes") of the Borrower (as herein defined)
pursuant to a Securities Purchase Agreement dated as of April 17, 1997 (the
"Bridge Lender Purchase Agreement") (DayStar and each of the Bridge Lenders is
herein referred to individually as a "Lender" and collectively, "Lenders") and
QuietPower Systems, Inc., a Delaware corporation ("Borrower").
BACKGROUND
The DayStar Lenders have entered into financing arrangements with Borrower
pursuant to certain agreements and related documents which provide for security
interests in all tangible and intangible property and assets of Borrower. The
Bridge Lenders have purchased $2,000,000 of Bridge Notes from Borrower, to be
secured by a security interest in all of the tangible and intangible property
and assets of Borrower. As an inducement to the Bridge Lenders to purchase the
Bridge Notes from the Borrower, and to set forth certain agreements with respect
to the respective security interests of each Lender in the Collateral, DayStar,
on behalf of the DayStar Lenders, and the Agent, on behalf of the Bridge
Lenders, have agreed to enter into this intercreditor agreement to set forth
their respective rights with respect to their "Liens" in the assets of Borrower.
NOW, THEREFORE, in consideration of the foregoing premises and for good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
I. DEFINITIONS
1.1 General Terms. For purposes of this Agreement, the following terms
shall have the following meanings:
"Books and Records" shall mean all books and records, whether now
owned or hereafter acquired or arising, including, but not limited to, customer
lists, credit files, computer programs, printouts and other computer materials
and records of the Borrower pertaining to any Collateral.
"Bridge Lender Agreements" shall mean the Transaction Documents, as
defined in the Bridge Lender Purchase Agreement, as such Transaction Documents
may be amended, modified or supplemented.
"Bridge Lender Obligations" shall mean the unpaid principal amount
of, and interest (including, without limitation, interest accruing after the
maturity of the Bridge Notes, and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization of
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) on the
Bridge Notes, and all other obligations and liabilities of the Borrower to the
Bridge Lenders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Transaction Documents, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees and disbursements
of counsel to the Bridge Lenders) or otherwise.
"Code" shall mean the United States Bankruptcy Code.
"Collateral" shall mean all tangible and intangible property or
assets of the Borrower, now owned or hereafter acquired by Borrower in or upon
which any of the Lenders now or hereafter has a Lien, and all proceeds of such
property (including, without limitation, insurance and condemnation proceeds and
escrow accounts covering any such property).
"DayStar Agreements" shall mean the Note Purchase Agreements dated
May 24, 1996 between the Borrower and each of (i) DayStar Partners, L.P., (ii)
Xxxxxxx Xxx, (iii) The Xxxxx 1987 Family Trust, Xxxxxxx Xxxxxx Xxxxx and
Xxxxxxxx Xxx Xxxxx, (iv) J. Xxxxxx Xxxxxxx, and (v) Westminster Associates,
Ltd., and all of the collateral documents thereto, including, without
limitation, the DayStar Notes, the Security Agreement dated as of May 24, 1996,
by and between the Borrower and DayStar and the other DayStar Lenders, as
amended, modified and supplemented, and each of the other documents creating the
DayStar Obligations as defined below.
"DayStar Lenders" shall mean those persons holding the DayStar Notes
(as such term is defined in the in the Bridge Lender Purchase Agreement).
"DayStar Obligations" shall mean, after the payment of $133,750 in
principal and $16,752 in interest (which represents a complete repayment of the
interest accrued through the date hereof on the principal being repaid) being
made to the DayStar Lenders upon the closing of the transactions contemplated by
the Bridge Lender Agreements, up to $401,250 in original principal amount of
DayStar Notes issued to DayStar and the other DayStar Lenders, plus interest
(including, without limitation, interest accruing after the maturity of the
DayStar Notes, and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization of like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) accrued thereon from and
after the date hereof; provided, however, that DayStar Obligations shall exclude
(i) any indebtedness or other obligation for borrowed money to the DayStar
Lenders other than the outstanding $401,250 in principal amount of DayStar Notes
(plus interest hereafter accruing), (ii)
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any amount of indebtedness owing under the DayStar Notes which is the result of
the re-lending of amounts outstanding under the DayStar Notes on the date hereof
which are subsequently repaid, and (iii) all other obligations and liabilities
of the Borrower to the DayStar Lenders, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the DayStar Agreements, whether
on account of reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees and disbursements of counsel to the
DayStar Lenders) or otherwise, except for such reasonable costs and expenses of
counsel to the DayStar Lenders in connection with enforcing the rights of the
DayStar Lenders upon any Event of Default under the DayStar Agreements but
consistent with and not in derogation of or duplicative of the Agent's exclusive
rights with respect to the Collateral and any process thereon as described in
this Agreement.
"Enforcement Action" shall mean, collectively or singly, for one or
more of the Lenders, to (i) declare an Event of Default and make demand for
payment, and/or accelerate the indebtedness of the Borrower to such Lender, (ii)
take possession of any material amount of Collateral, or (iii) exercise any
Secured Lender Remedies.
"Enforcement Notice" shall mean a written notice delivered at a time
when an Event of Default has occurred and is continuing, by any Lender to the
other Lenders, (i) specifying the relevant Event of Default, and (ii) stating
that an Enforcement Action shall commence or has commenced.
"Event of Default" when used throughout this Agreement shall mean
any default, event of default, or any event which, with notice or the passage of
time (or both) would constitute a default or an event of default under any of
the Lending Agreements.
"Lending Agreements" shall mean, collectively, the DayStar
Agreements and the Bridge Lender Agreements, each as from time to time in
effect.
"Liens" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights of way and the like), lien
(statutory or other), security agreement or transfer intended as security,
including without limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, or any financing
lease having substantially the same economic effect as any of the foregoing.
"Person" shall mean an individual, a partnership, a corporation
(including a business trust), a joint stock company, a trust, an unincorporated
association, a joint venture, or other entity or a government or any agency,
instrumentality or political subdivision thereof.
"Secured Lender Remedies" means any action which results in the
sale, foreclosure, realization upon, or a liquidation of any Collateral,
including without limitation, the
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exercise of any remedies or rights of a "Secured Party" under Article 9 of
the UCC, such as, without limitation, the notification of account debtors and
voting and receiving distributions with respect to pledged stock.
"UCC" shall mean Article 9 of the Uniform Commercial Code, as in
effect on the date hereof in the State of New York.
1.2 Certain Matters of Construction. The terms "wherein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders wherever appropriate in the context, terms
used herein in the singular also include the plural and vice versa. All
references to statutes and related regulations shall include any amendments of
same and any successor statues and regulations. All references to any
instruments or agreements, including, without limitation, references to any of
the Lending Agreements shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof.
II. PRIORITIES, SUBORDINATIONS AND RELATED MATTERS.
2.1 Priority of Rights in Collateral
(a) The Agent agrees and acknowledges on behalf of the Bridge
Lenders, subject to the terms of this Agreement, that regardless of the time or
order of attachment, or the time, order, or manner of perfection, or the time or
order of filing of financing statements, or any provisions of the UCC or
applicable law, as between the parties the DayStar Lenders shall have a first
and prior Lien in the Collateral.
(b) DayStar agrees and acknowledges on behalf of the DayStar
Lenders, subject to the terms of this Agreement, that regardless of the time or
order of attachment, or the time, order, or manner of perfection, or the time or
the order of filing of financing statements, or any provision of the UCC or
applicable law, as between the parties the Bridge Lenders shall have a second
priority Lien in the Collateral.
(c) With respect to proceeds from the sale of the Collateral, the
Agent shall turn or pay over to DayStar with respect thereto, proceeds of any
disposition of such Collateral until the satisfaction of all obligations of the
Borrower with respect to the DayStar Obligations then outstanding, and until
such time, the Agent shall hold such proceeds of Collateral in trust for the
benefit of the DayStar Lenders. DayStar agrees to release the Lien of the
DayStar Lenders in the Collateral and any and all other claims with respect to
the Borrower, under the DayStar Agreements or otherwise, promptly upon
satisfaction of the DayStar Obligations and agrees to execute any additional
instruments or take any action reasonably necessary to effectuate the same.
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(d) The subordination and priorities specified in this Section 2.1
are expressly conditioned upon the nonavoidability and perfection of the Lien to
which another Lien is subordinated and, if the Lien to which another Lien is
subordinated is not perfected or is avoidable, for any reason, then the
subordinations and relative priority agreements provided for herein shall not be
effective as to the particular Collateral (and only as to such particular
Collateral) which is the subject of the unperfected or avoidable Lien. The
subordination and priorities provided in this Section 2.1 shall not be altered
or otherwise affected by any amendment, modification, supplement, extension,
renewal, restatement or refinancing of the indebtedness payable under any
Lending Agreement, nor by any action or inaction which any Lender may take or
fail to take in respect of any Collateral.
2.2 Perfection. Each Lender shall be solely responsible for perfecting and
maintaining the perfection of its Lien in and to each item constituting the
Collateral in which such Lender has been granted a Lien. The foregoing
provisions of this Agreement are intended solely to govern the respective Lien
priorities as between the Lenders and shall not impose on the Lenders any
obligation in respect of the disposition of proceeds of foreclosure on any
Collateral which would conflict with prior perfected claims therein in favor of
any other Person. Each Lender agrees that it will not contest the validity,
perfection, priority or enforceability of the Liens of the other Lender upon its
respective Collateral and that, as between the Lenders, the terms of this
Agreement shall govern even if part or all of the indebtedness owed to such
Lender under the respective Lending Agreements are avoided, disallowed, set
aside or otherwise invalidated in any judicial proceeding or otherwise. Borrower
agrees that it will not contest the validity, perfection, priority or
enforceability of the Liens.
2.3 Management of Collateral. Subject to the terms hereof, the Agent, on
behalf of the Bridge Lenders, shall have the exclusive right to manage, perform
and enforce the terms of the Lending Agreements with respect to its collateral
and to exercise and enforce all privileges and rights thereunder according to
its discretion and the exercise of its business judgment, including, without
limitation, the exclusive right to enforce or settle insurance claims, take or
retake control or possession of such Collateral and to hold, prepare for sale,
process, sell, lease, dispose of, or liquidate such Collateral.
2.4 Use of Collateral. Notwithstanding anything to the contrary contained
herein or in any of the Lending Agreements, only the Agent, on behalf of the
Bridge Lenders, shall have the right to permit or approve the sale, transfer or
other disposition of the Collateral, whether by Borrower or otherwise. DayStar,
as agent on behalf of the DayStar Lenders, will, immediately upon the request of
the Agent, release or otherwise terminate the Liens of the DayStar Lenders upon
such Collateral, to the extent such Collateral is sold or otherwise disposed of
by the Agent or by Borrower with the consent of the Agent, and DayStar will
immediately deliver such release documents as the Agent may require in
connection therewith.
2.5 Distribution of Proceeds of Collateral. The proceeds of Collateral
shall be used first to pay the costs and expenses of realizing such proceeds and
then shall be paid to DayStar
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up to the amount of the DayStar Obligations with any residual or additional
proceeds after satisfaction of the DayStar Obligations being paid to the Bridge
Lenders. DayStar agrees that neither the Agent nor the Bridge Lenders have any
other obligations to the DayStar Lenders other than the obligation to pay to
DayStar the proceeds, if any, of Collateral, as set forth in this Article II, up
to the amount of the DayStar Obligations.
2.6 Enforcement Action.
(a) So long as the Bridge Lender Obligations are outstanding, none
of the DayStar Lenders shall take any action to commence any Enforcement Actions
or to enforce their Secured Lender Remedies with respect to Collateral;
provided, if (i) DayStar shall have notified the Agent in writing of an Event of
Default under the DayStar Agreements and (ii) within one hundred twenty days
(120) days thereafter the Agent shall not have commenced action to foreclose on
the Collateral or realize upon or enforce any of its rights with respect to the
Collateral, then DayStar may commence its own action to foreclose on the
Collateral or to realize upon or enforce any of its rights with respect to the
Collateral as agent on behalf of the Bridge Lenders and all proceeds in excess
of the DayStar Obligations shall be paid to the Bridge Star Lenders. DayStar, as
agent on behalf of the DayStar Lenders, waives any rights to a commercially
reasonable disposition of Collateral under the UCC.
(b) Subject to paragraphs 2.5 and 2.6(a) hereof, the Agent, at its
option, may take any action to accelerate or demand payment of the Bridge Lender
Obligations and to foreclose or realize upon or enforce any of its rights with
respect to Collateral, regardless of its effect on the DayStar Lenders. The
Agent acknowledges that it shall advise DayStar of the liquidation of the
Collateral.
2.7 Information Sharing. Upon the occurrence and continuance of an
Enforcement Action, in the event that any Lender, in the exercise of its
respective rights under the Lending Agreements, shall receive possession or
control of any Books and Records which contain information identifying or
pertaining to any of the property of any Borrower in which any other Lender has
been granted a Lien, it shall notify the other party that is has received such
Books and Records and shall, as promptly as practicable thereafter, make
available to the other party duplicate copies of such Books and Records in the
same form as the original. All expenses incurred by such Lender in performing
its obligations under this paragraph shall be borne by the Borrower and shall
constitute indebtedness under the such Lender's agreements with Borrower. The
failure of either Lender to share information shall not create a cause of action
against the party failing to share information or create any claim on behalf of
Borrower or any third party.
2.8 Notices of Default and Certain Events. Each of the Agent on behalf of
the Bridge Lenders, on the one hand, and DayStar, as agent on behalf of the
DayStar Lenders, on the other, hereby undertakes in good faith to notify the
other and the Borrower of the occurrence of any of the following as applicable:
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(a) occurrence or existence of an Event of Default (simultaneously
with the sending of such notice to the Borrower) under the respective Lending
Agreements;
(b) payment in full by Borrower (whether as a result of refinancing
or otherwise) of all obligations under the respective Lending Agreements; or
(c) the exercise of any Secured Lender Remedies.
Each of the Agent on behalf of the Bridge Lenders, on the one hand, and DayStar,
as agent on behalf of the DayStar Lenders, on the other, agrees to use its best
efforts to give to the other such notice, but the failure to do so shall not
affect the validity of such notice or create a cause of action against the party
failing to give such notice or create a claim or right on behalf of any third
party. The sending of such notice shall not oblige the other Lender to cure such
Event of Default.
2.9 Agreement Absolute. This Agreement shall be and remain absolute and
unconditional under any and all circumstances, and no act or omission on the
part of any Lender shall affect or impair the agreement of any other Lender
hereunder.
2.10 Bankruptcy Issues. This Agreement shall continue in full force and
effect after the filing of any petition by or against Borrower under the Code
and all converted or succeeding cases in respect thereof. All references herein
to Borrower shall be deemed to apply to a trustee for Borrower and Borrower as
debtor-in-possession.
III. PRIORITY OF PAYMENTS
The Bridge Lenders hereby subordinate, solely with respect to assets of
the Borrower comprising Collateral, payment of the Bridge Lender Obligations to
payment of the DayStar Obligations. Notwithstanding the foregoing, provided no
default or event of default shall have occurred under the DayStar Agreements,
and provided such payment does not cause the occurrence of such a default or
event of default, Borrower may make scheduled payments of principal and interest
under the Bridge Notes. This paragraph is intended to reflect the agreements of
the Lenders with regard to the priority of payments, and nothing herein shall
affect in any way any obligations of Borrower to any of the Lenders under the
Lending Agreements.
IV. MISCELLANEOUS
4.1 Notices. All notices, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given when
(a) delivered by hand, (b) sent by telex or telecopier (with receipt confirmed),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal Express or
other express delivery service (receipt requested), in each case to the
appropriate addresses, telex numbers and telecopier numbers set forth below (or
to such other
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addresses, telex numbers and telecopier numbers as a party may
designate as to itself by notice to the other parties complying as to delivery
with this Section):
(a) If to DayStar:
DayStar Partners, L.P.
00000 X. XxXxxx Xxxx., Xxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, President
Telecopier: (000) 000-0000
with a copy to:
Coblentz, Cahen, XxXxxx & Breyer, LLP
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telecopier: (000) 000-0000
(b) If to Company:
QuietPower Systems, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(c) If to Agent
QPS Bridge, LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
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Telecopier No.: (000) 000-0000
with a copy to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx Esq.
Telecopier No.: (000) 000-0000
4.2 Insurance. Proceeds of the Collateral include insurance proceeds, and
therefore the priorities set forth in Section 2.1 govern the ultimate
disposition of casualty insurance proceeds. The Agent, subject to the Bridge
Lender rights under the Transaction Documents, shall have the sole and exclusive
right, as against the other Lender, to adjust settlement of insurance claims in
the event of any covered loss, theft or destruction of such Collateral. All
proceeds of such insurance shall be applied as provided in Article II hereof,
and the other Lender shall cooperate (if necessary) in a reasonable manner in
effecting the payment of insurance proceeds as provided herein.
4.3 Dealings with Borrower: Agreement Continues. The subordination and
agreements as to relative priority as set forth above shall remain in full force
and effect, regardless of whether either Lender in the future seeks to rescind,
amend, terminate or reform by litigation or otherwise such Lender's agreement
with Borrower.
4.4 No Additional Rights For Borrower Hereunder. If any Lender shall
enforce its rights or remedies in violation of the terms of this Agreement,
Borrower agrees that it shall not use such violation as a defense to any action
by any Lender, nor assert such violation as a counterclaim or basis for set off
or recoupment against any Lender.
4.5 Section 9-504 Notice and Waiver of Marshaling. Lenders acknowledge
that this Agreement shall constitute notice of their respective interests in the
Collateral as provided by Section 9-504 of the UCC. Each Lender hereby waives
any and all rights to compel the marshaling of any of the Collateral.
4.6 Independent Credit Investigations. None of the Lenders nor any of
their respective directors, officers, agents or employees shall be responsible
to any other Lender or to any other person, firm or corporation for Borrower's
solvency, financial condition or ability to repay the DayStar Obligations or the
Bridge Lender Obligations, or for statements of Borrower, oral or written, or
for the validity, sufficiency or enforceability of the DayStar Obligations or
the Bridge Lender Obligations, or any Liens granted by Borrower to the Lenders
in connection therewith. Each Lender has entered into its respective financing
agreements with the Borrower
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based upon its own independent investigation, and makes no warranty or
representation to the other Lenders nor does it rely upon any representation of
the other Lenders with respect to matters identified or referred to in this
paragraph.
4.7 Amendments to Financing Arrangements or to this Agreement. Nothing
contained in this Agreement shall in any manner limit or restrict the ability of
any Lender from increasing (subject to the limitations set forth in the
definition of DayStar Obligations) or changing the terms of the loans under
their respective Lending Agreements, or otherwise to waive, amend or modify the
terms and conditions of their respective Lending Agreements, in such manner as
such Lender and Borrower shall mutually determine, and each Lender agrees that
none of such actions shall in any manner affect or impair the relative Lien
priorities and subordination established by this Agreement in respect of the
indebtedness payable under the Lending Agreements. Upon reasonable request of a
Lender, the other Lenders shall provide copies of all such modifications or
amendments to their respective Lending Agreements and copies of all other
documentation relevant to the Collateral. All waivers to, and 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, but shall not
require any agreement or consent by the Borrower thereto.
4.8 Binding Effect; Successors and Assigns. Replacement Financing. This
Agreement shall be a continuing agreement, shall be binding upon and shall inure
to the benefit of the parties hereto from time to time and their respective
successors and assigns, shall be irrevocable and shall remain in full force and
effect until all indebtedness and other obligations under the Lending Agreements
shall have been satisfied or paid in full in cash and the Lending Agreements
shall have been irrevocably terminated, but shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any amount paid by or on behalf of Borrower with regard to the indebtedness
and other obligations under the respective Lending Agreements is rescinded or
must otherwise be restored or returned upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Borrower, or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee,
custodian, or similar officer, for Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made. This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by Borrower or any other person not a party to this Agreement. In
the event Borrower's obligations to the Lenders are to be refinanced in full by
an institutional lender it will, at the request of such other Lender or
refinancer, enter into an intercreditor agreement with such refinancer
substantially in the form hereof.
4.9 Survival. Wherever possible, each provision of this Agreement shall be
interpreted in such manner to be effective and valid under applicable law, but
if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. The right of any Lender to
enforce the provisions of this Agreement shall not be prejudiced or impaired by
any act or
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omitted act of Borrower or such Lender including forbearance, waiver, consent,
compromise, amendment, extension, renewal, or taking or release of security in
respect of any obligations or noncompliance by Borrower with such provisions,
regardless of the actual or imputed knowledge of such holder of the obligations.
4.10 Governing Law; Proceedings. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT, GIVING
EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH LENDER, AND THE BORROWER, IRREVOCABLY SUBMITS, GENERALLY AND
UNCONDITIONALLY TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE
OF NEW YORK AND THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF THE STATE OF NEW YORK, IN RESPECT OF ANY PROCEEDING BY ANY
PARTY HERETO INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER OR CLAIM IN ANY WAY
ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
AGREEMENT, AND IRREVOCABLY AGREE TO BE BOUND BY THE JUDGMENT OF ANY SUCH COURT.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED
BY LAW. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH LENDER AND THE
BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY CERTIFIED MAIL AT THE ADDRESS
TO WHICH NOTICES ARE TO BE GIVEN. EACH PARTY HERETO WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY SUCH COURT AND
SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED
UPON FORUM NON CONVENIENS.
4.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
4.12 Headings. The headings in this Agreement are for convenience of
reference only, and shall not alter or otherwise affect the meaning hereof.
4.13 Representations and Warranties. Each Lender represents and warrants
to the other that it is the holder of the Liens which secure or will secure the
indebtedness payable under its respective loan agreements with Borrower. Each
Lender agrees that it shall not assign or transfer any of its Liens without (i)
notice being given to the other Lender and (ii) such assignment or transfer
being made expressly subject to the terms of this Agreement. Each Lender
warrants to the other Lender that it has full right, power and authority to
enter into this Intercreditor Agreement.
4.14 Consent to Liens of Bridge Lender. DayStar, as agent on behalf of the
DayStar Lenders, hereby consents to the granting by Borrower to the Bridge
Lender of Liens in and to the
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Collateral specified in the Bridge Lender Agreements as of the date hereof and
waives any event of default under the DayStar Agreements which otherwise might
have been caused solely by the granting of such Liens.
IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement
to be executed on the day and date first above written.
QUIETPOWER SYSTEMS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: President
DAYSTAR PARTNERS, L.P., as Agent on
behalf of the DayStar Lenders
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: President of General Partner
QPS BRIDGE, LLC,
as Agent on behalf of the Bridge Lenders
By: Xxxxxxxx, Xxxxxxxx & Co,. L.P., Manager
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: General Partner
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