INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "Agreement") made as of this 13th day
of February, 1997, by and between BANKAMERICA BUSINESS CREDIT, INC., a
Delaware corporation, with offices at 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000 ("BABC"), and XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY, XXXX XXXXXXX VARIABLE LIFE INSURANCE COMPANY, XXXX XXXXXXX LIFE
INSURANCE COMPANY OF AMERICA, NYNEX MASTER PENSION TRUST, THE LONG-TERM
INVESTMENT TRUST and SIGNATURE 1A (CAYMAN), LTD. (collectively referred to
herein as "TERM LENDER") with respect to certain financing arrangements with
EL DORADO CHEMICAL COMPANY ("EDC"), SLURRY EXPLOSIVES CORPORATION ("Slurry")
and NORTHWEST FINANCIAL CORPORATION ("Northwest") (collectively referred to
herein as "Borrower").
R E C I T A L S:
TERM LENDER has made a seven year term loan to Borrower in the principal
amount of $50,000,000 pursuant to the TERM LENDER Loan Documents (as defined
in this Agreement).
BABC has made and intends to continue making loans and advances from
time to time to EDC and Slurry pursuant to and subject to the BABC Loan
Documents (as defined in this Agreement). BABC and TERM LENDER desire to
confirm and agree as to the relative priority of their respective security
interests in, and liens on, the Collateral (as defined in this Agreement) and
certain other rights, priorities and interests.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms have the following
meanings, respectively, unless the context otherwise clearly requires:
"BABC Claim" means all of the obligations of EDC and Slurry to BABC as
set forth in the BABC Loan Documents, including but not limited to, all sums
loaned and advanced to or for the benefit of EDC and Slurry at any time, any
interest on such sums (including interest accruing after the commencement of a
bankruptcy proceeding by or against EDC and Slurry), any future advances, any
costs of preservation of the Collateral and of collection or enforcement,
including reasonable attorneys' and paralegals' fees and any prepayment
premiums.
"BABC Collateral" means collectively (i) all Receivables, Inventory,
documents and instruments representing the Receivables and all Proceeds
thereof, wherever located and whether now existing or hereafter arising or
acquired; (ii) all moneys, securities and other property and the Proceeds
thereof, now or hereafter held or received by, or in transit to, BABC from or
for Borrower, whether for safekeeping, pledge, custody, transmission,
collection or otherwise, including, without limitation, all of Borrower's
deposit accounts, credits, and balances with BABC and all claims of EDC and
Slurry against BABC at any time existing; (iii) all of the deposit accounts
with any financial institutions with which EDC or Slurry maintains deposits;
and (iv) all books, records and other property relating to or referring to any
of the foregoing, including, without limitation, all books, records, ledger
cards, data processing records, computer software and other property and
general intangibles at any time evidencing or relating to the Receivables,
Inventory, Documents, Instruments, Proceeds, and other property referred to
above.
"BABC Loan Documents" means, singularly or collectively as the context
may require, the Loan and Security Agreement dated as of December 12, 1994,
executed and delivered by and among EDC, Slurry and BABC (the "Loan and
Security Agreement), the "Loan Documents" as defined in the Loan and Security
Agreement, and any and all other documents, instruments, certificates, and
agreements executed and delivered in connection therewith, as any of them may
be amended, modified, extended or supplemented from time to time.
"Claim" means either the TERM LENDER Claim or the BABC Claim.
"Code" means the Uniform Commercial Code as in effect on the date of
this Agreement and as amended from time to time, of the state or states having
jurisdiction with respect to all or any portion of the Collateral from time to
time. Unless otherwise defined in this agreement or unless the context
otherwise requires, all terms used in this agreement which are defined by the
Code shall have the meanings stated in the Code.
"Collateral" means the BABC Collateral and the TERM LENDER Collateral
and the Proceeds and products of such collateral, and where applicable, the
proceeds of insurance or escrow accounts covering any such property.
"Enforcement Action" means, with respect to any Collateral:
repossessing, foreclosing, selling, leasing or otherwise disposing of all or
any part of such Collateral, or exercising notification or collection rights
with respect to all or any portion thereof, or attempting or agreeing to do
so; commencing the enforcement with respect to such Collateral of any of the
default remedies under any of the BABC or TERM LENDER Loan Documents, the UCC
or other applicable laws; or appropriating, setting off, or coming into the
possession of such Collateral, by BABC or TERM LENDER or its agent or bailee,
with respect to its Claim.
"Equipment" means all of Borrower's now owned and hereafter acquired
machinery, equipment, furniture, furnishings, fixtures, and other tangible
personal property located at EDC's Union County, Arkansas facility (except
Inventory and rolling stock), including, without limitation, data processing
hardware and software, dies, tools, jigs, and office equipment, as well as all
of such types of property leased by Borrower and all of Borrower's rights and
interests with respect thereto under such leases (including, without
limitation, options to purchase); together with all present and future
additions and accessions thereto, replacements therefor, component and
auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any of the
foregoing is located.
"Inventory" means all of the now owned and hereafter acquired inventory,
goods, merchandise, and other personal property, wherever located, to be
furnished under any contract of service or held for sale or lease, all raw
materials, work-in-process, finished goods, returned goods, and materials and
supplies of any kind, nature or description which are or might be used or
consumed in the business of EDC or Slurry or used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such
goods, merchandise and such other personal property, and all documents, of
title or other documents representing them.
"Proceeds" shall have the meaning given to that term in the Code and
shall include without limitation all products and proceeds of any Collateral,
and all proceeds of such proceeds and products, including, without limitation,
all cash and credit balances, all payments under any indemnity, warranty, or
guaranty payable with respect to any Collateral, all awards for taking by
eminent domain, all proceeds of fire or other insurance, and all money and
other Property obtained as a result of any claims against third parties or any
legal action or proceeding with respect to Collateral.
"Receivables" means all of the now owned and hereafter arising or
acquired: Accounts (as defined in the Loan and Security Agreement, whether or
not earned by performance), including Accounts owed to EDC or Slurry by any of
their Subsidiaries (as defined in the Loan and Security Agreement) or
Affiliates (as defined in the Loan and Security Agreement), (but excluding
Accounts arising solely from the sale of Equipment, Real Property [as defined
in the Loan and Security Agreement] or other fixed assets) together with all
interest, late charges, penalties, collection fees, and other sums which shall
be due and payable in connection with any Account; proceeds of any letters of
credit naming EDC or Slurry as beneficiary except such letters of credit as
are issued solely in connection with the purchase of Equipment, Real Property
or other fixed assets; contract rights, chattel paper, instruments, documents,
general intangibles (including without limitation choices in action, causes of
action, tax refunds, tax refund claims, and Reversions (as defined in the Loan
and Security Agreement) and other amounts payable to EDC or Slurry from or
with respect to any Plan (as defined in the Loan and Security Agreement) and
all forms of obligations owing to EDC or Slurry (including, without
limitation, in respect of loans, advances, and extensions of credit by EDC or
Slurry to their Subsidiaries and Affiliates); guarantees and other security
for any of the foregoing; rights of stoppage in transit, replevin, and
reclamation; and other rights or remedies of an unpaid vendor, lienor, or
secured party.
"TERM LENDER Claim" means all of the obligations of Borrower to TERM
LENDER as set forth in the TERM LENDER Loan Documents, including but not
limited to, all sums loaned and advanced to Borrower pursuant to the TERM
LENDER Loan Documents, any interest on such sums including interest accruing
after the commencement of a bankruptcy proceeding by or against Borrower and
any costs of preservation of the TERM LENDER Collateral and of collection or
enforcement, including reasonable attorney's and paralegal fees and any
prepayment premiums.
"TERM LENDER Collateral" means all Equipment and Mortgaged Properties
(as defined in the Term Lender Loan Documents) located at the Union County,
Arkansas facility of Borrower.
"TERM LENDER Loan Documents" means, singularly or collectively as the
context may require, (a) the Note Purchase Agreement dated on or about
February 13, 1997 executed and delivered by and between Borrower and TERM
LENDER; (b) the Floating Notes and Fixed Notes dated on or about February 13,
1997 in the aggregate original principal amount of $50,000,000, executed and
delivered by Borrower to TERM LENDER; and (c) any and all other documents,
instruments, certificates and agreements executed and delivered in connection
with such Note Purchase Agreement.
ARTICLE II
INTERCREDITOR AGREEMENT
2.01 Lien Priorities and Distribution of Proceeds. Notwithstanding the
date, manner or order of perfection of the security interests and liens
granted BABC or TERM LENDER or whether either BABC or TERM LENDER holds
possession of all or any part of the Collateral, and notwithstanding any
provisions of the BABC Loan Documents or the TERM LENDER Loan Documents or of
the Code or any applicable law or decision, the following, as between BABC and
TERM LENDER, shall be the relative priority of the security interests and
liens of BABC and TERM LENDER in the Collateral:
(a) BABC shall have a first and prior assignment of, or security
interest in, the BABC Collateral and all Proceeds of the BABC Collateral
including all insurance proceeds relating to the BABC Collateral and products
of the BABC Collateral. TERM LENDER shall not have, take or receive any
assignment of, security interest in or lien of any nature with respect to the
BABC Collateral.
(b) TERM LENDER shall have a first and prior assignment of, or
security interest in, the TERM LENDER Collateral and all Proceeds thereof,
including insurance proceeds relating to the TERM LENDER Collateral and
products of the TERM LENDER Collateral. BABC shall not have, take or receive
any assignment of, security interest in, or lien of any nature with respect to
the TERM LENDER Collateral.
2.02 Distribution of Proceeds of Collateral. All proceeds of
Collateral shall be distributed in accordance with the following procedure to
the extent permitted by law:
(a) All Proceeds of the BABC Collateral shall be paid to BABC
for application to the BABC Claim.
(b) All Proceeds of the TERM LENDER Collateral shall be paid to
TERM LENDER for application to the TERM LENDER Claim.
2.03 Enforcement Actions. BABC and TERM LENDER agree that upon the
commencement of an Enforcement Action by TERM LENDER, TERM LENDER grants to
BABC a non-exclusive ninety (90) day license to use the TERM LENDER Collateral
at the place or places where the TERM LENDER Collateral may be located as may
be necessary for the disposition of the BABC Collateral. BABC agrees to
insure (including naming TERM LENDER as a loss payee) and to take such other
steps as are necessary to protect, preserve and maintain the TERM LENDER
Collateral, while it is using such TERM LENDER Collateral. BABC shall
indemnify, defend and hold harmless TERM LENDER against any loss, damage or
claim resulting from the exercise of the license and the use of such TERM
LENDER Collateral, its agents or employees, including property damage
(including damage to the TERM LENDER Collateral). BABC shall compensate TERM
LENDER for the use of the TERM LENDER Collateral during the term of this
license at the fair market rental value at such time. In no event shall the
license granted hereunder restrict or limit TERM LENDER'S ability and right to
enter upon the TERM LENDER Collateral and commence any Enforcement Action.
2.04 Proceeds Received in Contravention of Agreement. All payments or
distributions with respect to the Collateral which are received by TERM LENDER
or BABC contrary to the provisions of this Agreement shall be received in
trust for the benefit of the other, shall be segregated from other funds and
property held by such lender in respect of any such payments or distributions
and shall be forthwith paid over to the other lender, in the same form as so
received (with any necessary endorsement).
2.05 Insurance. The lender having a security interest or lien in the
applicable Collateral shall, subject to such lender's rights under its
agreements with Borrower, have the sole and exclusive right, as against the
other lender, to adjust settlement of any insurance policy in the event of any
loss. All Proceeds of such policy shall be paid to the lender named in the
Loss Payable Endorsement and having the claim as set forth in this Agreement.
2.06 Waiver of Right to Require Marshaling. BABC and TERM LENDER
each hereby expressly waive any right that it otherwise might have to require
the other to marshal assets or to resort to Collateral in any particular order
or manner, whether provided for by common law or statute, provided that this
paragraph shall not override any specific provision of this Agreement.
Neither BABC or TERM LENDER shall be required to enforce any guaranty or any
security interest given by any person or entity other than Borrower as a
condition precedent or concurrent to the taking of any Enforcement Action.
2.07 UCC Notices. In the event that BABC or TERM LENDER shall be
required by the Code or any other applicable law to give notice to the other
of intended disposition of Collateral, such notice shall be given in
accordance with paragraph 3.01 of this Agreement, and ten (10) days' notice
shall be deemed to be commercially reasonable.
ARTICLE III
MISCELLANEOUS
3.01 Notices. All notices under this Agreement shall be effective upon
receipt, shall be in writing, and shall be sent by either certified mail,
return receipt requested, mailgram, telecopy, telegram or telex, if to BABC,
BankAmerica Business Credit, Inc., 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxx; if to TERM LENDER, Xxxx
Xxxxxxx Mutual Life Insurance Company, Xxxx Xxxxxxx Place, P. X. Xxx 000, 000
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Bond and Corporate
Finance Dept. T-57, with a copy to Xxxx Xxxxxxx Mutual Life Insurance Company,
00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxxx Xxxxxx,
or to such other address or person as any of the parties to this Agreement may
designate in writing to the other parties. Notice shall be deemed received
when presented for delivery to the United States Post Office or the
transmitting utility.
3.02 No Benefit to Third Parties. The terms and provisions of this
Agreement shall be for the sole benefit of BABC and TERM LENDER and their
respective successors and assigns, provided such assignment is not in
violation of this Agreement, and no other person, firm, entity or corporation
(including Borrowers) shall have any right, benefit, priority or interest
under or because of this Agreement.
3.03 Independent Credit Investigation. 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 (i)
Borrower's solvency, financial condition, or ability to repay the BABC Claim
or the TERM LENDER Claim; (ii) statements of Borrower, oral or written; (iii)
the validity, sufficiency or enforceability of the BABC Claim, the TERM LENDER
Claim, the BABC Loan Documents, or the TERM LENDER Loan Documents; or (iv) any
liens or security interests granted by Borrower to the lenders in connection
with such loan documents. 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.
3.04 Limitation on Liability of Lenders to Each Other. Except as
provided in this Agreement, neither of BABC or TERM LENDER shall have any
liability to the other.
3.05 Amendments to this Agreement. All modifications or amendments of
this Agreement must be in writing and duly executed by an authorized officer
of each party to be binding and enforceable.
3.06 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of BABC and TERM
LENDER, provided such assignment is not in violation of the provisions of this
Agreement. BABC consents to the assignment or replacement of the term loan
made to Debtor by TERM LENDER by a replacement lender provided BABC has
received from such assignee or replacement lender a written acknowledgment
stating that it has received a copy of this agreement and agrees to be bound
by the terms hereof. BABC agrees to enter into and execute an Intercreditor
Agreement containing substantially the same terms and conditions as this
Agreement, with any lender who succeeds TERM LENDER in providing a term loan
to Debtor secured by the TERM LENDER Collateral, or any part thereof.
3.07 Governing Law. This Agreement shall be governed as to validity,
interpretation, enforcement and effect by the laws of the State of Oklahoma.
3.08 Termination. This Agreement shall terminate upon the earlier to
occur of (i) the written termination agreement executed by both TERM LENDER
and BABC, or (ii) the payment in full of the TERM LENDER Claim or the BABC
Claim.
3.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be a single instrument.
IN WITNESS WHEREOF, BABC and TERM LENDER have executed this Agreement as
of the day and year first above written.
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:
Name:
Title:
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By:
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE
COMPANY OF AMERICA
By:
Name:
Title:
NYNEX MASTER PENSION TRUST
By: Mellon Bank, N.A., as Trustee
By:
Name:
Title:
THE LONG-TERM INVESTMENT TRUST
By: Mellon Bank, N.A., as Trustee
By:
Name:
Title:
SIGNATURE 1A (CAYMAN), LTD.
By: Xxxx Xxxxxxx Mutual Life Insurance
Company, Portfolio Adviser
By:
Name:
Title:
BANKAMERICA BUSINESS CREDIT, INC.
By:
Name:
Title:
ACKNOWLEDGMENT
EL DORADO CHEMICAL COMPANY, an Oklahoma corporation, SLURRY EXPLOSIVES
CORPORATION, an Oklahoma corporation, and NORTHWEST FINANCIAL CORPORATION, an
Oklahoma corporation (collectively, the "Borrower"), intending to be legally
bound hereby, each acknowledges and agrees to the terms and provisions of the
foregoing Intercreditor Agreement (the "Intercreditor Agreement") by and
between BANKAMERICA BUSINESS CREDIT, INC. ("BABC") and XXXX XXXXXXX MUTUAL
LIFE INSURANCE COMPANY, XXXX XXXXXXX LIFE INSURANCE COMPANY OF AMERICA, NYNEX
MASTER PENSION TRUST, THE LONG-TERM INVESTMENT TRUST and SIGNATURE 1A
(CAYMAN), LTD. (collectively, the "TERM LENDER") (including, without
limitation, the terms of Section 2.05 of this Agreement). By executing this
Acknowledgment, the Borrower agrees to be bound by the provisions of the
Intercreditor Agreement, as those provisions relate to the relative rights of
TERM LENDER and BABC as between such lenders; provided, however, that nothing
in the Intercreditor Agreement shall amend, modify, change or supersede the
respective terms of the TERM LENDER Loan Documents or the BABC Loan Documents
(or any other document to which the undersigned may be a party) as between the
parties and the Borrower. The Borrower further agrees that the terms of the
Intercreditor Agreement shall not give the Borrower any substantive rights
with respect to either TERM LENDER or BABC. If either BABC or TERM LENDER
shall enforce its rights or remedies in violation of the terms of the
Intercreditor Agreement, the Borrower agrees that it shall not use such
violations as a defense to the enforcement by either party of its rights under
the BABC Loan Documents or the TERM LENDER Loan Documents or assert such
violation as a counterclaim or basis for set-off or recoupment against either
lender, provided that the Borrower may assert as a defense against either
lender the payment and performance of the Borrower of its obligations to such
lender.
EL DORADO CHEMICAL COMPAMY
By:
Name:
Title:
SLURRY EXPLOSIVES CORPORATION
By:
Name:
Title:
NORTHWEST FINANCIAL CORPORATION
By:
Name:
Title:
