Confidential information indicated by X's has been omitted and filed separately
with the Securities and Exchange Commission.
TERM INTERCREDITOR AGREEMENT
THIS AGREEMENT, dated this 1st day of May, 1998, by XXXXX
XXXXXXXXXX., a New Jersey corporation ("XXXXXXX"); THE CHASE MANHATTAN BANK, in
its capacity as agent for the banks party to the Term Loan Agreement referred to
below (the "Agent"); IVC INDUSTRIES, INC., a Delaware corporation ("IVC");
INTERNATIONAL VITAMIN OVERSEAS SALES CORP., a New Jersey corporation ("IVOSC");
HALL LABORATORIES, LTD., a corporation organized under the laws of British
Columbia ("Hall (Canada)" and, collectively with IVC and IVOSC, the "Original
Obligors"); and VITAMIN SPECIALTIES CORP., a Pennsylvania corporation ("VSC";
and, collectively with the Original Obligors, the "Obligors").
Preliminary Statement
A. Reference is made to the Term Loan Agreement dated the date
hereof among IVC, the Banks party thereto and the Agent. (Such term loan
agreement, as the same may hereafter be amended or supplemented from time to
time, will be called herein the "Term Loan Agreement"; provided however that the
consent of XXXXXXX is required for certain changes to the Term Loan Agreement,
as provided in Section 5 of the XXXXXXX Term Guaranty hereinafter referred to.)
All capitalized terms used herein and not defined shall have the respective
meanings ascribed to them in the Term Loan Agreement.
B. XXXXXXX is this day executing and delivering to the Agent and the
Banks a guaranty (the "XXXXXXX Term Guaranty") of the obligations of IVC to the
Agent and the Banks under the Term Loan Agreement.
C. The Obligors are this day agreeing to reimburse XXXXXXX for any
and all amounts that may be paid by XXXXXXX under the XXXXXXX Term Guaranty,
plus interest thereon, plus collection costs with respect thereto, pursuant to a
certain May 1998 Amendment Agreement dated the date hereof.
D. XXXXXXX and the Agent desire to provide for the assignment by the
Agent and the Banks to XXXXXXX of the Term Loan Agreement and the other Chase
Documents, including the Term Loan Liens (as such capitalized terms are
hereinafter defined), upon a payment by XXXXXXX in full of its obligations under
the XXXXXXX Term Guaranty.
E. In order to induce the Agent and the Banks to enter into the Term
Loan Agreement, and in order to induce XXXXXXX to execute and deliver the
XXXXXXX Term Guaranty, the parties hereto are executing and delivering this Term
Intercreditor Agreement.
NOW, THEREFORE, for ten dollars ($10.00) and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto agree as follows:
SECTION 1. Assignment of Term Loan Documents. (a) Simultaneously
with the payment by XXXXXXX in full of its obligations under the XXXXXXX Term
Guaranty following a demand by the Agent for such payment, the Agent and the
Banks shall transfer and assign to XXXXXXX all their respective rights, title
and interest in and to the Term Loan Agreement and the other Chase Documents (as
such capitalized term is hereinafter defined), including (without limitation)
the Term-Loan Liens (as such term is hereinafter defined). At such time, (i) the
Agent and the Banks shall execute and deliver to XXXXXXX an Assignment of Term
Loan Documents in substantially the form attached hereto as Schedule A-1, and
(ii) the Agent shall execute, acknowledge and deliver to XXXXXXX an Assignment
of Mortgage in substantially the form attached hereto as Schedule A-2. Promptly
thereafter, (x) the Agent shall execute and deliver to XXXXXXX a UCC assignment
as to each UCC-1 financing statement filed in connection with the Term Loan
Agreement in favor of the Agent against VSC to evidence the Term-Loan Liens, and
(y) the Agent shall deliver to XXXXXXX the stock certificate(s) delivered by IVC
to the Agent pursuant to the Stock Pledge Agreement evidencing the shares of VSC
pledged by IVC to the Agent pursuant to the Stock Pledge Agreement, and (z) each
Bank shall deliver to XXXXXXX the Term Note in favor of such Bank.
(b) As used herein, the term "Chase Documents" means the
following:
(i) the Term Loan Agreement;
(ii) the Term Notes;
(iii) the Stock Pledge Agreement;
(iv) the VSC Term Guaranty;
(v) the VSC Term Security Agreement;
(vi) the Mortgage;
(vii) the Assignment of Leases and Rents;
(viii) the Collateral Assignment of Store Leases;
(ix) the Term Trademark Assignment;
(x) the Xxxxx Term Subordination Agreement;
(xi) the Authorization Letter;
(xii) the Designated Party Identification Agreement;
(xiii) UCC-1 Financing Statements filed in connection
with the Term Loan Agreement in favor of the
Agent against VSC to evidence the Term-Loan
Liens.
(c) As used herein, the term "Term-Loan Liens" means the Liens
on the Vitamin Specialties Assets (excluding the Excluded VSC Assets) and the
New Freehold/Xxxxxx Real Estate (subject to subsection (d) of this Section) and
the outstanding capital stock of VSC securing the obligations and liabilities of
the Borrower under the Term Loan Agreement (or securing the VSC Term Guaranty of
such obligations and liabilities).
(d) Notwithstanding anything to the contrary contained in this
Agreement or any other Term Loan Document, if the Mortgage shall have been
discharged
by the Agent upon a refinancing or a sale/leaseback arrangement as contemplated
by Section 2.09 of the Term Loan Agreement, the phrases "Term-Loan Lien" and
"Chase Document" shall not include the Mortgage or the Assignment of Leases and
Rents, and the Agent shall have no obligation to execute or deliver an
Assignment of Mortgage to XXXXXXX as provided in Section 1(a) of this Agreement.
(e) It is understood by the parties hereto that
(notwithstanding that the VSC Term Security Agreement is to be assigned
hereunder), no Lien on the Excluded VSC Assets is to be assigned hereunder.
SECTION 2. Relative Priorities as between Agent/Banks and XXXXXXX in
Vitamin Specialties Assets. (a) Pursuant to the May 1998 Amendment Agreement (as
hereinafter defined), the Revolving Credit Agreement Liens (as hereinafter
defined) in the Vitamin Specialties Assets (other than the Excluded VSC Assets)
are subordinate to the Term-Loan Liens in the Vitamin Specialties Assets, and
such Term-Loan Liens in the Vitamin Specialties Assets will continue to rank
prior to such Revolving Credit-Agreement Liens in the Vitamin Specialties Assets
(other than the Excluded VSC Assets) if and when the Term-Loan Liens are
assigned by the Agent to XXXXXXX, notwithstanding the terms of the Designated
Party Subordination and Intercreditor Agreement dated April 30, 1997. Reference
is made to the May 1998 Amendment Agreement for a complete statement of the
agreement as to the priority of the Term-Loan Liens relating to the Revolving
Credit-Agreement Liens in the Vitamin Specialties Assets.
(b) Also pursuant to the May 1998 Amendment Agreement, the
obligations of VSC under its guaranty of the Revolving Credit Agreement referred
to therein are made, from and after such assignment, subordinate in right of
payment to VSC's guaranty of the Term Loan Obligations referred to therein.
Reference is made to the May 1998 Amendment Agreement for a complete statement
of the agreement as to such subordination.
(c) As used herein, the term "May 1998 Amendment Agreement"
means the May 1998 Amendment Agreement dated the date hereof among IVC, IVOSC,
Hall (Canada), VSC, the Banks party to the Revolving Credit Agreement referred
to therein, The Chase Manhattan Bank as agent for such Banks (the "Revolving
Credit Agreement Agent"), and XXXXXXX. The term "Credit-Agreement Liens" means
the Liens granted to the Revolving Credit Agreement Agent in the Vitamin
Specialties Assets, as security for the obligations of the Obligors under the
Credit Agreement. The term "Term-Loan Liens" is defined in the May 1998
Amendment Agreement.
1. SECTION 3. Obligations of the Obligors Unconditional. Nothing
contained in this Agreement, is intended to or shall impair, as between any of
the Obligors and the Agent and Banks, or between the Obligors and XXXXXXX, the
obligation of such Obligors, which is absolute and unconditional, to pay their
respective obligations as and when the same shall become due and payable in
accordance with their terms, or affect the relative rights of the Agent, Banks
or XXXXXXX, except as provided herein, or any other creditors of any Obligor;
nor shall anything herein prevent the Agent, Banks or XXXXXXX from exercising
their respective remedies otherwise permitted under applicable law upon default.
The intercreditor provisions of this Agreement are and are intended solely for
the purpose
of defining the rights of XXXXXXX, on the one hand, and the Agent and the Banks,
on the other hand.
SECTION 4. Further Assurances. Each Obligor shall, at its expense
and at any time and from time to time, promptly execute and deliver all further
instruments and other documents, and take all further action, that may be
necessary or, in the opinion of XXXXXXX desirable, or that XXXXXXX may request,
in order to protect any right or interest granted or purported to be granted
hereby or to enable XXXXXXX to exercise and enforce its rights and remedies
hereunder. Following payment in full by XXXXXXX of its obligations under the
XXXXXXX Term Guaranty, each of the Agent and the Banks shall promptly execute
and deliver such further instruments as XXXXXXX may reasonably request to better
confirm the assignment to XXXXXXX of the Chase Documents, provided that XXXXXXX
bears the cost thereof (if any) and that the same involves no material risk of
liability to any of the Agent or the Banks.
SECTION 5. Expenses. The Obligors agree, jointly and severally, to
pay upon demand to XXXXXXX the amount of any and all expenses, including
(without limitation) the reasonable fees and disbursements of counsel for
XXXXXXX, which XXXXXXX may incur in connection with the enforcement of any
rights or interests hereunder.
SECTION 6. Certain Rights of XXXXXXX to Compel Acceleration. (a) If
an Event of Default under Section 10.01(k) of the Term Loan Agreement occurs, or
if an Event of Default occurs under Section 10.01(c)(i) of the Term Loan
Agreement that consists of a breach of Section 8.10 of the Term Loan Agreement,
XXXXXXX shall be entitled (on 15 days' advance notice by XXXXXXX to the Agent)
to require the Agent and the Banks to accelerate the maturity of the Term Notes,
provided that XXXXXXX makes payment (under the XXXXXXX Term Guaranty) to the
Agent of the outstanding balance of the Term Notes immediately upon such
acceleration, against assignment as provided in Section 1 hereof.
(b) Neither the Agent nor any of the Banks shall have an
obligation to notify XXXXXXX of the occurrence of any Event of Default described
in subsection (a) of this Section, or any other Default or Event of Default.
Each Obligor shall give XXXXXXX written notice of the occurrence of any Default
or Event of Default within ten days after any such occurrence.
SECTION 7. Binding Effect on Banks. The Agent is entering into this
Agreement in its capacity as Agent for the Banks under the Term Loan Agreement,
and this Agreement shall inure to the benefit of and be binding upon the Banks.
SECTION 8. Reporting Requirements. IVC shall deliver to XXXXXXX all
the financial statements, certificates, reports, notices and other information
required to be provided to the Agent and the Banks under Section 7.08 of the
Term Loan Agreement, at the times provided in such Section 7.08.
SECTION 9. Notices. Any notice, consent or other communication
herein required or permitted to be given shall be in writing and may be
personally served or sent by courier service or United States mail and shall
have been deemed to have been given when delivered in person or by courier
service, or three days after deposit in the United
States mail (registered or certified, with postage prepaid and properly
addressed). For purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section) shall be as
set forth below, or, as to each party, at such other address as may be
designated by such party in a written notice to all the other parties:
If to XXXXXXX:
XXXXXXX XXXXXXX XXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
-- with a simultaneous copy to:
XXXXXXX XXXXXXX XXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
If to the Agent or the Banks:
The Chase Manhattan Bank, as Agent
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx Agency
Xxx Xxxx, Xxx Xxxx 00000
-- with a simultaneous copy to:
The Chase Manhattan Bank
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxxx
If to any of the Obligors:
c/o IVC Industries, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Mr. I. Xxxx Xxxxxxxxxx
-- with a simultaneous copy to:
IVC Industries, Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Mr. E. Xxxxxx Xxxxx
SECTION 10. Miscellaneous. (a) No amendment of any provision of this
Agreement shall be effective unless it is in writing and signed by the parties
hereto, and no
waiver of any provision of this Agreement, and no consent to any departure
therefrom, shall be effective unless it is in writing and signed by the party
against whom the same is sought to be enforced, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that in all events the Banks shall be bound
by any such amendment, waiver or consent signed by the Agent.
(b) No failure on the part of XXXXXXX to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(c) This Agreement shall be binding on and inure to the
benefit of (i) XXXXXXX and the Obligors and their respective successors and
assigns, and (ii) the Agent and the Banks and their successors, transferees and
assigns and shall continue in effect so long as any of the XXXXXXX Term Guaranty
or the Term Notes remain outstanding.
(d) If any portion of this Agreement is held to be
non-enforceable in any jurisdiction, it shall be enforceable in any other
jurisdiction, and the remaining portions of this Agreement shall continue in
effect.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(f) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Term
Intercreditor Agreement to be duly executed and delivered by the respective
officers thereunto duly authorized, as of the date first above written.
WITNESS: XXXXXXX XXXXXXX
XXXXXXXXXXXXXXX By: XXXXXXXXXXXX
Name: Name:
Title: Title:
WITNESS: THE CHASE MANHATTAN BANK, as Agent
XXXXXXXXXXXXXXX By: /s/ Xxx X. Xxxxxxx
Name: ----------------------------
Title: Xxx X. Xxxxxxx
Vice President
WITNESS: IVC INDUSTRIES, INC.
XXXXXXXXXXXXXXX By: /s/ I. Xxxx Xxxxxxxxxx
Name: ----------------------------
Title: Name:
Title:
WITNESS: INTERNATIONAL VITAMIN OVERSEAS
SALES CORP.
By: /s/ I. Xxxx Xxxxxxxxxx
------------------------------ ----------------------------
Name: Name:
Title: Title:
WITNESS: HALL LABORATORIES, LTD.
------------------------------ By: ----------------------------
Name: Name:
Title: Title:
WITNESS: VITAMIN SPECIALTIES CORP.
XXXXXXXXXXXXXXX By: /s/ I. Xxxx Xxxxxxxxxx
Name: ----------------------------
Title: Name:
Title:
Schedule A-1
to Term Intercreditor Agreement
ASSIGNMENT OF TERM LOAN DOCUMENTS
THE CHASE MANHATTAN BANK ("Chase"), for valuable consideration,
hereby assigns and transfers to XXXXXXX XXXXXXX ("XXXXXXX") all the rights,
title and interest of Chase (as Agent and as Bank) in, to and under the Term
Loan Agreement and the other Chase Documents (as such capitalized terms are
hereinafter defined). All capitalized terms used in this Assignment and not
defined shall have the respective meanings ascribed to them in the Term Loan
Agreement.
Chase hereby represents that it is the owner and holder of 100% of
the interest of the Agent and the Banks under the Term Loan Agreement and the
other Chase Documents, and that Chase has not granted any participation interest
or security interest with respect thereto. Except as otherwise expressly
provided in the immediately preceding sentence, this Assignment is being made
without any recourse, representation or warranty whatsoever.
As used herein, the term "Term Loan Agreement" means the Term Loan
Agreement dated _________________, 1998 among IVC Industries, Inc., the Banks
party thereto and The Chase Manhattan Bank, as Agent. The term "Chase Documents"
means the following:
(i) the Term Loan Agreement;
(ii) the Term Notes;
(iii) the Stock Pledge Agreement;
(iv) the VSC Term Guaranty;
(v) the VSC Term Security Agreement;
(vi) [the Mortgage];
(vii) [the Assignment of Leases and Rents];
(viii) the Collateral Assignment of Store Leases;
(ix) the Term Trademark Assignment;
(x) the Xxxxx Term Subordination Agreement;
(xi) the Authorization Letter;
(xii) the Designated Party Identification Agreement;
(xiii) UCC-1 Financing Statements filed in connection
with the Term Loan Agreement in favor of the Agent
against VSC to evidence the Term-Loan Liens.
IN WITNESS WHEREOF, Chase has executed this Assignment as of this
____ day of ___________, ______.
WITNESS: THE CHASE MANHATTAN BANK
By:
------------------------------- --------------------------------
Name:
Title:
Schedule A-2
to Term Intercreditor Agreement
ASSIGNMENT OF MORTGAGE
THE CHASE MANHATTAN BANK, as Agent for the Banks under the Term Loan
Agreement hereinafter referred to (the "Mortgagee"), for valuable consideration,
does hereby assign and transfer to XXXXXXXXXXXXXXXXXX INC. all the rights, title
and interest of the Mortgagee in, to and under the Mortgage and the Assignment
of Leases and Rents (as such terms are hereinafter defined).
As used herein, the term "Mortgage" means the Mortgage dated
________________, 1998 from IVC Industries, Inc. to the Mortgagee in respect of
certain premises in Monmouth County, New Jersey, which was recorded in the
Office of the Clerk of Monmouth County in Book _____, page _____; and the term
"Assignment of Leases and Rents" means the Assignment of Leases and Rents dated
___________, 1998 from IVC Industries, Inc. to the Mortgagee with respect to
such premises, which was recorded in the such office in Book _____, page _____.
This Assignment is made without any recourse, representation or
warranty whatsoever, except that the Mortgagee represents that it is the owner
and holder of 100% of the interests of the Agent and the Banks in the Mortgage
and the Assignment of Leases and Rents and that the Mortgagee has not granted
any participation interest or security interest with respect thereto.
IN WITNESS WHEREOF, the Mortgagee has executed this Assignment as of
this ____ day of ___________, ______.
WITNESS: THE CHASE MANHATTAN BANK
By:
------------------------------- --------------------------------
Name:
Title:
STATE OF _____________
SS:
COUNTY OF ____________
On this ____ day of _____________, ____, before me, the undersigned,
personally appeared ______________________, the _______________________ of The
Chase Manhattan Bank, who, I am satisfied, is the person who signed the
foregoing instrument, and he or she did acknowledge under oath that he or she
signed and delivered the same in his or her capacity as such officer and that
the foregoing instrument is the voluntary act and deed of such bank made by
virtue of proper authority.
