INTERCREDITOR AGREEMENT
This Intercreditor Agreement (this "Agreement") is made as of March
___, 2000, between and among Marketing Specialist Corporation (the "PARENT"), a
corporation duly organized and validly existing under the laws of the State of
Delaware, Xxxx Xxxxx Associates, Inc. ("PIA"), a corporation duly organized and
validly existing under the laws of the State of Michigan, Marketing Specialists
Sales Company ("MSSC"), a corporation duly organized and validly existing under
the laws of the State of Texas, Bromar, Inc. ("BROMAR"), a corporation duly
organized and validly existing under the laws of the State of California, any
subsidiary of the Parent that is hereafter added as a Debtor hereunder pursuant
to the terms of Section 3.7(c) of this Agreement (any such subsidiary, together
with Parent, PIA, MSSC and Bromar herein individually a "Debtor" and
collectively the "Debtors"), The Chase Manhattan Bank ("Chase"), as agent for
the lenders under that certain credit agreement hereafter described as the
Revolver Agreement (together with its successors and assigns in such capacity,
"Revolver Agent"), and First Union National Bank ("First Union"), a national
banking association, as agent for the lenders under that certain credit
agreement hereafter described as the Term Loan Agreement (together with its
successors and assigns in such capacity, "Term Loan Agent," and together with
the Revolver Agent, the "Secured Parties").
RECITALS:
A. Pursuant to that certain Second Amended and Restated Credit
Agreement dated the date hereof among the Debtors, the Term Loan Agent and the
lenders named therein and the Collateral Security Documents referred to therein,
Debtors have granted a security interest in the assets of Debtors, including
without limitation, the Shared Collateral (as herein defined), in favor of the
Term Loan Agent, for the benefit of the Term Lenders (as hereinafter defined).
B. Pursuant to that certain Credit Agreement dated the date hereof
among the Debtors, the Revolver Agent and the lenders named therein and the loan
documents referred to therein, Debtors are granting a security interest in the
Shared Collateral in favor of the Revolver Agent, for the benefit of the
Revolver Lenders (as hereinafter defined).
C. The parties desire to enter into this Agreement in order to
establish the respective priorities of the Secured Parties in the Shared
Collateral, and otherwise to set forth certain rights and obligations of the
Secured Parties with respect to each other.
NOW, THEREFORE, in consideration of the above Recitals and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
Section 1.1. CERTAIN DEFINITIONS. The following terms when used herein
(including in the Recitals hereto) shall have the respective meanings indicated
below:
"Accounts" has the meaning specified on Exhibit "A" attached hereto.
"Agency Account Agreement" means an agreement entered into for the
benefit of the Secured Parties with a depository institution providing a Debtor
with lockbox services for the collections of its accounts, which Agency Account
Agreement shall be substantially in the form of that certain Three Party
Agreement Relating to Lockbox Services (with Activation) dated the date hereof
among the Revolver Agent, Marketing Specialists Sales Company and Bank of
America, N.A., as the same may be amended or otherwise modified, or any other
agreement approved by the Revolver Agent that has the same substantive effect of
such Three Party Agreement Relating to Lockbox Services (with Activation).
"Approved Lock Box" means a lock box post office address to which
account debtors with respect to the accounts of a Debtor have been instructed to
send all monies, checks and other instruments in payment of any accounts and
which is subject to an Agency Account Agreement or is held at Chase and is
subject to Section 2.13 hereof.
"Approved Lock Box Account" means a deposit account to which monies,
checks and other instruments received in the Approved Lock Box are deposited and
which is subject to an Agency Account Agreement or is held at Chase and is
subject to Section 2.13 hereof.
"Books and Records" means all of each Debtor's books and records,
including without limitation, all books and records, computer runs, invoices,
tapes, processing software, processing contracts (such as contracts for computer
time and services) and any computer prepared information, tapes, or data of
every kind and description, whether in the possession of any Debtor or in the
possession of third parties and all of each Debtor's other data, plans, manuals,
computer software, computer tapes, computer disks, computer programs, source
codes, object codes, rights of the Debtor to retrieve data and other information
from third parties, and other data of every kind and description, in each case
to the extent that they indicate, summarize, or evidence, or otherwise relate
to, the Accounts or Inventory, whether in the possession of any Debtor or in the
possession of any third party.
"Borrowing Base" has the meaning specified in the Revolver Agreement.
"Business Day" means a day, other than Saturday or Sunday and legal
holidays, when the Term Loan Agent and Revolver Agent are open for business.
"Default Notice" means (i) notice by Term Loan Agent to Revolver Agent
that an event of default has occurred under the Term Loan Documents, or (ii)
notice by Revolver Agent to Term Loan Agent that an event of default has
occurred under the Revolver Documents.
"Double Dilution" means two (2) times the average dilution percentage
for the accounts receivable of the applicable Debtor for any ninety (90) day
period selected by the Revolver Agent. "Average dilution percentage" shall be
calculated for any period by dividing the dilution of accounts receivable
occurring during such period by the gross sales for such period and multiplying
the resulting quotient by 100. For purposes of the foregoing, "dilution" means
any reduction in the value of accounts receivable caused by returns, write-offs,
discounts, credits, allowances, and/or any other non-cash offsets asserted or
assertable by account debtors having the effect of reducing the value of
accounts receivable.
"Intellectual Property" has the meaning specified on Exhibit "A"
attached hereto.
"Inventory" has the meaning specified on Exhibit "A" attached hereto.
"Lender" means any one of Revolver Lenders or the Term Lenders and
"Lenders" means, collectively, the Revolver Lenders and the Term Lenders.
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"Letters of Credit" has the meaning specified in the Revolver
Agreement.
"Person" means any individual, corporation, partnership, company,
association, limited liability corporation or other legal entity.
"Proceeds" has the meaning set forth on Exhibit "A" attached hereto.
"Realization Action" means with respect to any Debtor, any of the
following: (i) any of the following actions taken after the occurrence of an
event of default under the Revolver Documents: (a) any notice to account debtors
by the Revolver Agent to make payment to or in accordance with the instructions
of the Revolver Agent, (b) any action taken by the Revolver Agent to take
possession of tangible collateral, (c) any action taken by the Revolver Agent to
sell or otherwise dispose of any collateral under the Revolver Documents, or (d)
termination of the ability of Debtors to borrow under the Revolver Documents;
and (ii) any action taken by the Term Loan Agent in accordance with Section 2.4
to realize on the Shared Collateral.
"Reimbursement Obligation" has the meaning specified in the Revolver
Agreement.
"Required Lenders" means Lenders holding sixty-six and two-thirds
percent (66 2/3%) or more of the sum of (i) the commitments under the Revolver
Agreement, or if all such commitments have terminated, the outstanding principal
amount of the loans outstanding under the Revolver Agreement and the
participation interests in the Letters of Credit and (ii) the aggregate
principal balance outstanding under the Term Loan Agreement.
"Revolver Agreement" means that certain Credit Agreement dated the date
hereof among Revolver Agent, the lenders more particularly described therein,
and the Debtors, giving effect to all amendments and other modifications thereto
if such modifications are consummated in compliance with Section 2.20 hereof.
"Revolver Debt" means the Revolver Obligations, to the extent not in
excess of the Revolver Limit.
"Revolver Documents" means the Revolver Agreement, the Loan Documents
(as such term is defined in the Revolver Agreement) and any and all other
documents or instruments now or hereafter executed by a Debtor evidencing,
securing or relating to the Revolver Debt, giving effect to all amendments and
other modifications thereto if such modifications are consummated in compliance
with Section 2.20 hereof.
"Revolver Lenders" means the lenders who are from time to time parties
to the Revolver Agreement as lenders thereunder.
"Revolver Limit" means, on any date of determination thereof, an amount
equal to the sum of (i) the Revolver Principal Cap; (ii) all interest accrued
and unpaid as of such date with respect to the loans and other Revolver
Obligations outstanding under any of the Revolver Documents (including, without
limitation, any and all post-petition interest whether or not allowed under any
bankruptcy, insolvency or other similar law), provided that any such interest
accrued on the principal amount of the loans and Reimbursement Obligations that
is in excess of the Revolver Principal Cap shall not be included in this clause
(ii); (iii) all fees, costs, expenses and other disbursements incurred by (and
not reimbursed by Debtors to) the Revolver Agent and each Revolver Lender in
connection with the enforcement of any rights or remedies under the Revolver
Documents (including, without limitation, any and all post-petition fees,
expenses and disbursements whether or not allowed under any bankruptcy,
insolvency or other
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similar law); and (iv) all other Revolver Obligations outstanding as of such
date, provided that the amount of interest excluded pursuant to clause (ii)
of this definition and the principal amount of the loans made under the
Revolver Agreement and the Reimbursement Obligations outstanding thereunder
shall not be included under this clause (iv).
"Revolver Obligations" means the "Obligations" as that term is defined
in the Revolver Agreement.
"Revolver Principal Cap" means Sixty Million Dollars ($60,000,000).
"Shared Collateral" means the "Collateral" as defined on Exhibit "A"
attached hereto.
"Subordinated Notes" means the 10 1/8% Senior Subordinated Notes due
2007 issued by Parent (formerly Richmont Marketing Specialists, Inc.) pursuant
to an Indenture dated December 17, 1997 between Parent and Chase Bank of Texas
National Association (formerly Texas Commerce Bank National Association) as
Trustee.
"Term Lenders" means the lenders who are from time to time party to the
Term Loan Agreement as lenders thereunder.
"Term Loan Agreement" means that certain Second Amended and Restated
Credit Agreement dated the date hereof among the Term Loan Agent, the lenders
more particularly described therein, and the Parent, giving effect to all
amendments and other modifications thereto if such modifications are consummated
in compliance with Section 2.20 hereof.
"Term Loan Documents" shall mean the Term Loan Agreement and the
Collateral Security Documents described therein and any and all documents or
instruments now or hereafter executed by any Debtor evidencing, securing, or
relating to the Term Loan Agreement, giving effect to all amendments and other
modifications thereto if such modifications are consummated in compliance with
Section 2.20 hereof.
"Term Loan Obligations" means the Senior Obligations as defined in the
Term Loan Agreement.
Section 1.2. Singular terms shall include the plural forms and vice
versa, as applicable, of the terms defined.
Section 1.3. Terms contained in this Agreement shall, unless otherwise
defined herein or unless the context otherwise indicates, have the meanings, if
any, assigned to them by the Uniform Commercial Code in effect in the State of
New York.
ARTICLE II
INTERCREDITOR TERMS
Section 2.1. PRIORITIES WITH RESPECT TO THE SHARED COLLATERAL. Term
Loan Agent and Revolver Agent agree for themselves and on behalf of each of the
Lenders that they each represent that, irrespective of:
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(a) the validity of any security interest of either of the
Secured Parties in any or all of the Shared Collateral;
(b) whether and in what order the security interests of either
Secured Party in the Shared Collateral have attached or were perfected (by
filing, possession or otherwise);
(c) provisions of applicable law;
(d) the identity of the Secured Party who has possession of
the Shared Collateral; or
(e) any other matter that might determine the priority of
security interests or liens in and to the Shared Collateral,
any security interest, lien, right, title or other interest which Revolver Agent
has in the Shared Collateral shall constitute first priority liens in such
property to secure the payment and performance of the Revolver Debt, and shall
be superior to any security interest, lien, right, title or other interest held
by the Term Loan Agent in the Shared Collateral pursuant to the Term Loan
Documents or otherwise. Any security interest, lien, right, title or other
interest held by the Term Loan Agent in the Shared Collateral shall be
subordinate and junior in priority to any security interest, lien, right, title
or other interest held by the Revolver Agent therein securing the Revolver Debt.
Section 2.2. ACCESS TO COLLATERAL. The Term Loan Agent agrees that the
Revolver Agent, through its authorized representatives or agents may (to the
extent the Term Loan Agent has the right to restrict access to the real property
on which any of the Shared Collateral is located) enter upon such real property
at any time and from time to time for the purpose of inspecting, repairing,
removing or conducting a sale or sales of any or all of the Shared Collateral.
The Term Loan Agent agrees that neither the Revolver Agent nor any Revolver
Lender shall have any obligation or liability to the Term Loan Agent or any Term
Lender for any action taken in accordance with the preceding sentence, except
that Revolver Lenders shall (i) repair any damage to such real property caused
by the removal, repair, sale or inspection; and (ii) be liable for the negligent
acts of the employees or agents of any Revolver Lender or the Revolver Agent in
connection with such removal, repairs, sale or inspection.
Section 2.3. OTHER COLLATERAL; LICENSE IN INTELLECTUAL PROPERTY. In
addition to the Term Loan Agent's security interests in the Shared Collateral,
the Term Loan Agent also holds, or may in the future hold, mortgages and
security interests in all other assets of the Debtors, including without
limitation, all real property interests, equipment, fixtures, stock of
subsidiaries, Intellectual Property, insurance policies (other than casualty
insurance specifically relating to a casualty loss with respect to Shared
Collateral), and proceeds thereof (the "Other Collateral"). Term Loan Agent
acknowledges that any right, title or interest it holds in Other Collateral
consisting of Intellectual Property is subject to the licenses granted by the
Debtors in favor of the Revolver Agent pursuant to the Revolver Loan Documents
permitting the Revolver Agent to use such Intellectual Property in connection
with the sale or other disposition of any Shared Collateral. In furtherance of
the foregoing, and to the extent of the Term Loan Agent's interest in the
Intellectual Property, Term Loan Agent also hereby grants to the Revolving Agent
an irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Term Loan Agent) to use any of the Intellectual
Property for purposes of enabling the Revolver Agent to exercise its
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rights and remedies under the Revolver Documents and enabling the Revolver
Agent to enjoy the full benefits of the Shared Collateral (in each case as
the Revolver Agent shall be entitled under the Revolver Documents).
Section 2.4. SHARED COLLATERAL; TERM LOAN AGENT STANDSTILL. Neither
Term Loan Agent nor any Term Lender will exercise or seek to exercise any rights
or remedies with respect to any Shared Collateral unless and until the earliest
of (i) the Revolver Obligations shall have been paid and satisfied in full, (ii)
the Subordinated Notes shall be accelerated in accordance with their terms, or
any action shall be taken or any proceeding shall be initiated by the Trustee or
Holders with respect to the Subordinated Notes to enforce or otherwise exercise
remedies with respect to the Subordinated Notes, or (iii) the expiration of
ninety (90) days following a Default Notice; provided, however, that nothing
herein shall prevent Term Loan Agent or Term Lenders from (x) declaring an event
of default under the Term Loan Documents and/or accelerating the Term Loan
Obligations in accordance with the provisions of the Term Loan Documents, (y)
seeking and obtaining a judgment with respect to the Term Loan Obligations,
and/or (z) exercising any and all rights and remedies with respect to the Other
Collateral.
Section 2.5. AGREEMENT TO GIVE NOTICE OF DEFAULT.
(a) The Revolver Agent agrees to send Term Loan Agent a copy
of any notice of default given to any Debtor under the Revolver Documents.
Subject to clause (c) below, Term Lenders shall have the right (but not the
obligation) to cure any monetary default under the Revolver Documents if the
Term Loan Agent provides the Revolver Agent written notice of the Term Lenders'
intent to cure the monetary default and the Term Lenders make the required
payment to the Revolver Agent in the amount necessary to cure the monetary
default, in each case within three (3) Business Days of the date the notice of
default was given by the Revolver Agent. Except as provided in clause (c) below,
during such three (3) Business Day period, the Revolver Agent shall not take any
steps to exercise its rights and remedies arising as a result of the applicable
default but after the expiration of such three (3) Business Day period, the
Revolver Agent shall be free to exercise all rights and remedies available to it
arising as a result of such event of default. In the event Term Lenders elect,
in their sole discretion, to cure any such default, Revolver Agent agrees to
accept such performance on the part of Term Lenders just as if the same has been
performed by any of the Debtors. Upon any payment by Term Lenders of the
obligations of the Debtors to the Revolver Lenders pursuant to the provisions of
this paragraph (a), Term Lenders shall be subrogated to the rights and positions
of Revolver Lenders with respect thereto, provided that all rights of the Term
Lenders arising by way of the right of subrogation shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full of all the Revolver Obligations.
(b) The Term Loan Agent agrees to send the Revolver Agent a
copy of any notice of default given to any Debtor under the Term Loan Documents.
Revolver Lenders shall have the right (but not the obligation) to cure any
monetary default under the Term Loan Documents if the Revolver Agent provides
the Term Loan Agent written notice of the Revolver Lenders' intent to cure the
monetary default and the Revolver Lenders make the required payment to the Term
Loan Agent in the amount necessary to cure the monetary default, in each case
within three (3) Business Days of the date the notice of default was given by
the Term Loan Agent. Except as provided in clause (c) below, during such three
(3) Business Day period, the Term Loan Agent shall not take any steps to
exercise its rights and remedies arising as a result of the applicable default
but after the expiration of such three (3) Business Day period, the Term Loan
Agent shall be free to exercise all rights and remedies available to it arising
as a result of such event of default except as provided in Section 2.4. In the
event Revolver Lenders elect, in their sole discretion, to cure any such
default, Term Loan Agent agrees to accept such performance on the part of
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Revolver Lenders just as if the same has been performed by any of the Debtors.
Upon any payment by Revolver Lenders of the obligations of the Debtors to the
Term Lenders pursuant to the provisions of this paragraph (b), Revolver Lenders
shall be subrogated to the rights and positions of Term Lenders with respect
thereto, provided that all rights of the Revolver Lenders arising by way of the
right of subrogation shall in all respects be subordinate and junior in right of
payment to the prior indefeasible payment in full of all the obligations
outstanding under the Term Loan Documents.
(c) Notwithstanding the provisions of subsections (a) or (b)
of this Section 2.5, (i) in no event shall any failure of either of the Secured
Parties to provide notices of default to the other Secured Party in any way
impair the notices given to any Debtor, nor shall such failure affect the rights
of the Secured Parties except as specifically set forth herein; (ii) in no event
(except, with respect to the Term Loan Agent, as provided in Section 2.13) shall
any Secured Party or any Lender be prohibited from exercising any right of
setoff at any time in respect of any amount a Debtor has on deposit with a
Secured Party or any Lender or any amount a Secured Party or a Lender then owes
to a Debtor, whether or not a notice of default shall have been given and (iii)
immediately upon the occurrence of a default under the Revolver Documents, the
Revolver Lenders may suspend their obligation to make loans (as defined in the
Revolver Agreement) or issue Letters of Credit. Except as specifically provided
in Section 2.4 and in other provisions of this Agreement, nothing in this
Agreement shall impair the right and remedies that either Secured Party or any
Lender may have under their separate agreement with the Debtors or restrict such
Secured Party's collection efforts (including their independent right to
accelerate obligations owing to them and exercise remedies with respect to
collateral or otherwise).
Section 2.6. COLLECTION OF ACCOUNTS.
(a) The Revolver Documents require that all payments on the
Accounts be made to one or more Approved Lock Boxes. The funds collected in the
Approved Lock Boxes are to be deposited in an Approved Lock Box Account. On a
daily basis, the collected funds in the Approved Lock Box Accounts are forwarded
to the Revolver Agent and applied as a payment on the Revolver Obligations.
Revolver Agent shall not consent to any amendment to any Agency Account
Agreement or any other Revolver Document, or give any instruction or consent
under any Agency Account Agreement or other Revolver Document, which would (1)
permit items delivered in payment of Accounts to be sent anywhere except to the
Approved Lock Box or permit collection on such items or any other payment on the
Accounts to be deposited to any deposit account other than an Approved Lock Box
Account, or (2) permit funds received in an Approved Lock Box Account to be
transferred or withdrawn except as provided in Section 4.6 of the Revolver
Agreement, transfers to a deposit account with Chase established for that
purpose and subject to Section 2.13, and/or transfer to the Term Loan Agent in
accordance with Section 2.6(c).
(b) In the event that Revolver Agent exercises its rights
pursuant to the Revolver Documents to take any Realization Action with respect
to the Shared Collateral, Revolver Agent hereby agrees with Term Loan Agent as
follows:
(i) That it will act on its own behalf as agent for
the Revolver Lenders and on behalf of Term Loan Agent in connection with such
Realization Action with respect to the Shared Collateral as agent for the Term
Loan Agent under the terms hereof; and
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(ii) That it will provide to Term Loan Agent an
account detail of the results of any such Realization Action with respect to the
Shared Collateral.
(c) Following the occurrence of any Realization Action, all
Proceeds of the Shared Collateral shall be disbursed and applied as follows:
(i) first as payment of the unpaid costs and expenses
(including attorney's fees and expenses) of the Revolver Agent incurred in
obtaining the Proceeds of the Shared Collateral until all such costs and
expenses are paid in full;
(ii) second, to the Revolver Lenders in accordance
with the Revolver Agreement until the earlier of (1) the date the liquidated
Revolver Obligations have been satisfied in full and all contingent
Reimbursement Obligations have been fully cash collateralized or (2) the date
that Proceeds of Shared Collateral that have been dispersed after the date the
Realization Action shall have occurred equal the Revolver Limit, determined as
of such date;
(iii) third, to the Term Loan Agent for distribution
to the Term Lenders in accordance with the Term Loan Agreement until all the
obligations of the Debtors and each one of them under the Term Loan Documents
shall have been paid and satisfied in full;
(iv) fourth, if Revolver Obligations remain
outstanding after the applications described in clause 2.6(c)(ii) above, to the
Revolver Lenders in accordance with the Revolver Agreement until the Revolver
Obligations have been satisfied in full and all contingent Reimbursement
Obligations have been fully cash collatreralized; and
(v) fifth, to the Debtors, as a court of competent
jurisdiction may direct or as otherwise required by law.
(d) Prior to the occurrence of a Realization Action, proceeds
of the Shared Collateral shall be applied to the Revolver Obligations in
accordance with the terms of the Revolver Agreement and Section 2.6(a), without
regard to the Revolver Limit.
(e) Each Debtor hereby agrees that it will not deposit with,
transfer to or otherwise put in the possession of the Revolver Agent, any of the
Other Collateral or proceeds thereof, and will cause all funds, moneys or other
property representing proceeds of Other Collateral to be paid or delivered
directly to Term Loan Agent for application in accordance with the Term Loan
Documents. In the event that the Revolver Agent receives any funds, moneys,
items or other property that it knows are proceeds of Other Collateral in which
Term Loan Agent has perfected a first priority security interest, it shall (a)
notify the Term Loan Agent in writing of the notice of such receipt, the date of
such receipt and the amount thereof; (b) deduct from such property so received
any reasonable costs or expenses (including reasonable attorney's fees and
expenses) incurred in connection with the acquisition of such property; (c) hold
the remaining amounts in trust for the Term Loan Agent until paid over to the
Term Loan Agent; and (d) forward such remaining amounts to the Term Loan Agent
promptly upon receipt thereof.
Section 2.7. PROCEEDS SECURING CONTINGENT OBLIGATIONS. Portions of the
Proceeds of the Shared Collateral distributed to the Revolver Agent may
thereafter be held by the Revolver Agent as collateral for the contingent
Reimbursement Obligations of Debtors in respect of Letters of Credit. In the
event that a Letter of Credit expires undrawn and as a result the contingent
Reimbursement Obligations relating thereto terminate, the Revolver Agent agrees
to distribute the Proceeds so held in accordance with Section 2.6(b)(iii) of
this Agreement.
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Section 2.8. PROCEEDS RECEIVED DIRECTLY BY A LENDER OR A SECURED PARTY
If a Secured Party or any Lender receives any Proceeds from the Shared
Collateral after the date of a Realization Action, other than from the Revolver
Agent, such party shall (a) notify the Revolver Agent in writing of the nature
of such receipt, the date of the receipt and the amount thereof; (b) deduct from
the Proceeds received any costs or expenses (including attorneys' fees and
expenses) incurred in connection with the acquisition of such Proceeds; (c) hold
the remaining amount of such Proceeds in trust for the benefit of the Revolver
Agent until paid over to the Revolver Agent; and (d) pay the remaining amount of
such Proceeds to the Revolver Agent promptly upon receipt thereof. Upon receipt,
the Revolver Agent shall promptly distribute the Proceeds so received in
accordance with Section 2.6(c) of this Agreement.
Section 2.9. INCORRECT DISTRIBUTION. If either Secured Party or any
Lender receives any Proceeds of the Shared Collateral in an amount in excess of
the amount such party is entitled to receive under the terms hereof, such party
shall (a) hold such excess Proceeds in trust for the benefit of the Revolver
Agent until paid over to the Revolver Agent and (b) shall promptly pay the
excess amount of such Proceeds to the Revolver Agent. The Revolver Agent shall
promptly distribute the amount so received to the parties entitled thereto as
determined in accordance with Section 2.6(c) of this Agreement.
Section 2.10. RETURN OF PROCEEDS. If at any time payment, in whole or
in part, of any Proceeds of Shared Collateral or proceeds of Other Collateral
distributed hereunder is rescinded or must otherwise be restored or returned by
either Secured Party or any Lender as a preference, fraudulent conveyance or
otherwise under any bankruptcy, insolvency or similar law, then each Person
receiving any portion of such proceeds agrees, upon demand, to return the
portion of such proceeds it has received to the Person responsible for restoring
or returning such proceeds.
Section 2.11. NONCASH PROCEEDS. Notwithstanding anything contained
herein to the contrary, if Revolver Agent shall ever acquire any Shared
Collateral through foreclosure or by a conveyance in lieu of foreclosure or if
any Proceeds of Shared Collateral received by Revolver Agent (or received
directly by either Secured Party or any Lender) to be distributed and shared
pursuant to this Article II are in a form other than immediately available
funds, the Person receiving such Shared Collateral or Proceeds of Shared
Collateral shall not be required to remit any share thereof under the terms
hereof and the Lenders shall only be entitled to their interests in the Shared
Collateral or noncash Proceeds of Shared Collateral as determined hereby. The
Lenders shall receive the applicable portions of any immediately available funds
consisting of Proceeds from such Shared Collateral or proceeds of such noncash
Proceeds so acquired only if and when paid in connection with the subsequent
disposition thereof. While any Shared Collateral or other property to be shared
pursuant to this Article II is held by Revolver Agent pursuant to this Section
2.11, Revolver Agent shall hold such Shared Collateral or other property for the
benefit of the Revolver Lenders and the Term Loan Agent in accordance with their
interest therein and all matters relating to the management, operation, further
disposition or any other aspect of such Shared Collateral or other property
shall be resolved by the agreement of (a) the required number of Revolver
Lenders (as determined in accordance with the Revolver Agreement) until the date
set forth in Section 2.6(c)(ii) occurs and thereafter (b) the required number of
Term Lenders (as determined in accordance with the Term Loan Agreement).
Section 2.12. NOTICE TO PERSONS MAKING DISTRIBUTIONS. Each Secured
Party shall promptly and appropriately instruct any Person (other than Revolver
Agent) making any distribution of Proceeds of Shared Collateral, to make such
distribution so as to give effect to this Agreement.
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Section 2.13. PERFECTION BY POSSESSION; DEPOSIT ACCOUNTS. Each Secured
Party hereby appoints the other Secured Party to serve as its bailee to perfect
each Secured Party's liens in the Shared Collateral, including any Proceeds of
Shared Collateral in the possession of any such other Secured Party. Each
Secured Party possessing such Shared Collateral agrees to so act as bailee for
the other in accordance with the terms and provisions hereof. In furtherance of
the forgoing, the Secured Parties acknowledge that certain of the Debtors
maintain deposit accounts at First Union as disclosed pursuant to the Revolver
Documents (all such accounts herein the "First Union Accounts") and certain of
the Debtors maintain deposit accounts at Chase as disclosed pursuant to the Term
Loan Documents (all such accounts herein the "Chase Accounts" and together with
the First Union Accounts, the "Agent Accounts"). Each Secured Party agrees to
hold its Agent Accounts as bailee for the other Secured Party to perfect the
security interest held for the benefit of the Lenders therein. Prior to the
receipt by a Secured Party of notice from the other Secured Party that an event
of default under the Revolver Documents or Term Loan Documents, as applicable,
has occurred, the Debtors are entitled to make withdrawals from and deposits
into the Agent Accounts. When the Term Loan Agent has received notice that an
event of default under the Revolver Documents has occurred, the Revolver Agent
shall be the only party entitled to make withdrawals from the First Union
Accounts. The Term Loan Agent agrees to transfer, in immediately available funds
by wire transfer to the Revolver Agent, the amount of the collected funds
credited to the First Union Accounts and deliver to the Revolver Agent all
moneys or instruments relating thereto or held therein and any other Shared
Collateral at any time the Revolver Agent demands payment or delivery thereof by
such written notice, provided, that Revolver Agent hereby indemnifies and agrees
to hold First Union harmless with respect to any item that was credited to any
such First Union account and was subsequently returned to First Union for any
reason whatsoever. Each Debtor agrees that the Term Loan Agent is authorized to
immediately deliver all the Shared Collateral to Revolver Agent upon the Term
Loan Agent's receipt of such notice from Revolver Agent. The Term Loan Agent
shall not exercise any right of setoff or banker lien against any First Union
Account; provided that the Term Loan Agent shall be entitled to charge, or
setoff against, the First Union Accounts and retain for its own account, any
customary fees, costs, charges and expenses owed to it in connection with the
opening, operating and maintaining the First Union Accounts and for the amount
of any item credited to a First Union Account which is subsequently returned for
any reason.
Section 2.14. TERM LOAN AGENT OPTION TO COLLECT SHARED COLLATERAL. At
Term Loan Agent's sole and exclusive option (exercised by the delivery of
written notice to the Revolver Agent), after such time as the Revolver Debt has
been satisfied, the commitments of the Revolver Lenders terminated and the
contingent Reimbursement Obligations of the Debtors arising in connection with
outstanding Letters of Credit have been fully satisfied or collateralized,
Revolver Agent will either (A) continue collection of the Accounts and other
Shared Collateral on behalf of Term Loan Agent, as its agent, in accordance with
the terms hereof, or (B) transfer all collection duties to Term Loan Agent or
its designee, which transfer of duties shall include, without limitation, the
assignment of all rights under the Agency Account Agreements and the transfer of
any funds on deposit in any deposit account with the Revolver Agent together
with all records pertaining thereto, and, if applicable, the notification to all
account debtors of such transfer of collection duties. If the Term Loan Agent
elects to require that the Revolver Agent transfer collection duties under this
Section 2.14, (i) the Debtors and the Term Loan Agent, jointly and severally
agree to pay to the Revolver Agent all costs and expenses incurred by the
Revolver Agent in connection with complying with the Term Loan Agent's request
for transfer, including, without limitation, the reasonable fees and expenses of
legal counsel for the Revolver Agent and (ii) the Term Loan Agent agrees to
disburse the Proceeds of the Shared Collateral as provided in Section 2.6(c).
Section 2.15. REVOLVER AGENT AS AGENT FOR THE TERM LOAN AGENT. In order
to facilitate the
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collection of the Shared Collateral on behalf of the Term Loan Agent, the
Term Loan Agent appoints and authorizes the Revolver Agent to act as its
agent with respect to the following specific matters only:
(a) To receive on behalf of the Term Loan Agent any Proceeds
of the Shared Collateral and to distribute the Proceeds so received as provided
in this Agreement;
(b) To receive all Shared Collateral that comes into the
possession of the Revolver Agent as agent for the Term Loan Agent to the extent
of the Term Loan Agent's interest in the Shared Collateral as herein specified
as bailee for the Term Loan Agent to perfect the liens and security interests
granted to the Term Loan Agent in the Shared Collateral;
(c) To act as nominee for and on behalf of the Term Loan Agent
in and under the Agency Account Agreements and any landlord or mortgagee waivers
or subordination agreements; and
(d) To take title to the Shared Collateral for the benefit of
the Lenders pursuant to the exercise of any rights and remedies arising upon a
default and to manage the Shared Collateral so acquired pursuant to the
directions of the Lenders as provided herein.
The Revolver Agent consents to such appointment and agrees to perform the duties
specified above in this Section 2.15. Neither the Revolver Agent nor any of its
affiliates, officers, directors, employees, attorneys, or agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or
otherwise in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Revolver Agent, as agent for the Term Loan Agent: (i)
shall have no duties or responsibilities except those expressly set forth in
this Agreement; (ii) shall not be required to initiate any litigation,
foreclosure or collection proceedings hereunder; (iii) shall not be responsible
to the Term Loan Agent or any Term Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or any certificate or
other document referred to or provided for in, or received by any of them under
this Agreement, or for the value, validity, effectiveness, enforceability, or
sufficiency of this Agreement or any other document referred to or provided for
herein or therein or for any failure by any Person to perform any of its
obligations hereunder or thereunder; (iv) shall not be required to keep itself
informed as to the performance or observance by any Debtor of any Revolver
Document or Term Loan Document or to inspect the properties or books of any
Debtor; (v) shall not have any duty or responsibility to provide the Term Loan
Agent or the Term Lenders with any credit or other financial information
concerning the affairs, financial condition, properties or business of any
Debtor (or any of its affiliates) or the Shared Collateral which may come into
the possession of the Revolver Agent or any of its affiliates except as
expressly provided herein; (vi) may consult with legal counsel, independent
public accountants, and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants, or experts; (vii) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties; and (viii) shall
incur no liability to the Term Loan Agent or any Term Lender for taking action
for the benefit of the Revolver Lenders, even if such action is detrimental to
the interests of the Term Loan Agent or any Term Lender. As to any matters not
expressly provided for by this Agreement, the Revolver Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by Required Lenders, and such instructions
of Required Lenders and any action taken or failure to act
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pursuant thereto shall be binding on the Secured Parties and the Lenders;
PROVIDED, HOWEVER, that the Revolver Agent shall not be required to take any
action which exposes the Revolver Agent to personal liability (including any
liability to the Revolver Lenders) or which is contrary to this Agreement,
contrary to any obligation or duty the Revolver Agent owes to the Revolver
Lenders or contrary to applicable law or any court order.
Section 2.16. INTERPLEADER; DECLARATORY JUDGMENT. In the event any
controversy arises between or among the Lenders or the Secured Parties with
respect to this Agreement or any rights of any such Person hereunder, the
Revolver Agent shall have the right to institute a xxxx of interpleader in any
court of competent jurisdiction with respect to any amounts held by the Revolver
Agent hereunder or to initiate proceedings in any court of competent
jurisdiction for a declaratory judgment to determine the rights of the parties.
Section 2.17. RIGHTS OF REVOLVER AGENT AS A LENDER. The Chase Manhattan
Bank in its capacity as Revolver Agent and a Lender and not as agent acting for
the benefit of the Term Loan Agent shall have the rights and powers hereunder of
the Revolver Agent and a Revolver Lender and shall have the same rights and
powers hereunder as any other Revolver Lender and as the Revolver Agent and may
exercise the same as though it were not acting as the agent for the benefit of
the Term Loan Agent.
Section 2.18. EXPENSES. If the Term Loan Agent exercises the option to
require the Revolver Agent to collect the Shared Collateral on behalf of the
Term Loan Agent as provided in Section 2.14 of this Agreement, the Term Loan
Agent agrees to reimburse the Revolver Agent promptly upon demand for any and
all out-of-pocket costs and expenses (including reasonable attorneys' fees)
incurred by the Revolver Agent in connection with the duties of the Revolver
Agent performed in accordance with Section 2.15, to the extent that the Revolver
Agent is not reimbursed for such expenses by the Debtors, each Debtor hereby
agreeing to pay all such expenses incurred by the Revolver Agent, which cost and
expenses shall be obligations secured by the Shared Collateral and the Other
Collateral.
Section 2.19. BOOKS AND RECORDS, ETC. Revolver Agent and Term Loan
Agent acknowledge that Books and Records are included among the Shared
Collateral. Term Loan Agent agrees that Revolver Agent's security interest shall
be prior to that of Term Loan Agent, but Revolver Agent agrees, if it has
possession or control of the Books and Records in connection with the exercise
of its remedies, it will allow the Term Loan Agent access to such Books and
Records, and will, upon Term Loan Agent's request and upon payment of Revolver
Agent's costs, provide copies of all Books and Records to Term Loan Agent.
Revolver Agent shall cause any agreements required or obtained by Revolver Agent
from landlords or mortgagees which protect the rights of Revolver Agent to have
access to Books and Records on the premises leased from or mortgaged to such
landlord or mortgagee to also similarly protect the rights of Term Loan Agent
with respect thereto and with respect to any other Shared Collateral on such
premises.
Section 2.20. AMENDMENTS.
(a) The consent of Required Lenders shall be required for any
amendment to this Agreement, the Term Loan Documents or the Revolver Documents
that would have the effect of: (i) changing the advance percentage utilized to
determine each Debtor's Borrowing Base from the percentage established on the
date hereof or otherwise amend the definition of Borrowing Base (provided
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that the Revolver Lenders shall be permitted, without the consent of the Term
Lenders, to (A) intentionally extend credit in excess of the Borrowing Base
in an aggregate amount of Five Million Dollars ($5,000,000) outstanding at
any time and in calculating the amount of credit extended in excess of the
Borrowing Base for purposes of this provision, any amount of the Revolver
Obligations that are in excess of the Borrowing Base as a result of a decline
in the value of the property included therein, as a result of reserves
established under the Borrowing Base, as a result of any miscalculation of
the Borrowing Base or as a result of any other factor that has the effect of
reducing the Borrowing Base shall not be included; (B) reduce the advance
percentage applicable to a Debtor utilized to determine the Borrowing Base
based on an increase in the average dilution percentage of the accounts
receivable as described below in clause (b) of this Section 2.20; and (C)
establish reserves under the Borrowing Base and determine the eligibility of
the accounts receivable in the Borrowing Base in the ordinary course of its
business and in accordance with the Revolver Documents), (ii) shortening the
time of payments of principal or interest due under either the Term Loan
Agreement or the Revolver Agreement, or (iii) reducing the committed amount
under the Revolver Agreement in any situation when no default exists.
(b) The Revolver Lenders will be permitted to reset the
advance percentage applicable to any Debtor utilized to determine its Borrowing
Base without the consent of the Term Lenders by utilizing the following formula:
(i) 100%; MINUS
(ii) the sum of Double Dilution plus 3%; EQUALS
(iii) the new advance percentage.
(c) The Term Lenders and Revolver Lenders, as separate groups,
may establish among themselves the number of such Lenders in such group as are
required to take any action described in this Section 2.20, as permitted under
the terms, respectively, of the Term Loan Agreement and the Revolver Agreement,
and shall otherwise have the right to amend or otherwise modify, respectively,
the Term Loan Documents and Revolver Documents.
Section 2.21. PAYROLL ACCOUNTS. From and after the date hereof, Debtors
agree that the First Union Accounts listed on EXHIBIT B attached hereto (the
"Payroll Accounts") shall be used solely to make payroll disbursements. On or
prior to June 30, 2000, Debtors will make adequate arrangements for such payroll
disbursements to be made through an account at Chase or another financial
institution acceptable to Revolver Agent and as to which an Account Agency
Agreement is in effect, and will close the Payroll Accounts. Revolver Agent
agrees that any time and from time to time until June 30, 2000 and in accordance
with its rights under Section 11.4 of the Revolver Agreement, Revolver Agent
shall make advances to First Union on behalf of the Debtors to fund any
overdrafts in any Payroll Account (the "PAYROLL ADVANCES"). Each Payroll Advance
shall be made by wire transfer or ACH credit to the applicable overdrawn payroll
account within one (1) business day of First Union's written request; provided
that, (a) the Revolver Agent shall have no obligations to make any Payroll
Advance: (i) if the Revolver Agent shall have provided First Union three (3)
business days prior written notice that it will no longer make advances under
this Section 2.21 or (ii) if after giving effect to the amount of the Payroll
Advance, the Borrowing Availability (as defined in the Revolver Agreement) would
equal zero or less. Any such amounts paid by the Revolver Agent under this
Section 2.21 shall be deemed to be amounts
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paid under the terms of Section 11.4 of the Revolver Agreement. The Debtors
specifically agree to this Section 2.21 and acknowledge that, in accordance
with Section 3.4, no Debtor shall have any right to enforce the provisions of
this Section 2.21 against the Revolver Agent.
ARTICLE III
MISCELLANEOUS
Section 3.1. NOTICES, ETC. Any notice or other communication required
or permitted to be given by this Agreement or by applicable law shall be in
writing and shall be deemed received (a) on the date delivered, if sent by hand
delivery (to the person or department if one is specified below), (b) three (3)
Business Days following the date deposited in U.S. mail, certified or
registered, with return receipt requested, or (c) one (1) day following the date
deposited with Federal Express or other national overnight carrier, and in each
case addressed as follows:
IF TO THE REVOLVER AGENT:
The Chase Manhattan Bank
Asset Based Lending
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Credit Deputy
WITH A COPY TO:
Chase Business Credit
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
IF TO TERM LOAN AGENT:
First Union National Bank
0000 Xxxxxxxx Xxxxxx
XX 4843
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Either party may change its address to another address by notice given as herein
provided. Actual receipt of notice shall not be necessary in order to provide
effective notice hereunder, except that any change of address shall not be
effective until actually received by the other parties.
Section 3.2. WAIVER OF MARSHALING. Each party to this Agreement hereby
waives any right to require any other party to marshal any security or
collateral or otherwise to compel any other party to seek recourse against or
satisfaction of the indebtedness owed to it from one source before seeking
recourse or satisfaction from another source.
Section 3.3. COPIES OF LOAN DOCUMENTS. The Secured Parties agree to
provide each other with
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(i) copies of the fully executed loan documents which evidence or embody
their respective loans, on the closing date of such loans, and (ii) any
future amendments or other modifications thereto or waivers in connection
therewith, promptly upon the effectiveness of such amendment, modification or
waiver.
Section 3.4. OBLIGATIONS UNIMPAIRED; DEBTORS NOT THIRD PARTY
BENEFICIARIES. Except as expressly provided herein, nothing contained in this
Agreement shall impair, as between the Debtors on the one hand and the Secured
Parties and the Lenders on the other, the obligations of Debtors to pay or
perform any obligation or liability any one of them may have to such Secured
Party or Lender when the same are required to be paid or performed in accordance
with the terms of the Revolver Documents or Term Loan Documents, as applicable.
The Debtors agree that this Agreement (i) shall not give the any Debtor any
substantive rights vis-a-vis any Secured Party or any Lender, (ii) is for the
sole benefit of the Secured Parties and the Lenders, (iii) may be enforced by
only the Secured Parties and the Lenders and their respective successors and
assigns, and (iv) is not for the benefit of, and may not be enforced by, any
Debtor.
Section 3.5. NO ADDITIONAL RIGHTS FOR THE DEBTORS. If either Secured
Party or any Lender shall enforce its rights and remedies in violation of the
terms of this Agreement, each Debtor agrees that it shall not use such violation
as a defense to the enforcement by such Secured Party or any Lender of any of
their respective rights under the loan documents to which it is a party nor
assert such violation as a counterclaim or basis for setoff or recoupment
against either Secured Party or any Lender.
Section 3.6. FURTHER ASSURANCES. At any time and from time to time,
upon the written request of either Secured Party, and at the expense of the
Debtors, each Debtor will promptly execute and deliver any and all such further
instruments and documentation and take such further action as either Secured
Party deems necessary or advisable in obtaining the full benefits of this
Agreement.
Section 3.7. MISCELLANEOUS.
(a) This Agreement shall be binding upon the parties hereto,
the Lenders and their respective successors and assigns. Each Secured Party
represents and warrants to the other that it has the power to bind the Lenders
in its bank group to this Agreement.
(b) Should any provision of this Agreement be deemed invalid
or unenforceable as contrary to applicable law, the parties hereto agree that
such provision shall automatically be deemed to be reformed as to be consistent
with applicable law.
(c) This Agreement may not be amended or modified except by a
written instrument signed by the Secured Parties and the Required Lenders;
provided that a new Person that becomes a subsidiary of the Parent and pledges
its Shared Collateral to the Secured Parties may become a party hereto pursuant
to the execution of a joinder agreement in form and substance acceptable to the
Secured Parties without the consent or agreement of the Required Lenders.
(d) This Agreement may be executed in any number of
counterparts and on telecopy
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counterparts, each of which, when executed and delivered, shall be an
original, but such counterparts shall together constitute one and the same
agreement.
(e) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
(f) No waiver by any party hereto of the compliance by any
other party with any term, provision, obligation or agreement contained herein
shall constitute a waiver of such party's right to thereafter require full
compliance therewith.
Section 3.8. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY WAIVE ANY
RIGHT THAT ANY OF THEM MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM,
SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY
RELATED TO THIS AGREEMENT, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR
RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO
THIS AGREEMENT OR THE EXERCISE OF ANY PARTY'S RIGHTS AND REMEDIES UNDER THIS
AGREEMENT OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP OF THE PARTIES
HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING
AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES HERETO AGREE
THAT ANY PARTY MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF THE PARTIES
HERETO IRREVOCABLY TO WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY AS AN
INDUCEMENT TO THE PARTIES TO ENTER INTO THIS AGREEMENT, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER (WHETHER OR
NOT MODIFIED HEREIN) BETWEEN THE PARTIES HERETO SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
[Signature page follows]
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IN WITNESS WHEREOF, each of the undersigned have executed or have
caused this Agreement to be executed by their duly authorized officers on the
day and year first above written.
MARKETING SPECIALIST CORPORATION
MARKETING SPECIALISTS SALES COMPANY
By:
-----------------------------------------
Name:
------------------------------------
Authorized Officer for all Debtors
XXXX XXXXX ASSOCIATES, INC.
BROMAR, INC.
By:
-----------------------------------------
Name:
------------------------------------
Authorized Officer for all Debtors
THE CHASE MANHATTAN BANK,
as Revolver Agent
By:
-----------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
FIRST UNION NATIONAL BANK,
a national banking association, as Term Loan
Agent
By:
-----------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
-17-
EXHIBIT "A"
TO
INTERCREDITOR AGREEMENT
SHARED COLLATERAL
All of right, title and interest of each Debtor in and to the
following, whether now owned or hereafter arising or acquired and wherever
located (collectively, the "COLLATERAL"):
(a) all Accounts;
(b) all Inventory;
(c) all Deposit Accounts and all funds, certificates, Documents,
Instruments, checks, drafts, wire transfer receipts and other
earnings, profits or other Proceeds from time to time
representing, evidencing, deposited into or held in the
Deposit Accounts; and
(d) all Instruments, Financial Assets, other Investment Property,
Documents, Chattel Paper, General Intangibles, products and
Proceeds evidencing title to, or the right to possession of,
arising from the sale or other disposition of, necessary for
or used in connection with the production, manufacture, sale
or other disposition of, or otherwise relating to, or arising
or created out of the property described in the forgoing
clauses (a) through (c).
Notwithstanding the definition above, Collateral shall not include any
Debtor's equipment, fixtures, Intellectual Property, real estate, insurance
policies (other than casualty insurance specifically relating to a casualty loss
with respect to Shared Collateral) or stock of subsidiaries, or any Proceeds
thereof (other than proceeds of casualty insurance specifically relating to a
casualty loss with respect to Shared Collateral).
As used in the this Exhibit "A", the following terms shall have the
following meanings and terms used in this Exhibit "A", which are defined in the
UCC, unless otherwise defined in this Exhibit "A", shall have the meanings
determined in accordance with the UCC:
"ACCOUNT" means any "account," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by the Debtor:
(a) all rights of the Debtor to payment for goods sold or leased or
services rendered, whether or not earned by performance, (b) all
accounts receivable of the Debtor, (c) all security pledged, assigned
or granted to or held by the Debtor to secure any of the foregoing, (d)
all guaranties of, or indemnifications with respect to, any of the
foregoing, (e) all rights of the Debtor as an unpaid seller of goods or
services, including, but not limited to, all rights of stoppage in
transit, replevin, reclamation and resale, (f) all rights to brokerage
commissions, and (g) all other Supporting Obligations, including any
applicable Letter of Credit Rights.
"CHATTEL PAPER" means any "chattel paper," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by the Debtor.
"DEPOSIT ACCOUNTS" means any and all deposit accounts or other
bank accounts now owned or hereafter acquired or opened by the Debtor,
and any account which is a
replacement or substitute for any of such accounts.
"DOCUMENT" means any "document," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by the
Debtor, including, without limitation, all documents of title and all
receipts covering, evidencing or representing goods now owned or
hereafter acquired by the Debtor.
"FINANCIAL ASSETS" means any "financial asset," as such term
is defined in the UCC.
"GENERAL INTANGIBLES" means any "general intangibles," as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by the Debtor and (i) , in any event, shall include,
without limitation, each of the following, whether now owned or
hereafter acquired by the Debtor: (a) all of the Debtor's books and
records, including without limitation, all books and records, computer
runs, invoices, tapes, processing software, processing contracts (such
as contracts for computer time and services) and any computer prepared
information, tapes, or data of every kind and description, whether in
the possession of any Debtor or in the possession of third parties and
all of each Debtor's other data, plans, manuals, computer software,
computer tapes, computer disks, computer programs, source codes, object
codes, rights of the Debtor to retrieve data and other information from
third parties, and other data of every kind and description, to the
extent that they indicate, summarize, or evidence, or otherwise relate
to, the Accounts or Inventory, whether in the possession of any Debtor
or in the possession of any third party; (b) all of the Debtor's
contract rights, including, without limitation, all of Debtor's right,
title and interest in and to the Lockbox Agreements which include,
without limitation, the following: (i) all rights of the Debtor to
receive moneys due and to become due under or pursuant to such contract
rights, (ii) all rights of the Debtor to receive proceeds of any
insurance, indemnity, warranty, guaranty, or other Supporting
Obligations with respect to such contract rights, (iii) all claims of
the Debtor for damages arising out of or for breach of or default under
such contract rights, and (iv) all rights of the Debtor to terminate
such contract rights, to perform thereunder and to compel performance
and otherwise exercise all rights and remedies thereunder; (c) all
rights of the Debtor to payment under letters of credit and similar
agreements, including without limitation, all Letter of Credit Rights;
(d) all choses in action and causes of action of the Debtor (whether
arising in contract, tort or otherwise and whether or not currently in
litigation) and all judgments in favor of the Debtor, including without
limitation, all commercial tort claims; and (e) all rights of the
Debtor under any insurance, surety or similar contract or arrangement
and (ii) shall specifically exclude any Intellectual Property.
"INSTRUMENT" means any "instrument," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
the Debtor, and, in any event, shall include all promissory notes,
drafts, bills of exchange and trade acceptances of the Debtor, whether
now owned or hereafter acquired.
"INTELLECTUAL PROPERTY" means the Trademarks and Trademark
Licenses.
"INVENTORY" means any "inventory," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by the
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by the Debtor:
(a) all goods and other personal property of the
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Debtor that are held for sale or lease or to be furnished under any
contract of service; (b) all raw materials, work-in-process, finished
goods, inventory, supplies and materials of such Debtor; (c) all
wrapping, packaging, advertising and shipping materials of the Debtor;
(d) all goods that have been returned to, repossessed by or stopped in
transit by the Debtor; and (e) all Documents evidencing any of the
foregoing.
"INVESTMENT PROPERTY" means any "investment property" as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by the Debtor, and, in any event, shall include,
without limitation, each of the following, whether now owned or
hereafter acquired by the Debtor: (a) any security, whether
certificated or uncertificated; (b) any security entitlement; (c) any
securities account; (d) any commodity contract; and (e) any commodity
account, PROVIDED, however, that Investment Property shall not include
any equity interests issued by subsidiaries of the Debtor.
"LETTER OF CREDIT RIGHTS" means "letter of credit rights," as
such term is defined in the UCC.
"LOCKBOX ACCOUNTS" shall mean the lockbox accounts described
in the Revolver Documents and any other accounts established pursuant
to the Lockbox Agreements in which all funds received pursuant to the
Lockbox Agreements shall be deposited.
"LOCKBOX AGREEMENTS" shall mean the lockbox or other
agreements described in the Revolver Documents and any lockbox or other
agreement entered into by a Debtor, with the Revolver Agent, any
Revolver Lender or any other depository institution acceptable to the
Revolver Agent, pursuant to which a lockbox and deposit account shall
be established for a Debtor into which payments on such Debtor's
accounts or other Collateral shall be sent and deposited, each in form
and substance satisfactory to the Revolver Agent, as the same may be
amended or otherwise modified.
"PAYMENT INTANGIBLES" means "payment intangibles" as such term
is defined in the UCC.
"PROCEEDS" means any "proceeds," as such term is defined in
Article or Chapter 9 of the UCC and, in any event, shall include, but
not be limited to, (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Debtor from time to time
with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to the Debtor from time to
time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any party acting, or purporting to act, for
or on behalf of any governmental authority), and (c) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral and all other Payment Intangibles relating
thereto.
"SUPPORTING OBLIGATIONS" means "supporting obligations" as
such term is defined in the UCC.
"TRADEMARK LICENSE" means any written agreement now or
hereafter in existence granting to the Debtor any right to use any
Trademark.
"TRADEMARKS" means all of the following: (a) all trademarks,
trade names,
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corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers,
prints and labels on which any of the foregoing appear, all
registrations and recordings thereof and all applications in
connection therewith, including, without limitation, registrations,
recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political
subdivision thereof; (b) all reissues, extensions and renewals thereof;
(c) all income, royalties, damages and payments now or hereafter
relating to or payable under any of the foregoing, including, without
limitation, damages or payments for past or future infringements of
any of the foregoing; (d) the right to xxx for past, present and future
infringements of any of the foregoing; (e) all rights corresponding to
any of the foregoing throughout the world; and (f) all goodwill
associated with and symbolized by any of the foregoing; in each case,
whether now owned or hereafter acquired by the Debtor.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York from time to time and for purpose of the definitions
contained in this Exhibit "A", includes the Revised Article 9 of the
Uniform Commercial Code included in the 1998 official text of the
Uniform Commercial Code as approved by the American Law Institute in
1998 and the National Conference of Commissioners on Uniform State Laws
in 1999 ("Revised Article 9"). For purposes of this Exhibit "A", in the
event of any difference between the Uniform Commercial Code as in
effect in the State of New York and Revised Article 9, Revised Article
9 shall control.
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EXHIBIT B
PAYROLL ACCOUNTS
Payroll Account: #2079950027162
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