EXHIBIT 99.7
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INTERCREDITOR AGREEMENT
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THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated as of February
21, 2001, by and among TRIPLE L LTD., K&L FINANCIAL, INC., (the "Affiliated
Lenders"), XXXXXXXX STATE BANK ("Xxxxxxxx") (which is an assignee of Triple L)
(Xxxxxxxx and the Affiliated Lenders herein referred to collectively as the
"Senior Lender"), FINOVA MEZZANINE CAPITAL, INC. (the "Subordinated Lender" and,
together with the Senior Lender, the "New Lenders"), U.S. BANK TRUST NATIONAL
ASSOCIATION, a national banking association (the "Trustee"), and ABLE
LABORATORIES, INC., a Delaware corporation (the "Borrower"),
W I T N E S S E T H:
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BACKGROUND.
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Reference is made to those certain $1,700,000 Industrial Development
Revenue Bonds (Able Laboratories, Inc. Project) Series 1999A (the "Series 1999A
Bonds"), and those certain $300,000 Industrial Development Revenue Bonds (Able
Laboratories, Inc. Project) Series 1999B (Taxable) (the "Series 1999B (Taxable)
Bonds" and, together with the Series 1999A Bonds, the "Series 1999 Bonds")
executed and delivered by the New Jersey Economic Development Authority (the
"Authority") pursuant to a Trust Indenture (the "Indenture"), dated as of June
1, 1999, by and between the Authority and the Trustee. The Borrower has executed
and delivered to the Authority its Promissory Note dated June 1, 1999 in the
original principal amount of $2,000,000.00 (the "Bond Note"), which Bond Note
the Authority has assigned to the Trustee, which Bond Note provides, among other
things, for payments to be made by the Borrower in an amount sufficient to pay
the debt service on the Series 1999 Bonds. The Trustee has heretofore filed one
or more financing statements under the Uniform Commercial Code giving notice of
its security interest in certain of the assets of the Borrower and is the
mortgagee, by assignment, under that certain Leasehold Mortgage, Security
Agreement, Assignment of Rents and Financing Statement executed and delivered by
the Borrower in connection with the issuance of the Series 1999 Bonds.
This Agreement is being executed and delivered, for the purpose
hereinafter set forth, in connection with certain indebtedness that the Borrower
is accruing, and certain security interests that the Borrower has agreed to
grant, to the New Lenders. The Borrower has granted to the Senior Lender a
security interest in certain assets of the Borrower, and in connection with
additional financings may grant a security interest in other assets of the
Borrower, whether now owned or hereafter acquired (including, without
limitation, accounts, accounts receivable, inventory, furniture, fixtures,
equipment, general intangibles, intellectual property, licenses, contract
rights, chattel paper, instruments, documents, deposit accounts, books, records
and computer software, investment property and proceeds and products of the
foregoing, including, without limitation, insurance proceeds, lock box contents
and proceeds and deposit accounts) (the "Senior Lender's Collateral"). The
Senior Lender will file one or more financing statements under the Uniform
Commercial Code giving notice of the Senior Lender's security interest in the
Senior Lender's Collateral. The Borrower has granted to the Subordinated Lender
a security
interest in certain assets of the Borrower, whether now owned or hereafter
acquired (consisting of accounts, accounts receivable, inventory, general
intangibles, intellectual property, licenses, contract rights, chattel paper,
instruments, documents, deposit accounts, books, records and computer software,
investment property and proceeds and products of the foregoing, including,
without limitation, insurance proceeds, lock box contents and proceeds and
deposit accounts, but excluding any machinery, equipment, furniture and
fixtures) (the "Subordinated Lender's Collateral").
The parties hereto desire to avoid all conflicts that might otherwise
result from the filing of such financing statements, to set forth their
respective interests in the Borrower's assets, and to enter into this Agreement
for that purpose.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Trustee hereby expressly and unconditionally subordinates in
favor of the Senior Lender all right, title and interest that the Trustee might
at present have, or which it might hereafter acquire, from Borrower in and to
any of the Borrower's accounts, accounts receivable, investment property,
contract rights, chattel paper, general intangibles, instruments, documents,
intellectual property, deposit accounts, inventory including all claims against
any supplier, equipment, and all books, records (computerized or manual) and
computer software in connection with all of the foregoing, and all proceeds and
products of the foregoing including, but not limited to insurance proceeds, lock
box contents and proceeds, and deposit accounts, whether now owned or hereafter
acquired, save and except those assets that are more fully listed and described
on Exhibit A, attached hereto and incorporated herein by reference.
2. The Trustee hereby expressly and unconditionally subordinates in
favor of the Subordinated Lender all right, title and interest that the Trustee
might at present have, or which it might hereafter acquire, from Borrower in and
to all of the Borrower's accounts, accounts receivable, inventory, general
intangibles, intellectual property, licenses, contract rights, chattel paper,
instruments, documents, deposit accounts, books, records and computer software,
investment property and proceeds and products of the foregoing, including,
without limitation, insurance proceeds, lock box contents and proceeds and
deposit accounts (but excluding any machinery, equipment, furniture and
fixtures), whether now owned or hereafter acquired, save and except those assets
that are more fully listed and described on Exhibit A attached hereto and
incorporated herein by reference.
3. Reciprocally, each of the New Lenders hereby expressly and
unconditionally subordinates in favor of the Trustee all right, title and
interest that such New Lender might at present have, or which it might hereafter
acquire, from Borrower in and to all of the Borrower's assets that are more
fully listed and described on Exhibit A, attached hereto and incorporated herein
by reference, whether now owned or hereafter acquired, and all attachments,
accessories, accessions, substitutions and replacements thereto and therefor,
and all proceeds thereof (the aforesaid assets, together with all of the
Borrower's furniture, furnishings, equipment, machinery and building materials
that, at any time, heretofore have been, or hereafter may be, acquired by
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the Borrower by means of other than the proceeds of the Series 1999 Bonds being
herein referred to collectively as the "Assembled Industrial Plant Collateral").
4. Each of the New Lenders and the Trustee (hereinafter sometimes
referred to individually as a "Creditor" and collectively as the "Creditors")
consent to the others taking and perfecting a security interest in the
Borrower's assets as described above, subject to the terms of this Agreement.
Those assets of the Borrower in which more than one of the Creditors have a
security interest (whether junior or senior, and including the Assembled
Industrial Plant Collateral) are hereinafter referred to collectively as the
"Common Collateral."
5. During the term of this Agreement, the Trustee agrees that it will
not commence, undertake or prosecute any Enforcement Action with respect to all
or any part of the Common Collateral, other than the Assembled Industrial Plant
Collateral, unless and until an Enforcement Notice has been given to, and
actually received by, the other Creditors, and (a) such other Creditors have
consented in writing to such Enforcement Action (which consent may be
arbitrarily withheld by such other Creditors in their sole and absolute
discretion, but which consent shall be deemed to have been given if any such
other Creditor, itself, shall have commenced any such Enforcement Action), or
(b) such other Creditors have been paid in full all indebtedness owed to them by
the Borrower, or (c) a period of thirty (30) days after such other Creditor's
receipt of such Enforcement Notice shall have expired.
6. In addition, during the term of this Agreement, each New Lender
agrees that it will not commence, undertake or prosecute any Enforcement Action
with respect to all or any part of the Assembled Industrial Plant Collateral
unless and until an Enforcement Notice has been given to, and actually received
by, the Trustee, and (a) the Trustee shall have consented in writing to such
Enforcement Action (which consent may be arbitrarily withheld by the Trustee in
its sole and absolute discretion, but which consent shall be deemed to have been
given if the Trustee, itself, shall have commenced any such Enforcement Action),
or (b) the entire principal amount of the Series 1999 Bonds, together with all
interest accrued thereon and premium, if any, payable in respect thereof, shall
have been paid in full, or (c) a period of two (2) months after the Trustee's
receipt of such Enforcement Notice shall have expired.
7. For purposes of this Agreement:
(a) An Enforcement Action shall mean and include any of the
following by any Creditor: the repossession or attempted repossession of any of
the Common Collateral; the sale, use or other disposition of any of the Common
Collateral; the commencement of any judicial or non-judicial action for the
enforcement of any of the rights or remedies with respect to any Common
Collateral, including, without limitation, any such action under the United
States Bankruptcy Code or any state insolvency statute. An Enforcement Action
shall not include, and no Creditor shall be prevented by this Agreement from
having (and the Trustee on behalf of itself and any successors and assigns,
including purchasers at any foreclosure or similar sale agrees to furnish the
Senior Lender with), (i) access to the Facility (as defined in the Indenture)
for the purpose of exercising any rights and remedies available to it (subject
to the provisions of Paragraphs 5 and 6 hereof), or (ii) seeking a monetary
judgment against the Borrower, but any execution issued in connection therewith
shall be subject to the provisions of Paragraphs 5 and 6 hereof.
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(b) An Enforcement Notice shall mean a written notice
delivered, at a time when an "event of default" (as defined in any agreement
between or for the benefit of any Creditor and the Borrower, and whether or not
in precisely the aforesaid words or other words of similar import) has occurred
and is continuing, by any Creditor to the others, announcing that such Creditor
desires to commence an Enforcement Action, specifying the relevant event of
default, specifying the nature and extent of the Enforcement Action desired to
be commenced, and stating the current balance of the Borrower's debt to such
Creditor.
8. Each Creditor agrees hereby that, if the Borrower should satisfy in
full its indebtedness to such Creditor, it will promptly notify each other
Creditor of that fact. In addition, each Creditor shall notify each other
Creditor of any Enforcement Actions which such Creditor proposes to take
contemporaneously with any the delivery of any such notice furnished to the
Borrower, PROVIDED THAT, except as otherwise provided by applicable law
(including, without limitation, the Uniform Commercial Code) the failure of a
Creditor in good faith to furnish such notice to each other Creditor, shall not
limit or restrict the exercise of such Enforcement Actions, and FURTHER PROVIDED
THAT any such Enforcement Action will be subject to the provisions of Paragraphs
5 and 6 hereof.
9. Any notice, approval, waiver, objection, delivery of documents, or
other communication required or permitted to be given hereunder or given in
regard to this Agreement by one party to another shall be in writing, shall be
transmitted by one of the following specified methods, and shall be effective
when actually delivered in person, or when received when sent by a commercial
delivery service, by telecopy or the U.S. mail, certified, postage prepaid,
return receipt requested, and addressed as follows:
To the Affiliated Lenders: K&L Financial, Inc.
00 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
To Xxxxxxxx: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
To the Subordinated Lender: Finova Mezzanine Capital, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
The Trustee: U.S. Bank Trust National Association
Corporate Trust Services
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
The Borrower: Able Laboratories, Inc.
0 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, XX 00000
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10. Notwithstanding the date, manner or order of perfection of the
security interests in and liens on the Common Collateral granted to any Creditor
by Borrower, and notwithstanding any provision of the Uniform Commercial Code,
or any applicable law or decision, or the agreement of any Creditor with the
Borrower, or whether any Creditor holds possession of all or any part of the
Common Collateral, as among the Creditors, the relative priority of the security
interests and liens of the Creditors in and on the Common Collateral during the
term of this Agreement shall be as set forth in this Intercreditor Agreement.
11. The priorities established hereunder are only as among the
Creditors, and, to the extent that the operation of the foregoing provisions
would otherwise entitle any other person (including a trustee in bankruptcy) to
a priority over any Creditor, then (and only to such extent) such provisions
shall be ineffective.
12. If any Creditor shall attempt to enforce its rights or remedies in
violation of the terms of this Agreement, the Borrower agrees that it will not
use such violation as a defense to any Enforcement Action permitted any Creditor
by the provisions of this Agreement, nor assert such violation as a counterclaim
or basis for set-off or recoupment against any Creditor.
13. None of the Creditors nor any of their respective directors,
officers, agents or employees shall be responsible to the other Creditors or to
any other person or entity for the Borrower's solvency, financial condition or
ability to repay any indebtedness to any Creditor, or for any statements of the
Borrower, oral or written, or for the validity, priority, sufficiency or
enforceability of any Creditor's claims against or agreements with the Borrower,
or any lien or security interest, or the enforceability thereof, granted by the
Borrower to any Creditor. Each Creditor has entered into its agreements with the
Borrower based upon its own independent investigation, and makes no warranty or
representation to the other Creditors, nor does it rely upon any representation
of any other Creditor with respect to matters identified or referred to in this
Paragraph.
14. Except as provided in this Agreement and except with respect to any
breach of this Agreement, none of the Creditors shall have any liability to any
other Creditor except for bad faith or willful misconduct.
15. The Trustee shall have only such duties as are specifically set
forth in this Agreement with respect to the subject matter hereof, and, to the
extent provided by law, the Borrower agrees to indemnify and save the Trustee
and its officers, directors, employees and agents harmless against any loss,
expense and liabilities which they may incur arising out of or in the exercise
or performance of its powers and duties hereunder, including the costs and
expenses (including attorneys' fees) of defending against any claim of
liability, but excluding liabilities due to the Trustee's gross negligence or
willful misconduct. The Trustee shall not be deemed to be acting in a fiduciary
capacity for the Borrower, any other Creditor, any holder or beneficial owner of
the Series 1999 Bonds or any other party. In addition, the Trustee shall be
entitled, in acting hereunder, to all of the rights, protections and indemnities
afforded the Trustee under and pursuant to the Indenture and the Loan Agreement.
The obligations of the Borrower under this Section 15 shall survive resignation
or removal of the Trustee and payment of the Series 1999 Bonds.
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16. This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof, and all modifications or
amendments of this Agreement, to be binding and enforceable, must be in writing
and must be duly executed by an authorized officer of each party purported to be
bound thereby.
17. No Creditor shall contest the validity, perfection, priority or
enforceability of any lien or security interest in the Common Collateral granted
to the other Creditors, and each Creditor hereby agrees not to interfere with
any other Creditor's defense of any action contesting the validity, perfection,
priority or enforceability of such lien or security interest.
18. No waiver shall be deemed to be made by any Creditor of its rights
hereunder, unless the same shall be in writing, signed on behalf of such
Creditor. Each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of such
Creditor or the obligations of any other Creditor in any other respect at any
other time. This Agreement shall be governed as to validity, interpretation,
enforcement and effect by the laws of the State of New Jersey.
19. This Agreement shall remain in full force and effect for so long as
any part of the Borrower's outstanding liquidated and unliquidated indebtedness
to two or more Creditors shall remain unpaid. No change in the nature, amount,
type or other terms of any such indebtedness due any Creditor, including any
refinancing of any thereof, shall affect the provisions of this Agreement or the
enforceability thereof.
20. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Specifically,
the parties hereto agree that: (a) any Creditor may assign this Agreement, and
such Creditor's rights and obligations hereunder, to any lender (a "Future
Lender") that may, after the date hereof, acquire a security interest in any of
the Common Collateral to secure indebtedness (of whatsoever nature and in
whatsoever amount) that the Borrower might, from time to time, owe such Future
Lender (provided that such Future Lender joins in this Agreement and agrees to
be bound by all of the assigning Creditor's obligations hereunder); and (b) upon
such an assignment and joinder, such Future Lender will be deemed, for all
purposes hereunder, to have succeeded to the position and priorities of the
assigning Creditor. Except as specifically provided in this Paragraph 20, no
person or persons who are not a party hereto shall have or obtain any right,
benefit, priority or interest under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement the date and year first above written.
TRIPLE L, LTD. K&L FINANCIAL, INC.
By: By:
Name: Name:
ABLE LABORATORIES, INC. FINOVA MEZZANINE CAPITAL, INC.
By: By:
Name: Name:
XXXXXXXX STATE BANK
By:
Name:
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The following is the property on which the lien of the Trustee shall be
senior to any lien thereon now or hereafter held by or for the benefit of the
New Lenders:
1. The Lease Agreement, dated as of November 29, 1984, between the
Borrower's predecessor in interest and the present landlord's predecessor in
interest, relating to the Leasehold (hereinafter defined), as the same has or
hereafter may be, amended or supplemented (the "Lease").
2. The Borrower's leasehold interest in the land and buildings,
fixtures, rights-of-way, privileges and easements which constitute the real
property known and numbered as 0 Xxxxxxxxx Xxxxx, in the Borough of Xxxxx
Xxxxxxxxxx, Xxxxxxxxx Xxxxxx, Xxx Xxxxxx 00000 (the "Leasehold").
3. All fees, deposits or other funds or evidences of credit or
indebtedness deposited by or on behalf of the Borrower with all providers of
utility services to, or insurers of, the Leasehold.
4. All rentals, royalties and other revenues received by the Borrower
from third parties as a result of the Borrower' s subletting, underletting or
assigning of all or any part of the Leasehold.
5. All furniture, furnishings, equipment, machinery and building
materials that, at any time, may be acquired by the Borrower with proceeds of
the Series 1999 Bonds.
6. All proceeds, awards, settlements or other compensation received by
the Borrower as a result of any casualty to all or any part of the Leasehold or
the property referred to in the foregoing Paragraph 5.
7. All proceeds, awards, settlements or other compensation received by
the Borrower as a result of any taking in eminent domain or condemnation (or
conveyance in lieu thereof) of all or any part of the Leasehold or the property
referred to in the foregoing Paragraph 5.
8. All property that the Trustee may, at any time, hold in trust for
the Authority or the holders of the Series 1999 Bonds under and pursuant to the
provisions of the Indenture.
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