EXHIBIT 10.9
AMENDED AND RESTATED SUBORDINATION AND INTERCREDITOR AGREEMENT
THIS AMENDED AND RESTATED SUBORDINATION AND INTERCREDITOR AGREEMENT
(this "AGREEMENT") dated as of September 9, 2002 is entered into between Bank of
America, N.A., as administrative agent for the Senior Banks (in such capacity,
"AGENT"), and Halifax Fund, L.P. ("HALIFAX").
RECITALS
A. U.S. Plastic Lumber Corp., a Nevada corporation ("USPL"), is
indebted to Senior Banks pursuant to the Senior Credit Documents. All Senior
Indebtedness is secured by a first priority continuing Lien on all Senior Bank
Collateral.
B. USPL is indebted to Halifax pursuant to the Halifax Documents. All
Halifax Indebtedness is to be secured by a second priority continuing Lien on
all Senior Bank Collateral.
C. Agent and Halifax are parties to a Subordination and Intercreditor
Agreement dated as of June 15, 2001 (the "EXISTING INTERCREDITOR AGREEMENT"),
pursuant to which Agent and Halifax set forth, among other things, the relative
priority of their respective liens on, and their respective rights with respect
to certain collateral described in the Existing Intercreditor Agreement.
D. Agent and Halifax have entered into this Agreement to amend and
restate the Existing Intercreditor Agreement in order to set forth, among other
things, the relative priority of their respective Liens on, and their respective
rights with respect to, the Senior Bank Collateral after giving effect to the
sale by the Company of the stock of Clean Earth, Inc.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Agent and Halifax hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS. The following terms shall have the
following meanings for purposes of this Agreement (including the background
recitals hereto):
"Agent" - see the PREAMBLE.
"Bankruptcy Code" means Chapter 11 of title 11 of the United States
Code (11 U.S.C. ss. 101 et seq.), as amended from time to time, and any
successor statute, and all rules and regulations promulgated thereunder.
"Credit Parties" means USPL and the Guarantors.
"Existing Intercreditor Agreement" - see the RECITALS.
"Guarantors" means the "Guarantors" under and as defined in the Senior
Credit Agreement.
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"Halifax" - see the PREAMBLE.
"Halifax Documents" means and includes the documents relating to the
issuance of the Subordinated Debenture and the Subordinated Note and all other
agreements, documents and instruments set forth on SCHEDULE 1 hereto, and all
other agreements, documents and instruments evidencing any replacement,
substitution, refunding, renewal or refinancing of or for all or any part of the
Halifax Indebtedness, in each case as amended, restated, supplemented or
otherwise modified and in effect from time to time, to the extent permitted
pursuant to the terms hereof.
"Halifax Indebtedness" means all indebtedness, liabilities and other
obligations of any and every kind and nature now existing or hereafter arising,
contingent or otherwise, of USPL or any other Person under, in connection with,
or evidenced or secured by the Halifax Documents, in each case including,
without limitation, obligations to pay (i) principal, (ii) interest or premium
(including interest accruing after the commencement of any Proceeding, whether
or not constituting an allowed claim in such Proceeding), (iii) dividends, (iv)
fees, (v) costs, expenses and other amounts related to any indemnity against
loss, damage or liability and (vi) any other monetary obligation.
"Holders" means the holders of the Subordinated Debenture and the
Subordinated Note.
"Junior Security" means (i) any common stock of USPL, (ii) any
preferred stock of USPL which is not mandatorily redeemable prior to the 91st
day after the payment in full in cash of all Senior Indebtedness and (iii) any
debt securities issued by USPL which are expressly subordinated to the Senior
Indebtedness at least to the extent set forth herein.
"Lien" means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title, or other preferential arrangement having substantially the
same economic effect as any of the foregoing, whether voluntary or imposed by
law.
"Other Senior Default" - see SECTION 2.3(b).
"Payment Blockage Period" - see SECTION 2.3(b).
"Person" means any natural person, corporation, general or limited
partnership, limited liability company, firm, trust, association, government,
governmental agency or other entity, whether acting in an individual, fiduciary
or other capacity.
"Proceeding" means, with respect to any Person, any (a) insolvency,
bankruptcy, receivership, liquidation, reorganization, readjustment, composition
or other similar proceeding relating to such Person or its Property or creditors
in such capacity, (b) proceeding for any liquidation, dissolution or other
winding-up of such Person, voluntary or involuntary, whether or not involving
insolvency or proceedings under the Bankruptcy Code, whether partial or complete
and whether by operation of law or otherwise, (c) assignment for the benefit of
creditors of such Person or (d) other marshaling of the assets of such Person.
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"Property" means, with respect to any Person, all property and
interests in property of such Person, whether real, personal or mixed, whether
now owned or existing or hereafter acquired or arising and wheresoever located.
"Quakertown Note" means any promissory note issued to a Bank pursuant
to Section 13.20 of the Senior Credit Agreement.
"Senior Banks" means the "Banks" under and as defined in the Senior
Credit Agreement.
"Senior Bank Collateral" means all of each Credit Party's Property,
whether now owned or existing or hereafter acquired or arising and wheresoever
located, including, without limitation, (i) all of each Credit Party's accounts,
machinery, equipment, fixtures, inventory, goods, chattel paper, general
intangibles, investment property, instruments and documents, (ii) all real
property and interests in real property (including leasehold interests) of each
Credit Party and (iii) all accessions to, substitutions for and replacements,
products and proceeds of all of the foregoing Property; PROVIDED that, after
Agent has received the GE Capital Facility Confirmation, Senior Bank Collateral
shall not include the Chicago Purchase Options (as defined in the Senior Credit
Agreement) or, after the exercise of the Chicago Purchase Options, the Chicago
Facility.
"Senior Commitment" means the "Commitment" under and as defined in the
Senior Credit Agreement.
"Senior Credit Agreement" means the Credit Agreement dated as of
September 9, 2002 among USPL, Agent and Senior Banks, as amended or otherwise
modified from time to time.
"Senior Credit Documents" means and includes the Senior Credit
Agreement, all notes issued thereunder or in connection therewith (including,
without limitation, the Deferred Payment Notes (as defined in the Senior Credit
Agreement), but EXCLUDING any Quakertown Note) and all security agreements,
guaranties, pledge agreements, mortgages, deeds of trust and other agreements,
documents and instruments now or at any time hereafter entered into or delivered
by any Credit Party or other Person pursuant thereto, or evidencing any
replacement, substitution, refunding, renewal or refinancing of or for all or
any part of, the Senior Indebtedness, in each case as amended, restated,
supplemented or otherwise modified and in effect from time to time, to the
extent permitted pursuant to the terms hereof.
"Senior Default Notice" - see SECTION 2.3(b).
"Senior Enforcement Action" means any of the following: (a)
acceleration by Senior Banks of all or any part of the Senior Indebtedness; (b)
commencement of any Proceeding with respect to any Credit Party; (c) initiation
of any suit or action, including any Proceeding, against or with respect to any
Credit Party or other Person to enforce payment of or to collect the whole or
any part of the Senior Indebtedness; or (d) the taking by Agent of any action
under the provisions of any state or federal law, including, without limitation,
the Bankruptcy Code or the UCC, to enforce, foreclose upon, take possession of
or sell any Property of any Credit Party or any other Person on account of all
or any part of the Senior Indebtedness, including, any Senior Bank Collateral.
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"Senior Indebtedness" means all indebtedness, liabilities and other
obligations of any and every kind and nature now existing or hereafter arising,
contingent or otherwise, of any Credit Party or any other Person under, in
connection with, or evidenced or secured by the Senior Credit Agreement and the
other Senior Credit Documents, in each case including, without limitation,
obligations to pay (i) principal, (ii) interest (including interest accruing
after the commencement of any Proceeding, whether or not constituting an allowed
claim in such Proceeding), (iii) fees, (iv) termination payments, (v) costs,
expenses and other amounts related to any indemnity against loss, damage or
liability and (vi) any other monetary obligation; PROVIDED that Senior
Indebtedness shall not include obligations arising under the Quakertown Notes.
"Subordinated Debenture" means the $2,831,558 10% Convertible
Subordinated Debenture due March 26, 2006 issued by USPL to Halifax.
"Subordinated Note" means the $5,600,000 10% Subordinated Note due
March 26, 2006 issued by USPL to Halifax.
"UCC" means the Uniform Commercial Code, as in effect from time to time
in any applicable jurisdiction.
"USPL" - see the RECITALS.
All terms used but not otherwise defined herein but defined in the UCC
shall have the respective meanings provided in the UCC.
SECTION 2. LIEN PRIORITIES; PAYMENTS.
2.1 SUBORDINATION. Notwithstanding the date, manner or order of grant,
attachment or perfection of the Liens on all or any part of the Senior Bank
Collateral granted to Agent and Halifax, and notwithstanding the provisions of
the UCC or any other applicable law or decision, or the terms or provisions of
the Senior Credit Documents or the Halifax Documents, respectively, or any other
circumstance whatsoever, Halifax hereby agrees that (a) Agent and each of the
Senior Banks shall have a first, prior, senior and continuing Lien on all of the
Senior Bank Collateral to secure the prompt and complete payment, performance
and observance of all Senior Indebtedness and (b) any Lien on all or any part of
the Senior Bank Collateral now or hereafter held by Halifax or any other Holder,
regardless of when or how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be in all respects and for all purposes subject
to, junior to and subordinate to all Liens on all or any part of the Senior
Collateral granted to or held by Agent or any of the Senior Banks.
2.2 PROHIBITION ON CONTESTING LIENS. Halifax agrees not to challenge,
to seek to avoid or subordinate or to contest, or directly or indirectly to
support any other Person in challenging, seeking to avoid or subordinate or
contesting, in any judicial or other proceeding (including, without limitation,
any Proceeding) the priority, validity, extent, perfection or enforceability of
any Lien held by Agent or any Senior Bank in all or any part of the Senior Bank
Collateral. The foregoing shall not prevent Halifax from providing documents to
any Person pursuant to subpoena or other legal process.
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2.3 PAYMENTS. (a) Notwithstanding any provision of this Agreement to
the contrary, (i) at all times prior to the earlier to occur of (x) the
commencement of any Proceeding and (y) the receipt by Halifax of notice from
Agent of the commencement of any other Senior Enforcement Action, Halifax and
Holders may accept from any Credit Party regularly scheduled payments of
principal and/or interest at the respective times and in the respective amounts
required pursuant to the Halifax Documents without regard to whether such
payments constitute proceeds of Senior Bank Collateral (IT BEING UNDERSTOOD that
during the period beginning on the date of issue of the Subordinated Debenture
and the Subordinated Note and ending on the second anniversary of such issue
date, USPL may elect to pay interest that becomes due on a Scheduled Payment
Date (as defined in the Subordinated Debenture and the Subordinated Note) by
increasing the principal balance of such notes); (ii) the Halifax Indebtedness
may be converted into or exchanged for Junior Securities; and (iii) Halifax may
receive and retain any payment made solely in Junior Securities.
(b) Except as provided in SECTION 2.3(a)(ii) and (iii), no direct or
indirect payment (including by way of set-off) by any Credit Party in respect of
the Halifax Indebtedness, whether upon acceleration or otherwise, shall be made
if at the time of such payment there exists (x) a default in the payment when
due (whether upon acceleration or otherwise) of any principal of, or any
interest on or fees included in, any Senior Indebtedness; or (y) subject to the
following sentences of this paragraph, a matured event of default (other than a
default specified in the preceding CLAUSE (X)) under the Senior Credit Agreement
(an "OTHER SENIOR DEFAULT") and Halifax and USPL have received notice from Agent
or any Senior Bank, in the manner specified in SECTION 16 hereof, of such event
of default (a "SENIOR DEFAULT NOTICE"). With respect to any Other Senior
Default, the period during which no payment on account of Halifax Indebtedness
may be made to or retained by Halifax shall commence only upon giving of a
Senior Default Notice as provided above and shall end at the first to occur of
(x) completion of the 180th day after the beginning of such period, (y) the cure
or waiver of all defaults existing at the time of the applicable Senior Default
Notice or (z) the payment in full in cash of the Senior Indebtedness (the
"PAYMENT BLOCKAGE PERIOD"). Upon termination of any Payment Blockage Period,
USPL may resume payments on account of the Halifax Indebtedness (including any
missed payments) subject to the provisions of SECTION 2.3(a). Only one Senior
Default Notice may be given in any period of 360 consecutive days, and no Other
Senior Default which was in existence on the date of a Senior Default Notice may
be used as the basis for a subsequent Senior Default Notice (it being understood
that any action, or breach of a financial covenant, which occurs after the date
on which a Senior Default Notice is given that, in either case, would give rise
to a matured event of default pursuant to any provision of the Senior Credit
Agreement under which a matured event of default existed shall constitute a new
matured event of default for purposes of this paragraph).
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SECTION 3. ENFORCEMENT.
3.1 NO EXERCISE OF REMEDIES.
(a) Unless and until Agent and each Senior Bank shall have received
indefeasible payment in full in cash of all Senior Indebtedness and the Senior
Credit Documents and all Senior Commitments thereunder shall have terminated
pursuant to the respective terms and provisions thereof, except for its receipt
of payments expressly permitted by SECTION 2.3, neither Halifax nor any other
Holder shall exercise any right or remedy in respect of all or any part of the
Senior Bank Collateral and Halifax and each Holder agrees not to take or receive
from any Credit Party, directly or indirectly, in cash or other Property or by
set-off or in any other manner, whether pursuant to any enforcement, collection,
execution, levy or foreclosure proceeding or otherwise, all or any part of the
Senior Bank Collateral. Without limiting the generality of the foregoing, unless
and until Agent and each Senior Bank shall have received indefeasible payment in
full in cash of all Senior Indebtedness and the Senior Credit Documents and all
Senior Commitments thereunder shall have terminated pursuant to the respective
terms and provisions thereof, (i) neither Halifax nor any other Holder shall
exercise or otherwise assert any right or remedy in respect of all or any part
of the Senior Bank Collateral or any Lien thereon; (ii) the sole right of
Halifax with respect to the Senior Bank Collateral shall be to hold a Lien
thereon to the extent granted pursuant to the Halifax Documents and to receive
proceeds thereof remaining after such payment and termination; and (iii) without
the prior written consent of Agent, neither Halifax nor any other Holder shall
exercise any right Halifax may have under the Halifax Documents or under the UCC
or other applicable law to deliver any notices to account debtors informing them
of Halifax's interest in any accounts of any Credit Party or directing such
account debtors to make payments in any particular manner of amounts due in
respect of any such account.
3.2 COOPERATION. Halifax agrees that, unless and until Agent and each
Senior Bank shall have received indefeasible payment in full in cash of all
Senior Indebtedness and the Senior Credit Documents and all Senior Commitments
thereunder shall have terminated pursuant to the respective terms and provisions
thereof, neither Halifax nor any other Holder will commence, or join with any
creditor other than Agent in commencing, any enforcement, collection, execution,
levy or foreclosure proceeding with respect to any Lien held by it in, or
otherwise with respect to, all or any part of the Senior Bank Collateral,
including, without limitation, petitioning, filing or joining in any involuntary
Proceeding pursuant to Section 303 of the Bankruptcy Code.
3.3 JUDGMENT LIENS. Notwithstanding the provisions of SECTION 3.1 and
3.2, if Halifax obtains a final judgment against any Credit Party for any unpaid
amount payable in respect of the Halifax Indebtedness and, as a result of such
judgment, Halifax obtains a judgment Lien on any property of any Credit Party,
then Halifax may take any action permitted by applicable law to enforce such
judgment Lien against such property (subject, if such property constitutes
Senior Bank Collateral, to the rights of the Agent arising under applicable law
with respect to such property).
SECTION 4. LIQUIDATION; DISSOLUTION; BANKRUPTCY. In the event of any
Proceeding involving any Credit Party, or any sale, transfer or other
disposition of all or substantially all of the assets of any Credit Party:
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(a) Halifax agrees:
(i) that Senior Banks may consent to the use of cash
collateral or the provision of financing to Credit Parties on such terms and
conditions and in such amounts as Senior Banks, in their sole discretion, may
decide and that, in connection with such cash collateral usage or such
financing, as the case may be, each Credit Party (or a trustee appointed for the
estate of any Credit Party) may grant to Agent, for the benefit of Agent and
Senior Banks, Liens on all of such Credit Party's Property, which Liens (x)
shall secure payment, performance and observance of all Senior Indebtedness
(whether such Senior Indebtedness arose prior to the commencement of any
Proceeding or at any time thereafter) and (y) shall be superior in priority to
the Liens in favor of Halifax on any Property of any Credit Party;
(ii) that it will not object to or oppose a sale or other
disposition of any Property of any Credit Party securing all or any part of the
Senior Indebtedness free and clear of Liens or other claims of Halifax under
Section 363 of the Bankruptcy Code or any other provision of the Bankruptcy Code
if Senior Banks have consented to such sale or disposition;
(iii) agrees that it will not seek to have the automatic stay
lifted with respect to any Senior Bank Collateral, to appoint a Chapter 11
trustee under Section 1104 of the Bankruptcy Code or to convert or dismiss such
Proceeding under Section 1112 of the Bankruptcy Code, in each case without the
prior written consent of Agent;
(iv) to waive in any Proceeding under the Bankruptcy Code any
claim it may now or hereafter have under Section 1111(b)(2) of the Bankruptcy
Code, including, without limitation, any such claim arising out of the election
by Senior Banks of the application of Section 1111(b)(2) of the Bankruptcy Code,
and/or any borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code by any Credit Party, as debtor in possession; and
(v) that to the extent it receives any "adequate protection"
for any interest it may have in any Senior Bank Collateral in any Proceeding, it
will (A) if such "adequate protection" is in the form of cash or cash
equivalents, deliver such "adequate protection" to the Agent to be applied to,
or held as collateral for (and, if liquidated, applied against), the Senior
Indebtedness, and (B) if such "adequate protection" is in any other form, assign
such "adequate protection" to the Agent to be held as collateral for (and, if
liquidated, to be applied against) the Senior Indebtedness, in each case until
all Senior Indebtedness has been fully satisfied or is no longer outstanding.
(b) Halifax shall not, directly or indirectly, take any action or vote
in any way that would be in violation of, or inconsistent with, or result in a
breach of, this Agreement or challenge or contest in any Proceeding, or in
connection with any other enforcement, collection, execution, levy or
foreclosure proceeding or otherwise, (i) the validity, perfection, priority or
enforceability of any Liens held by Agent or any Senior Bank to secure the
payment, performance or observance of all or any part of the Senior
Indebtedness, (ii) the rights of Agent and Senior Banks set forth in any of the
Senior Credit Documents with respect to such Liens, or (iii) the validity or
enforceability of any of the Senior Credit Documents or any term, condition or
provision of this Agreement.
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(c) Subject to the limitations set forth in this Agreement, Halifax may
file proofs of claim and other pleadings and motions with respect to the Senior
Bank Collateral in such Proceeding.
(d) Halifax shall execute and deliver to Agent all such instruments and
other documentation confirming the above authorizations and all such proofs of
claim, assignments of claim and other instruments and documentation, and shall
take all such other action as may be reasonably requested by Agent to enforce
such claims and carry out the purpose of this SECTION 4.
(e) The agreements of Halifax set forth in this SECTION 4 are solely
for the benefit of the Agent and each Senior Bank. Without limiting the
foregoing, no agreement of Halifax set forth in this SECTION 4, and no action or
inaction of Halifax in accordance with the terms hereof (including, without
limitation, any failure to object to any sale or other disposition of property
or any waiver of any right) shall constitute a relinquishment by Halifax of any
Lien it may have on any property of any Credit Party (other than property which
has been sold or otherwise disposed of by such Credit Party as provided above)
or a waiver by Halifax of any priority it may have over any other creditor of
any Credit Party.
SECTION 5. INSURANCE AND CONDEMNATION; RELEASES OF LIENS; EFFECT OF
REFINANCING.
(a) Unless and until Agent and each Senior Bank shall have received
indefeasible payment in full in cash of all Senior Indebtedness and the Senior
Credit Documents and all Senior Commitments thereunder shall have terminated
pursuant to the respective terms and provisions thereof, (i) Halifax agrees that
Agent shall have the sole and exclusive right to adjust settlement with respect
to any insurance coverage for any Senior Bank Collateral and (ii) all proceeds
of any insurance policy, and proceeds of any condemnation or similar proceeding,
covering all or any part of the Senior Bank Collateral shall be paid to Agent
for application pursuant to the Senior Credit Documents. If Senior Banks allow
any portion of any proceeds of any insurance, condemnation or similar award with
respect to any Senior Bank Collateral to be used by any Credit Party to repair
or replace the Senior Bank Collateral affected, Halifax agrees to take promptly
all action reasonably requested by Agent to permit such use.
(b) If Agent releases any of its Liens on all or any part of the Senior
Bank Collateral in connection with the sale or other disposition thereof
(including the sale of all or a portion of the stock or assets of USPL and/or
any subsidiary thereof) or pursuant to any Senior Enforcement Action by Agent or
any Senior Bank or otherwise (other than in connection with a refinancing as
described in SECTION 5(c) below), Halifax shall thereupon promptly execute and
deliver to Agent such termination statements and releases as Agent shall
reasonably request to effect the release of Halifax's Lien thereon. In
furtherance of the foregoing, Halifax hereby appoints Agent as its
attorney-in-fact, with full authority in the place and stead of Halifax and full
power of substitution and in the name of Halifax or otherwise, to execute and
deliver any document or instrument which Halifax is required to deliver pursuant
to this SECTION 5(b), such appointment being coupled with an interest and
irrevocable.
(c) Halifax agrees that if the Senior Indebtedness is refinanced, (i)
all Liens of Halifax on the Senior Bank Collateral will continue to be junior
and subordinate to the Liens of
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the replacement lender or lenders (or any agent therefor) and (ii) in order to
evidence such subordination, Halifax shall, upon the request of any Credit Party
or such replacement lender or lenders (or any agent therefor), execute and
deliver to such replacement lender or lenders (or any agent therefor) a
subordination and intercreditor agreement containing terms no less favorable to
Halifax than this Agreement (and prior to such execution and delivery, all of
the terms of this Agreement shall inure to the benefit of such replacement
lender or lenders (or such agent) as if such Person or Persons were the original
Senior Banks hereunder).
SECTION 6. WHEN PROCEEDS MUST BE PAID OVER. If any proceeds of Senior
Bank Collateral are received by Halifax or any Holder for application to the
Halifax Indebtedness other than as expressly permitted by the terms of this
Agreement, such proceeds shall be received by such Person in trust for the
benefit of Agent and Senior Banks and such Person shall promptly turn over such
proceeds to Agent (in the same form as received, with any necessary
endorsement), for application (in the case of cash) to, or as Senior Bank
Collateral (in the case of non-cash Property or securities) for, the payment or
prepayment of the Senior Indebtedness remaining unpaid to the extent necessary
to pay such Senior Indebtedness in full in cash in accordance with its terms. In
the event Halifax or any Holder fails to provide any endorsement, as
contemplated by the preceding sentences, Agent, or any of its officers or
employees, is hereby irrevocably authorized to make the same (which
authorization, being coupled with an interest, is irrevocable).
SECTION 7. SUBROGATION. Halifax hereby waives all rights of subrogation
to the claims of Agent or any of the Senior Banks against any Credit Party, and
waives all rights of recourse to any security for any Senior Indebtedness, until
such time as all Senior Indebtedness shall have been indefeasibly paid in full
in cash and the Senior Credit Documents and all Senior Commitments thereunder
shall have terminated pursuant to the respective terms and provisions thereof;
PROVIDED that if any payment to Agent or any Senior Bank is rescinded as a
result of a Proceeding or otherwise, the subrogation of Halifax as provided
herein shall likewise be rescinded until all of the Senior Indebtedness is
indefeasibly paid in full in cash.
SECTION 8. NO IMPAIRMENT OF SUBORDINATION. No right of Agent or any
Senior Bank to enforce the subordination of the Liens on Senior Bank Collateral
securing all or any part of the Halifax Indebtedness shall be impaired by any
act or failure to act by any Credit Party or by its failure to comply with this
Agreement. Without limiting the generality of the foregoing, the rights of Agent
and Senior Banks under this Agreement shall remain in full force and effect
without regard to, and shall not be impaired by: (a) any act or failure to act
of any Credit Party, Halifax or any other Holder, or any noncompliance by any
Credit Party, Halifax or any other Holder with any agreement or obligation,
regardless of any knowledge thereof which Agent or any Senior Bank may have or
with which Agent or any Senior Bank may be charged, (b) the validity or
enforceability of any of the Senior Credit Documents, (c) any extension or
indulgence in respect of any payment or prepayment of the Senior Indebtedness or
any part thereof or in respect of any other amount payable to Agent or any
Senior Bank, (d) any amendment, modification or waiver of any of the terms of
the Senior Credit Documents or the Halifax Documents, (e) any exercise, delayed
exercise or non-exercise by Agent or any Senior Bank of any right, power,
privilege or remedy under or in respect of any Senior Indebtedness, the Senior
Bank Collateral or this Agreement, (f) any other action of Agent or any Senior
Bank permitted under the Senior Credit Documents or this Agreement or (g) the
absence of any notice to, or knowledge by, Halifax or any other Holder of the
existence, creation or non-payment of all or any part of the Senior
Indebtedness, or the occurrence of any of the matters or events set forth in the
foregoing CLAUSES (a) through (f), except as such notice shall be specifically
required pursuant to the terms hereof.
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SECTION 9. WAIVERS AND CONSENTS OF HALIFAX.
(a) All of the Senior Indebtedness shall be deemed to have been made or
incurred in reliance upon this Agreement and Halifax expressly waives (i) notice
of acceptance by Agent or any Senior Bank of this Agreement, (ii) notice of the
existence or creation or non-payment of all or any part of the Senior
Indebtedness, (iii) all diligence in collection or protection of or realization
upon all or any part of the Senior Indebtedness or any security therefor and any
requirement that Agent or any Senior Bank protect, secure, perfect or insure any
Lien or any Property subject thereto or exhaust any right or take any action
against any Credit Party or any other Person or any such Property, and (iv)
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Senior Indebtedness.
(b) Halifax agrees that Agent and Senior Banks may each, at any time
and from time to time, in their sole discretion, without the consent of or
notice to Halifax or any other Holder, without incurring responsibility to
Halifax or any other Holder, and without impairing or releasing the
subordination provided for herein or the obligations of Halifax or any other
Holder to Agent or any Senior Bank hereunder, amend, restate, supplement or
otherwise modify the Senior Credit Agreement or any of the other Senior Credit
Documents in any way whatsoever, including, without limitation, the following:
(i) shorten the final maturity of all or any part of the Senior Indebtedness,
(ii) modify the amortization of the principal amount of all or any part of the
Senior Indebtedness, (iii) increase the principal amount of Senior Indebtedness,
or otherwise provide for additional advances, (iv) raise the standard or default
per annum interest rates applicable to all or any part of the Senior
Indebtedness, (v) impose any additional fee or penalty upon any Credit Party or
increase the amount of or rate for any fee or penalty provided for in the Senior
Credit Documents, (vi) retain or obtain a Lien on any Property to secure any of
the Senior Indebtedness, (vii) enter into new Senior Credit Documents with any
Credit Party or any of its direct or indirect subsidiaries, (viii) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, all or any of the Senior Indebtedness or otherwise amend, restate,
supplement or otherwise modify in any manner, or grant any waiver or release
with respect to, all or any part of the Senior Indebtedness or any of the Senior
Credit Documents, (x) retain or obtain the primary or secondary obligation of
any other Person with respect to any of the Senior Indebtedness, (xi) release
any Person liable in any manner under or in respect of Senior Indebtedness or
release or compromise any obligation of any nature of any Person with respect to
any of the Senior Indebtedness, (xii) sell, exchange, not perfect or otherwise
deal with any Property at any time pledged, assigned or mortgaged to secure or
otherwise securing all or any part of the Senior Indebtedness, (xiii) release
its security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any Property securing any Senior Indebtedness,
or release, compromise, alter or exchange any obligations of any nature of any
Person with respect to any such Property, (xiv) amend, or grant any waiver or
release with respect to, or consent to any departure from, any guaranty for all
or any of the Senior Indebtedness, (xv) exercise or refrain from exercising any
rights against, and release from obligations of any type, any Credit Party or
any other Person, (xvi) apply any sums from time to
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time received to the Senior Indebtedness in such manner such as such Person
shall determine and (xvii) otherwise manage and supervise the Senior
Indebtedness in accordance with such Person's usual practices, modified from
time to time as such Person deems appropriate under the circumstances.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF HALIFAX. Halifax hereby
represents and warrants to Agent and each Senior Bank that all material
agreements, documents and instruments between Halifax and the other Holders, on
the one hand, and any Credit Party or any of its affiliates, on the other hand,
are set forth on SCHEDULE 1 hereto and, except as disclosed on SCHEDULE 1, no
such agreement, document or instrument has been amended, restated, supplemented
or otherwise modified.
SECTION 11. MARSHALLING. Halifax hereby waives, to the fullest extent
permitted by applicable law, any rights it may have under applicable law to
assert the doctrine of marshaling or otherwise to require Agent or any Senior
Bank to xxxxxxxx any Property of any Credit Party for the benefit of Halifax or
any Holder.
SECTION 12. WAIVER OF RIGHTS. Halifax hereby waives, to the fullest
extent permitted by applicable law, any rights it may have to enjoin or
otherwise obtain a judicial or administrative order preventing Agent or any
Senior Bank from taking, or refraining from taking, any action with respect to
all or any part of the Senior Bank Collateral.
SECTION 13. CONTINUATION OF SUBORDINATION; TERMINATION OF AGREEMENT.
This Agreement shall in all respects be a continuing agreement and shall remain
in full force and effect until Senior Banks shall have received indefeasible
payment in full in cash of all Senior Indebtedness and all of the Senior Credit
Documents and the Senior Commitments thereunder shall have terminated pursuant
to the respective terms and provisions thereof; PROVIDED that this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any Senior Indebtedness is rescinded, avoided or must
otherwise be returned by Agent or any Senior Bank upon the insolvency,
bankruptcy or reorganization of any Credit Party, all as though such payment had
not been made.
SECTION 14. SPECIFIC PERFORMANCE. Agent and each Senior Bank is hereby
authorized to demand specific performance of the provisions of this Agreement,
at any time when Halifax or any other Holder shall have failed to comply with
any term or provision hereof. Halifax hereby irrevocably waives any defense
based on the adequacy of a remedy at law that might be asserted as a bar to such
remedy of specific performance.
SECTION 15. FURTHER ASSURANCES. Each party hereto will, upon the
written request of the other party, from time to time execute and deliver or
cause to be executed and delivered such further instruments and agreements and
do or cause to be done such further acts as may be reasonably necessary or
proper to carry out more effectively the provisions of this Agreement and to
effectuate the terms of the Lien subordination contemplated hereby.
SECTION 16. NOTICES. Unless otherwise specifically provided herein, all
notices shall be in writing addressed to the respective parties as set forth
below and may be personally served, facsimilied or sent by overnight courier
service or United States mail and shall be deemed to
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have been given: (a) if delivered in person, when delivered; (b) if delivered by
facsimile transmission, on the date of such transmission if transmitted on a
business day before 4:00 p.m. (Chicago time) or, if not, on the next succeeding
business day; (c) if delivered by overnight courier, on the business day after
delivery to such courier correctly addressed; or (d) if by United States Mail,
upon receipt (or when delivery is refused):
If to Agent: BANK OF AMERICA, N.A., as Agent
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
FAX: (000) 000-0000
If to Halifax: c/o The Palladin Group, L.P.
Investment Manager
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxx
FAX: (000) 000-0000
or to such other address as the party addressed shall have previously designated
by written notice to the serving party given in accordance with this SECTION 16.
SECTION 17. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. AGENT AND
EACH SENIOR BANK MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND LOCATED IN THE
CITY OF CHICAGO, ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING
INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, HALIFAX HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF SUCH COURTS. HALIFAX HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF SUCH COURTS BY MAILING A COPY THEREOF, BY REGISTERED
MAIL, POSTAGE PREPAID, TO SUCH PERSON AT THE ADDRESS SET FORTH IN SECTION 16
HEREOF AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (i)
SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH PERSON
IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL BE TAKEN AND HELD TO BE
VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO SUCH PERSON. NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHTS OF AGENT OR ANY SENIOR BANK TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE AGENT OR ANY SENIOR
BANK FROM BRINGING AN ACTION OR PROCEEDING IN RESPECT HEREOF IN ANY OTHER
COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER SUCH ACTION. HALIFAX HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
SUCH PERSON NOW OR HEREAFTER MAY HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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SECTION 18. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES HEREUNDER OR UNDER ANY AGREEMENT, DOCUMENT OR INSTRUMENT
DELIVERED OR WHICH MAY HEREAFTER BE DELIVERED IN CONNECTION HEREWITH, OR ARISING
FROM ANY RELATIONSHIP ARISING HEREUNDER, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 19. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding
upon and inure to the benefit of Agent, each Senior Bank, Halifax, each other
Holder and each of their respective successors and permitted assigns.
(b) Each Senior Bank may, from time to time, without notice to or
consent of Halifax or any other Holder, assign or transfer to any Person any or
all of the Senior Indebtedness or any interest therein, and notwithstanding any
such assignment or transfer, or any subsequent assignment or transfer thereof,
the Senior Indebtedness shall be and remain Senior Indebtedness for purposes of
this Agreement, and every immediate and successive assignee or transferee of any
of the Senior Indebtedness or of any interest therein shall, to the extent of
the interest of such assignee or transferee in the Senior Indebtedness, be
entitled to rely upon and be a third party beneficiary of the subordination
provided under this Agreement.
(c) As used in this Agreement, the term "Credit Party" shall include
any receiver, trustee, custodian or debtor in possession which is a successor to
any Credit Party.
SECTION 20. GOVERNING LAW. This Agreement shall be construed and
interpreted, and the rights of the parties shall be determined, in accordance
with the internal laws and decisions of the State of Illinois, without regard to
conflicts of laws principles.
SECTION 21. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof. There are no other agreements between the parties hereto
in connection with the subject matter hereof except as specifically set forth
herein or contemplated hereby. No amendment, modification or waiver of any of
the provisions of this Agreement shall be binding unless executed in writing by
Agent and Halifax. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided. No delay on the part of Agent or any Senior Bank
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by Agent or any Senior Bank of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other
right or remedy. For the purposes of this Agreement, Senior Indebtedness shall
include all Senior Indebtedness, notwithstanding any right or power of any
Credit Party or other Person to assert any claim or defense as to the invalidity
or unenforceability of all or any part of the Senior Indebtedness, and no such
claim or defense shall affect or impair the agreements and obligations of the
respective parties hereto.
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SECTION 22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 23. INVALIDITY. In the event one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
SECTION 24. HEADINGS. The headings of the several sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
SECTION 25. PAYMENT IN FULL OF SENIOR INDEBTEDNESS. The Senior
Indebtedness shall be deemed to have been "paid in full in cash" even if (a) the
Deferred Payment Notes have been forgiven under the circumstances described in
the last paragraph thereof and/or (b) a portion of the Senior Indebtedness has
been deemed paid by the issuance of the Quakertown Notes; PROVIDED that (i) all
other Senior Indebtedness has been paid in full in cash and (ii) if any
Quakertown Note has been issued, Halifax shall have released any security
interest it may have on, or claim it may have in respect of, the Quakertown
Claim (as defined in the Senior Credit Agreement).
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IN WITNESS WHEREOF, this Agreement has been made and delivered as of
the date first above written.
BANK OF AMERICA, N.A.,
as Agent
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxx Xxxxxxx
----------------------------------
Title: Vice President
---------------------------------
HALIFAX FUND, L.P.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
----------------------------------
Title: Counsel
---------------------------------
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ACKNOWLEDGMENT AND CONSENT
Each of the undersigned hereby (a) acknowledges receipt of a copy of
the foregoing Amended and Restated Subordination and Intercreditor Agreement and
(b) acknowledges and consents to all of the terms and provisions thereof. In the
event of any breach of the provisions of such Amended and Restated Subordination
and Intercreditor Agreement by any Person (other than Agent or any Senior Bank),
each of the undersigned agrees that, in addition to any other rights and
remedies which Agent or any Senior Bank may have under the Senior Credit
Agreement and the other Senior Credit Documents, unless the Required Banks (as
such term is defined in the Senior Credit Agreement) shall otherwise elect, all
of the Senior Indebtedness shall, without notice or demand, become immediately
due and payable.
U.S. PLASTIC LUMBER CORP.
U.S. PLASTIC LUMBER LTD.
U.S. PLASTIC LUMBER FINANCE CORPORATION
THE EAGLEBROOK GROUP, INC.
U.S. PLASTIC LUMBER IP CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------
Title: Secretary
--------------------------------
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