INTERCREDITOR AGREEMENT
Exhibit
10.2
This
Intercreditor Agreement (Agreement) is made this day 9th day
of July, and entered into between Xxxxx X. Xxxxxxx Foundation, X.X. & X.X.
Xxxxxxx Trust, dtd May 18, 1988 (Bridge Lender) and Primary Funding Corporation
(Primary Funding).
Recitals
WHEREAS,
the Bridge Lender and Primary Funding have entered into an agreement where the
Bridge Lender is subordinating and assigning its priority interest in the
inventory and the accounts of PepperBall Technologies – CA, Inc. and PepperBall
Technologies, Inc. (CLIENT);
WHEREAS,
the parties wish to further clarify their respective rights regarding the
Agreement.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
Bridge Lender and the Primary Funding hereby agree as follows:
1.) The
term Accounts shall mean all existing and hereafter arising accounts, contract
rights, instruments, notes, drafts, documents, chattel paper and all other forms
of obligations owing to Client arising out of the sale or lease of goods or the
rendition of services by Client, irrespective of whether earned by performance,
and any and all credit insurance, guarantees and other security therefor, as
well as all merchandise returned to or reclaimed by Client and Clients books
relating to any of the foregoing.
2.) The
term Inventory shall mean all of Client’s present and future inventory in which
Client has any interest, including goods which have been leased or held for sale
or lease or to be furnished under a contract of service and all of Client’s
present and future raw materials, work in process, finished goods, and packing
and shipping materials, wherever located, and any documents of title
representing any of the above.
3.) The
Bridge Lender and the Primary Funding agree that Primary Funding’s security
interest in the Accounts and Inventory is to be construed as having priority to
the extent of all indebtedness secured thereby, now existing or hereafter
arising in the Accounts and Inventory over the security interest of the Bridge
Lender.
4.)
Notwithstanding any other provisions of this Agreement, it is the intent of the
Bridge Lender and Primary Funding that this Agreement and all prior agreements
shall be construed to be a subordination, subject to the terms and conditions
stated herein, from the Bridge Lender to Primary Funding of its security
interest as well as all rights, title and interest in the Accounts and the
Inventory. If, however, at the time either the Bridge Lender or Primary Funding,
as the case may be, has elected to foreclose upon its secured interest in Client
or otherwise files suit against Client related to the collection of the
obligation Client owes it, and Client is indebted to Primary Funding the parties
agree that the following shall be the order and priority of their respective
security interests in the Accounts and Inventory:
( i ) the
security interest of Primary Funding shall be superior to and entitled to
priority over the security interest of the Bridge Lender but only up to the
amount of $200,000 owed to Primary Funding by Client. Thereafter, Bridge Lender
shall have priority over the security interest of Primary Funding.
( ii ) to
the extent of the costs, expenses and attorneys fees incurred by Primary Funding
in conjunction with foreclosure efforts, the security interest of the Primary
Funding shall be superior to and entitled to priority over the security interest
of the Bridge Lender;
( iii )
thereafter, and to the extent of the indebtedness owed by Client to the Bridge
Lender, the security interest of Bridge Lender shall be superior to and entitled
to priority over the security interest of Primary Funding.
5.) The
parties each agree that prior to the exercise of any of their rights and
remedies with respect to any security interest they may have in Client, the
party pursuing its rights and remedies will first give the other twenty four
hours written notice before pursuing its claim.
6.) In the
event of any action to enforce or interpret the terms of this agreement, that
the prevailing party in any such action will be entitled to recover reasonable
attorney’s fees and cost.
7.) The
parties agree that all actions or proceedings of any nature whatsoever relating
directly or indirectly hereto shall be litigated or arbitrated in courts or
places located within the State of California, County of San Diego and if such
action shall be brought in Federal Court then within the Federal District Court
located in said State.
8.) This
Intercreditor Agreement constitutes the entire, final and integrated agreement
between the parties hereto pertaining to the subject matter hereof, and
supersedes any and all prior understandings, representations, warranties and
agreements between the parties hereto, or any of them pertaining to the subject
matter hereof.
IN WITNESS
WHEREOF, this Agreement is executed on the day first written above.
| PRIMARY FUNDING CORPORATION | ||
|
|
/s/ Xxxxxxxx X. Xxxxx | |
| By: Xxxxxxxx X. Xxxxx, President | ||
|
BRIDGE
LENDER
Xxxxx
X. Xxxxxxx Foundation
|
||
|
|
/s/ Xxxxx X. Xxxxxxx | |
| Xxxxx X. Xxxxxxx, Manager | ||
|
X.X.
& X.X. Xxxxxxx Trust, dtd May 18, 1988
|
||
|
|
/s/ Xxxxx X. Xxxxxxx | |
| Xxxxx X. Xxxxxxx, Trustee | ||
