AMENDED AND RESTATED INTERCREDITOR AGREEMENT
This Amended and Restated Intercreditor Agreement (this
"Agreement") is made as of November 17, 2000, between and among Marketing
Specialists 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, The
Sales Force Companies, Inc. ("SALES FORCE"), a corporation duly organized and
validly existing under the laws of the State of Indiana, 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 Sales Force herein individually a "Debtor" and collectively the
"Debtors"), The Chase Manhattan Bank ("Chase"), as agent for the Revolver
Lenders hereinafter defined (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 Term Lenders hereinafter defined
(together with its successors and assigns in such capacity, "Term Loan Agent,"
and together with the Revolver Agent, the "Secured Parties"); MS Acquisition
Limited, a Delaware limited partnership ("MS Acquisition"); and Richmont Capital
Partners I, L.P., a Delaware limited partnership ("Richmont").
RECITALS:
A. Pursuant to the Term Loan Agreement hereinafter defined
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 hereinafter defined, in favor of the Term
Loan Agent, for the benefit of the Term Lenders.
B. Pursuant to the Revolver Agreement hereinafter defined
and the "Loan Documents" referred to therein, Debtors have granted a security
interest in the Shared Collateral in favor of the Revolver Agent, for the
benefit of the Revolver Lenders.
C. As a condition to entering into the Term Loan Agreement
and the Revolver Agreement, the parties hereto (other than MS Acquisition and
Richmont) entered into an Intercreditor Agreement dated as of March 30, 2000
(the "Original 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.
D. In addition, the Parent has requested that the Term
Lenders make certain amendments to, and waive certain defaults under, the
Term Loan Agreement pursuant to a First Amendment to Credit Agreement dated
as of the date hereof, which amendments and waivers the Term Lenders have
agreed to consent to subject to certain terms and conditions including,
without limitation, the delivery of this Agreement, which amends and restates
the Original Agreement in its entirety.
E. The Debtors have requested that the Revolver Lenders
make certain amendments to, and waive certain defaults under, the Revolver
Agreement pursuant to a Second Amendment to Credit Agreement dated as of the
date hereof (the "Second Revolver Amendment"), which amendments and waivers
the Revolver Lenders have agreed to consent to subject to certain terms and
conditions including, without limitation, the delivery of this Agreement.
F. Richmont has guaranteed a portion of the indebtedness
under the Revolver Agreement pursuant to that certain Guaranty Agreement
dated Xxxxx 00, 0000 (xxx "Xxxxxxxx Xxxxxxxx"), and for a period of time
provided further credit support to the Revolver Lenders pursuant to a pledge
of certain cash collateral by Richmont. MS Acquisition was assigned such cash
collateral and has posted additional cash collateral in favor of the Revolver
Lenders. Such cash collateral will be released pursuant to the Revolver
Amendment, and in connection therewith MS Acquisition will purchase a
participation in a portion of the loans under the Revolver Agreement
designated as the Tranche B Loans.
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
- 2 -
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 any Debtor to Revolver
Agent or Term Loan Agent that an event of default has occurred under the
Revolver Documents or the Term Loan Documents, (ii) notice by Term Loan Agent to
Revolver Agent that an event of default has occurred under the Term Loan
Documents, or (iii) 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.
"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 any remedy available to the
Revolver Agent under any of the Revolver Documents or applicable law to enforce
collection of any of the Revolver Obligations following the occurrence of an
event of default under the Revolver Documents, and any remedy available to Term
Loan Agent under any of the Term Loan Documents or applicable law to enforce
collection of the Term Loan Obligations following the occurrence of an event of
default under the Term Loan Documents, including, in each case: (i) termination
of the commitment to lend under the Revolver Documents, or acceleration of the
maturity or demand for payment of the Revolver Obligations or Term Loan
Obligations; (ii) the commencement of any action, suit, or other judicial or
arbitral proceeding against any Debtor to enforce payment of any of the Revolver
Obligations or Term Loan Obligations; (iii) levy or execution upon any judgment
obtained in any such action, suit or other judicial or arbitral proceeding; (iv)
- 3 -
the repossession, replevin, attachment, foreclosure upon, garnishment or other
act to obtain possession of or realize upon any of the Shared Collateral; (v)
any notification by a party to any account debtor on any account receivable to
remit payments with respect to such account to the notifying party; and (vi) any
petition filed against any Debtor for relief in any bankruptcy, insolvency,
receivership, conservatorship, moratorium or other similar proceeding.
"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 of
Revolver Lenders to make Tranche A Loans, or if all such commitments have
terminated, the outstanding principal amount of the Tranche A 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 as of March 30, 2000, among Revolver Agent, Revolver Lenders, and the
Debtors, as amended by the First Amendment to Credit Agreement dated as of
April 13, 2000, the Joinder Agreement dated April 14, 2000, and the Second
Amendment to Credit Agreement dated as of November 17, 2000, and giving
effect to all amendments and other modifications thereto to the extent such
modifications are consummated in compliance with Section 2.20 hereof.
"Revolver Documents" means the Revolver Agreement, the "Loan
Documents" as defined therein, and any and all other documents or instruments
now or hereafter executed by any Debtor evidencing, securing or relating to the
Revolver Obligations, and giving effect to all amendments and other
modifications thereto to the extent 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 Obligations" means the "Obligations" as that
term is defined in the Revolver Agreement.
"Shared Collateral" has the meaning specified 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 as of March 30, 2000, as amended by the First
Amendment to Credit Agreement dated as of November 17, 2000, among the Term
Loan Agent, the Term Lenders, and the Parent, and giving
- 4 -
effect to all future 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,
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.
"Tranche A Limit" means, on any date of determination
thereof, an amount equal to the sum of (i) the Tranche A Principal Cap; (ii)
all interest accrued and unpaid as of such date with respect to the Tranche A
Loans and other Tranche A 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 amount of the loans and
Reimbursement Obligations that is in excess of the Tranche A Principal Cap
shall not be included in this clause (ii); (iii) all fees, costs, expenses
and other disbursements incurred by (and not reimbursed 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 similar
law); and (iv) all other Tranche A 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).
"Tranche A Principal Cap" means Forty-One Million Dollars
($41,000,000).
"Tranche A Loans" has the meaning specified in the
Revolver Agreement.
"Tranche A Obligations" has the meaning specified in the
Revolver Agreement.
"Tranche B Loans" has the meaning specified in the
Revolver Agreement.
"Tranche B Obligations" means the principal owing in
respect of and the unpaid interest accrued on the Tranche B Loans.
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
- 5 -
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:
(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 Tranche A Obligations, 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 Tranche A
Obligations; provided, however, that any security interest, lien, right, title
or other interest held by the Revolver Agent in the Shared Collateral securing
the Tranche B Obligations shall be subordinate and junior in priority to any
security interest, lien, right, title or other interest held by the Term Loan
Agent therein securing the Term Loan Obligations.
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,
and proceeds thereof (the "Other Collateral"). Term Loan Agent acknowledges
that any right, title or
- 6 -
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 Revolver 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 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 Tranche A 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 Tranche A
Obligations, but provided further, that all rights of the Term Lenders
arising by way of the right of subrogation shall in all respects be senior in
right of payment to all rights to payment of the Tranche B Obligations.
(b) The Term Loan Agent agrees to send the Revolver Agent a
copy of any notice of
- 7 -
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 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 Tranche A
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 for: (A)
direct applications thereof to the Tranche A Obligations; (B) transfers to a
deposit account with Chase established for that purpose and subject to
Section 2.13; and/or (C) transfers in accordance with Section 2.6(c).
- 8 -
(b) In the event that Revolver Agent exercises its rights
pursuant to the Revolver Documents to take any Realization Action, 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 as agent for the Term Loan Agent under the terms hereof; and
(ii) that it will provide to Term Loan Agent an
account detail of the results of any such Realization Action.
(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 Agent, for
distributions with respect to the Tranche A Obligations in accordance with the
Revolver Agreement until the earlier of (1) the date the liquidated Tranche A
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 Tranche A 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 Tranche A Obligations remain
outstanding after the applications described in clause (ii) above, to the
Revolver Agent, for distribution with respect to the Tranche A Obligations in
accordance with the Revolver Agreement until the Tranche A Obligations have
been satisfied in full and all contingent Reimbursement Obligations have been
fully cash collateralized;
(v) fifth, to the Revolver Agent for distribution
with respect to the Tranche B Obligations in accordance with the Revolver
Agreement until all the Tranche B Obligations shall have been paid and
satisfied in full; and
(vi) sixth, 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 Tranche A
Obligations in accordance with the terms of the Revolver Agreement and Section
2.6(a), without regard to the Tranche A Limit. Whether before or after the
occurrence of a
- 9 -
Realization Action, no payment shall be made on account of the Tranche B
Obligations prior to the indefeasible payment in full in cash of all of the
Term Loan Obligations, without the prior written consent of the Term Loan
Lenders.
(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(c) of
this Agreement.
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
- 10 -
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.
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 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 delivered to the Revolver Agent, all moneys or instruments relating
thereto or held therein and any other Shared Collateral at any time Agent
demands payment or delivery thereof by such written notice, provided, that
Revolver Agent hereby indemnifies and agrees to hold First Union
- 11 -
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
Obligations have 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 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 in the
possessions 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.
- 12 -
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 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. Chase 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.
- 13 -
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 2.17, to the extent that the
Revolver Agent is not reimbursed for such expenses by the Debtors, each Debtor
hereby agreeing to pay all such expense 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 percentages
established in clauses (i), (ii) and (iii) in the definition of the term
"Advance Percent" in the Revolver Agreement (as established on the date hereof
pursuant to the Second Revolver Amendment) or otherwise amend the definition of
Borrowing Base (provided that the Tranche A Lenders shall be permitted, without
the consent of the Term Lenders, to (A) intentionally extend credit that would
cause the Outstanding Revolving Credit (as defined in the Revolver Agreement)
to exceed the Borrowing Base in an aggregate amount of Five Million Dollars
($5,000,000) outstanding at any time; provided, that, in calculating the amount
of credit that causes the Outstanding Revolving Credit to exceed the Borrowing
Base for purposes of this provision, any amount of the Tranche A Obligations
that are in excess of the Borrowing Base as a result of (1) a decline in the
value of the property included therein, (2) reserves established under the
Borrowing Base, (3) any miscalculation of the Borrowing Base, or (4) any other
factor that has the effect of reducing the Borrowing Base, shall not be
included; (B) reduce or increase 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) acting under clause (iv) in the definition of the term Advance
Percent, except as permitted by clause (B) above; (iii) shortening the time of
any payments of principal or interest due under either the Term Loan Agreement
or the Revolver Agreement (including, without limitation, any such time of
payment for any Tranche A Obligation or any Tranche B Obligation); (iv)
reducing the committed amount under the Revolver Agreement in any situation
when no default exists; or (v) reducing the amount of the Tranche B Loans
outstanding.
- 14 -
(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. ADDITIONAL COLLATERAL.
(a) Each Secured Party agrees that it shall not accept,
either directly or indirectly, as security for any of the Revolver Obligations
or the Term Loan Obligations, any additional collateral from any Person (the
"Additional Collateral"), other than Secured Collateral and Other Collateral,
unless each Secured Party is granted a perfected security interest in such
Additional Collateral. Additional Collateral shall, for all purposes hereunder,
be treated as Shared Collateral.
(b) If furtherance of clause (a) above:
(i) MS Acquisition and Richmont each hereby grant to
the Term Loan Agent, for the benefit of the Term Lenders, a security interest
in any Additional Collateral which they provide to the Revolver Agent, for the
benefit of the Revolver Lenders.
(ii) The Revolver Agent agrees to hold for the
benefit of the Lenders, as Shared Collateral hereunder, any such Additional
Collateral received by it.
Section 2.22. SUBORDINATION OF OBLIGATED PARTIES. MS Acquisition and
Richmont expressly acknowledge and agree that any rights that they may have
against Debtors by way of subrogation, contribution, or other similar rights
arising out of any guaranty, pledge of assets other credit support with respect
to liabilities of the Debtors ("Subrogation Rights") shall be subordinated in
all respects to the Term Loan Obligations. Without limiting the generality of
the foregoing, MS Acquisition and Richmont agree that they shall not demand or
accept payment on account of or otherwise seek to enforce any such Subrogation
Rights until all Term Loan Obligations have been indefeasibly paid in full in
cash.
Section 2.23. CERTAIN ADDITIONAL AGREEMENTS. Prior to the date
hereof, MS Acquisition has advanced to Parent a subordinated loan in the
principal amount of $2,500,000, which loan by its terms is subordinated to the
Revolver Obligations and the Term Loan Obligations (the "MS Acquisition
Subordinated Debt"). In addition, pursuant to a Master Participation Agreement
relating to the Tranche B Obligations, MS Acquisition has committed to fund an
additional $5,000,000 of Tranche B Obligations to be advanced on December 13,
2000 (the "Additional Tranche B Funding"). The Revolver Lenders and the
- 15 -
Term Loan Lenders have consented to the repayment of the MS Acquisition
Subordinated Debt in connection with the funding of the Additional Tranche B
Funding, subject to certain conditions as set forth in the Second Revolver
Amendment and the First Term Loan Amendment (the "MS Acquisition Repayment").
In the event that the conditions to the MS Acquisition Repayment have not been
satisfied, Borrowers and MS Acquisition agree to take all action necessary to
convert the MS Acquisition Subordinated Debt into common equity (or other
equity approved in writing by Revolver Lenders and Term Loan Lenders) on or
before December 13, 2000, or otherwise assure on or before December 13, 2000
that the Additional Tranche B Funding will not result in any violation of the
Subordinated Debt.
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
000 Xxxxx Xxxxxxx Xxxxxx
mailcode # NC-0760
Xxxxxxxxx, XX 00000-0000
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.
- 16 -
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 (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 had 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
- 17 -
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 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.
(g) 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.
Section 3.8. ENTIRE AGREEMENT; AMENDMENT AND RESTATEMENT. THIS
AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
(INCLUDING, WITHOUT LIMITATION, THE ORIGINAL AGREEMENT) AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NOT UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES HERETO. THIS AGREEMENT AMENDS AND RESTATES
THE ORIGINAL AGREEMENT IN ITS ENTIRETY.
- 18 -
IN WITNESS WHEREOF, each of the undersigned have executed or
have caused this Amended and Restated Intercreditor Agreement to be executed
by their duly authorized officers on the day and year first above written.
MARKETING SPECIALIST CORPORATION
MARKETING SPECIALISTS SALES COMPANY
XXXX XXXXX ASSOCIATES, INC.
THE SALES FORCE COMPANIES, INC.
By:
-----------------------------------------------
Name:
----------------------------------------
Authorized Officer for all Debtors
THE CHASE MANHATTAN BANK,
as Revolver Agent and Revolver Lender
By:
-----------------------------------------------
Name:
----------------------------------------
Its:
----------------------------------------
FIRST UNION NATIONAL BANK,
as Term Loan Agent and the sole Term Lender
By:
-----------------------------------------------
Name:
----------------------------------------
Its:
----------------------------------------
CREDIT SUISSE FIRST BOSTON, as Revolver Lender
By:
-----------------------------------------------
Name:
----------------------------------------
Its:
----------------------------------------
FLEET CAPITAL CORPORATION, as Revolver Lender
By:
-----------------------------------------------
Name:
----------------------------------------
Its:
----------------------------------------
[EXECUTIONS CONTINUED]
- 19 -
MS ACQUISITION LIMITED
By: MSSC Acquisition Corp., its general partner
By:
-------------------------------------
Name:
------------------------------
Title:
------------------------------
RICHMONT CAPITAL PARTNERS I, L.P.
By: J.R. Investments Corp., its managing general
partner
By:
-------------------------------------
Name:
------------------------------
Title:
------------------------------
- 20 -
EXHIBIT "A"
TO
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
SHARED COLLATERAL
"Shared Collateral" means (i) the Additional Collateral
described in Section 2.21 of the Amended and Restated Intercreditor Agreement,
and (ii) 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 or stock of subsidiaries, or any Proceeds thereof (other than
proceeds of casualty insurance specifically relating to a casualty loss with
respect to Inventory).
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 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.
- 2 -
"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, 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
- 3 -
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.
- 4 -
