EXHIBIT 10.12
INTERCREDITOR AGREEMENT
FOR PARI PASSU INDEBTEDNESS OF
SURGILIGHT, INC.
INTERCREDITOR AGREEMENT, dated April 20, 2007, among Surgilight, Inc.,
a Florida corporation (the "Company"), GEM Surgilight Investors LLC ("GEM")
Xxxxxxx Xxxxxx ("Xxxxxx") and Xxxxxx Xxxxxxxxx ("Xxxxxxxxx"), where GEM,
Cozean and Xxxxxxxxx are holders of indebtedness ("the Indebtedness") secured
or to be secured by a lien with respect to all or any portion of the
Collateral (as defined below) pursuant to the terms of this Intercreditor
Agreement. The term "Collateral" as used herein means the following:
Intangible Assets, which include, but are not limited to, Patents, Assigned
Patents, Patent Licenses, and Patents Pending, of the Company, in which
Cozean and Xxxxxxxxx have a lien or security interest, secured by UCC-1
financing statements filed on December 3, 2004, and which shall be subject to
a lien or security interest in favor of GEM, in the priorities specified in
this Intercreditor Agreement.
WHEREAS, the Company has entered into Consulting Agreements with Cozean
and a Repayment Agreement with Xxxxxxxxx (the "Cozean Agreement" and
"Xxxxxxxxx Agreement," respectively), each dated April 20, 2007, providing
for the payment of various sums to Cozean and Xxxxxxxxx;
WHEREAS, the Cozean and Xxxxxxxxx Agreements are secured by liens on
the Collateral;
WHEREAS, the Company wishes to enter into a Secured Line of Credit Loan
Agreement (the "Loan Agreement") with GEM, under which GEM may lend to the
Company in installments, from time to time, up to $2,500,000.00;
WHEREAS, the Company proposes to provide GEM with a lien or security
interest in the Collateral as partial security for Indebtedness of the
Company under the Loan Agreement;
WHEREAS, it has been agreed by Cozean and Xxxxxxxxx that the Company be
permitted to obtain financing from GEM under the Loan Agreement to finance
the costs of its operations and to pay the sums due under the Cozean and
Xxxxxxxxx Agreements;
WHEREAS, the Cozean and Xxxxxxxxx Agreements permit the Company to
create or cause to be created additional liens and security interests in the
Collateral in favor of GEM which will have equal priority with the liens of
the Cozean and Xxxxxxxxx Agreements pursuant to an Intercreditor Agreement
and Cozean and Xxxxxxxxx and the Company, upon fulfillment of certain
conditions precedent, to execute and deliver an Intercreditor Agreement in
substantially the form hereof to GEM;
WHEREAS, the Company has entered into certain documents and agreements
providing for the grant to GEM of liens and security interests in all of the
property and assets constituting the Collateral in which Cozean and Xxxxxxxxx
have a lien or security interest, (the property and assets constituting the
Collateral in which each of the Cozean, Michelson, and GEM have obtained
liens or security interests being referred to herein as the "Pari Passu
Collateral");
WHEREAS, the aggregate outstanding principal amount of the Cozean
Agreement at the date hereof is $1,052,301.43;
WHEREAS, the aggregate outstanding principal amount of the Xxxxxxxxx
Agreement at the date hereof is $178,683;
WHEREAS, the aggregate outstanding principal amount of the Indebtedness
owed by the Company to GEM at the date hereof is $0, with such Indebtedness
to be increased from time to time up to the total principal amount of
$2,500,000.00;
WHEREAS, the parties hereto desire to set forth their agreement as to
the nature of priority of the liens and security interests held by Cozean and
Xxxxxxxxx and GEM in the Pari Passu Collateral and certain other matters
related thereto;
NOW, THEREFORE, in consideration of the mutual premises and agreements
herein contained it is hereby agreed as follows:
SECTION 1. Definitions. As used in this Agreement, the following
terms have the meanings hereinafter set forth:
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
section 101 et seq.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, and any other
state or federal insolvency, reorganization, moratorium or similar law for
the relief of debtors.
"Bankruptcy Proceeding" means any proceeding commenced under any
Bankruptcy Law.
"Pari Passu Parties" means, collectively, Cozean, Xxxxxxxxx and GEM.
SECTION 2. Lien Acknowledgement. (a) The Company and each of the
Pari Passu Parties hereby agrees that each lien or security interest of
Cozean and Xxxxxxxxx in the property and assets constituting the Pari Passu
Collateral, to the extent of the obligations secured by such lien or security
interest, shall be equal in priority with (i) each lien or security interest
of GEM in the property and assets constituting the Pari Passu Collateral, to
the extent of the obligations secured by such liens or security interests.
SECTION 3. Lien Priority. The priorities of the liens or security
interests established, altered or specified herein are applicable
irrespective of: (i) the time or order of attachment or perfection thereof;
(ii) the method of perfection; (iii) the time or order of filing or
recording of financing statements or other instruments; or (iv) any
amendments to the liens or security interest established, altered or
specified herein, provided that such amendment does not alter the aggregate
principal amount of the Indebtedness secured by such lien or security
interest; and (v) the time or order of foreclosure, taking of possession or
the exercise of any remedy; provided, however, that the priorities of any
liens or security interests which are not established, altered or specified
herein shall be unaffected and shall exist and continue in accordance with
applicable law. The agreements herein are solely for the purpose of
establishing the relative priorities of the interests of the Pari Passu
Parties in the Pari Passu Collateral and shall not inure to the benefit of
any other Person.
SECTION 4. Controlling Party. The Pari Passu Party or Parties
holding a majority in principal amount of Indebtedness secured by the Pari
Passu Collateral (the "Controlling Party") shall have the sole right, without
the affirmative consent of any of the other Pari Passu Parties (the "Minority
Party(ies)"), and on behalf of itself and each Pari Passu Party, to (i) take
any action, or fail to take any action, to enforce or exercise any right or
remedy with respect to the Pari Passu Collateral and to foreclose upon,
collect, dispose of the Pari Passu Collateral or any portion thereof; and
(ii) exercise any right or remedy, or decline to exercise any right or
remedy, with respect to the Pari Passu Collateral in any Bankruptcy
Proceeding, including, without limitation, any right of election under
Sections 1111(b) or 365(h) of the Bankruptcy Code, any other rights of
election, determinations, proofs of claims or other rights or remedies in
connection with any Bankruptcy Proceeding; provided that each Minority Party
shall have the right to file its own proof(s) of claim in any Bankruptcy
Proceeding.
If the Controlling Party as defined above fails to take any action
within 30 days after receipt of written notice from the Minority Party(ies),
requesting it to take action to foreclose upon, collect, dispose of, or
exercise any right or remedy with respect to the Pari Passu Collateral or any
portion thereof, then a Minority Party or Parties shall be entitled to act as
the Controlling Party, and upon commencing action to foreclose upon, collect,
dispose of, or exercise any right or remedy with respect to the Pari Passu
Collateral or any portion thereof, shall be deemed the Controlling Party and
the other Pari Passu Parties shall be deemed the Minority Party(ies) for
purposes of Section 5 below.
SECTION 5. Minority Party Agreements. In accordance with paragraph
4 hereof, the Minority Party(ies) agree(s) (regardless of whether it agrees,
disagrees or abstains with respect to any action or failure to act by the
Controlling Party) that the Controlling Party shall have the authority to act
or fail to act, as it deems necessary in its sole discretion, with respect to
the rights and remedies of all of the Pari Passu Parties and that the
Controlling Party shall have no liability for acting or failing to act
(provided such action or failure to act does not conflict with the express
terms of this Agreement). Each Pari Passu Party further acknowledges and
agrees that, until the Indebtedness of all other Pari Passu Parties is no
longer outstanding, the only right of such Pari Passu Party with respect to
the Pari Passu Collateral is to be secured by the Pari Passu Collateral as
and to the extent provided in its respective loan document or agreement and
as provided herein and to receive a share of the proceeds of the Pari Passu
Collateral, if any, to the extent provided under Section 6 hereof; provided,
however, that, until the Indebtedness of all Pari Passu Parties is no longer
outstanding, in no event shall any rights or benefits accorded any Pari Passu
Party include any right to challenge, contest or dispute any action taken or
not taken, by the Controlling Party, the Collateral Agent (as hereinafter
defined) or any other Pari Passu Party in accordance with this Agreement. In
addition, the Minority Party agrees that it (i) shall not attack nor
challenge the validity, perfection or priority of the Controlling Party's
lien with respect to the Pari Passu Collateral; (ii) will release all liens
and security interests in all or any affected portion of the Pari Passu
Collateral (to the extent of its respective interest therein) upon the sale
of all or any portion of the Pari Passu Collateral pursuant to the exercise
of any right or remedy with respect to the Pari Passu Collateral; and (iii)
waives any right of election it may have under Sections 1111(b) or 365(h) of
the Bankruptcy Code, or any other rights of election, determinations, proofs
of claims or other rights or remedies in connection with any Bankruptcy
Proceeding with respect to the Pari Passu Collateral.
Notwithstanding the preceding paragraph, if all or any portion of the
Pari Passu Collateral is to be sold in a public or private sale, the
following conditions shall apply: (i) in event of a public sale of all or a
portion of the Pari Passu Collateral, the Controlling Party shall give at
least fourteen days notice to the Minority Party(ies), which may appear and
participate on the same terms as the Controlling Party and the public; (ii)
in the event of a private sale, the Controlling Party shall give the Minority
Party(ies) at least fourteen days written notice ("Controlling Party Notice")
of the terms of any proposed private sale to the Controlling Party or a third
party for all or any portion of the Pari Passu Collateral. The Controlling
Party Notice, if the offer concerns more than the Pari Passu Collateral,
shall include the allocated portion of the price for the Pari Passu
Collateral or portion thereof which it concerns. Within fourteen days after
receipt of the Controlling Party Notice, any Minority Party may offer or
submit a competing offer by a third party (referred to collectively
hereinafter as "Minority Party Offer") to purchase the Pari Passu Collateral
to be sold by tendering to the Controlling Party a Minority Party Offer in
writing for payment of an amount exceeding the proposed sale price for the
Pari Passu Collateral by at least 10%. If there is no Minority Party Offer,
the Controlling Party may sell the Pari Passu Collateral on the terms
proposed in the original Controlling Party Notice. If there is more than one
Minority Party Offer to purchase the Pari Passu Collateral, the highest
Minority Party Offer shall prevail between them, or, if more than one
Minority Party offers the same amount, and there is no higher offer, the
Property shall be deemed to be an offer to purchase jointly by the Minority
Parties in undivided pari passu shares and the price divided between them
equally. The Controlling Party shall issue a Controlling Party Notice
advising the Minority Parties of acceptance of the Minority Party Offer or of
any counteroffer at least 10% higher than the Minority Party offer made by
the Controlling Party or a third party within 14 days after the receipt of
the last timely Minority Party Offer, if any. In event of a higher offer
notified by the Controlling Party, the Minority Parties shall again have
fourteen days to submit a Minority Party Offer at least 10% higher, and the
process shall continue at intervals of fourteen day notice periods until
there is no higher counteroffer for the Pari Passu Collateral. Payment to be
made by any Pari Passu Party for the Pari Passu Collateral or portion thereof
to be sold in a private sale shall be made to the Collateral Agent (as
defined In Section 6 below) within 28 days after the Controlling Party Notice
advising the final acceptance of an offer to purchase the Pari Passu
Collateral and the purchase price shall be held in escrow by the Collateral
Agent until transfer of the Pari Passu Collateral to the prevailing bidder.
Any Pari Passu Party shall be entitled to apply its Pari Passu portion of
then outstanding Indebtedness (i.e., the amount it would receive in
accordance with Section 6b, hereof) as a credit towards its purchase of the
Pari Passu Collateral and the balance of the purchase price shall be paid in
cash or cash equivalents.
SECTION 6. Allocation of Payments. The Pari Passu Parties each
agree that (i) all money or funds collected with respect to the Pari Passu
Collateral (including, without limitation, any net condemnation proceeds or
other awards, insurance or other loss recoveries which are required or
permitted under each of the documents and agreements governing the Pari Passu
Collateral, and any property (real and personal) and any amounts in respect
of any deficiency recoveries) in connection with the enforcement or exercise
of any right or remedy with respect to the Pari Passu Collateral following
the acceleration of the Indebtedness of the Company to any of the Pari Passu
Parties, and (ii) all money or funds received by any Pari Passu Party in
excess of regular periodic payments to the Pari Passu party under the terms
of the obligation to the Pari Passu Party--other than the intial payments
made to Cozean and Xxxxxxxxx pursuant to the terms of the Cozean Agreement
and the Xxxxxxxxx Agreement--received as a result, directly or indirectly, of
any new capital contributions or new financing in an amount exceeding
$1,000,000 in net proceeds obtained by the Company from a person or entity
other than a Pari Passu party, shall be directed to a collateral agent
appointed by the mutual consent of the Pari Passu Parties and acting on
behalf of all of the Pari Passu Parties (the "Collateral Agent"), which
Collateral Agent shall be instructed by the Controlling Party to distribute
such money, funds or other property in the following order of priority:
a. First: to the payment to each Pari Passu Party in respect of
all reasonable expense in connection with the collection or realization of
such cash or funds or the administration of this Agreement in connection with
the collection or realization of such cash or funds;
b. Second: to each such Pari Passu Party a proportion of such
remaining money or funds as the total outstanding obligations secured by a
lien or security interest on the Pari Passu Collateral held by such Pari
Passu Party bears to the total amount of outstanding obligations secured by
liens or security interests on the Pari Passu Collateral held by all Pari
Passu Parties until all such secured obligations of such Pari Passu Party
have been paid in full (disregarding any reduction of any such secured
obligations arising or occurring because of a foreclosure sale or the
exercise of any other right or remedy with respect to the Pari Passu
collateral);
c. Third: to whosoever may be lawfully entitled to receive the
same as a court of competent jurisdiction may direct.
SECTION 7. Enforcing Rights. Each Pari Passu Party agrees not to
take any action whatsoever to enforce any term or provision of its respective
security document or this Agreement or to enforce any of its rights in
respect of the Pari Passu Collateral, except through the Controlling Party
in accordance with paragraphs 5 and 6 hereof; provided, however that this
Agreement shall not prevent any Pari Passu Party from enforcing or exercising
any right or remedy with respect to the Pari Passu Collateral granted to it
by its respective documents and agreements to the extent that such
enforcement or exercise of rights or remedies does not impair the security
interest of the Controlling Party or any other Pari Passu Party in the Pari
Passu Collateral; nor shall this Agreement grant any of the Pari Passu
Parties any right or remedy under the documents or agreements of the other
Pari Passu Parties.
SECTION 8. Distributions. The Company, Cozean and Xxxxxxxxx and GEM
each agree that if any Pari Passu Party receives any money, funds or other
property that is to be distributed to the Pari Passu Parties pursuant to
Section 6 above, such money, funds or other property shall discharge the
Obligations of the Company to each Pari Passu Party only to the extent such
money, funds or other property is distributed to each of them under this
Agreement. In the event that any payment in respect of, or distribution of,
the Pari Passu Collateral, of any kind or character, whether in cash,
property or securities, shall be received by any Pari Passu Party before all
Indebtedness secured by Pari Passu Collateral is paid in full, such payment
or distribution shall be held in trust for the benefit of, and shall be paid
over to, the Pari Passu Parties in accordance with paragraph 6 above.
SECTION 9. Communications. Each of the Pari Passu Parties agrees to
transmit to the Controlling Party a copy of any communication sent by such
Pari Passu Party to the Company, or any other Person (contemporaneously with
the transmittal of any such communication) with respect to any event of
default, any acceleration of Indebtedness, or any notice of sale of any Pari
Passu Collateral as a result of a default. Any failure by any Pari Passu
Party to furnish a notice pursuant to this paragraph 9 shall in no way
diminish the rights of such party hereunder.
SECTION 10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD
TO ITS CHOICE OF LAW PROVISIONS, AND SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE PARI PASSU PARTIES, AND THEIR RESPECTIVE SUCCESSORS, DESIGNEES
AND ASSIGNS.
SECTION 11. Defined Terms. All terms used herein which are defined
in the Florida Uniform Commercial Code shall have the meanings therein
stated, unless the context otherwise requires.
SECTION 12. Notices. All notices or other communications required
or permitted hereunder shall be in writing and shall be given by personal
delivery or United States mail, first class, registered or certified, postage
prepaid, return receipt requested, addressed to the parties at the address
indicated on the signature pages hereof. Each such notice or other
communication shall be deemed given on (a) the date of receipt of personal
delivery thereof, or (b) if not by mail (as aforesaid), the date which is
three (3) business days after such communication is deposited in the mail
(postage prepaid as aforesaid). Any party may change its address for notice
by notice to the other parties hereto in accordance with the foregoing.
SECTION 13. Further Assurances. Each of the Pari Passu Parties
(including Cozean and Xxxxxxxxx), upon the request of any Pari Passu Party,
shall execute and deliver and cause
to be recorded where desirable an Intercreditor Agreement substantially in
the form of this Agreement, which Intercreditor Agreement shall be effective
if and only if all Pari Passu Parties shall have executed and delivered the
same or a counterpart thereof. Simultaneously with the repayment or other
discharge of Indebtedness secured by any Pari Passu Collateral, the Pari
Passu Party whose Indebtedness is so repaid or discharged shall execute and
delivery such instruments as may be reasonably required by any of the other
Pari Passu Parties to release or extinguish such Pari Passu Party's interest
in the Pari Passu Collateral.
SECTION 14. Liability. No Pari Passu Party shall be liable to any
other Pari Passu Party for any action taken by it, including the, payment of
any monies hereunder, in connection with this Agreement, provided the same
was taken in good faith and did not constitute gross negligence or willful
misconduct.
SECTION 15. Amendments. Each Pari Passu Party shall have the right
to alter or amend its respective loan agreements and documents and to release
or take additional collateral pursuant thereto. Nothing in this agreement is
intended to alter or amend the obligations of any Pari Passu Party with
respect to the Company under its respective loan agreements and documents.
Nothing herein is intended to confer upon the Company any right or benefit
with respect to any Pari Passu Party and the Company hereby acknowledges that
it has no right to enforce the terms hereunder against any Pari Passu Party.
The Company's signature hereto is merely to acknowledge this agreement, which
is for the sole benefit of the Pari Passu Parties.
SECTION 16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
SECTION 17. Severability. In the event any provision hereof is
determined to be unenforceable or invalid, such provision or such part
thereof which may be unenforceable shall be deemed severed from this
Agreement and the remaining provisions carried out with the same force and
effect as if the severed provision of part thereof had not been made a part
hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, Cozean, Michelson, the Company, and GEM have caused
this Agreement to be duly executed as of the date first above written.
SURGILIGHT, INC. GEM SURGILIGHT INVESTORS LLC
BY: GEM SURGILIGHT MANAGEMENT LLC,
MANAGING MEMBER
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxx Xxxxx
---------------- ----------------
Name: Xxxxxxx Xxxx Name: Xxxxxx Xxxxx
Notice Address Notice Address
0000 XXXXXXX XXXXX, XXXXX 000
XXXXXXX, XX 00000
XXXXXXX XXXXXX XXXXXX XXXXXXXXX
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
------------------ --------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxx Xxxxxxxxx
Notice Address Notice Address
