Exhibit 10.47
INTERCREDITOR AGREEMENT
This Intercreditor Agreement (this "Agreement") is dated as of June 1,
2000, and is entered into by and among TEXAS COMMUNITY BANK AND TRUST, N.A.
("Texas Community"), THE TEXAS MEZZANINE FUND, INC. ("Texas Mezzanine") and BANK
OF AMERICA, N.A. ("Bank of America") (Texas Community, Texas Mezzanine and Bank
of America sometimes herein referred to individually as "Party" and collectively
as "Parties").
A. Texas Community has established a revolving credit facility in the amount
of $750,000.00 (the "Texas Community Facility") for MWI, INC., d/b/a DANAM
ELECTRONICS (the "Debtor"), which has an address at 0000 Xxxxxxxx Xxx, Xxxxxx,
Xxxxx 00000 and pursuant to a security agreement has obtained a security
interest in certain property of the Debtor described on Exhibit A ("Texas
Community's Collateral").
B. Texas Mezzanine has made a loan to the Debtor in the original principal
amount of $500,000 (the 'Texas Mezzanine Facility"), and pursuant to a security
agreement has obtained a security interest in certain property of the Debtor
described on Exhibit B ("Texas Mezzanine's Collateral").
C. Bank of America has established a revolving credit facility for the Debtor
in the amount of $2,000,000 (the "Bank of America Facility"), and pursuant to a
security agreement has obtained a security interest in certain property of the
Debtor described on Exhibit C ("Bank of America's Collateral").
D. Each of Texas Community's Collateral, Texas Mezzanine's Collateral and
Bank of America's Collateral may be the same as the collateral held by one or
more of the other Parties hereto.
E. Texas Community and Texas Mezzanine have entered into an Intercreditor
Agreement dated or effective August 3, 1999 (the "Prior Intercreditor
Agreement") pursuant to which Texas Community and Texas Mezzanine had
established relative priorities in the Texas Community Collateral and the Texas
Mezzanine Collateral.
F. Texas Community, Texas Mezzanine and Bank of America would like to agree
upon the priority of their respective security interests in the Texas Community
Collateral, the Texas Mezzanine Collateral and the Bank of America Collateral
(collectively, the "Assets").
In consideration of the premises and mutual covenants contained in this
Agreement, the parties agree as follows:
1. Priorities. The Parties shall have the following priority in the Assets:
(a) Texas Community Bank shall have the prior and superior lien on (i)
those specific Assets consisting of Domestic Accounts (as defined in
Section 5 below) and Domestic Inventory (as defined in Section 5
below) and (ii) those specific Assets in which Texas Community Bank
has a valid and enforceable "purchase money
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security interest" as defined in the UCC ("PMSI") in connection with
advances made to the Debtor; provided, that such lien secures
Permitted Indebtedness (as defined in Section 5 below).
(b) Texas Mezzanine shall have the prior and superior lien on (i) those
specific Assets consisting of equipment (as defined in the UCC, and
hereinafter referred to as "Equipment") and (ii) those specific
Assets in which Texas Mezzanine has a valid and enforceable PMSI in
connection with advances made to the Debtor; provided, that such
lien secures Permitted Indebtedness.
(c) Bank of America shall have the prior and superior lien on (i) those
specific Assets consisting of Export-Related Accounts (as defined in
Section 5 below) and Export-Related Inventory (as defined in Xxxxxxx
0, xxxxx), (xx) those specific Assets in which Bank of America has a
valid and enforceable PMSI in connection with advances made to the
Debtor, and (iii) those specific Assets that are not described in
(a) or (b) of this Section 1; provided, that such lien secures
Permitted Indebtedness.
(d) Texas Mezzanine shall have a second priority lien on the Domestic
Accounts and the Domestic Inventory.
(e) Texas Community shall have a second priority lien on Equipment.
(f) Bank of America shall have a third priority lien on Domestic
Accounts, Domestic Inventory and Equipment.
(g) Neither Texas Community nor Texas Mezzanine shall have any lien on
the Export-Related Accounts or the Export-Related Inventory.
2. Effectiveness of Priorities. The priorities set forth in this Agreement
will be effective regardless of the order in which the parties respective
security interests in the Assets were created or perfected; provided, that the
priorities established in Section 1 shall not apply as to any Party whose lien
(a) is not then perfected, (b) is a voidable preference under the U.S.
Bankruptcy Code, 11 U.S.C. Section 101 et seq or (c) is held by a final order of
a court of competent jurisdiction to be unenforceable.
3. Remedies Undisturbed. Except as provided in this Agreement, each party is
entitled to pursue remedies arising from its respective security interests in
the Property and may otherwise proceed in any manner permitted by any properly
created and perfected security interest.
4. Notification of Default. Upon the occurrence of any monetary event of
default under either the Texas Community Facility, the Texas Mezzanine Facility
or the Bank of America Facility or upon the acceleration of any indebtedness
under either of the aforementioned facilities, the Party under whose facility
such event of default or acceleration has occurred, shall notify the other
Parties in writing, specifically referencing this Agreement, specifying the type
of default that has occurred and that the notifying Party has declared such an
event of default or
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otherwise accelerated or attempted to accelerate its respective facility or to
exercise any other right or remedy at law or in equity against the Debtor;
provided, that no Party shall be liable for monetary damages for any failure to
so notify. The notice shall include a statement in the form of a certificate of
an officer of the respective Party of the outstanding indebtedness owed to such
Party. Each Party, in its sole discretion, also may assert any rights under
applicable bankruptcy, insolvency, reorganization, receivership, liquidation or
other similar proceedings.
5. Certain Definitions. "Domestic Accounts" shall mean all Accounts (as
hereinafter defined) that are not Export-Related Accounts. "Domestic Inventory"
shall mean all inventory that is not Export-Related Inventory. "Export-Related
Accounts" shall mean Accounts and related general intangibles of the Debtor
arising from the sale of finished goods or services that are intended for export
from the United States. "Export-Related Inventory" shall mean inventory of the
Debtor that is located in the United States that has been purchased,
manufactured or otherwise acquired by the Debtor for resale pursuant to a
written export order or contract for the purchase by a buyer of finished goods
or services that are intended for export from the United States. "Permitted
Indebtedness" shall mean (a) with respect to the Texas Community Facility,
$750,000 plus Default Expenses, (b) with respect to the Texas Mezzanine
Facility, $500,000 plus Default Expenses and (c) with respect to the Bank of
America Facility, $2,000,000 plus Default Expenses. "Default Expenses" shall
mean, with respect to each Party's facility, accrued and unpaid interest, plus
the amount of any advances made by such Party pursuant to such Party's loan
documents to pay taxes or insurance premiums, to prevent waste or to otherwise
preserve the condition of the Assets in which such Party has a security
interest, plus all reasonable costs and expenses (including court costs and
reasonable attorneys' fees) incurred by such Party in connection with its
facility. "Accounts" shall mean (a) accounts (as defined in the UCC), other
receivables, book debts and other forms of obligations, whether arising out of
goods sold or services rendered or from any other transaction, (b) rights in, to
and under all purchase orders or receipts for goods and services, (c) rights to
any goods represented or purported to be represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
moneys due or to become due to the Debtor under all purchase orders and
contracts for the sale of goods or the performance of services or both by the
Debtor (whether or not yet earned by performance on the part of the Debtor),
including the proceeds of the foregoing; (e) any notes, drafts, letters of
credit, insurance proceeds or other instruments, documents and writings
evidencing or supporting the foregoing and (f) all collateral security and
guarantees of any kind given with respect to any of the foregoing.
6. Distribution of Proceeds. Any funds received from or on behalf of the
Debtor by any Party through the foreclosure and liquidation of the Assets after
an event of default shall have occurred shall be distributed according to the
priorities established in Section 1 hereof. If an event of default has occurred
and only one or two Parties have accelerated their respective loans, and the
other Party (or Parties) has received the notice set forth in Section 4 above,
the non-accelerating Party (or Parties) shall have ten (10) days after receipt
of such notice in which to declare an event of default, accelerate its loans and
join in any foreclosure and liquidation of the Assets. Absent such declaration,
acceleration and joinder, the Party or Parties accelerating its loans shall
proceed with whatever action it deems necessary or appropriate. Notwithstanding
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anything in this Section 6 to the contrary, no Party shall have any duty beyond
that prescribed in the Uniform Commercial Code as adopted in Texas (the "UCC").
7. Accounting by Liquidating Party. Any distribution by the liquidating Party
of the portion of the proceeds due to the other Party shall be accompanied by an
accounting showing the Assets liquidated, the costs of preparing the Assets for
sale, the costs of the sale, the net proceeds upon liquidation of the Assets,
the amount retained by the liquidating Party and the amount distributed to the
other Party or Parties.
8. No Notice of Extensions. Each Party waives notice of any and all
extensions, renewals and/or modifications of Debtor's obligations to the other,
and each Party may make loans or extend credit to Debtor from time to time at
Debtor's request and without further authorization from or notice to any other
Party; provided, in each case, that the aggregate amount of loans and credit
accommodations in favor of Debtor by such Party does not exceed such Party's
Permitted Indebtedness. No Party need inquire into the power or authority of
Debtor, or its officers, directors or agents acting or purporting to act on its
behalf.
9. Bankruptcy. In the event a voluntary or involuntary petition under any
bankruptcy or insolvency law of the United States or any state is brought by or
against Debtor, or other proceedings instituted for the reorganization,
readjustment of debt, dissolution or liquidation of Debtor whether voluntary of
involuntary, then each party to this Agreement will have any and all remedies
available to it with respect to the relative priority of their respective
security interest in the Property as set forth in this Agreement.
10. No Creation of Security Interest. The provisions of this Agreement will
not be deemed to create a security interest in Assets where none would exist
absent this Agreement.
11. Benefit: Binding Nature: Assignment. This Agreement is entered into solely
for the benefit of Texas Community, Texas Mezzanine and Bank of America and
their successors and assigns, and no other person or persons will have any
right, benefit or priority interest under or because of the existence of this
Agreement. This Agreement will be binding upon Texas Community, Texas Mezzanine
and Bank of America and their successors and assigns. Each Party agrees that
prior to any assignment, sale or transfer of any rights, claims or interests in
or to the loan documents with respect to any Party's facility, such Party shall
provide the assignee, purchaser or transferee with a copy of this Agreement and
such Party shall deliver ten (10) days prior written notice to each other Party.
Any such assignment shall be subject to this Agreement.
12. Notice. Any notice to be given under this Agreement shall be in writing
and shall be delivered or mailed by Registered or Certified United States Mail
postage prepaid or by any prepaid courier service and addressed to each Party as
follows:
If to Texas Community Texas Community Bank and Trust,
N.A.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxxx
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If to Texas Mezzanine Texas Mezzanine Fund, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to Bank of America 000 Xxxx Xxxxxx, 0xx Xxxxx
XX 1-492-07-01
Xxxxxx, Xxxxx 00000
Attn: Commercial Banking Group
13. Termination. This Agreement shall continue in full force and effect and
shall be irrevocable by any party hereto until the earlier to occur of the
following:
a. The parties mutually agree in writing to terminate this
Agreement; or
b. All of the obligations owed by the Debtor to all of the
parties hereto are fully paid and satisfied and the respective
security interests have been terminated and released of
record.
14. Waiver. No waiver of any of the provisions of this Agreement will be
deemed to be made unless the same is specifically waived or released by a party
in writing, notice of which is given to all other parties.
15. Representations and Warranties. The Parties hereto represent and warrant
that the facts contained in the Recitals herein in regard to their own facility
are true and correct.
16. Amendment. This Agreement may be amended or modified only by an agreement
in writing signed by all parties hereto.
17. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Texas. Venue of any suit arising
hereunder shall lie in state or federal courts located in Dallas County, Texas.
18. Costs. In the event any suit or action is instituted to enforce or
interpret any provision of this Agreement, the prevailing party will be entitled
to recover from the other contesting party or parties such sum as the court may
determine as reasonable attorneys' fees and in addition, costs of suit or other
sum provided by law.
19. Counterparts. This Agreement may be executed in any number of
counterparts, all of which, taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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20. Supercedes Prior Agreements. This Agreement supercedes any prior agreement
(whether oral or written) between any of the parties hereto with respect to the
parties' respective priority in the Debtor's property, including (without
limitation) the Prior Intercreditor Agreement.
TEXAS COMMUNITY BANK AND TRUST, N.A.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Its: EVP
THE TEXAS MEZZANINE FUND, INC.
By: /s/ Xxxxxxx Xxx
---------------------------------------
Name: Xxxxxxx Xxx
Its: Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
Its: Assistant Vice President
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DEBTOR'S ACKNOWLEDGMENT AND CONSENT
The undersigned Debtor hereby acknowledges and agrees to the foregoing
Intercreditor Agreement. Debtor agrees to be bound by the terms and provisions
thereof as they relate to the relative rights of the Parties with respect to
each other. However, nothing therein shall be deemed to amend, modify, supersede
or otherwise alter the terms of the respective agreements between the Debtor and
each Party (the "Loan Agreement") and in the event of any inconsistency or
conflict between the terms of the Loan Agreements and the Intercreditor
Agreement, the Loan Agreements shall govern as between the Debtor and each
Party. The Debtor agrees that each Party holding collateral may serve as bailee
for the other Party and each Party is hereby authorized to turn such collateral
over to such other Party. Debtor further agrees that the Intercreditor Agreement
is solely for the benefit of the Parties and shall not give the Debtor, its
successors and assigns, or any other person, any rights vis-a-vis either
Party.
MWI,INC.
By: /s/ Xxxxx Xxxx
----------------------
Name : Xxxxx Xxxx
Title: PRESIDENT
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EXHIBIT A
(TEXAS COMMUNITY'S COLLATERAL)
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EXHIBIT B
(TEXAS MEZZANINE'S COLLATERAL)
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EXHIBIT C
(BANK OF AMERICA'S COLLATERAL)
