EXHIBIT 10.12
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT ("Agreement"), dated as of April 12, 2001,
is made and entered into on the terms and conditions hereinafter set forth, by
and between HARBINGER MEZZANINE PARTNERS, L.P., a Delaware limited partnership
("HMP") and PETRA MEZZANINE FUND, L.P., a Delaware limited partnership ("Petra")
(HMP, Petra and HMP in its capacity as agent for itself and Petra are referred
to herein collectively as "Junior Lender"), and XXXXXXX X. XXXXX, a resident of
California ("Senior Lender").
RECITALS:
A. Pursuant to a Loan and Security Agreement of even date herewith, by
and between Junior Lender and iPAYMENT HOLDINGS, INC., a Tennessee corporation
("Parent"), iPAYMENT TECHNOLOGIES, INC., a California corporation ("Sub1"), and
FIRST ACQUISITION COMPANY, a Nevada corporation ("Sub2") (Parent, Sub1 and Sub2
are sometimes referred to herein individually as "Borrower" and collectively as
"Borrowers") (together with any amendments thereto and/or modifications thereof,
herein referred to as the "Subordinate Loan Agreement"), HMP and Petra have
agreed to make a term loan to Borrower in the original aggregate principal
amount of $7,000,000 (the "Subordinate Loan"), on the terms and conditions set
forth in the Subordinate Loan Agreement; the Subordinate Loan is sometimes
referred to herein as the "Subordinate Debt".
B. The Subordinate Loan is evidenced by Secured Promissory Notes of
even date herewith made and executed by Borrower in the original aggregate
principal amount of $7,000,000 (collectively, together with any amendments,
extension and/or renewals thereof and/or any promissory notes given in payment
thereof, the "Subordinate Note").
C. The Subordinate Loan is secured by, among other things, the
Subordinate Loan Agreement, assigning to HMP, as collateral agent for Junior
Lender, and granting to HMP, as collateral agent for Junior Lender, a security
interest in, among other things, Borrower's equipment, inventory, accounts,
contract rights, chattel paper and general intangibles.
D. Pursuant to the agreement described on Exhibit A attached hereto
("Senior Loan Documents"), Sub1 is indebted to Senior Lender in the aggregate
current principal amount of $2,081,741.40 (the "Senior Debt").
E. The Senior Debt is secured by the security agreement, described on
Exhibit A attached hereto, covering certain personal property of Sub1.
F. Junior Lender has requested that Senior Lender consent to the
Subordinate Loan, together with the Subordinate Note, the Subordinate Loan
Agreement, and all other instruments, documents and agreements now or hereafter
evidencing and/or securing the Subordinate Loan (individually and collectively,
the "Subordinate Loan Documents") on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the making of the Subordinate Loan,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. The current outstanding principal balance of the Senior Debt is
$2,081,741.40.
2. The Senior Debt is the only indebtedness or obligation secured by
the Senior Loan Documents.
3. Senior Lender is presently the sole legal owner of the Senior Debt.
4. No default, or event which with the passage of time or the giving of
notice or both would constitute a default, presently exists under the Senior
Loan Documents and the Senior Debt is in good standing in all respects.
5. Senior Lender hereby consents to the lien, security interests and/or
encumbrances evidenced by the Subordinate Loan Documents in favor of Junior
Lender, so long as the lien, security interests and encumbrances of the
Subordinate Loan Agreement are subordinate and inferior to the lien, security
interests and encumbrances of the Senior Loan Documents with respect to the
Senior Debt, and Senior Lender acknowledges and agrees that such lien, security
interests and encumbrances do not constitute a default under the Senior Loan
Documents. Senior Lender hereby acknowledges and agrees that the lien, security
interests and encumbrances of the Senior Loan Documents shall not be prior and
superior to the lien, security interests and encumbrances of the Subordinate
Loan Documents in favor of Junior Lender with respect to any obligations of
Borrower to Senior Lender other than the Senior Debt.
6. Senior Lender acknowledges that while it may in the future be the
holder of indebtedness other than the Senior Debt owed to it by Sub1 or any
other Borrower, any such other indebtedness will not have priority over and
shall be subordinate to the lien, security interests and encumbrances of the
Subordinate Loan Documents in favor of Junior Lender with respect to the
Subordinate Debt, as more fully described in the Subordinate Loan Documents.
7. Senior Lender acknowledges and agrees that Junior Lender will rely
upon the contents of this Agreement in making the Subordinate Loan, and in
accepting the collateral described in the Subordinate Security Agreement as
security therefor, and that Junior Lender shall be entitled in all respects to
rely upon the statements and representations made in this Agreement.
8. This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, successors-in-title and assigns.
9. The use of defined terms herein is for convenience of reference
only, and shall not amplify or limit the provisions hereof. When used herein,
the singular shall include the plural, and vice versa, and the use of any gender
shall include all other genders. If any provision of this Agreement or the
application thereof to any person or circumstance shall be held invalid or
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unenforceable to any extent, the remainder of this Agreement and the application
of such provision(s) to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law. This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, applicable to contracts to be wholly performed in such state.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
or on behalf of Junior Lender and Senior Lender as of the date first above
written.
JUNIOR LENDER:
HARBINGER MEZZANINE PARTNERS, L.P., a
Delaware limited partnership
By: Harbinger Mezzanine GP, LLC, its
General Partner
By: Harbinger Mezzanine Manager,
Inc., its Manager
By: /s/ Xxxx X. Xxxxx
---------------------------------
Title: Vice President
--------------------------------
PETRA MEZZANINE PARTNERS, L.P., a Delaware
limited partnership
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------
Title: General Partner
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SENIOR LENDER:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
[SIGNATURES CONTINUED NEXT PAGE]
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AGREED TO AND ACKNOWLEDGED BY:
iPAYMENT HOLDINGS, INC., a Tennessee corporation
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------------
Title: Vice President
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iPAYMENT TECHNOLOGIES, INC., a California
corporation
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------------
Title: Vice President
--------------------------------------------
FIRST ACQUISITION COMPANY, a Nevada
corporation
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------------
Title: Vice President
--------------------------------------------
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