EXHIBIT 10.5
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT (this "Agreement") as of September 19, 2001,
between MCG FINANCE CORPORATION, as collateral agent for the MCG Lenders
referred to below (the "MCG Debt Agent"), STATE STREET BANK AND TRUST COMPANY,
N.A., as collateral agent for the Junior Creditor referred to below (the "Junior
Agent"), and any Other Senior Agent (as defined below) that may from time to
time sign an Adopting Instrument (as defined below).
WHEREAS, certain Subsidiaries of Talk America Holdings, Inc.
("Holdings") are parties to a Credit Facility Agreement dated as of October 20,
2000 among such subsidiaries (collectively, the "Companies"), the lenders party
thereto and MCG Finance Corporation, as agent for itself and the other lenders
(as amended, modified or supplemented from time to time, the "MCG Credit
Agreement");
WHEREAS, pursuant to the MCG Credit Agreement, the Companies have
granted to the MCG Debt Agent for the benefit of the lenders under the MCG
Credit Agreement a security interest in all of their respective assets to secure
their obligations under the MCG Credit Agreement and certain other documents
delivered by the Companies pursuant thereto;
WHEREAS, pursuant to a certain Restructuring and Note Agreement by and
between Holdings and America Online, Inc. ("AOL") dated as of the date hereof
(as amended, modified or supplemented from time to time, the "Note Agreement"),
Holdings has agreed to deliver one or more 8% secured convertible promissory
notes in the amount of $54,000,000 (collectively, the "Convertible Note") to
AOL;
WHEREAS, the Note Agreement permits the incurrence by Holdings and the
Companies of other Senior Debt (as defined below) in an aggregate principal
amount that, together with the aggregate principal amount under the MCG Credit
Agreement, shall not exceed $50 million at any time outstanding;
WHEREAS, as an inducement to AOL to enter into the Note Agreement and
for good and valuable consideration, the Companies have entered into the
Subsidiary Guarantee and Security Agreement (as defined below) pursuant to which
the Companies have granted to the Junior Agent, for the benefit of the holder
from time to time of the Convertible Note, a security interest in all of their
assets to guarantee Holdings' obligations under the Convertible Note; and
WHEREAS, pursuant to the Note Agreement and the Subsidiary Guarantee
and Security Agreement, the Junior Agent's rights to the Collateral (as defined
below) and to payment by the Companies under the Subsidiary Guarantee and
Security Agreement are to be subordinate to the rights of the Senior Agent (as
defined below), as more fully described below;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Section 1. Definitions. As used herein, the following terms shall have
the meanings indicated:
"Adopting Instrument" shall mean an adopting instrument in the form of
Annex A hereto.
"AOL" shall have the meaning in the third recital paragraph of this
Agreement.
"Collateral" shall mean all assets subject to any Lien granted by any
Company under any Senior Security Document, without regard, for purposes of this
Agreement, to the final paragraph of Section 1.1 of the MCG Security Agreement.
"Companies" shall have the meaning in the first recital paragraph of
this Agreement.
"Convertible Note" shall have the meaning in the third recital
paragraph of this Agreement.
"Holdings" shall have the meaning in the first recital paragraph of
this Agreement.
"Junior Agent" shall have the meaning in the first paragraph of this
Agreement.
"Junior Claims" shall mean all indebtedness, obligations and other
liabilities (contingent or otherwise) of any Company arising under or with
respect to the Note Agreement and the Junior Claims Documents.
"Junior Claims Documents" shall mean the Subsidiary Guarantee and
Security Agreement and each other security agreement, pledge agreement, mortgage
or other security document delivered by any Company pursuant to the Note
Agreement or the Subsidiary Guarantee and Security Agreement, as the same may be
amended, modified, supplemented or restated from time to time.
"Junior Claims Event of Default" shall mean an "Event of Default" under
(and as defined in) the Note Agreement.
"Junior Creditor" shall mean, collectively, the holders from time to
time of the Convertible Note.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest deposit arrangement, encumbrance, lien or
preference priority or other security agreement or other preferential
arrangement whatsoever, including, without limitation, any right of setoff, any
conditional sale or other title retention agreement, the interest of a lessor
under a lease or any financing lease having
2
substantially the same economic effect as any of the foregoing and the filing
of any financing statement naming the owner of the asset to which the Lien
relates as debtor.
"MCG Credit Agreement" shall have the meaning in the first recital
paragraph of this Agreement.
"MCG Debt Agent" shall have the meaning in the first paragraph of this
Agreement.
"MCG Lenders" shall mean the Senior Agent and the other lenders from
time to time under the MCG Credit Agreement.
"MCG Security Agreement" shall mean the Master Security Agreement,
Collateral Assignment and Equity Pledge dated as of October 20, 2000 made by
each grantor party thereto in favor of the MCG Debt Agent, as the same may be
amended, modified, supplemented or restated from time to time.
"MCG Security Documents" shall mean the MCG Security Agreement and each
other security agreement, pledge agreement, mortgage or other security document
delivered by any Company pursuant to the MCG Credit Agreement, as the same may
be amended, modified, supplemented or restated from time to time.
"MCG Senior Debt" shall mean all Secured Obligations, as defined in the
MCG Security Documents, and any renewal, extension, modification or replacement
thereof.
"Note Agreement" shall have the meaning in the third recital paragraph
of this Agreement.
"Other Security Documents" shall mean all security agreements, pledge
agreements, mortgages or other security documents delivered by any Company
pursuant to which such Company grants a Lien to secure any Other Senior Debt.
"Other Senior Agent" shall mean the collateral agent or security agent
for the Other Senior Creditors under the Other Security Documents.
"Other Senior Creditors" shall mean the Other Senior Agent and the
holders from time to time of the Other Senior Debt.
"Other Senior Debt" shall mean all obligations of any Company in
respect of any indebtedness that by its terms ranks senior in right of payment
and security to the Junior Claims, and any renewal, extension, modification or
replacement thereof; provided that the aggregate principal amount of such
indebtedness, together with the aggregate principal amount under the MCG Credit
Agreement, shall not exceed $50 million at any one time outstanding; provided
that, for purposes of determining the aggregate principal amount of any such
indebtedness, there shall be included in the "principal amount" thereof the
amount of any liquidation or prepayment penalty or premium that shall, by the
terms of the agreement or other instrument governing or evidencing such
indebtedness,
3
be payable in addition to the stated amount of such indebtedness, whether upon
acceleration, mandatory prepayment or otherwise.
"Right of Payment" shall mean the right of the Junior Creditor, or of
the Junior Agent acting on behalf of the Junior Creditor, to compel any Company
to make any payment under Article II of the Subsidiary Guaranty and Security
Agreement.
"Senior Agent" shall mean, collectively, the MCG Debt Agent and the
Other Senior Agent (or, if none has been appointed, the Other Senior Creditors,
if any).
"Senior Creditors" shall mean, collectively, the MCG Lenders and the
Other Senior Creditors.
"Senior Debt" shall mean, collectively, the MCG Senior Debt and the
Other Senior Debt.
"Senior Security Documents" shall mean, collectively, the MCG Security
Documents and the Other Security Documents.
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity are at
the time owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of Holdings.
"Subsidiary Guarantee and Security Agreement" shall mean the Master
Subsidiary Guarantee, Security Agreement, Collateral Assignment and Equity
Pledge, dated as of September 19, 2001, among the Companies, as grantors; the
Junior Agent, as collateral agent on behalf of AOL and its successors and
assigns; and AOL.
"Uniform Commercial Code" means the Uniform Commercial Code as the same
may, from time to time, be in effect in the Commonwealth of Virginia; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of the Collateral Agent's interest in
any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the Commonwealth of Virginia, or by the laws of a
jurisdiction other than a state of the United States, the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction or such
other laws, as the case may be, for purposes of the provisions hereof relating
to such attachment, perfection or priority.
Section 2. Subordination.
2.1 Subordination of Junior Claims. Each of the Junior Agent and the
Junior Creditor covenant and agree, that, to the extent and in the manner set
forth in this
4
Agreement, the Junior Claims, and the payment from whatever source (other than
Holdings and any entity on behalf of Holdings, but excluding payments made by
or on behalf of any Company) of all amounts in respect thereof, are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full in cash of all Senior Debt.
2.2 Subordination of Liens. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Junior Creditor
or to the Junior Agent on behalf of the Junior Creditor or of any Liens granted
to the Senior Creditors or to the Senior Agent on behalf of the Senior Creditors
and notwithstanding any provision of the Uniform Commercial Code, or any
applicable law or decision or the Junior Claims Documents or the Senior Security
Documents or any other circumstance whatsoever, each of the Junior Agent and the
Junior Creditor, by accepting and holding the Convertible Note, hereby agrees
that: (a) the Senior Creditors and the Senior Agent shall have a senior and
prior Lien on and security interest in the Collateral and all proceeds thereof
to secure the Senior Debt; and (b) any Lien on the Collateral now or hereafter
held by the Junior Creditor or by the Junior Agent on behalf of the Junior
Creditor regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall be junior and subordinate in all respect to
all Liens in the Collateral securing the Senior Debt. All Liens on the
Collateral securing the Senior Debt shall be and remain senior to all Liens on
the Collateral securing the Junior Claims for all purposes, whether or not such
Liens on the Collateral securing the Senior Debt are subordinated to any Lien
securing any other obligations of any Company.
2.3 Prohibition on Contesting Liens. Neither the Junior Agent nor the
Junior Creditor shall contest or challenge the validity, enforceability,
priority or perfection of, or restrict, interfere with or prevent any action
taken by the Senior Agent on behalf of the Senior Creditors to foreclose on or
enforce, any Lien under any Senior Security Document. Each of Junior Creditor
and Junior Agent hereby waives any and all defenses and rights of discharge
based upon suretyship or impairment of Collateral (including lack of attachment
or perfection with respect thereto) that it may now have or may hereafter
acquire with respect to the Senior Agent or any Senior Creditor or any of its
obligations hereunder, under any Junior Claims Document.
Section 3. Enforcement.
3.1 No Exercise of Remedies. Until such time as the Senior Debt shall
have been paid in full in cash and the commitment of the Senior Creditor to lend
has been terminated, neither the Junior Agent nor the Junior Creditor shall take
any action to foreclose, enforce or realize upon any Lien on Collateral or Right
of Payment under any Junior Claims Document or otherwise exercise any right or
remedy to enforce any such Lien on Collateral or Right of Payment if:
(i) any Senior Debt has been accelerated and any holder of Senior
Debt or the Senior Agent on behalf of any such holder has commenced
action to enforce its rights against all or any portion of the
Collateral,
5
(ii) a Junior Claims Event of Default (a "Triggering Default") has
occurred and no acceleration of the Senior Debt has occurred, until the
expiration of (A) a period of 180 days ("Enforcement Blockage Period")
after written notice to the Senior Agent of the occurrence of a Junior
Claims Event of Default and such failure has not been cured by the
Companies or (at its sole discretion, and without any obligation to do
so) by any Senior Creditor during such Enforcement Blockage Period and
(B) the 30th day after written notice by the Junior Creditor of the
intent to take action to enforce any Lien on Collateral or Right of
Payment under any Junior Claims Document has been given to the Senior
Agent and the Senior Creditors, which notice under this clause (B) may
only be given following the expiration of such Enforcement Blockage
Period. Each Enforcement Blockage Period will only prevent the Junior
Agent or Junior Creditor from exercising the remedies available to them
solely in connection with the Triggering Default and will not affect
the remedies available to the Junior Agent or the Junior Creditor
arising out of any previous Junior Claims Event of Default; or
(iii) no Triggering Default has occurred or is continuing;
provided that nothing contained herein is intended to prevent the Junior
Creditor from obtaining a judgment against the Companies (or any of them)
following the occurrence of a Junior Claims Event of Default so long as (A)(x)
the Junior Claims Event of Default has not been cured or waived and (y) the
Enforcement Blockage Period has expired or (B) the events contained in clause
(i) above have occurred.
3.2 Bankruptcy, etc. Neither the Junior Agent nor Junior Creditor will
commence or join with any other creditor or creditors of any Company in
commencing any bankruptcy, reorganization or insolvency proceedings against such
Company. At any general meeting of creditors of such Company or in the event of
any proceeding, voluntary or involuntary, for the distribution, division or
application of all or part of the assets of such Company or the proceeds
thereof, whether such proceeding be for the liquidation, dissolution or winding
up of such Company or its business, a receivership, insolvency or bankruptcy
proceeding, an assignment for the benefit of creditors or a proceeding by or
against such Company for relief under any bankruptcy, indebtedness,
reorganization, arrangement, composition or extension or otherwise, if all
Senior Debt has not been indefeasibly paid in full in cash at the time, (i) the
Junior Creditor, or the Junior Agent on its behalf, may demand, but only the
Senior Agent may collect until all such Senior Debt shall have been paid in full
in cash, any amount from such Company or from any other person, and neither the
Junior Agent nor the Junior Creditor may set off or otherwise discharge any part
of the Junior Claims; and (ii) the Senior Agent is hereby irrevocably authorized
on behalf of the Junior Agent and the Junior Creditor at any such meeting or in
any such proceeding to collect any assets of such Company distributed, divided
or applied by way of dividend or payment, or any such securities issued, on
account of the Junior Claims and apply the same, or the proceeds of any
realization upon the same that the holders of the Senior Debt in their
discretion elect to effect, to Senior Debt until all such Senior Debt shall have
been indefeasibly paid in full in cash, rendering any surplus then remaining to
the Junior Creditor or its representative, as the Junior
6
Creditor shall direct or as otherwise may be required by law or by agreement
of all creditors of such Company.
3.3 Payments Over. Any proceeds of the Collateral received by the
Junior Agent or the Junior Creditor and any other cash or other property
received by the Junior Agent or the Junior Creditor, in either case in
contravention of this Agreement, the MCG Credit Agreement or the guaranty of
Holdings related thereto shall be segregated and held in trust and forthwith
paid over to the Senior Agent for the benefit of the Senior Creditors in the
same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. The Senior Agent is hereby
authorized to make any such endorsements as the agent for the Junior Agent and
the Junior Creditor. This authorization is coupled with an interest and is
irrevocable.
Section 4. Other Agreements.
4.1 Releases. (a) If the Senior Agent releases any of its Liens on any
part of the Collateral in connection with any sale, lease, exchange, transfer or
other disposition thereof (each, a "Sale"), the Liens on the Collateral, if any,
of the Junior Creditor or the Junior Agent on behalf of the Junior Creditor
shall be automatically, unconditionally and simultaneously released, provided
that Holdings, any Company or the Senior Agent provides the Junior Agent and the
Junior Creditor with written notice of such Sale and release at least five (5)
business days prior to the date on which the Senior Agent agrees to be obligated
to effect such release (such notice not being required if the proposed Sale (i)
is not in excess of $2.5 million or (ii) involves a foreclosure or bankruptcy
procedure); and the Junior Agent shall, at the sole expense of the Company
requesting such release, execute and deliver to the Senior Agent or such Company
such termination statements, releases and other documents as the Senior Agent or
such Company may request to effectively confirm such release. The Junior Agent
hereby (i) appoints the Senior Agent as its attorney-in-fact to execute and
deliver, on behalf of the Junior Agent, termination and release documents, which
appointment shall be coupled with an interest, and (ii) authorizes the Senior
Agent to file, on behalf of the Junior Agent, one or more termination
statements, in each case in connection with any release of Collateral under this
Section 4.1 if the Junior Agent has not executed and delivered and/or filed any
such documents and or termination statement on or prior to the third day
following a written request therefor from the Senior Agent or any Company.
Notwithstanding the foregoing, the Liens on the Collateral granted to the Junior
Agent on behalf of the Junior Creditor shall, subject to all of the provisions
of this Agreement, continue in the proceeds of any sale, lease, exchange or
other disposition of the Collateral if such proceeds are not applied to the
Senior Debt or otherwise in accordance with the Senior Security Documents.
Nothing contained in this Section 4.1 shall impair, as among Holdings, the
Junior Agent and the Junior Creditor, the obligation of Holdings to pay all
amounts payable in respect of the Junior Claims as and when the same shall
become due and payable in accordance with the terms thereof, or prevent the
Junior Agent and Junior Creditor (except as expressly otherwise provided in this
Section 4.1) from exercising all rights, powers and remedies otherwise permitted
by the Junior Claims Documents or by applicable law, all, however, subject to
the rights of the Senior Agent and Senior Creditor as set forth in this Section
4.1.
7
(b) At the request of the Senior Agent, each of the Junior Agent
and the Junior Creditor agrees to use reasonable efforts to assist and
facilitate any sale, lease, exchange, transfer or other disposition of the
Collateral, whether by foreclosure or otherwise.
4.2 Enforcement of Liens; Application of Proceeds. At any time during
the existence of any "Event of Default" under (and as defined in) the MCG Credit
Agreement or any other agreement relating to Senior Debt, the Senior Creditors
and the Senior Agent will have the immediate right to enforce and realize upon
any Collateral security granted under any Senior Security Document in any manner
or order that the Senior Creditors or the Senior Agent on behalf of the Senior
Creditors deems expedient without regard to any equitable principles of
marshaling or otherwise. The Senior Creditors may at any time apply the proceeds
of any of the Collateral subject to the Senior Security Documents (including
without limitation proceeds of any sale of Collateral subject to the provisions
of Section 4.1 above), together with any rights of the Senior Creditors under
any insurance policy, including (without limitation) any hazard or casualty
insurance, credit insurance, business interruption or title insurance policy or
condemnation proceeding, to the Senior Debt, and among such obligations at such
time and in such order as they shall determine.
4.3 Reinstatement. If the Senior Agent or any Senior Creditor is
required in any bankruptcy, reorganization or insolvency proceeding or otherwise
to turn over or otherwise pay to the estate of Holdings or any Company any
amount received by the Senior Agent or any Senior Creditor with respect to the
Senior Debt or as a result of the provisions of this Agreement (a "Recovery"),
the Senior Debt and this Agreement shall be reinstated to the extent of such
Recovery and the Senior Creditors shall be entitled to receive payment in full
of all such amounts in accordance with the priorities established under this
Agreement.
4.4 Provisions Solely to Define Relative Rights. The provisions of
Sections 2, 3 and 4 are and are intended solely for the purpose of defining the
relative rights of the Junior Creditor on the one hand and the Senior Creditors
on the other hand. No rights are intended to be created hereunder for the
benefit of the Companies or any other alleged third party beneficiary. Subject
to the subordination provisions hereof, nothing contained in Sections 2, 3 and 4
or elsewhere in this Agreement or in the Junior Claims Documents is intended to
or shall:
(a) impair, as among the Companies, their creditors other than the
Senior Creditors and the Junior Creditor, the obligations or liabilities of the
Companies (whether contingent or otherwise) under the Junior Claims Documents in
accordance with the terms thereof; or
(b) affect the relative rights of the Junior Creditor or the Junior
Agent on behalf of the Junior Creditor against the Companies under the Junior
Claims Documents.
8
Section 5. Representations and Warranties of the Junior Agent. Each of
AOL and the Junior Agent represents and warrants to the Senior Agent that:
5.1 Corporate Existence. It is a corporation duly organized and validly
existing under the laws of the jurisdiction of its incorporation.
5.2 No Breach. None of the execution and delivery of this Agreement,
the consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof will result in a breach of, or require any consent
under, the charter or bylaws of the Junior Agent or AOL, as applicable, any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which the Junior Agent or AOL, as applicable, is a party or by which the Junior
Agent or AOL, as applicable, is bound or to which the Junior Agent or AOL, as
applicable, is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of the Junior Agent or AOL, as applicable, pursuant to the
terms of any such agreement or instrument, except where such breach, failure to
obtain such consent, default or creation or imposition of any such Lien could
not reasonably be expected to have a material adverse effect on business,
assets, operations, prospects or condition, financial or otherwise, of the
Junior Agent or AOL, as applicable.
5.3 Corporate Action: Execution and Delivery. The Junior Agent or AOL,
as applicable, has all necessary corporate power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by the Junior Agent or AOL, as applicable, of this
Agreement have been duly authorized by all necessary action on its part; and
this Agreement has been duly and validly executed and delivered by the Junior
Agent or AOL, as applicable, and constitutes the legal, valid and binding
obligation of the Junior Agent or AOL, as applicable, enforceable in accordance
with its terms.
5.4 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by the Junior
Agent or AOL, as applicable, of this Agreement or for the validity or
enforceability hereof.
Section 6. Representations and Warranties of the Senior Agent. The
Senior Agent represents and warrants to the Junior Agent that:
6.1 Corporate Existence. The Senior Agent is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation.
6.2 No Breach. None of the execution and delivery of this Agreement,
the consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof will result in a breach of, or require any consent
under, the charter or bylaws of the Senior Agent, any applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or instrument to which the
Senior Agent is a party or by which the Senior Agent is bound
9
or to which the Senior Agent is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
upon any of the revenues or assets of the Senior Agent pursuant to the terms of
any such agreement or instrument, except where such breach, failure to obtain
such consent, default or creation or imposition of any such Lien could not
reasonably be expected to have a material adverse effect on business, assets,
operations, prospects or condition, financial or otherwise, of the Senior Agent.
6.3 Corporate Action: Execution and Delivery. The Senior Agent has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement; the execution, delivery and performance by the
Senior Agent of this Agreement have been duly authorized by all necessary action
on its part; and this Agreement has been duly and validly executed and delivered
by the Senior Agent and constitutes the legal, valid and binding obligation of
the Senior Agent, enforceable in accordance with its terms.
6.4 Approvals. No authorizations, approvals or consents of, and no
filings, or registrations with, any governmental or regulatory authority or
agency are necessary for the execution, delivery or performance by the Senior
Agent of this Agreement or for the validity or enforceability hereof.
Section 7. Bailment for Perfection. Senior Agent agrees that it shall
hold any Collateral as to which perfection is accomplished solely by possession
for its own benefit and, for the purposes of perfection only, for the benefit of
the Junior Agent, subject to the provisions of this Agreement. Each of the
Junior Agent and Junior Creditor waives, releases and agrees not to xxx upon any
claim against the Senior Agent (or its directors, officers, employees or agents)
whether sounding in tort, contract or otherwise, except for claims for
foreseeable actual losses resulting directly from the Senior Agent's own gross
negligence, willful misconduct or fraud with respect to the Collateral
(including the gross negligence, willful misconduct or fraud of its directors,
officers and employees). Moreover, whether or not such damages are related to a
claim that is subject to the waiver effected above and whether or not such
waiver is effective, the Senior Agent (or its directors, officers, employees or
agents) shall not have any liability with respect to (and each of the Junior
Agent and Junior Creditor hereby waives, releases and agrees not to xxx upon any
claim for) any special, indirect, consequential, punitive or non-foreseeable
damages suffered by either the Junior Agent or the Junior Creditor in connection
with or in any way related to the transactions contemplated or the relationship
established by this Agreement, or any act, omission or event occurring in
connection herewith or therewith. In no way shall the Senior Agent be deemed to
stand in a trust or fiduciary relationship with the Junior Agent or the Junior
Creditor.
Section 8. Miscellaneous.
8.1 No Waiver. No failure on the part of the Senior Creditors or the
Senior Agent on behalf of the Senior Creditors to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder or under the Senior Security Documents or related agreements shall
operate as a waiver thereof, nor shall any
10
single or partial exercise by the Senior Creditors or the Senior Agent on behalf
of the Senior Creditors of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided at law or in equity.
8.2 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Virginia.
8.3 Notices. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at the
"Address for Notices" specified beneath its name on the signature pages hereof
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
8.4 No Modifications. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the parties
hereto.
8.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Junior
Agent, the Junior Creditor, the Senior Agent and the Senior Creditors. The terms
"Junior Agent," "Junior Creditor," "Senior Agent" and "Senior Creditors" shall
respectively apply to any successor and assign of any such party. Each party
agrees to notify any successor and assign of the existence and terms of this
Agreement.
8.6 Captions. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
8.7 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.
8.8 Subordination Legend. Each instrument, document or agreement
creating or evidencing the Junior Claims shall contain a conspicuous legend (in
form and substance satisfactory to the Senior Agent) that such instrument,
document or agreement and the rights therein are subject to the provisions of
this Agreement.
8.9 Amendment to Junior Claims Documents. The Junior Agent covenants
and agrees, on its own behalf and on behalf of the Junior Creditor, that it will
not modify any of the Junior Claims Documents, the Note Agreement or the
Convertible Note in any manner that would accelerate the date on which any
payment thereunder is to become due, increase the Companies' monetary
obligations thereunder, or make more restrictive any financial covenants
thereunder.
11
8.10 Expenses. Senior Agent shall have the right to recover on demand
from Junior Agent and the Junior Creditor all expenses incurred by the Senior
Agent to enforce the provisions of this Agreement against the Junior Agent and
the Junior Creditor.
8.11 Waiver of Jury Trial. Each party hereto hereby knowingly,
voluntarily and intentionally waives (to the maximum extent not prohibited by
applicable law) any rights it may have to a trial by jury in respect of any
litigation (whether as claim, counter-claim, affirmative defense or otherwise)
in connection with or in any way related to any of this Agreement, or any course
of conduct, course of dealing, statements (whether verbal or written), actions
or inactions of other party. Each party hereto acknowledges and agrees (a) that
it has received full and sufficient consideration for this provision, and (b)
that it has been advised by legal counsel in connection herewith, and (c) that
this provision is a material inducement for each Senior Creditor entering into
this Agreement and permitting the incurrence by the Companies of the Junior
Claims.
[SIGNATURE PAGE FOLLOWS]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
du y executed and delivered as of the day and year first above written.
JUNIOR AGENT SENIOR AGENT
------------ ------------
STATE STREET BANK AND TRUST COMPANY, N.A., MCG FINANCE CORPORATION, as
as collateral agent collateral agent
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------------- -----------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Title: Vice President Title: President and Chief
Operating Officer
Address for Notices: Address for Notices:
State Street Bank and Trust Company, N.A. MCG Finance Corporation
61 Broadway 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department Attn: Loan Administration
Talk America Holdings, Inc./AOL Facsimile No.: (000) 000-0000
Security and Pledge
Facsimile No.: (000) 000-0000
13
ACKNOWLEDGED AND AGREED:
AMERICA ONLINE, INC., as the initial Junior Creditor and on behalf of the
holders of the Convertible Note from time to time
By: /s/ Xxxxx Xxxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
Address for Notices:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile Number: (000) 000-0000
TALK AMERICA INC.
ACCESS ONE COMMUNICATIONS CORP.
OMNICALL, INC.
THE OTHER PHONE COMPANY, INC.
TALK AMERICA OF VIRGINIA, INC.
By: /s/ Xxxxxxxx X. Lawn, IV
---------------------------------
Name: Xxxxxxxx X. Lawn, IV
Title: Executive Vice President, General Counsel
and Secretary
As authorized officer of each of the above named companies
(Signature Page to Intercreditor Agreement)
14
Annex A to
Intercreditor Agreement
[Form of Adopting Instrument]
Reference is made to the Intercreditor Agreement, dated as of September
19, 2001 (the "Subordination Agreement"; capitalized terms used and not defined
herein shall have the meanings assigned to them in the Intercreditor Agreement),
by and among MCG Finance Corporation, as collateral agent, State Street Bank and
Trust Company, N.A., as collateral agent, and any Other Senior Agent from time
to time party thereto. By executing and delivering this Adopting Instrument, the
undersigned hereby agrees to be bound by all the terms and provisions of the
Intercreditor Agreement applicable to the Senior Agent and a Senior Creditor on
and after the date hereof.
This Adopting Instrument shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia.
[Adopting Person]
By:
---------------------------------
Title
Date:__________________ , 200_
