INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "Agreement"), dated as of June 28,
2001, among Renaissance US Growth & Income Trust PLC, a public limited company
registered in England and Wales ("RUSGIT"), BFSUS Special Opportunities Trust
PLC, a public limited company registered in England and Wales ("BFSUS") (RUSGIT
and BFSUS collectively referred to as "Lender"), and the other debenture holders
(the "Other Debenture Holders") who are signatories to this Agreement.
RECITALS
A. Lender has loaned to Cover-All Technologies Inc., a Delaware
corporation ("Borrower"), the aggregate principal amount of $1,400,000 evidenced
by Borrower's 8.00% Convertible Debentures of even date herewith, and the Other
Debenture Holders have loaned to the Borrower the aggregate principal amount of
$400,000 evidenced by Borrower's 8.00% Convertible Debentures of even date
herewith (all of such debentures collectively referred to as the "Debentures").
B. The Lender, Renaissance Capital Group, Inc., a Texas corporation
("RCG"), and the Borrower have entered into a Pledge Agreement, the Borrower
Security Agreement and the Subsidiary Security Agreement of even date herewith
providing for the pledge and grants of security interests in the pledged Shares
and the Collateral to secure the payment when due of the Obligations of the
Borrower under the Loan Documents.
C. The Lender and the Other Debenture Holders desire to enter into
this Agreement to set forth their relative rights as creditors of the Borrower.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements set forth herein, the parties agree as follows:
1. ACTION OF DEBENTURE HOLDERS. Without the prior written consent
of the holders of 66-2/3% of the principal amount of the then-outstanding
Debentures, no Debenture holder shall commence any action or proceeding against
the Borrower or join with any other creditor of the Borrower in bringing any
proceeding against the Borrower under any bankruptcy, insolvency,
reorganization, receivership or other federal or state law, or accelerate the
maturity of the Debentures or any other obligations of the Borrower to the
Debenture holders, whether under the Debentures or any loan documents relating
to the Debentures, or exercise any rights or remedies, whether pursuant to the
Debentures, the loan documents relating to the Debentures or applicable law,
including declaring any Default or Event of Default.
2. RIGHTS TO COLLATERAL. Notwithstanding that the Lender has sole
possession of the pledged Shares or that the Lender is described as the sole
secured party on UCC-1s filed by Lender, the Collateral and the pledged Shares
shall secure the payment when due of all of the obligations of the Borrower to
all of the Debenture holders under the Debentures or any loan documents relating
to the Debentures, on a PARI PASSU basis (notwithstanding any subsequent
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UCC-1 filings by the Other Debenture Holders) in accordance with the respective
principal amounts of the Debentures. Lender agrees that, in the event Lender
converts its Debentures, Lender shall promptly transfer its interest in all of
the Collateral, including its possession of the Shares pledged to Lender to the
Other Debenture Holders, if any, and execute any and all documents reasonably
requested by the Other Debenture Holders to accomplish the foregoing.
3. AMENDMENTS TO DEBENTURES; WAIVERS. Without the prior written
consent of the holders of 66-2/3% of the principal amount of the
then-outstanding Debentures, no Debenture holder may (i) renew or extend the
time of payment of the Debentures, or (ii) modify or amend the Debentures or any
related loan documents. The Lender shall have no liability to the Other
Debenture Holders for any action taken or omitted to be taken (excluding
Lender's willful misconduct, but including, without limitation, actions with
respect to the creation, perfection or continuation of liens or security
interests in any existing or future Collateral or pledged Shares), actions with
respect to the occurrence of a Default or an Event of Default, actions with
respect to the foreclosure upon, sale, release or depreciation of, or failure to
realize upon any of the Collateral or pledged Shares and actions with respect to
the collection of any claim for all or any part of the obligations of Borrower
to the Other Debenture Holders from any other party. Notwithstanding anything
contained herein to the contrary, no Debenture holder may modify or amend any
provision of the Debentures or any related loan document affecting the right of
all Debenture holders to share pro rata in the proceeds of any Collateral if,
when and however received.
4. MARSHALING; APPLICATION OF PAYMENTS. The Other Debenture Holders
hereby waive any rights they have or may have in the future to require Lender to
marshal their Collateral or pledged Shares, and agree that Lender may proceed
against its Collateral and pledged Shares in any order that it deems appropriate
in the exercise of its absolute discretion.
5. BANKRUPTCY ISSUES. This Agreement shall continue in full force
and effect after the filing by or against Borrower of a petition under the U.S.
Bankruptcy Code (the "Code") or any other insolvency proceeding, and all
references herein to Borrower shall be deemed to apply to a trustee for
Borrower's bankruptcy estate and to Borrower as debtor-in-possession. The Lender
is irrevocably authorized and empowered to receive and collect any and all
dividends, payments or distributions made on account of any proof of claim
relating to the Debentures and Lender is required to pay or otherwise distribute
pro rata to the Other Debenture Holders any such dividends, payments or
distributions received, and the Other Debenture Holders shall execute and
deliver such assignments or instruments as the Lender may require to enable it
to collect such dividends, payments or distributions.
6. REPRESENTATIONS CONCERNING THE BORROWER. Neither Lender nor any
of its directors, officers, agents, affiliates or employees, shall be
responsible to the Other Debenture Holders for (i) Borrower's solvency,
financial condition, or ability to repay debt, (ii) any oral or written
statements of Borrower, or (iii) the validity, sufficiency or enforceability of
the Debentures, any of Borrower's loan documents or the security interests and
pledge granted by Borrower to Lender. The Other Debenture Holders have entered
into their loan documents and
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financing arrangements with Borrower based upon their own independent
investigation, and have not relied on any warranty or representation of the
Lender.
7. MISCELLANEOUS.
a. This Agreement shall bind and inure to the benefit of
the parties and their respective heirs, personal representatives,
successors and assigns, except that Borrower shall not assign any of its
rights hereunder without the prior written consent of holders of more
than 50% of the principal amount of the then outstanding Debentures.
b. Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without affecting the validity or enforceability of the remainder of
this Agreement or the validity or enforceability of such provision in
any other jurisdiction.
c. This Agreement shall be governed by and construed and
enforced in accordance with the substantive laws of the State of Texas,
without regard to the conflicts of laws principles thereof, and the
applicable laws of the United States. Venue and jurisdiction shall be in
the state or federal courts in Dallas County, Texas.
d. All Debenture holders hereby consent to the jurisdiction
of the courts of the State of Texas in any action or proceeding which
may be brought against it under or in connection with this Agreement or
any transaction contemplated hereby or to enforce any agreement
contained herein and, in the event any such action or proceeding shall
be brought against it, all Debenture holders agree not to raise any
objection to such jurisdiction or to venue in Dallas County, Texas or,
if applicable, any other county in any state in which Collateral is
located.
e. All capitalized terms, unless otherwise specified, have
the meanings assigned to them in the Loan Agreement, the Pledge
Agreement, the Borrower Security Agreement, the Subsidiary Security
Agreement and the Debentures, as applicable.
f. The transfer or assignment of any of the Debentures, or
any right, claim or interest therein, shall only be made subject to this
Agreement.
g. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and
instruments referred to herein must be (i) given in writing and
personally delivered, mailed by prepaid certified or registered mail or
sent by overnight service, such as FedEx, or (ii) made by telex or
facsimile transmission delivered or transmitted to the party to whom
such notice or communication is directed, with confirmation thereupon
given in writing and personally delivered or mailed by prepaid certified
or registered mail.
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If to Other Debenture Holders:
c/o Xxxx X. Xxxxxx
Cover-All Technologies Inc.
00-00 Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lender to:
Renaissance US Growth & Income Trust PLC
c/o Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BFSUS Special Opportunities Trust PLC
c/o Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000-XX00
Xxxxxx, Xxxxx 00000
Attn.: Xxxx X. Xxxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice delivered personally in the manner provided herein
will be deemed given to the party to whom it is directed upon the
party's (or its agent's) actual receipt. Any notice addressed and mailed
in the manner provided herein will be deemed given to the party to whom
it is addressed at the close of business, local time of the recipient,
on the fourth business day after the day it is placed in the mail, or,
if earlier, the time of actual receipt.
h. Capitalized terms used herein, unless otherwise defined
herein, have the definitions given them in the Loan Agreement, the
Pledge Agreement, the Borrower's Security Agreement and the Subsidiary
Security Agreement, all among Borrower, Lender and RCG.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
and year written above.
LENDER:
RENAISSANCE US GROWTH & INCOME TRUST PLC
By: ____________________________________
Name: Xxxxxxx Xxxxxxxxx
Title: Director
BFSUS SPECIAL OPPORTUNITIES TRUST PLC
By: ____________________________________
Name: Xxxxxxx Xxxxxxxxx
Title: Director
OTHER DEBENTURE HOLDERS:
___________________________________________
Xxxx X. Xxxxxx
__________________________________________
Xxxxxx Xxxxxxxx
__________________________________________
Xxxxxx Xxxxxxxxx
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