1
EXHIBIT 4.7
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "Agreement") is entered into as
of February 9, 2000 by and among US Xchange, L.L.C., a Michigan limited
liability company ("Holdings"), US Xchange Finance Company, L.L.C., a Delaware
limited liability company (the "Borrower"), General Electric Capital Corporation
as the Administrative Agent (as defined below) and Xxxxxx X. Xxxxxx Pol ("Vander
Pol").
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower and certain of its operating
subsidiaries as Guarantors, the financial institutions and other entities from
time to time party to the Loan Agreement referred to below (the "Lenders") and
General Electric Capital Corporation as administrative agent for the Lenders (in
such capacity, the "Administrative Agent") are party to a Loan Agreement, dated
as of April 29, 1999 (as such agreement may be amended, supplemented or
otherwise modified from time to time the "Loan Agreement"); and
WHEREAS, all extensions of credit by the Lenders to the Borrower
pursuant to the Loan Agreement are guaranteed by Holdings; and
WHEREAS, Vander Pol has entered into that certain Business Loan
Agreement, dated as of August 26, 1999, with Holdings, pursuant to which Vander
Pol has agreed, upon the terms and conditions contained therein, to make a loan
to Holdings in the principal amount of $50,000,000; and
WHEREAS, in connection with the agreements made among the parties
hereto, the Administrative Agent, for the benefit of the Senior Lenders, and
Vander Pol desire to establish between themselves their relative rights,
remedies and priorities with respect to the Common Collateral;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained the parties agree as follows:
1. Definitions. As used herein the following terms shall have the
meanings indicated and any capitalized terms not defined herein shall have the
meanings specified in the Loan Agreement.
"Administrative Agent" shall include, in addition to the
Administrative Agent referred to in the recitals hereto, the then acting agent
for the Senior Lenders (or if there is more than one agent, a majority of them)
under the Loan Agreement and any successor thereto exercising substantially the
same rights and powers, or if there is no acting Administrative Agent under the
Loan Agreement, the Senior Lenders holding a majority in principal amount of
Senior Loan Claims outstanding.
2
"Agreement" shall mean this Agreement as modified or amended from
time to time in accordance with the terms hereof.
"Avoided Transfer" shall have the meaning set forth in Section 7.3
hereof.
"Bankruptcy Code" shall mean Title 11 of the United States Code
(11 U.S.C. 101 et seq.), as amended from time to time and any successor statute.
"Business Day" shall mean any day other than Saturday, Sunday and
a day that is a legal holiday under the laws of the State of New York or on
which banking institutions in the State of New York are required or authorized
by law or other governmental action to close.
"Common Collateral" shall mean the Collateral with respect to
which the Borrower or any of its Subsidiaries has granted a Lien to both (i) to
the Administrative Agent, for the benefit of the Senior Lenders, and (ii) to the
Junior Lenders.
"Insolvency or Liquidation Proceeding" shall mean (i) any
voluntary or involuntary case or proceeding under the Bankruptcy Code with
respect to Holdings or the Borrower, (ii) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to Holdings or the Borrower or to any of their respective assets,
or (iii) any liquidation, dissolution, reorganization or winding up of Holdings
or the Borrower whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (iv) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of Holdings or the Borrower.
"Junior Claims" shall mean all indebtedness, obligations and other
liabilities (contingent or otherwise) arising under or with respect to the
Junior Loan Documents or any of them, including claims for misrepresentation and
breach of warranties or covenants.
"Junior Lenders" shall mean Vander Pol and each and every
successor and assignee in its capacity as a lender under the Junior Loan
Agreement.
"Junior Loan Agreement" shall mean that certain Business Loan
Agreement, dated as of August 26, 1999, by and between Holdings and Vander Pol,
pursuant to which Vander Pol has agreed, upon the terms and conditions contained
therein, to make a loan to Holdings in the aggregate principal amount of
$50,000,000.
"Junior Loan Documents" shall mean the Junior Loan Agreement, the
Note (as defined in the Junior Loan Agreement), the Junior Security Agreement,
and any document or instrument executed or delivered in connection therewith or
pursuant thereto or under which rights or remedies with respect to any of such
documents or instruments are governed, as the same may be amended, renewed,
extended, supplemented or modified.
2
3
"Junior Security Agreement" shall mean the Security Agreement
dated as of August 26, 1999 between Holdings and Vander Pol and any document or
instrument under which any Lien is granted to secure the Junior Claims or under
which rights or remedies with respect to any such Lien are governed, as the same
may be amended, renewed, extended, supplemented or modified.
"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 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 such Lien relates as debtor.
"paid in full" and "payment in full" shall mean, with respect to
any and all Senior Loan Claims, payment in full thereof in cash (or otherwise to
the written satisfaction of the Senior Lenders) and termination of the
commitments of the Senior Lenders and all other obligations under the Loan
Agreement.
"Person" shall mean any person, individual, sole proprietorship,
partnership, joint venture, corporation, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency or instrumentality thereof.
"Recovery" shall have the meaning set forth in Section 7.3 hereof.
"Senior Lenders" shall mean the Persons holding Senior Loan
Claims, including the Administrative Agent.
"Senior Loan Claims" shall mean (a) all Obligations (as defined in
the Loan Agreement), including, without limitation, all indebtedness,
obligations (including, without limitation, to cash collateralize outstanding
letters of credit) and other liabilities (contingent or otherwise) payable
directly or indirectly to the Senior Lenders by Holdings, the Borrower or its
Subsidiaries, whether outstanding on the date of this Agreement or hereafter
incurred, created or assumed, (b) the principal of all loans, letters of credit
and other extensions of credit under any financing under section 364 of the
Bankruptcy Code or any arrangement for use of cash collateral under section 363
of the Bankruptcy Code, the terms of which are consented to by the
Administrative Agent in its capacity as such, (c) all interest, expenses, fees,
reimbursements, indemnities and other similar amounts owing pursuant to any of
the Senior Loan Documents, (d) any amounts advanced by any of the Senior Lenders
to acquire, pay or otherwise satisfy, discharge or reduce any claim secured by a
Lien on the Collateral which is senior to a Lien granted to the Senior Lenders
pursuant to the Senior Loan Documents; and (e) any other advance or extension of
credit by any Senior Lender for the purpose of maintaining, preserving or
protecting any of the Collateral. Senior Loan Claims shall include all interest
accrued or accruing (or which would, absent the commencement of an Insolvency or
Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding
3
4
in accordance with and at the rate specified in the Loan Agreement whether or
not the claim for such interest is allowed as a claim in such Insolvency or
Liquidation Proceeding. To the extent any payment with respect to the Senior
Loan Claims (whether by or on behalf of Holdings or the Borrower, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
"Senior Loan Documents" shall mean the Loan Agreement, the Loan
Documents (as defined in the Loan Agreement) and all documents and instruments
delivered in connection with or pursuant thereto or under which any of the
Collateral is granted or under which rights or remedies with respect to any of
the foregoing are governed, as any such document or instrument may from time to
time be amended, renewed, supplemented or otherwise modified at the option of
the parties thereto.
"Uniform Commercial Code" or "UCC" shall mean the Uniform
Commercial Code of the State of New York, as amended.
2. Debt Priorities.
2.1 Subordination. Notwithstanding anything to the contrary
contained in the Junior Loan Documents or otherwise, the Junior Claims shall be
subordinated in right of payment to the Senior Loan Claims and the Senior Loan
Claims shall be prior in right of payment to the Junior Claims. No Junior Lender
shall take, demand or receive and neither Holdings nor the Borrower will make,
give or permit, directly or indirectly, by set-off, redemption, purchase or in
any other manner, any payment on account of any Junior Claim until the Senior
Loan Claims have been paid in full. All Senior Loan Claims shall be and remain
senior to all Junior Claims for all purposes whether or not such Senior Loan
Claims are subordinated to any other obligations of Holdings or the Borrower.
3. Lien Priorities.
3.1 Subordination. Notwithstanding the date, manner or order of
grant, attachment or perfection of any Liens (including, without limitation, the
Liens on the Common Collateral) granted to the Junior Lenders or of any Liens
granted to the Senior Lenders and notwithstanding any provision of the Uniform
Commercial Code, or any applicable law or decision or the Junior Loan Documents
or the Senior Loan Documents or any other circumstance whatsoever, each Junior
Lender hereby agrees that: (a) the Administrative Agent and the Senior Lenders
shall have a senior and prior Lien on and security interest in the Common
Collateral and all proceeds thereof to secure the Senior Loan Claims; and (b)
any Lien in the Common Collateral now or hereafter held by the Junior Lenders
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all
Liens in the Common Collateral securing the Senior Loan Claims. All Liens
securing the Senior Loan Claims shall be and remain senior to all Liens securing
the Junior Claims for all
4
5
purposes, whether or not such Liens securing the Senior Loan Claims are
subordinated to any Lien securing any other obligation of the Borrower or
Holdings.
3.2 Prohibition on Contesting Liens and Senior Obligations; No New
Liens. Each Junior Lender agrees that it shall not (and hereby waives any right
to) contest or support any other Person in contesting, in any action or
proceeding or otherwise (including, without limitation, any Insolvency or
Liquidation Proceeding), the priority, the validity or enforceability or the
Senior Loan Claims or any Lien held by the Senior Lenders. Without the prior
written consent of the Administrative Agent and those Senior Lenders holding a
majority of the Senior Loan Claims, no Junior Lender shall hold any Lien on any
assets of the Borrower, Holdings or any of its Subsidiaries, other than the Lien
granted to pursuant to the Junior Security Agreement as in effect on the date
hereof in the Common Collateral.
4. Enforcement.
4.1 No Exercise of Remedies. (a) Unless and until the Senior Loan
Claims have been paid in full, no Junior Lender shall assert any right or remedy
in respect of the Junior Claims, the Common Collateral or any Lien therein held
by the Junior Lenders or any of them (including without limitation, under or in
respect of the Junior Security Agreement).
(b) Each Junior Lender agrees not to take or receive from or on
behalf of Holdings or the Borrower, directly or indirectly, in cash or other
property or by setoff, counterclaim or in any other manner (whether pursuant to
any enforcement, collection, execution, levy or foreclosure proceeding or
otherwise) any Collateral (including any Common Collateral) or any proceeds of
the Collateral (including any Common Collateral), unless and until all Senior
Loan Claims shall have been paid in full. Without limiting the generality of the
foregoing, unless and until the Senior Loan Claims have been paid in full, the
sole right of the Junior Lenders with respect to the Collateral is to hold a
Lien on the Common Collateral pursuant to the Junior Security Agreement for the
period and to the extent granted therein and to receive a share of the proceeds
thereof, if any, after payment in full of the Senior Loan Claims.
4.2 Cooperation. Each Junior Lender agrees that, unless and until
all Senior Loan Claims have been paid in full, it will not commence, or join
with any Person (other than the Senior Lenders and the Administrative Agent) in
commencing any enforcement, collection, execution, levy or foreclosure action or
proceeding with respect to any Lien held by it under any of the Junior Loan
Documents or otherwise.
5. Payments Over. Any proceeds of the Common Collateral received
by any Junior Lender and any other cash or other property received by any Junior
Lender in contravention of this Agreement shall be segregated and held in trust
and forthwith paid over to the Administrative Agent for the benefit of the
Senior Lenders in the same form as received, with any necessary endorsements or
as a court of competent jurisdiction may otherwise direct. The Administrative
Agent is hereby authorized to make any such
5
6
endorsements as the agent for any such Junior Lender. This authorization is
coupled with an interest and is irrevocable.
6. Other Agreements.
6.1 Releases. (a) If the Senior Lenders release any of their Liens
on any part of the Common Collateral in connection with the sale, lease,
exchange, transfer or other disposition thereof or in connection with any
restructuring of the indebtedness of the Borrower or Holdings, the Liens, if
any, of the Junior Lenders shall be automatically, unconditionally and
simultaneously released and each Junior Lender shall execute and deliver to the
Administrative Agent or the Borrower such termination statements, releases and
other documents as the Administrative Agent or the Borrower may request to
effectively confirm such release. Notwithstanding the foregoing, the Lien
granted to the Junior Lender shall, subject to all of the provisions of this
Agreement, continue in the proceeds of any sale, lease, exchange or other
disposition of the Common Collateral if such proceeds are not applied to the
Senior Loan Claims.
(b) At the request of the Senior Lenders, each Junior Lender
agrees to assist and facilitate any sale, lease, exchange, transfer or other
disposition of the Common Collateral, whether by foreclosure or otherwise. Each
Junior Lender hereby waives any and all rights it may have to object to the
manner in which the Administrative Agent or the Senior Lenders seek to enforce
or collect the Senior Loan Claims or the Liens granted in any of the Collateral,
including waiving any right based on any duty to conduct any such sale, lease,
exchange, transfer or other disposition in a commercially reasonable manner.
(c) In furtherance of the foregoing, the Junior Lenders, on the
date hereof and from time to time, have executed and delivered or will execute
and deliver to the Administrative Agent undated UCC termination statements in
respect of all of the Common Collateral in such number and such jurisdictions as
determined by the Administrative Agent. Each Junior Lender hereby appoints the
Administrative Agent its attorney-in-fact and authorizes the Administrative
Agent to complete the UCC termination statements and file them in order to carry
out the purposes of this Section 6.1. This appointment and authorization is
coupled with an interest and is irrevocable.
6.2 Insurance. Unless and until the Senior Loan Claims are paid in
full, the Senior Lenders shall have the sole and exclusive right, subject to the
rights of the Borrower and Holdings under the Senior Loan Documents, to adjust
settlement for any insurance policy covering the Collateral in the event of any
loss thereunder and to approve any award granted in any condemnation or similar
proceeding affecting the Collateral. Unless and until the Senior Loan Claims are
paid in full, all proceeds of any such policy and any such award shall be paid
to the Administrative Agent for the benefit of the Senior Lenders and thereafter
to the Junior Lenders if in respect to the Common Collateral and then to the
owner of the subject property or as a court of competent jurisdiction may
otherwise direct. In the event the Senior Lenders allow any portion of such
insurance proceeds or condemnation or similar award to be used by Holdings or
the Borrower to repair or replace the Collateral affected or for any other
purpose, the Junior
6
7
Lenders hereby consent thereto and agree to take all action necessary under the
Junior Loan Documents to permit such use.
6.3 Amendments to Junior Loan Documents. Without the prior written
consent of the Administrative Agent and those Senior Lenders holding a majority
of the Senior Loan Claims, no Junior Loan Document may be amended, modified,
supplemented or entered into.
6.4 Assignment. No Junior Lender may sell, transfer, pledge,
hypothecate, assign or grant any participation or subparticipation in, or
otherwise transfer or dispose of, the Junior Claims to any Person without the
consent of the Administrative Agent and those Senior Lenders holding a majority
of the Senior Loan Claims
7. Insolvency or Liquidation Proceedings.
7.1 Filing of Claims; Voting of Claims. The Administrative Agent
has the right, but not the obligation, to file proofs of claim and other
pleadings and motions directly related to the Junior Claims and/or the Junior
Liens in any Insolvency or Liquidation Proceeding. In addition, the
Administrative Agent has the right, but not the obligation, to vote any and all
claims that the Junior Lenders may have in any Insolvency or Liquidation
Proceeding. Each Junior Lender hereby appoints the Administrative Agent as its
attorney-in-fact to take all actions as are necessary to carry out the purposes
of this section 7.1 and such power of attorney is coupled with an interest and
irrevocable.
7.2 Financing Issues. If Holdings shall be subject to any
Insolvency or Liquidation Proceeding and the Administrative Agent shall desire
to permit the use of cash collateral or to permit Holdings to obtain financing
under section 363 or section 364 of the Bankruptcy Code, then each Junior Lender
agrees that it will raise no objection to such use or financing and will not
request adequate protection or any other relief in connection therewith (except
to the extent permitted by Section 7.5) and, to the extent necessary, will
subordinate its Liens in the Common Collateral to such financing.
7.3 Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Borrower or Holdings any amount ("Recovery"), the Senior
Loan Claims shall be reinstated to the extent of such Recovery and the Senior
Lenders shall be entitled to receive payment in full of all such amounts.
7.4 Other Issues. No Junior Lender shall seek relief from the
automatic stay or any other stay in any Insolvency or Liquidation Proceeding in
respect of the Common Collateral.
7.5 Adequate Protection. No Junior Lender shall seek or request
adequate protection nor shall it contest (or support any other Person
contesting) (i) any request by the Administrative Agent or the Senior Lenders
for adequate protection or (ii) any objection by the Administrative Agent or the
Senior Lenders to any motion, relief, action or proceeding based on the
Administrative Agent or the Senior Lenders claiming a lack of adequate
protection. Notwithstanding the foregoing contained in this Section 7.5, in
7
8
any Insolvency or Bankruptcy Proceeding, if the Senior Lenders are granted
adequate protection in the form of additional collateral in connection with any
financing or use of its cash collateral under section 363 or section 364 of the
Bankruptcy Code, then the Junior Lenders may seek or request adequate protection
in the form of a replacement Lien on such additional collateral, which Lien is
subordinated to the Senior Loan Claims on the terms and conditions set forth
herein, including, without limitation, sections 3, 4 and 5 hereof.
7.6 No Waiver. Nothing contained herein shall prohibit or in any
way limit the Administrative Agent or any Senior Lender from objecting in any
Insolvency or Liquidation Proceeding or otherwise to any action taken by any
Junior Lender, including, without limitation, the seeking by such Junior Lender
of adequate protection or the asserting by such Junior Lender of any of its
rights and remedies under the Junior Loan Documents or otherwise. Nothing
contained herein shall prohibit the Junior Lenders from seeking membership on
any creditors' committee in any Insolvency or Bankruptcy Proceeding.
8. Reliance; Waivers; etc.
8.1 Reliance. The consent by the Senior Lenders to the execution
and delivery of the Junior Loan Documents and the grant to the Junior Lenders of
a Lien on the Common Collateral and all loans and other extensions of credit
made on and after the date hereof by the Senior Lenders pursuant to the Loan
Agreement shall be deemed to have been given and made in reliance upon this
Agreement. Each Junior Lender acknowledges that it has, independently and
without reliance on the Administrative Agent or any Senior Lender, and based on
documents and information deemed by it appropriate, made its own credit analysis
and decision to enter into the Junior Loan Agreement, this Agreement and the
transactions contemplated hereby and thereby and it will continue to make its
own credit decision in taking or not taking any action under the Junior Loan
Agreement or this Agreement.
8.2 No Warranties or Liability. Each Junior Lender acknowledges
and agrees that each of the Administrative Agent and the Senior Lenders have
made no express or implied representation or warranty, including, without
limitation, with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the Senior Loan Documents. The Senior
Lenders will be entitled to manage and supervise their respective loans and
extensions of credit pursuant to the Loan Agreement in accordance with law and
their usual practices, modified from time to time as they in their sole
discretion deem appropriate and the Senior Lenders may manage their loans and
extensions of credit without regard to any rights or interests that the Junior
Lenders have in the Common Collateral or otherwise. Neither the Administrative
Agent nor any Senior Lender shall have any duty to the Junior Lenders to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of an event of default or default under any agreements with Holdings
or the Borrower (including the Junior Loan Documents), regardless of any
knowledge thereof which they may have or be charged with.
8
9
8.3 No Waiver of Subordination Provisions. (a) No right of the
Senior Lenders, the Administrative Agent or any of them to enforce any provision
of this Agreement shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of Holdings or the Borrower or by any act or
failure to act by any Senior Lender or the Administrative Agent, or by any
noncompliance by any Person with the terms, provisions and covenants of this
Agreement, any of the Senior Loan Documents or any of the Junior Loan Documents,
regardless of any knowledge thereof which the Administrative Agent or the Senior
Lenders, or any of them, may have or be otherwise charged with.
(b) Without in any way limiting the generality of the foregoing
paragraph, the Senior Lenders, the Administrative Agent, and any of them, may,
at any time, and from time to time, without the consent of, or notice to, any
Junior Lender, without incurring any liabilities to any Junior Lender and
without impairing or releasing the subordination and other benefits provided in
this Agreement (even if any right of subrogation or other right or remedy of any
Junior Lender is affected, impaired or extinguished thereby) do any one or more
of the following:
(i) change the manner, place or terms of payment or
change or extend the time of payment of, or renew, exchange, amend,
increase or alter, the terms of any of the Senior Loan Claims or any
Lien in any Collateral or guaranty thereof or any liability of Holdings
or the Borrower or any guarantor, or any liability incurred directly or
indirectly in respect thereof (including, without limitation, any
increase in or extension of the Senior Loan Claims, without any
restriction as to the amount, tenor or terms of any such increase or
extension), or otherwise amend, renew, exchange, extend, modify or
supplement in any manner any Liens held by the Senior Lenders, the
Senior Loan Claims or any of the Senior Loan Documents;
(ii) sell, exchange, release, surrender, realize upon,
enforce or otherwise deal with in any manner and in any order any part
of the Collateral or any liability of Holdings or the Borrower or any
guarantor to the Senior Lenders or the Administrative Agent, or any
liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any Senior Loan Claim or any
other liability of Holdings or the Borrower or any guarantor or any
security therefor or any liability incurred directly or indirectly in
respect thereof and apply any sums by whomsoever paid and however
realized to any liability (including, without limitation, the Senior
Loan Claims) in any manner or order (provided that nothing herein shall
permit amounts collected on account of the Senior Loan Claims to be
applied to any other liability); and
(iv) exercise or delay in or refrain from exercising any
right or remedy against Holdings or the Borrower or any security or any
guarantor or any other Person, elect any remedy and otherwise deal
freely with Holdings, the Borrower and the Collateral and any security
and any guarantor or any
9
10
liability of the Borrower or Holdings or any guarantor to the Senior
Lenders or any liability incurred directly or indirectly in respect
thereof.
(c) Each Junior Lender also agrees that the Senior Lenders and the
Administrative Agent shall have no liability to any Junior Lender, and each
Junior Lender hereby waives any claim against any Senior Lender or the
Administrative Agent arising out of any and all actions which the Senior Lenders
or the Administrative Agent may take or permit or omit to take with respect to:
(i) the Senior Loan Documents, (ii) the collection of the Senior Loan Claims or
(iii) the foreclosure upon, or sale, liquidation or other disposition of, the
Collateral. Each Junior Lender agrees that the Senior Lenders and the
Administrative Agent have no duty to them in respect of the maintenance or
preservation of the Collateral, the Senior Loan Claims or otherwise.
(d) Each Junior Lender agrees not to assert and hereby waives, to
the fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling, appraisal,
valuation or other similar right that may otherwise be available under
applicable law or any other similar rights a junior secured creditor may have
under applicable law.
9. Miscellaneous.
9.1 Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of the Senior Loan Documents or the Junior
Loan Documents, the provisions of this Agreement shall govern.
9.2 Continuing Nature of Subordination. This Agreement shall
continue to be effective until all Senior Loan Claims shall have been paid in
full. This is a continuing agreement of subordination and the Senior Lenders may
continue, at any time and without notice to any Junior Lender to extend credit
and other financial accommodations and lend monies to or for the benefit of
Holdings or the Borrower on the faith hereof. Each Junior Lender hereby waives
any right it may have under applicable law to revoke this Agreement or any of
the provisions of this Agreement. The terms of this Intercreditor Agreement
shall survive, and shall continue in full force and effect, in any Insolvency or
Liquidation Proceeding.
9.3 Amendments; Waivers. No amendment, modification or waiver of
any of the provisions of this Agreement by any Junior Lender, the Administrative
Agent or any Senior Lender shall be deemed to be made unless the same shall be
in writing signed on behalf of the party making the same or its authorized agent
and each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the parties making
such waiver or the obligations of the other parties to such party in any other
respect or at any other time. Neither the Borrower nor Holdings shall have any
right to amend, modify or waive any provision of this Agreement, nor shall any
consent or signed writing be required of either of their to effect any
amendment, modification or waiver.
10
11
9.4 Information Concerning Financial Condition of the Borrower and
Holdings. The Administrative Agent and the Senior Lenders, on the one hand, and
the Junior Lenders, on the other hand, shall each be responsible for keeping
themselves informed of (i) the financial condition of Holdings and the Borrower
and all endorsers and/or guarantors of the Junior Claims or the Senior Loan
Claims and (ii) all other circumstances bearing upon the risk of nonpayment of
the Junior Claims or the Senior Loan Claims. The Administrative Agent and the
Senior Lenders shall have no duty to advise any Junior Lender of information
known to it or them regarding such condition or any such circumstances or
otherwise. In the event the Administrative Agent or any of the Senior Lenders,
in its or their sole discretion, undertakes at any time or from time to time to
provide any such information to any Junior Lender, it or they shall be under no
obligation (a) to provide any additional information or to provide any such
information on any subsequent occasion, (b) to undertake any investigation, or
(c) to disclose any information which, pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential.
9.5 Subrogation. Each Junior Lender hereby waives any rights of
subrogation it may acquire as a result of any payment hereunder.
9.6 Application of Payments. All payments received by the Senior
Lenders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Loan Claims as the Senior Lenders, in their sole discretion,
deem appropriate. Each Junior Lender assents to any extension or postponement of
the time of payment of the Senior Loan Claims or any part thereof and to any
other indulgence with respect thereto, to any substitution, exchange or release
of any security which may at any time secure any part of the Senior Loan Claims
and to the addition or release of any other Person primarily or secondarily
liable therefor.
9.7 Consent to Jurisdiction; Waivers. THE PARTIES HERETO CONSENT
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN NEW YORK, NEW YORK,
AND CONSENT THAT ALL SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED
TO SUCH PARTY AS PROVIDED IN SECTION 9.8 BELOW FOR SUCH PARTY. SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED THREE (3) DAYS AFTER THE SAME SHALL BE POSTED AS
AFORESAID. THE PARTIES HERETO WAIVE ANY OBJECTION TO ANY ACTION INSTITUTED
HEREUNDER BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO THE VENUE OF ANY
ACTION INSTITUTED HEREUNDER. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY
HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF
ANY PARTY HERETO.
9.8 Notices. All notices to the Junior Lenders and the Senior
Lenders permitted or required under this Agreement may be sent to the Junior
Lender and the Administrative Agent, respectively. Unless otherwise specifically
provided herein, any
11
12
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telecopied, telexed or sent by courier
service or United States mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a telecopy or telex
or four Business Days after deposit in the United States mail (registered or
certified, with postage prepaid and properly addressed). For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party's name on the signature pages hereto, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties.
9.9 Further Assurances. Each Junior Lender agrees that it shall
take such further action and shall execute and deliver to the Senior Lenders
such additional documents and instruments (in recordable form, if requested) as
the Senior Lenders may reasonably request to effectuate the terms of and the
subordination contemplated by this Agreement.
9.10 Governing Law. This Agreement has been delivered and accepted
at and shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the law of the State of New York.
9.11 Binding On Successors and Assigns. This Agreement shall be
binding upon the Administrative Agent, the Senior Lenders, the Junior Lenders
and their respective permitted successors and assigns.
9.12 Specific Performance. The Administrative Agent may demand
specific performance of this Agreement. Each Junior Lender hereby irrevocably
waives any defense based on the adequacy of a remedy at law and any other
defense which might be asserted to bar the remedy of specific performance in any
action which may be brought by the Administrative Agent.
9.13 Section Titles; Time Periods. The section titles contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of this Agreement. In the computation of time
periods, unless otherwise specified, the word "from" means "from and including"
and the each of the phrases "to" and "until" means "to and including".
9.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document.
9.15 Authorization. By his signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that he is duly authorized to execute this Agreement.
9.16 No Third Party Beneficiaries. This Agreement and the rights
and benefits hereof shall inure the benefit of the Administrative Agent and the
Senior Lenders and their successors and assigns. No other Person, including
without limitation, the
12
13
Borrower as debtor in possession and any trustee in an Insolvency or Liquidation
Proceeding, shall have or be entitled to assert rights or benefits hereunder.
9.17 Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to Holdings or the Borrower shall include Holdings or
the Borrower (as the case may be) as debtor and debtor in possession and any
receiver or trustee for Holdings or the Borrower (as the case may be) in any
Insolvency or Liquidation Proceeding. If any Junior Lender assigns, sells or
otherwise disposes of any Junior Claim, such assignee or buyer shall agree, in
writing delivered to the Administrative Agent, to be bound by the terms hereof.
13
14
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Portfolio Mgr.
Address:
Fax: 000-000-0000
XXXXXX X. XXXXXX POL
By: /s/ Xxxxxx X. XxxxxxXxx
--------------------------------------
Name: Xxx XxxxxxXxx
Title: Chairman
Address: 00 Xxxxxx Xxx XX
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
US XCHANGE, L.L.C.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman & CEO
Address: 00 Xxxxxx Xxx XX
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
US XCHANGE FINANCE COMPANY, L.L.C.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman & CEO
Address: 00 Xxxxxx Xxx XX
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
14
