IntercreditorAgreement.doc

IntercreditorAgreement thisintercreditoragreement,datedasof(m,d,y)(thisagreement),isamongaaa(thesubordinatingcreditor),bbb,a(placename)corporation(thedebtor),andcccllc,asagentfortheddd(theseniorcreditor). recitals atheseniorcreditorhasorexpectstoacquireasecurityinterestinassetsofthedebtorinwhichthesubordinatingcreditorhasaninterest,includingbutnotlimitedtotheseniorcreditorcollateral. bthedebtorandsubordinatingcreditorarepartiestothesubordinatingcreditoragreements.thecreditorsareexecutingthisagreementtosetforththeirlienprioritieswithrespecttotheseniorcreditorcollateral. now,therefore,inconsiderationofthepremises,andintendingtobelegallyboundhereby,thecreditorsherebyagreeasfollows: agreement 1.definitions.thefollowingtermsusedhereinshallhavethefollowingmeaning.allcapitalizedtermsnothereindefinedshallhavethemeaningsetforthintheuniformmercialcode: 1.1.bankruptcycodetitle11oftheunitedstatescode. 1.2.chosenstate(placename). 1.3.creditorsthesubordinatingcreditorandtheseniorcreditor. 1.4.debtorseepreamble. 1.5.interestpaymentsregularlyscheduledinterestpaymentspursuanttothesubordinatingcreditoragreements. 1.6.partyeachofthesubordinatingcreditor,thedebtor,andtheseniorcreditor. 1.7.permittedpayments(i)interestpayments,and(ii)$,ofthesubordinatingcreditorobligations. 1.8.secondarycollateralcollateralofacreditorholdingasecurityinterestwhichisinferiortothepriorityoftheothercreditor. 1.9.seniorcreditorseepreamble. 1.10.seniorcreditorcollateralalldebtorspresentandfutureaccounts,instruments,documents,chattelpaper,generalintangibles,inventory,equipment,letterofcreditrights,andinvestmentpropertyandthedirectandindirectproceedsthereof.1.11.seniorcreditorobligationsobligationsofthedebtortotheseniorcreditorsecuredbytheseniorcreditorcollateral. 1.12.subordinatingcreditorseepreamble. 1.13.subordinatingcreditoragreementsthenoteandwarrantpurchaseagreement,dated(m,d,y),betweendebtorandsubordinatingcreditor,andrelateddocumentsthereto. 1.14.subordinatingcreditorobligationsindebtednessowedbythedebtortothesubordinatingcreditorsecuredbyseniorcreditorcollateral. 2.priority.notwithstandingthetermsorprovisionsofanyagreementorarrangementwhicheithercreditormaynoworhereafterhavewiththedebtororanyruleoflaw,andirrespectiveofthetime,order,ormethodofattachmentorperfectionofanysecurityinterestortherecordationorotherfilinginanypublicrecordofanyfinancingstatement,anysecurityinterestsintheseniorcreditorcollateralheldbytheseniorcreditor,whetherornotperfected,areandshallremainseniortoanyliennoworhereafterheldbythesubordinatingcreditorand,anypresentandfutureguarantiesrelatingtotheseniorcreditorobligations. 3.permittedpayments. 3.1.notwithstandinganythingtothecontrarycontainedherein,debtormaymakeandsubordinatingcreditormayretainpermittedpayments;provided,thatwithrespecttoanypermittedpaymentsotherthaninterestpayments(a)subordinatingcreditorshallprovideseniorcreditorwith30dayswrittennoticepriortosuchpayment,and(b)suchnoticeisnotgivenpriorto(m,d,y). 3.2.anypaymentsreceivedbysubordinatingcreditoronaccountofthesubordinatingcreditorobligations,otherthanpermittedpayments,shallbeheldbysubordinatingcreditorintrustforthebenefitofseniorcreditor,andshallbedeliveredtoseniorcreditorinkind,immediatelyuponreceiptbysubordinatingcreditortobeheldbyseniorcreditorascashcollateralsecuringtheseniorcreditorobligations. 3.3.subordinatingcreditormayrequestandreceivepaymentoftheremainingsubordinatingcreditorobligationswiththepriorwrittenconsentofseniorcreditor,whichconsentshallnotbeunreasonablywithheldordelayed,solongassuchrepaymentdoesnotcausesubordinatingcreditor(aschiefexecutiveofficeranddirector)tobreachhisfiduciarydutiestothedebtoranditsshareholders. 3.4.theprovisionsetforthinsection3.1abovepermittingpermittedpaymentsshallterminateandbeofnofurtherforceandeffectupontheoccurrenceandduringthecontinuanceofadefaultintheperformanceoftheseniorcreditorobligations. 4.enforcementofsecurityinterest. 4.1.thesubordinatingcreditorshallhavenorighttotakeanyactionwithrespecttotheseniorcreditorcollateral,whetherbyjudicialornonjudicialforeclosure,notificationtothedebtorsaccountdebtors,theseekingoftheappointmentofareceiverforanyportionofthedebtorsassets,setoff,orotherwise,unlessanduntiltheseniorcreditorhasreceivedpaymentofallseniorcreditorobligationsinimmediatelyavailablefunds. 4.2.ifthesubordinatingcreditor,incontraventionofthetermsofthisagreement,shallmence,prosecute,orparticipateinanysuit,action,orproceedingagainstthedebtororinitiateanyforeclosuresaleorproceedingoranyotheractiontoenforceitslienonanyoftheseniorcreditorcollateral,thenthedebtormayinterposeasadefenseorpleadthemakingofthisagreement,andtheseniorcreditormayinterveneandinterposesuchdefenseorpleainitsnameorinthenameofthedebtor.ifthesubordinatingcreditor,incontraventionofthetermsofthisagreement,shallattempttoenforceanyremediesprohibitedbythisagreement,thentheseniorcreditororthedebtormay,byvirtueofthisagreement,restraintheenforcementthereofinthenameoftheseniorcreditororinthenameofthedebtor. 5.proceedsofcollateral. 5.1.anyproceedsofsecondarycollateral,orproceedsofproceeds,receivedbyacreditorshallbe,immediatelyupondiscovery,paidtotheothercreditor. 5.2.anysuchsumsnotpaidwhendueshallaccruealatechargeattherateof24%perannum. 6.subordinatingcreditorcovenantsandwarranties.thesubordinatingcreditorwarrantscovenantsandrepresentsthatit: 6.1.istheownerofthesubordinatingcreditorobligations,freeandclearoftheclaimsofanyotherentity; 6.2.isthesecuredpartynamedineachfinancingstatementlistedontheattachedexhibitentitledsubordinatingcreditorfinancingstatements. 6.3.willindemnifyseniorcreditorandholditharmlessagainstanydirectorindirectloss(includingattorneysfeesandexpenses)arisingfromtheassertionbyanyholderofthesubordinatingcreditorobligationsthattheprovisionsofthisagreementdonotbindsuchholder. 6.4.will,attherequestofseniorcreditorinconnectionwiththeproperenforcementofitssecurityinterest,promptlyreleaseanylienandsecurityinterestithasonanyseniorcreditorcollateraltofacilitateitstransferorsalesolongastheproceedsthereofareappliedagainsttheseniorcreditorobligationsandanyexcessispaidtothesubordinatingcreditortobeappliedagainstthesubordinatingcreditorobligations. 6.5.waivesanyrightsitmayhavetoclaimthattheenforceabilityofthisagreementmaybeaffectedbyanysubsequentmodification,release,extension,orotherchange,materialorotherwise,intheseniorcreditorobligationsortheseniorcreditorcollateral. 6.6.willreasonablycooperatewithseniorcreditorinnotifyingthedebtorsaccountdebtorsthatproceedsofaccountsshouldbepaidtoseniorcreditorandnottosubordinatingcreditor. 7.remedyforbreach. anybreachhereofislikelytocauseirreparabledamagetotheaggrievedparty.therefore,therelieftowhichsuchpartyshallbeentitledinsucheventshallinclude,butnotbelimitedto:(a)amandatoryinjunctionforspecificperformance,(b)judicialrelieftopreventaviolationofanyoftheprovisionsofthisagreement,(c)damages,and(d)anyotherrelieftowhichitmaybeentitledatlaworinequity. 8.amendmentofsubordinatingcreditoragreements. 8.1.thisagreementshallbedeemedanamendmenttothesubordinatingcreditoragreements,whichcannotbefurtheramendedtoadverselyaffecttherightsofseniorcreditorhereunder. 8.2.thesignatureofseniorcreditorshallnotberequiredforanyfurtheramendmentofthesubordinatingcreditoragreements. 9.effectofbankruptcy.thisagreementshallremaininfullforceandeffectnotwithstandingthefilingofapetitionforreliefbyoragainstthedebtorunderthebankruptcycodeandshallapplywithfullforceandeffectwithrespecttoallseniorcreditorcollateralacquiredbythedebtor,andobligationsincurredbythedebtortothesubordinatingcreditor,subsequenttothedateofanysuchpetition. 10.nodutytoprovidefinancialacmodations.nothingcontainedhereinorinanyprioragreementorunderstandingshallbedeemedtocreateanydutyonthepartofeitherpartytoextendorcontinuetoextendfinancialacmodationstothedebtor. 11.waiverofmarshaling.thesubordinatingcreditorirrevocablywaivesanyrighttopeltheseniorcreditortomarshalassetsofthedebtor. 12.crossdefault.notwithstandinganythingtothecontrarycontainedinanyagreementbetweendebtorandseniorcreditor,defaultbydebtorintheperformanceofitsobligationstothesubordinatingcreditorshallconstituteadefaultbydebtorintheperformanceoftheseniorcreditorobligations. 13.choiceoflaw.thisagreementandalltransactionscontemplatedhereunderand/orevidencedherebyshallbegovernedby,construedunder,andenforcedinaccordancewiththeinternallawsofthechosenstate. 14.amendmentandwaiver.onlyawritingsignedbyallpartiesheretomayamendthisagreement.nofailureordelayinexercisinganyrighthereundershallimpairanysuchrightthatseniorcreditormayhave,norshallanywaiverbyseniorcreditorhereunderbedeemedawaiverofanydefaultorbreachsubsequentlyoccurring.seniorcreditorsrightsandremedieshereinarecumulativeandnotexclusiveofeachotherorofanyrightsorremediesthatseniorcreditorwouldotherwisehave. 15.construction.thisagreementandallagreementsrelatingtothesubjectmatterhereofistheproductofnegotiationandpreparationbyandamongeachpartyanditsrespectiveattorneys. 16.benefitsofthisagreement.thisagreementissolelyforthebenefitofandshallbindthecreditorsandtheirrespectivesuccessorsandassignsandnootherentityshallhaveanyright,benefit,priority,orinteresthereunder. 17.term.thisagreementshallcontinueonlysolongastheseniorcreditorandsubordinatingcreditoreachholdasecurityinterestinanyportionoftheseniorcreditorcollateral. 18.heeventthatanypartyfindsitnecessarytoretaincounselinconnectionwiththeinterpretation,defense,orenforcementofthisagreement,theprevailingpartyshallrecoveritsreasonableattorneysfeesandexpensesfromtheunsuccessfulparty.itshallbepresumed(subjecttorebuttalonlybytheintroductionofpetentevidencetothecontrary)thattheamountrecoverableistheamountbilledtotheprevailingpartybyitscounselandthatsuchamountwillbereasonableifbasedonthebillingrateschargedtotheprevailingpartybyitscounselinsimilarmatters. 19.counterparts.thisagreementmaybesignedinanynumberofcounterparts,eachofwhichshallbeanoriginal,withthesameeffectasifallsignatureswereuponthesameinstrument.deliveryofanexecutedcounterpartofthesignaturepagetothisagreementbyfacsimileshallbeeffectiveasdeliveryofamanuallyexecutedcounterpartofthisagreement,andanypartydeliveringsuchanexecutedcounterpartofthesignaturepagetothisagreementbyfacsimiletoanyotherpart