Exhibit 10.5
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "Agreement") made and entered into
as of April 21, 2004, by and between MARQUETTE COMMERCIAL FINANCE, INC.
(hereinafter "MCF"), and XXXXXX INVESTMENT LTD., (hereinafter "Creditor").
WHEREAS, Creditor and AESP, Inc., a Florida corporation ("AESP") are
parties to that certain Loan Agreement (the "XXXXXX LOAN AGREEMENT") dated April
16, 2004; and AESP's obligations to Creditor are secured by AESP's grant of a
security interest in all of AESP's assets as described in that certain Security
Agreement dated April 16, 2004 (the "XXXXXX SECURITY AGREEMENT"); and
WHEREAS, MCF (formerly known as KBK Financial, Inc.) and AESP have
entered into an account transfer and purchase agreement (the "PURCHASE
AGREEMENT") under the terms of which MCF, from time to time, may purchase
accounts receivable of AESP which are evidenced by invoices dated on or after
July 1, 2003 (each account now or hereafter purchased under the Purchase
Agreement to be known herein as the ("PURCHASED ACCOUNTS"); and
WHEREAS, to secure all present and future indebtedness obligations and
liabilities of AESP to MCF, including, without limitation, any such
indebtedness, obligations arising under the Purchase Agreement (collectively,
the "MCF OBLIGATIONS"), AESP has granted to MCF a security interest in all
present and future personal property of AESP; PROVIDED, HOWEVER, the MCF
Obligations are primarily secured by the following: (a) all of AESP's accounts
(including the Purchased Accounts) other than (i) all accounts which are
evidenced by invoices dated before July 1, 2003, (ii) all present and future
accounts owing by foreign account debtors which are not purchased by MCF under
the Purchase Agreement, and (iii) all present and future accounts owing by
entities affiliated with Creditor (the accounts described in clauses (i), (ii)
and (iii) shall be known collectively herein as the "MCF SUBORDINATED
ACCOUNTS"); (b) all returned goods with respect to AESP's present and future
accounts (other than the MCF Subordinated Accounts); (c) all of AESP's present
and future general intangibles, documents, instruments and chattel paper; and; (
d) all proceeds of inventory sold by AESP which constitute accounts (other than
the MCF Subordinated Accounts), chattel paper or general intangibles (all of
which will hereafter collectively be referred to herein as the "MCF PRIMARY
COLLATERAL"); and
WHEREAS, the parties hereto desires to establish the relative
priorities and manner of enforcing of their respective security interests in,
and rights with respect to, the property of AESP; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SUBORDINATION OF CREDITOR'S SECURITY INTEREST IN MCF PRIMARY COLLATERAL.
Creditor hereby subordinates its security interest in all MCF Primary Collateral
to the security interest of MCF in the MCF Primary Collateral and Creditor
agrees that its security interest, whenever granted and/or perfected in the MCF
Primary Collateral, will be inferior, junior and secondary to the security
interests held by MCF in the MCF Primary Collateral.
2. SUBORDINATION OF MCF'S SECURITY INTEREST IN CREDITOR PRIMARY COLLATERAL. MCF
hereby subordinates its security interest in all Creditor Primary Collateral (as
defined below) to the security interest of Creditor in the Creditor Primary
Collateral and MCF agrees that its security interest, whenever granted and/or
perfected in the Creditor Primary Collateral, will be inferior, junior and
secondary to the security interests held by Creditor in the Creditor Primary
Collateral. As used herein, the term "CREDITOR PRIMARY COLLATERAL" shall mean
(a) all accounts of AESP which are evidenced by invoices dated before July 1,
2003, (b) all accounts owing by foreign account debtors which are not purchased
by MCF under the Purchase Agreement, (c) all accounts owing by entities
affiliated with Creditor, and (d) all of AESP's present and future equipment and
inventory; PROVIDED, HOWEVER, inventory proceeds and returned goods of accounts
(other than MCF Subordinated Accounts) shall also constitute MCF Primary
Collateral.
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3. DELIVERY OF ACCOUNT PAYMENTS. Creditor agrees that Creditor shall remit to
MCF at the following address all proceeds constituting MCF Primary Collateral
(including, without limitation, all MCF Purchased Accounts) which may now or
hereafter be delivered to or otherwise received by Creditor from time to time
within 3 business days after receipt thereof by Creditor:
AESP, Inc. OR AESP, Inc.
x/x XXX x/x XXX
Xxxx 0000, Xxxxxxx 00000 Bank One
New Orleans, LA 0000 Xxxxxxxxx Xxx
00000-0000 Xxxxxxx, XX 00000
MCF agrees that MCF shall remit to Creditor at the following address all
proceeds constituting Creditor Primary Collateral which may now or hereafter be
delivered to or otherwise received by MCF from time to time within 3 business
days after receipt thereof by MCF:
AESP, Inc.
x/x Xxxxxx Xxxxxxxxxx Xxx.
0000 Xxxxxx'x Xxxxxxxx
00 Xxxxxx Xxxx
Xxxx Xxxx, XXX
Attn: Xx. Xxxxxxxx X. Xxxxxxxxxx
4. TIME OF PERFECTION. The priorities specified herein are applicable
irrespective of the time or order of attachment or perfection of any security
interests, or the time or order of filing of any financing statements, or the
giving or failure to give notice of the acquisition or the expected acquisition
of any purchase money or other security interest. Except as herein otherwise
specifically provided, priority of the respective security interests of Creditor
and MCF shall be determined in accordance with the Uniform Commercial Code.
5. EFFECT OF BANKRUPTCY. This Agreement shall remain in full force and effect
notwithstanding the filing or a petition for relief by or against AESP under the
Bankruptcy Code and shall apply with full force and effect with respect to all
collateral acquired by AESP, or obligations incurred by AESP to Creditor or MCF,
subsequent to the date of said bankruptcy petition.
6. NO DUTV TO LEND. Nothing contained herein, or in any prior agreement or
understanding shall be deemed to create any duty on the part of Creditor or MCF
to extend or continue to extend financial accommodations to AESP.
7. FINANCIAL CONDITION OF CLIENT. Each party hereto has adequate means to obtain
from AESP on a continuing basis information concerning the financial condition
of AESP and each party hereto is not relying on the other party to provide such
information now or in the future. Each party hereto acknowledges and agrees that
each party hereto is not obligated to keep the other party informed of AESP's
financial condition.
8. RELIANCE. This Agreement is an irrevocable and continuing agreement and MCF
and Creditor may continue to rely upon same in providing financing and other
financial accommodations to or for the benefit of AESP. In connection therewith,
each party may without notice to or consent from the other party hereto and
without impairing the rights and obligations of the parties under this Agreement
(a) release any person or entity now or hereafter liable upon any of the
indebtedness and obligations owing to such party by AESP, (b) renew, extend or
modify the terms of any document or instrument evidencing, governing, securing
or guaranteeing any of the indebtedness and obligations owing to such party by
AESP, and/or (c) provide additional financing to AESP after the date hereof.
9. ENFORCEMENT OF REMEDIES AND NOTICE.
(a) Until termination of this Agreement, Creditor agrees not to (i) take any
action to foreclose, repossess, xxxxxxxx, control or exercise any remedies with
respect to any property included within the MCF Primary Collateral, (ii) not to
join in any petition for bankruptcy or assignment for the benefit of creditors
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affecting AESP or any of its assets, or seek to appoint a receiver for all or
any portion of AESP's assets, or (iii) make any contact or communications,
directly or indirectly, (including without limitation notification or
confirmation) with any account debtor or obligor with respect to any accounts,
chattel paper, instruments or general intangibles of AESP other than solely with
respect to accounts not constituting MCF Primary Collateral.
(b) Until termination of this Agreement, MCF agrees not to (i) take any action
to foreclose, repossess, xxxxxxxx, control or exercise any remedies with respect
to any property included within the Creditor Primary Collateral, or (ii) not to
join in any petition for bankruptcy or assignment for the benefit of creditors
agreement affecting AESP or any of its assets, or seek to appoint a receiver for
all or any portion of AESP's assets, or (iii) make any contact or
communications, directly or indirectly, (including without limitation
notification or confirmation) with any account debtor or obligor with respect to
any accounts of AESP other than solely with respect to accounts constituting MCF
Primary Collateral.
(c) MCF agrees to deliver to Creditor, to be recorded, UCC amendments with
respect to any UCC financing statements on file between MCF and Client in order
to reference that MCF's security interest in the subject collateral is subject
to the terms and provisions of this Agreement.
(d) MCF agrees to provide Creditor notice (either written or oral) on or before
the day MCF commences exercising its remedies under the Purchase Agreement
against the MCF Primary Collateral. Creditor agrees to provide MCF notice
(either written or oral) on or before the day Creditor commences exercising its
remedies under the Xxxxxx Loan Agreement against any Creditor Primary
Collateral. Except as required by the terms of this Agreement, each party hereto
waives its right to receive notification from the other party before the
disposition of collateral under the Uniform Commercial Code.
10. PERFECTION OF SECURITY INTERESTS. The priorities set forth in this Agreement
between each parties collateral shall govern with respect to the parties
notwithstanding if the security interest to which another security interest is
subordinate is voidable for any reason. Each party covenants and agrees not to
take any action to seek to rescind, modify, or circumvent the provisions of this
Agreement in the absence of fraud by the other party directly related to the
transactions described herein.
11. NOTICES. Except as set forth in PARAGRAPH 10 herein, all notices, requests
and other written communications hereunder must be in writing and shall be
deemed to have been properly given (i) upon personal delivery , (ii) on the
third Business Day following the day sent, if sent by registered or certified
mail, provided such is received by the intended party, but if such is not
received because of such party's refusal to accept such delivery, then such
shall be deemed to be received on the date of first refusal, (iii) on the next
Business Day following the day sent, if sent by overnight express courier,
provided such is received by the intended party, but if such is not received
because of such party refusal to accept such delivery , then such shall be
deemed to be received on the date of first refusal, or (iv) on the day sent or
if such day is not a Business Day on the next Business Day after the day sent,
if sent by telecopy providing the receiving party has acknowledged receipt by
return telecopy, in each case, at the following address and/or telecopy number
or at such other address and/or telecopy number as either party may designate
for such purpose in a written notice given to the other party:
If to MCF:
Marquette Commercial Finance, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, Xxxxx, 00000
Attention: Legal Department
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to Creditor:
Xxxxxx Investment Ltd.
0000 Xxxxxx'x Xxxxxxxx
00 Xxxxxx Xxxx
Xxxx Xxxx, XXX
Attn: Xx. Xxxxxxxx X. Xxxxxxxxxx
Telephone: 41-1-391 44 77
Telecopy No.: 41-1-391 77 35
12. RESERVATION OF RIGHTS. No third-party beneficiary rights are, or are
intended to be, created hereunder, and all understandings, agreements,
representations, and warranties contained herein are solely for the benefit of
the parties hereto and for the benefit of no other parties (including but not
limited to AESP). In connection therewith, AESP shall not be entitled for any
purpose or under any circumstances to rely upon the failure of MCF or Creditor
to comply with the terms hereof and nothing herein contained shall be deemed to
authorize AESP to take any action not permitted under any agreement between AESP
and MCF or Creditor. Nothing herein is intended to affect or limit in any way
the interest of Creditor or MCF in any or all of the assets of AESP insofar as
the rights of AESP or third parties are involved. The parties hereto
specifically reserve all of their respective rights as against AESP and any
third parties.
13. AMENDMENTS AND WAIVERS. No waiver, amendment or other variation of the
terms, conditions, or provisions of this Agreement shall be valid unless in
writing and then only to the extent specifically set forth in such writing.
14. GOVERNING LAW; JURY WAIVER. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THE PARTIES HERETO
WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
15. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same agreement.
16. SUCCESSORS AND ASSIGNS. Unless otherwise herein provided, this Agreement
shall be binding upon and inure to the benefit of all successors and assigns,
including, without limitation, such transferee of any of the obligations of AESP
to MCF or to Creditor under any agreement or by law. Any transferee of the
obligations or indebtedness owed by Client to Creditor or any part thereof,
shall take such obligations or indebtedness or any part thereof subject to the
provisions of this Agreement.
17. ENTIRE AGREEMENT. This Agreement constitutes the complete and integrated
agreement of both MCF and Creditor with respect to the subject matter hereof,
supersedes all prior or contemporaneous oral agreements, discussions or
negotiations, and may not be orally modified or supplemented by parol or
extrinsic evidence.
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IN WITNESS WHEREOF, the parties hereto by their authorized
agents or officers have caused this Agreement to be executed as of the day and
year first above written.
MCF:
Marquette Commercial Finance, Inc.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Legal Administrator
Creditor:
Xxxxxx Investment Ltd.
By: /s/ Xx. Xxxxxxxx X. Xxxxxxxxxx
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Name: Xx. Xxxxxxxx X. Xxxxxxxxxx
Title: Director
ACKNOWLEDGMENT BY AESP
The undersigned, hereby (i) accepts and consents to this Agreement,
(ii) agrees to be bound by all of the provisions thereof, (iii) agrees to
recognize all of the priorities and other rights granted thereby, (iv)
acknowledges and agrees that such agreement may be amended, altered, modified by
MCF and Creditor without notice to or the consent of AESP, and (v) instructs and
authorizes the Creditor and MCF to remit proceeds of accounts which may be
delivered or otherwise received by Creditor and MCF from time to time pursuant
to the terms of Section 3 of the foregoing Agreement.
AESP, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Executive Vice President
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Date: April 21, 2004
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