EXHIBIT 4.4
INTERCREDITOR (SUBORDINATION) AGREEMENT
THIS INTERCREDITOR (SUBORDINATION) AGREEMENT (this "Agreement") is made as
of the 16th day of July, 2002 by and among the J. Xxxxxx Xxxxxxxxxx Trust dated
February 26, 1971, an Indiana Trust (the "Xxxxxxxxxx Trust"), the Xxxx X.
XxXxxxx Trust dated February 26, 1971, an Illinois trust (the "XxXxxxx Trust"),
the Xxxx X. Xxxxxxxx Trust dated February 26, 1971, an Indiana trust (the
"Xxxxxxxx Trust" and together with the Xxxxxxxxxx Trust and the XxXxxxx Trust,
the "Xxxxxx Lenders"), Wakefield Group III, LLC a North Carolina limited
liability company ("Wakefield"), Noro-Xxxxxxx Partners V, L.P., a Georgia
limited partnership ("Noro-Xxxxxxx") (in their capacities as holders of Bridge
Lender Indebtedness (as defined below) each are a "Bridge Lender"), and the
undersigned holders, including the Xxxxxx Lenders, Wakefield and Noro-Xxxxxxx in
their capacities as holders of Noteholder Indebtedness (the "Noteholders") of up
to $10,000,000 of Fixed Rate Convertible Notes due July 1, 2009 (the
"Convertible Notes"), issued by both U.S. RealTel, Inc., a Delaware corporation
("U.S. RealTel") and Cypress Communications, Inc., a Delaware corporation
("Cypress").
WHEREAS, Bridge Lenders have extended credit to U.S. RealTel and Cypress,
as borrowers (collectively, the "Borrowers") as evidenced by (i) that certain
Loan Agreement dated July 16, 2002 by and among the Bridge Lenders and the
Borrowers (as amended, modified or supplemented from time to time, the "Loan
Agreement") and (ii) those certain Term Notes issued to each Bridge Lender, each
dated July 16, 2002 with an aggregate principal amount of $8,000,000
(collectively, the "Term Notes");
WHEREAS, Noteholders deem the extensions of credit to Borrowers by the
Bridge Lenders necessary or desirable to the conduct and operation of Borrowers'
business and therefore beneficial to their interest as creditors of U.S. RealTel
and desire that Bridge Lenders extend credit to Borrowers pursuant to the Loan
Agreement;
WHEREAS, to induce Bridge Lenders to grant credit to Borrowers pursuant to
the Loan Agreement, Noteholders have agreed to subordinate the Noteholder
Indebtedness (as defined below) to the Bridge Lender Indebtedness (as defined
below); and
NOW, THEREFORE, to induce Bridge Lenders to grant credit to Borrowers
pursuant to the Loan Agreement and in consideration of the making of the Loans
pursuant thereto, extending credit to Borrowers in the future and for other
valuable consideration, receipt of which is hereby acknowledged, the undersigned
do hereby agree as follows:
1. Noteholders hereby subordinate, on the terms and conditions set forth
herein, the Noteholder Indebtedness to any and all sums, debts, demands, claims,
liabilities or causes of action for which Borrowers may be liable to Bridge
Lenders pursuant to the Loan Agreement and pursuant to any note, security
agreement, guaranty or other instrument or document executed pursuant thereto or
in connection therewith (all items herein collectively called the "Bridge
Lender Indebtedness"). The term "Noteholder Indebtedness" shall mean the debt
owed to Noteholders by U.S. RealTel and/or Cypress under the Convertible Notes,
including any amendments, extensions and modifications thereto.
2. Noteholders hereby agree not to seek, accept or otherwise obtain any
security interests, liens, encumbrances and claims which in any way secure the
Noteholder Indebtedness, and Noteholders (to the extent Noteholders do seek,
accept or obtain such security interests), hereby subordinate all such security
interests, liens, encumbrances and claims which in any way secure the Noteholder
Indebtedness whether now existing or to be created (herein collectively called
the "Noteholder Collateral") to all security interests, liens, encumbrances and
claims which in any way secure the payment of the Bridge Lender Indebtedness
whether now existing or to be created (herein collectively called the "Bridge
Lender Collateral") specifically including but not limited to the security
interests granted in the Loan Agreement. Noteholders agree that until the Bridge
Lender Indebtedness is paid in full, Noteholders will not in any way, manner or
respect, assert or seek to enforce by legal proceedings or other proceedings or
actions any of their liens, mortgages, security interests or other encumbrances
on Noteholder Collateral. Noteholders agree that this subordination and the
priority established hereby shall apply regardless of the time or order of
attachment or perfection of such security interests, liens, encumbrances or
claims or the granting or failure to give notice thereof.
3. Noteholders hereby instruct Borrowers not to pay (directly or
indirectly) the Noteholder Indebtedness in whole or in part, and Noteholders
agree not to accept payment of the Noteholder Indebtedness, including interest
thereon, or any part thereof or seek to enforce against Borrowers the Noteholder
Indebtedness or Noteholders' security interests, liens, encumbrances or claims
on the Noteholder Collateral, unless and until the Bridge Lenders have notified
Noteholders, in writing, that the Bridge Lender Indebtedness has been paid in
full; provided, however, that nothing herein shall restrict the Noteholders from
converting their Convertible Notes into common stock of U.S. RealTel pursuant to
the terms of the Convertible Notes.
4. (a) Noteholders agree to hold in trust for Bridge Lenders and promptly
turn over to Bridge Lenders (to be allocated ratably among Bridge Lenders) any
sum or sums at any time paid or received by Noteholders in violation of the
terms of this Agreement and to reimburse Bridge Lenders for all costs, including
reasonable attorneys' fees actually incurred by Bridge Lenders in the course of
collecting the sum or sums should Noteholders fail to voluntarily turn over same
to Bridge Lenders. In the event of any distribution, division or application,
partial or complete, voluntary or involuntary, by operation of law or otherwise,
of all or any part of the assets of Borrowers or the proceeds thereof, in
whatever form to creditors of Borrowers or upon any indebtedness of Borrowers
occurring by reason of the liquidation, dissolution or other winding up of
Borrowers or by reason of any execution sale, receivership, insolvency or
bankruptcy proceedings or assignments for the benefit of creditors or
proceedings for reorganization or readjustment of Borrowers or their properties,
then and in such event, the Bridge Lender Indebtedness shall first be paid in
full before any payment is made upon the Noteholder Indebtedness, and any
payment or distribution of any kind or character either in cash, property or
securities which shall be payable or deliverable upon or in respect of the
Noteholder
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Indebtedness and interest thereon shall be paid or delivered directly to Bridge
Lenders for ratable application in payment of the amounts then due on the Bridge
Lender Indebtedness until the Bridge Lender Indebtedness shall have been
indefeasibly paid in full.
(b) In order to enable Bridge Lenders to enforce their rights under
the preceding paragraph 4(a) in any action or proceedings, Bridge Lenders are
hereby irrevocably authorized and empowered in their discretion to make and
present for or on behalf of the undersigned such proof of claim or claims
against Borrowers on account of the Noteholder Indebtedness as Bridge Lenders
may deem expedient and proper; to vote such claims in any such proceedings; to
receive and collect any and all dividends or other payments or disbursements
made thereon in whatever form the same may be paid or issued; and to apply same
on account of the Bridge Lender Indebtedness. Noteholders agree to and do hereby
assign all such claims to Bridge Lenders, and Noteholders further agree to
execute such instruments as may be required by Bridge Lenders to enable them to
enforce any and all such claims and collect any and all dividends or other
payments or disbursements that may be made on account of the Noteholder
Indebtedness.
5. Noteholders represent and warrant to Bridge Lenders that Noteholders
have not assigned or transferred the Noteholder Indebtedness or Noteholder
Collateral, or any interest therein, to any person, firm, association,
corporation or party, and that all agreements, instruments and documents
evidencing the Noteholder Indebtedness and Noteholder Collateral will be
endorsed with a proper notice of this Agreement as set forth below. Noteholders
shall have the right to assign the Noteholder Indebtedness provided that any
such assignment shall only be made upon prior written notice to Bridge Lenders
and shall be made expressly subject to the rights of the Bridge Lenders
hereunder conspicuously noted in writing on any such assignment. Noteholders
agree to xxxx the Convertible Notes with the following legend:
"This note is subordinated to all indebtedness now or
hereafter owed by maker to Bridge Lenders as provided in an
Intercreditor (Subordination) Agreement dated July 16, 2002."
6. Bridge Lenders are hereby authorized by Noteholders to: (a) renew,
compromise, extend, or otherwise change the time of payment or any other terms
of the Bridge Lender Indebtedness under the Loan Agreement other than to
increase the principal amount thereunder; (b) exchange, enforce, waive or
release any security therefor; or (c) apply such security and direct the order
or manner of sale thereof in such manner as the Bridge Lenders may in their sole
discretion determine, all without notice to Noteholders and without affecting
the subordination provided by this Agreement.
7. Except to the extent specifically provided herein, this Agreement shall
continue effective until the Bridge Lender Indebtedness shall have been fully
and indefeasibly discharged and Bridge Lenders' commitment to make any further
loans or credit accommodations to Borrowers pursuant to the Loan Agreement shall
have been terminated. Noteholders agree that
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they will not challenge any liens and security interest of the Bridge Lenders
securing payment of the Bridge Lender Indebtedness and that as between the
Bridge Lenders and Noteholders, the terms of this Agreement shall govern even if
part or all of the Bridge Lender Indebtedness or the liens or security interests
securing payment thereof are avoided, disallowed, set aside or otherwise
invalidated in any judicial proceeding or otherwise.
8. All notices, payments, requests, reports, information and demands which
any party may desire or may be required to give or make to any other party shall
be given or made upon such party in writing by hand delivery, by facsimile or by
the deposit in the United States mail, postage prepaid, certified or registered
addressed as follows:
To Bridge Lenders:
(a) If to Xxxxxx Lenders, at:
000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Noro-Xxxxxxx, at:
Noro-Xxxxxxx Partners V. LP
0 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Fax: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
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Fax: (000) 000-0000
(c) If to Wakefield, at:
Wakefield Group III LLC
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
To Noteholders:
(a) If to Xxxxxx Lenders, at:
000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Noro-Xxxxxxx, at:
Noro-Xxxxxxx Partners V. LP
0 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Fax: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
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(c) If to Wakefield, at:
Wakefield Group III LLC
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
Said notice shall be deemed given when delivered, sent by facsimile or mailed as
aforesaid. Noteholders hereby agree that if at any time or times they notifies
Borrowers that Borrowers are in default in respect of the Noteholder
Indebtedness, they shall simultaneously provide notice thereof to Bridge
Lenders.
9. Noteholders irrevocably agree that all actions or proceedings in any
way, manner or respect, arising out of or from or related to this Agreement, the
other agreements, or any Bridge Lender Collateral shall be litigated only in the
courts having situs within the State of Georgia. Noteholders hereby consent and
submit to the jurisdiction of any local, state or federal court located within
the State of Georgia. Noteholders and the Bridge Lenders hereby waive any rights
they may have to transfer or change venue of any litigation brought against
Noteholders by Bridge Lender in accordance with this paragraph.
10. This Agreement shall be binding upon the successors and assigns of
Noteholders, and Borrowers. This Agreement and any existing or future claim of
Bridge Lenders hereunder may be assigned by Bridge Lenders, in whole or in part,
without notice to Noteholders. Bridge Lenders may, without notice, assign this
Agreement in whole or in part in connection with an assignment of all or part of
the Loan Agreement or a sale of a participation thereunder.
11. No amendment to or waiver of any provision of this Agreement nor
consent to any departure by Noteholders or Borrowers herefrom shall in any event
be effective unless the same shall be in writing and signed by Bridge Lenders,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
12. References herein to Sections are references to Sections of this
Agreement unless otherwise indicated. Capitalized terms not otherwise defined
herein shall have the meanings provided in the Loan Agreement.
13. Wherever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
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14. This Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF DELAWARE. THIS AGREEMENT CONSTITUTES THE
ENTIRE UNDERSTANDING BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDES ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
16. THE UNDERSIGNED HEREBY IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED IN CONNECTION HEREWITH, OR (II) ARISING FROM ANY DISPUTE OR
CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT, AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed on the date first above written.
NOTEHOLDERS:
J. XXXXXX XXXXXXXXXX TRUST, dated
February 26, 1971, an Indiana trust
By: ________________________________
Name: Xxxx X. Xxxxxxx
Title: Trustee
XXXX. X. XXXXXXX TRUST, dated
February 26, 1971, an Illinois trust
By: ________________________________
Name: Xxxx X. Xxxxxxx
Title: Trustee
XXXX X. XXXXXXXX TRUST, dated
February 26, 1971, an Indiana trust
By: ________________________________
Name: Xxxx X. Xxxxxxx
Title: Trustee
NORO-XXXXXXX PARTNERS V, L.P., a
Georgia limited partnership
By: ________________________________
Name:
Title:
WAKEFIELD GROUP III LLC, a North
Carolina limited liability company
By: ________________________________
Name:
Title:
Intercreditor (Subordination) Agreement
ACCEPTANCE OF BORROWERS
The undersigned hereby accept and consent to the foregoing Agreement and
agree to be bound by all of the provisions thereof and to recognize all
priorities and rights granted thereby to, and their successors and assigns and
to perform in accordance therewith.
U.S. RealTel, Inc., a Delaware
corporation
By _________________________________
Name:
Title:
Cypress Communications, Inc., a
Delaware corporation
By _________________________________
Name:
Title:
Intercreditor (Subordination) Agreement
