THIS DOCUMENT IS A COPY OF THE EXHIBIT FILED ON OCTOBER 24, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
INTERCREDITOR AGREEMENT
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THIS INTERCREDITOR AGREEMENT is made this 10th day of October 1996 by and
between NATIONAL CANADA FINANCE CORP., a Delaware corporation with an office and
place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("NCFC"),
and XXXXXX X. XXXXXXX XX, with an office at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Xxxxxxx").
W I T N E S S E T H :
WHEREAS, Delta Computec Inc. ("DCI") and Delta Data Net, Inc. ("DDI") are
parties with NCFC to a Credit Agreement as of April 1, 1994, as the same has
been amended from time to time; and
WHEREAS, contemporaneously with the execution of this Intercreditor
Agreement, NCFC has assigned to Xxxxxxx all of its right, title and interest in
and to the Credit Agreement, the indebtedness evidenced by the Credit Agreement
and all related promissory notes and all security agreements relating thereto,
except to the extent that such right, title and interest relates to indebtedness
of DCI (but not DDI) to NCFC under the NCFC Note (as hereinafter defined) and
except that NCFC retains a shared security interest with Xxxxxxx in the spare
parts inventory of DCI ("Shared Collateral"); and
WHEREAS, following such assignment, the indebtedness of DCI retained by
NCFC shall be evidenced by an Amended and Restated Promissory Note dated the
date hereof in the principal
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amount of $750,000 (the "NCFC Note") and shall be secured by a security interest
in the Shared Collateral pursuant to an Amended and Restated Security Agreement;
and
WHEREAS, following the assignment, the indebtedness of DCI and DDI to
Xxxxxxx shall be evidenced by an Amended and Restated Credit Agreement dated the
date hereof (the "Xxxxxxx Credit Agreement") and an Amended and Restated
Promissory Note dated the date hereof in the maximum principal amount of
$2,550,000 (the "Xxxxxxx Note"), shall be secured by a security interest in all
of DCI's and DDI's personal property, including the Shared Collateral, and shall
be guaranteed by SAI/Delta, Inc. ("SAI"), which guaranty shall be secured by a
security interest in all of SAI's personal property; and
WHEREAS, NCFC and Xxxxxxx desire to set forth in writing their agreement
concerning the application of the proceeds of Shared Collateral and certain
other matters;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and for other good and valuable consideration, NCFC and
Xxxxxxx agree as follows:
1. Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the NCFC Note.
2. Any proceeds realized from the sale or other disposition of Shared
Collateral (the "Proceeds of Shared Collateral") shall be applied as follows:
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(a) The Proceeds of Shared Collateral shall be applied first to pay the
actual costs and expenses of the party liquidating the Shared Collateral, to the
extent, and only to the extent, such expenses are specifically related to
exercising rights of a creditor against the Shared Collateral.
(b) After payment of such costs and expenses, any of the Proceeds of Shared
Collateral remaining shall be applied to repayment of all amounts outstanding
under the NCFC Note.
(c) After repayment in full of all amounts outstanding under the NCFC Note,
any of the Proceeds of Shared Collateral remaining shall be applied to repayment
of all amounts outstanding under the Xxxxxxx Credit Agreement and the Xxxxxxx
Note.
3. The application of proceeds of collateral described above shall be
effective irrespective of the time or order in which the security interests
described above arise, attach or perfected by filing, recording or otherwise.
The liens of Xxxxxxx and NCFC with regard to the Shared Collateral relate back
to the original NCFC loan to DCI and DDI, and the division of interests taking
place in the transaction to which this Intercreditor Agreement relates is as a
result of the assignment of a portion of that original NCFC Loan to Xxxxxxx by
NCFC pursuant to an Assignment being executed of even date with this
Intercreditor Agreement.
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4. NCFC agrees that so long as no Event of Default pursuant to clause 7(a),
(b), (c), (d), (e), (g), (i), (l) or (m) of the NCFC Note occurs, taking into
consideration any and all cure periods, that NCFC will not take any action
whatsoever to enforce the NCFC Note or to enforce, realize upon or foreclose its
security interest in the Shared Collateral or take any action which in any other
manner affects NCFC Note or the Shared Collateral, including, in the case of
bankruptcy, any action seeking relief from the automatic stay. No event of
default under the NCFC Note except for those which are described in clause 7(a),
(b), (c), (d), (e), (g), (i), (l) or (m) thereof shall entitle NCFC to take
action to enforce the NCFC Note or to take action related to the seizure,
replevin, liquidation or other disposition of Shared Collateral without the
prior written consent of Xxxxxxx. Notwithstanding the foregoing, if NCFC is
unable by operation of section 362 of the United States Bankruptcy Code or any
other insolvency stay provision, to give notice or commence the running of any
grace or cure period under Section 7 of the NCFC note, then the giving of such
notice and/or the commencement of such cure period shall be deemed to have
occurred on the date any one or more of the specified events (other than the
giving of notice) enumerated in Section 7 shall have occurred, so long as any
otherwise-required written notice shall have been given to Xxxxxxx.
5. If an Event of Default exists pursuant to clause 7(a) or 7(h) of the
NCFC Note and (i) all scheduled payments of
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Indebtedness are current and (ii) no Event of Default exists pursuant to clause
7(d) of the NCFC Note, NCFC agrees that it will not take any action to enforce
its rights under the Pledge Agreement or the Xxxxxxx Guaranty until October 10,
1999. Notwithstanding the foregoing, if NCFC is unable by operation of section
362 of the United States Bankruptcy Code or any other insolvency stay provision,
to give notice or commence the running of any grace or cure period under Section
7 of the NCFC note, then the giving of such notice and/or the commencement of
such cure period shall be deemed to have occurred on the date of the specified
events (other than the giving of notice) enumerated in Section 7 shall have
occurred, so long as such written notice shall have been given to Xxxxxxx.
6. This Intercreditor Agreement shall be governed by the internal laws of
the State of New York without regard to the principles of conflicts of laws and
shall be binding upon the parties hereto and their respective successors and
assigns.
7. This Intercreditor Agreement may not be amended by any party except in
writing signed by all the parties hereto.
8. This Intercreditor Agreement is solely for the benefit of the parties
hereto and their respective successors and assigns and no other person shall
have any right, benefit or interest under, or because of the existence of this
Intercreditor Agreement.
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9. This Intercreditor Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
10. In the event that, as a result of a lock box arrangement which exists
among DCI, DDI and NCFC, any checks or instruments of payment are received by
NCFC at its existing lock box, NCFC will take such checks or instruments as
agent for DCI, and, as soon as practicable, will take such steps as are
necessary to deliver by courier or overnight delivery service to such bank or
other recipient as DCI and DDI direct by written instructions to NCFC, all such
checks or instruments, uncashed and undeposited. The actual cost of any courier
or overnight delivery will be borne by DCI. In the event that Xxxxxxx ever
determines that the foregoing arrangement results in unacceptable delays in the
receipt of funds, the parties hereto agree to execute such documents as are
reasonably necessary to effectuate a transfer of funds in a more prompt manner.
In no event shall NCFC cash or deposit any checks or instrument received by it
as a result of such lock box arrangement or exercise in any way any right of
offset against the assets of DCI or DDI or apply any such checks or instruments
to the payment of any obligations of DCI to NCFC.
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11. Recognizing and in consideration of Xxxxxxx'x undertakings as herein
set forth, NCFC hereby waives and releases Xxxxxxx and his representatives,
attorneys, agents, and employees from any liability, suit, damage, claim, loss,
or expense of any kind or nature whatsoever and howsoever arising out of or
relating to Xxxxxxx'x acts or omissions with respect to NCFC or any of its
lending relationships with the Borrower arising on or before the date hereof;
provided, however, that specifically excepted from the terms of the release set
forth in this paragraph 11 shall be the obligations of Xxxxxxx pursuant to a
Pledge Security Agreement of even date herewith between Xxxxxxx and NCFC.
11. No provision contained in this Intercreditor Agreement nor in any other
document executed between or amongDCI, NCFC or Xxxxxxx shall constitute, or be
construed to be or to create, a partnership, joint venture or other non-lending
relationship between DCI, NCFC or Xxxxxxx or any of them. DCI, NCFC and Xxxxxxx
specifically acknowledge that no such relationship is intended hereby and that
NCFC has entered into this Intercreditor Agreement and all documents entered
into and in connection with this Intercreditor Agreement solely in its capacity
as lender to DCI.
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IN WITNESS WHEREOF, NCFC and Xxxxxxx have caused this Intercreditor
Agreement to be executed, intending to be legally bound, as of the date first
above written.
NATIONAL CANADA FINANCE CORP.
By: /s/ E. Xxxx Xxxxxxx
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Name:
Title:
/s/ Xxxxxx X. Xxxxxxx XX
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Xxxxxx X. Xxxxxxx XX
The undersigned acknowledge receipt of a copy of the above Intercreditor
Agreement and agree to, and are entitled to rely upon, the terms thereof.
DELTA COMPUTEC INC.
By: /s/ Xxxxxxx Xxxxxx
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Name:
Title:
DELTA DATA NET, INC.
By: /s/ Xxxxxxx Xxxxxx
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Name:
Title:
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