EXHIBIT 10.47
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT ("Agreement") is made and entered into as
of August 1, 2003, by and among between Laurus Master Fund, Ltd., a Cayman
Islands company ("Laurus"), Flying Food Group, L.L.C. ("FFG"), Briazz Venture,
L.L.C. ("Briazz Venture"), Spinnaker Investment Partners, L.P. ("Spinnaker"),
Deutsche Bank London Ag, acting through DB Advisors LLC ("DB"), Delafield
Hambrecht, Inc. ("Delafield") and BRIAZZ, INC. ("Borrower"). Upon the closing of
the DB Financing (as defined below), this Agreement supercedes the Amended and
Restated Agreement Between Creditors dated April 10, 2003 among Laurus, FFG,
Briazz Venture, Spinnaker and Borrower.
A. Laurus is the payee and owner and holder of that certain promissory
note, dated June 18, 2002, executed by Borrower and payable to the order of
Laurus in the original principal amount of $1,250,000 (the "Existing Note", as
amended, modified or supplemented from time to time). The Existing Note is
secured by a security interest in the assets of Borrower as more fully described
and evidenced by that certain security agreement with Laurus dated June 18, 2002
(as amended, modified and supplemented from time to time, the "Laurus Security
Agreement") and by a UCC Financing Statement filed on June 24, 2002 with the
Washington Department of Licensing (the "UCC Filing"). The interest of Laurus in
the collateral granted by Borrower to Laurus under the Laurus Security Agreement
and securing debt owed to Laurus pursuant to the Existing Note (the "Laurus
Collateral"), including but not limited to the security interest evidenced by
the UCC Filings, is referred to in this Agreement as the "Laurus Security
Interest", the obligations now and hereafter outstanding secured by the Laurus
Security Interest are referred to as the "Laurus Obligations" and all documents
and instruments executed by the Borrower in connection with the Laurus
Obligations are referred to as the "Laurus Documents".
B. Borrower had previously (i) issued a non-convertible promissory note in
the principal amount of $2,000,000 to Briazz Venture (the "BV Note"), (ii)
issued a non-convertible promissory note in the principal amount of $550,000 to
Spinnaker (the "Spinnaker Note"), and (iii) entered into the Food Production
Agreement dated December 1, 2002 with FFG, as amended and restated (the "Food
Production Agreement"). The BV Note, the Spinnaker Note and the Food Production
Agreement were secured a security interest in collateral granted pursuant to an
Amended and Restated Security Agreement dated April 10, 2003. Following the
closing of the DB Financing as discussed below, the BV Note and the Spinnaker
Note will be converted into the DB Notes (as defined below) and the Amended and
Restated Security Agreement will be terminated and replaced with the DB Security
Agreement (as defined below).
C. Borrower has entered into a Securities Purchase Agreement with DB,
Briazz Venture, Spinnaker and Delafield (the "Purchasers") in connection with
the proposed issuance of $6.0 million of non-convertible promissory notes (the
"DB Notes") and shares of Series F Preferred Stock (the "DB Financing"). The DB
Notes and the obligations under the Food Production Agreement will be secured by
a security interest in certain collateral (all such collateral, the
"Collateral") under the terms of the Security Agreement to be entered into as of
the date of closing of the DB Financing (the "DB Security Agreement"). Such
security interest in the Collateral is referred to as the "DB Security Interest"
and all documents and instruments
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executed by the Borrower in connection with the DB Financing are referred to as
the "DB Documents".
D. As a condition precedent to funding under the DB Financing, the
purchasers in the DB Financing have required that FFG and Laurus enter into this
Agreement setting forth the relative rights of the Purchasers, FFG and Laurus
with respect to the Collateral and Laurus Collateral.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants of the parties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Equal Priority of Interests.
1.1 Priorities; Exercise of Remedies.
(a) The Purchasers, FFG and Laurus hereby agree that the
lien of the Laurus Security Interest and the lien of the DB Security Interest,
shall rank equally in priority, neither being subordinate to the other. The
priorities specified in this Agreement are applicable irrespective of: (i) the
time, order, manner or method of creating, attaching or perfecting the
respective security interest, guaranties or liens granted to the Purchasers, FFG
or Laurus in or with respect to the Collateral and Laurus Collateral; (ii)
whether the Purchasers, FFG or Laurus or any bailee or agent thereof holds
possession of any or all of the property or assets of the Borrower; (iii) the
time or manner of filing the Purchaser's and FFG's and Laurus' respective
financing statements; (iv) the date, execution or delivery of any agreement,
document or instrument granting the Purchasers, FFG or Laurus security interests
or liens in or on any of all of Borrower's property or assets; and (v) any
provision of the UCC as adopted by the state of Washington, as may be amended
from time to time or other applicable law to the contrary. The Purchasers, FFG
and Laurus agree that each shall be solely responsible for perfecting and
maintaining the perfection of its lien in each item constituting the collateral
in which it has been granted a lien. The Purchasers, FFG and Laurus agree that
each will not contest the validity, perfection, priority or enforceability of
the liens of the other in the Collateral and the Laurus Collateral, as
applicable.
(b) Upon default of the Food Production Agreement and upon
prior written notice to the Purchasers and Laurus, FFG may exercise any and all
remedies that it may have under the Food Production Agreement, DB Securitiy
Agreement and/or under applicable law with respect to the Collateral, including
without limitation, sale of the Collateral at public or private sale or
retention of the Collateral so long as the exercise of such remedies is
conducted in a commercially reasonably manner. In connection therewith, Laurus
and the Purchasers, and each individually, waive any and all right to affect the
method or challenge the appropriateness of any action of FFG.
(c) Upon default of the DB Documents and upon prior written
notice to Laurus and FFG, the Purchasers or their agent may exercise any and all
remedies that they may have under the DB Documents and/or under applicable law
with respect to the
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Collateral, including without limitation, sale of the Collateral at public or
private sale or retention of the Collateral so long as the exercise of such
remedies is conducted in a commercially reasonably manner. In connection
therewith, Laurus and FFG waive any and all right to affect the method or
challenge the appropriateness of any action of the Purchasers or their agent.
(d) Upon default of the Laurus Documents and upon prior
written notice to the Purchasers and FFG, Laurus may exercise any and all
remedies that it may have under the Laurus Documents and/or under applicable law
with respect to the Laurus Collateral, including without limitation, sale of the
Laurus Collateral at public or private sale or retention of the Laurus
Collateral so long as the exercise of such remedies is conducted in a
commercially reasonably manner. In connection therewith, the Purchasers and FFG,
and each individually, waive any and all right to affect the method or challenge
the appropriateness of any action of Laurus.
1.2 Distributions. Upon any payment or distribution of assets of
the Borrower of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or total or partial liquidation
or reorganization of the Borrower, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings including, without
limitation, all amounts received by the Purchasers, FFG and/or Laurus under and
in accordance with Section 1.1 above (each such payment, distribution and/or
amount is hereafter referred to as a "Collateral Proceed Amount"), all
Collateral Proceed Amounts shall be paid to each of the Purchasers, FFG and
Laurus on a pro rata basis in accordance with Borrower's outstanding obligations
to each of the Purchasers, FFG and Laurus pursuant to the DB Documents, the Food
Production Agreement and Laurus Documents, respectively.
1.3 Treatment of Collateral Proceed Amounts. Any and all
Collateral Proceed Amounts received by any of the Purchasers, FFG or Laurus
pursuant to the provisions of Section 1.1 or 1.2 shall be held in trust for the
benefit of the Purchasers, FFG and Laurus, and shall be apportioned among the
Purchasers, FFG and Laurus, paid over or delivered to the other party on a pro
rata basis to each in accordance with Borrower's outstanding obligations to each
of the Purchasers, FFG and Laurus pursuant to the DB Documents, the Food
Production Agreement and Laurus Documents, respectively.
2. Notice of Default. Each of the Purchasers, FFG and Laurus shall
give the others prompt notice of default by the Borrower under the DB Documents,
the Food Production Agreement and Laurus Documents, as applicable, and to the
extent such notice is required to be given to the Borrower under the DB
Documents, the Food Production Agreement and/or Laurus Documents, as applicable,
at the same time as such notice is given to the Borrower. Except as set forth
herein, each of the Purchasers, FFG and Laurus hereby waive all other notices of
any kind to which the other may be entitled at any time in connection with the
Purchasers', FFG's or Laurus' financing arrangements with the Borrower or the
transactions contemplated by this Agreement other than any and all notices
required under applicable law, including, without limitation, the Uniform
Commercial Code.
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3. Consent of Borrower. Borrower understands and agrees that the
provisions of this Agreement define the relative rights of the Purchasers, FFG
and Laurus with respect to the Collateral and Laurus Collateral, and that
nothing contained in this Agreement shall impair the unconditional and absolute
obligations of the Borrower under the DB Documents, the Food Production
Agreement or Laurus Documents. By joining in the execution of this Agreement,
Borrower acknowledges, agrees, and consents to all of the provisions hereof.
4. Miscellaneous Provisions.
4.1 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors, and assigns. Each party shall notify its respective
transferees or assignees that this Agreement is in effect. Each party shall
notify the other in writing of any such assignment or transfer. Each party
agrees that any assignee or transferee of any of the Borrower's obligations
pursuant to the Food Production Agreement, DB Documents or Laurus Documents
shall be required to become a party to this Agreement at the time of such
transfer or assignment.
4.2 Waiver. Failure of any party at any time to require
performance of any provision of this Agreement shall not limit such party's
right to enforce such provision, nor shall any waiver of any breach of any
provision of this Agreement constitute a waiver of any succeeding breach of such
provision or a waiver of such provision itself.
4.3 Amendment. This Agreement may not be modified or amended
except by the written agreement of the parties. No attempted waiver of any
provision of this Agreement shall be binding unless in writing and signed by the
party to be bound.
4.4 Attorneys' Fees. In the event a suit, action, or other
proceeding of any nature whatsoever, including any proceeding under the U.S.
Bankruptcy Code, is instituted in connection with any controversy arising out of
this Agreement or to interpret or enforce any rights hereunder, the prevailing
party shall be entitled to recover from the losing party its attorneys',
paralegals', accountants', and other experts' fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the court at trial or on any appeal or review, in addition to
all other amounts provided by law.
4.5 Severability. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall to any extent be
held invalid or unenforceable, the remainder of this Agreement and the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable shall not be affected
thereby, and each term or provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
4.6 Integration. This Agreement contains the entire agreement and
understanding of the parties with respect to the subject matter hereof, and upon
the closing of the DB Financing, supersedes all prior and contemporaneous
agreements among them with respect to such matters, including, but not limited
to, the Amended and Restated Agreement Between Creditors dated April 10, 2003.
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4.7 Notices. Notices under this Agreement shall be in writing and
shall be effective when actually delivered, by facsimile or by personal
delivery, or three (3) days after being deposited in the United States Mails,
certified, return receipt requested, directed to the other party at the address
set forth below, or to such other address as the party may indicate by written
notice:
If to Borrower: BRIAZZ, Inc.
3901 7th Avenue South, Suite 200
Seattle, Washington 98108
Attention: Victor D. Alhadeff, Chief Executive Officer
Facsimile: (206) 467-1970
If to Spinnaker: Spinnaker Investment Partners L.P.
56 John Street
Southport, Connecticut 06890
Attention: Charles C. Matteson, Jr.
Telephone: (203) 259-6661
Facsimile: (203) 255-8828
If to FFG or Briazz Flying Food Group, L.L.C.
Venture: 212 North Sangamon, Suite 1-A
Chicago, Illinois 60607
Attention: David Cotton
Facsimile: (312) 243-5088
If to DB: DB Advisors, LLC
31 West 52nd Street
New York, NY 10019
Attention: Glen MacMullin
Telephone: (212) 469-7471
Facsimile: (646) 324-7313
If to Delafield: Delafield Hambrecht, Inc.
701 Fifth Avenue, Suite 3800
Seattle, WA 98104
Attention: JD Delafield
Telaphone: (206) 254-4101
Facsimile: (206) 254-4199
If to Laurus: John Tucker, Esq.
152 West 57th Street, 4th Floor
New York, New York 10019
Facsimile: (212) 541-4434
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4.8 Governing Law. This Agreement and all actions arising out of
or in connection with this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of law provisions of the State of New York or of any other state. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined exclusively in any New York state or federal court sitting
in the Borough of Manhattan of The City of New York. The parties hereto hereby
(a) submit to the exclusive jurisdiction of any state or federal court sitting
in the Borough of Manhattan of The City of New York for the purpose of any
action arising out of or relating to this Agreement brought by any party hereto,
and (b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the action is brought in an
inconvenient forum, that the venue of the action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be enforced
in or by any of the above-named courts.
4.9 Inconsistent Provisions. In the event of any inconsistency
between the provisions of this Agreement and the provisions of the Spinnaker
Documents, the provisions of the Laurus Documents, or the provisions of the Loan
Documents, the provisions of this Agreement shall control and shall be binding
upon the parties hereto.
4.10 Construction and Interpretation. The headings or titles of
the sections of this Agreement are intended for ease of reference only and shall
have no effect whatsoever on the construction or interpretation of any provision
of this Agreement. All provisions of this Agreement have been negotiated at arms
length and this Agreement shall not be construed for or against any party by
reason of the authorship or alleged authorship of any provision hereof,
notwithstanding that each party may have signed a separate signature page.
4.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
instrument, notwithstanding that one or more parties may have signed a separate
signature page.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
LAURUS: Laurus Master Fund, Ltd
A Cayman Islands company
By: /s/ Eugene Grin
------------------------------
Title:____________________________
BORROWER: Briazz, Inc., a Washington corporation
By: /s/ Victor D. Alhadeff
------------------------------
Title:____________________________
LENDERS: Flying Food Group LLC
By: New Management, Ltd., its Manager
By: /s/ Sue Ling Gin
---------------------
Its: Manager
Briazz Venture, LLC
By: /s/ Sue Ling Gin
---------------------
Its: Manager
SPINNAKER: Spinnaker Investment Partners, L.P.
By: Spinnaker Capital Partners, LLC,
its General Partner
By: /s/ C.C. Matteson, Jr.
----------------------
Its: Manager
DB: Deutsche Bank London Ag, acting through DB Advisors,
LLC
By: DB Advisors, LLC
By: /s/ Glenn MacMullin
----------------------
Its: Director
DELAFIELD: Delafield Hambrecht, Inc.
By: /s/ John D. Delafield
----------------------
Its: ______________________________
SIGNATURE PAGE TO INTERCREDITOR AGREEMENT
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