Exhibit 10.2
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of August __, 2002 (as
modified, amended, restated or supplemented from time to time, this
"Agreement"), is by and between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation ("GECC"), acting in its capacity as the administrative agent under
the OpCo Credit Agreement (hereinafter defined) and the other "Loan Documents"
referenced therein (in such capacity, together with its successors in such
capacity, the "OpCo Agent"), and LEHMAN COMMERCIAL PAPER INC., a New York
corporation ("LCPI"), acting in its capacity as the agent under the Warehouse
Agreement (hereinafter defined) and the other "Loan Documents" referenced
therein (in such capacity, together with its successors in such capacity, the
"Warehouse Agent").
R E C I T A L S:
A. ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware limited
liability company ("ALS"), has entered into a Receivables Warehouse
Agreement dated as of May 5, 1998 (as amended, supplemented, restated
or otherwise modified from time to time, the "Sale Agreement") with
ALLIANCE LAUNDRY RECEIVABLES WAREHOUSE LLC, a Delaware limited
liability company (the "SPE"), pursuant to which ALS has agreed to
convey to the SPE, and the SPE has agreed to purchase and accept from
ALS, all of the right, title and interest of ALS in certain Specified
Assets (as defined in the Sale Agreement).
B. The SPE is financing its purchases of Specified
Assets under the Sale Agreement in part with the proceeds of loans made
to the SPE pursuant to the terms of a Loan and Security Agreement dated
as of May 5, 1998 (as amended, supplemented, restated or otherwise
modified from time to time, the "Warehouse Agreement") among the SPE,
as borrower, the financial institutions from time to time party thereto
(collectively, the "Warehouse Lenders"), and the Warehouse Agent.
C. ALLIANCE LAUNDRY HOLDINGS LLC, a Delaware limited
liability company ("Parent"), ALS, GECC and the other financial
institutions from time to time party thereto (collectively, the "OpCo
Lenders"), Lehman Brothers, Inc., as Arranger, and the OpCo Agent are
parties to that certain Amended and Restated Credit Agreement dated as
of the date hereof (as amended, supplemented, restated or otherwise
modified from time to time, the "OpCo Credit Agreement"), pursuant to
which the OpCo Lenders have agreed to make certain loans and other
credit accommodations available to or for the account of ALS, provided
that, among other conditions, ALS secures its obligations under the
OpCo Credit Agreement, and each of Parent and ALLIANCE LAUNDRY
CORPORATION, a Delaware corporation ("ALC"), guarantees ALS's
obligations under the OpCo Credit Agreement and secures its
guarantee, in each case, pursuant to the terms of an Amended and
Restated Guarantee and Collateral Agreement dated as of the date hereof
by and among ALS, Parent, ALC and the OpCo Agent (as amended,
supplemented, restated or otherwise modified from time to time, the
"Guarantee and Collateral Agreement").
D. The parties hereto wish to set forth certain
agreements with respect to the assets conveyed or encumbered pursuant
to the agreements described above.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed as follows:
ARTICLE 1. DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Asset" means a Trade Receivable or an Equipment Loan, regardless
of whether it is owned by an Originator or by the SPE.
"Bankruptcy Code" means the provisions of title 11 of the United
States Code, 11 U.S.C.(S)(S) 101 et seq.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in any of the States
of Illinois, Wisconsin or New York.
"Claim" means the OpCo Claim or the Warehouse Claim, as
applicable.
"Collection Accounts" means, collectively, all lockboxes, bank
accounts or cash collateral accounts, any rights in and to any escrow assets or
any similar accounts or assets relating to, or containing or constituting
Collections or proceeds of or distributions on, any of the Assets, including,
without limitation, each of the Trade Receivables Lockboxes, Trade Receivables
Demand Deposit Accounts, Trade Receivables Lockbox Accounts, Equipment Loan
Lockboxes, Equipment Loan Demand Deposit Accounts, Equipment Loan Lockbox
Accounts and the Cash Collateral Account (each, as defined in the Warehouse
Agreement).
"Collections" means with respect to any Asset, the sum of all
amounts, whether in the form of cash, checks, drafts, or other instruments,
received by the SPE, an Originator, the Servicer or in a Collection Account in
payment of, or applied to, any amount owed by an Obligor on account of such
Asset, including, without limitation, all amounts in respect of fees with
respect to such Asset and all proceeds of any collateral for such Asset (if
any).
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"Contract" means any contract (including, without limitation,
any loan agreement, instrument, lease, installment purchase contract or other
written agreement), invoice, or other writing evidencing any Asset.
"Disposition" means any liquidation of the Parent or any of
its Subsidiaries or their assets, the establishment of any receivership for the
Parent or any of its Subsidiaries or their assets, a bankruptcy proceeding
(either voluntary or involuntary) of the Parent or any of its Subsidiaries, the
payment of any insurance, condemnation, confiscation, seizure or other claim
upon the condemnation, confiscation, seizure, loss or destruction of, or damage
to, or any other sale, transfer, assignment or other disposition of assets of
the Parent or any of its Subsidiaries (other than the sale, contribution and
pledge of interests in the Warehouse Collateral pursuant to the Sale Agreement
and the Warehouse Agreement).
"Effective Advance Rate" means, on any date of determination
following delivery of an Enforcement Notice by the OpCo Agent to the Warehouse
Agent and ALS, the percentage of the aggregate outstanding principal balance of
all New Assets that the Warehouse Lenders have advanced in cash, taking into
account all exclusions (whether for ineligibles, overconcentrations, reserves or
otherwise) taken by the Warehouse Agent pursuant to the Warehouse Agreement.
"Enforcement" means, collectively or individually, (a)
acceleration of the loans and other obligations outstanding under the Warehouse
Agreement and/or the OpCo Loan Documents; or (b) commencement of any judicial or
nonjudicial enforcement of any of the default rights and remedies against the
Parent or any of its Subsidiaries (other than the SPE) or any of their
respective assets under the OpCo Loan Documents or against the SPE nor any of
its assets under the Warehouse Documents.
"Enforcement Notice" means a written notice delivered in
accordance with Section 2.4 hereof which notice: (a) if delivered by the
Warehouse Agent, shall state that (i) a Warehouse Event of Default has occurred
under the Warehouse Agreement, (ii) the loans and other obligations outstanding
thereunder have been accelerated, and (iii) an Enforcement Period has commenced,
and (b) if delivered by the OpCo Agent, (i) shall state that (A) an OpCo Event
of Default has occurred, (B) the indebtedness of the Parent and its Subsidiaries
(other than the SPE) to the OpCo Agent or any of the OpCo Lenders under the OpCo
Loan Documents has been accelerated, and (C) an Enforcement Period has
commenced, and (ii) may, subject to the conditions specified in Section 2.1 of
this Agreement, state that subsequent sales and contributions of Assets under
the Sale Agreement must terminate.
"Enforcement Period" means the period of time following the
receipt by either the OpCo Agent or the Warehouse Agent of an Enforcement Notice
delivered by the other until the earliest of the following: (a) the Warehouse
Claim has been satisfied in full, the Warehouse Lenders and the Warehouse Agent
have no further obligations under the Warehouse Documents and the Warehouse
Documents have been terminated; (b) the OpCo Claim has been satisfied in full,
the OpCo Agent and the OpCo Lenders have no further obligations under the OpCo
Loan Documents and the OpCo Loan Documents have been terminated; and (c) the
parties hereto agree in writing to terminate the Enforcement Period.
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"Equipment" has the meaning specified in the Warehouse
Agreement.
"Equipment Loan" means a loan or finance lease secured by
Equipment, which loan or finance lease was originated by an Originator,
including without limitation, the obligation to pay any finance, interest, late
payment or similar charges with respect thereto.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Lien" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the UCC or comparable law of any jurisdiction.
"New Assets" means, as of any date of determination, all
Transferred Assets transferred to the SPE on any day following the date on which
the OpCo Agent delivers the Enforcement Notice referred to in clause (a) of
Section 2.1 of this Agreement.
"Obligor" means, with respect to any Asset, the Person
primarily obligated to make payments in respect thereof.
"OpCo Claim" means all of the indebtedness, obligations and
other liabilities of the Parent or any of its Subsidiaries (other than the SPE)
now or hereafter arising under, or in connection with the OpCo Loan Documents,
including, but not limited to, all reimbursement obligations of the Parent with
respect to any loans made or any letters of credit issued thereunder, all
guarantee obligations of the Parent's Subsidiaries (other than the SPE) under
the OpCo Loan Documents, any interest thereon (including, without limitation,
interest accruing after the commencement of a bankruptcy, insolvency or similar
proceeding relating to any of the Parent or its Subsidiaries (other than the
SPE), whether or not such interest is an allowed claim in any such proceeding),
any reimbursement obligations, premiums, make-whole amounts, yield maintenance
amounts, fees or expenses due thereunder, and any costs of collection or
enforcement.
"OpCo Collateral" means all property and interests in property
now owned or hereafter acquired or created, of the Parent or any of its
Subsidiaries (other than the SPE) in or upon which a OpCo Interest is granted or
purported to be granted by any such Person to the OpCo Agent under any of the
OpCo Loan Documents, excluding, however, the Warehouse Collateral.
"OpCo Event of Default" has the meaning ascribed to the terms
"Event of Default" or "Default" in the OpCo Credit Agreement.
"OpCo Interest" means, with respect to any property or
interest in property (including, without limitation, the OpCo Collateral), now
owned or hereafter acquired or created,
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of the Parent or any of its Subsidiaries (other than the SPE), any lien, claim,
encumbrance, security interest or other interest of the OpCo Agent in such
property or interests in or to such property.
"OpCo Loan Documents" means the OpCo Credit Agreement, the
Guarantee and Collateral Agreement, and all other "Loan Documents" under and as
defined in the OpCo Credit Agreement.
"OpCo Lockbox Account" means a lockbox and associated account
in the name of ALS that is subject to a first priority perfected security
interest in favor of the OpCo Agent into which only proceeds of OpCo Collateral
are to be deposited.
"Originator" means ALS and any of its affiliates that is
hereafter added to the Sale Agreement as a seller or contributor of Assets
thereunder.
"Outstanding Balance" means (a) with respect to any Trade
Receivable and as of any date of determination, the amount (which amount shall
not be less than zero) equal to (i) the amount billed to the Obligor thereof,
minus (ii) all Collections received from the Obligor thereunder, minus (iii) all
discounts to or any other modifications that reduce such amount billed to the
Obligor; provided that if the Warehouse Agent or the Servicer makes a
determination that all payments by such Obligor with respect to such amount
billed have been made, the Outstanding Balance shall be zero, and (b) with
respect to any Equipment Loan and as of any date of determination, the then
outstanding principal balance thereof.
"Person" means any individual, sole proprietorship,
partnership, joint venture, unincorporated organization, trust, association,
corporation (including a business trust), limited liability company,
institution, public benefit corporation, joint stock company, Governmental
Authority or any other entity of whatever nature.
"Records" means all Contracts, Servicing Records (as defined
in the Sale Agreement) and other documents, books, records and other information
(including computer programs, tapes, disks, data processing software and related
property and rights) prepared and maintained by any Originator, the Servicer or
the SPE with respect to the Warehouse Collateral and the Obligors thereunder.
"Returned Goods" means all right, title and interest of any
Originator or the SPE, as applicable, in and to returned, repossessed,
reclaimed, traded-in or foreclosed upon Equipment or other goods, the sale or
financing of which gave rise to an Asset.
"Servicer" has the meaning specified in the Warehouse
Agreement.
"Subsidiary" means, with respect to any Person, any
corporation or other entity (a) of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such Person or (b) that is directly or indirectly controlled
by such Person within the meaning of control under Section 15 of the Securities
Act of 1933, as amended from time to time.
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"Trade Receivable" means any indebtedness and other
obligations (other than an Equipment Loan) owed to an Originator (prior to
giving effect to any sale or other transfer to the SPE under the Sale Agreement,
if applicable) whether constituting an account, chattel paper, an instrument or
a general intangible, arising in connection with the sale of goods or
merchandise or the rendering of services by such Originator, which includes,
without limitation, the obligation to pay any finance, interest, late payment or
similar charges with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Trade Receivable separate from a Trade Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction. Restructurings and extensions of such indebtedness and other
rights and obligations including, without limitation, a restructuring in which a
new Obligor is permitted to assume the obligations of an existing Obligor, shall
not be deemed to give rise to the creation of new Trade Receivables.
"Transferred Asset" means any Asset in which is sold or
contributed to the SPE pursuant to the Sale Agreement.
"UCC" means, with respect to any jurisdiction, the Uniform
Commercial Code as the same may, from time to time, be enacted and in effect in
such jurisdiction.
"Unsold Asset" means any Asset or other account, general
intangible, instrument or chattel paper of any Originator other than Transferred
Assets.
"Warehouse Claim" means all indebtedness, obligations and
other liabilities of (a) the SPE to the Warehouse Agent and the Warehouse
Lenders arising under or in connection with the Warehouse Documents and (b)
until and unless all of the obligations to the Warehouse Agent or any Warehouse
Lender arising under or in connection with the Warehouse Documents have been
fully performed and indefeasibly paid in full in cash to the Warehouse Agent,
all obligations and other liabilities of any Originator to the SPE, in each case
now or hereafter arising under, or in connection with, the Warehouse Documents,
including, but not limited to, all sums or advances now made to or for the
benefit of the SPE under the Warehouse Agreement, any yield or interest thereon
(including, without limitation, interest or yield accruing after the
commencement of a bankruptcy, insolvency or similar proceeding relating to the
Originators or the SPE, whether or not such interest or yield is an allowed
claim in any such proceeding), any repayment obligations, fees or expenses due
thereunder, and any costs of collection or enforcement.
"Warehouse Collateral" means (a) the Transferred Assets
(including Returned Goods related to such Transferred Assets), (b) the
Collections related to such Transferred Assets, (c) each of the Collection
Accounts to which any Collections of such Transferred Assets are deposited and
all cash or other property now or hereafter on deposit therein (but in no event
shall Warehouse Collateral include any Collections or other monies deposited in
such accounts which are not Collections related to Transferred Assets), (d) all
Equipment Loan Documents (as defined in the Warehouse Agreement) related to any
Transferred Asset, (e) all rights, remedies, powers and privileges of the SPE
under such Equipment Loan Documents (including, without limitation, all rights
of the SPE in and to the Equipment and other interests that are the subject of
the Equipment Loans) and such Trade Receivables; (f) all Servicing Records (as
defined in the
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Warehouse Agreement) and other books and records (including, without limitation,
computer programs, tapes and other computer storage media) relating to any of
the foregoing; (g) all recourse or support obligations, surety bonds,
guarantees, indemnities and security relating to any of the foregoing and all
letters of credit relating thereto; (h) all insurance policies covering the
related Equipment and any proceeds with respect thereto and all FCIA Insurance
(as defined in the Warehouse Agreement) covering Trade Receivables included in
the Transferred Assets the Obligors with respect to which are not resident in
the United States; (i) to the extent not included in the foregoing, all
"accounts," "chattel paper," "instruments," "goods" and "general intangibles"
(as defined in the Uniform Commercial Code) relating to or constituting any and
all of the foregoing in whole or in part; (j) all other property of the SPE of
any nature whatsoever (including, without limitation, all "documents,"
"equipment" and "inventory" (as defined in the Uniform Commercial Code); (k) all
rights of the SPE against the Originators under the Sale Agreement; and (l) any
and all replacements, substitutions, distributions on or proceeds of any and all
of the foregoing.
"Warehouse Documents" means the Sale Agreement, the Warehouse
Agreement, and each of the other "Loan Documents" under and as defined in the
Warehouse Agreement.
"Warehouse Event of Default" means an "Event of Default" under
and as defined in the Warehouse Agreement.
"Warehouse Interest" means, with respect to any of the
Warehouse Collateral or any property or interest in property, any lien, claim,
encumbrance, security interest or other interest of any or all of the SPE, the
Warehouse Lenders and/or the Warehouse Agent in or to any of such property.
"Warehouse Lenders" means LCPI and its assigns under the
Warehouse Agreement.
ARTICLE 2. INTERCREDITOR PROVISIONS
2.1. Termination of Sales and Contributions. If (a) the OpCo Agent
delivers an Enforcement Notice to the Warehouse Agent and ALS that conforms to
the requirements of clause (b)(i) of the definition of "Enforcement Notice" and
(b) the OpCo Agent, following the delivery of such Enforcement Notice, delivers
to the Warehouse Agent and ALS a second Enforcement Notice stating that (i) (A)
for any day, the Effective Advance Rate under the Warehouse Agreement for New
Assets consisting of Trade Receivables is less than 80% or (B) for any day, the
Effective Advance Rate under the Warehouse Agreement for New Assets consisting
of Equipment Loans is less than 85%, and that (ii) all subsequent sales and
contributions of Assets under the Sale Agreement shall terminate, no further
sales or contributions shall be permitted under the Sale Agreement. If any such
subsequent sale or contribution shall nonetheless occur, the OpCo Interest in
the New Assets subject thereto and in all proceeds thereof shall not be
released, such New Assets shall not constitute Transferred Assets and any
Warehouse Interest therein shall be subordinated to any OpCo Interest therein.
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2.2. Distribution of Proceeds.
(a) From and after delivery by the Warehouse Agent of an Enforcement
Notice: (i) all proceeds of the Warehouse Collateral or any Disposition thereof
which come into the possession of the OpCo Agent or any of the OpCo Lenders
shall be held in trust for, and promptly turned over to, the applicable
Collection Account for application against the Warehouse Claim in accordance
with the Warehouse Documents until the Warehouse Claim has been paid and
satisfied in full in cash and the Warehouse Documents have terminated, and (ii)
any remaining proceeds of the Warehouse Collateral shall be paid to the SPE or
as otherwise required by applicable law.
(b) From and after delivery by the OpCo Agent of an Enforcement
Notice, (i) all proceeds of the OpCo Collateral or any Disposition thereof which
come into the possession of the Warehouse Agent or any of the Warehouse Lenders
shall be held in trust for, and promptly turned over to, the OpCo Lockbox
Account if one exists (and otherwise, to the OpCo Agent) for application against
(or cash-collateralization of) the OpCo Claim in accordance with the OpCo
Documents until the OpCo Claim has been paid and satisfied in full in cash and
the OpCo Documents have terminated, and (ii) any remaining proceeds of the OpCo
Collateral shall be paid to the Parent or the applicable Subsidiary or as
otherwise required by applicable law.
2.3. Collection Accounts.
(a) The Warehouse Agent hereby acknowledges that Collections of Unsold
Assets which are deposited in the Collection Accounts or otherwise shall not
constitute Warehouse Collateral, and the Warehouse Agent has no claim to such
Collections as they are not property of the SPE.
(b) In order to effect more fully the provisions of this Agreement,
each of the parties hereto agrees that during an Enforcement Period, it shall
not send any notices to the Obligors directing them to remit Collections of any
Transferred Assets other than to a Collection Account.
(c) The OpCo Agent agrees that it shall not, at any time prior to
Enforcement, exercise any rights it may have under the OpCo Loan Documents to
send any notices to Obligors (i) informing them of the OpCo Agent's interest in
the Transferred Assets, or (ii) directing such Obligors to make payments in any
particular manner of any amounts due under the Transferred Assets; the OpCo
Agent further agrees that it shall not take any of the foregoing actions during
Enforcement prior to the later of payment in full of the Warehouse Claim and the
termination of the Warehouse Documents, except that the OpCo Agent may inform
any Obligors of Unsold Assets that such Unsold Assets have been pledged to the
OpCo Agent so long as such notices expressly state that all payments on account
of such Unsold Assets shall continue to be made as otherwise required pursuant
to the terms of the Warehouse Documents, unless the Warehouse Agent and the OpCo
Agent agree otherwise in writing. The Warehouse Agent hereby agrees to return
reasonably promptly to the applicable Originator funds received by the Warehouse
Agent which are reasonably identified to the Warehouse Agent (through supporting
documentation) to constitute proceeds of an Unsold Asset constituting OpCo
Collateral (including such funds received in the Collection Accounts); provided
that if the OpCo Agent shall so request in a written notice to the Warehouse
Agent delivered at any time while an OpCo Event of Default
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exists and is continuing, the Warehouse Agent shall transfer such funds to the
OpCo Lockbox Account instead of returning them to an Originator. The OpCo Agent
agrees that, prior to the later of payment in full of the Warehouse Claim and
the termination of the Warehouse Documents, if it receives payments directly
from any Obligor on account of an Unsold Asset, it shall promptly notify the
Warehouse Agent in order that the Warehouse Agent may determine whether such
payment was, in fact, properly allocated to such Unsold Asset in accordance with
the terms of this Section 2.3, and if the Warehouse Agent shall have reasonably
identified (through supporting documentation) to the OpCo Agent that such
payment was not properly allocated to such Unsold Asset, the OpCo Agent hereby
agrees to return reasonably promptly such payment by wire transfer to the
applicable Collection Account.
2.4. Enforcement Actions. Each of the OpCo Agent and the Warehouse
Agent agrees to use reasonable efforts to give an Enforcement Notice to the
other prior to commencement of Enforcement (but failure to do so shall not
prevent such Person from commencing Enforcement or affect its rights hereunder
nor create any cause of action or liability against such Person). Subject to the
foregoing, each of the parties hereto agrees that during an Enforcement Period:
(a) Subject to any applicable restrictions in the Warehouse Documents,
the Warehouse Agent may at its option and without the prior written consent of
the OpCo Agent take any action to (i) accelerate payment of the Warehouse Claim
or any other obligations and liabilities under any of the Warehouse Documents
and (ii) liquidate the Warehouse Collateral or foreclose or realize upon or
enforce any of its rights with respect to the Warehouse Collateral.
(b) Subject to any applicable restrictions in and to the terms of the
OpCo Loan Documents, the OpCo Agent may, at its option, and without the prior
written consent of the Warehouse Agent, take any action to (i) accelerate
payment of or require cash collateral for the OpCo Claim or any other obligation
or liability arising under any of the OpCo Loan Documents and (ii) liquidate the
OpCo Collateral or foreclose or realize upon or enforce any of its rights with
respect to the OpCo Collateral.
2.5. Non-interference. Subject to any applicable restrictions in the
Warehouse Documents, the OpCo Agent agrees that to the extent it now or
hereafter obtains title to or lawful possession of any premises leased or owned
by the Parent, the Servicer, any Originator or the SPE where Records with
respect to Warehouse Collateral are maintained or stored: (a) it will permit the
Warehouse Lenders and the Warehouse Agent (or their agents, employees or
designees) to enter one or more of such premises at any time during reasonable
business hours, without force or process of law and without obligation to pay
rent or compensation to the OpCo Agent or any of the OpCo Lenders, whether
before, during or after an Enforcement Period, and to have access to and use of
all Records located thereon for the purpose of enforcing the Warehouse Agent's
rights, on behalf of the Warehouse Lenders, with respect to the Warehouse
Collateral, and (b) any mortgage of, assignment of, security interest in or lien
upon any real property and interests in real property of the Parent or any of
its Subsidiaries other than the SPE (whether leased or owned) shall be subject
to the Warehouse Lenders' and the Warehouse Agent's rights of access and use of
the Records described above.
2.6. Accountings. If the OpCo Agent delivers written notice to the
Warehouse Agent and the Servicer that an OpCo Event of Default has occurred and
is continuing, the Warehouse
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Agent shall direct the Servicer to render monthly written statements to the
Warehouse Agent and the OpCo Agent identifying in reasonable detail the Unsold
Assets and any Collections received in respect thereof during the calendar month
then most recently ended.
2.7. Agency for Perfection. To the fullest extent permitted by
applicable law: (a) the Warehouse Agent and the OpCo Agent hereby appoint each
other as third party bailee with notice and acceptance for purposes of
perfecting by possession their respective security interests and liens on the
OpCo Collateral and Warehouse Collateral described hereunder; (b) in the event
that the Warehouse Agent becomes aware that it has obtained possession of any of
the OpCo Collateral, the Warehouse Agent shall notify the OpCo Agent of such
fact, shall hold such OpCo Collateral in trust and shall transfer such OpCo
Collateral to an OpCo Lockbox Account (if one has been established pursuant to
this Agreement) or otherwise, to the applicable Originator; and (c) in the event
that the OpCo Agent becomes aware that it has obtained possession of any of the
Warehouse Collateral, the OpCo Agent shall notify the Warehouse Agent of such
fact, shall hold such Warehouse Collateral in trust and shall deliver such
Warehouse Collateral to the applicable Collection Account upon request.
2.8. UCC Notices. In the event that the Warehouse Lenders or the
Warehouse Agent shall be required by the UCC or any other applicable law to give
notice to the OpCo Agent of any intended disposition of any Warehouse
Collateral, such notice shall be given in accordance with Section 3.1 hereof and
ten (10) days' notice shall be deemed to be commercially reasonable.
2.9. Independent Credit Investigations. None of the Warehouse Lenders,
the Warehouse Agent, the OpCo Lenders or the OpCo Agent or any of their
respective directors, officers, agents or employees shall be responsible to the
other or to any other person, firm or corporation for the solvency, financial
condition or ability of the SPE , the Parent, ALC, any Originator or its
Subsidiaries to repay the Warehouse Claim or the OpCo Claim, or for the worth of
the Warehouse Collateral or the OpCo Collateral, or for statements of the
Originators, the SPE or the Parent or its Subsidiaries, oral or written, or for
the validity, sufficiency or enforceability of the Warehouse Claim, the OpCo
Claim, the Warehouse Documents, the OpCo Loan Documents, the Warehouse Agent's
interest in the Warehouse Collateral or the OpCo Agent's interest in the OpCo
Collateral. The OpCo Lenders and the Warehouse Lenders have entered into their
respective agreements with the Parent and its applicable Subsidiaries based upon
their own independent investigations. None of the Warehouse Lenders, the
Warehouse Agent, the OpCo Lenders or the OpCo Agent makes any warranty or
representation to the other nor does it rely upon any representation of the
other with respect to matters identified or referred to in this Section 2.9.
2.10. Limitation on Liability of Parties to Each Other. Except as
provided in this Agreement, neither party shall have any liability to any other
party except for liability arising from the gross negligence or willful
misconduct of such party or its representatives.
2.11. Amendments to Financing Arrangements or to this Agreement. The
OpCo Agent agrees to use reasonable efforts to give, concurrently with any
written amendment or modification in the OpCo Loan Documents, prompt notice to
the Warehouse Agent of the same and the Warehouse Agent agrees to use reasonable
efforts to, concurrently with any written amendment or modification in the
Warehouse Documents (including, without limitation, the
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addition of any Originator to the Sale Agreement besides ALS), notify the OpCo
Agent of the same; provided, however, that the failure to do so shall not create
a cause of action against any party failing to give such notice or create any
claim or right on behalf of any third party or affect any such amendment or
modification. Each party hereto shall, upon reasonable request of the other
party hereto, provide copies of all such modifications or amendments and copies
of all other documentation relevant to the Warehouse Collateral or the OpCo
Collateral. All modifications or amendments of this Agreement must be in writing
and duly executed by an authorized officer of each party hereto to be binding
and enforceable.
2.12. Marshalling of Assets. Nothing in this Agreement will be deemed to
require the Warehouse Agent (i) to proceed against any property securing the
Warehouse Claim (or any other obligation or liability under the Warehouse
Documents) prior to proceeding against other property securing such Claim or
obligations or liabilities or against certain persons guaranteeing any such
obligations or (ii) to marshal the Warehouse Collateral upon the enforcement of
the Warehouse Agent's remedies under the Warehouse Documents. Nothing in this
Agreement will be deemed to require the OpCo Agent (i) to proceed against any
property securing the OpCo Claim (or any other obligation or liability under the
OpCo Loan Documents) prior to proceeding against other property securing such
Claim or obligations or liabilities or against certain persons guaranteeing any
such obligations or (ii) to marshal the OpCo Collateral upon the enforcement of
the OpCo Agent's remedies under the OpCo Loan Documents.
2.13. Relative Rights. The OpCo Agent and the OpCo Lenders shall be
entitled to rely on the power and authority of the Warehouse Agent to act on
behalf of its principals to the extent the provisions hereof have the Warehouse
Agent so act, and the Warehouse Agent and the Warehouse Lenders shall be
entitled to rely on the power and authority of the OpCo Agent to act on behalf
of its principals to the extent the provisions hereof have the OpCo Agent so
act.
2.14. Effect Upon OpCo Loan Documents and Warehouse Documents. Each of the
Warehouse Agent and the OpCo Agent agrees that, as between themselves and their
respective constituents, to the extent the terms and provisions of the OpCo Loan
Documents or the Warehouse Documents are inconsistent with the terms and
provisions of this Agreement, the terms and provisions of this Agreement shall
control.
2.15. Nature of the OpCo Claim and Modification of the OpCo Loan Documents.
The Warehouse Agent, on behalf of the Warehouse Lenders, acknowledges that the
OpCo Claim and other obligations and liabilities owing under the OpCo Loan
Documents are, in part, revolving in nature and that the amount of such
revolving indebtedness which may be outstanding at any time or from time to time
may be increased or reduced and subsequently reborrowed. The terms of the OpCo
Loan Documents may be modified, extended or amended from time to time, and the
amount thereof may be increased or reduced, all without notice to or consent by
any of the Warehouse Lenders or the Warehouse Agent and without affecting the
provisions of this Agreement. Without in any way limiting the foregoing, the
Warehouse Agent, on behalf of the Warehouse Lenders, hereby agrees that the
maximum amount of OpCo Claim and other obligations and liabilities owing under
the OpCo Loan Documents may be increased at any time and from time to time to
any amount.
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2.16. Nature of the Warehouse Claim and Modification of Warehouse
Documents. The OpCo Agent acknowledges that the Warehouse Claim and other
obligations and liabilities owing under the Warehouse Documents are, in part,
revolving in nature and that the amount of such revolving obligations which may
be outstanding at any time or from time to time may be increased or reduced and
subsequently reincurred. The terms of the Warehouse Documents may be modified,
extended or amended from time to time, and the amount thereof may be increased
or reduced, all without notice to or consent by the OpCo Agent and without
affecting the provisions of this Agreement. Without in any way limiting the
foregoing, the OpCo Agent hereby agrees that the maximum amount of Warehouse
Claim and other obligations and liabilities owing under the Warehouse Documents
may be increased at any time and from time to time to any amount.
2.17. Further Assurances; Adding Parties. Each of the parties agrees to
take such actions as may be reasonably requested by any other party, whether
before, during or after a Enforcement, in order to effect the rules of
distribution and allocation set forth above in this Article 2 and to otherwise
effectuate the agreements made in this Article. In addition, in the event any
Originator other than ALS is added to the Sale Agreement, the Warehouse Agent
agrees to require such new Originator to become a party hereto prior to or
simultaneously with its addition to the Sale Agreement, and in the event any
additional Subsidiaries of the Parent become guarantors under the OpCo Loan
Documents, the OpCo Agent agrees to require such new guarantor to become a party
hereto prior to or simultaneously with its addition to the Guarantee and
Collateral Agreement.
2.18. Non-Petition. To and until the date which is one year and one day
after the later of the date the Warehouse Claim shall have been paid in full and
the Warehouse Documents have been terminated, the OpCo Agent (on behalf of
itself and the OpCo Lenders) agrees that it shall not consent to or vote for the
filing of any petition in bankruptcy for the SPE.
2.19. True Sale. The OpCo Agent, on behalf of the OpCo Lenders, agrees that
it will not seek to challenge the characterization of the transfers of Warehouse
Collateral pursuant to the Sale Agreement as being true sales or other outright
conveyances thereof, and will not seek to substantively consolidate the SPE with
the Parent or any of the Parent's other Subsidiaries.
ARTICLE 3. MISCELLANEOUS
3.1. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including
telecommunications and communication by facsimile copy) and mailed, transmitted
or delivered, as to each party hereto, at its address set forth under its name
on the signature pages hereof or at such other address as shall be designated by
such party in a written notice to the other parties hereto. All such notices and
communications shall be effective upon receipt, or, in the case of notice by
mail, five (5) days after being deposited in the mails, postage prepaid, or in
the case of notice by facsimile copy, when verbal confirmation of receipt is
obtained, in each case addressed as aforesaid.
3.2. Agreement Absolute. Each of the OpCo Lenders and the OpCo Agent shall
be deemed to have entered into the OpCo Loan Documents in express reliance upon
this Agreement. This Agreement shall be and remain absolute and unconditional
under any and all
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circumstances, and no acts or omissions on the part of any party to this
Agreement shall affect or impair the agreement of any party to this Agreement,
unless otherwise agreed to in writing by all of the parties hereto. This
Agreement shall be applicable both before and after the filing of any petition
by or against the Parent or any of its Subsidiaries, Originators or the SPE
under the Bankruptcy Code and all references herein to the Parent or any of its
Subsidiaries, Originators or the SPE shall be deemed to apply to a
debtor-in-possession for such party and all allocations of payments between the
OpCo Agent, the OpCo Lenders, the Warehouse Lenders and the Warehouse Agent
shall, subject to any court order to the contrary, continue to be made after the
filing of such petition on the same basis that the payments were to be applied
prior to the date of the petition.
3.3. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns. The successors and assigns for the Parent and its Subsidiaries shall
include a debtor-in-possession or trustee of or for such party. The successors
and assigns for the OpCo Lenders, the OpCo Agent, the Warehouse Lenders or the
Warehouse Agent, as the case may be, shall include any successor OpCo Lender,
OpCo Agent, Warehouse Lenders or the Warehouse Agent, as the case may be,
appointed under the terms of the OpCo Loan Documents or the Warehouse Documents,
as applicable. Each of the OpCo Agent and the Warehouse Agent agrees not to
transfer any interest it may have in the OpCo Loan Documents or the Warehouse
Documents, as applicable, unless such transferee has been notified of the
existence of this Agreement and has agreed to be bound hereby. In the event that
the financing provided under the OpCo Credit Agreement shall be refinanced,
replaced or refunded, the Parent, ALC, the Originators, the Servicer, the SPE,
the Warehouse Lenders, the OpCo Agent and the Warehouse Agent hereby agree, at
the request of the Warehouse Agent or lenders under the credit facility that so
refinances, replaces or refunds the financing under the OpCo Credit Agreement,
to execute and deliver a new intercreditor agreement with such agent and/or
lenders on substantially the same terms as herein provided. In the event that
the financing provided under the Warehouse Documents shall be refinanced,
replaced or refunded, the OpCo Agent hereby agrees, at the request of the agent
or Warehouse Lenders under the facility that so refinances, replaces or refunds
the financing under the Warehouse Documents, to execute and deliver a new
intercreditor agreement with such agent and/or Warehouse Lender on substantially
the same terms as herein provided.
3.4. Beneficiaries. The terms and provisions of this Agreement shall be for
the sole benefit of the parties hereto and their respective successors and
assigns, and no other Person shall have any right, benefit, or priority by
reason of this Agreement.
3.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES) OF THE
STATE OF NEW YORK.
3.6. Waiver of Jury Trial. Each of the parties hereto hereby waives its
respective rights to a jury trial of any action or proceeding arising out of or
relating to this Agreement. This waiver is irrevocable and may not be modified
either orally or in writing (other than by a mutual written waiver specifically
referencing this section executed by all of the parties hereto).
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3.7. Section Titles. The article and section headings contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
3.8. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
3.9. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same agreement.
[signature pages follow]
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IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as OpCo Agent
By:_______________________________________________________
Name:_____________________________________________________
Title: Its Duly Authorized Signatory
Address:
500 West Monroe
Suite 1700
Chicago, Illinois 60661
Attention: Chad Blakeman
Telecopy: (312) 463-2273
[Signature Page to Intercreditor Agreement]
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LEHMAN COMMERCIAL PAPER INC.,
as Warehouse Agent
By:_______________________________________________________
Name:_____________________________________________________
Title:
Address:
745 Seventh Avenue, 19th Floor
New York, New York 10019
Attention: Frank Turner
Telecopy: (212) 526-1463
Telephone: (646) 758-1986
[Signature Page to Intercreditor Agreement]
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By its respective signature below: (i) each of the undersigned agrees that, upon
receipt of an Enforcement Notice, it will be bound by the provisions of Section
2.1 with the same force and effect as if it were a direct signatory hereto, (ii)
each of the Parent, ALC and the Originators agrees to be bound by the provisions
of the second sentence of Section 2.17 of this Agreement with the same force and
effect as if it were a direct signatory hereto, (iii) so long as Parent or any
of its Subsidiaries is acting as the Servicer, each of the undersigned agrees
that it will prepare, or cause the Servicer to prepare, the monthly reports
required under Section 2.6 upon request of the Warehouse Agent or the OpCo
Agent, and (iv) from and after delivery by the OpCo Agent of notice of an OpCo
Event of Default pursuant to Section 2.6, each of the Parent, ALC and the
Originators will establish one or more OpCo Lockbox Accounts in the name of ALS
but subject to a first priority perfected security interest in favor of the OpCo
Agent into which only the proceeds of OpCo Collateral and Dispositions thereof
are deposited.
ALLIANCE LAUNDRY HOLDINGS LLC
By: ______________________________________
Name:
Title:
ALLIANCE LAUNDRY SYSTEMS LLC
By: ______________________________________
Name:
Title:
ALLIANCE LAUNDRY CORPORATION
By: ______________________________________
Name:
Title:
ALLIANCE LAUNDRY RECEIVABLES WAREHOUSE LLC
By: ______________________________________
Name:
Title:
[Signature Page to Intercreditor Agreement]
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