Exhibit 4.16
INTERCREDITOR AGREEMENT
This Intercreditor Agreement dated as of May 15, 2001 (as such
Intercreditor Agreement may from time to time be amended, modified, or restated,
this "Intercreditor Agreement") is by and among Bank of America, National
Association, as Administrative Agent (the "US Agent") under the Amended and
Restated Multicurrency Credit Agreement, dated as of May 15, 2001, among APW
Ltd. (the "US Borrower"), various financial institutions (the "US Banks"), Bank
One, NA as Syndication Agent and the US Agent (as such Multicurrency Credit
Agreement may from time to time be amended, modified, restated or refinanced,
the "US Credit Agreement"); Bank of America, National Association as Security
Trustee in the United Kingdom (the "US Security Trustee") under the Debenture,
dated as of May 15, 2001 ("US Debenture"), among the companies set forth on
Schedule I attached thereto and Bank of America, N.A. as Security Trustee; the
US Banks (via the execution and delivery of this Intercreditor Agreement by the
Required Banks (as such term is defined in the US Credit Agreement)); Royal Bank
of Scotland, PLC, as agent ("UK Agent") for itself and National Westminster
Bank, PLC ("National Westminster"); Royal Bank of Scotland, PLC as Security
Trustee (the "UK Security Trustee") under the Debenture, dated as of May 15,
2001 ("UK Debenture"), among the companies set forth on Schedule I attached
thereto and Royal Bank of Scotland, PLC as Security Trustee; and Royal Bank of
Scotland, PLC and National Westminster (collectively, the "UK Banks").
WITNESSETH:
WHEREAS, pursuant to the terms of the US Credit Agreement, the US Banks
have extended, and may in the future extend credit to the US Borrower;
WHEREAS, the Obligations, as defined in the US Credit Agreement, have been,
and will be, supported by certain Guaranties and secured by certain collateral
(such Obligations (including, without limitation any interest or fees accruing
or professional fees and expenses incurred after the commencement of any
Insolvency Proceeding (as such term is defined herein), together with any
additional obligations (including for any such post-Insolvency Proceeding
interest/fees and professional fees and expenses) of the guarantors under such
Guarantees, the "US Obligations");
WHEREAS, APW Enclosure Products and Systems Limited, its subsidiaries and
affiliates, and Vero group PLC, its subsidiaries and affiliates (collectively
"UK Borrowers") have severally entered into various credit facilities with the
UK Banks, including (1) Revolving Credit Facilities, as amended and restated
dated as of May 15, 2001, with Royal Bank of Scotland, PLC; (2) Counter-
Indemnity Agreement, as amended and restated dated as of May 15, 2001, with
National Westminster and (3) a Multiline Facility Agreement, as amended and
restated dated as of May 15, 2001, with National Westminster (collectively, the
"UK Credit Agreement") pursuant to which the UK Banks agreed to extend financial
accommodations including loans, bills, bonding facilities, indemnifications and
related credit facilities for the account of the UK Borrowers as set forth
therein and in any specific loan note guarantees.
WHEREAS, the obligations of the UK Borrowers under the UK Credit Agreement
have been, and will be, supported by certain Guaranties and secured by certain
collateral (such obligations (including, without limitation, any interest or
fees accruing or professional fees and expenses incurred after the commencement
of any Insolvency Proceeding (as such term is defined herein)), together with
any additional obligations (including for any such post-Insolvency Proceeding
interest/fees and professional fees and expenses) of the guarantors under such
guarantees, the "UK Obligations");
WHEREAS, subject to the provisions hereof, the parties intend that such
collateral shall secure both the US Obligations and the UK Obligations, and the
US Banks and the UK Banks wish to provide for sharing the proceeds of such
collateral and to address other intercreditor matters;
NOW, THEREFORE, in consideration of the mutual covenants herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Definitions.
-----------
For the purposes of this Agreement, the following terms shall have the
meanings specified with respect thereto below. Any plural term that is used
herein in the singular shall be taken to mean each entity or item of the defined
class and any singular term that is used herein in the plural shall be taken to
mean all of the entities or items of the defined class, collectively.
"Advance Share" means at any time (a) as to any US Bank a fraction, the
numerator of which its unused US Commitment and the denominator of which is the
sum of the US Commitments and the UK Commitments and (b) as to any UK Bank a
fraction, the numerator of which is its unused UK Commitment and the denominator
of which the sum of the US Commitments and the UK Commitments.
"Affected Party" shall have the meaning set forth in Section 16 hereof.
"Agent" shall mean the US Agent or the UK Agent, as appropriate.
"Agreement Currency" shall have the meaning set forth in Section 25
hereof.
"APW Electronics Ltd. Collateral" shall have the meaning set forth in
Section 33 hereof.
"Bankruptcy Code" shall mean title 11 of the United States Code (11
U.S.C. ss. 101 et seq.), as amended from time to time and any successor statute.
"Business Day" means a day other than a day on which commercial banks are
authorized or required to close in London, New York, Charlotte, Dallas, San
Francisco, or Chicago.
2
"Collateral" shall mean all property and assets, and interests in property
and assets, upon or in which any Loan Party has granted a perfected lien or
security interest to the US Security Trustee, the US Agent, the US Banks, the UK
Security Trustee, the UK Banks or the UK Agent to secure US Obligation and/or
the UK Obligations, including, without limitation, all balances held by the US
Security Trustee, the US Security Trustee, the US Agent, the UK Agent, or any
Senior Lender for the account of any Loan Party or any other property held or
owing by the Security Trustee, or any Senior Lender to or for the credit or for
the account of any Loan Party with respect to which the US Security Trustee, the
UK Security Trustee, the US Agent, the UK Agent or any Senior Lender has rights
to setoff or appropriate or a common law lien or any other lien arising by
operation of laws.
"Collateral Agent Expenses" shall mean, without limitation, all costs and
expenses incurred by the US Agent, the UK Agent, the US Security Trustee and/or
the UK Security Trustee in connection with the performance of its duties under
this Agreement and/or any other Collateral Documents, including the realization
upon or protection of the Collateral or enforcing or defending any lien upon or
security interest in the Collateral or any other action taken in accordance with
the provisions of this Agreement and the Collateral Documents, expenses incurred
for legal counsel in connection with the foregoing, and any other costs,
expenses, liabilities, claims, damages, penalties, losses and actions for which
any Agent or Security Trustee is entitled to be reimbursed or indemnified by a
Loan Party pursuant to this Agreement or the Collateral Documents or by the
Senior Lenders pursuant to this Agreement.
"Collateral Documents" shall mean documents listed in the attached Schedule
1, any other agreement, document or instrument in effect on the date hereof or
executed by any Loan Party after the date hereof under which such Loan Party has
granted a lien upon or security interest in any property or assets to the US
Security Trustee, US Agent, the US Banks, the UK Security Trustee, the UK Banks
and/or the UK Agent to secure all or any part of the US Obligations and/or the
UK Obligations, and all financing statements, certificates, documents and
instruments relating thereto or executed or provided in connection therewith,
each as amended, restated, supplemented or otherwise modified from time to time.
"Debenture" shall mean that UK Debenture or the US Debenture, as
appropriate.
"Default" means an "Event of Default" under the US Credit Agreement or any
"Event of Default" under the UK Credit Agreement.
"Defaulted Swap Obligations" shall have the meaning set forth in the
definition of "US Obligations" set forth herein.
"Enforcement" shall mean (a) for any Senior Lender to make demand for
payment prior to the scheduled payment date, if any, of or accelerate the time
for payment of any US Obligation or UK Obligation (and/or terminate any
commitment relating to any US Obligation or UK Obligation), or to call for
funding of or collateral for any Letter of Credit, swap obligation, or loan note
guaranty in an equivalent amount prior to being presented with a draft drawn
3
thereunder (or, in the event the draft is a time draft, prior to its due date),
(b) for any Senior Lender to commence the judicial or non-judicial enforcement
of any rights or remedies under or with respect to the US Credit Agreement, the
UK Credit Agreement, swap obligation, loan note guaranty, or any Collateral
Document or to setoff, freeze or otherwise appropriate any balances held by it
for the account of any Loan Party or any other property at anytime held or owing
by it to or for the credit or for the account of any Loan Party, (c) for the US
Agent, the UK Agent, the US Security Trustee, the UK Security Trustee, any US
Bank or any UK Bank to commence the judicial or non-judicial enforcement of any
rights or remedies under any Collateral Document (other than an action solely
for the purpose of establishing or defending the lien or security interest
intended to be created by such Collateral Document upon or in any Collateral as
against or from claims of third parties on or in such Collateral), to setoff,
freeze or otherwise appropriate any balances held by it for the account of any
Loan Party or any other property at any time held or owing by it to or for the
credit or for the account of any Loan Party or to otherwise take any action to
realize upon the Collateral, or (d) the commencement by, against or with respect
to any Loan Party of any Insolvency Proceeding.
"Guarantor" shall mean the guarantors listed on the attached Schedule 1 and
the guarantors hereafter acknowledging that they are bound by the provisions of
this Intercreditor Agreement, it being contemplated that any affiliates of the
US Borrower or the UK Borrower that subsequently become guarantors of the US
Obligations or the UK Obligations shall execute and deliver an acknowledgment
substantially in the form attached hereto contemporaneously upon becoming such a
guarantor.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership (including for the appointment of a
receiver), dissolution, winding-up, administration, voluntary arrangement or
relief of debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; undertaken under U.S. Federal (including the Bankruptcy Code), or any
similar or equivalent proceedings in any relevant jurisdiction, state or foreign
law, or any similar or equivalent proceedings in any relevant jurisdiction.
"Insolvency Proceeding Commencement" shall have the meaning set forth in
Section 11 hereof and shall include, without limitation, the commencement of any
voluntary or involuntary Insolvency Proceeding.
"Intercreditor Agreement" shall have the meaning set forth in the preamble.
"Judgment Currency" shall have the meaning set forth in Section 25
hereof.
"Loan" shall mean a loan under either the US Credit Agreement or the UK
Credit Agreement.
"Loan Parties" shall mean the US Borrower, the UK Borrowers and the
Guarantors.
4
"Majority Creditors" shall mean US Banks and UK Banks having at least 51%
of the sum of the US Commitments (or if the US Commitments have terminated, the
principal (including letter of credit usage) amount of the outstanding US
Obligations) and UK Commitments (or if the UK Commitments have terminated, the
principal amount of the outstanding UK Obligations).
"National Westminster" shall have the meaning set forth in the preamble.
"Net Proceeds" shall mean any and all proceeds of any Shared Collateral
(including, without limitation, any proceeds realized from any collection, sale
or other disposition of any Shared Collateral or from any set-off, deduction or
counterclaim) remaining after payment in full of any security interests or liens
of any other Person that are senior in priority to the security interests and
liens of the US Agent, the UK Agent, the US Security Trustee, and/or the UK
Security Trustee in, to, and/or on any such Shared Collateral.
"No Lien in APW Electronics Ltd. Collateral Determination" shall have the
meaning set forth in Section 33 hereof.
"Non-Affected Party" shall have the meaning set forth in Section 16 hereof.
"Non-Shared Collateral" means Collateral other than the Shared Collateral.
"Person" means any natural person, corporation, partnership, trust, limited
liability company, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity, whether acting in an individual, fiduciary or other capacity.
"Pro Rata Share" means at any time (a) as to any US Bank, a fraction the
numerator of which is the principal amount of US Obligations payable to it and
the denominator of which is the sum of the principal amount of the US
Obligations and the UK Obligations and (b) as to any UK Bank, a fraction the
numerator of which is the principal amount of the UK Obligations payable to it
and the denominator of which the sum of the principal amount of the US
Obligations and the UK Obligations.
"Returned Amount" shall have the meaning set forth in Section 16 hereof.
"Security Trustee" shall mean the UK Security Trustee or the US Security
Trustee, as appropriate.
"Senior Lenders" mean the US Agent, the UK Agent, US Banks and UK
Banks.
"Shared Collateral" shall mean any Collateral in which both (a) the US
Agent and the US Banks and (b) the UK Agent and the UK Banks have a perfected
and non-avoidable security interest or lien and shall include, without
limitation, all balances held by the US Security Trustee or the UK Security
Trustee, any US Bank or any UK Bank constituting Collateral or proceeds of
5
Collateral in which both (a) the US Agent and the US Banks and (b) the UK Agent
and the UK Banks have a perfected and non-avoidable security interest or lien;
provided, however, this term shall nonetheless include the APW Electronics Ltd.
Collateral even if the UK Lender Group has perfected and non-avoidable security
interests and liens in and to such Collateral, but the US Lender Group should
not have such perfected and non-avoidable security interests and liens therein.
"Substitute US Security Trustee" shall have the meaning as set forth in
Section 32 hereof.
"UK Agent" shall have the meaning set forth in the preamble.
"UK Banks" shall have the meaning set forth in the preamble.
"UK Borrowers" shall have the meaning set forth in the recitals.
"UK Commitment" shall mean the aggregate commitments of the UK Banks under
the UK Facility.
"UK Credit Agreement" shall have the meaning set forth in the preamble.
"UK Debenture" shall have the meaning set forth in the preamble.
"UK Facility" shall have the meaning set forth in the US Credit
Agreement.
"UK Lender Group" shall mean the UK Agent, the UK Security Trustee and
the UK Banks.
"UK Obligations" shall have the meaning set forth in the recitals.
"UK Security Trustee" shall have the meaning set forth in the preamble.
"US Agent" shall have the meaning set forth in the preamble.
"US Banks" shall have the meaning set forth in the preamble.
"US Borrower" shall have the meaning set forth in the preamble.
"US Commitments" shall mean the aggregate commitments of the US Banks under
the US Credit Agreement.
"US Credit Agreement" shall have the meaning set forth in the preamble.
"US Debenture" shall have the meaning set forth in the preamble.
6
"US Lender Group" shall mean the US Agent, the US Security Trustee and the
US Banks.
"US Obligations" shall have the meaning set forth in the recitals;
provided, however, that in the event that any of the swap obligations under
existing swap agreements with Bank of America, N.A., First Union Securities, or
Fleet National Bank at the time of any distribution under this Intercreditor
Agreement are in default (the "Defaulted Swap Obligations"), the term "US
Obligations" shall include, for the purposes of any such distribution, any and
all amounts then owing under the pertinent swap documents to Bank of America,
N.A., First Union Securities, or Fleet National Bank, as the case may be;
provided, further, however, that the voting percentages of any such swap banks
shall remain as they then exist under the US Credit Agreement with respect to
any non-swap obligations and shall not include the amount of the Defaulted Swap
Obligations or otherwise be altered to reflect such swap exposure for the
purposes of voting on any matter under this Intercreditor Agreement or the US
Credit Agreement.
"US Security Trustee" shall have the meaning set forth in the preamble.
2. Principal Payments. Subject to Sections 5 and 33 hereof, all
payments of principal (including, without limitation, Letter of Credit Usage as
defined in the US Credit Agreement) by the US Borrower, the UK Borrower and the
Guarantors, whether before or after a Default or Insolvency Proceeding with
respect to any Loan Party, shall be applied to the US Obligations and the UK
Obligations based on their respective Pro Rata Shares, with the amount so
allocable to the US Obligations being paid to the US Agent for distribution to
the US Agent and the US Banks in accordance with the provisions of the US Credit
Agreement and the amount so allocable to the UK Obligations being paid to the UK
Agent for distribution to the UK Agent and the UK Banks in accordance with the
provisions of the UK Credit Agreement. Schedule 2 hereto sets forth a breakdown
of the US Obligations and the UK Obligations, each as of the original date of
this Intercreditor Agreement.
3. Collateral Proceeds. Notwithstanding any Default, Insolvency
Proceeding or sale or other disposition of Shared Collateral (including, without
limitation, but subject to the provisions of Section 33 hereof, any disposition
of Shared Collateral as a result of any Enforcement), any Net Proceeds of Shared
Collateral shall be allocated among the parties as follows:
(a) first, to the US Agent, the UK Agent, the US Security
Trustee and/or the UK Security Trustee, as the case may be, until all
then outstanding Collateral Agent Expenses have been paid in full;
(b) second, to the extent of any surplus, to the US Agent (for
distribution to the US Banks in accordance with the provisions of the
US Credit Agreement) or the UK Agent (for distribution to the UK Banks
in accordance with the UK Credit Agreement)
7
until any net amount then owing to such Agent pursuant to Section 5
hereof until such amount is paid in full;
(c) third, to the extent of any surplus, to the US Obligations and
the UK Obligations based on their Pro Rata Shares until the US Obligations
and the UK Obligations have been paid in full, with the amounts allocable
to the US Obligations being paid to the US Agent for distribution to the US
Agent and the US Banks in accordance with the provisions of the US
Agreement and the amounts allocable to the UK Obligations being paid to the
UK Agent for distribution to the UK Agent and the UK Banks in accordance
with the provisions of the UK Credit Agreement; and
(d) finally, to the extent of any surplus, to the US Borrower either
for retention (if it shall be the rightful owner of any such surplus) or to
be held in trust for distribution to the Loan Party that is the rightful
owner of any portion of any such surplus, as the case may be.
4. Commitment Reductions. Subject to Section 33 hereof, any commitment
reductions shall be applied to the UK Commitments and the US Commitments based
on the Pro Rata Shares.
5. Monthly Payments. Notwithstanding the foregoing, prior to any notice
from either the US Agent to the UK Agent or the UK Agent to the US Agent after a
Default or an Insolvency Proceeding with regard to any Loan Party, payment may
be made to the US Banks and the UK Banks, not in the proportions set forth above
in Section 2 hereof; provided, that as of the end of each calendar month,
payments shall be made by the applicable Loan Party to cause the payments
received in such month to be in such proportion as of the end of such month. In
the event that the applicable Loan Party shall fail to make any such payments,
the provisions of Section 14 hereof shall be deemed to be operative.
6. Advances. If at any time the outstanding UK Obligations are less
than the UK Commitments and the principal amount (including letter of credit
usage) of the US Obligations are less than the US Commitments, any Loans
thereafter borrowed by the US Borrowers and the UK Borrowers shall be borrowed
based on Advance Shares until such time as either the UK Commitments or the US
Commitments are fully utilized.
7. Acknowledgment of Collateral Interest. (a) The US Banks acknowledge
the security interests and liens of the UK Banks in the Collateral and agree not
to take any actions to challenge the validity of such security interests and
liens.
(b) The UK Banks acknowledge the security interests and liens of the US
Banks in the Collateral and agree not to take any actions to challenge the
validity of such security interests and liens.
8. Priorities. The priorities herein specified are applicable
irrespective of the time or order of attachment, or the time or order of
perfection of security interests or the time of filing
8
or recording of financing statements, deeds, deeds of trust or mortgages;
provided, however, that if, through the operation of any bankruptcy,
reorganization, insolvency (including fraudulent conveyance) or other laws or
otherwise, the security interests or liens of or attributable to the obligations
of any party hereto are avoided, rescinded, or otherwise nullified, then the
Collateral with respect to which such avoidance, rescission or other
nullification is applicable (other than the APW Electronics Ltd. Collateral (as
defined below) as it pertains to any priority distributions to be made to the US
Lender Group in respect of such Collateral), by definition, shall not constitute
Shared Collateral and shall not come within the scope of the provisions of this
Intercreditor Agreement relating to Shared Collateral (including, without
limitation, the provisions of Sections 3 and 10 hereof), but instead shall
constitute Non-Shared Collateral for the purposes of this Intercreditor
Agreement.
9. Non-Shared Collateral. Notwithstanding any provisions of Section 2
or 3 to the contrary, any proceeds of Non-Shared Collateral shall be applied to
the payment of the US Obligations or the UK Obligations, whichever are secured
by such Collateral.
10. Release of Shared Collateral. Each of the US Security Trustee and the
UK Security Trustee is authorized and directed to release security interests and
liens in Shared Collateral where expressly permitted by the provisions of both
the US Credit Agreement and the UK Credit Agreement without any further lender
or agent consent and/or upon the direction not of the Majority Creditors, but
instead of the US Banks and the UK Banks having at least 662/3% of the sum of
the US Commitment (or if the US Commitments have terminated, the principal
(including letter of credit usage) amount of the outstanding of US Obligations)
and UK Commitments (or if the UK Commitments have terminated, the principal
(including letter of credit) amount of the outstanding UK Obligations) provided
that the release applies to the interests of both the UK Lender Group and the US
Lender Group in such collateral. The UK Agent, US Agent, the US Security Trustee
and the UK Security Trustee agree to release security interests and liens in
Shared Collateral upon the direction of the US Banks and the UK Banks having at
least 662/3% of the sum of the US Commitments (or if the US Commitments have
terminated, the principal (including letter of credit usage) amount of the
outstanding of US Obligations) and UK Commitments (or if the UK Commitments have
terminated, the principal (including letter of credit) amount of the outstanding
UK Obligations) provided that the release applies to the interests of both the
UK Lender Group and the US Lender Group in such collateral. Consistent with, but
not in limitation of, the foregoing, the Majority Creditors are not empowered by
the provisions of this Intercreditor Agreement to authorize the release of the
interests of only the UK Lender Group in any Shared Collateral.
11. Enforcement. No Enforcement shall be commenced by the US Security
Trustee, the UK Security Trustee, the US Agent, the UK Agent, or any Senior
Lender, except with the consent of the Majority Creditors; provided, however,
that an Enforcement Action consisting of the acceleration of the pertinent
obligations (and/or any concomitant termination of commitments) may occur
pursuant to the provisions of the pertinent credit agreement without the vote of
the Majority Creditors on the occurrence of a payment default or the
commencement of any Insolvency Proceeding involving one or more of the Loan
Parties as debtor(s) ("Insolvency
9
Proceeding Commencement"). Consistent with, but not in limitation of, the
foregoing, absent any such payment default or Insolvency Proceeding Commencement
(in the case of any Enforcement consisting of any unilateral acceleration and
termination of commitments) or any such Majority Creditors-sanctioned
Enforcement, there shall be a moratorium on enforcement of remedies by the UK
Lender Group and the US Lender Group against any Loan, which moratorium shall
automatically terminate under and to the extent dictated by the circumstances
specified in the first sentence of this Section 11. The US Security Trustee, the
UK Security Trustee, the US Agent, and any Senior Lender shall undertake any
Enforcement to which the Majority Creditors shall have consented, subject to any
indemnity and similar rights (including, without limitation, exculpation rights)
provided to and in favor of the US Security Trustee, UK Security Trustee, the US
Agent, the UK Agent and/or other Senior Lender under any other pertinent
agreement or document. Without limiting the generality of the foregoing, the
indemnity and similar rights of the US Agent and the US Security Trustee are set
forth in Section 9 of the US Credit Agreement.
12. Letters of Credit and Loan Note Guaranties. To the extent a payment
is made hereunder of Net Proceeds of Shared Collateral in respect of US
Obligations, with respect to undrawn letters of credit or UK Obligations with
respect to undrawn loan note guaranties, such payments may be retained and held
as collateral by the US Security Trustee, the UK Security Trustee, US Agent to
UK Agent, as applicable, to be applied to letters of credit, or loan note
guaranties, as drawn. To the extent such letters of credit, or loan note
guaranties shall expire undrawn (or drawn in amounts less than such collateral),
the collateral shall be released and deemed received under this Intercreditor
Agreement at the time of such release to be applied as set forth in this
Intercreditor Agreement.
13. Trust. Any payments received by the US Security Trustee, the UK
Security Trustee, the US Agent, the UK Agent, the US Banks or the UK Banks
contrary to the provisions of this Intercreditor Agreement shall be held by the
recipient in trust and paid to the party entitled thereto under this
Intercreditor Agreement.
14. Sharing of Payments. If, other than as expressly provided elsewhere
herein, and subject to any scheduled mandatory reductions under the UK Credit
Agreement or the US Credit Agreement (provided that the corresponding scheduled
mandatory payment(s) has or have been made to the other bank group), any Senior
Lender shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of the share to which
it is entitled under this Intercreditor Agreement, such Senior Lender shall
immediately (a) notify the US Agent and the UK Agent of such fact, and (b)
purchase from the other Senior Lenders such participations in the US Obligations
and UK Obligations as shall be necessary to cause such purchasing Senior Lender
to share the excess payment pro rata with each of them; provided, however, that
if all or any portion of such excess payment is thereafter recovered from the
purchasing Senior Lender, such purchase shall to that extent be rescinded and
each other Senior Lender shall repay to the purchasing Senior Lender the
purchase price paid therefor, together with an amount equal to such paying
Senior Lender's ratable share (according to the proportion of (i) the amount of
such paying Senior Lender's required repayment to (ii) the total
10
amount so recovered from the purchasing Senior Lender) of any interest or other
amount paid or payable by the purchasing Senior Lender in respect of the total
amount so recovered. Each Loan Party agrees any Senior Lender so purchasing a
participation from another Senior Lender may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off), with
respect to such participation as fully as if such Senior Lender were the direct
creditor of the applicable Loan Party in the amount of such participation. The
US Agent and the UK Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section 14 and will in each case notify the Senior Lenders following any such
purchases or repayments. Where the reduction in the US Commitments has occurred
as required pursuant to the US Credit Agreement, the purchase mechanism set
forth in this Section 14 shall also apply where a revolving facility has not
been fully utilized to its then current level of commitment at the time of any
Enforcement. Notwithstanding anything to the contrary in this Section 14, the
participation purchases contemplated hereby shall occur no frequently than (i)
every six months prior to the commencement and continuation of any Enforcement
and (ii) every month during the continuation of any Enforcement.
15. Insolvency Proceedings.
(a) Until the US Obligations and the UK Obligations shall have been paid
in full, any distribution of any kind made in any Insolvency Proceeding of a
Loan Party on account of the Shared Collateral shall be allocated and
distributed in accordance with the provisions of Section 3 hereof (or Section 33
hereof, if that latter provision instead should be applicable) and in the event,
for whatever reason, such a distribution does not occur, the party receiving any
portion of a distribution made in violation of Section 3 hereof (or Section 33
hereof, if that latter provision instead should be applicable) shall hold such
position in trust consistent with the provisions of Section 13 hereof and shall
promptly deliver such portion to the party that should have instead received it
pursuant to Section 3 hereof (or Section 33 hereof, if that latter provision
instead should be applicable) to then be further distributed by such party as
provided in Section 3 hereof (or Section 33 hereof, if that latter provision
should be applicable). Without limiting the generality of Section 3 hereof (or
Section 33 hereof, if that latter provision instead should be applicable) or of
any other provision of this Intercreditor Agreement, if, in any Insolvency
Proceeding of any Loan Party, a party hereto obtains a cash or other payment in
connection with any asserted or determined impairment to its interest in any of
the Shared Collateral or otherwise as a form of "adequate protection" of its
interest in any of the Shared Collateral, such payment shall be deemed, for
purposes of this Intercreditor Agreement, to be Net Proceeds of Shared
Collateral and such party shall thereupon redistribute such payment in
accordance with the priority of payment set forth in Section 3 hereof (or
Section 33 hereof, if that latter provision instead should be applicable).
(b) Each party may file in any Insolvency Proceeding of any Loan Party
proofs of claim and other motions and pleadings with respect to its claims and
liens and security interests, if and only if consistent with the terms hereof
and the limitations of such party imposed hereby. Consistent with, but not in
limitation of, the foregoing, each party expressly reserves: (i) its right to
vote in any Insolvency Proceeding of any Loan Party; (ii) any and all of its
claims or defenses
11
in favor of or in opposition to any plan of reorganization proposed for any Loan
Party in an Insolvency Proceeding; and (iii) any and all of its claims, rights,
powers and/or remedies under any law governing the Loan Party that any other
creditor with security interests and liens in the assets of the Loan Party would
have; provided, however, each party expressly agrees that it shall exercise all
of such claims, rights, powers, and or remedies in a manner that is consistent
with the provisions of this Intercreditor Agreement and that it shall not
exercise (and it shall be expressly prohibited from exercising) any such claims,
rights (including, without limitation, any right to vote its claim to accept or
reject any plan of reorganization for any Loan Party), powers, and/or remedies
in a manner that is intended to deprive or that has the likely effect of
depriving other parties of the benefits of this Intercreditor Agreement (and any
such exercise shall be deemed to be null and void). Each party shall have the
right to enforce the provisions of this Intercreditor Agreement (including the
provisions of this Section 15(b)) in an Insolvency Proceeding of any Loan Party.
Without limiting the generality of the foregoing, no party shall have the right
to waive or fail to assert its claims or to support a plan of reorganization
that provides for a priority of distribution that is inconsistent with the
provisions of Section 3 hereof (or Section 33 hereof, if that latter provision
instead should be applicable) in an Insolvency Proceeding of any Loan Party and
in the event that US Agent reasonably determines that any member of the UK
Lender Group, or that the UK Agent reasonably determines that any member of the
US Lender Group, may be on the verge of doing so in any Insolvency Proceeding of
any Loan Party, the US Agent or the UK Agent (as the case may be) shall be
deemed to be the assignee (and thus the holder) of such claim and shall have the
right to assert and vote (including pursuant to a deemed power of attorney) such
claim in the Insolvency Proceeding of any Loan Party, including through the
filing of a proof of claim therein and/or casting ballots in connection with any
proposed plan of reorganization for any Loan Party.
(c) Each party hereto agrees that this Intercreditor Agreement shall be
enforceable against it before, during, and after any Insolvency Proceeding for
any Loan Party. All references to any Loan Party shall include such Loan Party
as debtor in possession in any Insolvency Proceeding and any receiver, trustee,
or other estate representative for any Loan Party in any Insolvency Proceeding.
Consistent with, but not in limitation of, the foregoing, each party agrees and
acknowledges that this Intercreditor Agreement constitutes a "subordination
agreement" within the meaning of both Illinois law and Section 510(a) of the
Bankruptcy Code.
16. Invalidated Payments. If any party (the "Affected Party") remits
proceeds of Collateral pursuant to this Intercreditor Agreement to another party
(the "Non-Affected Party"), and any portion of the amount paid by the Affected
Party to the Non-Affected Party (such portion being the "Returned Amount") is
subsequently required to be returned or repaid by the Affected Party as
determined by a court of competent jurisdiction because it was prohibited by
applicable law, voidable under any insolvency law (including the Bankruptcy
Code) or in violation of the rights of any other creditor of any Loan Party when
made, then the Non-Affected Party shall forthwith upon its receipt of a notice
thereof from the Affected Party, pay the Affected Party an amount equal to the
Returned Amount together with all interest thereon required to be paid by the
Affected Party in connection with the return or repayment of the Returned
Amount. The US Obligations and/or the UK Obligations, as appropriate,
12
automatically shall be reinstated for the purposes of this Intercreditor
Agreement to the extent of the Returned Amount.
17. Continuing Agreement. This is a continuing agreement and is
applicable to all of the Collateral, whether now owned or hereafter acquired,
until the US Obligations and the UK Obligations shall have been paid in full.
18. Grant of Security Interest. If any Loan Party grants a lien or
security interest in the Collateral to the US Agent or the UK Agent, such grant
shall not constitute a default or breach of warranty under any instrument or
agreement with the UK Banks or the US Banks, notwithstanding any provision of
any such instrument or agreement to the contrary.
19. The US Agent. The US Banks acknowledge (or shall be deemed to have
acknowledged as a result of the execution and delivery of this Intercreditor
Agreement by the Required Banks (as such term is defined in the US Credit
Agreement)): (a) that the US Agent is authorized to execute and deliver this
Intercreditor Agreement and (b) that the provisions of Section 9 of the US
Credit Agreement (including, without limitation, Sections 9.3 and 9.7 of the US
Credit Agreement) are applicable to this Intercreditor Agreement in every
respect. Consistent with, but not in limitation of, the foregoing, each US Bank
agrees (or shall be deemed to have agreed as a result of the execution and
delivery of this Intercreditor Agreement by the Required Banks (as such term is
defined in the US Credit Agreement)) that the provisions of Section 9 of the US
Credit Agreement apply to the US Agent's execution, delivery and other
participation in this Intercreditor Agreement and the transactions contemplated
thereby, and the US Agent shall have the full benefit thereof, as if all of
Section 9 of the US Credit Agreement were set forth and restated herein.
20. Conflicts Among Agreements/No Impairment of Obligations. This
Intercreditor Agreement shall control in the event of a conflict with the US
Credit Agreement, the UK Credit Agreement or any Collateral Document. Otherwise,
any such other agreement shall be unaffected by the provisions of this
Intercreditor Agreement, and the UK Lender Group shall not be or constitute
general third party beneficiaries of the US Credit Agreement (and related
documents) and the US Lender Group shall not be or constitute general third
party beneficiaries of the UK Credit Agreement (and related documents).
Specifically, the US Lender Group, on the one hand, and the UK Lender Group, on
the other hand, will be entitled to manage and supervise its respective credit
transactions and relationships with the Loan Parties in accordance with the
provisions of its documents and applicable law and as they otherwise determine
to be appropriate, all without regard to the provisions of the other's
agreements with the Loan Parties, subject, however, in all cases to the terms
and conditions of this Intercreditor Agreement. Consistent with, but not in
limitation of the preceding two sentences, nothing contained in this
Intercreditor Agreement shall impair, as between any Loan Party, on the one
hand, and any of the Senior Lenders, on the other hand, the obligation of any
Loan Party to make any payments of principal of, and interest on, the US
Obligations or the UK Obligations, as the case may be, pursuant to the
provisions of the pertinent agreement (as expressly limited hereby).
13
21. Reliance. The US Credit Agreement, the UK Credit Agreement, and the
Collateral Documents shall be deemed to be executed and delivered in reliance
upon this Intercreditor Agreement. Each party expressly waives all notice of the
acceptance of and reliance on this Intercreditor Agreement by any of the other
parties.
22. No Warranties or Liability. The UK Lender Group, on the one hand, and
the US Lender Group, on the other hand, acknowledge and agree that neither of
them has made any representation or warranty to the other, including, without
limitation, any representation or warranty with respect to: (a) the validity,
legality, completeness, collectability, or enforceability of the US Credit
Agreement, the UK Credit Agreement, and/or the Collateral Documents, (b) the
attachment, validity, legality, perfection, priority, completeness, or
enforceability of any security interest or lien in, to, and/or on any of the
Collateral, and/or (c) the sufficiency or the value, fair market or otherwise,
of any of the Collateral.
23. Intercreditor Agreement Creates No Fiduciary Relationship; No
Liability of US Agent. This Intercreditor Agreement shall not create any
fiduciary relationship among the parties except solely to the extent of the
funds to be held in trust pursuant to Section 13 hereof. Each of the US Security
Trustee and the US Agent and its respective officers, directors, employees, and
agents shall not be responsible, directly or indirectly, to any of the UK Lender
Group for any action taken or omitted to be taken hereunder or otherwise, nor
shall they be liable or responsible for any loss, cost, or expense incurred by
any of the UK Lender Group, except solely for any such loss, cost or expense
caused by the gross negligence or willful misconduct of the US Agent or the US
Security Trustee. The UK Security Trustee and the UK Agent and its officers,
directors, employees and agents shall not be responsible, directly or
indirectly, to any of the US Lender Group, for any action taken or omitted to be
taken hereunder or otherwise, nor shall they be liable or responsible for any
loss, cost or expense incurred by any of the US Lender Group, except solely for
any such loss, cost, or expense caused by the gross negligence or willful
misconduct of the UK Security Trustee or the UK Agent.
24. Calculations. For the purpose of calculating Pro Rata Share or
Advance Share, all obligations or commitments shall be stated in U.S. dollars.
Any such obligations or commitments not stated in U.S. dollars shall be
converted to U.S. dollars at the rate of exchange that the US Agent could in
accordance with normal banking procedures purchase US dollars with such currency
on the preceding Business Day. For the purposes of allocations pursuant to
Sections 3 and 33 hereof, exchange rates shall be determined as of the date of
each allocation and distribution of such Net Proceeds of Shared Collateral.
25. Judgment. If, for the purposes of obtaining judgment in any court, it
is necessary to convert a sum due hereunder in one currency into another
currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the US Agent could purchase the first currency with
such other currency on the Business Day preceding that on which final judgment
is given. The obligation of any party in respect of any such sum due from it
hereunder shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in accordance with
the applicable provisions of
14
this Intercreditor Agreement (the "Agreement Currency"), be discharged only to
the extent that on the Business Day following receipt by the applicable party of
any sum adjudged to be so due in the Judgment Currency, the US Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the applicable party in the Agreement
Currency, the parties agree, as a separate obligation and notwithstanding any
such judgment, to indemnify the US Agent or the Person to whom such obligation
was owing against such loss.
26. Assigns. Subject to any limitation on assignment set forth in the US
Credit Agreement or the UK Credit Agreement (as the case may be), the terms and
provisions of this Intercreditor Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors and assigns.
27. Severability. Any provision of this Intercreditor 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
28. Amendment and Waivers. No amendment of any provision of this
Intercreditor Agreement shall be effective unless the same shall be in writing
and signed by the UK Banks and the US Banks (via the consent of the Required
Banks (as such term is defined in the US Credit Agreement)). No waiver of any
provision of this Intercreditor Agreement, and no consent with respect to any
departure by any Loan Party therefrom, shall be effective unless the same shall
be in writing and signed by the UK Banks and the US Banks (via the consent of
the Required Banks (as such term is defined in the US Credit Agreement)) or if
such waiver or consent relates to the rights, the benefit and interest of only
the UK Lender Group or the US Lender Group, as the case may be, then such waiver
or consent shall not be effective unless the same shall be in writing and signed
by the party sought to be bound thereby. Moreover, in each and every instance,
any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
29. No Prejudice/No Implicit Waiver. No party to this Intercreditor
Agreement shall be prejudiced in its rights under this Intercreditor Agreement
by any act or failure to act of any party hereto or any noncompliance by any
party hereto with any agreement or obligation, regardless of any knowledge
thereof which such party may have or with which such party may be charged; and
no action of any party hereto permitted hereunder shall in any way affect or
impair the respective rights and obligations of any party under this
Intercreditor Agreement. No delay on the part of any party hereto in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by any party hereto of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
30. No Third Party Beneficiaries. This Intercreditor Agreement and the
rights and benefits hereof shall inure to the benefit of the parties hereto and
their successors and assigns,
15
subject to Section 26 hereof, and no other Person (including, without
limitation, any Loan Party, whether as debtor in possession or otherwise in any
Insolvency Proceeding, and any trustee for the estate created by the
commencement of any Insolvency Proceeding) shall have or be entitled to assert
rights or benefits hereunder.
31. Information Concerning Financial Condition of any Loan Party. Each
party hereto hereby assumes responsibility for keeping itself informed of: (a)
the financial condition of any Loan Party (and, to the extent relevant, any of
their affiliates) and (b) all other circumstances bearing upon the risk of
nonpayment of the obligations owing to such party. The UK Lender Group and the
US Lender Group agree that neither of them shall have any duty to advise the
other group (or any of its members) of any information known to it (or any of
its members) regarding such condition or circumstances. In the event either the
UK Lender Group (or any of its members) or the US Lender Group (or any of its
members), in its sole discretion, undertakes at any time or from time to time to
provide any such information to the other group (or any of its members), it
shall be under no obligation (a) to provide any such information to such other
group (or any of its members) or any other party on any subsequent occasion, (b)
to undertake any investigation, or (c) to disclose any information which,
pursuant to accepted or reasonable commercial finance practices, such party
wishes to maintain confidential.
32. Replacement of US Security Trustee. If (a) any Loan Party becomes a
debtor in a voluntary or involuntary case under the Bankruptcy Code or any of
the US Lender Group otherwise becomes subject to any type of restraining order
or injunction, whether temporary or permanent, limiting the exercise of any
creditor remedies against any Loan Party and (b) as a result of the pendency of
any such Bankruptcy Code proceeding or any such order or injunction (including,
without limitation, any order or injunction entered by any bankruptcy court in
any Bankruptcy Code proceeding), the US Security Trustee refuses to proceed with
any Enforcement that has been authorized pursuant to the provisions of this
Intercreditor Agreement, the UK Banks shall be entitled to appoint a substitute
US Security Trustee ("Substitute US Security Trustee") in such a circumstance,
but if and only if the following conditions shall have been satisfied to the
reasonable satisfaction of the US Agent: (i) the UK Banks shall have provided a
reasoned opinion from a substantial US law firm with a nationally recognized
bankruptcy practice that the Enforcement to be undertaken by the Substitute US
Security Trustee shall be in violation of neither the Bankruptcy Code or any
such order or injunction (including, without limitation, any such order or
injunction entered by any bankruptcy court in any Bankruptcy Code proceeding)
and shall not subject any member of the US Lender Group (including, without
limitation, the existing US Security Trustee) to any liability and (b) the UK
Banks provide the US Lender Group with an acceptable indemnity to the US
Security Trustee to protect the US Lender Group (including, without limitation,
their respective successors and assigns, directors, officers, and agents) from
the consequences of any such liability. Without expanding the obligations of any
member of the US Lender Group hereunder, if, prior to any Enforcement, the
Senior Lenders deem it is appropriate, they shall consult with each other in
good faith regarding the advisability of the appointment of a Substitute US
Trustee. After such consultation (and subject to appropriate opinions of counsel
and subject further to the condition of the provision of
16
the indemnity described in the preceding sentence of this Section 33), the
Senior Lenders may decide by Majority Creditors vote to appoint a Substitute US
Security Trustee.
33 Automatic Reallocation of Net Proceeds of Shared Collateral Under
Certain Circumstances. Each of the UK Agent and the Royal Bank of Scotland, PLC
(in its capacity as a UK Bank), after due inquiry hereby (1) represents to each
member of the US Lender Group that the Royal Bank of Scotland, PLC has had a
valid and continuously perfected first security interests and liens in and to
substantially all of the assets of APW Electronics Ltd. since April 14, 1994 and
that such security interests have not effectively been released, but instead
remain effective as of the date hereof, (2) shall undertake to deliver upon the
execution and delivery of this Intercreditor Agreement (but in no event later
than May 22, 2001) a reasoned opinion subject to customary qualifications of and
assumptions from its counsel (provided, however, that any factual assumptions
shall be based on an officer's certificate from authorized officers of the Royal
Bank of Scotland, PLC and/or APW Electronic Ltd.) to such effect of its United
Kingdom counsel in form and substance satisfactory to the US Agent (and its
counsel) to the US Agent for the benefit of the US Lender Groups, and (3) shall
not release such security interest and liens after the date hereof except, if at
all, as provided pursuant to the provisions of Section 10 hereof. In the event
that it should transpire that the Royal Bank of Scotland, PLC does not have a
valid and continuously first perfected security interests and liens in and to
substantially all of the assets of APW Electronics Ltd. (the "APW Electronics
Ltd. Collateral") (or that the UK Banks have otherwise released any portion of
such security interest or liens in such assets except as expressly provided in
Section 10 hereof), the Royal Bank of Scotland, PLC shall take any and all
necessary actions (including, without limitation, paying such amounts as
necessary to the US Agent for distribution to the US Lender Group on account of
the US Obligations) to produce the same result as would have pertained if any
and all Net Proceeds of Shared Collateral distributed up to the date of such a
determination had not been distributed pursuant to the priority of payment and
allocation scheme set forth in Section 3 hereof, but instead had been allocated
and distributed from the original date of this Intercreditor Agreement as
follows:
(a) first, to the US Agent, the UK Agent, the US Security
Trustee and/or the UK Security Trustee, as the case may be, until all
then outstanding Collateral Agent Expenses have been paid in full;
(b) second, to the extent of any surplus, to the US Agent for
distribution to the US Banks in accordance with the provisions of the
US Credit Agreement until the US Commitments shall have been reduced to
$530 million;
(c) third, to the extent of any surplus, to the US Agent (for
distribution to the US Banks in accordance with the provisions of the
US Credit Agreement) or the UK Agent (for distribution to the UK Banks
in accordance with the UK Credit Agreement) until any net amount then
owing to such Agent pursuant to Section 5 hereof until such amount is
paid in full;
(d) fourth, to the extent of any surplus, to the US
Obligations and the UK
17
Obligations based on their Pro Rata Shares until the US Obligations and
the UK Obligations have been paid in full, with the amounts allocable
to the US Obligations being paid to the US Agent for distribution to
the US Agent and the US Banks in accordance with the provisions of the
US Agreement and the amounts allocable to the UK Obligations being paid
to the UK Agent for distribution to the UK Agent and the UK Banks in
accordance with the provisions of the UK Credit Agreement; and
(e) finally, to the extent of any surplus, to the US Borrower
either for retention (if it shall be the rightful owner of any such
surplus) or to be held in trust for distribution to the Loan Party that
is the rightful owner of any portion of any such surplus, as the case
may be.
If the UK Banks undertake and consummate such necessary actions (including by
promptly paying in immediately available funds all such necessary amounts to the
US Agent) promptly upon such a determination of the invalidity, release,
inferiority or nonperfection (as of the original date of this Intercreditor
Agreement) of the purported 1994 lien of the Royal Bank of Scotland, PLC in and
to the APW Electronics Ltd. Collateral (a "No Lien in APW Electronics Ltd.
Collateral Determination"), the UK Banks shall have no other liability with
respect to the breach of the representations and warranties made by them in this
Section 33. Thereafter, and notwithstanding any Default, Insolvency Proceeding
or sale or other disposition of Shared Collateral (including, without
limitation, any disposition of Shared Collateral as a result of any
Enforcement), any Net Proceeds of Shared Collateral shall be allocated among the
parties as set forth in this Section 33 and not as set forth in Section 3
hereof. Without limiting the generality of the foregoing, it is the intention of
the parties that, in the event of a No Lien in APW Electronics Ltd. Collateral
Determination there be an automatic reallocation of any Net Sale Proceeds of
Shared Collateral based on the allocation and priority of payment scheme set
forth in this Section 33 (notwithstanding the provisions of Section 3 hereof) so
that the past distributions and the future distributions of Net Proceeds of
Shared Collateral are (and will be) reallocated to replicate what a distribution
of such proceeds pursuant to the allocation and priority scheme set forth in
this Section 33 would have produced had it been operative from the original date
of this Intercreditor Agreement and the provisions of this Intercreditor
Agreement (including of this Section 33) shall be interpreted accordingly.
Without limiting the generality of the foregoing, a release of lien (or a
direction to counsel for APW Electronics Ltd. (or its predecessor) authorizing
the execution and recordation of such a release) signed by an officer(s) of the
Royal Bank of Scotland, PLC shall constitute a No Lien in APW Electronics Ltd.
Collateral Determination. Consistent with the foregoing, and notwithstanding
anything to the contrary contained in this Intercreditor Agreement, after a No
Lien in APW Electronics Ltd. Collateral Determination, past and future payments
shall be reallocated or applied (as the case may be) so that the US Commitments
shall be reduced to $530,000,000 before any reductions are permitted to be made
in the UK Commitments.
34 Consistent Terms/No More Restrictive Covenants. The US Agent and
US Banks (via the executive and delivery of this Intercreditor Agreement by the
Required Banks (as such term is defined in the US Credit Agreement)), on the one
hand, and the UK Agent and the UK Banks, on the other hand, hereby acknowledge
that, as of the original date of this
18
Intercreditor Agreement: (a) all known existing "Events of Default" under their
predecessor loan documents have been waived or will be deemed waived upon the
effectiveness of the US Credit Agreement and the UK Credit Agreement, as the
case may be, (b) there is no known existing or unmatured "Event of Default"
under their respective loan documents and (c) their respective credit agreements
are to have identical (or pro rata, as the case may be) terms on such matters as
interest rates, stated maturity date, scheduled mandatory payments, financial
covenants, collateral, and warrants. No Loan Party shall permit the financial
covenants (and any events of default relating thereto) or the provisions
relating to interest rates, bank fees, stated maturity date, collateral or
warrants set forth in either the US Credit Agreement or the UK Credit Agreement,
to be amended, restated, supplemented, or otherwise modified at any time and
from time to time, in the reasonable and good faith determination of such Loan
Party to be more restrictive (in the case of the financial covenants) or more
favorable to the lenders (in the case of the other such provisions) than those
contained in the other credit agreement, unless the lenders under such credit
agreement are afforded the benefit of such more restrictive financial covenant
(or related event of default) or more favorable other provisions, as the case
may be; provided, however, that such benefit shall cease upon a subsequent
amendment to the originally more restrictive financial covenant or more
favorable provision making it again less restrictive or favorable; provided
further, however, that if any such further amended financial covenant or other
provision is still more restrictive or favorable than in its original form, the
lenders under the other credit agreement are similarly to be afforded the
benefit of such still more restrictive financial (or related event of default)
or more favorable other provision.
35 Property: Delivery of Documents of Title.
(a) The pertinent Loan Parties shall, upon execution of the
Collateral Documents listed in Schedule 1:
(i) deliver (or procure delivery) to the UK Security
Trustee, who shall be entitled to hold and retain the
same, all deeds, certificates and other documents of
title relating to the properties and intellectual
property rights secured by the Debentures, together
with all policies and receipts for all premium and
other payments necessary for maintaining insurances
required to be in force in respect of UK Borrowers or
any Guarantors of the UK Obligations under the terms
of the US Credit Agreement, the UK Credit Agreement
or any Collateral Document; and
(ii) deliver (or procure delivery) to the US Security
Trustee, who shall be entitled to hold and retain the
same, all deeds, certificates and other documents of
title relating to the properties and intellectual
property rights secured by the Debentures, together
with all policies and receipts for all premium and
other payments necessary for maintaining insurances
required to be in force in respect of all Borrowers
and Guarantors other than the UK Borrowers and the
Guarantors of the UK Obligations under
19
the terms of the US Credit Agreement, the UK Credit
Agreement or any Collateral Document.
(b) The UK Security Trustee and the US Security Trustee shall allow
each other and their authorized representatives access at reasonable times and
on reasonable notice to all such deeds, certificates and other documents of
title as are held by the UK Security Trustee or the US Security Trustee, as the
case may be.
36 Note of Debenture. In the case of any property secured by the
Debentures, title to which is, or will be, registered under the Land
Registration Acts 1925 to 1988, the pertinent Loan Party shall make, or consent
to the UK Security Trustee or any of its agents making, an application to the
H.M. Chief Land Registrar in respect of the entry of a Notice of the Debentures
on the Charges Register of such property, requesting that it be noted on the
relevant register that it is intended that the security created by the
debentures should rank pari passu and a restriction in terms set out in clause
4.4 of the Debentures.
37 Book Debts. The UK Security Trustee and the US Security Trustee
hereby direct each UK Borrower and Guarantors of the UK Obligations whose book
debts are subject to the Debentures that, in the event of any inconsistency
between the instructions provided in the Debentures, all Debts (as defined
therein) which are to be paid into a specified bank account shall be paid into
one of the Special Accounts with The Royal Bank of Scotland PLC or National
Westminster and that, pending such payment, all such Debts shall be held upon
trust for the UK Security Trustee (although such expressed priority shall not,
as between the parties to this Agreement, in any way alter the priorities
elsewhere in this Agreement) and dealt with on the instructions of the UK
Security Trustee, which instructions shall have regard to any restrictions
contained in the Debentures and the provisions of this Intercreditor Agreement.
38 Notices to Insurers and Notices of Assignment.
(a) If any notice is required to be given to any party under the terms
of the Collateral Documents, whether for the purpose of perfecting security or
for any other reason, the UK Security Trustee and the US Security Trustee shall,
if both are entitled to give such notice under the Collateral Documents, either
coordinate the giving of such notices or, if either Security Trustee considers,
on the basis of appropriate professional advice, that giving more than one
competing notice may reasonably be expected to prejudice the interests of the US
Banks and/or the UK Banks, expressly provide in such notices that the provisions
of one notice take priority over the provisions contained in the second.
(b) In assessing which notice shall take priority, the UK Security
Trustee and the US Security Trustee shall have regard to the following
provisions:
(i) If the notice is to be given to a UK Borrower
pursuant to a Debenture, the notice provided by the
UK Security Trustee shall be expressed to take
priority over the notice provided by the US Security
Trustee (although such expressed priority shall not,
as between the parties to this
20
Intercreditor Agreement, in any way alter the
priorities specified elsewhere in this Intercreditor
Agreement); and
(ii) If the notice is to be given to a US Borrower
pursuant to a Security Agreement, the notice provided
by the US Security Trustee shall be expressed to take
priority over the notice provided by the UK Security
Trustee (although such expressed priority shall not,
as between the parties to this Intercreditor
Agreement, in any way alter the priorities specified
elsewhere in this Intercreditor Agreement).
39 Charged Share Certificates and Instruments of Transfer.
Notwithstanding any other provision in this Intercreditor Agreement to the
contrary, the US Secretary Trust shall be entitled to hold and retain all of the
Charged Shares (as defined in The Debentures) or the certificates or documents
of title to or representing the same together with any instruments of transfer
or assignment of such Charged Shares, duly executed by the relevant Loan Party
in whose name any of such Charged Shares are registered or held, with the name
of the transferee or assignee, the consideration and the date left blank. The US
Security Trustee shall allow the UK Security Trustee and its authorized
representatives access at reasonable times and on reasonable notice to all such
certificates or documents of title or instruments of transfer or assignment as
are held by the US Security Trustee in respect of such Charged Shares.
40 Counterparts. This Intercreditor Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and either of the parties hereto may execute this Intercreditor
Agreement by signing any such counterpart.
41 Interpretation. The headings preceding the text of Sections
included in this Intercreditor Agreement and the headings to Schedules attached
to this Intercreditor Agreement are for convenience only and shall not be deemed
part of this Agreement or be given any effect in interpreting this Intercreditor
Agreement. The use of the masculine, feminine or neuter gender or the singular
or plural form of words herein shall not limit any provision of this
Intercreditor Agreement. The use of the terms "including" or "include" shall in
all cases herein mean "including, without limitation" or "include, without
limitation," respectively. Reference to any person or entity includes such
person's or entity's successors and assigns to the extent such successors and
assigns are permitted by the terms of the US Credit Agreement or the UK Credit
Agreement (as the case may be), and reference to a person or entity in a
particular capacity excludes such person or entity in any other capacity or
individually. Reference to any agreement (including this Intercreditor
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Reference to any law means
such law as amended, modified, codified, replaced or re-enacted, in whole or in
part, and in effect on the date hereof, including rules, regulations,
enforcement procedures and any interpretations promulgated thereunder.
Underscored references to Sections, clauses, Exhibits or Schedules shall refer
to those portions of this Intercreditor Agreement, and any underscored
references to a clause shall, unless otherwise identified, refer to the
appropriate clause within the same Section in which such reference occurs. The
use of the terms "hereunder", "hereof", "hereto" and words of similar import
shall refer to this Intercreditor Agreement as a whole and not to any particular
Section or clause of or Exhibit or Schedule to this Intercreditor Agreement. All
terms defined in this Intercreditor Agreement shall have the above-defined
meanings when used in any certificate, report or other document made or
delivered pursuant to this Intercreditor Agreement, unless the context therein
shall clearly otherwise require. In the computation of periods of time in this
Intercreditor Agreement from a specified date to a later specified date, the
word "from" means "from and including" and the words "to" and "until" each means
"to and through". This Intercreditor Agreement and the other documents relating
to this Intercreditor Agreement are the result of negotiations among and have
been reviewed by counsel to the UK Agent, the US Agent, and certain of the other
parties, and are the products of all parties. Accordingly, they
21
shall not be construed against any party merely because of such party's
involvement in their preparation.
42 Notices.
(a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by facsimile (i) shall be immediately confirmed by a telephone call
to the recipient at the number specified on Schedule 42, and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed, faxed
or delivered, to the address or facsimile number specified for notices on
Schedule 42; or, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
other parties.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery.
43 Governing Law and Jurisdiction.
(a) THIS INTERCREDITOR AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS INTERCREDITOR
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED
STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE PARTIES EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
44 Waiver of Jury Trial. THE PARTIES EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS INTERCREDITOR AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF
ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY, WHETHER WITH
RESPECT TO CONTRACT
22
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE PARTIES EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS INTERCREDITOR.
[Signature Pages Follow]
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
15th day of May, 2001 as of the date first written above.
BANK OF AMERICA, NATIONAL ASSOCIATION,
as US Agent, US Security Trustee and a US
Bank
By:_______________________________________
Name:_____________________________________
Title:______________________________________
ROYAL BANK OF SCOTLAND, PLC, as UK
Agent, as UK Security Trustee, as a
UK Bank and as a US Bank
By:______________________________________
Name:____________________________________
Title:_____________________________________
BANK ONE, NA, as a US Bank
By:
Name:
Title:
THE CHASE MANHATTAN BANK, as a US Bank
By:
Name:
Title:
FIRST UNION NATIONAL BANK, as a US Bank
By:
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as a US Bank
By:___________________________
Name:
Title: ________________________
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH, as a US Bank
By: _____________________________
Name:
Title: ___________________________
CREDIT LYONNAIS CHICAGO BRANCH,
as a US Bank
By: _______________________________
Name:
Title: _____________________________
U.S. BANK NATIONAL ASSOCIATION,
as a US Bank
By: _____________________________
Name:
Title:
FIRSTAR BANK, N.A.,
as a US Bank
By:
Name:
Title: _________________________
Its Attorney-In-Fact
THE FUJI BANK, LIMITED,
as a US Bank
By: __________________________
Name:
Title:
FLEET NATIONAL BANK,
as a US Bank
By:
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.,
as a US Bank
By:
Name:
Title:
M&I MARSHALL & ILSLEY BANK,
as a US Bank
By: ___________________________
Name:
Title:
By:
Name:
Title: _________________________
BNP PARIBAS,
as a US Bank
By:
Name:
Title: ______________________
By:
Name:
Title:
SOCIETE GENERALE,
as a US Bank
By:_________________________
Name:
Title: _______________________
THE BANK OF NEW YORK,
as a US Bank
By: __________________________
Name:
Title: ________________________
WACHOVIA BANK, N.A.,
as a US Bank
By: __________________________
Name:
Title: ________________________
SUMITOMO MITSUI BANKING CORPORATION
as a US Bank
By: ___________________________
Name:
Title: _________________________
THE MITSUBISHI TRUST & BANKING
CORPORATION, as a US Bank
By: __________________________
Name:
Title: _________________________
NATIONAL WESTMINSTER BANK, PLC,
as a UK Bank
By: __________________________
Name:
Title: _________________________
LOAN PARTY ACKNOWLEDGMENT
Each of the undersigned Loan Parties hereby acknowledges receipt of a copy
of the foregoing Intercreditor Agreement, waives notice of acceptance thereof by
the parties to such agreement, and agrees to be bound by the terms and
provisions thereof, to make no payments or distributions contrary to the terms
and provisions thereof, and to do every other act and thing necessary or
appropriate to carry out such terms and provisions.
Dated as of May 15, 2001.
APW LTD.By:_____________________________Name:Title:
APW NORTH AMERICA INC.By:_______________Name:Title:
APW HOLDING DENMARK APSBy:______________Name:Title:
APPLIED POWER LTD.APW ELECTRONICS INVESTMENTS
OVERSEAS LTD.APW ELECTRONICS LTD.APW ENCLOSURE
SYSTEMS HOLDINGS LTD.APW ENCLOSURE SYSTEMS (UK)
LTD.WRIGHT LINE LTD.
By:Name:Title:
APW ENCLOSURES (DUBLIN) LIMITED
By:Name:Title:
APW GALWAY LIMITED
By:Name:Title:
HOERMANN SECURITY SYSTEMS LTD.
By:
Name:
Title:
APW POWER SUPPLIES LTD.
By:
Name:
Title:
APW NEW FOREST LIMITED
By:
Name:
Title:
TOWERFLAME LIMITED
By:
Name:
Title:
APW ELECTRONICS GROUP PLC
By:
Name:
Title:
APW ENCLOSURE PRODUCTS AND SYSTEMS LIMITED
By:
Name:
Title:
APW ENCLOSURE SYSTEMS PLC
By:
Name:
Title:
AIR CARGO EQUIPMENT (UK) LIMITED
By:
Name:
Title:
APW ENCLOSURE SYSTEMS, INC.
APW ENCLOSURE SYSTEMS HOLDING, INC.
APW WRIGHT LINE LLC
ASPEN MOTION TECHNOLOGIES, INC.
EDER INDUSTRIES INC.
CAMBRIDGE AEROFLO, INC.
ELECTRONIC SOLUTIONS
HSP USA INC.
INNOVATIVE METAL FABRICATION, INC.
MCLEAN WEST INC.
MCLEAN MIDWEST CORPORATION
APW-ERIE, INC.
PRECISION FABRICATION TECHNOLOGIES INC.
RUBICON USA, INC.
VERO ELECTRONICS, INC.
ZERO-EAST DIVISION, ZERO CORPORATION
By:
Name: JAMES MAXWELL
Title: TREASURER, ASSISTANT TREASURER, CFO
APW ENCLOSURE SYSTEMS, LP
by APW ENCLOSURE SYSTEMS HOLDING, INC.,
its General Partner
By:
Name:
Title: