EXHIBIT 2.5
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "AGREEMENT"), executed this 13th day
of July, 2004, is made by and among MicroTel International Inc., a Delaware
corporation (the "BORROWER") and the persons listed on the Schedule of Lenders
attached hereto as EXHIBIT A (each, a "LENDER" and collectively, the "Lenders").
RECITALS
A. Borrower and the Lenders are parties to the Stock Purchase Agreement
of event date herewith (the "STOCK PURCHASE AGREEMENT") relating to the purchase
by Borrower of all of the issued and outstanding shares of common stock of Larus
Corporation, a California corporation ("LARUS").
B. Pursuant to the terms of the Stock Purchase Agreement, Borrower
issued the Short Term Notes and the Long Term Notes to each of the Lenders to
satisfy a portion of the aggregate consideration to be paid by Borrower for the
purchase of the shares of common stock of Larus from the Lenders.
C. CXR, Larus and Vista are each delivering a Continuing Guarantee
dated as of the date hereof pursuant to which each entity guarantees the
obligations of Borrower under the terms of the Long Term Notes (collectively,
the "CONTINUING GUARANTEES").
D. CXR, Larus and Vista are each delivering a Security Agreement dated
as of the date hereof (collectively, the "SECURITY AGREEMENTS") to Lenders
pursuant to which their respective obligations to Lenders under the Continuing
Guarantees are secured by the assets of CXR, Larus and Vista, respectively .
E. Borrower is delivering a Pledge and Security Agreement dated as of
the date hereof (the "PLEDGE AGREEMENT") to Lenders pursuant to which the
obligations of Borrower to Lenders are secured by the equity securities of Larus
and the Larus Entity.
F. Lenders desire to set forth in this Agreement their respective
rights and obligations with respect to the Notes, the Continuing Guarantees, the
Pledge Agreement, the Security Agreements and the exercise of rights with
respect thereto.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"COLLATERAL" shall have the meanings set forth in the Pledge Agreement
and Security Agreements, collectively.
"COLLATERAL AGENT" shall have the meaning set forth in the Pledge
Agreement.
"CXR" shall have the meaning set forth in the Long Term Notes.
"EVENT OF DEFAULT" shall mean the occurrence of any event that will
constitute a default by Borrower under any Note.
"INDEBTEDNESS" shall mean the aggregate outstanding principal amount,
together with accrued but unpaid interest (including any interest accruing after
the commencement of any action or proceeding under the federal bankruptcy laws,
as now or hereafter constituted, or any other applicable domestic or foreign
federal or state bankruptcy, insolvency or other similar law, and any other
interest that would have accrued but for the commencement of such proceeding),
premiums and any other amounts (including any fees or expenses) owed or payable
with respect to the Notes.
"LARUS" has the meaning given in the recitals hereof.
"LARUS ENTITY" shall have the meaning set forth in the Long Term Notes.
"LONG TERM NOTES" shall have the meaning set forth in the Stock
Purchase Agreement.
"NOTES" shall mean the Short Term Notes and the Long Term Notes,
collectively.
"SENIOR LENDERS" shall have the meaning set forth in the Long Term
Notes.
"SHORT TERM NOTES" shall have the meaning set forth in the Stock
Purchase Agreement.
"VISTA" shall mean Vista Corporation, a California corporation.
2. INTERCREDITOR AGREEMENT.
2.1 PARI PASSU STATUS IN NOTES AND COLLATERAL SECURING THE
GUARANTEE. Each of the Lenders hereby acknowledges and agrees that no Lender
shall have priority over any other Lender with respect to any payments of
principal or interest in respect of the Notes, or any Collateral securing the
Notes, where applicable. Rather, each of the Lenders hereby acknowledges and
agrees that its rights and priority are PARI PASSU with the rights and priority
of each of the other Lenders. In addition, and without limitation of the
generality of the foregoing, each Lender hereby confirms that regardless of the
relative times of attachment or perfection thereof or the order of filing of
financing statements, mortgages or other documents, and regardless of anything
to the contrary contained in any documents executed in connection with any of
the Notes (including without limitation the Stock Purchase Agreement, Pledge
Agreement, Security Agreements, Continuing Guarantees and this Agreement), any
security interests or liens granted from time to time to any Lender shall in all
respects be PARI PASSU with the security interests and liens granted from time
to time to each of the other Lenders.
2.2 NOTICES OF DEFAULT. Each of the Lenders shall provide a
copy to Collateral Agent and each of the other Lenders of any written notice
provided by such Lender to Borrower with respect to any Event of Default. Such
notices shall be delivered in accordance with SECTION 5 below within three (3)
calendar days of the date any such notice is given to Borrower.
-2-
2.3 DISPOSITION OF BORROWER'S ASSETS. In the event of (i) an
Event of Default, (ii) any insolvency, bankruptcy, receivership, liquidation,
reorganization, assignment for the benefit of creditors or other similar
proceeding relating to the Borrower, whether voluntary or involuntary, (iii) any
proceeding for the voluntary liquidation, dissolution or other winding-up of the
Borrower, whether involving insolvency or bankruptcy proceedings or not, or (iv)
any attachment of, foreclosure on, or other judicial action with respect to all
or any portion of the assets of the Borrower, or any transfer of such assets in
lieu of any such judicial action, or any creation of any lien, security
interest, mortgage, or deed of trust on any such assets other than in favor of
the Senior Lenders, then, and in any such event, any payment or other
distribution of any character, whether in cash, securities or other property out
of or in respect of the assets of the Borrower or any proceeds thereof or any
such security to which the Lenders are entitled, shall be shared by the Lenders
on a PARI PASSU basis with the amount thereto to which each such Lender is
entitled determined in accordance with the Pledge Agreement, the Security
Agreements and the Continuing Guarantees; PROVIDED, HOWEVER, that no Lender
shall take any action without written notice to Collateral Agent and the other
Lenders.
2.4 PAYMENTS TO BE HELD IN TRUST. If any Lender shall have
received any payment, distribution or security out of any of the assets of the
Borrower, whether arising out of or as a result of any event described in
SECTION 2.3 above or otherwise, the receiving party thereof shall promptly
provide Collateral Agent and each of the Lenders a clear and detailed accounting
thereof, and shall promptly take all action necessary to implement the sharing
contemplated by SECTION 2.3 above and by the Pledge Agreement, the Security
Agreements and the Continuing Guarantees. Any such payment, distribution or
security so received shall be deemed to be held in trust by the receiving party
thereof for the benefit of the Lenders until such sharing has been implemented
and completed as contemplated by SECTION 2.3 above and by the Pledge Agreement,
the Security Agreements and the Continuing Guarantees.
2.5 COOPERATION. Each of the Lenders agrees to use reasonable
best efforts to cooperate with one another in the realization upon and
liquidation of the assets of Borrower following an Event of Default, and to
promptly advise Collateral Agent and the other Lenders of any actions taken with
respect thereto, or of any modification or amendment of any or all of the
documents with respect to the Indebtedness; PROVIDED, HOWEVER, that no Lender
shall, enter into any such modification or amendment that would (i) extend the
term of such Indebtedness, (ii) increase the applicable rate of interest
thereunder, or (iii) increase the amount of Borrower's indebtedness thereunder,
without the prior written approval of the other Lenders.
3. RIGHT TO AMEND, ETC. Any demand for payment of any Indebtedness or
delivery of collateral from Borrower upon the occurrence of an Event of Default
made by any Lender may be rescinded in whole or in part by such Lender. Lenders
may exercise or refrain from exercising any rights or remedies against the
Borrower and others, if any, liable under the Indebtedness. The Indebtedness
shall conclusively be deemed to have been created, contracted and incurred and
permitted to remain outstanding in reliance upon the provisions of this
Agreement.
-3-
4. FURTHER ASSURANCES. The Borrower, for itself and its respective
successors and assigns, agrees to execute and deliver to Collateral Agent and
Lenders such further documents and instruments and to take such further action
as Collateral Agent and Lenders may at any time or times reasonably request in
order to carry out the provisions and intent of this Agreement.
5. NOTICES. All notices and other communications hereunder to any
Lender shall be in writing and shall be personally delivered or mailed by first
class mail, postage prepaid, to the respective addresses set forth under the
signature of such Lender set forth on EXHIBIT A to this Agreement, or to such
other address or addresses as the party to whom such notice is directed may have
designated in writing to the other parties hereto. All notices and other
communications hereunder to Borrower shall be in writing and shall be personally
delivered or mailed by first class mail, postage prepaid, to the following
address:
MicroTel International Inc.
9485 Haven Avenue, Suite 100
Rancho Cucamonga, California 91730
Attention: Carmine T. Oliva
or to such other address or addresses as the party to whom such notice is
directed may have designated in writing to the other parties hereto. A notice
shall be deemed to have been given upon the earlier to occur of (i) three (3)
days after the date on which it is deposited in the U.S. mails or (ii) receipt
by the party to whom such notice is directed.
6. SUCCESSORS; CONTINUING EFFECT, ETC. This Agreement is being entered
into for the benefit of, and shall be binding upon, Lenders and their respective
successors and assigns. This Agreement shall be a continuing agreement and shall
be irrevocable and shall remain in full force and effect so long as there is
Indebtedness outstanding.
7. MISCELLANEOUS. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall be governed by the laws of the State of
California without reference to the choice of law principles thereof.
-4-
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
BORROWER:
MICROTEL INTERNATIONAL INC.,
a Delaware corporation
By: /S/ CARMINE T. OLIVA
------------------------------------------------
Carmine T. Oliva, Chairman, President and
Chief Executive Officer
LENDERS:
See Schedule of Lenders on
EXHIBIT A for signatures.
[Signatures continued on next page]
-5-
EXHIBIT A
---------
SCHEDULE OF LENDERS
PRINCIPAL
LENDER'S NAME AND ADDRESS AMOUNT OF NOTE LENDER'S SIGNATURE
------------------------- -------------- ------------------
Noel McDermott, as Trustee of the Noel C. $1,680,000 /S/ NOEL MCDERMOTT, TRUSTEE, BY WARREN P.
McDermott Revocable Living Trust dated -----------------------------------------
December 18, 1995 YOST, ATTORNEY-IN-FACT
502 Village Circle ----------------------
Santa Cruz, CA 95060 Noel McDermott, Trustee of the Noel C.
McDermott Revocable Living Trust dated
December 18, 1995
Warren P. Yost and Gail A. Yost, as $1,320,000 /S/ WARREN P. YOST
Co-Trustees Under Declaration of Trust dated Warren P. Yost, Co-Trustee Under Declaration
March 9, 1988 of Trust dated March 9, 1988
10324 Miner Place
Cupertino, CA 95014 /S/ GAIL A. YOST
----------------
Gail A. Yost, Co-Trustee Under Declaration of
Trust dated March 9, 1988
A-1