AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT
AMENDED AND RESTATED INTERCREDITOR AND SUBORDINATION AGREEMENT, dated
as of April 1, 2003, by and among FLEET NATIONAL BANK ("Fleet"), CORSAIR SPECIAL
SITUATIONS FUND, L.P. ("Corsair", together with Fleet, each a "Subordinated
Lender; collectively, together with any other holders from time to time of the
Subordinated Obligations, the "Subordinated Lenders"), EDAC Technologies
CORPORATION, a Wisconsin Corporation ("EDAC"), APEX MACHINE TOOL COMPANY, INC.,
a Connecticut Corporation ("Apex", together EDAC and their successors and
assigns, each a "Borrower"; collectively the "Borrowers"), GROS-ITE Industries,
Inc., a Connecticut Corporation ("Guarantor") and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (together with its successors and assigns,
the "Senior Lender").
The parties hereto hereby agree as follows:
1. Definitions. (a) Unless otherwise defined herein, terms defined in the
Senior Loan Agreement and used herein shall have the meanings given to them in
the Senior Loan Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Intercreditor and Subordination Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Amended and Restated Note A": that certain Amended and Restated Note A
in the original principal amount of $1,325,000 made by EDAC in favor
Fleet dated as of April __, 2003 and assigned by Fleet to Corsair
pursuant to the Assignment and Intercreditor Agreement.
"Amended and Restated Note B": that certain Amended and Restated Note B
in the original principal amount of $1,000,000 made by EDAC in favor
Fleet dated as of April __, 2003.
"Assignment and Intercreditor Agreement": that certain Assignment and
Intercreditor Agreement dated as of April __, 2003 by and between Fleet
and Corsair.
"Blockage Notice": a written notice from the Senior Lender to Corsair
that (a) a Non-Payment Event of Default has occurred and is continuing
or (b) an Event of Default would occur if a scheduled interest or
principal payment were made under the Amended and Restated Note A in
accordance with the terms thereof.
"Blockage Period": any period commencing on the date a Blockage Notice
is given and ending on the earlier to occur of: (a) the date when (1)
the Event of Default that was the basis for such notice has been cured
or waived or (2) the conditions shall have ceased to exist which would
cause an Event of Default to occur if a scheduled interest or principal
payment were made under Amended and Restated Note A in accordance with
the terms thereof; and (b) 180 days after the date such Blockage Notice
is given. Notwithstanding
the foregoing, in the event that a Blockage Notice is given as a result
of Non-Payment Event of Default, Senior Lender shall not give another
Blockage Notice during such Blockage Period that would commence an
additional Blockage Period or extend the current Blockage Period.
"Collateral": the collective reference to any and all property from
time to time subject to security interests to secure payment or
performance of the Senior Obligations or the Subordinated Obligations.
"Designated Subordinated Lender Default": a default in payment of the
Subordinated Obligations beyond any applicable grace period with
respect thereto.
"Insolvency Event: (a) Each Borrower or any of its Subsidiaries
commencing any case, proceeding or other action (1) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (2) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or any Borrower or any of its
Subsidiaries making a general assignment for the benefit of its
creditors; or (b) there being commenced against any Borrower or any of
its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (a) above which (1) results in the entry of an
order for relief or any such adjudication or appointment or (2) remains
undismissed, undischarged or unbonded for a period of 60 days; or (c)
there being commenced against any Borrower or any of its Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (d) any Borrower or any of its Subsidiaries taking any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (a), (b) or (c)
above; or (e) any Borrower or any of its Subsidiaries generally not
paying, or being unable to pay, or admitting in writing its inability
to pay, its debts as they become due.
"Modification Agreement": that certain Modification Agreement dated as
of April __, 2003 by and among Borrowers, Guarantor and Fleet.
"Non-Payment Event of Default": any event (other than a Payment Event
of Default) the occurrence of which entitles the Senior Lender to
accelerate the maturity of any of the Senior Obligations.
"Payment Event of Default": any default in the payment of the Senior
Obligations (whether upon maturity, mandatory prepayment, acceleration
or otherwise) beyond any applicable grace period with respect thereto.
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"Senior Loan Agreement": the Loan and Security Agreement dated as of
September 29, 2000, among the Borrowers and the Senior Lender, as the
same may be amended, modified or supplemented from time to time,
including, without limitation, amendments, modifications, supplements
and restatements thereof giving effect to increases, renewals,
extensions, refundings, deferrals, restructurings, replacements or
refinancings of, or additions to, the arrangements provided in such
Loan Agreement (whether provided by the original Senior Lender or a
successor Senior Lender or other Lenders).
"Senior Loans": the loans made by the Senior Lender to Borrower,
pursuant to the Senior Loan Agreement.
"Senior Loan Documents": the collective reference to the Senior Loan
Agreement, the Senior Notes, the Senior Security Documents and all
other documents that from time to time evidence the Senior Obligations
or secure payment or performance thereof.
"Senior Notes": the promissory notes of any Borrower outstanding from
time to time under the Senior Loan Agreement.
"Senior Obligations": the collective reference to the unpaid principal
(which for purposes of this Agreement shall not exceed $16,500,000) of
and interest on the Senior Notes and all other obligations and
liabilities of any Borrower or the Guarantor to the Senior Lender of
whatever kind or nature (including, without limitation, interest
accruing at the then applicable rate provided in the Senior Loan
Agreement after the maturity of the Senior Loans and interest accruing
at the then applicable rate provided in the Senior Loan Agreement after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, whether arising under, out of, or in connection
with, the Senior Loan Agreement, the Senior Notes, this Agreement, the
other Senior Loan Documents or any other document made, delivered or
given by any Borrower or the Guarantor, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Senior Lender that are required to
be paid by any Borrower pursuant to the terms of the Senior Loan
Agreement or this Agreement or any other Senior Loan Document).
"Senior Security Documents": the collective reference to all documents
and instruments, now existing or hereafter arising, which create or
purport to create a security interest in property to secure payment or
performance of the Senior Obligations.
"Subordinated Lender Payment Conditions": on any date of determination,
the satisfaction of each of the following conditions in a manner
satisfactory to Lender: (i) no Default or Event of Default shall have
occurred and be continuing or would arise after giving affect to the
proposed payment with respect to the
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Subordinated Loans; (ii) Borrowers on a consolidated basis shall have a
Net Borrowing Availability of not less than $750,000 prior to and after
giving effect to any proposed payment with respect to the Subordinated
Obligations; and (iii) Borrowers on a consolidated basis shall have a
Fixed Charge Coverage Ratio for the most recent Fiscal Quarter then
ended, calculated as if such proposed payments with respect to the
Subordinated Obligations to be made at such date of determination were
made during such Fiscal Quarter, of not less than the minimum Fixed
Charge Coverage Ratio required to maintained according to the terms of
the Senior Loan Agreement.
"Subordinated Loan Documents": the collective reference to the
Modification Agreement, the Subordinated Notes, the Subordinated
Security Documents and any other documents or instruments that from
time to time evidence the Subordinated Obligations or secure or support
payment or performance thereof.
"Subordinated Loans": the loans made by the Subordinated Lenders
pursuant to the Subordinated Notes.
"Subordinated Notes": the collective reference to (i) Amended and
Restated Note A and (ii) Amended and Restated Note B.
"Subordinated Obligations": the collective reference to the unpaid
principal and interest on the Subordinated Notes and all other
obligations and liabilities of any Borrower or any Guarantor to the
Subordinated Lenders (including, without limitation, interest accruing
at the then applicable rate provided in the Subordinated Notes after
the maturity of the Subordinated Loans and interest accruing at the
then applicable rate provided in the Subordinated Notes after the
filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, the the Subordinated Notes, this Agreement, or any other
Subordinated Loan Document, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees
and disbursements of counsel to the Subordinated Lenders that are
required to be paid by any Borrower pursuant to the terms of the
Subordinated Notes or this Agreement or any other Subordinated Loan
Document).
"Subordinated Security Documents": the collective reference to (a) the
documents listed on Schedule 1, as the same may be amended, modified or
otherwise supplemented from time to time with the prior written consent
of the Senior Lender and (b) any other documents executed by any
Borrower or any Guarantor with the prior written consent of the Senior
Lender that from time to time secure payment or performance of the
Subordinated Obligations.
"Termination Date": the date on which the Senior Obligations are
indefeasibly paid in full and Senior Lender's obligations to extend
credit under any Senior Loan Document shall have been irrevocably
terminated.
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(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Subordination. (a) Each Borrower, the Guarantor and each of the
Subordinated Lenders agrees, for itself and each future holder of the
Subordinated Obligations, that the Subordinated Obligations are expressly
"subordinate and junior in right of payment" (as that phrase is defined in
paragraph 2(b)) to all Senior Obligations.
(b) "Subordinate and junior in right of payment" means that (1) no
part of the Subordinated Obligations shall have any claim to the assets of any
Borrower or any Guarantor on a parity with or prior to the claim of the Senior
Obligations; and (2) unless and until the Senior Obligations have been paid in
full and the obligation of Senior Lender to extend credit to the Borrowers under
the Senior Loan Documents shall have been irrevocably terminated, without the
express prior written consent of the Senior Lender (A) no Subordinated Lender
will take, demand or receive from any Borrower or the Guarantor, and neither the
Borrowers nor the Guarantor will make, give or permit, directly or indirectly,
by set-off, redemption, purchase or in any other manner, any payment of (of
whatever kind or nature, whether in cash, property, securities or otherwise) or
security for the whole or any part of the Subordinated Obligations, including,
without limitation, any letter of credit or similar credit support facility to
support payment of the Subordinated Obligations; provided, however, that (i) no
Blockage Period is in effect, (ii) no Payment Event of Default has occurred and
is continuing and (iii) the Subordinated Lender Payment Conditions have been
satisfied, the Borrowers may make and Corsair may receive regularly scheduled
payments on account of principal of and interest on Amended and Restated Note A
in accordance with the terms thereof determined on a pre-default non-accelerated
basis, and (B) no Subordinated Lender will accelerate for any reason the
scheduled maturities of any amount owing under the Subordinated Notes; provided,
however, that (i) upon the occurrence of any Insolvency Event or (ii) if Senior
Lender shall accelerate the scheduled maturity of the Senior Obligations,
Corsair may accelerate the scheduled maturities of Amended and Restated Note A.
(c) Upon the termination of any Blockage Period or if any Payment
Event of Default has been cured or waived or shall cease to exist, the
Subordinated Lenders' right to receive payments as provided in clause 2(b)(2)(A)
shall be reinstated, and the Borrowers may resume making such payments to the
Subordinated Lenders (including any payments that were deferred as a result
thereof) in accordance with the terms of clause 2(b)(2)(A).
(d) The expressions "prior payment in full," "payment in full,"
"paid in full" and any other similar terms or phrases when used herein with
respect to the Senior Obligations shall mean the payment in full, in immediately
available funds, of all of the Senior Obligations.
(e) Corsair shall, as soon as reasonably practicable, but in no
event later than three (3) Business Days, notify Senior Lender upon the
obtaining of actual knowledge of the occurrence
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of any default under the Subordinated Loan Documents. Any "default" or "event of
default" under the Subordinated Loan Documents shall automatically constitute an
Event of Default under the Senior Loan Documents so that payments received by
any Subordinated Lender following any such occurrence shall not be retained
irrespective of the lack of receipt by such holder of a Blockage Notice, unless
(i) the Event of Default is waived by the Subordinated Lender, (ii) a copy of
such waiver is given in writing by the Subordinated Lender to Senior Lender, and
(iii) no Blockage Notice is thereafter forthcoming from Senior Lender with five
(5) Business Days following the giving of notice of the aforesaid waiver, in
which event Corsair may retain all payments previously or thereafter received,
subject to the provisions of this Section 2.
3. Additional Provisions Concerning Subordination. (a) The Subordinated
Lenders, the Borrowers and the Guarantor agree that upon the occurrence of any
Insolvency Event:
(1) all Senior Obligations shall be paid in full before any
payment or distribution of whatever kind or nature is made with respect
to the Subordinated Obligations; and
(2) any payment or distribution of assets of any Borrower or the
Guarantor, whether in cash, property or securities, to which any
Subordinated Lender would be entitled except for the provisions hereof,
shall be paid or delivered by any Borrower or the Guarantor, or any
receiver, trustee in bankruptcy, liquidating trustee, disbursing agent
or other Person making such payment or distribution, directly to the
Senior Lender, to the extent necessary to pay in full all Senior
Obligations, before any payment or distribution of any kind or nature
shall be made to any Subordinated Lender.
(b) Upon the occurrence of any "Insolvency Event":
(1) each Subordinated Lender irrevocably authorizes and empowers
the Senior Lender (A) to demand, xxx for, collect and receive every
payment or distribution on account of the Subordinated Obligations
payable or deliverable in connection with such event or proceeding and
give acquittance therefor, and (B) to file claims and proofs of claim
in any statutory or non-statutory proceeding and take such other
actions, in its own name as Senior Lender, or in the name of the
Subordinated Lenders or otherwise, as the Senior Lender may deem
necessary or advisable for the enforcement of the provisions of this
Agreement; provided, however, that the foregoing authorization and
empowerment imposes no obligation on the Senior Lender to take any such
action; and
(2) each Subordinated Lender shall execute and deliver such powers
of attorney, assignments or proofs of claim or other instruments as the
Senior Lender may request to enable the Senior Lender to enforce any
and all claims in respect of the Subordinated Obligations and to
collect and receive any and all payments and distributions which may be
payable or deliverable at any time upon or in respect of the
Subordinated Obligations.
(c) If any payment or distribution, whether consisting of money,
property or securities, shall be collected or received by any Subordinated
Lender in respect of the Subordinated Obligations, except payments permitted to
be made at the time of payment as provided in paragraph 2(b), such Subordinated
Lender forthwith shall deliver the same to the
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Senior Lender, in the form received, duly indorsed to the Senior Lender, if
required, to be applied to the payment or prepayment of the Senior Obligations
until the Senior Obligations are paid in full. Until so delivered, such payment
or distribution shall be held in trust by such Subordinated Lender as the
property of the Senior Lender, segregated from other funds and property held by
such Subordinated Lender.
4. Rights in Collateral. (a) Notwithstanding anything to the contrary
contained in the Senior Loan Agreement, any Senior Security Document, any other
Senior Loan Document or any Subordinated Security Document or other Subordinated
Loan Document and irrespective of:
(1) the time, order or method of attachment or perfection of the
security interests created by any Senior Security Document or any
Subordinated Security Document,
(2) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect security
interests in any Collateral,
(3) anything contained in any filing or agreement to which the
Senior Lender or any Subordinated Lender now or hereafter may be a
party; and
(4) the rules for determining perfection or priority under the
Uniform Commercial Code or any other law governing the relative
priorities of secured creditors,
any security interest in any Collateral pursuant to any Senior Security Document
has and shall have priority, to the extent of any unpaid Senior Obligations,
over any security interest in such Collateral pursuant to any Subordinated
Security Document.
(b) So long as the Senior Obligations have not been paid in full
and any Senior Security Document remains in effect, whether or not any
Insolvency Event has occurred,
(1) no Subordinated Lender will (A) exercise or seek to exercise
any rights or exercise any remedies with respect to any Collateral or
(B) institute any action or proceeding with respect to such rights or
remedies, including without limitation, any action of foreclosure or
(C) contest, protest or object to any foreclosure proceeding,
postpetition financing, use of cash collateral or action brought by the
Senior Lender or any other exercise by the Senior Lender of any rights
and remedies under any Senior Loan Documents; provided, however, that
Corsair may take the actions referred to in (A) and (B) above if (i) a
Designated Subordinated Lender Default with respect to Amended and
Restated Term Note A has occurred and is continuing, (ii) Corsair has
notified Senior Lender in writing of the occurrence of such Designated
Subordinated Lender Default, (iii) no Insolvency Event has occurred,
(iv) all applicable Blockage Periods have ended, (v) the Senior Lender
has not commenced exercising any rights or remedies with respect to the
Collateral and (vi) Corsair shall have first given no less than three
(3) Business Days' prior written notice to the Senior Lender of its
intention to take such action.
(2) except as set forth in clause (b)(1) above, the Senior Lender
shall have the exclusive right to enforce rights and exercise remedies
with respect to the Collateral and Senior Lender shall not be required
to marshal any Collateral.
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(c) In exercising rights and remedies with respect to the
Collateral, the Senior Lender may enforce the provisions of the Senior Security
Documents and exercise remedies thereunder and under any other Senior Loan
Documents, all in such order and in such manner as it may determine in the
exercise of their sole business judgment. Such exercise and enforcement shall
include, without limitation, the rights to sell or otherwise dispose of
Collateral, to incur expenses in connection with such sale or disposition and to
exercise all the rights and remedies of a secured lender under the Uniform
Commercial Code of any applicable jurisdiction. (d) When all Senior Obligations
have been paid in full and the Senior Security Documents no longer are in
effect, the Subordinated Lenders shall have the right to enforce the provisions
of the Subordinated Security Documents and exercise remedies thereunder.
(e) Any money, property or securities realized upon the sale,
disposition or other realization by the Senior Lender upon all or any part of
the Collateral, shall be applied by the Senior Lender in the following order:
(1) First, to the payment in full of all costs and expenses
(including, without limitation, attorneys' fees and disbursements) paid
or incurred by the Senior Lender in connection with the such
realization on the Collateral or the protection of their rights and
interests therein;
(2) Second, to the payment in full of all Senior Obligations in
such order as the Senior Lender may elect in its sole discretion;
(3) Third, to the payment in full of all Subordinated Obligations
then due and which are secured by such Collateral, which shall be paid
to Corsair; and
(4) Fourth, to pay to the Borrowers, or their representative or as
a court of competent jurisdiction may direct, any surplus then
remaining.
(f) The Senior Lender's rights with respect to the Collateral
include the right to release any or all of the Collateral from the Lien of any
Senior Security Document or Subordinated Security Document in connection with
the sale of such Collateral, notwithstanding that the net proceeds of any such
sale may not be used to permanently prepay any Senior Obligations or
Subordinated Obligations. If the Senior Lender shall determine, in connection
with any sale of Collateral, that the release of the Lien of any Subordinated
Security Document on such Collateral in connection with such sale is necessary
or advisable, the Subordinated Lenders shall execute such release documents and
instruments and shall take such further actions as the Senior Lender shall
request. Each Subordinated Lender hereby irrevocably constitutes and appoints
the Senior Lender and any officer or Senior Lender, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Subordinated Lender and in
the name of such Subordinated Lender or in the Senior Lender's own name, from
time to time in the Senior Lender's discretion, for the purpose of carrying out
the terms of this paragraph, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this paragraph, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer or release. Each Subordinated Lender
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hereby ratifies all that said attorneys shall lawfully do or cause to be done
pursuant to the power of attorney granted in this paragraph.
5. Subrogation. Subject to the payment in full of the Senior Obligations,
the Subordinated Lenders shall be subrogated to the rights of the Senior Lender
to receive payments or distributions of assets of any Borrower or the Guarantor
in respect of the Senior Obligations until the Senior Obligations shall be paid
in full. For the purposes of such subrogation, payments or distributions to the
Senior Lender, of any money, property or securities to which any Subordinated
Lender would be entitled except for the provisions of this Agreement shall be
deemed, as between each Borrower or the Guarantor and its creditors other than
the Senior Lender and such Subordinated Lender, to be a payment by such Borrower
or the Guarantor to or on account of Subordinated Obligations, it being
understood that the provisions of this Agreement are, and are intended solely,
for the purpose of defining the relative rights of the Subordinated Lender, on
the one hand, and the Senior Lender, on the other hand.
6. Consent of Subordinated Lenders. (a) Each Subordinated Lender consents
that, without the necessity of any reservation of rights against any
Subordinated Lender, and without notice to or further assent by any Subordinated
Lender:
(1) any demand for payment of any Senior Obligations made by the
Senior Lender may be rescinded in whole or in part by the Senior
Lender, and any Senior Obligation may be continued, and the Senior
Obligations, or the liability of any Borrower or any guarantor or any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, or any
obligation or liability of any Borrower or any other party under the
Senior Loan Agreement or any other agreement, may, from time to time,
in whole or in part, be renewed, extended, modified, accelerated,
compromised, waived, surrendered, or released by the Senior Lender; and
(2) the Senior Loan Agreement, the Senior Notes and any other
Senior Loan Document may be amended, modified, supplemented or
terminated, in whole or in part, as the Senior Lender may deem
advisable from time to time; provided, however, that Senior Lender
shall not amend the definitions "Fixed Charge Coverage Ratio" and "Net
Borrowing Availability" in the Senior Loan Agreement so as to adversely
affect Corsair's ability to receive payments on account of Amended and
Restated Note A in accordance with the provisions of clause 2(b)(2)(A)
hereof without the prior written consent of Corsair, and any collateral
security at any time held by the Senior Lender for the payment of any
of the Senior Obligations may be sold, exchanged, waived, surrendered
or released,
in each case all without notice to or further assent by any Subordinated Lender,
which will remain bound under this Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for herein.
(b) Each Subordinated Lender waives any and all notice of the
creation, renewal, extension or accrual of any of the Senior Obligations and
notice of or proof of reliance by the Senior Lender upon this Agreement. The
Senior Obligations, and any of them, shall continue to be deemed conclusively to
have been created, contracted or incurred in reliance upon this
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Agreement, and all dealings between the Borrowers and the Senior Lender shall be
deemed to have been continued in reliance upon this Agreement. Each Subordinated
Lender acknowledges and agrees that the Senior Lender has relied upon the
subordination provided for herein in continuing to provide the financial
accommodation to Borrowers pursuant to the Senior Loan Agreement and in
continuing to make funds available to the Borrowers thereunder. Each
Subordinated Lender waives notice of or proof of reliance on this Agreement and
protest, demand for payment and notice of default.
7. Negative Covenants of the Subordinated Lenders. So long as any of the
Senior Obligations shall remain outstanding or the obligation of Senior Lender
to extend credit to any Borrower remains in effect, no Subordinated Lender
shall, without the prior written consent of the Senior Lender:
(a) sell, assign, or otherwise transfer, in whole or in part, the
Subordinated Obligations or any interest therein to any other Person (a
"Transferee") or create, incur or suffer to exist any security interest, lien,
charge or other encumbrance whatsoever upon the Subordinated Obligations in
favor of any Transferee unless (1) such action is made expressly subject to this
Agreement and (2) the Transferee expressly acknowledges to the Senior Lender, by
a writing in form and substance satisfactory to the Senior Lender, the
subordination provided for herein and agrees to be bound by all of the terms
hereof;
(b) permit any of the Subordinated Loan Documents to be amended,
modified or otherwise supplemented;
(c) commence or join with any creditors other than the Senior
Lender in commencing any case or proceeding referred to in the definition of
Insolvency Event.
8. Senior Obligations Unconditional. All rights and interests of the
Senior Lender hereunder, and all agreements and obligations of the Subordinated
Lenders and the Borrowers hereunder, shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any Senior Security
Documents or any other Senior Loan Documents;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Senior Obligations, or any amendment or
waiver or other modification, whether by course of conduct or otherwise, of the
terms of the Senior Loan Agreement or any other Senior Security Document;
(c) any exchange, release or non-perfection of any security
interest in any Collateral, or any release, amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Obligations or any guarantee thereof; or
(d) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, any Borrower or the Guarantor in
respect of the Senior Obligations, or of either any Subordinated Lender or any
Borrower in respect of this Agreement.
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9. Representations and Warranties. Each Subordinated Lender represents and
warrants to the Senior Lender that:
(a) its Subordinated Notes (1) have been issued to it for good and
valuable consideration, (2) are owned by the such Subordinated Lender free and
clear of any security interests, liens, charges or encumbrances whatsoever
arising from, through or under such Subordinated Lender, other than the interest
of the Senior Lender under this Agreement, (3) are payable solely and
exclusively to such Subordinated Lender and to no other Person and are payable
without deduction for any defense, offset or counterclaim, and (4) constitute
the only evidence of the obligations evidenced thereby;
(b) such Subordinated Lender has the corporate power and authority
and the legal right to execute and deliver and to perform its obligations under
this Agreement and has taken all necessary corporate action to authorize its
execution, delivery and performance of this Agreement;
(c) this Agreement constitutes a legal, valid and binding
obligation of such Subordinated Lender;
(d) the execution, delivery and performance of this Agreement will
not violate any provision of any Requirement of Law or Contractual Obligation of
such Subordinated Lender and will not result in the creation or imposition of
any Lien on any of the properties or revenues of such Subordinated Lender
pursuant to any Requirement of Law affecting or any Contractual Obligation of
such Subordinated Lender, except the interest of the Senior Lender under this
Agreement; and
(e) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of such
Subordinated Lender), is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
10. No Representation by Senior Lender. The Senior Lender has not made and
does not hereby or otherwise makes to the Subordinated Lenders, any
representations or warranties, express, or implied, nor does the Senior Lender
assume any liability to any Subordinated Lender with respect to: (a) the
financial or other condition of obligors under any instruments of guarantee with
respect to the Senior Obligations, (b) the enforceability, validity, value or
collectibility of the Senior Obligations or the Subordinated Obligations, any
collateral therefor, or any guarantee or security which may have been granted in
connection with any of the Senior Obligations or the Subordinated Obligations or
(c) any Borrower's title or right to transfer any collateral or security.
11. Waiver of Claims. To the maximum extent permitted by law, each
Subordinated Lender waives any claim it might have against the Senior Lender
with respect to, or arising out of, any action or failure to act or any error of
judgment, negligence, or mistake or oversight whatsoever on the part of the
Senior Lender, or its directors, officers, employees or agents with respect to
any exercise of rights or remedies under the Senior Loan Documents or any
transaction relating to the Collateral. Neither the Senior Lender, nor any of
its directors, officers, employees or
11
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Borrower or any
Subordinated Lender or any other Person or to take any other action whatsoever
with regard to the Collateral or any part thereof.
12. Provisions Applicable After Bankruptcy: No Turnover. (a) The provisions
of this Agreement shall continue in full force and effect notwithstanding the
occurrence of any Insolvency Event.
(b) To the extent that any Subordinated Lender has or acquires any
rights under Section 363 or Section 364 of the Bankruptcy Code with respect to
the Collateral, such Subordinated Lender hereby agrees not to assert such rights
without the prior written consent of the Senior Lender. Each of the Subordinated
Lenders (both in its capacity as Subordinated Lender and in its capacity as a
party which may be obligated to any Borrower or any of Borrowers' Affiliates
with respect to contracts which are part of the Senior Lender's Collateral)
agrees not to initiate or prosecute or encourage any other Person to initiate or
prosecute any claim, action or other proceeding (i) challenging the
enforceability of the Senior Lender's claim (ii) challenging the enforceability
of any liens or security interests in assets securing the Senior Obligations or
(iii) asserting any claims which any Borrower may hold with respect to the
Senior Lender
13. Further Assurances. The Subordinated Lenders and the Borrowers, at
their own expense and at any time from time to time, upon the written request of
the Senior Lender will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Senior Lender
reasonably may request for the purposes of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted.
14. Expenses. (a) The Borrowers, jointly and severally, agree to pay or
reimburse the Senior Lender and the Subordinated Lenders, upon demand, for all
its costs and expenses in connection with the enforcement or preservation of any
rights under this Agreement, including, without limitation, fees and
disbursements of counsel to the Senior Lender.
(b) The Borrowers, jointly and severally, agree to pay, indemnify,
and hold each Senior Lender and the Subordinated Lenders harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions (whether sounding in contract, tort or on any other ground), judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of, or in any other way arising out of or relating to this Agreement or any
action taken or omitted to be taken by any Senior Lender or any Subordinated
Lender with respect to any of the foregoing.
15. Provisions Define Relative Rights. This Agreement is intended solely
for the purpose of defining the relative rights of the Senior Lender on the one
hand and the Subordinated Lenders on the other, and no other Person shall have
any right, benefit or other interest under this Agreement.
12
16. Legend. (a) Each Subordinated Lender and the Borrowers will cause each
of the Subordinated Notes to bear upon its face the following legend:
ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO
OTHER INDEBTEDNESS PURSUANT TO, AND TO THE EXTENT PROVIDED IN,
AND IS OTHERWISE SUBJECT TO THE TERMS OF, THE INTERCREDITOR
AND SUBORDINATION AGREEMENT, DATED APRIL __, 2003 (THE
"SUBORDINATION AGREEMENT"), AS THE SAME MAY BE AMENDED,
MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME, BY AND
AMONG EDAC TECHNOLOGIES CORPORATION, APEX MACHINE TOOL
COMPANY, INC., AS BORROWERS, GROS-ITE INDUSTRIES, INC., AS
GUARANTOR, GENERAL ELECTRIC CAPITAL CORPORATION, AS SENIOR
LENDER, AND THE HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS
ARISING UNDER THE SUBORDINATED LOAN AGREEMENT REFERRED TO IN
THE SUBORDINATION AGREEMENT, INCLUDING, WITHOUT LIMITATION,
THIS NOTE.
(b) Each Subordinated Lender and the Borrowers will cause each
Subordinated Security Document to include the following legend:
THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED APRIL __,
2003 (THE "SUBORDINATION AGREEMENT") AS THE SAME MAY BE
AMENDED, MODIFIED OR OTHERWISE SUPPLEMENTED FROM TIME TO TIME,
BY AND AMONG, EDAC TECHNOLOGIES CORPORATION, APEX MACHINE TOOL
COMPANY, INC., AS BORROWERS, GROS-ITE INDUSTRIES, INC., AS
GUARANTOR, GENERAL ELECTRIC CAPITAL CORPORATION, AS SENIOR
LENDER, AND THE HOLDERS FROM TIME TO TIME OF THE OBLIGATIONS
ARISING UNDER THE SUBORDINATED LOAN AGREEMENT REFERRED TO IN
THE SUBORDINATION AGREEMENT.
17. Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Senior Obligations are paid in full and the obligation of
the Senior Lender to extend credit under the Senior Loan Documents is
irrevocably terminated.
18. Notices. All notices, requests and demands to or upon the
Senior Lender or the Borrowers or any Subordinated Lender to be effective shall
be in writing (or by telex, fax or similar electronic transfer confirmed in
writing) and shall be deemed to have been duly given or made (1) when delivered
by hand or (2) if given by mail, when deposited in the mails by certified mail,
return receipt requested, or (3) if by telex, fax or similar electronic
transfer, when sent and receipt has been confirmed, addressed as follows:
13
If to the Senior Lender: General Electric Capital Corporation
00 Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: EDAC Technologies Corporation -
Account Manager
If to the Borrowers: EDAC Technologies Corporation
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Purple
If to any Subordinated Lender, at its address or transmission number
for notices set forth under its signature below.
The Senior Lender, the Borrowers and any Subordinated Lender may change their
respective addresses and transmission numbers for notices by notice in the
manner provided in this Section.
19. Counterparts. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all the parties shall be lodged
with the Senior Lender.
20. Severability. Any provision of this Agreement which 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.
21. Integration. This Agreement represents the agreement of the Senior
Lender and the Subordinated Lenders with respect to the subject matter hereof
and there are no promises or representations by the Senior Lender or any
Subordinated Lender relative to the subject matter hereof not reflected herein.
22. Amendments in Writing; No Waiver: Cumulative Remedies. (a) None of the
terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Senior Lender,
the Borrowers, the Guarantor and each Subordinated Lender; provided that any
provision of this Agreement may be waived by the Senior Lender in a letter or
agreement executed by the Senior Lender or by telex or facsimile transmission
from the Senior Lender.
(b) No failure to exercise, nor any delay in exercising, on the
part of the Senior Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
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(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
23. Section Headings. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
24. Successors and Assigns. (a) This Agreement shall be binding upon the
successors and assigns of the Borrowers, the Guarantor and the Subordinated
Lenders and shall inure to the benefit of the Senior Lender and its successors
and assigns.
(b) Upon a successor Senior Lender becoming the Senior Lender
under the Senior Loan Agreement, such successor Senior Lender automatically
shall become the Senior Lender hereunder with all the rights and powers of the
Senior Lender hereunder without the need for any further action on the part of
any party hereto.
25. Invalidated Payments. To the extent that the Senior Lender receives
payments on, or proceeds of Collateral for, the Senior Obligations which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to any Borrower or the Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law, or equitable cause, then to the extent of such payment or proceeds
received, the Senior Obligations, or part thereof, intended to be satisfied
shall be revived and continue in full force and effect as if such payments or
proceeds had not been received by the Senior Lender.
26. Specific Performance. The Senior Lender is hereby authorized to demand
specific performance of this Agreement at any time when any Subordinated Lender
shall have failed to comply with any of the provisions of this Agreement
applicable to such Subordinated Lender whether or not any Borrower shall have
complied with any of the provisions hereof applicable to any Borrower, and the
Subordinated Lender hereby irrevocably waives any defense based on the adequacy
of a remedy at law which might be asserted as a bar to such remedy of specific
performance.
27. GOVERNING LAW: CONSENT TO JURISDICTION AND VENUE. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF New York APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. EACH OF THE BORROWERS, THE GUARANTOR, THE SUBORDINATED LENDERS AND
THE SENIOR LENDER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN New York SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES AMONG THE BORROWERS, THE SUBORDINATED LENDERS AND THE SENIOR
LENDER PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE SENIOR LOAN DOCUMENTS, PROVIDED, THAT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY
15
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF New
York AND, PROVIDED, FURTHER THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE SENIOR LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE SENIOR OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE SENIOR LENDER. EACH OF THE BORROWERS, THE GUARANTOR AND
THE SUBORDINATED LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH OF THE
BORROWERS AND THE SUBORDINATED LENDERS HEREBY WAIVES ANY OBJECTION WHICH IT MAY
HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS. EACH OF THE BORROWERS, THE GUARANTOR AND THE SUBORDINATED LENDERS
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINTS AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO IT AT THE ADDRESS SET FORTH IN THE SENIOR LOAN AGREEMENT OR BENEATH
ITS SIGNATURE LINE BELOW, AS THE CASE MAY BE, AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF THE SUCH BORROWER'S OR ANY SUBORDINATED
LENDER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
28. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN THE PARTIES ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE SENIOR LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
29. Amendment and Restatement. As of the date of this Agreement, the terms,
conditions, covenants, agreements, representations and warranties contained in
the Intercreditor and Subordination Agreement dated as of September 29, 2000 by
and among Fleet, Borrowers, Guarantor and Senior Lender shall be deemed amended
and restated in their entirety as set forth in this Agreement and shall be
replaced with and superseded by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Senior Lender
By: /s/Xxxxxx X. Xxxxxx
---------------------------------
Title: Duly Authorized Signatory
EDAC TECHNOLOGIES CORPORATION,
as a Borrower
By: /s/Xxxxxxxx X. Xxxxxx
---------------------------------
Title: President
APEX MACHINE TOOL COMPANY, INC.
as a Borrower
By: /s/Xxxxxxxx X. Xxxxxx
---------------------------------
Title: President
GROS-ITE INDUSTRIES, INC.,
as Guarantor
By: /s/Xxxxxxxx X. Xxxxxx
---------------------------------
Title: President
CORSAIR SPECIAL SITUATIONS FUND, L.P.,
by CORSAIR HOLDINGS, LLC, its General Partner
By: /s/Xxxxxx Xxxx
---------------------------------
Title: Managing Member
Address:
000 Xxxxx Xxx.
00xx Xxxxx
XX,XX 00000
Telex:_________________
Fax:___________________
17
FLEET NATIONAL BANK
By: /s/Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Vice President
Address:
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Telex:_________________
Fax:___________________
18
Schedule 1
