INTERCREDITOR AGREEMENT RELATING TO THE OFFERING OF 12% SECURED CONVERTIBLE NOTES DUE 2006 OF SHEERVISION, INCIntercreditor Agreement |
|
|
|
You are currently viewing: This Intercreditor Agreement involves
SHEERVISION, INC.. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Intercreditor Agreement by:
EX-10.17
EXECUTION COPY
================================================================================
--------------------------------------------
INTERCREDITOR AGREEMENT
RELATING TO
THE OFFERING OF
12% SECURED
CONVERTIBLE NOTES DUE 2006
OF
SHEERVISION, INC.
--------------------------------------------
DATED AS OF
SEPTEMBER 13, 2005
================================================================================
<PAGE>
INTERCREDITOR AGREEMENT (this
"AGREEMENT"), dated as of
September
13, 2005, between SHEERVISION,
INC., a California corporation with
offices located
at 4040 Palos Verdes Drive
North, Suite 105,
Rolling Hills Estates, California
90274 (the "COMPANY")
and THE
HOLDERS (the
"INVESTORS") of the 12% Secured Convertible Notes due
2006 of the COMPANY (the
"NOTES").
INTRODUCTION
In accordance with the
Confidential Private Placement
Memorandum, dated
August 24, 2005, of the Company and the documents attached thereto, including,
without limitation, the
Subscription Package attached
thereto (the
"SUBSCRIPTION"), the Investors
have agreed to purchase from the Company the
Notes, each dated as of the date hereof,
and delivered respectively
to the
Investors pursuant to the Subscription,
dated as of the date hereof, by and
between the Company
and each of
the Investors. Pursuant
to Notes, the
obligations of the Company under the
Notes are secured by a security
interest,
granted in favor of the Investors
in and to all property and
assets of the
Company (the "SECURITY INTEREST").
The Company's obligations, as set forth in
the Notes, are sometimes referred to herein as the "COMPANY'S
OBLIGATIONS". The
Investors desire to enter into
this Agreement in order to set forth
their
understanding with respect to several matters pertaining to the servicing of the
Loan (as hereinafter defined) and the enforcement of their respective
rights
with respect to the Notes,
as well as matters related to the subordination
thereof.
NOW, THEREFORE, in consideration
of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set
forth and
for other good and valuable consideration,
the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Loan Advance.
The Investors have advanced, pursuant to the terms and conditions
set forth in the Transaction Documents (as defined in the Notes), the amounts
set forth in Exhibit A attached hereto (in the aggregate, the "LOAN"). For the
purposes of this Agreement, the amount of
principal, plus interest
accrued
thereon, owed to each Investor under its
respective Note as a proportion of the
aggregate amount of the Loan, shall be referred to as such Investor's
respective
percentage interest (the "PERCENTAGE INTERESTS").
2. Ownership Interest.
Each Investor
shall own an interest
in the Loan equal to its
Percentage Interest as described on
Exhibit A and each Investor shall own its
interest the Company's Obligations.
Except as otherwise stated herein,
the
Investor shall own, PARI PASSU to each of the other Investors,
an undivided
fractional interest equal to such Investor's
Percentage Interest in: (a) the
<PAGE>
Loan; (b) all payments made on or in respect
of the Loan; (c) all recoveries or
distributions in connection
with the Loan; and (d) all present
and future
collateral (and all proceeds in connection therewith) securing the same.
3. No Representation or Warranty Relating to
Loan.
3.1. No Investor has made any warranty or representation to any
other Investor, expressed or implied,
with respect to the Loan, the adequacy of
security for the Loan, the existing or future solvency or financial worth of
the
Company, and the ability of the Company
to repay the Loan and the
Company's
Obligations. Each Investor
acknowledges that the
Loan and the
Company's
Obligations carry a high degree of risk; that the
Company may default on the
Loan, which may result in a bankruptcy filing and/or foreclosure action and/or
a
deterioration of the collateral
for the Loan; and that it may not be possible
for the Investors to collect the full principal
balance of the Loan, any or all
of the accrued interest on the Loan, and/or any or all other amounts due with
respect to the Loan.
3.2. Any
information, data, projections
and other materials
heretofore supplied to each
Investor has been
extrapolated from material
supplied by the Company or due diligence.
Each Investor acknowledges and agrees
that no Investor makes any
representation or warranty
as to the nature and
quality of such information. Each
Investor acknowledges and agrees that it
has
had ample opportunity to make and have made such investigations as it has
deemed
necessary under the circumstances.
4. Expenses.
All expenses including, but
not limited to, counsel fees and court
costs paid or incurred by any Investor (an
"OBLIGATED PARTY") in
any action to
collect or foreclose on any of the Company's Obligations, the Security Interest
or the Loan, shall be borne by the Investors in accordance with their
respective
Percentage Interests at the time of the default or the failure
of performance
giving rise to the action to
collect or enforce
the rights of the Investors
under the Noteor
the Company's Obligations.
Payment shall be made by each
Investor to the Obligated Party within
five (5) days after receipt of notice of
demand for the payment of such Investor's PRO RATA share. If such payment is
not
made when due, the Obligated
Party may make such payment on the
defaulting
Participant's behalf, such
payment shall bear
interest at the rate of ten
percent (10%) PER ANNUM and shall be automatically repaid to the Obligated
Party
out of the first funds received on behalf of the defaulting Participant from or
on behalf of the Company.
5. Distribution of Sale or Refinance
Proceeds.
5.1. If Company repays or refinances the Loan, or
if the Company
is in default of the Company's Obligations and any Investor sells or disposes
of
any Collateral for the Loan or any
Investor otherwise recovers all or part of
the principal and interest and other amounts due and owing
under the Company's
Obligations, the net proceeds
of said refinances or sale or the amount
of
principal, interest and
other amounts repaid
shall be distributed in the
following order of priority:
(a) First,
repayment of
each Investor's expenses
described above in Section 4;
-2-
<PAGE>
(b) Second,
repayment of remaining
principal and
interest (exclusive of default interest and late charges to each Investor);
(c) Third, repayment of default interest, late charges,
and any other amounts to each
Investor PARI PASSU in accordance
with their
respective Percentage Interests;
5.2. The priorities of allocation set forth in
Section 5.1 shall
apply in all circumstances, including with respect to any distribution
made in
any case or proceeding
under Title 11 of United
States Code or any other
proceeding relating to
the Company under
any






