Exhibit 10.5
INTERCREDITOR AND SUBORDINATION
AGREEMENT
This Intercreditor
and Subordination Agreement (“Agreement”) is made as of
this 16th day of May, 2005, by and between Wells Fargo Business
Credit, Inc., a Minnesota corporation (“Wells Fargo”),
and Ingram Micro Inc., a Delaware corporation
(“Ingram”).
Background
A.
Wells Fargo, as lender, Infotech USA, Inc., a New Jersey
corporation (“Infotech-NJ”), as borrower, and Infotech
USA, Inc., a Delaware corporation (“Infotech-DE”), and
Information Technology Services, Inc., a New York corporation
(“ITS”), as guarantors (Infotech-NJ, Infotech-DE and
ITS each an “Obligor” and collectively, the
“Obligors”), are parties to that certain Credit and
Security Agreement, dated as of June 29, 2004, (as the same may be
amended, modified, supplemented or restated from time to time, the
“Credit Agreement”), pursuant to which: (i) Wells Fargo
has made loans and other credit accommodations to Infotech-NJ, and
may, from time to time hereafter, make additional loans and credit
accommodations to Infotech-NJ; and (ii) the Obligors have granted
to Wells Fargo a security interest in the Wells Fargo Collateral
(as defined below) as security for the Wells Fargo Indebtedness (as
defined below). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit
Agreement.
B.
Ingram (i) has entered or is about to enter into that certain
Security Agreement between Ingram and Infotech-NJ, dated as of May
16, 2005 (the “Security Agreement”), pursuant to which
Infotech-NJ has granted or will grant Ingram a security interest in
and to all of Infotech-NJ’s presently owned and after
acquired equipment, inventory, accounts and chattel paper and (ii)
has received or is about to receive (x) that certain Guaranty,
dated as of May 16, 2005, made by Infotech-DE in favor of Ingram
and (y) that certain Guaranty, dated as of May 16, 2005, made by
ITS in favor of Ingram (collectively, the
“Guarantees”). The Security Agreement and the
Guarantees and all other documents, agreements and instruments
related thereto or to the Ingram Indebtedness, as each may be
amended, modified, supplemented or restated from time to time, are
collectively referred to herein as the “Ingram
Documents.”
C.
Wells Fargo and Ingram desire to enter into this Agreement for the
purpose of establishing their respective rights with respect to
their liens upon and security interests in the assets of the
Obligors and certain other rights, priorities and interests between
them.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants contained
herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Wells Fargo and
Ingram hereby agree as follows:
1.
Definitions . All terms used in this Agreement (including
the foregoing recitals, which are part of this Agreement) that are
defined in the UCC (as hereinafter defined) as enacted shall have
the meanings ascribed to them in the UCC, unless otherwise
expressly defined herein. As used in this Agreement, the following
terms shall have the meanings respectively set forth after
each:
“
Ingram Documents ” shall have the meaning ascribed to
such term in the recitals to this Agreement.
“
Ingram Indebtedness ” shall mean any and all of the
present and future obligations, liabilities and indebtedness of the
Obligors to Ingram, whether now existing or hereafter arising, of
every kind and character, whether arising out of the purchase of
Ingram Inventory or otherwise (including, without limitation,
interest or finance charges accruing after the commencement of a
bankruptcy proceeding by or against any Obligor, fees, collection
costs and expenses and other amounts), all whether direct or
indirect, fixed or contingent, matured or unmatured, liquidated or
unliquidated, and whether arising under contract, in tort or
otherwise.
“
Ingram Inventory ” shall mean any and all presently
owned and hereafter acquired inventory sold by Ingram to
Infotech-NJ for which payment has not been received by
Ingram.
“
Ingram Inventory Receivables ” shall mean any and all
accounts receivable of Infotech-NJ arising from the sale of any
Ingram Inventory.
“
Lien ” shall mean any lien, security interest, charge,
encumbrance, mortgage or deed of trust, howsoever
arising.
“
Loan Documents ” shall mean the Credit Agreement and
any other documents, instruments or agreements executed or
delivered in connection therewith, as the same may be amended,
modified, supplemented or restated from time to time.
“
Payment in Full ” or “ Paid in Full
” shall mean the indefeasible final payment in full in cash
and satisfaction of the Wells Fargo Indebtedness, in accordance
with the Credit Agreement and the other Loan Documents, and that
such payment shall not be subject to defeasance, disgorgement,
repayment or return for any reason.
“
UCC ” shall mean the Uniform Commercial Code as the
same may be amended and in effect from time to time in the State of
New York.
“
Wells Fargo Collateral ” shall mean all of each
Obligor's presently existing and hereafter acquired, created or
arising personal property (including, without limitation, all
Ingram Inventory and Ingram Inventory Receivables), wherever
located, and all proceeds (including proceeds of insurance) and
products thereof.
“
Wells Fargo Indebtedness ” shall mean any and all of
the present and future Obligations (as defined in the Credit
Agreement) of the Obligors evidenced by, secured by, arising under
or related to the Credit Agreement and the other Loan Documents
(including, without limitation, interest accruing after the
commencement of a bankruptcy proceeding by or against any Obligor,
fees, collection costs and expenses and other amounts), all whether
direct or indirect, fixed or contingent, matured or unmatured,
liquidated or unliquidated, joint or several and whether arising
under contract, in tort or otherwise.
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2.
Priority of Security Interests .
(a)
Notwithstanding (i) any statement or term contained in the Credit
Agreement or any of the other Loan Documents or the Ingram
Documents or any other agreement with the Obligors to the contrary;
(ii) the time, order or method of attachment or perfection of the
security interests granted thereby or the time or order of filing
or recording of any financing statements or other lien or security
interests; or (iii) anything contained in any filing or agreement
to which Wells Fargo or Ingram may now or hereafter be a party,
until such time as all of the Wells Fargo Indebtedness shall have
been Paid in Full and all financing arrangements among the Obligors
and Wells Fargo shall have been terminated, the priority of any and
all Liens, rights and interests of Ingram and Wells Fargo, whether
now or hereafter arising and howsoever existing, is as
follows:
(A)
Except as otherwise expressly set forth herein, Wells Fargo shall
have a first priority security interest in all Wells Fargo
Collateral other than the Ingram Inventory and Ingram shall have a
second priority security interest in all Wells Fargo Collateral
other than the Ingram Inventory, which second priority security
interest shall be subordinate and junior to the security interest
of Wells Fargo;
(B)
Ingram shall have a first priority security interest in the Ingram
Inventory and Wells Fargo shall have a second priority security
interest in the Ingram Inventory;
For purposes of the foregoing,
any claim of a right of setoff, or lien of judgment, execution or
levy, shall be treated in all respects as a security interest and
no claimed right of setoff, lien or judgment, execution or levy
shall be asserted to defeat or diminish the rights or priorities
provided for herein.
3.
Subordination of Debt . Ingram hereby subordinates its right
to payment under the Guarantees to the prior Payment in Full of the
Wells Fargo Indebtedness, and Ingram’s receipt of any payment
pursuant to any of the Guarantees is deferred until the Payment in
Full of the Wells Fargo Indebtedness. During the term of this
Agreement, Ingram will not ask for, demand, sue for, take or
receive from Infotech-DE or ITS any payment in respect of the
Ingram Indebtedness. In the event that Ingram shall receive any
payment in respect of the Ingram Indebtedness in violation of this
Section 3, it shall receive and hold same for the benefit of Wells
Fargo and shall forthwith deliver the same to Wells Fargo in
precisely the form received (except for the endorsement or
assignment of Ingram where necessary) for application against the
Wells Fargo Indebtedness, whether due or not due, and, until so
delivered, the same shall be held in trust by Ingram as the
property of Wells Fargo.
4.
Limitation on Ingram Inventory and Wells Fargo Collateral
.
(a)
During the term of this Agreement, Ingram shall have no right to
take any action with respect to the Wells Fargo Collateral (other
than the Ingram Inventory), whether by judicial or non-judicial
foreclosure, the seeking of the appointment of a receiver for any
portion of any Obligor’s property or assets or otherwise, or
to take possession of any of the Wells Fargo Collateral (other than
the Ingram Inventory), and shall have no rights of notification to
any obligor or account debtor of any Obligor for any purpose
whatsoever.
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(b)
Unless and until all Ingram Indebtedness shall have been
indefeasibly paid in full in cash, Wells Fargo shall have no right
to take any action with respect to the Ingram Inventory, whether by
judicial or non-judicial foreclosure, the seeking of the
appointment of a receiver for the Ingram Inventory, or to take
possession of any of the Ingram Inventory.
5.
Distribution of Ingram Collateral and Wells Fargo Collateral
.
(a)
During the term of this Agreement, Ingram will not ask for, demand,
sue for, take or receive from any Obligor or any successor or
assign of any Obligor, including, without limitation, a receiver,
trustee or debtor in possession, whether by setoff or in any other
manner, the whole or any part of the Ingram Indebtedness from any
of the Wells Fargo Collateral (other than the Ingram Inventory) or
any income or proceeds thereof. Ingr
