Exhibit 10.10
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT ("Intercreditor Agreement") dated
as of March 31, 2003, is by and among CONGRESS FINANCIAL CORPORATION (FLORIDA),
a Florida corporation in its capacity as agent pursuant to the Senior Loan
Agreement (as hereinafter defined) acting for and on behalf of the financial
institutions from time to time party thereto as lenders (in such capacity,
"Senior Creditor Agent" as hereinafter further defined), and the financial
institutions from time to time party to the Senior Loan Agreement as lenders
("Lenders" as hereinafter further defined), and U.S. BANK NATIONAL ASSOCIATION,
a national banking association ("Junior Creditor" as hereinafter further
defined).
W I T N E S S E T H:
WHEREAS, pursuant to the Junior Loan Agreement, Mackie Designs Inc., a
Washington corporation ("Borrower" as hereinafter further defined) is indebted
to Junior Creditor, which indebtedness is secured by certain assets and
properties of Borrower and Obligors (as hereinafter defined);
WHEREAS, the Lenders have entered or are about to enter into financing
arrangements with Borrower, pursuant to which Lenders may, upon certain terms
and conditions, make loans and provide other financial accommodations to
Borrower secured by certain assets and properties of Borrower and Obligors; and
WHEREAS, Creditors (as hereinafter defined) desire to enter into this
Intercreditor Agreement to (i) confirm the relative priority of the security
interests of each Creditor in the assets and properties of Borrower and
Obligors, (ii) provide for the orderly sharing among Creditors, in accordance
with such priorities, of proceeds of such assets and properties upon any
foreclosure thereon or other disposition thereof, and (iii) agree upon the terms
of the subordination of the obligations of Borrower and Obligors to Junior
Creditor and related matters;
NOW THEREFORE, in consideration of the mutual benefits accruing to Creditors
hereunder and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
1.
DEFINITIONS
As used above and in this Intercreditor Agreement, the following terms shall
have the meanings ascribed to them below:
1.1
"Agreements" shall mean, collectively, the Senior Creditor Agreements
and the Junior Creditor Agreements; each sometimes being referred to
individually as an "Agreement".
1.2
"Blockage Notice" shall mean a written notice from the Senior Creditor
Agent to the Borrower and the Junior Creditor that a Non-Triggering Event of
Default has occurred and is continuing with respect to the Senior Debt and which
specifies that such notice is a "Blockage Notice".
1.3
"Blockage Period" shall mean (a) any period during which a Triggering
Event of Default has occurred and is continuing; and (b) any other period
commencing on the date a Blockage Notice is given by the Senior Creditor Agent
and ending on the earliest to occur of (1) the date when each Non-Triggering
Event of Default that was the basis for such notice has been cured or waived,
and (2) one hundred eighty (180) days after the date such Blockage Notice is
given,
1.4
"Borrower" shall mean Mackie