Common use of Intercompany Subordination Clause in Contracts

Intercompany Subordination. 29 INDEX OF EXHIBITS AND SCHEDULES ------------------------------- Schedule A - Definitions Schedule B - Lender's and Borrowers' Addresses for Notices Schedule C - Letters of Credit (Not Used) Schedule D - Cash Management System Schedule E - Fees and Expenses Schedule F - Schedule of Documents Schedule G - Financial Covenants Disclosure Schedule (3.2) - Places of Business; Corporate Names Disclosure Schedule (3.6) - Real Estate Disclosure Schedule (3.7) - Stock; Affiliates Disclosure Schedule (3.10) - Taxes Disclosure Schedule (3.12) - ERISA Disclosure Schedule (3.13) - Litigation Disclosure Schedule (3.14) - Intellectual Property Disclosure Schedule (3.16) - Environmental Matters Disclosure Schedule (3.17) - Insurance Disclosure Schedule (3.18) - Commodity and Security Accounts Disclosure Schedule (3.19) - Contracts (Offset Risk) Disclosure Schedule (5(b)) - Indebtedness Disclosure Schedule (5(e)) - Liens Disclosure Schedule (6.1) - Actions to Perfect Liens Exhibit A - Form of Notice of Revolving Credit Advance Exhibit B - Other Reports and Information Exhibit C - Form of Borrowing Base Certificate Exhibit C-1 - Inventory Rollforward and Reconciliation Exhibit D - Form of Accounts Payable Analysis Exhibit E - Form of Accounts Receivable Rollforward Analysis Exhibit F - Form of Revolving Credit Note Exhibit G - Form of Term Note Exhibit H - Form of Secretarial Certificate Exhibit I - Form of Power of Attorney Exhibit J - Form of Certificate of Compliance Exhibit K - Form of Lockbox Agreement Exhibit L - Form of Landlord's Waiver and Consent Exhibit M - Form of Opinion of Counsel to Borrower Exhibit N - Form of Intercreditor Agreement (unsecured junior debt) Exhibit O - Form of U.C.C. Schedule Exhibit P - Form of Payment of Proceeds Letter Exhibit Q - Form of Standard Payoff Letter GE Capital TRANSACTION SUMMARY AS OF THE DATE OF THIS AGREEMENT -------------------------------------------------------------------------------- REVOLVING CREDIT LOAN Maximum Amount: $12,000,000 -------------- Term: 3 years ---- Revolving Credit Rate: Index Rate plus .50% ---------------------- Letter of Credit Subfacility: n/a ---------------------------- Borrowing Base: 85% of the value (as determined by Lender) of -------------- each Borrower's Eligible Accounts; provided, that Lender shall reduce the foregoing percentage by one percentage point for each percentage point that the dilution of such Borrower's Accounts (calculated by Lender as the average dilution over the most recent three months) exceeds 5%; plus the lesser of ---- (i) 60% of the value of each Borrower's (or 49% in the case of BPI) Eligible Inventory or (ii) 85% of the orderly liquidation value as determined by Lender of each Borrower's Eligible Inventory. TERM LOAN Original Principal Amount: $2,360,000 ------------------------- Term: 3 years ---- Amortization: Equal monthly principal installments of ------------ $11,479.17 until the date the Ash Corp. Acquisition is closed, at which time the monthly principle installment shall thereafter increase to $49,166.70, payable on the first day of each month, with payment of all remaining principle then outstanding due on the Commitment Termination Date. Term Loan Rate: Index Rate plus .50% -------------- FEES Closing Fee: $120,000 ----------- Collateral Monitoring Fee: $10,000 per annum. ------------------------- Unused Line Fee: .25% --------------- Letter of Credit Fee: n/a -------------------- Prepayment Fee: 3% in year one; 2% in year two; and 1% in year three. The Loans described generally here are established and governed by the terms and conditions set forth below in this Agreement and the other Loan Documents, and if there is any conflict between this general description and the express terms and conditions below or elsewhere in the Loan Documents, such other express terms and conditions shall control. -------------------------------------------------------------------------------- This LOAN AND SECURITY AGREEMENT is dated as of November 15, 1999, and agreed to by and among NUTRITION FOR LIFE INTERNATIONAL, INC., a Texas corporation ("Leading Borrower"), NL ACQUISITION COMPANY, a Delaware corporation ( "NLAC"), AC ACQUISITION COMPANY, a Delaware corporation (to be known after the Ash Corp. Acquisition as Ash Corp. and herein "ASH"), BPI ACQUISITION COMPANY, a Delaware corporation (to be known after the Closing Date as Bactolac Pharmaceutical Inc. and herein "BPI" and Leading Borrower, ASH, NLAC, and BPI being collectively referred to as "Borrowers" and each a "Borrower"), any other Credit Party executing this Agreement, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("Lender").

Intercompany Subordination. 29 27 12. Release............................................................ 27 12.1 Lender Release of NLAC....................................... 27 12.2 NLAC Release of Lender....................................... 27 INDEX OF EXHIBITS AND SCHEDULES ------------------------------- Schedule A - Definitions Schedule B - Lender's and Borrowers' Addresses for Notices Schedule C - Letters of Credit (Not Used) Schedule D - Cash Management System Schedule E - Fees and Expenses Schedule F - Schedule of Documents Schedule G - Financial Covenants Disclosure Schedule (3.2) - Places of Business; Corporate Names Disclosure Schedule (3.6) - Real Estate Disclosure Schedule (3.7) - Stock; Affiliates Disclosure Schedule (3.10) - Taxes Disclosure Schedule (3.12) - ERISA Disclosure Schedule (3.13) - Litigation Disclosure Schedule (3.14) - Intellectual Property Disclosure Schedule (3.16) - Environmental Matters Disclosure Schedule (3.17) - Insurance Disclosure Schedule (3.18) - Commodity and Security Accounts Disclosure Schedule (3.19) - Contracts (Offset Risk) Disclosure Schedule (5(b)) - Indebtedness Disclosure Schedule (5(e)) - Liens Disclosure Schedule (6.1) - Actions to Perfect Liens Exhibit A - Form of Notice of Revolving Credit Advance Exhibit B - Other Reports and Information Exhibit C - Form of Borrowing Base Certificate Exhibit C-1 - Inventory Rollforward and Reconciliation Exhibit D - Form of Accounts Payable Analysis Exhibit E - Form of Accounts Receivable Rollforward Analysis Exhibit F - Form of Revolving Credit Note Exhibit G - Form of Term Note Exhibit H - Form of Secretarial Certificate (ANIP) Exhibit H-1 - Form of Secretarial Certificate (other Credit Parties) Exhibit I - Form of Power of Attorney Exhibit J - Form of Certificate of Compliance Exhibit K - Form of Lockbox Agreement Exhibit L - Form of Landlord's Waiver and Consent Reserved Exhibit M - Form of Opinion of Counsel to Borrower and Holding Co. Exhibit N - Form of Intercreditor Agreement (unsecured junior debt) Reserved Exhibit O - Form of U.C.C. UCC Schedule Exhibit P - Form of Payment of Proceeds Letter Exhibit Q - Reserved Exhibit R - Form of Standard Payoff Borrower Authorized Representative Letter Exhibit S - Form of Guarantee GE Capital TRANSACTION SUMMARY AS OF THE DATE OF THIS AGREEMENT -------------------------------------------------------------------------------- REVOLVING CREDIT LOAN Maximum Amount: $12,000,000 -------------- Term: 3 years ---- Revolving Credit Rate: Index Rate plus .500.50% ---------------------- Letter of Credit Subfacility: n/a ---------------------------- Borrowing Base: 85% of the value (as determined by -------------- Lender) of -------------- each Borrower's Eligible Accounts; provided, that Lender shall reduce the foregoing percentage by one percentage point for each percentage point that the dilution of such Borrower's Accounts (calculated by Lender as the average dilution over the most recent three months) exceeds 5%; plus ---- the lesser of ---- (i) 60% of the value of each Borrower's (or 49% in the case of BPILeading Borrower) Eligible Inventory or (ii) 85% of the orderly liquidation value as determined by Lender of each Borrower's Eligible Inventory. TERM LOAN Original Principal Amount: $2,360,000 ------------------------- Term: 3 years ---- Amortization: Equal monthly principal installments of ------------ $11,479.17 until the date the Ash Corp. Acquisition is closed, at which time the monthly principle installment shall thereafter increase to $49,166.70, payable on the first day of each month, with payment of all remaining principle then outstanding due on the Commitment Termination Date. Term Loan Rate: Index Rate plus .50% -------------- FEES Closing Fee: $120,000 ----------- Collateral Monitoring Fee: $10,000 per annum. ------------------------- Unused Line Fee: .25% --------------- Letter of Credit Fee: n/a -------------------- Prepayment Fee: 3% in year one; 2% in year two; and 1% in year three. The Loans described generally here are established and governed by the terms and conditions set forth below in this Agreement and the other Loan Documents, and if there is any conflict between this general description and the express terms and conditions below or elsewhere in the Loan Documents, such other express terms and conditions shall control. -------------------------------------------------------------------------------- This LOAN AND SECURITY AGREEMENT is dated as of November 15, 1999, and agreed to by and among NUTRITION FOR LIFE INTERNATIONAL, INC., a Texas corporation ("Leading Borrower"), NL ACQUISITION COMPANY, a Delaware corporation ( "NLAC"), AC ACQUISITION COMPANY, a Delaware corporation (to be known after the Ash Corp. Acquisition as Ash Corp. and herein "ASH"), BPI ACQUISITION COMPANY, a Delaware corporation (to be known after the Closing Date as Bactolac Pharmaceutical Inc. and herein "BPI" and Leading Borrower, ASH, NLAC, and BPI being collectively referred to as "Borrowers" and each a "Borrower"), any other Credit Party executing this Agreement, and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("Lender").