EXHIBIT 10.4
INTERCREDITOR, SUBORDINATION AND
TURNOVER AGREEMENT
THIS INTERCREDITOR, SUBORDINATION AND TURNOVER AGREEMENT (as may be
amended, modified or restated from time to time, this "AGREEMENT"), dated as of
the 17th day of June, 2005, is by and among WACHOVIA BANK, NATIONAL ASSOCIATION,
as Lender under the below-described Senior Credit Agreement (the "SENIOR
LENDER"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in his capacity as agent for the Junior Lenders
under the below-described Junior Credit Agreement (the "JUNIOR AGENT").
R E C I T A L S :
▇. ▇▇▇▇▇▇ INDUSTRIES, INC., a Tennessee corporation ("▇▇▇▇▇▇"), and
the Senior Lender have entered into a certain Credit Agreement dated as of June
17, 2005 (as may be amended, modified or restated from time to time hereafter in
accordance with the terms of this Agreement, the "SENIOR CREDIT AGREEMENT"),
pursuant to which, among other things, the Senior Lender has agreed, subject to
the terms and conditions set forth in such agreement, to make certain loans and
financial accommodations to ▇▇▇▇▇▇ (▇▇▇▇▇▇, along with certain of its
subsidiaries listed on the Acknowledgment and Agreement attached hereto, are
referred to herein as the "Debtors").
B. The Junior Agent, the lenders from time to time party thereto
(the "JUNIOR LENDERS"; the Junior Agent and the Junior Lenders, collectively,
the "JUNIOR CREDITORS"), and one or more of the Debtors have entered into a
certain Amended and Restated Credit Agreement dated as of July 23, 2001 (as
amended by (i) that certain Amendment No. 1 dated as of April 12, 2002, among
▇▇▇▇▇▇, ▇▇▇▇▇▇ Industries Towing Equipment Inc., certain subsidiaries of ▇▇▇▇▇▇,
Bank of America, N.A., Wachovia Bank, N.A., AmSouth Bank and SunTrust Bank, (ii)
that certain letter agreement dated November 19, 2003, by Contrarian Funds, LLC,
and Bank of America, N.A., (iii) that certain Amendment No. 3 dated as of
January 14, 2004, among ▇▇▇▇▇▇, ▇▇▇▇▇▇ Industries Towing Equipment Inc., certain
subsidiaries of ▇▇▇▇▇▇, Contrarian Funds, LLC as agent and lender and
Harbourside as a lender, (iv) that certain Amendment No. 4 dated as of November
5, 2004, among ▇▇▇▇▇▇, ▇▇▇▇▇▇ Industries Towing Equipment Inc., certain
subsidiaries of ▇▇▇▇▇▇ and Harbourside as agent and sole lender, and (v) that
certain Amendment No. 5 dated as of even date herewith, among ▇▇▇▇▇▇, certain
Subsidiaries of ▇▇▇▇▇▇ and Junior Agent, it its capacity as agent and sole
lender, and as the same may from time to time be amended, supplemented, restated
or modified from time to time provided that any such amendment, supplement,
restatement or modification is permitted under this Agreement, the "JUNIOR
CREDIT AGREEMENT"), pursuant to which, among other things, the Junior Lenders
have agreed, subject to
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the terms and conditions set forth in such agreement, to make a term loan to one
or more of the Debtors, which loan is to be guaranteed by Debtors and certain
other Subsidiaries of ▇▇▇▇▇▇.
C. The Debtors have granted security interests to the Senior Lender
and the Junior Agent, in certain of the Debtors' real and personal property,
whether now existing or hereafter arising, as more particularly described on
SCHEDULE A hereto (collectively, the "COLLATERAL"), in order to secure the
Debtors' respective obligations to the Senior Lender and the Junior Creditors.
D. In connection with the foregoing, the parties hereto desire to
enter into this Agreement, pursuant to which (a) the obligations of the Debtors
to the Junior Creditors under the Junior Loan Documents are subordinated to the
obligations of the Debtors to the Senior Lender under the Senior Loan Documents,
and (b) all of the liens and security interests of the Junior Agent in the
Collateral are subordinated to the liens and security interests of the Senior
Lender therein.
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. In addition to capitalized terms defined
elsewhere in this Agreement, the following capitalized terms shall have the
following respective meanings when used in this Agreement:
"AGREEMENT" has the meaning set forth in the preamble to this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
ss. 101 ET SEQ.), as amended from time to time, or any successor statute.
"COLLATERAL" has the meaning set forth in the recitals to this
Agreement.
"CONTINUING SUBSIDIARY" has the meaning set forth in the Senior Credit
Agreement.
"DEBTORS" has the meaning set forth in the recitals to this Agreement.
"ENFORCEMENT ACTION" means any action to enforce or attempt to enforce
any right or remedy available to any Junior Creditor under the Junior Loan
Documents, applicable law or otherwise, including any action to (a) accelerate
the maturity of, or demand as immediately due and payable, all or any part of
the Junior Liabilities, (b) exercise any right of set-off, (c) realize or
foreclose upon, repossess, sell or otherwise dispose of, liquidate, or otherwise
restrict or interfere with the use of, any Collateral, (d) commence, continue or
participate in (other than as a defendant or co-defendant in defense of its own
interests) any judicial, arbitral or other proceeding, or any other collection
or enforcement action of any kind, against any Debtor or any assets of any
Debtor (including any Insolvency or Liquidation Proceeding), in any case,
seeking, directly or indirectly, to enforce any rights or remedies, or to
enforce any of the obligations incurred by any Debtor, under or in connection
with the Junior Liabilities or the Junior Loan Documents, or (e) commence or
pursue any judicial, arbitral or other proceeding or legal action
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of any kind, seeking injunctive or other equitable relief to prohibit, limit or
impair the commencement or pursuit by the Senior Lender of any of its rights or
remedies under or in connection with the Senior Loan Documents or otherwise
available to the Senior Lender under applicable law.
"EVENT OF DEFAULT" means any event of default under and as defined in
the Senior Loan Documents.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means (a) any insolvency or
bankruptcy case or proceeding (including any case under the Bankruptcy Code), or
any receivership, custodianship, liquidation, reorganization or other similar
case or proceeding, relative to any Debtor or any Turnover Subsidiary, or to the
assets of any Debtor or any Turnover Subsidiary, (b) any liquidation,
dissolution, reorganization or winding up of any Debtor or any Turnover
Subsidiary, whether voluntary or involuntary and whether or not involving
solvency or bankruptcy, (c) any assignment for the benefit of creditors or any
other marshalling of assets and liabilities of any Debtor or any Turnover
Subsidiary, or (d) any sale, transfer or other disposition of all or
substantially all of the assets of any Debtor or any Turnover Subsidiary in
connection with any of the foregoing.
"JUNIOR AGENT" has the meaning set forth in the preamble to this
Agreement.
"JUNIOR CREDIT AGREEMENT" has the meaning set forth in the recitals to
this Agreement.
"JUNIOR CREDITOR DEFAULT NOTICE" has the meaning set forth in Section
6.2 of this Agreement.
"JUNIOR CREDITORS" has the meaning set forth in the recitals to this
Agreement.
"JUNIOR LIABILITIES" means all Liabilities to any of the Junior
Creditors from time to time outstanding pursuant to the Junior Loan Documents
(including, without limitation, all principal, interest, fees, Liabilities
relating to or arising out of any warrants or other any equity interests in any
Debtor, Liabilities arising out of any guarantees, and all indemnities, costs,
and expenses).
"JUNIOR LOAN DOCUMENTS" means the Junior Credit Agreement and all
agreements, documents and instruments related to the debt obligations thereunder
and collateral security therefor and any put or similar rights granted in
connection therewith, including but not limited to, the Junior Notes and any
guarantees relating to the Junior Credit Agreement, as any of the foregoing may
from time to time be amended, restated, supplemented or otherwise modified in
compliance with the terms of this Agreement.
"JUNIOR NOTES" means, collectively, each promissory note (including
promissory notes issued after the date hereof with respect to the payment of
interest in kind under the Junior
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Liabilities) issued to a Junior Creditor pursuant to the terms of the Junior
Credit Agreement and all notes issued in substitution or replacement thereof.
"JUNIOR SECURITIES" means securities of any Debtor or any of its
subsidiaries (including, without limitation, equity securities), in each case
the payment or redemption of which is subordinate, at least to the extent
provided in this Agreement with respect to the Junior Liabilities, to the
payment of the Senior Liabilities and to the payment of all securities issued in
exchange therefor to the Senior Lender, so long as all requirements of Section
9.10 of the Credit Agreement have been complied with.
"LIABILITIES" means all indebtedness, obligations and liabilities of
each Debtor, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, joint or several, now or hereafter existing,
or due or to become due.
"LIEN" means any mortgage, deed to secure debt, deed of trust, lien,
pledge, charge, security interest, security title or encumbrance of any kind,
whether created by agreement or by possession of property, or conferred by
statute or applicable law.
"▇▇▇▇▇▇" has the meaning set forth in the recitals to this Agreement.
"NEW LENDER" has the meaning set forth in Section 17.1 of this
Agreement.
"PAYMENT BLOCKAGE NOTICE" has the meaning set forth in Section 4.2 of
this Agreement.
"PAYMENT BLOCKAGE PERIOD" has the meaning set forth in Section 4.2 of
this Agreement.
"PERMITTED PAYMENTS" means (a) regularly scheduled payments of interest
and fees on the dates, in the amounts and at the interest rates (including any
changes thereto by the application of interest rate adjustments as provided for
in the Junior Loan Documents, but excluding any increase in the interest rate
resulting from application of default rate interest under the Junior Loan
Documents) set forth in the Junior Credit Agreement as in effect on the date
hereof, and (b) prepayments of the principal outstanding amount of the Junior
Liabilities to the extent permitted pursuant to Section 9.2(d) of the Senior
Credit Agreement.
"PLEDGE AGREEMENT" means the Pledge Agreement dated as of even date
herewith pursuant to which the equity interests of certain of ▇▇▇▇▇▇'▇ direct
and indirect Subsidiaries are pledged to the Senior Lender.
"SENIOR LENDER" has the meanings set forth in the preamble to this
Agreement, together with its successors and assigns.
"SENIOR CREDIT AGREEMENT" has the meaning set forth in the recitals to
this Agreement.
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"SENIOR LIABILITIES" means all Liabilities to the Senior Lender from
time to time outstanding pursuant to or in connection with the Senior Loan
Documents (including, without limitation, all principal, interest, fees,
reimbursement obligations with respect to letters of credit, indemnities, costs
and expenses) up to an aggregate amount not to exceed the sum of (a) up to
$20,000,000 of revolving loans and letters of credit at any time outstanding
pursuant to the Senior Credit Agreement; PLUS (b) up to $7,000,000 of term loans
made pursuant to the Senior Credit Agreement; PLUS (c) all interest arising
under or with respect to the Senior Loan Documents, including, in the event of
an Insolvency or Liquidation Proceeding, any and all post-petition interest and
costs from and after the date of filing of a petition by or against any Debtor
or its bankruptcy estate, whether or not such amounts are allowed as a claim
against any Debtor in any Insolvency or Liquidation Proceeding; PLUS (d) all
Liabilities arising under or out of any other product or service offered by
Senior Lender to ▇▇▇▇▇▇; PLUS (e) all reasonable costs and expenses incurred by
the Senior Lender in connection with its enforcement of any rights or remedies
under the Senior Loan Documents and under this Agreement, the collection of any
of the Senior Liabilities, or the protection of, or realization upon, any
collateral therefor after the occurrence and during the continuance of an Event
of Default under the Senior Loan Documents, including, by way of example,
reasonable attorneys' fees, court costs, appraisal and consulting fees,
auctioneers' fees, rent, storage, insurance premiums and like items, and whether
or not such amounts are allowed as a claim against any Debtor in any Insolvency
or Liquidation Proceeding; PLUS (f) all fees, charges, and indemnities owing by
any Debtor to the Senior Lender under or in connection with the Senior Loan
Documents.
"SENIOR LIABILITY REPAYMENT" means the circumstance in which (a) the
Senior Liabilities have been indefeasibly paid in full in cash, (b) all letters
of credit provided by the Senior Lender have been released, terminated or
cash-collateralized as provided in the Senior Credit Agreement, and (c) all
commitments under the Senior Loan Documents have been terminated.
"SENIOR LOAN DOCUMENTS" means the Senior Credit Agreement and all
agreements, documents and instruments related thereto, as any of the foregoing
may from time to time be amended, restated, supplemented or otherwise modified
in compliance with the terms of this Agreement.
"SENIOR NON-PAYMENT DEFAULT" means an Event of Default that does not
constitute a Senior Payment Default.
"SENIOR PAYMENT DEFAULT" means an Event of Default that arises out of
the failure to make any payment when due under any of the Senior Loan Documents.
"TURNOVER SUBSIDIARY" shall mean any Continuing Subsidiary that is a
party to any Junior Loan Documents, but that is not a party to any Senior Loan
Documents.
2. SUBORDINATION.
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2.1 SUBORDINATION OF DEBT. To the extent and in the manner
hereinafter set forth in this Agreement, the Junior Liabilities are hereby
expressly made subordinate, junior and subject in right of payment to the full
and final payment of the Senior Liabilities in cash. The Junior Agent agrees
that the Junior Notes and any other instrument or document evidencing the Junior
Liabilities, will at all times bear the following legend:
THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY HAVE BEEN
SUBORDINATED TO CERTAIN OBLIGATIONS OF THE MAKER PURSUANT TO AN
INTERCREDITOR AND SUBORDINATION AGREEMENT BETWEEN ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, AS JUNIOR AGENT, AND WACHOVIA BANK, NATIONAL
ASSOCIATION, AS SENIOR LENDER, AS AMENDED FROM TIME TO TIME.
2.2 SUBORDINATION OF LIENS. To the extent and in the manner
hereinafter set forth in this Agreement, each Junior Creditor
hereby subordinates and makes junior any and all of its now
existing or hereafter acquired Liens on any and all Collateral,
including, without limitation, all Liens granted by any Debtor
to the Junior Agent in the Junior Loan Documents, to the Liens
of the Senior Lender, whether now existing or hereafter
acquired, in, to or on the Collateral. Said priority shall be
applicable irrespective of the time or order of attachment or
perfection of any security interest or other Lien or the time or
order of filing or recording of any financing statements,
fixture filings, security instruments, certificate of title
applications or other documents, or any statutes, rules or law,
or court decisions to the contrary. The Lien subordination
provisions in this Agreement are for the benefit of and shall be
enforceable directly by the Senior Lender, and the Senior Lender
shall be deemed to have acquired the Senior Liabilities, whether
now existing or hereafter arising, in reliance upon this
Agreement.
2.3 DISPOSITION OF COLLATERAL.
(a) Each Junior Creditor hereby agrees that the Debtors may
sell or dispose of any or all of their assets without any consent of any
Junior Creditor, which sale or disposition shall be free and clear of
all Liens of the Junior Creditors (to the same extent the transferee
would take free of the Lien thereon in favor of the Senior Lender), the
proceeds of which shall be applied to the outstanding Senior
Liabilities, provided that the Junior Creditors retain any rights they
may have as a junior secured creditor with respect to the surplus (if
any) over the amount necessary to pay the Senior Liabilities in full in
cash arising from any such sale or disposition. Upon any such sale or
disposition of any of the Collateral, any and all Liens of the Junior
Creditors in such Collateral shall be deemed to be released free of the
Lien of any Junior Creditor (to the same extent the transferee would
take free of the Lien thereon in favor of the Senior Lender) without
further action on the part of the Junior Creditors or the Senior Lender,
and the Junior Creditors agree (a) if requested, to execute and promptly
deliver to the Senior Lender any and all financing statements, quitclaim
deeds, releases and other documents with respect to such releases which
the Senior Lender deems necessary in its reasonable discretion,
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and (b) that the Senior Lender is hereby irrevocably authorized to
execute and deliver on behalf of the Junior Agent all such title
applications, releases and other documents as the Senior Lender deems
necessary in its reasonable discretion to evidence such release.
(b) Each Junior Creditor hereby further agrees that, until
the Senior Liability Repayment, the Senior Lender may, in the
enforcement of its rights under the Senior Loan Documents after an Event
of Default, dispose of (free of the Lien of any Junior Creditor to the
same extent as the transferee would take free of the Lien thereon in
favor of the Senior Lender), and exercise or refrain from exercising any
rights with respect to, any or all of the Collateral, provided that any
such disposition is made in a commercially reasonable manner and that
the Junior Creditors retain any rights they may have as a junior secured
creditor with respect to the surplus (if any) over the amount necessary
to pay the Senior Liabilities in full in cash arising from any such
disposition or enforcement. Upon any disposition of any of the
Collateral as provided in this Section by the Senior Lender, any and all
Liens of the Junior Creditors in such Collateral shall be deemed to be
released free of the Lien of any Junior Creditor to the same extent as
the transferee would take free of the Lien thereon in favor of the
Senior Lender without further action on the part of the Junior Creditors
or the Senior Lender, and the Junior Creditors agree (a) if requested,
to execute and promptly deliver to the Senior Lender any and all
financing statements, quitclaim deeds, releases and other documents with
respect to such releases which the Senior Lender deems necessary in its
reasonable discretion, and (b) that the Senior Lender is hereby
irrevocably authorized to execute and deliver on behalf of the Junior
Agent all such title applications, releases and other documents as the
Senior Lender deems necessary in its reasonable discretion to evidence
such release. Each Junior Creditor agrees that any funds of any Debtor
which it obtains through the exercise of any right of setoff or other
similar right (other than for routine account activity charges)
constitute Collateral, and such Junior Creditor shall promptly pay such
funds to the Senior Lender to be applied to the outstanding Senior
Liabilities.
2.4 INTERCREDITOR ARRANGEMENTS IN BANKRUPTCY.
(a) This Agreement shall remain in full force and effect and
enforceable pursuant to its terms in accordance with Section 510(a) of
the Bankruptcy Code, and all references herein to any Debtor shall be
deemed to apply to such Debtor as debtor in possession and to any
trustee in bankruptcy for the estate of such Debtor.
(b) Except as otherwise specifically permitted in this
Section 2.4, until the Senior Liability Repayment, no Junior Creditor
shall assert any claim, motion, objection, or argument in respect of any
Collateral in connection with any Insolvency or Liquidation Proceeding
which could be asserted or raised in connection with such Insolvency or
Liquidation Proceeding by such Junior Creditor as a secured creditor of
any Debtor, including, without limitation, any claim, motion, objection
or argument seeking adequate protection or relief from the automatic
stay in respect of the Collateral.
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(c) Without limiting the generality of the foregoing, until
the Senior Liability Repayment shall have occurred, each Junior Creditor
agrees that if an Insolvency or Liquidation Proceeding occurs, (i) the
Senior Lender may consent or object to the use of cash collateral on
such terms and conditions and in such amounts as the Senior Lender, in
its sole discretion, may decide, without seeking or obtaining the
consent of any Junior Creditor as holder of an interest in the
Collateral; (ii) such Junior Creditor shall not oppose any Debtor's use
of cash collateral to which the Senior Lender consents on the basis that
any Junior Creditor's interest in the Collateral is impaired by such use
or inadequately protected by such use to the extent such use has been
approved by the Senior Lender; (iii) the Senior Lender may provide
financing to any Debtor pursuant to Section 364 of the Bankruptcy Code
or other applicable law (such financing, the "POST-PETITION FINANCING")
on such terms and conditions and in such amounts as the Senior Lender,
in its sole discretion, may decide, without seeking or obtaining the
consent of any Junior Creditor as holder of an interest in the
Collateral; and (iv) such Junior Creditor shall not oppose any such
financing on the basis that any Junior Creditor's interest in the
Collateral is impaired by such financing or inadequately protected by
such financing to the extent such financing has been approved by the
Senior Lender.
(d) Each Junior Creditor and the Senior Lender agrees that
it will not initiate, prosecute, encourage, or assist with any other
person or entity to initiate or prosecute any claim, action or other
proceeding (i) challenging the validity or enforceability of this
Agreement, (ii) challenging the validity, enforceability or seniority of
the Senior Lender's claims or any Junior Creditor's claim, (iii)
challenging the perfection, enforceability or seniority of any Liens of
the Senior Lender or the Junior Agent or any other Junior Creditor, or
(iv) asserting any claims, if any, which any Debtor may hold with
respect to the Senior Lender, the Junior Agent, Junior Creditor, or the
Senior Liabilities or Junior Liabilities.
(e) To the extent that the Senior Lender receives payments
or transfers on the Senior Liabilities or proceeds of the Collateral
which are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to 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 Liabilities, 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.
(f) Notwithstanding any other provision of this Section 2.4,
each Junior Creditor shall be entitled to file any necessary responsive
or defensive pleadings in opposition to any motion, claim, adversary
proceeding or other pleading made by any person objecting to or
otherwise seeking the disallowance of the claims of such Junior
Creditor, including, without limitation, any claims secured by the
Collateral, if any.
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3. INSOLVENCY AND LIQUIDATION PROCEEDING. In the event of any
Insolvency or Liquidation Proceeding, as between the Senior Lender and the
Junior Creditors, the following shall apply:
3.1 Upon any payment or distribution of assets or securities
of any kind or character, whether in cash, securities or other property, of any
Debtor or the estate created by the commencement of any such Insolvency or
Liquidation Proceeding, the Senior Liabilities shall first be paid irrevocably
in full in cash before any Junior Creditor shall be entitled to receive any
payment or distribution of any cash, securities or other property other than
Junior Securities on account of the Junior Liabilities.
3.2 The Senior Lender shall be entitled to receive from the
Debtors and any other person making any distribution in accordance with Section
3.1 any payment or distribution of any kind or character, whether in cash,
securities or other property other than Junior Securities which may be payable
or deliverable in respect of the Junior Liabilities in any such Insolvency or
Liquidation Proceeding for application to the payment of the Senior Liabilities
(to the extent necessary to pay such Senior Liabilities after giving effect to
any concurrent payment to the holders of such Senior Liabilities). To facilitate
the foregoing, each Junior Creditor irrevocably authorizes, empowers and directs
any Debtor, debtor in possession, receiver, liquidator, custodian, conservator,
trustee or other person having authority to pay or otherwise deliver all such
payments or distributions to the Senior Lender as required by this Section 3.2,
and each Junior Creditor also irrevocably authorizes and empowers the Senior
Lender, in the name of such Junior Creditor and at the Senior Lender's sole cost
and expense, to demand, ▇▇▇ for, collect, receive and receipt for any and all
such payments and distributions to effect payment or other delivery thereof by
such person required by this Section 3.2 directly to the Senior Lender.
3.3 In the event that, notwithstanding the foregoing
provisions of Section 3.2, any Junior Creditor receives any payment from or
distribution of assets or securities of any Debtor or the estate created by the
commencement of any such Insolvency or Liquidation Proceeding, of any kind or
character in respect of the Junior Liabilities, whether in cash, securities or
other property other than Junior Securities, before the Senior Liability
Repayment shall have occurred, then, and in such event, such payment or
distribution shall be received and held in trust by such Junior Creditor for the
benefit of the Senior Lender, and shall be promptly paid over or delivered by
such Junior Creditor to the Senior Lender to the extent necessary to pay the
Senior Liabilities in full after giving effect to any concurrent payment to the
holders of the Senior Liabilities.
3.4 (a) Each Junior Creditor hereby authorizes and
employs the Senior Lender in any Insolvency or Liquidation Proceeding to
file a proof of claim on behalf of such Junior Creditor with respect to
the Junior Liabilities if such Junior Creditor (or the Junior Agent)
fails to file such proof of claim prior to 15 days before the expiration
of the time period during which such claims must be submitted. Each
Junior Creditor agrees that the Senior Lender shall have no obligation
whatsoever to file any such proof of claim and that the Senior Lender
shall not be liable to any Junior Creditor for any loss or
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liability suffered by any Junior Creditor as a result of (i) the Senior
Lender's compliance with the terms of this Section 3.4(a), except to the
extent directly caused by the gross negligence, willful misconduct or
criminal acts of such Senior Lender as determined by a court of
competent jurisdiction in a final non-appealable judgment, or (ii) any
election of the Senior Lender in its sole discretion not to file a proof
of claim on behalf of any Junior Creditor.
(b) Each Junior Creditor covenants and agrees to
provide the Senior Lender with a copy of any proof of claim filed by
such Junior Creditor in connection with any Insolvency or Liquidation
Proceeding.
(c) In any Insolvency or Liquidation Proceeding,
each Junior Creditor agrees that it shall not vote to accept or approve
any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension (nor shall it provide any
financing to any Debtor or its affiliates under any such plan) that
would cause any Junior Creditor or affiliate thereof to receive any
payment in respect of Junior Liabilities (other than current interest in
connection with any debt owing to such Junior Creditor pursuant to a
plan of reorganization, provided that the payment of such current
interest is subordinated to the Senior Liabilities on substantially the
terms set forth herein) prior to the Senior Liability Repayment.
3.5 In addition to setting forth the relative priorities and
rights of the Senior Lender and the Junior Creditors with respect to the Senior
Loan Documents and the Junior Loan Documents, in the event, in any Insolvency or
Liquidation Proceeding with respect to any Turnover Subsidiary, the Junior Agent
and/or the Junior Lenders receives any payment or other consideration by reason
of, or pursuant to, any guaranty or other claim against, or Lien upon any of the
assets of, any Turnover Subsidiary held by the Junior Agent and/or the Junior
Lenders, including, but not limited to, the proceeds of any sale or other
disposition of the equity interests or assets of any Turnover Subsidiary, the
Junior Agent and/or the Junior Lenders will hold such payment or other
consideration in trust on behalf of the Senior Lender and shall immediately
turnover and convey to the Senior Lender such payment or other consideration in
the form received for application to the then outstanding Senior Liabilities.
Further, the Junior Agent and the Junior Lenders shall not voluntarily release
any such claim or Lien against any Turnover Subsidiary until the payment in full
in cash of all Senior Liabilities or until payment in full of the Junior
Liabilities.
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4. PAYMENTS OF JUNIOR LIABILITIES.
4.1 Subject to the provisions of Section 4.2, no Junior
Creditor will ask for, demand, ▇▇▇ for, take or receive from any Debtor, by
setoff, counterclaim, recoupment or in any other manner, the whole or any part
of any of the Junior Liabilities, unless and until the Senior Liability
Repayment shall have occurred.
4.2 Notwithstanding the provisions of Section 4.1, except as
otherwise provided in this Section 4.2, the Debtors may pay, and the Junior
Creditors may receive and retain, Permitted Payments, unless prior to any such
Permitted Payment an Event of Default has occurred and is continuing and the
Senior Lender has given to ▇▇▇▇▇▇ and the Junior Agent written notice thereof
identifying the Event of Default and invoking a payment blockage under this
Agreement (such notice, a "PAYMENT BLOCKAGE NOTICE" and such period during which
payments are blocked as described in Section 4.2(a) or (b) below, a "PAYMENT
BLOCKAGE PERIOD"), in which case no direct or indirect payment or distribution
of any kind or character shall be made by any Debtor or any other person on
behalf of any Debtor (or received by any Junior Creditor) on account of the
Junior Liabilities or any judgment related thereto, or on account of the
purchase or redemption or other acquisition of the Junior Liabilities, unless
and until:
(a) If such Event of Default is a Senior Payment
Default, the earliest to occur of (i) the payment in full of all amounts
due with respect to such Senior Payment Default, or (ii) the date such
Senior Payment Default shall have been cured or waived in writing in
accordance with the terms of the Senior Loan Documents; or
(b) If such Event of Default is a Senior Non-Payment
Default, the earliest to occur of (i) the date such Senior Non-Payment
Default shall have been cured or waived in writing in accordance with
the terms of the Senior Loan Documents, or (ii) the date that is 180
days after the date on which the Senior Lender shall have given the
related Payment Blockage Notice, or such longer period of 270 days as
provided in Section 6.2(b).
Notwithstanding the foregoing, (w) except as set forth in clause (b) of the
definition of "Permitted Payments", no prepayments of any of the Junior
Liabilities (or redemptions or other payments with respect to any warrants or
other equity interests associated with the Junior Liabilities) may be made by
any Debtor, or received or retained by any Junior Creditor, until the Senior
Liability Repayment, (x) no direct or indirect payment or distribution of any
kind or character shall be made by any Debtor or any other person on behalf of
any Debtor on account of the Junior Liabilities or any judgment related thereto,
or on account of the purchase or redemption or other acquisition of the Junior
Liabilities, if the Senior Lender shall have accelerated payment of any of the
Senior Liabilities, unless such acceleration has been rescinded in writing, (y)
the aggregate number of days in any consecutive 365 day period during which
Payment Blockage Periods may be in effect solely as a result of Senior
Non-Payment Defaults shall be 180 days, and (z) no Payment Blockage Period may
be imposed by the Senior Lender as a result of (i) a Senior Non-Payment Default
which served as the basis for a previous Payment
11
Blockage Period by the Senior Lender, or (ii) a Senior Non-Payment Default
existing on the date that any Payment Blockage Notice was given (other than any
such Senior Non-Payment Default which serves as the basis for such Payment
Blockage Notice) and of which an officer of the Senior Lender had actual
knowledge on the date such Payment Blockage Notice was given, unless in either
such case such Senior Non-Payment Default reoccurs after having first been cured
for at least 30 consecutive days in accordance with the applicable provisions of
the Senior Loan Documents.
Immediately upon the expiration of any Payment Blockage Period as described in
this Section 4.2, the Debtors may resume making (and the Junior Creditors may
receive and retain) any and all Permitted Payments (including any Permitted
Payments missed during such period).
4.3 In the event that any Junior Creditor shall have
received any payment or distribution at a time when such payment or distribution
was prohibited by the provisions of either of Section 4.1 or Section 4.2 hereof,
then, and in such event, such payment or distribution shall be deemed to have
been paid to such Junior Creditor in trust for the benefit of the Senior Lender,
and shall be promptly paid over to the Senior Lender (with proper endorsements
or assignments, if necessary) to the extent necessary to pay the Senior
Liabilities after giving effect to any concurrent payment to the Senior Lender
from other sources. To the extent there are any excess amounts paid over to the
Senior Lender after the Senior Liability Repayment, such excess amounts shall be
promptly remitted to the Junior Agent to the extent necessary to pay in full the
Junior Liabilities then due, which amounts shall constitute payments in respect
of the Junior Liabilities and will so reduce the outstanding amount of the
Junior Liabilities; provided, that, to the extent of the amount of any such
remittance received by it, each Junior Creditor hereby indemnifies and holds
harmless the Senior Lender from any and all claims, liabilities, damages and
expenses suffered by the Senior Lender in connection with the making of any such
remittance to the Junior Agent, but only to the extent of such Junior Creditor's
pro rata share of such remittance received by the Junior Agent.
4.4 The provisions of this Section 4 shall not modify or
limit in any way the application of Section 3 hereof.
4.5 The Senior Lender agrees to give prompt written notice
to the Debtors and the Junior Agent of any determination by the Senior Lender
that an Event of Default that gave rise to a Payment Blockage Period instituted
by the Senior Lender has been cured or waived, though the failure to give such
notice promptly or otherwise shall not affect the subordination effected by the
terms of this Agreement or otherwise result in any liability of the Senior
Lender to any Debtor or any Junior Creditor.
5. SUBROGATION. After the Senior Liability Repayment, the Junior
Creditors shall be subrogated (without any representation by or recourse to the
Senior Lender), to the extent of any payments or distributions (if any) made by
the Junior Creditors to the Senior Lender, or otherwise applied to payment of
such Senior Liabilities solely by reason of the provisions of this Agreement, to
any rights of the Senior Lender to receive payments and distribution of cash,
12
securities and other property applicable to the Senior Liabilities, if any,
until the Junior Liabilities shall have been irrevocably paid in full in cash.
In no event, however, shall any Junior Creditor have any rights or claims
against the Senior Lender for any alleged impairment of any Junior Creditor's
subrogation rights, each Junior Creditor acknowledging that, for purposes of
this Section 5, any actions (or inactions) taken by the Senior Lender with
respect to the Senior Liabilities or the collateral therefor are authorized and
consented to by such Junior Creditor. For purposes of such subrogation, no
payments or distributions to the Senior Lender of any cash, securities or other
property to which any Junior Creditor would have been entitled, except for the
provisions of this Agreement, and no payments pursuant to the provisions of this
Agreement to the Senior Lender by any Junior Creditor, shall be deemed to be a
payment or distribution by any Debtor to or on account of the Senior
Liabilities, it being understood and agreed that the provisions of this
Agreement are solely for the purpose of defining the relative rights of the
Senior Lender on the one hand, and the Junior Creditors on the other hand.
6. STANDSTILL; RELATIVE RIGHTS.
6.1 Except as otherwise expressly set forth in Section 6.2
or any other provision of this Agreement, nothing contained in this Agreement is
intended to or shall: (a) impair the obligations of the Debtors, which are
absolute and unconditional, to the Junior Creditors to pay the Junior
Liabilities as and when the same shall become due and payable in accordance with
their terms; (b) affect the relative rights of the Junior Creditors and the
creditors of the Debtors (other than the Senior Lender); or (c) prevent the
Junior Creditors from exercising all remedies otherwise permitted by applicable
law upon an Event of Default under the Junior Credit Agreement or otherwise,
subject to: (i) the rights under this Agreement of the Senior Lender to receive
payments or distributions otherwise payable or deliverable to, or received by,
the Junior Creditors upon the exercise of any such collection remedy; (ii) the
provisions of Section 3 of this Agreement; and (iii) the provisions of Section
6.2 of this Agreement.
6.2 Notwithstanding anything to the contrary contained in
the Junior Loan Documents, Section 6.1 of this Agreement or otherwise, no Junior
Creditor:
(a) will take any Enforcement Action described in
clause (c) or (e) of the definition of "Enforcement Action", or
otherwise relating to the Collateral, prior to the Senior Liability
Repayment; or
(b) will take any other Enforcement Action prior to
the earliest of: (i) the commencement of an Insolvency or Liquidation
Proceeding; (ii) the date that is (A) 120 days after written notice is
given by the Junior Agent to the Senior Lender of the occurrence and
continuance of any event of default under the Junior Loan Documents,
which notice shall specify the nature of such event of default and state
such Junior Creditor's intent to commence such Enforcement Action (the
"JUNIOR CREDITOR DEFAULT NOTICE"), or (B) in the event that, during such
120-day period referred to in clause (A), the Senior Lender gives the
Junior Agent a written notice invoking a standstill, the date that is
180 days after the date the Junior Creditor Default Notice is given
unless the event
13
of default stated in such Junior Creditor Default Notice is the failure
to pay the Junior Notes at maturity, in which case the date that is 270
days after the date the Junior Creditor Default Notice is given;
provided that in the case of either of the foregoing clauses (A) or (B),
if the Debtors or the Senior Lender shall cure such event of default
prior to the taking of such Enforcement Action by any Junior Creditor,
no Junior Creditor will take or continue any Enforcement Action with
respect to such event of default after the date of such cure; or (iii)
the Senior Liabilities having been accelerated or declared accelerated
in their entirety in writing; provided, however, that until the Senior
Liability Repayment, any payments, distributions or proceeds resulting
from the exercise of any such Enforcement Action received by any Junior
Creditor or other holders of the Junior Liabilities shall be subject to
the terms of this Agreement and shall be paid or delivered to the Senior
Lender as provided in this Agreement.
7. AMENDMENTS; CERTAIN WAIVERS AND CONSENTS
7.1 The Senior Lender and the Debtors may modify, supplement
or amend the terms of the Senior Loan Documents, or waive any of the provisions
thereof, in any manner whatsoever, all without consent of the Junior Agent or
any other Junior Creditor and without affecting the subordinations set forth in
this Agreement or the liabilities and obligations of the Junior Creditors
hereunder. Without limiting the generality of the foregoing, the Senior Lender
and the Debtors may, without consent of the Junior Agent or any other Junior
Creditor and without affecting the subordinations set forth in this Agreement or
the liabilities and obligations of the Junior Creditors hereunder, increase or
decrease the principal amount of the Senior Liabilities (subject to the
definitions of "Senior Liabilities" set forth in Section 1 hereof).
Notwithstanding any provision contained herein to the contrary, the Senior
Lender agrees that it shall not, without the prior written consent of the Junior
Agent, modify, supplement or amend the Senior Credit Agreement to specifically
prohibit the payment of any amount of interest or the prepayment of any amount
of principal to the Junior Creditors which payment would otherwise be permitted
under the terms hereof or under the Junior Credit Agreement as in effect on the
date hereof.
7.2 The Junior Creditors and the Debtors may modify,
supplement or amend the terms of the Junior Loan Documents, all without the
consent of the Senior Lender, except that the Senior Lender's prior written
consent shall be required for any modification, supplement or amendment that has
the effect of (a) increasing the interest rate on the Junior Liabilities; (b)
shortening the final maturity or average life to maturity of, or requiring any
payment of interest to be made earlier than the date originally scheduled on the
Junior Liabilities; (c) changing any event of default or adding any covenant
with respect to the Junior Liabilities that is more onerous to any of the
Debtors or that is otherwise adverse to the Senior Lender; or (d) changing,
amending or altering any term thereof if such change, amendment or alteration
would materially increase the obligations of any Debtor or confer additional
material rights on the Junior Creditors in a manner adverse to the Senior
Lender.
14
7.3 The terms of this Agreement, the subordination effected
hereby, and the rights and the obligations of the Senior Lender arising
hereunder shall not be affected, modified or impaired in any manner or to any
extent by: (a) any amendment or modification of or supplement to any of the
Senior Loan Documents or any of the Junior Loan Documents effected in accordance
with the terms of this Agreement; (b) the validity or enforceability of any of
such documents; (c) any exercise or non-exercise of any right, power or remedy
under or in respect of the Senior Liabilities or the Junior Liabilities or any
of the instruments or documents referred to in clause (a) above; or (d) an
assignment or sale of any participation by the Senior Lender of all or a portion
of the Senior Liabilities and the Senior Loan Documents, provided that the
Senior Lender complies with Section 17.12 hereof. In this connection, any
assignee or participant of any Senior Liabilities and Senior Loan Documents
shall be entitled to the full benefits and rights of the Senior Lender as set
forth in this Agreement.
7.4 The Junior Creditors hereby waive any defense based on
the adequacy of a remedy at law or equity which might be asserted as a bar to
the remedy of specific performance of this Agreement in any action brought
therefor by the Senior Lender. To the fullest extent permitted by applicable
law, and except as expressly set forth herein, the Junior Creditors hereby
further waive: (a) presentment, demand, protest, notice of protest, notice of
default or dishonor, notice of payment or nonpayment and any and all other
notices and demands of any kind in connection with all negotiable instruments
evidencing all or any portion of the Senior Liabilities; (b) the right to
require the Senior Lender to ▇▇▇▇▇▇▇▇ any assets or Collateral, or to enforce
any Lien the Senior Lender may now or hereafter have in any assets or Collateral
securing the Senior Liabilities, or to pursue any claim the Senior Lender may
have against any guarantor of the Senior Liabilities, as a condition to the
Senior Lender's entitlement to receive any payment on account of the Senior
Liabilities; (c) notice of the acceptance of this Agreement by the Senior
Lender; and (d) notice of any loans or other credit made available to any
Debtor, extensions of time granted, amendments to the Senior Loan Documents, or
other action taken in reliance hereon. The Junior Creditors hereby consent and
agree that the Senior Lender may, without in any manner impairing, releasing or
otherwise affecting the subordination provided for in this Agreement or any of
the Senior Lender's rights hereunder and without prior notice to or the consent
of any Junior Creditor: (i) release, renew, extend, compromise or postpone the
time of payment of any of the Senior Liabilities; (ii) substitute, exchange or
release any or all of the Collateral or guaranties for the Senior Liabilities or
decline or neglect to perfect the Senior Lender's Lien upon any of the
Collateral for the Senior Liabilities; and (iii) add or release any person or
entity primarily or secondarily liable for any of the Senior Liabilities.
8. NO CONTEST OF LIENS, ETC. Each Junior Creditor and the Senior
Lender agrees that it will not at any time contest the validity, perfection,
priority or enforceability of the Liens granted by the Debtors to the Senior
Lender or the Junior Agent and the Junior Creditors in the Debtors' assets
pursuant to the Senior Loan Documents and the Junior Loan Documents. Each Junior
Creditor agrees that it will not, until the Senior Liability Repayment, take a
Lien on any property of any Debtor, other than Liens in the Collateral, as in
effect on the date of this Agreement, which Liens shall at all times be
subordinate and junior to the Liens of the Senior Lender in the Collateral as
herein provided.
15
9. SALES AND TRANSFERS. Each Junior Creditor represents that it is
the lawful owner of the Junior Liabilities evidenced by the Junior Note
evidencing the Junior Liabilities owing to it and that it has not heretofore
sold, assigned, disposed of or transferred any of the Junior Liabilities, and
agrees that it shall not hereafter sell, assign, dispose of or otherwise
transfer all or any portion of its Junior Liabilities without, upon the
consummation of any such action, causing the transferee thereof to execute and
deliver to the Senior Lender an agreement substantially identical to this
Agreement that is acceptable to the Senior Lender in its sole discretion,
providing for the continued subordination of the Junior Liabilities so sold,
assigned, disposed of or transferred to the Senior Liabilities as provided
herein and for the continued effectiveness of all of the rights of the Senior
Lender arising under this Agreement in respect of the Junior Liabilities so
sold, assigned, disposed of or transferred. Notwithstanding the failure to
execute or deliver any such agreement, the subordination effected hereby shall
survive any sale, assignment, disposition or other transfer of all or any
portion of the Junior Liabilities, and the terms of this Agreement shall be
binding upon the successors and assigns of the Junior Creditors.
10. CONFLICT. In the event of any conflict between any term,
covenant or condition of this Agreement and any term, covenant or condition of
any of the Junior Loan Documents, the provisions of this Agreement shall control
and govern.
11. WAIVER AND AMENDMENT. No waiver of any provision of this
Agreement shall be deemed to be made by the Senior Lender or the Junior Agent of
any of their rights hereunder unless the same shall be in writing signed by each
of the Senior Lender and the Junior Agent. Each waiver, if any, by the Senior
Lender or the Junior Agent shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the Senior Lender or
the Junior Agent, as the case may be, in any other respect at any other time. No
provision of this Agreement may be modified or amended in any respect unless the
same shall have been approved and consented to in writing by each of the Senior
Lender and the Junior Agent.
12. NOTICES. Any notices or other communications required or
permitted to be given hereunder shall be delivered personally or mailed,
certified mail, return receipt requested, or sent by commercial overnight
courier service, or sent by telecopy, to the following addresses (or such other
addresses as shall be given by a notice delivered hereunder), and shall be
deemed to have been given on the day of delivery if delivered personally or sent
via overnight courier, on the day received if mailed, or on the date of
transmission if transmitted by facsimile on a business day, otherwise on the
next business day:
16
If to the Junior Agent:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Miller Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇ ▇▇▇▇, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 246
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Senior Lender:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change the address to which notices to it are sent by giving
written notice pursuant to this Section to the other party hereto.
13. REPRESENTATIONS AND WARRANTIES. Each party hereto represents and
warrants to the other party hereto as follows: (a) such party has all requisite
power and authority to execute, deliver and perform this Agreement without other
or further action or approval of any kind; and (b) this Agreement constitutes
the valid and legally binding obligation of such party, enforceable in
accordance with its terms (except that enforceability may be limited by
bankruptcy, insolvency and other laws affecting creditors' rights generally),
and no consent or approval of any other party, and no consent, license, approval
or authorization of any governmental authority, bureau or agency, is required in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement by such party.
14. [INTENTIONALLY DELETED.]
15. INDEPENDENT CREDIT INVESTIGATIONS. Neither any Junior Creditor
nor the Senior Lender, nor any of their respective directors, officers, agents
or employees, shall be responsible
17
to the others for any Debtor's solvency, financial condition or ability to repay
any of the Senior Liabilities or the Junior Liabilities, or for statements of
any Debtor, oral or written, or for the validity, sufficiency or enforceability
of any of the Senior Loan Documents or any of the Junior Loan Documents or the
value of any collateral. Each of the Junior Creditors and the Senior Lender has
entered into its agreements with the Debtors based upon its own independent
investigation, and makes no warranty or representation to the other, nor does it
rely upon any representation of the other, with respect to matters identified or
referred to in this paragraph.
16. TERM OF AGREEMENT. This Agreement shall continue in full force
and effect and shall be irrevocable by the Junior Creditors until the earliest
to occur of the following: (a) the parties hereto in writing mutually agree to
terminate this Agreement; or (b) the Senior Liability Repayment.
17. MISCELLANEOUS.
17.1 Subject to Section 17.12 hereof, the Junior Creditors
agree that they will agree to subordinate the Junior Liabilities then owed to
them, and the Junior Creditors' Liens in the Collateral, to another lender or
group of lenders that refinance in whole the Senior Liabilities then owing to
the Senior Lender under the Senior Loan Documents (the "NEW LENDER") by entering
into a subordination agreement with the New Lender, provided that (a) the
aggregate amount of New Lender Liabilities (Liabilities to the New Lender)
replacing the Senior Liabilities shall not exceed the Senior Liabilities,
together with prepayment and closing fees and expenses not to exceed 5% in the
aggregate of the replaced Liabilities, and (b) the terms and conditions of such
new subordination agreement, taken as a whole, shall not be less favorable to
the Junior Creditors in any material respect than the terms and conditions
contained in this Agreement. Further, subject to Section 17.12 hereof, the
Junior Creditors agree that they will agree to subordinate the Junior
Liabilities then owed to them, and the Junior Creditors' Liens in the
Collateral, to another lender to whom the Senior Lender assigns or sells a
participation interest in all or a portion of the Senior Liabilities pursuant to
Section 11.5 of the Senior Credit Agreement, provided that the terms and
conditions of such new subordination agreement, taken as a whole, shall not be
less favorable to the Junior Creditors in any material respect than the terms
and conditions contained in this Agreement.
17.2 The Senior Lender covenants and agrees to deliver to the
Junior Agent, and the Junior Agent covenants and agrees to deliver to the Senior
Lender, notice of any default or Event of Default under the Senior Loan
Documents or the Junior Loan Documents, as applicable, simultaneously with
delivery thereof to the Debtors (or any of them); provided, however, the failure
to deliver such notice shall not give rise to a claim or cause of action against
Senior Lender or Junior Agent by reason of its failure to give such notice. The
Senior Lender covenants and agrees to deliver to the Junior Agent, and the
Junior Agent covenants and agrees to deliver to the Senior Lender, reasonable
notice of any intended sale of Collateral under the Senior Loan Documents or the
Junior Loan Documents, as applicable; provided, however, the failure to deliver
such notice shall not give rise to a claim or cause of action against Senior
Lender, Junior Agent by reason of its failure to give such notice.
18
17.3 Senior Lender hereby agrees, on a best efforts basis and
without assuming any liabilities to the Junior Creditors in connection herewith,
to hold that portion of the Collateral in which security interests may be
perfected by possession or endorsement, that at any time is in its possession,
as the bailee of Junior Creditors under the Junior Loan Documents for the
purpose of perfecting the subordinated security interest of Junior Creditors in
any Collateral in which security interests may be perfected by possession or
endorsement, subject to the terms of this Agreement. Upon the Senior Liability
Repayment, and termination of any agreement between the Debtors and Senior
Lender under which the Senior Lender is required to or may make loans or provide
other financial accommodations, Senior Lender shall release its Lien on all
Collateral and, on a best efforts basis and without assuming any liabilities to
the Junior Creditors in connection therewith, transfer possession of the
Collateral as is then in its possession to the Junior Creditors under the Junior
Loan Documents together with appropriate endorsements or assignments as may be
required for Junior Creditors to be perfected in such Collateral, all at the
cost of Junior Creditors.
17.4 [Intentionally Deleted.]
17.5 This Agreement shall be construed in accordance with and
governed by the laws of the State of Georgia without regard to principles of
conflict of laws.
17.6 THE SENIOR LENDER AND EACH JUNIOR CREDITOR EACH HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (a) TO
ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR (b)
ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
EACH JUNIOR CREDITOR AND THE SENIOR LENDER HEREBY AGREE THAT THE
FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA AND THE STATE COURTS LOCATED
IN ATLANTA, GEORGIA, OR, AT THE OPTION OF THE SENIOR LENDER, ANY COURT IN WHICH
THE SENIOR LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY AND WHICH SITS IN A
JURISDICTION IN WHICH ANY DEBTOR TRANSACTS BUSINESS SHALL HAVE NON-EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN SUCH JUNIOR
CREDITOR AND THE SENIOR LENDER PERTAINING DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT OR TO ANY MATTER ARISING HEREFROM. EACH JUNIOR CREDITOR EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS. THE NON-EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED
IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE
SAME IN ANY APPROPRIATE JURISDICTION.
19
17.7 The provisions of this Agreement are solely for the
purpose of defining the relative rights of the Junior Creditors and the Senior
Lender and shall not, and shall not be deemed, to create any rights or
priorities in favor of any other person or entity, including the Debtors.
17.8 Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement unless the consummation
of the transactions contemplated hereby is materially adversely affected
thereby.
17.9 This Agreement and any amendments thereto may be
executed in any number of counterparts, each of which shall be an original, and
all of which taken together shall constitute one and the same instrument.
17.10 The headings appearing in this Agreement have been
inserted solely for reference and shall not affect the meaning or interpretation
of any provision of this Agreement.
17.11 This Agreement embodies the entire Agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
17.12 Junior Agent Purchase Option.
(a) Upon notice by the Senior Lender (each such
notice, a "NOTICE OF PROPOSED TRANSFER") to the Junior Agent given in accordance
with Section 17.12(b) hereof of the intent of the Senior Lender to at any time
assign, transfer or grant participations in, all or any part of the Senior
Liabilities (each such proposed assignment, transfer or participation referred
to herein as a "PROPOSED TRANSFER"), the Junior Agent shall have the option (but
shall be under no obligation to), which such option shall be exercised by
delivery of notice by the Junior Agent to the Senior Lender (each such notice, a
"PURCHASE NOTICE") given by a same day method (e.g. facsimile, electronic mail
or personal delivery), to purchase all (but not less than all) of the portion of
the Senior Liabilities that are proposed to be assigned, transferred or
participated by the Senior Lender through a last out participation agreement
entered into between Senior Lender and Junior Lenders, which agreement shall
contain provisions customary in last out participation agreements and shall be
in form and substance mutually satisfactory to the Senior Lender and the Junior
Agent. Each Purchase Notice shall be irrevocable when given. If the Junior Agent
does not deliver any such Purchase Notice within 10 days of the receipt by the
Junior Agent of the applicable Notice of Proposed Transfer, the purchase right
of the Junior Agent hereunder with respect to such Notice of Proposed Transfer
shall expire and be of no force and effect.
(b) The Senior Lender shall deliver to the Junior
Agent a Notice of Proposed Transfer prior to the proposed consummation of (or
the entering into of any irrevocable
20
agreement for the consummation of), each and every assignment, transfer or
participation of all or any portion of the Senior Liabilities at any time on or
hereafter. The Junior Agent may send to the Senior Lender a Purchase Notice
within 10 days after the date of receipt by the Junior Agent of the applicable
Notice of Proposed Transfer, in which event, the Senior Lender shall not
consummate any assignment, transfer or participation of all or any portion of
the Senior Liabilities, PROVIDED that, the purchase, sale and conversion with
respect to the Senior Liabilities provided for in this Section 17.12(b) shall
have closed within 30 days after the receipt by the Senior Lender of the
Purchase Notice and the Senior Lender shall have received payment in full of the
Senior Loans as provided for herein within such 30 day period.
(c) On the date specified by the Junior Agent in the
Purchase Notice (which shall not be more than 30 days after the receipt by the
Senior Lender of the Purchase Notice), the Senior Lender shall sell to the
Junior Agent, and the Junior Agent shall purchase from the Senior Lender, the
Senior Liabilities that are the subject of such Proposed Transfer through a last
out participation agreement between the Senior Lender and the Junior Lenders,
which agreement shall contain provisions customary in last out participation
agreements and shall be in form and substance mutually satisfactory to the
Senior Lender and the Junior Agent.
(d) Upon the date of such purchase and sale, the
Junior Agent shall (a) pay to the Senior Lender as the purchase price therefor
the principal amount (valued at par) of the Senior Liabilities then outstanding
and unpaid that are the subject of such Proposed Transfer, together with all
accrued and unpaid interest and fees, if any, relating to such Senior
Liabilities (and, in the case of any Proposed Transfer of all Senior Liabilities
under the Senior Credit Agreement, (i) pay any other fees and expenses,
including reasonable attorneys' fees and legal expenses, that are then due and
owing to the Senior Lender by any of the Debtors under the Senior Loan
Documents, and (ii) furnish cash collateral to the Senior Lender in such amounts
as required under the Senior Credit Agreement to cash collateralize outstanding
Letter of Credit Liabilities in connection with any then issued and outstanding
Letters of Credit until such Letters of Credit are cancelled or terminated).
Such purchase price (and cash collateral, if applicable) shall be remitted by
wire transfer in federal funds to such bank account of the Senior Lender as the
Senior Lender may designate in writing to Junior Agent for such purpose.
Interest on the Senior Liabilities that are the subject of such Proposed
Transfer shall be calculated to but excluding the business day on which such
purchase and sale shall occur if the amounts so paid by the Junior Agent to the
bank account designated by the Senior Lender are received in such bank account
prior to 2:00 p.m., Atlanta, Georgia time, and such interest shall otherwise be
calculated to and including such business day if the amounts so paid by the
Junior Agent to the bank account designated by the Senior Lender are received in
such bank account later than 2:00 p.m., Atlanta, Georgia time.
(e) Such purchase and sale by the Senior Lender to
the Junior Agent hereunder shall be expressly made without representation or
warranty of any kind by the Senior Lender, except that the Senior Lender shall
represent and warrant to the Junior Agent: (a) the amount of the Senior
Liabilities that are the subject of such Proposed Transfer, (b) that Senior
Lender owns the Senior Liabilities that are the subject of such purchase and
sale hereunder free and clear of any Liens or encumbrances and (c) that such
Senior Lender has the right to assign or
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grant participations in such Senior Liabilities (and Senior Loan Commitments, if
applicable) and the assignment or participation is duly authorized by Senior
Lender.
(Signatures Begin On The Following Pages)
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IN WITNESS WHEREOF, this Intercreditor, Subordination and Turnover
Agreement has been duly executed by the parties hereto as of the date first
above written.
JUNIOR AGENT:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
SENIOR LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Senior Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Acknowledged and Agreed:
JUNIOR LENDER:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as the sole Junior Lender