EXECUTION VERSION
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INTERCREDITOR AGREEMENT
dated as of
September 24, 2008
between
▇▇▇▇▇ FARGO FOOTHILL, LLC,
as First Priority Agent,
and
THE BANK OF NEW YORK MELLON,
as Second Priority Agent
THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE INDENTURE, DATED AS
OF SEPTEMBER 24, 2008, AMONG ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ HOLDING INC., ▇▇▇▇▇▇▇ &
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ INC., CERTAIN OF ITS SUBSIDIARIES FROM TIME TO TIME PARTY
THERETO AND THE BANK OF NEW YORK MELLON, AS TRUSTEE AND COLLATERAL AGENT, (B)
THE CREDIT AGREEMENT, DATED AS OF SEPTEMBER 24, 2008, AS AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇'▇ HOLDING INC., ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇, INC., CERTAIN OF ITS
SUBSIDIARIES FROM TIME TO TIME PARTY THERETO, THE LENDERS FROM TIME TO TIME
PARTY THERETO AND ▇▇▇▇▇ FARGO FOOTHILL, LLC, AS AGENT, (C) THE OTHER LOAN
DOCUMENTS REFERRED TO IN SUCH CREDIT AGREEMENT, AND (D) THE OTHER COLLATERAL
AGREEMENTS REFERRED TO IN SUCH INDENTURE.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms..........................................2
SECTION 1.02. Other Defined Terms............................................2
SECTION 1.03. Terms Generally................................................9
ARTICLE II
LIEN PRIORITIES
SECTION 2.01. Relative Priorities...........................................10
SECTION 2.02. Prohibition on Contesting Liens...............................11
SECTION 2.03. No New Liens..................................................11
SECTION 2.04. Similar Collateral............................................12
ARTICLE III
ENFORCEMENT OF RIGHTS; MATTERS RELATING TO COLLATERAL
SECTION 3.01. Exercise of Rights and Remedies...............................12
SECTION 3.02. No Interference...............................................17
SECTION 3.03. Rights as Unsecured Creditors.................................20
SECTION 3.04. Automatic Release of Second Priority Liens....................21
SECTION 3.05. Automatic Release of First Priority Liens.....................22
SECTION 3.06. Insurance and Condemnation Awards.............................22
SECTION 3.07. Notification of Release of Collateral.........................23
ARTICLE IV
PAYMENTS
SECTION 4.01. Application of Proceeds......................................23
SECTION 4.02. Payment Over.................................................24
SECTION 4.03. Certain Agreements with Respect to Unenforceable Liens.......25
ARTICLE V
BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS
ARTICLE VI
INSOLVENCY OR LIQUIDATION PROCEEDINGS
SECTION 6.01. Finance and Sale Matters.....................................27
SECTION 6.02. Relief from the Automatic Stay...............................29
SECTION 6.03. Reorganization Securities....................................30
SECTION 6.04. Post-Petition Interest.......................................30
SECTION 6.05. Certain Waivers by the Second Priority Secured Parties.......30
SECTION 6.06. Certain Voting Matters.......................................31
ARTICLE VII
OTHER AGREEMENTS
SECTION 7.01. Matters Relating to Debt Documents...........................31
SECTION 7.02. Effect of Refinancing of Indebtedness under First Priority
Debt Documents...............................................31
SECTION 7.03. No Waiver by First Priority Secured Parties..................32
SECTION 7.04. Reinstatement................................................32
SECTION 7.05. Authorization of Collateral Agents...........................33
SECTION 7.06. Further Assurances...........................................33
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01. Representations and Warranties of Each Party.................34
SECTION 8.02. Representations and Warranties of Each Collateral Agent......34
ARTICLE IX
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE
SECTION 9.01. No Reliance; Information.....................................34
SECTION 9.02. No Warranties or Liability...................................35
SECTION 9.03. Obligations Absolute.........................................36
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices.....................................................36
SECTION 10.02. Conflicts...................................................37
SECTION 10.03. Effectiveness; Survival; Termination........................37
SECTION 10.04. Severability................................................38
SECTION 10.05. Amendments; Waivers.........................................38
SECTION 10.06. Postponement of Subrogation.................................38
SECTION 10.07. Applicable Law; Jurisdiction; Consent to Service of Process.39
SECTION 10.08. Waiver of Jury Trial........................................39
SECTION 10.09. Parties in Interest.........................................40
SECTION 10.10. Specific Performance........................................40
SECTION 10.11. Headings....................................................40
SECTION 10.12. Counterparts................................................40
SECTION 10.13. Provisions Solely to Define Relative Rights.................40
INTERCREDITOR AGREEMENT dated as of September 24, 2008 (this
"AGREEMENT"), between ▇▇▇▇▇ FARGO FOOTHILL, LLC, as agent for the First Priority
Secured Parties (as defined below) (in such capacity, the "FIRST PRIORITY
AGENT"), and THE BANK OF NEW YORK MELLON, as collateral agent for the Second
Priority Secured Parties (as defined below) (in such capacity, the "SECOND
PRIORITY AGENT").
PRELIMINARY STATEMENT
Reference is made to (a) the Credit Agreement, dated as of September
24, 2008 (as amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms hereof, the "FIRST PRIORITY DEBT AGREEMENT"),
among ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ Holding Inc., a Delaware corporation (the "PARENT"),
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ Inc., a Delaware corporation (the "COMPANY"),
certain of the Company's subsidiaries, the lenders from time to time party
thereto (the "FIRST PRIORITY CREDITORS") and the First Priority Agent, (b) the
Indenture, dated as of September 24, 2008 (as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof, the
"SECOND PRIORITY DEBT AGREEMENT" and, together with the First Priority Debt
Agreement, the "DEBT AGREEMENTS"), among the Parent, the Company, the
Subsidiaries of the Company from time to time party thereto, The Bank of New
York Mellon, as Trustee (in such capacity, the "SECOND PRIORITY TRUSTEE") and
the Second Priority Agent, (c) the Security Agreement, dated as of September 24,
2008 (as amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms hereof, the "FIRST PRIORITY SECURITY AGREEMENT"),
among the Parent, the Company, the Subsidiaries of the Company from time to time
party thereto and the First Priority Agent, (d) the Security Agreement, dated as
of September 24, 2008 (as amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof, the "SECOND PRIORITY
SECURITY AGREEMENT"), among the Parent, the Company, the Subsidiaries of the
Company from time to time party thereto and the Second Priority Agent, (e) the
other Loan Documents as defined, and referred to, in the First Priority Debt
Agreement, and (f) the other Collateral Agreements as defined, and referred to,
in the Second Priority Debt Agreement.
RECITALS
A. The First Priority Creditors have agreed to make loans and other
extensions of credit to the Company pursuant to the First Priority Debt
Agreement on the condition, among others, that the First Priority Claims (such
term and each other capitalized term used but not defined in the preliminary
statement or these recitals having the meaning given it in Article I) shall be
secured by first priority Liens on, and security interests in, the Collateral.
B. The Second Priority Creditors have agreed to purchase and/or hold
the Notes issued by the Company from time to time pursuant to the Second
Priority Debt Agreement on the condition, among others, that the Second Priority
Claims shall be secured by second priority Liens on, and security interests in,
the Collateral.
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C. The Debt Agreements require, among other things, that the parties
thereto set forth in this Agreement, among other things, their respective
rights, obligations and remedies with respect to the Collateral.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. Capitalized terms used
in this Agreement and not otherwise defined herein shall, except to the extent
the context otherwise requires, have the meanings set forth in the Second
Priority Debt Agreement (as in effect on the date hereof) or the Second Priority
Security Agreement (as in effect on the date hereof), as applicable.
SECTION 1.02. OTHER DEFINED TERMS. As used in the Agreement,
the following terms shall have the meanings specified below:
"AGREEMENT" shall have the meaning assigned to such term in the
preamble to this Agreement.
"BANK PRODUCT OBLIGATIONS" shall mean the "Bank Product Obligations",
as that term is defined in the First Priority Debt Agreement.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now and hereinafter in effect, or any successor
statute.
"BANKRUPTCY LAW" shall mean the Bankruptcy Code and any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law.
"COLLATERAL" shall mean, collectively, all "Collateral", as defined in
each of the First Priority Debt Agreement or any other First Priority Debt
Document and/or the Second Priority Debt Agreement or any other Second Priority
Debt Document.
"COLLATERAL AGENTS" shall mean the First Priority Agent and the Second
Priority Agent.
"COMPANY" shall have the meaning assigned to such term in the
preliminary statement to this Agreement.
"DEBT AGREEMENTS" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
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"DEBT DOCUMENTS" shall mean the First Priority Debt Documents and the
Second Priority Debt Documents.
"DIP FINANCING" shall have the meaning assigned to such term in
Section 6.01(a).
"DIP FINANCING LIENS" shall have the meaning assigned to such term in
Section 6.01(a).
"DISCHARGE OF FIRST PRIORITY CLAIMS" shall mean, subject to Sections
7.02 and 7.04, (a) payment in full in cash of the principal of and interest
(including interest accruing during the pendency of any Insolvency or
Liquidation Proceeding, regardless of whether allowed or allowable in such
Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness
outstanding under the First Priority Debt Documents to the extent constituting
First Priority Claims, (b) payment in full in cash of all other First Priority
Claims that are due and payable (other than the Bank Product Obligations) or
otherwise accrued and owing at or prior to the time such principal and interest
are paid, (c) cancellation of or the entry into cash collateralization
arrangements satisfactory to the First Priority Agent and the Issuing Bank with
respect to all Letters of Credit issued and outstanding under the First Priority
Debt Agreement, (d) termination or expiration of all commitments to lend and all
obligations to issue or extend Letters of Credit under the First Priority Debt
Agreement, and (e) the termination or cash collateralization (in an amount and
in the manner required by the First Priority Debt Agreement) of all Bank Product
Obligations.
"DISCHARGE OF SECOND PRIORITY CLAIMS" shall mean, subject to Section
7.04, (a) payment in full in cash of the principal of and interest (including
interest accruing during the pendency of any Insolvency or Liquidation
Proceeding, regardless of whether allowed or allowable in such Insolvency or
Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding
under the Second Priority Debt Documents to the extent constituting Second
Priority Claims, (b) payment in full of all First Priority Claims acquired by
the Second Priority Agent and/or any of the Second Priority Secured Parties as
contemplated by Section 10.06 hereof, and (c) payment in full in cash of all
other Second Priority Claims that are due and payable or otherwise accrued and
owing at or prior to the time such principal and interest are paid.
"DISPOSITION" shall mean any sale, lease, exchange, transfer or other
disposition. "DISPOSE" shall have a correlative meaning.
"EXCESS CLAIMS" shall have the meaning set forth in the last paragraph
of the definition of the term "First Priority Claims".
"EXCESS CLAIMS PERMITTED ACTIONS" shall have the meaning assigned to
such term in Section 3.01(e).
"EXERCISE OF SECURED CREDITOR REMEDIES" shall mean the taking of any
action to enforce or realize upon any Lien in respect of the Collateral pursuant
to any public or private sale pursuant to Article 9 of the UCC.
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"FIRST PRIORITY AGENT" shall have the meaning assigned to such term in
the preamble to this Agreement.
"FIRST PRIORITY CLAIMS" shall mean, subject to the immediately
succeeding paragraph, (a) (i) the due and punctual payment of (A) the principal
of and interest (including interest accruing during the pendency of any
Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable
in such proceeding) on the loans and other advances outstanding under the First
Priority Debt Agreement, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise, (B) each payment required to be made by
the Company under the First Priority Debt Agreement in respect of any Letter of
Credit, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral, and (C) all other
monetary obligations of the Company to any of the First Priority Secured Parties
under the First Priority Debt Agreement and each of the other First Priority
Debt Documents, including fees (including any early termination or prepayment
fees), costs, expenses (including fees and expenses of counsel) and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any Insolvency or
Liquidation Proceeding, regardless of whether allowed or allowable in such
proceeding), (ii) the due and punctual performance of all other obligations of
the Company under or pursuant to the First Priority Debt Agreement and each of
the other First Priority Debt Documents, and (iii) the due and punctual payment
and performance of all the obligations of each other Grantor under or pursuant
to the First Priority Debt Agreement and each of the other First Priority Debt
Documents; and (b) the due and punctual payment and performance of all Bank
Product Obligations.
Notwithstanding the foregoing, to the extent that the sum of (1) the
principal amount of any loans or other advances under the First Priority Debt
Documents, PLUS (2) the aggregate face amount of any Letters of Credit issued
and undrawn or drawn but not reimbursed under the First Priority Debt Agreement,
PLUS (3) the outstanding amount of any Bank Product Obligations, exceeds the
Maximum First Priority Indebtedness Amount, then all such amounts in excess of
the Maximum First Priority Indebtedness Amount, together with interest on such
excess amounts, shall not constitute First Priority Claims (such excess amounts
being referred to herein as "EXCESS CLAIMS"). This Agreement does not constitute
the consent by the Second Priority Agent and/or any Second Priority Secured
Party to the incurrence or existence of any Excess Claim, or to the provision of
collateral security for any Excess Claim, that would constitute a "Default" or
"Event of Default" under the Second Priority Debt Agreement, nor does this
Agreement constitute a waiver by the Second Priority Agent and/or any Second
Priority Secured Party of any such "Default" or "Event of Default", and nothing
in this Agreement shall be interpreted to effect such a consent or waiver.
"FIRST PRIORITY COLLATERAL" shall mean all "Collateral", as defined in
the First Priority Debt Agreement or any other First Priority Debt Document, and
any other assets of any Grantor now or at any time hereafter subject to Liens
securing any First Priority Claims.
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"FIRST PRIORITY CREDITORS" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"FIRST PRIORITY DEBT AGREEMENT" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
"FIRST PRIORITY DEBT DOCUMENTS" shall mean the "Loan Documents", as
defined in the First Priority Debt Agreement.
"FIRST PRIORITY LIENS" shall mean all Liens on the First Priority
Collateral securing the First Priority Claims, whether created under the First
Priority Security Documents or acquired by possession, statute (including any
judgment lien), operation of law, subrogation or otherwise.
"FIRST PRIORITY MORTGAGE" shall mean any mortgage, deed of trust,
leasehold mortgage, assignment of leases and rents, modifications and any other
agreement, document or instrument pursuant to which a Lien on real property is
granted by any Grantor to secure any First Priority Claims or under which rights
or remedies with respect to any such Lien are governed.
"FIRST PRIORITY SECURED PARTIES" shall mean, at any time, (a) the
First Priority Creditors, (b) the First Priority Agent, (d) the Issuing Bank,
(e) each other Person to whom any of the First Priority Claims is owed
(including any Affiliate of a First Priority Creditor to whom any First Priority
Claims of the type described in clause (b) of the definition thereof is owed)
and (f) the successors and assigns of each of the foregoing.
"FIRST PRIORITY SECURITY AGREEMENT" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
"FIRST PRIORITY SECURITY DOCUMENTS" shall mean the First Priority Debt
Agreement, the First Priority Security Agreement, each First Priority Mortgage
and any other agreement, document or instrument pursuant to which a Lien is
granted by any Grantor to secure any First Priority Claims or under which rights
or remedies with respect to any such Lien are governed.
"GRANTORS" shall mean the Parent, the Company and each of its
Subsidiary Guarantors that shall have created or purported to create any First
Priority Lien or Second Priority Lien on all or any part of its assets to secure
any First Priority Claims or any Second Priority Claims, and each other Person
that shall have created or purported to create any First Priority Lien or Second
Priority Lien on all or any part of its assets to secure any First Priority
Claims or any Second Priority Claims.
"GUARANTORS" shall mean, collectively, the Parent and each other
Grantor that has guaranteed, or that may from time to time hereafter guarantee,
the First Priority Claims or the Second Priority Claims, whether by executing
and delivering the applicable Debt Agreement, a supplement thereto or otherwise.
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"INDEBTEDNESS" shall mean and includes all obligations that constitute
"Indebtedness", as defined in the First Priority Debt Agreement or the Second
Priority Debt Agreement, as applicable.
"INSOLVENCY OR LIQUIDATION PROCEEDING" shall mean (a) any voluntary or
involuntary proceeding under the Bankruptcy Code or any other Bankruptcy Law
with respect to any Grantor, (b) any voluntary or involuntary appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Grantor or for a substantial part of the property or assets of any Grantor,
(c) any voluntary or involuntary winding-up or liquidation of any Grantor, or
(d) a general assignment for the benefit of creditors by any Grantor.
"ISSUING BANK" shall mean the "Issuing Lender" as defined in the First
Priority Debt Agreement.
"LETTER OF CREDIT" shall mean a "Letter of Credit" as defined in the
First Priority Debt Agreement.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third Person with respect to such
securities.
"LIQUIDATION SALE" shall mean a so-called bulk sale, liquidation sale
or "going out of business sale" conducted either by any Secured Party or a
Grantor in respect to all or a substantial portion of such Grantor's Collateral
following the occurrence and during the continuance of an Event of Default
under, and as defined in, either the First Priority Debt Documents or Second
Priority Debt Documents.
"MAXIMUM FIRST PRIORITY INDEBTEDNESS AMOUNT" shall mean $27,000,000,
LESS the aggregate amount of all payments of revolving loan Indebtedness under
the First Priority Debt Agreement that result in a permanent reduction of the
revolving credit commitment under the First Priority Debt Agreement (other than
by virtue of any initial or subsequent refinancing of Indebtedness under the
First Priority Debt Documents in whole or in part).
For the sake of clarity, (i) the Maximum First Priority Indebtedness
Amount is intended to be applicable only to the principal amount of any loans or
advances under the First Priority Debt Documents, the aggregate amount of any
undrawn or unreimbursed Letters of Credit issued thereunder, and the outstanding
amount of the Bank Product Obligations; and (ii) all interest (including
interest accruing during the pendency of any Insolvency or Liquidation
Proceeding, regardless of whether allowed or allowable in such proceeding)
(other than interest on Excess Claims), fees, costs and indemnities (whether or
not charged to the Loan Account (as defined in the First Priority Debt
Agreement) under the First Priority Debt Agreement)
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(including interest, fees, costs and indemnities under the First Priority Debt
Documents relating to the Bank Product Obligations) which are included under the
definition of First Priority Claims shall not be subject to the Maximum First
Priority Indebtedness Amount, notwithstanding that such interest, fees, costs
and indemnities constitute First Priority Claims hereunder and not Excess
Claims.
"MAXIMUM SECOND PRIORITY INDEBTEDNESS AMOUNT" shall mean $132,000,000,
LESS the aggregate amount applied from time to time to repay the principal of
Indebtedness under the Second Priority Debt Documents.
For the sake of clarity, the Maximum Second Priority Indebtedness
Amount is intended to be applicable only to the principal amount of any loans or
advances under the Second Priority Debt Documents and not on any interest
(including interest accruing during the pendency of any Insolvency or
Liquidation Proceeding, regardless of whether allowed or allowable in such
proceeding) (other than interest on principal amounts in excess of the Maximum
Second Priority Indebtedness Amount), fees, costs or indemnities under the
Second Priority Debt Agreement.
"NEW FIRST PRIORITY AGENT" shall have the meaning assigned to such
term in Section 7.02.
"NEW FIRST PRIORITY CLAIMS" shall have the meaning assigned to such
term in Section 7.02.
"NEW FIRST PRIORITY DEBT DOCUMENTS" shall have the meaning assigned to
such term in Section 7.02.
"PARENT" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"PLEDGED OR CONTROLLED COLLATERAL" shall have the meaning assigned to
such term in Article V.
"PURCHASE OPTION" shall have the meaning assigned to such term in
Section 3.01(d).
"REFINANCE" shall mean, in respect of any Indebtedness, to refinance,
extend, renew, restructure (including by the amendment and restatement of any
instrument or agreement evidencing such Indebtedness) or replace or to issue
other Indebtedness in exchange or replacement for, such Indebtedness, in whole
or in part. "REFINANCED" and "REFINANCING" shall have correlative meanings.
"REFINANCING NOTICE" shall have the meaning assigned to such term in
Section 7.02.
"RELEASE" shall have the meaning assigned to such term in Section
3.04(a).
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"SECOND PRIORITY AGENT" shall have the meaning assigned to such term
in the preamble to this Agreement.
"SECOND PRIORITY CLAIMS" shall mean all "Obligations", as defined in
the Second Priority Security Agreement of the Grantors under the Second Priority
Debt Documents.
Notwithstanding the foregoing, if the aggregate principal amount of
any notes (including the Notes), debentures, loans or other advances under the
Second Priority Debt Documents exceeds the Maximum Second Priority Indebtedness
Amount, then all such principal amounts in excess of the Maximum Second Priority
Indebtedness Amount shall not constitute Second Priority Claims.
"SECOND PRIORITY COLLATERAL" shall mean all "Collateral", as defined
in any Second Priority Debt Document, and any other assets of any Grantor now or
at any time hereafter subject to Liens securing any Second Priority Claims.
"SECOND PRIORITY CREDITORS" shall mean the "Holders", as defined in
the Second Priority Debt Agreement.
"SECOND PRIORITY DEBT AGREEMENT" shall have the meaning assigned to
such term in the preliminary statement of this Agreement.
"SECOND PRIORITY DEBT DOCUMENTS" shall mean the "Indenture Documents",
as defined in the Second Priority Debt Agreement.
"SECOND PRIORITY LIENS" shall mean all Liens on the Second Priority
Collateral securing the Second Priority Claims, whether created under the Second
Priority Security Documents or acquired by possession, statute (including any
judgment lien), operation of law, subrogation or otherwise.
"SECOND PRIORITY MORTGAGE" shall mean any mortgage, deed of trust,
leasehold mortgage, assignment of leases and rents, modifications and any other
agreement, document or instrument pursuant to which any Lien on real property is
granted by any Grantor to secure any Second Priority Claims or under which
rights or remedies with respect to any such Lien are governed.
"SECOND PRIORITY PERMITTED ACTIONS" shall have the meaning assigned to
such term in Section 3.01(a).
"SECOND PRIORITY RELEASE" shall have the meaning assigned to such term
in Section 3.05.
"SECOND PRIORITY SECURED PARTIES" shall mean, at any time, (a) the
Second Priority Creditors, (b) the Second Priority Trustee, (c) the Second
Priority Agent, (d) each other Person to whom any of the Second Priority Claims
(including indemnification obligations) is owed and (e) the successors and
assigns of each of the foregoing.
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"SECOND PRIORITY SECURITY AGREEMENT" shall have the meaning assigned
to such term in the preliminary statement of this Agreement.
"SECOND PRIORITY SECURITY DOCUMENTS" shall mean the Second Priority
Debt Agreement, the Second Priority Security Agreement, each Second Priority
Mortgage and any other agreement, document or instrument pursuant to which a
Lien is granted by any Grantor to secure any Second Priority Claims or under
which rights or remedies with respect to any such Lien are governed.
"SECOND PRIORITY TRUSTEE" shall have the meaning assigned to such term
in the preliminary statement of this Agreement.
"SECURED PARTIES" shall mean, as the context may require, the First
Priority Secured Parties and/or the Second Priority Secured Parties.
"SECURITY DOCUMENTS" shall mean the First Priority Security Documents
and the Second Priority Security Documents.
"STANDSTILL PERIOD" shall have the meaning assigned to such term in
Section 3.02(a)(i).
"TERMINATION FEES" shall have the meaning assigned to such term in
Section 3.01(d).
"TRIGGERING EVENT" shall mean (a) the acceleration of the Indebtedness
then outstanding under the First Priority Debt Agreement, (b) the First Priority
Agent's Exercise of Secured Creditor Remedies, (c) (i) the Company's failure to
make any scheduled payment of principal, interest or fees due under the Second
Priority Debt Agreement on the due date thereof and the continuation of such
failure or (ii) the Company's failure to make (x) any scheduled payment of
principal due under the First Priority Debt Agreement on the due date thereof,
or (y) any scheduled payment of interest or fees due under the First Priority
Debt Agreement on the due date thereof and after giving effect to any cure or
grace period relating thereto, and the continuation of such failure to pay such
interest or fees for a period of at least ten Business Days, or (d) the
commencement of an Insolvency or Liquidation Proceeding with respect to any
Grantor.
"UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
Code (or any similar or equivalent legislation) as in effect from time to time
in any applicable jurisdiction.
SECTION 1.03. TERMS GENERALLY. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." The word
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"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, restated, supplemented or otherwise modified, (b) any
reference herein (i) to any Person shall be construed to include such Person's
successors and assigns and (ii) to the Company or any other Grantor shall be
construed to include the Company or such Grantor as debtor and
debtor-in-possession and any receiver or trustee for the Company or any other
Grantor, as the case may be, in any Insolvency or Liquidation Proceeding or
Liquidation Sale, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles or Sections shall be construed to refer to Articles or Sections of this
Agreement, and (e) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
ARTICLE II
LIEN PRIORITIES
SECTION 2.01. RELATIVE PRIORITIES. Notwithstanding the date,
manner or order of grant, attachment or perfection of any Second Priority Lien,
any First Priority Lien or any Lien that would constitute a First Priority Lien
but for the fact that it purportedly secures any Excess Claims, and
notwithstanding any provision of the UCC or any other applicable law or the
provisions of any Security Document or any other Debt Document or any other
circumstance whatsoever, each Collateral Agent, for itself and on behalf of the
Secured Parties on whose behalf it acts in such capacity, hereby agrees that,
(a) so long as the Discharge of First Priority Claims has
not occurred, (i) any First Priority Lien on any Collateral now
or hereafter held by or for the benefit of any First Priority
Secured Party shall be senior in right, priority, operation,
effect and all other respects to any and all Second Priority
Liens on any Collateral and to any and all Liens that would have
constituted Second Priority Liens but for the fact that they
secure principal amounts in excess of the Maximum Second Priority
Indebtedness Amount, and (ii) any Second Priority Lien on any
Collateral (and any and all Liens that would have constituted
Second Priority Liens but for the fact that they secure principal
amounts in excess of the Maximum Second Priority Indebtedness
Amount) now or hereafter held by or for the benefit of any Second
Priority Secured Party shall be junior and subordinate in right,
priority, operation, effect and all other respects to any and all
First Priority Liens on any Collateral, and the First Priority
Liens on any Collateral shall be and remain senior in right,
priority, operation, effect and all other respects to any Second
Priority Liens on any Collateral (and any and all Liens that
would have constituted Second Priority Liens but for the fact
that they secure principal amounts in excess of the Maximum
Second Priority Indebtedness Amount) for all purposes, whether or
not any First Priority Liens on any Collateral are subordinated
11
in any respect to any other Lien held by any Person (other than
the Second Priority Secured Parties) securing any other
obligation of the Company, any other Grantor or any other Person;
and
(b) so long as the Discharge of Second Priority Claims has
not occurred, (i) any Second Priority Lien now or hereafter held
by or for the benefit of any Second Priority Secured Party shall
be senior in right, priority, operation, effect and all other
respects to any and all Liens that would have constituted First
Priority Liens but for the fact that they secure Excess Claims
and (ii) any such Lien now or hereafter held by or for the
benefit of any Persons that would otherwise hold First Priority
Secured Claims but for the operation of the second paragraph of
the definition of the term "First Priority Claims" shall be
junior and subordinate in right, priority, operation, effect and
all other respects to any and all Second Priority Liens, and the
Second Priority Liens shall be and remain senior in right,
priority, operation, effect and all other respects to any such
Liens for all purposes, whether or not any Second Priority Liens
are subordinated in any respect to any other Lien held by any
Person (other than the First Priority Secured Parties in respect
of the First Priority Claims) securing any other obligation of
the Company, any other Grantor or any other Person.
SECTION 2.02. PROHIBITION ON CONTESTING LIENS. Each
Collateral Agent, for itself and on behalf of the other Secured Parties on whose
behalf it acts in such capacity, agrees that it will not, and hereby waives any
right to, contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of any Second Priority Lien, any First Priority Lien or any Lien
that would constitute a First Priority Lien but for the fact that it purportedly
secures any Excess Claims, as the case may be; PROVIDED that nothing in this
Agreement shall be construed to prevent or impair the rights of any Collateral
Agent or any other Secured Party to enforce this Agreement to the extent
provided hereby.
SECTION 2.03. NO NEW LIENS. (a) The parties hereto agree
that, so long as the Discharge of First Priority Claims has not occurred, none
of the Grantors shall, nor shall any Grantor permit any of its subsidiaries to,
(i) grant or permit any additional Liens on any asset of a Grantor to secure any
Second Priority Claim unless it has granted, or substantially concurrently
therewith grants, a Lien on such asset of such Grantor to secure the First
Priority Claims or (ii) grant or permit any additional Liens on any asset of a
Grantor to secure any First Priority Claims unless it has granted, or
substantially concurrently therewith grants, a Lien on such asset of a Grantor
to secure the Second Priority Claims, with each such Lien to be subject to the
provisions of this Agreement. To the extent that the provisions of the
immediately preceding sentence are not complied with for any reason, without
limiting any other right or remedy available to the First Priority Agent or the
other First Priority
12
Secured Parties, the Second Priority Agent agrees, for itself and on behalf of
the other Second Priority Secured Parties, that any amounts received by or
distributed to any Second Priority Secured Party pursuant to or as a result of
any Lien granted in contravention of this Section 2.03 shall be subject to
Section 4.02(a).
(b) The parties hereto agree that, so long as the Discharge of
Second Priority Claims has not occurred, none of the Grantors shall, nor shall
any Grantor permit any of its subsidiaries to, grant or permit any additional
Liens on any asset to secure any Excess Claims other than Liens that would
otherwise constitute First Priority Liens but for the fact that such Liens
secured Excess Claims. To the extent that the provisions of the immediately
preceding sentence are not complied with for any reason, without limiting any
other right or remedy available to the Second Priority Agent or the other Second
Priority Secured Parties, each Person that holds Excess Claims agrees that any
amounts received by or distributed to any such Person pursuant to or as a result
of any Lien granted in contravention of this Section 2.03(b) shall be subject to
Section 4.02(b).
SECTION 2.04. SIMILAR COLLATERAL. The parties hereto
acknowledge and agree that it is their intention that the First Priority
Collateral and the Second Priority Collateral be identical. In furtherance of
the foregoing, the parties hereto agree to cooperate in good faith in order to
determine, upon any reasonable request by the First Priority Agent or the Second
Priority Agent, the specific assets included in the First Priority Collateral
and the Second Priority Collateral, the steps taken to perfect the First
Priority Liens and the Second Priority Liens thereon and the identity of the
respective parties obligated under the First Priority Debt Documents and the
Second Priority Debt Documents in respect of the First Priority Claims and the
Second Priority Claims, respectively.
SECTION 2.05. LIEN SUBORDINATION ONLY. The parties hereto
acknowledge and agree that this Agreement constitutes only an agreement to
subordinate Liens. The parties hereby agree that nothing herein constitutes a
debt subordination of the Second Priority Claims to the First Priority Claims.
ARTICLE III
ENFORCEMENT OF RIGHTS; MATTERS RELATING TO COLLATERAL
SECTION 3.01. EXERCISE OF RIGHTS AND REMEDIES. (a) So long
as the Discharge of First Priority Claims has not occurred, whether or not any
Insolvency or Liquidation Proceeding or Liquidation Sale has been commenced, the
First Priority Agent and the other First Priority Secured Parties shall have the
exclusive right to enforce rights and exercise remedies (including any right of
setoff) with respect to the Collateral (including making determinations
regarding the release, Disposition or restrictions with respect to the
Collateral), or to commence or seek to commence any
13
action or proceeding with respect to such rights or remedies (including any
foreclosure action or proceeding or any Insolvency or Liquidation Proceeding or
Liquidation Sale), in each case, without any consultation with or the consent of
the Second Priority Agent or any other Second Priority Secured Party; provided
that, notwithstanding the foregoing, (i) in any Insolvency or Liquidation
Proceeding, the Second Priority Agent may file a proof of claim or statement of
interest with respect to the Second Priority Claims; (ii) the Second Priority
Agent may take any action to preserve or protect the validity and enforceability
of the Second Priority Liens, PROVIDED that no such action is, or could
reasonably be expected to be, (A) adverse to the First Priority Liens or the
rights of the First Priority Agent or any other First Priority Secured Party to
exercise remedies in respect thereof or (B) otherwise inconsistent with the
terms of this Agreement, including the automatic release of Second Priority
Liens provided in Section 3.04; (iii) the Second Priority Secured Parties may
file any 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 the Second Priority Secured
Parties, including any claims secured by the Collateral or otherwise make any
agreements or file any motions pertaining to the Second Priority Claims, in each
case, to the extent not inconsistent with the terms of this Agreement; (iv) the
Second Priority Secured Parties may exercise rights and remedies as unsecured
creditors, as provided in Section 3.03(a); and (v) subject to Section 3.02(a),
the Second Priority Agent and the other Second Priority Secured Parties may
enforce any of their rights and exercise any of their remedies with respect to
the Collateral after the termination of the Standstill Period (the actions
described in this proviso being referred to herein as the "SECOND PRIORITY
PERMITTED ACTIONS"). Except for the Second Priority Permitted Actions, unless
and until the Discharge of First Priority Claims has occurred, the sole right of
the Second Priority Agent and the other Second Priority Secured Parties with
respect to the Collateral shall be to receive the proceeds of the Collateral, if
any, remaining after the Discharge of First Priority Claims has occurred and in
accordance with the Second Priority Debt Documents and applicable law.
(b) In exercising rights and remedies with respect to the
Collateral, the First Priority Agent and the other First Priority Secured
Parties may enforce the provisions of the First Priority Debt Documents and
exercise remedies thereunder, all in such order and in such manner as they may
determine in their sole discretion, in accordance with the First Priority Debt
Documents and applicable law. Such exercise and enforcement shall include the
rights of an agent appointed by them to Dispose of Collateral upon foreclosure,
to incur expenses in connection with any such Disposition and to exercise all
the rights and remedies of a secured creditor under and in accordance with the
Uniform Commercial Code, the Bankruptcy Code or any other Bankruptcy Law. The
First Priority Agent agrees that any Disposition of any Collateral shall be
conducted in accordance with applicable law. The First Priority Agent agrees to
provide at least ten Business Days' prior written notice to the Second Priority
Agent of its intention to foreclose upon or Dispose of any Collateral.
(c) The Second Priority Agent, for itself and on behalf of the
other Second Priority Secured Parties, hereby acknowledges and agrees that no
covenant,
14
agreement or restriction contained in any Second Priority Security Document or
any other Second Priority Debt Document shall be deemed to restrict in any way
the rights and remedies of the First Priority Agent or the other First Priority
Secured Parties with respect to the Collateral as set forth in this Agreement
and the other First Priority Debt Documents.
(d) Notwithstanding anything in this Agreement to the contrary,
upon and during the occurrence of a Triggering Event, the Second Priority
Secured Parties may, at their sole expense and effort, upon notice from the
Second Priority Agent to the Company and the First Priority Agent (which notice
shall be irrevocable), require the First Priority Secured Parties to transfer
and assign to the Second Priority Secured Parties, without warranty or
representation or recourse, all (but not less than all) of the First Priority
Claims and First Priority Security Documents; PROVIDED that (x) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other Governmental Authority having jurisdiction, and (y) the Second Priority
Secured Parties shall have paid to the First Priority Agent, for the account of
the First Priority Secured Parties, in immediately available funds, an amount
equal to 100% of the principal of such Indebtedness PLUS all accrued and unpaid
interest thereon PLUS all accrued and unpaid fees (other than any fees that
become due as a result of the prepayment of the loans and other advances under,
or early termination of, the First Priority Debt Agreement (such fees are
referred to hereinafter as "TERMINATION FEES")) PLUS all the other First
Priority Claims then outstanding (which shall include, with respect to (i) the
aggregate face amount of the Letters of Credit outstanding under the First
Priority Debt Agreement, an amount in cash equal to 105% thereof, and (ii) each
agreement that evidence any Bank Product Obligations, 100% of the aggregate
amount of such First Priority Claims). In order to effectuate the foregoing, the
First Priority Agent shall calculate, upon the written request of the Second
Priority Agent from time to time, the amount in cash that would be necessary to
purchase the First Priority Claims. If the right set forth in this Section
3.01(d) is exercised, (1) the parties shall endeavor to close promptly
thereafter but in any event within ten Business Days of the request set forth in
the first sentence of this Section 3.01(d), (2) such purchase of the First
Priority Claims shall be exercised pursuant to documentation mutually acceptable
to each of the First Priority Agent and the Second Priority Agent, and (3) such
purchase of the First Priority Claims shall be made on a pro rata basis among
the Second Priority Secured Parties giving notice to the Second Priority Agent
of their intent to exercise the purchase option under this Section 3.01(d)
according to such Second Priority Secured Parties' portion of the Second
Priority Claims outstanding on the date of such purchase. Notwithstanding
anything to the contrary herein, if, at any time following the consummation of
such transfer and assignment and the occurrence of the Discharge of First
Priority Claims and the Discharge of Second Priority Claims (other than the
payment of any fees that become due as a result of the prepayment or termination
of the Second Priority Claims and the payment of any principal amount of the
Second Priority Claims in excess of the Maximum Second Priority Indebtedness
Amount), the Second Priority Secured Parties recover any Termination Fees prior
to the first anniversary of the date of such transfer and assignment is
consummated, they shall turn over such fees to First Priority Secured Parties in
the form and to the extent received. In the event that any one or more of the
Second Priority Secured Parties exercises the purchase option set forth in this
15
Section 3.01(d) (the "PURCHASE OPTION"), (A) the First Priority Agent shall have
the right, but not the obligation, to immediately resign under the First Lien
Debt Documents upon the closing of such purchase, (B) the purchasing Second
Priority Secured Parties shall have the right, but not the obligation, to
require the First Priority Agent to immediately resign under the First Lien Debt
Documents upon the closing of such purchase, and (C) the First Priority Agent
shall take such action with respect to the Collateral in an Insolvency or
Liquidation Proceeding as may be reasonably requested in good faith and in
writing by the Second Priority Agent (on behalf of the purchasing Second
Priority Secured Parties) until the closing of such purchase (but in no event
later than 10 Business Days after the delivery of notice set forth in the first
sentence of this Section 3.01(d)); PROVIDED, HOWEVER, (1) if First Priority
Agent so requests, it shall first be indemnified to its reasonable satisfaction
from the Second Priority Agent and the purchasing Second Priority Secured
Parties against any and all liability, loss and expense that may be incurred by
it by reason of taking or continuing to take, or refraining from taking, any
such action, (2) First Priority Agent shall not be required to take any action
that, in the determination of First Priority Agent, is not permitted under the
First Priority Debt Documents or applicable law or will result in liability to
First Priority Agent or any of the First Priority Secured Parties, (3) unless
and until First Priority Agent has received any such written request or
indemnification, the First Priority Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Insolvency or Liquidation Proceeding as it shall deem advisable or as the First
Priority Secured Parties shall so direct, and (4) the First Priority Agent shall
have the right, but not the obligation, to appoint the Second Priority Agent or
any purchasing Second Priority Secured Party, as its agent for the purposes of
taking any action requested by the Second Priority Agent pursuant to this clause
(C). For the avoidance of doubt, the First Priority Agent hereby agrees, for
itself and on behalf of the other First Priority Secured Parties, that the First
Priority Secured Parties will not agree to any amendment or other modification
of any provision of the First Priority Debt Documents (including, but not
limited to, Section 13.1 of the Credit Agreement) that would prohibit, limit or
otherwise restrict the right of the Second Priority Secured Parties from
exercising the Purchase Option.
(e) So long as the Discharge of First Priority Claims has
occurred and the Discharge of Second Priority Claims has not occurred, whether
or not any Insolvency or Liquidation Proceeding has been commenced or
Liquidation Sale, the Second Priority Agent and the other Second Priority
Secured Parties shall have the exclusive right to enforce rights and exercise
remedies (including any right of setoff) with respect to the Collateral
(including making determinations regarding the release, Disposition or
restrictions with respect to the Collateral), or to commence or seek to commence
any action or proceeding with respect to such rights or remedies (including any
foreclosure action or proceeding or any Insolvency or Liquidation Proceeding or
Liquidation Sale), in each case, without any consultation with or the consent of
any Person that holds Excess Claims; PROVIDED that, notwithstanding the
foregoing, (i) in any Insolvency or Liquidation Proceeding, any such Person may
file a proof of claim or statement of interest with respect to the Excess
Claims; (ii) any such Person may take any action to preserve or protect the
validity and enforceability of the Liens that would have constituted First
Priority Liens but for the fact that such Liens secure Excess Claims,
16
PROVIDED that no such action is, or could reasonably be expected to be, (A)
adverse to the Second Priority Liens or the rights of the Second Priority Agent
or any other Second Priority Secured Party to exercise remedies in respect
thereof or (B) otherwise inconsistent with the terms of this Agreement,
including the automatic release of such Liens provided in Section 3.05; (iii)
any such Person may file any 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 Person,
including any claims secured by the Collateral or otherwise make any agreements
or file any motions pertaining to the Excess Claims, in each case, to the extent
not inconsistent with the terms of this Agreement; (iv) any such Person may
exercise rights and remedies as unsecured creditors, as provided in Section
3.03(b) (theactions described in this proviso being referred to herein as the
"EXCESS CLAIMS PERMITTED ACTIONS"). Except for the Excess Claims Permitted
Actions, unless and until the Discharge of Second Priority Claims has occurred,
the sole right of any Person holding Excess Claims with respect to the
Collateral shall be to receive the proceeds of the Collateral, if any, remaining
after the occurrence of the Discharge of First Priority Claims and the Discharge
of the Second Priority Claims (PROVIDED that the principal amount of the Second
Priority Claims shall be limited to the Maximum Second Priority Indebtedness
Amount) and in accordance with the agreements, instruments and other documents
evidencing or governing the Excess Claims and applicable law.
(f) In exercising rights and remedies with respect to the
Collateral, the Second Priority Agent and the other Second Priority Secured
Parties may enforce the provisions of the Second Priority Debt Documents and
exercise remedies thereunder, all in such order and in such manner as they may
determine in their sole discretion, in each case, to the extent that such
enforcement or exercise is not otherwise prohibited by clauses (a) through (d)
of this Section 3.01. Such exercise and enforcement shall, in each case, to the
extent that such enforcement or exercise is not otherwise prohibited by clauses
(a) through (d) of this Section 3.01, include the rights of an agent appointed
by them to Dispose of Collateral upon foreclosure, to incur expenses in
connection with any such Disposition and to exercise all the rights and remedies
of a secured creditor under the Uniform Commercial Code, the Bankruptcy Code or
any other Bankruptcy Law. The Second Priority Agent agrees to provide at least
ten Business Days' prior written notice to the First Priority Agent of its
intention to foreclose upon or Dispose of any Collateral; PROVIDED, HOWEVER,
that the failure to give any such notice shall not in any way limit its ability
to foreclose upon or Dispose of any Collateral to the extent that such
foreclosure is not otherwise prohibited by clauses (a) through (d) of this
Section 3.01.
(g) The First Priority Agent, for itself and on behalf of the
other First Priority Secured Parties, hereby acknowledges and agrees that no
covenant, agreement or restriction contained in any agreement, instrument or
other document that evidences or governs any Excess Claims (other than the
provisions of this Agreement that inure to the benefit of the First Priority
Secured Parties) shall be deemed to restrict in any way the rights and remedies
of the Second Priority Agent or the other Second Priority Secured Parties with
respect to the Collateral as set forth in this Agreement and the other Second
Priority Debt Documents.
17
SECTION 3.02. NO INTERFERENCE. (a) The Second Priority
Agent, for itself and on behalf of the other Second Priority Secured Parties,
agrees that, whether or not any Insolvency or Liquidation Proceeding or
Liquidation Sale has been commenced, the Second Priority Secured Parties:
(i) except for Second Priority Permitted Actions, will not, so
long as the Discharge of First Priority Claims has not occurred, (A)
enforce or exercise, or seek to enforce or exercise, any rights or
remedies (including any right of setoff) with respect to any
Collateral (including the enforcement of any right under any account
control agreement, landlord waiver or bailee's letter or any similar
agreement or arrangement to which the Second Priority Agent or any
other Second Priority Secured Party is a party) or (B) commence or
join with any Person (other than the First Priority Agent) in
commencing, or petition for or vote in favor of any resolution for,
any action or proceeding with respect to such rights or remedies
(including any foreclosure action); PROVIDED, HOWEVER, that the Second
Priority Agent may enforce or exercise any or all such rights and
remedies, or commence, join with any Person in commencing, or petition
for or vote in favor of any resolution for, any such action or
proceeding, after a period of 120 days has elapsed (which period shall
be tolled during any period in which the First Priority Agent shall
not be entitled to enforce or exercise any rights or remedies with
respect to any Collateral as a result of (x) any injunction issued by
a court of competent jurisdiction or (y) the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding) since the date
on which the Second Priority Agent has delivered to the First Priority
Agent written notice of the acceleration of the Indebtedness then
outstanding under the Second Priority Debt Agreement (the "STANDSTILL
PERIOD"); PROVIDED FURTHER, HOWEVER, that (1) notwithstanding the
expiration of the Standstill Period or anything herein to the
contrary, in no event shall the Second Priority Agent or any other
Second Priority Secured Party enforce or exercise any rights or
remedies with respect to any Collateral, or commence, join with any
Person at any time in commencing, or petition for or vote in favor of
any resolution for, any such action or proceeding, if the First
Priority Agent or any other First Priority Secured Party shall have
commenced, and shall be diligently pursuing (or shall have sought or
requested relief from or modification of the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding to enable the
commencement and pursuit thereof), the enforcement or exercise of any
rights or remedies with respect to any Collateral or any such action
or proceeding (prompt written notice thereof to be given to the Second
Priority Agent by the First Priority Agent) and (2) after the
expiration of the Standstill Period, so long as neither the First
Priority Agent nor the First Priority Secured Parties have commenced
any action to enforce their Lien on any material portion of the
Collateral, in the event that and for so long as the Second Priority
Secured Parties (or the Second Priority Agent on their behalf) have
commenced any actions to enforce their Lien with respect to any
Collateral to the extent permitted hereunder and are diligently
pursuing such actions, neither the First Priority
18
Secured Parties nor the First Priority Agent shall take any action of
a similar nature with respect to such Collateral; PROVIDED that all
other provisions of this Agreement (including the turnover provisions
of Article IV) are complied with;
(ii) will not contest, protest or object to any foreclosure
action or proceeding brought by the First Priority Agent or any other
First Priority Secured Party, or any other enforcement or exercise by
any First Priority Secured Party of any rights or remedies relating to
the Collateral under the First Priority Debt Documents or an
Insolvency or Liquidation Proceeding or in connection with a
Liquidation Sale or otherwise, so long as Second Priority Liens attach
to the proceeds thereof subject to the relative priorities set forth
in Section 2.01(a);
(iii) subject to the rights of the Second Priority Secured
Parties under clause (i) above, will not object to the forbearance by
the First Priority Agent or any other First Priority Secured Party
from commencing or pursuing any foreclosure action or proceeding or
any other enforcement or exercise of any rights or remedies with
respect to the Collateral;
(iv) will not, so long as the Discharge of First Priority Claims
has not occurred and except for Second Priority Permitted Actions,
take or receive any Collateral, or any proceeds thereof or payment
with respect thereto, in connection with the exercise of any right or
enforcement of any remedy (including any right of setoff) with respect
to any Collateral or in connection with any insurance policy award
under a policy of insurance relating to any Collateral or any
condemnation award (or deed in lieu of condemnation) relating to any
Collateral;
(v) will not, except for Second Priority Permitted Actions, take
any action that would, or could reasonably be expected to, hinder, in
any manner, any exercise of remedies under the First Priority Debt
Documents, including any Disposition of any Collateral, whether by
foreclosure or otherwise;
(vi) will not, except for Second Priority Permitted Actions,
object to the manner in which the First Priority Agent or any other
First Priority Secured Party may seek to enforce or collect the First
Priority Claims or the First Priority Liens, regardless of whether any
action or failure to act by or on behalf of the First Priority Agent
or any other First Priority Secured Party is, or could be, adverse to
the interests of the Second Priority Secured Parties, and will not
assert, and hereby waive, to the fullest extent permitted by law, any
right to demand, request, plead or otherwise assert or claim the
benefit of any marshalling, appraisal, valuation or other similar
right that may be available under applicable law with respect to the
Collateral or any similar rights a junior secured creditor may have
under applicable law; and
19
(vii) will not attempt, directly or indirectly, whether by
judicial proceeding or otherwise, to challenge or question the
validity or enforceability of any First Priority Claim or any First
Priority Security Document, including this Agreement, or the validity
or enforceability of the priorities, rights or obligations established
by this Agreement.
(b) Each Person that holds Excess Claims agrees that, whether or not
any Insolvency or Liquidation Proceeding or Liquidation Sale has been commenced,
such Person:
(i) except for Excess Claims Permitted Actions, will not, so long
as the Discharge of Second Priority Claims has not occurred, (A)
enforce or exercise, or seek to enforce or exercise, any rights or
remedies (including any right of setoff) with respect to any
Collateral (including the enforcement of any right under any account
control agreement, landlord waiver or bailee's letter or any similar
agreement or arrangement to which such Person is a party) or (B)
commence or join with any Person (other than the Second Priority
Agent) in commencing, or petition for or vote in favor of any
resolution for, any action or proceeding with respect to such rights
or remedies (including any foreclosure action);
(ii) will not contest, protest or object to any foreclosure
action or proceeding brought by the Second Priority Agent or any other
Second Priority Secured Party, or any other enforcement or exercise by
any Second Priority Secured Party of any rights or remedies relating
to the Collateral under the Second Priority Debt Documents or an
Insolvency or Liquidation Proceeding or in connection with a
Liquidation Sale or otherwise, so long as Liens securing the Excess
Claims attach to the proceeds thereof subject to the relative
priorities set forth in Section 2.01(b);
(iii) subject to the rights of all such Persons under clause (i)
above, will not object to the forbearance by the Second Priority Agent
or any other Second Priority Secured Party from commencing or pursuing
any foreclosure action or proceeding or any other enforcement or
exercise of any rights or remedies with respect to the Collateral;
(iv) will not, so long as the Discharge of Second Priority Claims
has not occurred and except for Excess Claims Permitted Actions, take
or receive any Collateral, or any proceeds thereof or payment with
respect thereto, in connection with the exercise of any right or
enforcement of any remedy (including any right of setoff) with respect
to any Collateral or in connection with any insurance policy award
under a policy of insurance relating to any Collateral or any
condemnation award (or deed in lieu of condemnation) relating to any
Collateral;
(v) will not, except for Excess Claims Permitted Actions, take
any action that would, or could reasonably be expected to, hinder, in
any manner, any exercise of remedies under the Second Priority Debt
20
Documents, including any Disposition of any Collateral, whether by
foreclosure or otherwise;
(vi) will not, except for Excess Claims Permitted Actions, object
to the manner in which the Second Priority Agent or any other Second
Priority Secured Party may seek to enforce or collect the Second
Priority Claims or the Second Priority Liens, regardless of whether
any action or failure to act by or on behalf of the Second Priority
Agent or any other Second Priority Secured Party is, or could be,
adverse to the interests of all such Persons, and will not assert, and
hereby waive, to the fullest extent permitted by law, any right to
demand, request, plead or otherwise assert or claim the benefit of any
marshalling, appraisal, valuation or other similar right that may be
available under applicable law with respect to the Collateral or any
similar rights a junior secured creditor may have under applicable
law; and
(vii) will not attempt, directly or indirectly, whether by
judicial proceeding or otherwise, to challenge or question the
validity or enforceability of any Second Priority Claim or any Second
Priority Security Document, including this Agreement, or the validity
or enforceability of the priorities, rights or obligations established
by this Agreement.
For the sake of clarity, the foregoing provisions of this Section
3.02(b) shall only apply to the exercise of rights and remedies by the holders
of Excess Claims in such capacity and shall not be applicable to the First
Priority Secured Parties in respect of their exercise of rights and remedies
with respect to their First Priority Claims.
SECTION 3.03. RIGHTS AS UNSECURED CREDITORS. (a) The Second
Priority Agent and the other Second Priority Secured Parties may, in accordance
with the terms of the Second Priority Debt Documents and applicable law, enforce
rights and exercise remedies against any Grantor as unsecured creditors;
PROVIDED that no such action is otherwise inconsistent with the terms of this
Agreement. Without limiting the generality of the foregoing sentence, the Second
Priority Secured Parties shall be entitled to prosecute litigation against any
Grantor or any other Person liable in respect of the Second Priority Claims,
notwithstanding whether any Standstill Period is then in effect, but shall be
prohibited from taking any action to enforce any judgment until the lapse of any
applicable Standstill Period. Nothing in this Agreement shall prohibit the
receipt by the Second Priority Agent or any other Second Priority Secured Party
of the required payments of principal, premium, interest, fees and other amounts
due under the Second Priority Debt Documents so long as such receipt is not the
direct or indirect result of the enforcement or exercise in contravention of
this Agreement by the Second Priority Agent or any other Second Priority Secured
Party of rights or remedies as a secured creditor (including any right of
setoff) against Collateral or enforcement in contravention of this Agreement of
any Second Priority Lien against Collateral (including any judgment lien
resulting from the exercise of remedies available to an unsecured creditor).
21
(b) Each Person that holds Excess Claims may, in accordance with
the terms of the agreements, instruments and other documents evidencing or
governing the Excess Claims and applicable law, enforce rights and exercise
remedies against any Grantor as unsecured creditors; PROVIDED that no such
action is otherwise inconsistent with the terms of this Agreement. Nothing in
this Agreement shall prohibit the receipt by any such Person of the required
payments of principal, premium, interest, fees and other amounts due under such
agreements, instruments and other documents so long as such receipt is not the
direct or indirect result of the enforcement or exercise in contravention of
this Agreement by any such Person of rights or remedies as a secured creditor
(including any right of setoff) against Collateral or enforcement in
contravention of this Agreement of any Lien against Collateral that would
constitute a First Priority Lien but for the fact that it purportedly secures
any Excess Claims (including any judgment lien resulting from the exercise of
remedies available to an unsecured creditor).
SECTION 3.04. AUTOMATIC RELEASE OF SECOND PRIORITY LIENS.
(a) If, in connection with (i) any Disposition of any Collateral permitted under
the terms of the First Priority Debt Documents and subject to Section 3.01(b) or
(ii) subject to Section 3.01(b), the enforcement or exercise of any rights or
remedies with respect to the Collateral, including any Disposition of
Collateral, the First Priority Agent, for itself and on behalf of the other
First Priority Secured Parties, (x) releases any of the First Priority Liens, or
(y) releases any Guarantor from its obligations under its guarantee of the First
Priority Claims (in each case, a "RELEASE"), other than any such Release granted
following (and not as a condition to) the Discharge of First Priority Claims,
then the Second Priority Liens on such Collateral (and any and all Liens that
would have constituted Second Priority Liens but for the fact that they secure
principal amounts in excess of the Maximum Second Priority Indebtedness Amount),
and the obligations of such Guarantor under its guarantee of the Second Priority
Claims, as applicable, shall be automatically, unconditionally and
simultaneously released, and the Second Priority Agent shall, for itself and on
behalf of the other Second Priority Secured Parties, promptly execute and
deliver to the First Priority Agent, the relevant Grantor or such Guarantor such
termination statements, releases and other documents as the First Priority Agent
or the relevant Grantor or Guarantor may reasonably request and provide to
effectively confirm such Release; PROVIDED that, in the case of a Disposition of
Collateral (other than any such Disposition in connection with the enforcement
or exercise of any rights or remedies with respect to the Collateral) or a
Release of a Guarantor from its Guarantee (as defined in the Second Priority
Debt Agreement as in effect on the date hereof) (other than any such Release in
connection with the enforcement or exercise of any rights or remedies with
respect to all of the Capital Interests of such Guarantor or all or
substantially all of its assets), the Second Priority Liens or the applicable
Guarantee(s) shall not be so released if such Disposition or such Release is not
permitted under the terms of the Second Priority Debt Agreement .
(b) Until the Discharge of First Priority Claims occurs, the
Second Priority Agent, for itself and on behalf of each other Second Priority
Secured Party, hereby appoints the First Priority Agent, and any officer or
agent of the First Priority
22
Agent, with full power of substitution, as the attorney-in-fact of each Second
Priority Secured Party for the purpose of carrying out the provisions of this
Section 3.04 and taking any action and executing any instrument that the First
Priority Agent may deem necessary or advisable to accomplish the purposes of
this Section 3.04 (including any endorsements or other instruments of transfer
or release), which appointment is irrevocable and coupled with an interest.
SECTION 3.05. AUTOMATIC RELEASE OF FIRST PRIORITY LIENS. If,
in connection with the enforcement or exercise of any rights or remedies with
respect to the Collateral after the expiration of the Standstill Period that is
permitted in accordance with clause (2) of the second proviso to Section
3.02(a)(i) and conducted in accordance with applicable law, including any
Disposition of Collateral, the Second Priority Agent, for itself and on behalf
of the other Second Priority Secured Parties, (x) releases any of the Second
Priority Liens, or (y) releases any Guarantor from its obligations under its
guarantee of the Second Priority Claims (in each case, a "SECOND PRIORITY
RELEASE"), then the First Priority Liens on such Collateral, and the obligations
of such Guarantor under its guarantee of the First Priority Claims, as
applicable, shall be automatically, unconditionally and simultaneously released,
and the First Priority Agent shall, for itself and on behalf of the other First
Priority Secured Parties, promptly execute and deliver to the Second Priority
Agent, the relevant Grantor or such Guarantor such termination statements,
releases and other documents as the Second Priority Agent or the relevant
Grantor or Guarantor may reasonably request to effectively confirm such release;
PROVIDED that so long as the Discharge of First Priority Claims has not
occurred, the proceeds of, or payments with respect to, any Second Priority
Release that are received by the Second Priority Agent or any other Second
Priority Secured Party, shall be segregated and held in trust and forthwith
transferred or paid over to the First Priority Agent for the benefit of the
First Priority Secured Parties in accordance with Section 4.02(a); PROVIDED
FURTHER, HOWEVER, that the First Priority Agent shall not be obligated to
release the First Priority Liens on any Collateral in connection with any sale
or other Disposition of Collateral to a Second Priority Secured Party or an
affiliate thereof or any other transaction other than a sale of such Collateral
to a third Person with respect to which at least 75% of the consideration
therefor consists of cash and cash equivalents.
SECTION 3.06. INSURANCE AND CONDEMNATION AWARDS. So long as
the Discharge of First Priority Claims has not occurred, the First Priority
Agent and the other First Priority Secured Parties shall have the exclusive
right, subject to the rights of the Grantors under the First Priority Debt
Documents, to settle and adjust claims in respect of Collateral under policies
of insurance covering Collateral and to approve any award granted in any
condemnation or similar proceeding, or any deed in lieu of condemnation, in
respect of the Collateral. All proceeds of any such policy and any such award,
or any payments with respect to a deed in lieu of condemnation, shall (a) first,
prior to the Discharge of First Priority Claims and subject to the rights of the
Grantors under the First Priority Debt Documents,
23
be paid to the First Priority Agent for the benefit of First Priority Secured
Parties pursuant to the terms of the First Priority Debt Documents, (b) second,
after the Discharge of First Priority Claims and subject to the rights of the
Grantors under the Second Priority Debt Documents, be paid to the Second
Priority Agent for the benefit of the Second Priority Secured Parties pursuant
to the terms of the Second Priority Debt Documents, (c) third, after the
Discharge of Second Priority Claims and subject to the rights of the Grantors
under the agreements, instruments and other documents evidencing or governing
the Excess Claims, be paid to the Persons that hold Excess Claims pursuant to
the terms of such agreements, instruments and other documents, and (d) fourth,
if no Excess Claims are outstanding, be paid to the owner of the subject
property or as a court of competent jurisdiction may otherwise direct. Until the
Discharge of First Priority Claims has occurred, if the Second Priority Agent or
any other Second Priority Secured Party shall, at any time, receive any proceeds
of any such insurance policy or any such award or payment, it shall transfer and
pay over such proceeds to the First Priority Agent in accordance with Section
4.02(a). Following the occurrence of the Discharge of First Priority Claims and
prior to the Discharge of Second Priority Claims, if any Person that holds
Excess Claims, at any time, receives any proceeds of any such insurance policy
or any such award or payment, it shall transfer and pay over such proceeds to
the Second Priority Agent in accordance with Section 4.02(b).
SECTION 3.07. NOTIFICATION OF RELEASE OF COLLATERAL. Each of
the First Priority Agent and the Second Priority Agent shall give the other
prompt written notice of the Disposition by it of, and Release by it of the Lien
on, any Collateral. Such notice shall describe in reasonable detail the subject
Collateral, the parties involved in such Disposition or Release, the place, time
manner and method thereof, and the consideration, if any, received therefor;
PROVIDED, HOWEVER, that the failure to give any such notice shall not in and of
itself in any way impair the effectiveness of any such Disposition or Release.
SECTION 3.08. AUTOMATIC RELEASE OF LIENS WITH RESPECT TO
EXCESS CLAIMS. If, after the Discharge of First Priority Claims has occurred,
there is a Second Priority Release, then the Liens securing the Excess Claims on
such Collateral, and the obligations of such Guarantor under its guarantee of
the Excess Claims, shall be automatically, unconditionally and simultaneously
released, and the First Priority Agent shall, for itself and on behalf of the
other First Priority Secured Parties, promptly execute and deliver to the Second
Priority Agent, the relevant Grantor or such Guarantor such termination
statements, releases and other documents as the Second Priority Agent or the
relevant Grantor or Guarantor may reasonably request to effectively confirm such
release.
ARTICLE IV
PAYMENTS
SECTION 4.01. APPLICATION OF PROCEEDS.
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Any Collateral or proceeds thereof received by any Secured Party or any Person
that holds Excess Claims in connection with any Disposition of, or collection
on, such Collateral upon the enforcement or exercise of any right or remedy
(including any right of setoff) shall be applied as follows:
FIRST, to the payment of costs and expenses of the applicable
Secured Party in connection with such enforcement or exercise,
SECOND, after all such costs and expenses have been paid in full,
to the payment of the First Priority Claims,
THIRD, after all such costs and expenses have been paid in full
and the Discharge of First Priority Claims has occurred, to the
payment of the Second Priority Claims, and
FOURTH, after all such costs and expenses have been paid in full,
the Discharge of First Priority Claims has occurred and the Discharge
of Second Priority Claims has occurred, to the payment of any Excess
Claims. After all such costs and expenses have been paid in full, the
Discharge of First Priority Claims has occurred, the Discharge of
Second Priority Claims has occurred and all Excess Claims have been
paid in full, any surplus Collateral or proceeds then remaining shall
be returned to the applicable Grantor or to whosoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
SECTION 4.02. PAYMENT OVER. (a) So long as the Discharge of
First Priority Claims has not occurred, any Collateral or any proceeds thereof
(together with assets or proceeds subject to Liens referred to in the final
sentence of Section 2.03(a)) received by the Second Priority Agent or any other
Second Priority Secured Party in connection with any Disposition of, or
collection on, such Collateral upon the enforcement or the exercise of any right
or remedy (including any right of setoff) with respect to the Collateral, or in
connection with any insurance policy claim or any condemnation award (or deed in
lieu of condemnation), shall be segregated and held in trust and forthwith
transferred or paid over to the First Priority Agent for the benefit of the
First Priority Secured Parties in the same form as received, together with any
necessary endorsements, or as a court of competent jurisdiction may otherwise
direct. Until the Discharge of First Priority Claims occurs, the Second Priority
Agent, for itself and on behalf of each other Second Priority Secured Party,
hereby appoints the First Priority Agent, and any officer or agent of the First
Priority Agent, with full power of substitution, the attorney-in-fact of each
Second Priority Secured Party for the purpose of carrying out the provisions of
this Section 4.02(a) and taking any action and executing any instrument that the
First Priority Agent may deem necessary or advisable to accomplish the purposes
of this Section 4.02(a), which appointment is irrevocable and coupled with an
interest.
25
(b) So long as the Discharge of First Priority Claims has
occurred and the Discharge of Second Priority Claims has not occurred, any
Collateral or any proceeds thereof (together with assets or proceeds subject to
Liens referred to in the final sentence of Section 2.03(b)) received by any
Person that holds Excess Claims in connection with any Disposition of, or
collection on, such Collateral upon the enforcement or the exercise of any right
or remedy (including any right of setoff) with respect to the Collateral, or in
connection with any insurance policy claim or any condemnation award (or deed in
lieu of condemnation), shall be segregated and held in trust and forthwith
transferred or paid over to the Second Priority Agent for the benefit of the
Second Priority Secured Parties in the same form as received, together with any
necessary endorsements, or as a court of competent jurisdiction may otherwise
direct. After the Discharge of First Priority Claims and until the Discharge of
Second Priority Claims occurs, each Person that holds any Excess Claims hereby
appoints the Second Priority Agent, and any officer or agent of the Second
Priority Agent, with full power of substitution, the attorney-in-fact of each
such Person for the purpose of carrying out the provisions of this Section
4.02(b) and taking any action and executing any instrument that the Second
Priority Agent may deem necessary or advisable to accomplish the purposes of
this Section 4.02(b), which appointment is irrevocable and coupled with an
interest.
SECTION 4.03. CERTAIN AGREEMENTS WITH RESPECT TO
UNENFORCEABLE LIENS. (a) Notwithstanding anything to the contrary contained
herein, if in any Insolvency or Liquidation Proceeding a determination is made
that any Lien encumbering any Collateral is not enforceable for any reason, then
the Second Priority Agent and the Second Priority Secured Parties agree that,
any distribution or recovery they may receive with respect to, or allocable to,
the value of the assets constituting Collateral subject to an enforceable Lien
in favor of the Second Priority Secured Parties or any proceeds thereof shall
(for so long as the Discharge of First Priority Claims has not occurred) be
segregated and held in trust and forthwith paid over to the First Priority Agent
for the benefit of the First Priority Secured Parties in the same form as
received without recourse, representation or warranty (other than a
representation of the Second Priority Agent that it has not otherwise sold,
assigned, transferred or pledged any right, title or interest in and to such
distribution or recovery) but with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. Until the Discharge of First
Priority Claims occurs, the Second Priority Agent, for itself and on behalf of
each other Second Priority Secured Party, hereby appoints the First Priority
Agent, and any officer or agent of the First Priority Agent, with full power of
substitution, the attorney-in-fact of each Second Priority Secured Party for the
limited purpose of carrying out the provisions of this Section 4.03(a) and
taking any action and executing any instrument that the First Priority Agent may
deem necessary or advisable to accomplish the purposes of this Section 4.03(a),
which appointment is irrevocable and coupled with an interest.
(b) Notwithstanding anything to the contrary contained herein, if
in any Insolvency or Liquidation Proceeding a determination is made that any
Lien encumbering any Collateral is not enforceable for any reason, then Persons
holding any Excess Claims
26
agree that, any distribution or recovery they may receive with respect to, or
allocable to, the value of the assets intended to constitute such Collateral or
any proceeds thereof shall (for so long as so long as the Discharge of First
Priority Claims has occurred and the Discharge of Second Priority Claims has not
occurred) be segregated and held in trust and forthwith paid over to the Second
Priority Agent for the benefit of the Second Priority Secured Parties in the
same form as received without recourse, representation or warranty (other than a
representation of any such Person that it has not otherwise sold, assigned,
transferred or pledged any right, title or interest in and to such distribution
or recovery) but with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. After the Discharge of First Priority Claims
has occurred and until the Discharge of Second Priority Claims occurs, each
Person holding Excess Claims, hereby appoints the Second Priority Agent, and any
officer or agent of the Second Priority Agent, with full power of substitution,
the attorney-in-fact of such Person for the limited purpose of carrying out the
provisions of this Section 4.03(b) and taking any action and executing any
instrument that the First Priority Agent may deem necessary or advisable to
accomplish the purposes of this Section 4.03(b), which appointment is
irrevocable and coupled with an interest.
ARTICLE V
BAILMENT FOR PERFECTION OF CERTAIN SECURITY INTERESTS
(a) The First Priority Agent agrees that if it shall at any time
hold a First Priority Lien on any Collateral that can be perfected or the
priority of which can be enhanced by the possession or control of such
Collateral or of any account in which such Collateral is held, and if such
Collateral or any such account is in fact in the possession or under the control
of the First Priority Agent, or of agents or bailees of the First Priority Agent
(such Collateral being referred to herein as the "PLEDGED OR CONTROLLED
COLLATERAL"), the First Priority Agent shall, solely for the purpose of
perfecting the Second Priority Liens granted under the Second Priority Debt
Documents and subject to the terms and conditions of this Article V, also (i)
hold and/or maintain control of such Pledged or Controlled Collateral as
gratuitous bailee for and representative (as defined in Section 1-201(35) of the
Uniform Commercial Code as in effect in the State of New York) of, or as agent
for, the Second Priority Agent, (ii) with respect to any securities accounts
included in the Collateral, have "control" (within the meaning of Section
8-106(d)(3) of the UCC) of such securities accounts on behalf of the Second
Priority Agent and (iii) with respect to any deposit accounts included in the
Collateral, act as agent for the Second Priority Agent and any assignee.
(b) So long as the Discharge of First Priority Claims has not
occurred, the First Priority Agent shall be entitled to deal with the Pledged or
Controlled Collateral in accordance with the terms of this Agreement and the
other First Priority Debt Documents as if the Second Priority Liens did not
exist. The obligations and responsibilities of the First Priority Agent to the
Second Priority Agent and the other Second Priority Secured Parties under this
Article V shall be limited solely to holding or controlling the Pledged or
Controlled Collateral as gratuitous bailee and representative (as defined in
27
Section 1-201(35) of the Uniform Commercial Code as in effect in the State of
New York) in accordance with this Article V. Without limiting the foregoing, the
First Priority Agent shall have no obligation or responsibility to ensure that
any Pledged or Controlled Collateral is genuine or owned by any of the Grantors.
The First Priority Agent acting pursuant to this Article V shall not, by reason
of this Agreement, any other Security Document or any other document, have a
fiduciary relationship in respect of any other First Priority Secured Party, the
Second Priority Agent or any other Second Priority Secured Party.
(c) Upon the Discharge of First Priority Claims, the First
Priority Agent shall transfer the possession and control of the Pledged or
Controlled Collateral, together with any necessary endorsements but without
recourse or warranty, (i) if the Second Priority Claims are outstanding at such
time, to the Second Priority Agent, (ii) if no Second Priority Claims are
outstanding at such time and any Excess Claims are outstanding at such time, to
the Persons holding such Excess Claims, and (iii) if no Second Priority Claims
and no Excess Claims are outstanding at such time, to the applicable Grantor, in
each case so as to allow such Person to obtain possession and control of such
Pledged or Controlled Collateral. In connection with any transfer under clause
(i) of the immediately preceding sentence, the First Priority Agent agrees, at
the expense of the Grantors, to take all actions in its power as shall be
reasonably requested by the Second Priority Agent to permit the Second Priority
Agent to obtain, for the benefit of the Second Priority Secured Parties, a first
priority security interest in the Pledged or Controlled Collateral.
(d) After the Discharge of First Priority Claims and upon the
Discharge of Second Priority Claims, the Second Priority Agent shall transfer
the possession and control of the Pledged or Controlled Collateral, together
with any necessary endorsements but without recourse or warranty, (i) if any
Excess Claims are outstanding at such time, to Persons holding such Excess
Claims, and (ii) if no Excess Claims are outstanding at such time, to the
applicable Grantor, in each case so as to allow such Person to obtain possession
and control of such Pledged or Controlled Collateral. In connection with any
transfer under clause (i) of the immediately preceding sentence, the Second
Priority Agent agrees, at the expense of the Grantors, to take all actions in
its power as shall be reasonably requested by the Persons holding any Excess
Claims to permit such Persons to obtain a first priority security interest in
the Pledged or Controlled Collateral.
ARTICLE VI
INSOLVENCY OR LIQUIDATION PROCEEDINGS
SECTION 6.01. FINANCE AND SALE MATTERS. (a) Until the
Discharge of First Priority Claims has occurred, the Second Priority Agent, for
itself and on behalf of the other Second Priority Secured Parties, agrees that,
in
28
the event of any Insolvency or Liquidation Proceeding, the Second Priority
Secured Parties:
(i) will not oppose or object to the use of any Collateral
constituting cash collateral under Section 363 of the Bankruptcy Code,
or any comparable provision of any other Bankruptcy Law, unless the
First Priority Secured Parties, or a representative authorized by the
First Priority Secured Parties, shall oppose or object to such use of
cash collateral;
(ii) (A) will not oppose or object to any post-petition financing
provided to any Grantor, whether provided by the First Priority
Secured Parties or any other Person, under Section 364 of the
Bankruptcy Code, or any comparable provision of any other Bankruptcy
Law (a "DIP FINANCING"), or the Liens securing any DIP Financing ("DIP
FINANCING LIENS"), unless the First Priority Secured Parties, or a
representative authorized by the First Priority Secured Parties, shall
then oppose or object to such DIP Financing or such DIP Financing
Liens, and, to the extent that such DIP Financing Liens are senior to,
or rank PARI PASSU with, the First Priority Liens on the Collateral,
or the First Priority Claims are (x) included as obligations under
such DIP Financing or (y) are repaid with proceeds of the DIP
Financing, the Second Priority Agent will, for itself and on behalf of
the other Second Priority Secured Parties, subordinate the Second
Priority Liens on the Collateral (and any and all Liens that would
have constituted Second Priority Liens but for the fact that they
secure principal amounts in excess of the Maximum Second Priority
Indebtedness Amount) to the First Priority Liens on the Collateral, if
applicable, and the DIP Financing Liens (including if the First
Priority Claims are (x) included as obligations under such DIP
Financing or (y) are repaid with proceeds of the DIP Financing) on the
terms of this Agreement (and each Person holding any Excess Claims
will subordinate its Liens securing such Excess Claims to the Second
Priority Claims, the First Priority Liens and the DIP Financing Liens
on the terms of this Agreement); and (B) will not propose any DIP
Financing to any Grantor. Notwithstanding anything to the contrary,
the Second Priority Secured Parties retain their rights under the
Bankruptcy Code to make post-petition financing proposals and such
proposals shall not be deemed to be an objection to any other DIP
Financing proposals so long as (x) any court order approving such
post-petition financing requires that the First Priority Claims be
paid in full in cash as a condition to such post-petition financing,
and (y) the First Priority Claims are paid in full in cash on the date
of such post-petition financing, which date shall be no later than 10
days after the date on which such post-petition financing is approved
by the court in which such Insolvency or Liquidation Proceeding is
pending;
(iii) except to the extent permitted by paragraph (b) of this
Section 6.01, in connection with the use of cash collateral as
described in clause (i) above or a DIP Financing, will not request
adequate protection
29
with respect to any Collateral or any other relief in connection with
such use of cash collateral, DIP Financing or DIP Financing Liens; and
(iv) will not oppose or object to any Disposition of any
Collateral free and clear of the Second Priority Liens (or any and all
Liens that would have constituted Second Priority Liens but for the
fact that they secure principal amounts in excess of the Maximum
Second Priority Indebtedness Amount) or other claims under Section 363
of the Bankruptcy Code, or any comparable provision of any other
Bankruptcy Law, if the First Priority Secured Parties, or a
representative authorized by the First Priority Secured Parties, shall
consent to such Disposition.
(b) The Second Priority Agent, for itself and on behalf of the other
Second Priority Secured Parties, agrees that no Second Priority Secured Party
shall contest, or support any other Person in contesting, (i) any request by the
First Priority Agent or any other First Priority Secured Party for adequate
protection in respect of any First Priority Claims or (ii) any objection, based
on a claim of a lack of adequate protection with respect of any First Priority
Claims, by the First Priority Agent or any other First Priority Secured Party to
any motion, relief, action or proceeding. Notwithstanding the immediately
preceding sentence, if, in connection with any DIP Financing or use of cash
collateral, (A) any First Priority Secured Party is granted adequate protection
in the form of a Lien on additional collateral, the Second Priority Agent may,
for itself and on behalf of the other Second Priority Secured Parties, seek or
request adequate protection in the form of a Lien on such additional collateral,
which Lien will be subordinated to the First Priority Liens and DIP Financing
Liens on the same basis as the other Second Priority Liens are subordinated to
the First Priority Liens under this Agreement or (B) any Second Priority Secured
Party is granted adequate protection in the form of a Lien on additional
collateral, the First Priority Agent shall, for itself and on behalf of the
other First Priority Secured Parties, be granted adequate protection in the form
of a Lien on such additional collateral that is senior to such Second Priority
Lien as security for the First Priority Claims.
(c) Notwithstanding the foregoing, the applicable provisions of
Section 6.01(a) and (b) shall only be binding on the Second Priority Secured
Parties with respect to any DIP Financing to the extent the principal amount of
such DIP Financing, when taken together with the aggregate principal amount of
the First Priority Claims (which, in each case, for the avoidance of doubt shall
not include any First Priority Claims of the type described in clause (b) of the
first paragraph of the definition thereof), does not exceed the sum of (i) the
Maximum First Priority Indebtedness Amount, plus (ii) $10,000,000.
SECTION 6.02. RELIEF FROM THE AUTOMATIC STAY. The Second
Priority Agent, for itself and on behalf of the other Second Priority Secured
Parties, agrees that, so long as the Discharge of First Priority Claims has not
occurred, no Second Priority Secured Party shall, without the prior written
consent of the First Priority
30
Agent, seek or request relief from or modification of the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding in respect of any part of
the Collateral, any proceeds thereof or any Second Priority Lien on the
Collateral (or any Liens that would have constituted Second Priority Liens but
for the fact that they secure principal amounts in excess of the Maximum Second
Priority Indebtedness Amount).
SECTION 6.03. REORGANIZATION SECURITIES. If, in any
Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor
secured by Liens upon any property of the reorganized debtor are distributed,
pursuant to a plan of reorganization or similar dispositive restructuring plan,
on account of the First Priority Claims, the Second Priority Claims and any
Excess Claims, then, to the extent the debt obligations distributed on account
of the First Priority Claims, on account of the Second Priority Claims and on
account of any Excess Claims are secured by Liens upon the same assets or
property, the provisions of this Agreement will survive the distribution of such
debt obligations pursuant to such plan and will apply with like effect to the
Liens securing such debt obligations.
SECTION 6.04. POST-PETITION INTEREST. (a) The Second
Priority Agent, for itself and on behalf of the other Second Priority Secured
Parties, agrees that no Second Priority Secured Party shall oppose or seek to
challenge any claim by the First Priority Agent or any other First Priority
Secured Party for allowance in any Insolvency or Liquidation Proceeding of First
Priority Claims consisting of post-petition interest, fees or expenses to the
extent of the value of the First Priority Liens (it being understood and agreed
that such value shall be determined without regard to the existence of the
Second Priority Liens on the Collateral).
(b) The First Priority Agent, for itself and on behalf of the
other First Priority Secured Parties, agrees that the Second Priority Agent or
any other Second Priority Secured Party may make a claim for allowance in any
Insolvency or Liquidation Proceeding of Second Priority Claims consisting of
post-petition interest, fees or expenses to the extent of the value of the
Second Priority Liens; PROVIDED, HOWEVER, that (i) if the First Priority Secured
Parties shall have made any such claim, such claim (A) shall have also have been
approved or (B) shall have been approved prior to, or will be approved
contemporaneous with, the approval of any such claim by any Second Priority
Secured Party and (ii) each First Priority Secured Party may oppose or seek to
challenge any such claim.
SECTION 6.05. CERTAIN WAIVERS BY THE SECOND PRIORITY SECURED
PARTIES. The Second Priority Agent, for itself and on behalf of the other Second
Priority Secured Parties, waives any claim any Second Priority Secured Party may
hereafter have against any First Priority Secured Party arising out of (a) the
election by any First Priority Secured Party of the application of Section
1111(b)(2) of the Bankruptcy Code, or any comparable provision of any other
Bankruptcy Law, or (b) any use of cash collateral or
31
financing arrangement, or any grant of a security interest in the Collateral, in
any Insolvency or Liquidation Proceeding.
SECTION 6.06. CERTAIN VOTING MATTERS. Each of the First
Priority Agent, on behalf of the First Priority Secured Parties and the Second
Priority Agent on behalf of the Second Priority Secured Parties, agrees that,
without the written consent of the other, it will not seek to vote in the same
class as the other in connection with any plan of reorganization in any
Insolvency or Liquidation Proceeding. Except as provided in this Section 6.06,
nothing in this Agreement is intended, or shall be construed, to limit the
ability of the Second Priority Agent or the Second Priority Secured Parties to
vote on any plan of reorganization that maintains the lien subordination
provisions of this Agreement or of either the First Priority Secured Parties or
Second Priority Secured Parties, to contest any plan of reorganization that does
not maintain the lien subordination provisions of this Agreement.
ARTICLE VII
OTHER AGREEMENTS
SECTION 7.01. MATTERS RELATING TO DEBT DOCUMENTS(a) . The
Second Priority Agent agrees that the Second Priority Debt Agreement and the
Second Priority Security Agreement shall contain the applicable provisions set
forth on Annex I hereto, or similar provisions approved by the First Priority
Agent, which approval shall not be unreasonably withheld or delayed. The Second
Priority Agent further agrees that each Second Priority Mortgage covering any
Collateral shall contain such other language as the First Priority Agent may
reasonably request to reflect the subordination of such Second Priority Mortgage
to the First Priority Security Document covering such Collateral pursuant to
this Agreement.
SECTION 7.02. EFFECT OF REFINANCING OF INDEBTEDNESS UNDER
FIRST PRIORITY DEBT DOCUMENTS. If, substantially contemporaneously with the
Discharge of First Priority Claims, the Grantors Refinance the Indebtedness
outstanding under the First Priority Debt Documents and provided that (a) such
Refinancing is not prohibited hereby and (b) the Company gives to the Second
Priority Agent written notice (the "REFINANCING NOTICE") electing the
application of the provisions of this Section 7.02 to such Refinancing
Indebtedness, then (i) such Discharge of First Priority Claims shall
automatically be deemed not to have occurred for all purposes of this Agreement,
(ii) such Refinancing Indebtedness and all other obligations under the documents
evidencing such Indebtedness (the "NEW FIRST PRIORITY CLAIMS") shall
automatically be treated as First Priority Claims for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect
of Collateral set forth herein, (iii) the Debt Agreement and the other documents
evidencing such Refinancing Indebtedness (the "NEW FIRST PRIORITY DEBT
DOCUMENTS")
32
shall automatically be treated as the First Priority Debt Agreement and the
First Priority Debt Documents and, in the case of New First Priority Debt
Documents that are security documents pursuant to which any Grantor has granted
a Lien to secure any New First Priority Claim, as the First Priority Security
Documents for all purposes of this Agreement, (iv) the collateral agent under
the New First Priority Debt Documents (the "NEW FIRST PRIORITY AGENT") shall be
deemed to be the First Priority Agent for all purposes of this Agreement and (v)
the lenders under the New First Priority Debt Documents shall be deemed to be
the First Priority Creditors for all purposes of this Agreement. Upon receipt of
a Refinancing Notice, which notice shall include the identity of the New First
Priority Agent, the Second Priority Agent shall promptly enter into such
documents and agreements (including amendments or supplements to this Agreement)
as the Company or such New First Priority Agent may reasonably request in order
to provide to the New First Priority Agent the rights and powers contemplated
hereby, in each case consistent in all material respects with the terms of this
Agreement. If the Second Priority Claims are Refinanced and (x) such Refinancing
is not prohibited hereby and (y) the Company gives to the First Priority Agent
written notice (including the identity of the new Second Priority Agent) of such
Refinancing, then First Priority Agent shall promptly enter into such documents
and agreements (including amendments or supplements to this Agreement) necessary
to provide to the new Second Priority Agent the rights and powers contemplated
hereby, in each case consistent in all material respects with the terms of this
Agreement. The Company shall cause the agreement, document or instrument
pursuant to which the New First Priority Agent is appointed to provide that the
New First Priority Agent agrees to be bound by the terms of this Agreement. In
furtherance of Section 2.03, if the New First Priority Claims are secured by
assets of the Grantors that do not also secure the Second Priority Claims, the
applicable Grantors shall promptly grant a Second Priority Lien on such assets
to secure the Second Priority Claims.
SECTION 7.03. NO WAIVER BY FIRST PRIORITY SECURED PARTIES.
Other than with respect to the Second Priority Permitted Actions, nothing
contained herein shall prohibit or in any way limit the First Priority Agent or
any other First Priority Secured Party from opposing, challenging or objecting
to, in any Insolvency or Liquidation Proceeding or otherwise, any action taken,
or any claim made, by the Second Priority Agent or any other Second Priority
Secured Party, including any request by the Second Priority Agent or any other
Second Priority Secured Party for adequate protection or any exercise by the
Second Priority Agent or any other Second Priority Secured Party of any of its
rights and remedies under the Second Priority Debt Documents or otherwise.
SECTION 7.04. REINSTATEMENT. If, in any Insolvency or
Liquidation Proceeding or otherwise, all or part of any payment with respect to
(a) the First Priority Claims previously made shall be rescinded for any reason
whatsoever, then the First Priority Claims shall be reinstated to the extent of
the amount so rescinded (and to the extent the Maximum First Priority
Indebtedness Amount was decreased in connection with such payment of the First
Priority Claims, the Maximum First Priority Indebtedness Amount shall be
increased to such extent) and, if
33
theretofore terminated, this Agreement shall be reinstated in full force and
effect and such prior termination shall not diminish, release, discharge, impair
or otherwise affect the Lien priorities and the relative rights and obligations
of the First Priority Secured Parties and the Second Priority Secured Parties
provided for herein and (b) the Second Priority Claims previously made shall be
rescinded for any reason whatsoever and the Discharge of First Priority Claims
shall, subject to (for the avoidance of doubt) the immediately preceding clause
(a), have occurred, then the Second Priority Claims shall be reinstated to the
extent of the amount so rescinded (and to the extent the Maximum Second Priority
Indebtedness Amount was decreased in connection with such payment of the Second
Priority Claims, the Maximum Second Priority Indebtedness Amount shall be
increased to such extent) and, if theretofore terminated, this Agreement shall
be reinstated in full force and effect and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the Lien priorities and
the relative rights and obligations of the Second Priority Secured Parties and
any Person that holds Excess Claims provided for herein solely with respect to
any Excess Claims and for the avoidance of doubt, not with respect to any First
Priority Claims.
SECTION 7.05. AUTHORIZATION OF COLLATERAL AGENTS. By
accepting the benefits of this Agreement and the other First Priority Security
Documents, each First Priority Secured Party hereby (a) authorizes the First
Priority Agent to enter into this Agreement and to act on its behalf as
collateral agent hereunder and in connection herewith and (b) agrees to be bound
to the terms hereof to the extent that it holds any Excess Claims. By accepting
the benefits of this Agreement and the other Second Priority Security Documents,
each Second Priority Secured Party hereby authorizes the Second Priority Agent
to enter into this Agreement and to act on its behalf as collateral agent
hereunder and in connection herewith.
SECTION 7.06. FURTHER ASSURANCES. Each of the First Priority
Agent, for itself and on behalf of the other First Priority Secured Parties, the
Second Priority Agent, for itself and on behalf of the other Second Priority
Secured Parties, and each Person that holds any Excess Claims agrees that it
will execute, or will cause to be executed, any and all further documents,
agreements and instruments, and take all such further actions, as may be
required under any applicable law, or which the First Priority Agent or the
Second Priority Agent may reasonably request, to effectuate the terms of this
Agreement, including the relative Lien priorities provided for herein.
SECTION 7.07. ROLES OF SECURED PARTIES. The parties hereto
agree that any limitations, restrictions or prohibitions imposed on any Secured
Party in its capacity as such shall not apply to such Secured Party in its
capacity as a holder of debt or equity under documentation not issued pursuant
to the First Priority Debt Documents or the Second Priority Debt Documents. For
the avoidance of doubt, this means that no Secured Party shall be bound to any
term or
34
condition of this Agreement in its capacity as a holder of the Company's 10%
Senior Notes due 2013.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01. REPRESENTATIONS AND WARRANTIES OF EACH PARTY.
Each party hereto represents and warrants to the other parties hereto as
follows:
(a) Such party is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to execute and deliver this Agreement and perform
its obligations hereunder.
(b) This Agreement has been duly executed and delivered by
such party and constitutes a legal, valid and binding obligation of such party,
enforceable in accordance with its terms.
(c) The execution, delivery and performance by such party of
this Agreement (i) do not require any consent or approval of, registration or
filing with or any other action by any governmental authority (except as
contemplated hereby) and (ii) will not violate any provision of law, statute,
rule or regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of such party or any order of any governmental
authority or any provision of any indenture, agreement or other instrument
applicable to or binding upon such party.
SECTION 8.02. REPRESENTATIONS AND WARRANTIES OF EACH
COLLATERAL AGENT. Each Collateral Agent represents and warrants to the other
parties hereto that it has been authorized by the Secured Parties under and as
defined in the First Priority Debt Agreement or the Second Priority Security
Agreement, as applicable, to enter into this Agreement.
ARTICLE IX
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE
SECTION 9.01. NO RELIANCE; INFORMATION. The First Priority
Secured Parties and the Second Priority Secured Parties shall have no duty to
disclose to any Second Priority Secured Party or to any First Priority Secured
Party, respectively, any information relating to the Company or any of the
Grantors, or any other circumstance bearing upon the risk of nonpayment of any
of the First Priority Claims or the Second Priority Claims, as the case may be,
that is known or becomes
35
known to any of them or any of their Affiliates. In the event any First Priority
Secured Party or any Second Priority Secured Party, in its sole discretion,
undertakes at any time or from time to time to provide any such information to,
respectively, any Second Priority Secured Party or any First Priority Secured
Party, it shall be under no obligation (i) to make, and shall not make or be
deemed to have made, any express or implied representation or warranty,
including with respect to the accuracy, completeness, truthfulness or validity
of the information so provided, (ii) to provide any additional information or to
provide any such information on any subsequent occasion or (iii) to undertake
any investigation.
SECTION 9.02. NO WARRANTIES OR LIABILITY. (a) The First
Priority Agent, for itself and on behalf of the other First Priority Secured
Parties, acknowledges and agrees that, except for the representations and
warranties set forth in Article VIII, neither the Second Priority Agent nor any
other Second Priority Secured Party has made any express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Second
Priority Debt Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon. The Second Priority Agent, for itself and on
behalf of the other Second Priority Secured Parties, acknowledges and agrees
that, except for the representations and warranties set forth in Article VIII,
neither the First Priority Agent nor any other First Priority Secured Party has
made any express or implied representation or warranty, including with respect
to the execution, validity, legality, completeness, collectibility or
enforceability of any of the First Priority Debt Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon.
(b) The Second Priority Agent and the other Second Priority
Secured Parties shall have no express or implied duty to the First Priority
Agent or any other First Priority Secured Party, and the First Priority Agent
and the other First Priority Secured Parties shall have no express or implied
duty to the Second Priority Agent or any other Second Priority Secured Party, to
act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of a default or an event of default under any First
Priority Debt Document and any Second Priority Debt Document (other than, in
each case, this Agreement), regardless of any knowledge thereof which they may
have or be charged with.
(c) The Second Priority Agent, for itself and on behalf of
the other Second Priority Secured Parties, agrees no First Priority Secured
Party shall have any liability to the Second Priority Agent or any other Second
Priority Secured Party, and hereby waives any claim against any First Priority
Secured Party, arising out of any and all actions which the First Priority Agent
or the other First Priority Secured Parties may take or permit or omit to take
with respect to (i) the First Priority Debt Documents (other than this
Agreement), (ii) the collection of the First Priority Claims or (iii) subject to
Section 3.01(b), the maintenance of, the preservation of, the foreclosure upon
or the Disposition of any Collateral.
36
SECTION 9.03. OBLIGATIONS ABSOLUTE. The Lien priorities
provided for herein and the respective rights, interests, agreements and
obligations hereunder of the First Priority Agent and the other First Priority
Secured Parties and the Second Priority Agent and the other Second Priority
Secured Parties shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Debt
Document;
(b) any change in the time, place or manner of payment of,
or in any other term of, all or any portion of the First Priority
Claims, it being specifically acknowledged that a portion of the First
Priority Claims consists or may consist of Indebtedness that is
revolving in nature, and the amount thereof that may be outstanding at
any time or from time to time may be increased or reduced and
subsequently reborrowed;
(c) any change in the time, place or manner of payment of,
any other term of, all or any portion of the First Priority Claims;
(d) any amendment, waiver or other modification, whether by
course of conduct or otherwise, of any Debt Document;
(e) the securing of any First Priority Claims or Second
Priority Claims with any additional collateral or guarantees, or any
exchange, release, voiding, avoidance or non-perfection of any
security interest in any Collateral or any other collateral or any
release of any guarantee securing any First Priority Claims or Second
Priority Claims;
(f) the commencement of any Insolvency or Liquidation
Proceeding or Liquidation Sale in respect of the Company or any other
Grantor; or
(g) any other circumstances that otherwise might constitute
a defense available to, or a discharge of, the Company or any other
Grantor in respect of the First Priority Claims or this Agreement, or
any of the Second Priority Secured Parties in respect of this
Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
fax, as follows:
37
(a) if to the First Priority Agent, to ▇▇▇▇▇ Fargo Foothill,
LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of Specialty Finance Credit Manager (Fax No. (310)
453-7442); and
(b) if to the Second Priority Agent, to The Bank of New York
Mellon, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of
Corporate Trust Administration (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇).
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or overnight courier
service or sent by fax or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 10.01 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 10.01. As agreed to between the Company and any
Collateral Agent from time to time, notices and other communications may also be
delivered by e-mail to the e-mail address of a representative of the applicable
Person provided from time to time by such Person.
The First Priority Agent and the Second Priority Agent agree
to use diligent efforts to provide each other with copies of any notices of
default or acceleration or similar notices which they give to the Company under
the First Priority Debt Documents and Second Priority Debt Documents
respectively; PROVIDED, however, that in the event that either of such parties
fails to provide the other with such notice, such failure shall not affect their
respective obligations hereunder or the effectiveness of any such notice.
SECTION 10.02. CONFLICTS. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THIS AGREEMENT AND THE PROVISIONS OF THE
OTHER DEBT DOCUMENTS, THE PROVISIONS OF THIS AGREEMENT SHALL CONTROL.
SECTION 10.03. EFFECTIVENESS; SURVIVAL; TERMINATION. This
Agreement shall become effective when executed and delivered by the parties
hereto. All covenants, agreements, representations and warranties made by any
party in this Agreement shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of this
Agreement. The terms of this Agreement shall survive, and shall continue in full
force and effect, in any Insolvency or Liquidation Proceeding. The Second
Priority Agent, for itself and on behalf of the other Second Priority Secured
Parties, hereby waives any and all rights the Second Priority Secured Parties
may now or hereafter have under applicable law to revoke this Agreement or any
of the provisions of this Agreement. This Agreement shall terminate and be of no
further force and effect, (i) subject to compliance with its obligations to take
certain actions upon Discharge of the Second Priority Claims pursuant to Article
V and
38
Section 3.01(d), with respect to the Second Priority Agent, the Second Priority
Secured Parties and the Second Priority Claims, upon the later of (1) the date
upon which the obligations under the Second Priority Debt Agreement terminate if
there are no other Second Priority Claims outstanding on such date and (2) if
there are other Second Priority Claims outstanding on such date, the date upon
which such Second Priority Claims terminate and (ii) subject to Section 7.02 and
compliance with its obligations to take certain actions upon Discharge of the
First Priority Claims pursuant to Article V, with respect to the First Priority
Agent, the First Priority Secured Parties and the First Priority Claims, the
date of Discharge of First Priority Claims, subject to the rights of the First
Priority Secured Parties under Section 7.04.
SECTION 10.04. SEVERABILITY. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10.05. AMENDMENTS; WAIVERS. (a) No failure or delay
on the part of any party hereto in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the parties
hereto are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by any party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 10.05, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the First Priority Agent and the Second Priority Agent.
SECTION 10.06. POSTPONEMENT OF SUBROGATION. The Second
Priority Agent agrees that no payment or distribution to any First Priority
Secured Party pursuant to the provisions of this Agreement shall entitle any
Second Priority Secured Party to exercise any rights of subrogation in respect
thereof until the Discharge of First Priority Claims shall have occurred.
Following the Discharge of First Priority Claims, each First Priority Secured
Party agrees to execute such documents,
39
agreements, and instruments as any Second Priority Secured Party may reasonably
request to evidence the transfer by subrogation to any such Person of an
interest in the First Priority Claims resulting from payments or distributions
to such First Priority Secured Party by such Person, so long as all costs and
expenses (including all reasonable legal fees and disbursements) incurred in
connection therewith by such First Priority Secured Party are paid by such
Person upon request for payment thereof.
SECTION 10.07. Applicable Law; Jurisdiction; Consent to
Service of Process. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of any
Supreme Court for New York County, New York or in The United States District
Court for the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined only in
such New York court or, to the extent permitted by law, in such Federal court.
Each party hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(c) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York court or in any such Federal court. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.08. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
40
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.08.
SECTION 10.09. PARTIES IN INTEREST. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, as well as the other First Priority
Secured Parties and Second Priority Secured Parties, all of whom are intended to
be bound by, and to be third party beneficiaries of, this Agreement. No other
Person shall have or be entitled to assert rights or benefits hereunder.
SECTION 10.10. SPECIFIC PERFORMANCE. Each Collateral Agent
may demand specific performance of this Agreement and, on behalf of itself and
the respective other Secured Parties, hereby irrevocably waives any defense
based on the adequacy of a remedy at law and any other defense that might be
asserted to bar the remedy of specific performance in any action which may be
brought by the respective Secured Parties.
SECTION 10.11. HEADINGS. Article and Section headings used
herein and the Table of Contents hereto are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
SECTION 10.12. COUNTERPARTS. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 10.03. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
SECTION 10.13. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the First Priority Secured Parties, on the one
hand, and the Second Priority Secured Parties, on the other hand. None of the
Company, any other Grantor, any Guarantor or any other creditor thereof shall
have any rights or obligations, except as expressly provided in this Agreement
hereunder and none of the Company, any other Grantor or any Guarantor may rely
on the terms hereof. Nothing in this Agreement is intended to or shall impair
the obligations of the Company or any other Grantor or any
41
Guarantor, which are absolute and unconditional, to pay the First Priority
Claims and the Second Priority Claims as and when the same shall become due and
payable in accordance with their terms.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
FIRST PRIORITY AGENT
▇▇▇▇▇ FARGO FOOTHILL, LLC, a Delaware limited
liability company,
as First Priority Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
SECOND PRIORITY AGENT
THE BANK OF NEW YORK MELLON,
as Second Priority Agent
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
ACKNOWLEDGMENT
The Parent, the Company and each of the Company's undersigned subsidiaries each
hereby acknowledge that they have received a copy of the foregoing Agreement and
consent thereto, agree to recognize all rights granted thereby to the First
Priority Agent, the First Priority Secured Parties, the Second Priority Agent
and the Second Priority Secured Parties, and will not do any act or perform any
obligation which is not in accordance with the terms set forth therein. The
Parent, the Company and each of the Company's undersigned subsidiaries each
further acknowledge and agree that they are not an intended beneficiary or third
party beneficiary under the foregoing Agreement.
ACKNOWLEDGED AS OF THE DATE
FIRST WRITTEN ABOVE:
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ HOLDING
INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇'▇ REALTY LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ FINANCE CORP.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
[SIGNATURE PAGE TO ACKNWOLEDGEMENT TO INTERCREDITOR AGREEMENT]
WILSHIRE RESTAURANT GROUP, LLC
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ PIE SHOPS, INC.
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
MACAL INVESTORS, INC.
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ WHOLESALERS, INC.
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
FIV CORP.
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President, Secretary
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
MCID, Inc.
an Idaho corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
WILSHIRE BEVERAGE, INC.
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President, Vice President, Treasurer,
Secretary
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
ANNEX I
PROVISION FOR THE SECOND PRIORITY DEBT AGREEMENT
"EACH SECURED PARTY HEREUNDER (A) ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF
THE INTERCREDITOR AGREEMENT, (B) CONSENTS TO THE SUBORDINATION OF LIENS PROVIDED
FOR IN THE INTERCREDITOR AGREEMENT, (C) AGREES THAT IT WILL BE BOUND BY AND WILL
TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND
(D) AUTHORIZES AND INSTRUCTS THE COLLATERAL AGENT TO ENTER INTO THE
INTERCREDITOR AGREEMENT AS COLLATERAL AGENT AND ON BEHALF OF SUCH SECURED PARTY.
THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE FIRST PRIORITY
SECURED PARTIES UNDER THE FIRST PRIORITY DEBT DOCUMENTS TO PERMIT THE INCURRENCE
OF INDEBTEDNESS UNDER THIS AGREEMENT AND TO EXTEND CREDIT TO THE COMPANY AND
CERTAIN OF ITS SUBSIDIARIES AND SUCH FIRST PRIORITY SECURED PARTIES ARE INTENDED
THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THE
PROVISIONS OF THIS AGREEMENT OR THE OTHER INDENTURE DOCUMENTS, THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT SHALL CONTROL."
PROVISION FOR THE SECOND PRIORITY SECURITY AGREEMENT
"REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF SEPTEMBER 24, 2008
(AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
"INTERCREDITOR AGREEMENT"), BETWEEN ▇▇▇▇▇ FARGO FOOTHILL, LLC, AS FIRST PRIORITY
AGENT (AS DEFINED THEREIN), AND THE BANK OF NEW YORK MELLON, AS SECOND PRIORITY
AGENT (AS DEFINED THEREIN). NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE
LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF
THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR
REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE
SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT
AND THE PROVISIONS OF THIS AGREEMENT OR THE OTHER INDENTURE DOCUMENTS, THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL."