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EXHIBIT 4.12
INTERCREDITOR AND COLLATERAL
AGENCY AGREEMENT
This INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT (this "Agreement")
is made as of the 25th day of February, 1998, among (i) U.S. Trust Company of
California, N.A., as collateral agent (in such capacity, the "Collateral Agent")
for the Secured Parties (as hereinafter defined), (ii) BankBoston, N.A., as
Agent (in such capacity, the "Agent") for the Lenders (as hereinafter defined),
(iii) U.S. Trust Company of California, N.A., as Trustee (the "Trustee") on
behalf of the holders of Debentures (as defined below), and (iv) American
Restaurant Group, Inc. ("ARG") and each of its subsidiaries listed on the
signature pages hereto (the "Guarantors", and together with ARG, collectively,
the "Borrowers").
WHEREAS, pursuant to a Revolving Credit Agreement dated as of the date
hereof (as supplemented or otherwise amended and in effect from time to time,
the "Original Credit Agreement"), among the Borrowers, BankBoston, N.A. and the
other financial institutions which may from time to time become parties thereto
(the "Lenders") and BankBoston, N.A., as Agent for the Lenders, the Lenders
have, upon the terms and subject to the conditions contained therein, agreed to
make loans, and otherwise extend credit to the Borrowers;
WHEREAS, it is a condition precedent to the Lenders' obligations to
make loans, and otherwise extend credit to the Borrowers that the Borrowers
grant to the Collateral Agent for the benefit of the Lenders and the Agent, as
security for the Borrowers' obligations to the Lenders and the Agent under or in
respect of the Original Credit Agreement, a first priority perfected lien on and
security interest in the Collateral (as hereinafter defined), subject to the
provisions of this Agreement;
WHEREAS, pursuant to an Indenture dated as of the date hereof (as
supplemented or otherwise amended and in effect from time to time, the
"Indenture"), among ARG, the Guarantors and the Trustee, ARG has agreed to issue
its 11.5% Senior Secured Notes Due 2003, (the "Debentures");
WHEREAS, pursuant to a guaranty included in the Indenture, the
Guarantors have guaranteed the obligations of ARG under the Debentures, the
Indenture and the other documents to which ARG is a party;
WHEREAS, in order for the Debentures to be issued by ARG and to be
accepted by the holders thereof, the Indenture requires that the Borrowers grant
to the Collateral Agent for the benefit of the holders of the Debentures and the
Trustee, as security for the Borrowers' obligations to the holders of Debentures
and the Trustee under the Indenture, a first priority perfected security
interest in the Collateral, subject to the provisions of this Agreement;
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WHEREAS, concurrently herewith, the Borrowers and the Collateral Agent
have entered into certain security agreements and related documents pursuant to
which the Borrowers have granted or agreed to grant to the Collateral Agent, for
the benefit of (i) the Lenders, (ii) the Agent, (iii) the Trustee and (iv) the
holders of the Debentures, a security interest in and lien upon the Collateral;
and
WHEREAS, the parties hereto wish to set forth their relative rights and
priorities with respect to the Collateral;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS.
Section 1.1. DEFINITIONS OF TERMS USED IN CREDIT AGREEMENT. All
capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Credit Agreement as in effect on the date hereof and as
amended from time to time hereafter (but only to the extent any such amendment
complies with the provisions of Section 9 of this Agreement).
Section 1.2. DEFINITIONS. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Agreement
referred to below:
Act. See Section 2.2.
Actionable Default. Any Event of Default under and as defined
in the Credit Agreement or Event of Default under and as defined in the
Indenture.
Agency Agreements. Each Agency Account Agreement (and any
additions, replacements or substitutions thereof) among the Borrowers, the
Agent, the Collateral Agent and each of the Borrowers' depository banks covering
all concentration (and, to the extent required by the Requisite Party, other)
accounts of the Borrowers with such banks, together with all notices in
substantially the form of Exhibit A to the Company Security Agreement (as
defined in the Credit Agreement) or, as the case may be, to the Subsidiary
Security Agreement (as defined in the Credit Agreement) given by the Borrowers
and the Collateral Agent to the Borrowers' depository banks with respect to
local depository accounts.
Agent. As defined in the preamble hereto and shall include any
replacement or successor Agent under the Original Credit Agreement, or any like
agent(s) (or replacement(s) thereof or successor(s) thereto) under any other
Credit Agreement.
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Agreement. This Intercreditor and Collateral Agency Agreement.
Bank Debt. The "Obligations" as defined in the Original Credit
Agreement, or any like term of the same meaning contained in any replacement
Credit Agreement. Bank Debt shall include without limitation, any interest and
collection costs to the extent allowable under applicable bankruptcy laws and
any such amounts that would have been allowable to the extent that the Liens on
Collateral secured only the Bank Debt. Notwithstanding the foregoing, Bank Debt
shall not include (i) principal amounts under the Credit Agreement, or any
replacement of the Credit Agreement, to the extent, and only to the extent, that
such principal amounts at any one time outstanding exceed the Maximum Bank Debt
Principal (such excess, the "Excess Bank Debt") and (ii) any interest, fees,
collection costs and other amounts to the extent that they relate solely to, or
are allocable solely to, any Excess Bank Debt. As used herein, "Maximum Bank
Debt Principal" shall mean $20,000,000.
Bank Loan Documents. The "Loan Documents", as defined in the
Original Credit Agreement, or any like term of the same meaning contained in any
other Credit Agreement.
Borrowers. As defined in the preamble hereto. Borrowers as
used herein includes the Borrowers as debtors, and the estate of the Borrowers
as debtors, under the federal Bankruptcy Code as well as any permitted
post-confirmation successor to such debtors under Chapter 11 of the federal
Bankruptcy Code.
Collateral. Any of the properties and assets of whatever
nature, tangible or intangible, now owned or existing or hereafter acquired or
arising, of the Borrowers in which the Borrowers have at the time of reference
granted a Lien to the Collateral Agent to secure the Bank Debt and the Debenture
Debt and which has not been released pursuant to the terms hereof; provided
however, Collateral shall not include certain real estate collateral.
Collateral Agent. As defined in the preamble hereto unless and
until a successor Collateral Agent shall have been appointed pursuant to
Section 5.4 hereof, and thereafter "Collateral Agent" shall mean such successor
Collateral Agent.
Credit Agreement. The Original Credit Agreement and the Bank
Loan Documents, and any agreement or agreements designated as a "Credit
Agreement" hereunder by written notice by the Borrowers to the Collateral Agent
with the written consent of the Agent and governing Indebtedness all or part of
which was incurred to refund, refinance or replace all or any portion of the
Indebtedness under the Original Credit Agreement, as the same may hereafter be
amended, renewed, extended, restated, supplemented or otherwise modified
(including without limitation, (i) by increasing the
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amount of Indebtedness thereunder and (ii) any credit facility entered into
after the commencement of an Insolvency Proceeding) from time to time.
Credit Documents. Collectively, the Credit Agreement, the
Debenture Documents, and the Security Documents.
Debenture Acceleration Notice. See definition of Requisite
Party.
Debenture Debt. The "Obligations" as defined in the Indenture.
Debenture Debt shall include, without limitation, all indebtedness and
obligations of the Borrowers to the holders of the Debentures and the Trustee
under the Indenture and the other Debenture Documents, and shall further
include, without limitation, any interest and collection cost to the extent
allowable under applicable bankruptcy laws.
Debenture Documents. The Indenture, the Debentures, and all
documents, instruments and agreements executed in connection therewith and, to
the extent permitted by the Credit Documents, in connection with any
indebtedness issued by the Borrowers to refund or refinance all or substantially
all of the Debentures.
Debentures. As defined in the preamble hereto and, to the
extent permitted by the Credit Documents, any replacement or substitution
therefor issued by the Borrowers to refund or refinance all or substantially all
of the Debentures which is explicitly entitled under the terms and conditions
thereof to the benefits of this Agreement.
Indenture. As defined in the preamble hereto and shall include
any amendment or supplement thereof and, to the extent permitted by the Credit
Documents, any replacement or substitution therefor issued by the Borrowers to
refund or refinance all or substantially all of the Debentures.
Insolvency Proceeding. A case or proceeding, voluntary or
involuntary, for the distribution, division or application of all or part of the
assets of the Borrowers or the proceeds thereof, whether such case or proceeding
be for the liquidation, dissolution or winding up of the Borrowers or their
business, a receivership, insolvency or bankruptcy case or proceeding, an
assignment for the benefit of creditors or a proceeding by or against the
Borrowers for relief under the federal Bankruptcy Code or any other bankruptcy,
reorganization or insolvency law or any other law relating to the relief of
debtors, readjustment of indebtedness, reorganization, arrangement, composition
or extension or marshalling of assets or otherwise.
Lenders. As defined in the preamble hereto, together with
their respective successors and assigns, and shall include any replacement or
successive lenders under the Credit Agreement.
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Lien. Any consensual mortgage, security deed, deed of trust,
pledge, lien, security interest or other voluntary encumbrance, whether now
existing or hereafter created, acquired or arising.
Notice of Actionable Default. A notice by the Requisite Party
delivered to the Collateral Agent, stating that an Actionable Default has
occurred. A Notice of Actionable Default shall be deemed to have been given when
the notice referred to in the preceding sentence has actually been received by
the Collateral Agent and to have been rescinded when the Collateral Agent has
actually received from the notifying party a notice withdrawing such notice. A
Notice of Actionable Default shall be deemed to be outstanding at all times
after such notice has been given until such time, if any, as such notice has
been rescinded. The Requisite Party may rescind a Notice of Actionable Default
during an Insolvency Proceeding.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business or other legal entity, and any government
or any governmental agency or political subdivision thereof.
Requisite Party. The Agent until such time as the Agent shall
certify to the Collateral Agent in writing that the Bank Debt has been paid in
full in cash (or in a manner otherwise satisfactory to the Agent in its sole and
absolute discretion) and the commitments represented by the Credit Agreement
shall have expired or been reduced to zero or terminated; and, thereafter, the
Trustee. Notwithstanding the foregoing, the Trustee shall become the Requisite
Party 180 days after the Trustee has delivered notice to the Collateral Agent
and the Agent that the entire principal amount of the Debenture Debt shall have
become due and payable (a "Debenture Acceleration Notice"), if prior to the end
of such period either the Agent has failed to deliver a Notice of Actionable
Default or an Insolvency Proceeding does not exist. During any Insolvency
Proceeding, until the Bank Debt has been paid in full in cash (or in a manner
otherwise satisfactory to the Agent in its sole and absolute discretion) and the
commitments represented by the Credit Agreement shall have expired or been
reduced to zero or terminated, the Agent shall be the Requisite Party (even if
the Trustee shall have been the Requisite Party prior to the commencement of the
Insolvency Proceeding).
Secured Obligations. Collectively, the Bank Debt (unless and
until the Agent has given notice in writing to the Collateral Agent that either
(i) the Bank Debt has been paid in full and all commitments under the Credit
Agreement have been reduced to zero or (ii) the Bank Debt otherwise no longer
constitutes Secured Obligations under the Security Documents) and the Debenture
Debt (unless and until the Trustee has given notice in writing to the Collateral
Agent that the Debenture Debt no longer constitutes Secured Obligations under
the Security Documents).
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Secured Parties. The Agent, for the benefit of the Lenders and
the Agent, and the Trustee, for the benefit of the holders of Debentures and the
Trustee.
Security Documents. Any instrument or agreement pursuant to
which a Lien in Collateral is created or arises to secure the Bank Debt and the
Debenture Debt.
Trustee. As defined in the preamble hereto and shall include
any replacement or successor Trustee under the Indenture.
Section 1.3. TERMS GENERALLY. The definitions in Section 1.2 shall
apply equally to both 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".
All references herein to Section s shall be deemed references to Section s of
this Agreement unless the context shall otherwise require.
Section 2. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL; ACTS OF
SECURED PARTIES.
Section 2.1. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL.
(a) Each of the Secured Parties acknowledges and agrees that
except as provided in part (b) of this Section 2.1, (i) it shall only have
recourse to the Collateral through the Collateral Agent and that it shall have
no independent recourse to the Collateral and (ii) the Collateral Agent shall
have no obligation to take any action, or refrain from taking any action, except
upon instructions from the Requisite Party in accordance with Section 2.2
hereof.
(b) Nothing contained herein shall restrict (i) subject to
Section 7.2 hereof, the Agent's or any Lender's right to exercise the right of
setoff, (ii) the Agent's right to give notice under the Agency Agreements, and
to apply all amounts received from the depository accounts covered by the Agency
Agreements to payment of the Bank Debt and (iii) the Agent's and the Trustee's
rights to pursue remedies, by proceedings in law and equity, to collect
principal of or interest on the Bank Debt or, as the case may be, the Debentures
or to enforce the performance of and provisions of the Bank Debt or, as the case
may be, the Debentures, including, without limitation, the filing of, or joining
in the filing of, a petition in bankruptcy, to the extent that such remedies do
not seek recovery from the Collateral or interfere with the Collateral Agent's
right to take action hereunder or under the Security Documents.
Section 2.2. ACTS OF SECURED PARTIES. Any request, demand,
authorization, direction, notice, consent, waiver or other action permitted or
required by this Agreement to be given
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or taken by the Requisite Party, may be and, at the request of the Collateral
Agent, shall be embodied in and evidenced by one or more instruments
satisfactory in form to the Collateral Agent and signed by or on behalf of the
Requisite Party and, except as otherwise expressly provided in any such
instrument, any such action shall become effective when such instrument or
instruments shall have been delivered to the Collateral Agent. The instrument or
instruments evidencing any action (and the action embodied therein and evidenced
thereby) are sometimes referred to herein as an "Act" of the persons signing
such instrument or instruments. The Collateral Agent shall be entitled to rely
absolutely upon an Act of the Requisite Party if such Act purports to be taken
by or on behalf of the Requisite Party, and nothing in this Section 2.2 or
elsewhere in this Agreement shall be construed to require the Agent (if the
Agent is then the Requisite Party) or the Trustee (if the Trustee is then the
Requisite Party) to demonstrate that it has been authorized by the Lenders or,
as the case may be, holders of the Debentures to take any action which it
purports to be taking, the Collateral Agent being entitled to rely conclusively,
and being fully protected in so relying, on any Act of the Agent or the Trustee,
as the case may be.
Section 3. DUTIES OF COLLATERAL AGENT.
Section 3.1. NOTICES TO THE SECURED PARTIES AND THE BORROWERS. The
Collateral Agent shall within five (5) business days following receipt thereof
furnish to each of the Agent, the Trustee, and the Borrowers:
(a) a copy of each Notice of Actionable Default received by
the Collateral Agent;
(b) a copy of each certificate received by the Collateral
Agent rescinding a Notice of Actionable Default;
(c) a copy of each Debenture Acceleration Notice received by
the Collateral Agent;
(d) written notice of any release or subordination by the
Collateral Agent of any Collateral; and
(e) such other notices required by the terms of this Agreement
to be furnished by the Collateral Agent.
Section 3.2. ACTIONS UNDER SECURITY DOCUMENTS. The Collateral Agent
shall not be obligated to take any action under this Agreement or any of the
Security Documents except for the performance of such duties as are specifically
set forth herein or therein or as may be requested in writing by both the Agent
and the Trustee. Subject to the provisions of Section 5 hereof, the Collateral
Agent shall take any action under or with respect to the Security
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Documents which is requested by the Requisite Party and which request shall not
be inconsistent with or contrary to this Agreement; provided that the Collateral
Agent shall not amend or waive any provision of the Security Documents except in
accordance with Section 9 hereof. The Collateral Agent shall, subject in all
cases to the provisions of Section 5 hereof, exercise or refrain from exercising
all such rights, powers and remedies as shall be available to it under the
Security Documents or any of them in accordance with any written instructions
received from the Requisite Party. The Collateral Agent shall have the right to
decline to follow any such direction if the Collateral Agent, being advised by
counsel, determines that the directed action is not permitted by the terms of
this Agreement, the Security Documents or the Credit Documents, may not lawfully
be taken, might jeopardize its rights with respect to the Collateral, or would
subject it to personal liability, and the Collateral Agent shall not be required
to take any such action unless any indemnity which is required hereunder in
respect of such action has been provided. Subject to Section 5 hereof, the
Collateral Agent may rely on any such written direction given to it by the
Requisite Party and shall be fully protected, and shall under no circumstances
(absent the gross negligence or willful misconduct of the Collateral Agent) be
liable to the Borrowers, any holder of any Secured Obligations or any other
Person for taking or refraining from taking action in accordance therewith. In
the absence of written instructions (which may relate to the exercise of
specific remedies or to the exercise of remedies in general) from the Requisite
Party, the Collateral Agent shall not exercise remedies available to it under
any Security Documents with respect to the Collateral or any part thereof.
Section 4. PRIORITY OF RIGHTS AGAINST COLLATERAL AND PROCEEDS THEREOF.
It is the intent of the parties hereto that the Bank Debt shall be paid in full
in cash (or in a manner otherwise satisfactory to the Agent in its sole and
absolute discretion) and that the commitments represented by the Credit
Agreement shall have expired or been reduced to zero or terminated before any of
the Debenture Debt is paid from the Collateral. Accordingly, the parties hereto
acknowledge and agree as follows:
(a) If, prior to its receipt of a Notice of Actionable
Default, the Collateral Agent receives any cash amounts as proceeds of or
otherwise constituting the Collateral (which amounts, under the terms of any of
the Security Documents, are to be applied to any of the Secured Obligations),
including, without limitation, any net proceeds received by the Collateral Agent
during an Insolvency Proceeding or in connection with any sale, exchange,
destruction, condemnation, or other disposition of any of the Collateral (such
net proceeds to be deemed to include any amounts received by the Collateral
Agent under Section 507(b) of the Bankruptcy Code as compensation for a failure
of adequate protection in the context of an Insolvency Proceeding), such cash
amounts shall be paid to the Agent to be applied in accordance with the terms
and conditions of the Bank Loan Documents. Nothing contained herein shall limit
the right of the Agent and the Lenders to continue to make loans, advances and
otherwise extend credit under Bank Loan Documents, including loans, advances and
extensions of credit during an Insolvency Proceeding.
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(b) If, following its receipt of a Notice of Actionable
Default which has not been rescinded, the Collateral Agent receives any cash
amounts in respect of the Collateral (which amounts, under the terms of any of
the Security Documents, are to be applied to any of the Secured Obligations),
including, without limitation, any net proceeds received by the Collateral Agent
during an Insolvency Proceeding or in connection with any sale, exchange,
destruction, condemnation, or other disposition of any of the Collateral (such
net proceeds to be deemed to include any amounts received by the Collateral
Agent under Section 507(b) of the Bankruptcy Code as compensation for a failure
of adequate protection in the context of an Insolvency Proceeding) such cash
amounts shall be paid (i) to the Agent to be applied to the Bank Debt until such
time as the Agent has notified the Collateral Agent in writing that (A) the Bank
Debt has been paid in full in cash (or in a manner otherwise satisfactory to the
Agent in its sole and absolute discretion) and (B) the commitments represented
by the Credit Agreement have expired or been reduced to zero or terminated; (ii)
thereafter to the Trustee for application to the Debenture Debt until such time
as the Trustee has notified the Collateral Agent in writing that the Debenture
Debt has been paid in full in cash (or in a manner otherwise satisfactory to the
Trustee in its sole and absolute discretion) and (iii) thereafter unless
otherwise required by applicable law, to the Borrowers. Nothing contained herein
shall limit the right of the Agent and the Lenders to continue to make loans,
advances and otherwise extend credit under Bank Loan Documents, including loans,
advances and extensions of credit during an Insolvency Proceeding.
(c) If the Collateral Agent receives any non-cash
distributions or proceeds in respect of the Collateral, then, unless the
Security Documents expressly provide to the contrary, the Collateral Agent shall
hold such non-cash distributions and proceeds as Collateral upon the terms of
this Agreement and the Security Documents until converted to cash and thereupon
distributed in accordance with paragraphs (a) and (b) of this Section 4.
Section 5. CONCERNING THE COLLATERAL AGENT.
Section 5.1. APPOINTMENT OF COLLATERAL AGENT. The Agent, acting on
instructions from the Lenders, and the Trustee, acting pursuant to the
Indenture, hereby appoints U.S. Trust Company of California, N.A. to act as
Collateral Agent pursuant to the terms of this Agreement and the Security
Documents. The relationship between the Collateral Agent and the holders of the
Secured Obligations is and shall be that of agent and principal only, and
nothing contained in this Agreement or any of the Credit Documents shall be
construed to constitute the Collateral Agent as a trustee for any such holder.
Section 5.2. LIMITATIONS ON RESPONSIBILITY OF COLLATERAL AGENT. The
Collateral Agent shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties contained
herein or in any Security Document,
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except for those made by it herein. The Collateral Agent makes no representation
as to the value or condition of the Collateral or any part thereof, as to the
title of the Borrowers to the Collateral, as to the security afforded by this
Agreement or any Security Document or, except as set forth in Section 6, as to
the validity, execution, enforceability, legality or sufficiency of this
Agreement or any Security Document, and the Collateral Agent shall incur no
liability or responsibility in respect of any such matters. The Collateral Agent
shall not be responsible for insuring the Collateral, for the payment of taxes,
charges, assessments or liens upon the Collateral or otherwise as to the
maintenance of the Collateral, except as provided in the immediately following
sentence when the Collateral Agent has possession of the Collateral. The
Collateral Agent shall have no duty to the Borrowers or to the holders of any of
the Secured Obligations as to any Collateral in its possession or control or in
the possession or control of any agent or nominee of the Collateral Agent or any
income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto, except the duty to accord such of the
Collateral as may be in its possession substantially the same care as it accords
its own assets and the duty to account for monies received by it. The Collateral
Agent shall not be responsible for any loss suffered with respect to any
investment permitted to be made under this Agreement and shall not be
responsible for the consequences of any oversight or error of judgment
whatsoever, except that the Collateral Agent may be liable for losses due to its
willful misconduct or gross negligence. The Collateral Agent shall not be
required to ascertain or inquire as to the performance by the Borrowers of any
of the covenants or agreements contained herein or in any of the Credit
Documents. Neither the Collateral Agent nor any officer, agent or representative
thereof shall be personally liable for any action taken or omitted to be taken
by any such person in connection with this Agreement or any Security Document
except for such person's own gross negligence or willful misconduct. Neither the
Collateral Agent nor any officer, agent or representative thereof shall be
personally liable for any action taken by any such person in accordance with any
notice given by the Requisite Party pursuant to the terms of this Agreement even
if, at the time such action is taken by any such person, the Requisite Party or
person purporting to be the Requisite Party is not entitled to give such notice,
except where the account officer of the Collateral Agent active upon the
Borrower's account has actual knowledge that such Requisite Party or person
purporting to be the Requisite Party is not entitled to give such notice. The
Collateral Agent may execute any of the powers granted under this Agreement or
any of the Security Documents and perform any duty hereunder or thereunder
either directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it without gross negligence or willful misconduct.
Section 5.3. RELIANCE BY COLLATERAL AGENT; ETC. (a) Whenever in the
performance of its duties under this Agreement the Collateral Agent shall deem
it necessary or desirable that a matter be proved or established with respect to
any Person in connection with the taking, suffering or omitting of any action
hereunder by the Collateral Agent, such matter may be conclusively deemed to be
proved or established by a certificate executed by an officer of
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such Person, and absent gross negligence or willful misconduct, the Collateral
Agent shall have no liability with respect to any action taken, suffered or
omitted in reliance thereon.
(b) The Collateral Agent may consult with counsel and shall be
fully protected in taking any action hereunder in accordance with any advice of
such counsel. The Collateral Agent shall have the right but not the obligation
at any time to seek instructions concerning the administration of this
Agreement, the duties created hereunder, or any of the Collateral from any court
of competent jurisdiction.
(c) The Collateral Agent shall be fully protected in relying
upon any resolution, statement, certificate, instrument, opinion, report,
notice, request, consent, order or other paper or document which it believes to
be genuine and to have been signed or presented by the proper party or parties.
In the absence of its gross negligence or willful misconduct, the Collateral
Agent may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificate or opinions
furnished to the Collateral Agent in connection with this Agreement.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Actionable Default unless and until the Collateral Agent shall have received a
Notice of Actionable Default. The Collateral Agent shall have no obligation
whatsoever either prior to or after receiving such a Notice of Actionable
Default to inquire whether an Actionable Default has, in fact, occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any certificate so furnished to it and shall have no obligation,
absent written instructions from the Requisite Party, to take or omit to take
any action with respect to such Notice of Actionable Default.
(e) If the Collateral Agent has been requested by the
Requisite Party to take any specific action pursuant to any provision of this
Agreement, the Collateral Agent shall not be under any obligation to exercise
any of the rights or powers vested in it by this Agreement in the manner so
requested unless, if so requested by the Collateral Agent, it shall have been
provided indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred by it in compliance with such request or
direction.
(f) If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder or
under any Security Document, the Collateral Agent shall have the right to
deliver such sum to a court of competent jurisdiction and therein commence an
action for interpleader.
Section 5.4. RESIGNATION OR REPLACEMENT OF THE COLLATERAL AGENT. The
Collateral Agent may at any time resign by giving thirty (30) days' prior
written notice thereof to each Secured Party and the Borrowers, provided that no
resignation shall be effective until a
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successor for the Collateral Agent is appointed. The Requisite Party may at any
time, with or without cause, remove the Collateral Agent and replace it with a
successor Collateral Agent. Following any resignation or removal, the Requisite
Party shall appoint a successor Collateral Agent, which may, but need not be,
the Requisite Party. The Requisite Party shall notify the other parties hereto
in writing of the appointment of any successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed by the Requisite Party and shall
have accepted such appointment within forty-five (45) days after the retiring
Collateral Agent's giving of notice of resignation, then the retiring Collateral
Agent may, on behalf of the Secured Parties, appoint a successor Collateral
Agent, which shall be a financial institution having a long-term bank deposit
rating of not less than "A" if rated by Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Services, Inc. Upon the acceptance of any appointment as Collateral
Agent hereunder by a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall be discharged from its duties and obligations hereunder.
After any retiring Collateral Agent's resignation or removal, the provisions of
this Agreement and the Security Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Collateral Agent.
Section 5.5. EXPENSES AND INDEMNIFICATION BY THE BORROWERS. By
countersigning this Agreement, the Borrowers agree (a) to reimburse the
Collateral Agent, on demand, for any expenses incurred by the Collateral Agent,
including reasonable counsel fees and disbursements and compensation of agents,
arising out of, in any way connected with, or as a result of, the execution or
delivery of this Agreement or any Security Document or any agreement or
instrument contemplated hereby or thereby or the performance by the parties
hereto or thereto of their respective obligations hereunder or thereunder or in
connection with the enforcement or protection of the rights of the Collateral
Agent and the Secured Parties hereunder or under the Security Documents, (b) to
indemnify and hold harmless the Collateral Agent and its directors, officers,
employees and agents, on demand, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent in its capacity as the
Collateral Agent or any of them in any way relating to or arising out of this
Agreement or any Security Document or any action taken or omitted by them under
this Agreement or any Security Document; provided that the Borrowers shall not
be liable to the Collateral Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Collateral Agent or any of its directors, officers, employees
or agents as determined by a final non-appealable order of a court of competent
jurisdiction, (c) to indemnify and hold harmless the Collateral Agent, on
demand, from and against any and all liabilities which may be imposed on or
incurred by the Collateral Agent (in its capacity as Collateral Agent) for the
net amount of taxes (after taking into account any
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deduction, credit or other tax reduction or benefit available by reason of the
imposition of any such tax) in any jurisdiction in which the Collateral Agent
would not otherwise be subject to tax except by reason of its acting under this
Agreement or the Security Documents (directly or through agents); provided that
such indemnification for taxes (i) shall apply only in respect of taxes
attributable to the performance of the Collateral Agent's obligations hereunder
and (ii) shall in no event cover any federal, state, local or other taxes
imposed upon the Collateral Agent with respect to or measured by its gross or
net income or profits. A statement by the Collateral Agent that is submitted to
the Borrowers with respect to the amount of such expenses and containing a basic
description thereof and/or the amount of its indemnification obligation shall be
prima facie evidence of the amount thereof owing to the Collateral Agent.
Section 5.6. EXPENSES AND INDEMNIFICATION BY SECURED PARTIES. The
Requisite Party at any time of determination agrees (i) to reimburse the
Collateral Agent, on demand, in the amount of any expenses referred to in
Section 5.5 and fees due pursuant to Section 5.7. which shall not have been
reimbursed or paid by the Borrowers or paid from the proceeds of Collateral as
provided herein and (ii) to indemnify and hold harmless the Collateral Agent and
its directors, officers, employees and agents, on demand from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements referred to in Section 5.5,
to the extent the same shall not have been reimbursed by the Borrowers or paid
from the proceeds of Collateral as provided herein; provided that the Requisite
Party shall not be liable to the Collateral Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Collateral Agent or any of its directors, officers, employees
or agents as determined by a final non-appealable order of a court of competent
jurisdiction.
Section 5.7. COLLATERAL AGENT'S FEE. By countersigning this Agreement,
the Borrowers agree to pay to the Collateral Agent for the Collateral Agent's
own account, a non-refundable Collateral Agent's fee in an amount agreed to by
the parties on the Closing Date and on each anniversary thereof thereafter until
the Secured Obligations have been paid in full in cash (or in a manner otherwise
satisfactory to the Agent in its sole and absolute discretion), the commitments
represented by the Credit Agreement shall have expired or been reduced to zero
or terminated and the Collateral Agent no longer has any duties hereunder.
Section 6. REPRESENTATIONS AND WARRANTIES. Each of the Collateral
Agent, the Trustee, and, by countersigning this Agreement, the Borrowers
represents and warrants to the other parties hereto that (a) the execution,
delivery and performance of this Agreement (i) have been duly authorized by all
requisite corporate action on its part and, in the case of the Agent, by the
Lenders, and, in the case of the Trustee, by the Indenture, and (ii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which it is subject or any judgment, order, writ,
injunction, license or permit
14
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applicable to it and will not conflict with any provision of its corporate
charter or bylaws or any agreement or other instrument binding upon it; and (b)
this Agreement has been duly executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms.
Section 7. CERTAIN INTERCREDITOR ARRANGEMENTS.
Section 7.1. TURNOVER OF COLLATERAL. If any Secured Party acquires
custody, control or possession of any Collateral or proceeds therefrom, other
than pursuant to the terms of this Agreement or pursuant to the Agency
Agreements, such Secured Party shall promptly cause such Collateral or proceeds
to be delivered to or put in the custody, possession or control of the
Collateral Agent or, if the Collateral Agent shall so designate, an agent of the
Collateral Agent (which agent may be a branch or affiliate of the Collateral
Agent) in the same form of payment received, with appropriate endorsements, in
the country in which such Collateral is held, for distribution in accordance
with the provisions of Section 4. Until such time as the provisions of the
immediately preceding sentence have been complied with, such Secured Party shall
be deemed to hold such Collateral and proceeds in trust for the Collateral
Agent. Notwithstanding the foregoing, (a) if the Requisite Party receives
proceeds of Collateral in the form of cash, the Requisite Party may apply such
amounts to the payment of the Bank Debt (until payment in full of the Bank Debt
in cash (or in a manner otherwise satisfactory to the Agent in its sole and
absolute discretion) and the reduction of all commitments under the Credit
Agreement to zero) or the Debenture Debt (after payment in full of the Bank Debt
in cash (or in a manner otherwise satisfactory to the Agent in its sole and
absolute discretion) and the reduction of all commitments under the Credit
Agreement to zero) and (b) the Trustee and the holders of the Debentures shall
not be required to deliver to the Collateral Agent or such agent of the
Collateral Agent, any amounts received by them prior to the earlier to occur of
(i) receipt by the Collateral Agent of a Notice of Actionable Default or (ii) an
Insolvency Proceeding.
Section 7.2. SETOFFS. If (a) any Lender exercises any right of setoff,
banker's lien or similar right with respect to any Collateral for payment of any
Secured Obligations, each of the Secured Parties agrees with each other Secured
Party that if an amount to be set off is to be applied to Indebtedness of the
Borrowers to such Lender, other than the Bank Debt, such amount shall be applied
ratably to such other Indebtedness and to the Bank Debt, and (b) any Secured
Party, Lender or holder of Debentures shall receive from the Borrowers, whether
by voluntary payment, exercise of the right of setoff, counterclaim, cross
action, enforcement of the claim on the Bank Debt or Debenture Debt by
proceedings against the Borrowers at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of Bank Debt or Debenture
Debt held by such Person any amount from the Collateral in excess of its ratable
portion of the payments received by the other Lenders or holders of Debentures
with respect to the Bank Debt and Debenture Debt held by all of the Lenders and
holders of Debentures
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as contemplated by this Agreement, such Person will make such disposition and
arrangements with the other Lenders and holders of Debentures with respect to
such excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise, as shall result in each Lender or holder of Debentures
receiving in respect of the Bank Debt or Debenture Debt held by it its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
Section 8. RELEASE OR SUBORDINATION OF COLLATERAL; FREEDOM TO DEAL.
Section 8.1. RELEASE OF COLLATERAL. The Collateral Agent is hereby
authorized, upon receipt of instructions from the Requisite Party, and subject
to Section 8.3, to (a) release any Collateral and to provide such releases and
termination statements with respect to any Collateral in connection with any
sale, exchange or other disposition thereof so long as (i) the Collateral Agent
obtains a perfected security interest in any non-cash proceeds of such sale,
exchange or other disposition and (ii) any net cash proceeds of such sale,
exchange or other disposition are paid in accordance with Sections 4(a) or (b)
and (b) consent to the use of cash collateral in connection with any Insolvency
Proceeding. The Trustee and the holders of the Debentures waive any right they
may have to object to the use of cash collateral in connection with any
Insolvency Proceeding so long as the proceeds of Collateral are applied in
accordance with Sections 4(a) or (b).
Section 8.2. SUBORDINATION OF LIEN. To the extent permitted by the
Credit Agreement and the Indenture, the Collateral Agent shall, on the written
instructions of the Requisite Party, and subject to Section 8.3, subordinate by
written instrument the Lien on all or any portion of the Collateral to any other
lender extending to the Borrowers indebtedness permitted by the terms of the
Credit Agreement and the Indenture. Further, following the commencement of any
Insolvency Proceeding, with the consent of the Requisite Party, the Collateral
Agent may subordinate the Lien on portions of the Collateral (including without
limitation, subordination to indebtedness owed to the Agent or any of the
Lenders) so long as the sum of the principal amount of such indebtedness and the
principal amount of the Bank Debt does not exceed in the aggregate $20,000,000.
Section 8.3. TRUST INDENTURE ACT COMPLIANCE. Notwithstanding the
foregoing provisions of this Section 8, except for (i) the collection (including
through a collection agency) of accounts receivable (including checks and other
instruments received by the Borrowers and its Subsidiaries in respect thereof)
in the ordinary course of business, (ii) pursuant to Section 10.3(b) of the
Indenture, the disposition of inventory (as defined in the Uniform Commercial
Code as in effect from time to time in the State of New York) in the ordinary
course of business, (iii) utilization of cash as provided in and subject to
Sections 4(a) and 4(b) hereof, or (iv)
16
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the release, withdrawal and utilization of cash and all funds on deposit in bank
accounts of the Borrowers and their Subsidiaries (including without limitation
proceeds of Collateral), the Collateral Agent is not authorized to release any
Collateral or to provide any such release, termination statement or instrument
of subordination unless the Collateral Agent shall have received a certificate
from the Borrowers certifying that all documentation required by Section 314(d)
of the Trust Indenture Act of 1939, as amended, in connection with such release
has been duly furnished to the Trustee in accordance with Section 10.4 of the
Indenture.
Section 8.4. LEGALLY REQUIRED RELEASES. Whether or not so instructed by
the Requisite Party, and whether or not any such certificate referred to in
Section 8.3 has been provided to the Collateral Agent, the Collateral Agent may
release any Collateral and may provide any release, termination statement or
instrument of subordination required by order of a court of competent
jurisdiction or otherwise required by applicable law.
Section 8.5. LENDERS' FREEDOM OF DEALING. The Trustee agrees, with
respect to the Bank Debt, any and all guaranties thereof and any and all
Collateral, that the Borrowers and the Lenders may agree to increase the amount
(not to exceed the dollar amount contained in the definition of Bank Debt) of
the Bank Debt or otherwise modify or waive the terms of any of the Bank Debt,
and the Lenders may grant extensions of the time of payment or performance to
and make compromises, including releases of guaranties, collateral which is not
Collateral or Collateral as set forth in Section 8.1 hereof, and settlements
with the Borrowers and all other persons, in each case without the consent of
the Trustee or any of the Debenture holders for which it acts and without
affecting the agreements of the Trustee or the Borrowers contained in this
Agreement.
Section 9. AMENDMENT OF THIS AGREEMENT.
(a) No modification or amendment of this Agreement shall be
effective unless the same shall be in writing and signed by the Secured Parties,
the Collateral Agent and, to the extent that any such modification or amendment
would adversely affect the rights of the Borrowers hereunder or under any
Security Document, the Borrowers, and no modification or amendment of any
Security Document shall be effective without the written consent of the Agent,
the Trustee and the Borrowers; provided, however, no amendment or waiver shall
adversely affect any of the Collateral Agent's rights, immunities or rights to
indemnification hereunder or under any of the Security Documents or expand its
duties or reduce any amount payable to the Collateral Agent hereunder or under
any Security Documents without the written consent of the Collateral Agent.
(b) No waiver of any provision of this Agreement and no
consent to any departure by any party hereto from the provisions hereof shall be
effective unless such waiver or consent shall be set forth in a written
instrument executed by the party against
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which it is sought to be enforced, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any party hereto in any case shall entitle such party to
any other or further notice or demand in the same, similar or other
circumstances.
Section 10. APPROVAL BY THE BORROWERS; BORROWERS' OBLIGATIONS ABSOLUTE.
By countersigning this Agreement, the Borrowers acknowledge and consent to and
agree to perform and be bound by each provision of this Agreement which
expressly recites that the Borrowers are agreeing thereto by countersigning this
Agreement. Nothing contained in this Agreement shall impair, as between the
Borrowers and the Trustee, for the benefit of the security holders for which it
acts, the obligation of the Borrowers to pay to the Trustee, for the benefit of
the security holders for which it acts, all amounts payable in respect of the
Debenture Debt as and when the same shall become due and payable in accordance
with the terms thereof, or prevent the Trustee (except as expressly otherwise
provided in this Agreement) from exercising all rights, powers and remedies
otherwise permitted by the Indenture and by applicable law upon a default in the
payment of the Debenture Debt, all, however, subject to the rights of the Agent
and the Lenders as set forth in this Agreement.
Section 11. MISCELLANEOUS.
Section 11.1. FURTHER ASSURANCES, ETC. The Agent, the Trustee, the
Collateral Agent and, by countersigning this Agreement, the Borrowers agree to
execute and deliver such other documents and instruments, in form and substance
reasonably satisfactory to the Collateral Agent, and shall take such other
action, in each case as the Collateral Agent or any Secured Party may reasonably
request (at the sole cost and expense of the Borrowers which, by countersigning
this Agreement, agree to pay such costs and expenses), to effectuate and carry
out the provisions of this Agreement including, without limitation, by recording
or filing in such places as the requesting party may deem desirable, this
Agreement or such other documents or instruments.
Section 11.2. BANKRUPTCY VOTING RIGHTS. Except as provided in Section
8, at any meeting of creditors of the Borrowers or in the event of any
Insolvency Proceeding, the Secured Parties shall retain the right to vote and
otherwise act with respect to their Secured Obligations (including, without
limitation, the right to vote to accept or reject any plan of partial or
complete liquidation, reorganization, arrangement, composition or extension),
provided that no Secured Party shall vote to accept any such plan or take any
other action in any way contesting the relative rights and duties of (i) any
holders of any Bank Debt or (ii) the Trustee and the holders of the Debentures,
in each case as established in this Agreement or any instruments or agreements
creating or evidencing any of the Bank Debt or with respect to any of the
Collateral.
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Section 11.3. NO INDIVIDUAL ACTION; MARSHALING; ETC. No holder of any
Secured Obligations may require the Collateral Agent to take or refrain from
taking any action hereunder or under any of the Security Documents or with
respect to any of the Collateral except as and to the extent expressly set forth
in this Agreement. The Agent and the Collateral Agent shall have no duty to, and
the Trustee hereby waives any and all right to require the Agents and the
Collateral Agent to, marshal any assets or otherwise to take any actions with
respect to marshaling.
Section 11.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
on and inure to the benefit of the Collateral Agent, each of the Lenders, the
Agent, the Trustee and each of the Debenture holders and their respective
successors and permitted assigns and shall be binding on the Borrowers and its
successors and permitted assigns. The Trustee acknowledges that the provisions
of this Agreement apply to each of the holders of Debentures for which the
Trustee acts regardless of any sale, transfer, pledge, assignment, hypothecation
or other disposition by such Debenture holder to any person or entity; provided,
that the indemnification provisions set forth in Section 5.6 shall only apply to
holders of the Debentures at the time such expenses were incurred. The Agent
acknowledges that the provisions of this Agreement apply to each of the Lenders
regardless of any replacement, sale, transfer, pledge, assignment, hypothecation
or other disposition by such Lender to any person or entity
Section 11.5. NOTICES. All notices and other communications made or
required to be given pursuant to this Agreement or the Security Documents shall
be in writing and shall be delivered in hand, mailed by United States registered
or certified first class mail, postage prepaid, sent by overnight courier or
sent by telecopy or facsimile, confirmed by delivery via courier or postal
service addressed as follows:
(a) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., with a copy to
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ LLP ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
(b) if to the Trustee, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Department;
(c) if to the Collateral Agent, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Corporate
Trust Department; and
(d) if to the Borrowers, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer.
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Any such notice and other communications shall be deemed to have been duly given
or made and to have become effective (i) if delivered by hand, overnight courier
or facsimile to a responsible officer of the party to which it is directed, at
the time of the receipt thereof by such officer or the sending of such facsimile
and (ii) if mailed, sent by registered or certified first class mail postage
prepaid, on the third Business Day following the mailing thereof; provided,
however, that a Notice of Actionable Default or any other notice to be delivered
to the Collateral Agent pursuant to the terms of this Agreement shall not be
deemed to have been received by the Collateral Agent until the Collateral Agent
actually receives such notice.
Section 11.6. TERMINATION.
(a) Upon (i) receipt by the Collateral Agent from the Agent of
notice stating that either (A) the Bank Debt has been paid in full in cash (or
in a manner otherwise satisfactory to the Agent in its sole and absolute
discretion) and all commitments under the Credit Agreement have been reduced to
zero or (B) the Bank Debt otherwise no longer constitutes Secured Obligations
under the Security Documents, (ii) receipt by the Collateral Agent from the
Trustee of notice that (A) the Debenture Debt has been paid in full in cash (or
in a manner otherwise satisfactory to the holders of the Debentures) defeased in
accordance with the Indenture or (B) the Debenture Debt no longer constitutes
Secured Obligations under the Security Documents and (iii) payment in full in
cash (or in a manner otherwise satisfactory to the Collateral Agent) of all
amounts payable to the Collateral Agent pursuant to Section Section 5.5 and 5.7,
the security interests created by the Security Documents shall terminate
forthwith and all right, title and interest in the Collateral shall revert to
the Borrowers and their successors and assigns.
(b) Upon the termination of the Collateral Agent's security
interest and the release of the Collateral in accordance with subsection (a) of
this Section , the Collateral Agent will promptly at the Borrowers' written
request and expense, (i) execute and deliver to the Borrowers such documents as
the Borrowers shall reasonably request to evidence the termination of such
security interest or the release of the Collateral and (ii) deliver or cause to
be delivered to the Borrowers all property of the Borrowers constituting
Collateral and then held by Collateral Agent or any agent thereof.
(c) This Agreement shall terminate automatically when the
security interest granted under the Security Documents has terminated and the
Collateral has been released.
(d) Upon payment in full of the Bank Debt in cash (or in a
manner otherwise satisfactory to the Agent in its sole and absolute discretion)
and the reduction of all commitments under the Credit Agreement to zero, the
Agent will remit any amounts held by it to the Collateral Agent (unless
otherwise required by law) and will deliver to the
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financial institutions party to the Agency Agreements notices in order to change
(i) the identity of the Person entitled to give notices thereunder to the
Collateral Agent only and (ii) the account to which cash should be distributed
thereunder to the Collateral Account (as defined in the Company Security
Agreement, as defined in the Credit Agreement).
(e) If at any time any payment made or value received with
respect to any Bank Debt is rescinded or must otherwise be returned by the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of the
Borrowers, or otherwise, all as though such payment had not been made or value
received, (i) to the extent necessary to repay in full in cash (or in a manner
otherwise satisfactory to the Agent in its sole and absolute discretion) the
Bank Debt, the Trustee will, following notice from the Agent, deliver to the
Agent any amounts previously received and then held by the Trustee on account of
or in any way relating to the Collateral; except, however, that the Trustee
shall not be required to deliver to the Agent, any payments received by the
Trustee prior to receipt by the Collateral Agent of a Notice of Actionable
Default, and (ii) to the extent previously terminated, the security interest in
the Collateral created by the Security Documents in favor of the Agent and the
Lenders and the rights of the Agent to act as Requisite Party and to receive
amounts pursuant to this Agreement shall be reinstated.
(f) Notwithstanding the foregoing, Section Section 5.5 and 5.6
of this Agreement shall survive, and remain operative and in full force and
effect, regardless of the termination of this Agreement.
Section 11.7. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS) AND SHALL BE A SEALED INSTRUMENT UNDER
SUCH LAWS. THE PARTIES AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH
COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE PARTIES BY
MAIL AT THE ADDRESSES SPECIFIED IN SECTION 12.5. THE PARTIES HEREBY WAIVE ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 11.8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS
HEREUNDER, OR THE
21
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PERFORMANCE OF ANY SUCH RIGHTS AND OBLIGATIONS. Except as prohibited by law,
each of the parties hereto hereby waives any right which it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Each of the parties hereto with respect to itself
(i) certifies that neither the Collateral Agent, the Agent, the Lenders or the
Trustee nor any representative, agent or attorney of the Collateral Agent, the
Agent, the Lenders or the Trustee has represented, expressly or otherwise, that
the Collateral Agent would not, in the event of litigation, seek to enforce the
foregoing waivers, and (ii) acknowledges that, in entering into this Agreement,
the Collateral Agent, the Agent, the Lenders and the Trustee are relying upon,
among other things, the waivers and certifications contained in this Section
11.8.
Section 11.9. WAIVER OF RIGHTS. Neither any failure nor any delay on
the part of any party hereto IN exercising any right, power or privilege
hereunder shall operate as a waiver thereof, and a single or partial exercise
thereof shall not preclude any other or further exercise or the exercise of any
other right, power or privilege.
Section 11.10. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be 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. 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 provision.
Section 11.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of wHICH shall constitute an original, but all of which,
when taken together, shall constitute but one instrument.
Section 11.12. SECTION HEADINGS. The section headings used herein are
for convenience of reference ONLy and are not to affect the construction of or
be taken into consideration in interpreting this Agreement.
Section 11.13. COMPLETE AGREEMENT. This Agreement constitutes the
entire agreement among the partiES hereto with respect to the subject matter
hereof and supersedes all prior representations, negotiations, writings,
memoranda and agreements with respect to such subject matters. To the extent any
provision of this Agreement conflicts with the Credit Agreement, the Indenture
or any other Credit Document, as between the Secured Parties the provisions of
this Agreement shall be controlling. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto any
rights or remedies under or by reason of this Agreement.
22
IN WITNESS WHEREOF, the Collateral Agent, the Agent, the Trustee and the
Borrowers have caused this Intercreditor and Collateral Agency Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
in its capacity as Collateral Agent
By: /s/
-------------------------------------
Name:
Title: Authorized Officer
BANKBOSTON, N.A., in its capacity as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Managing Director
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
IN ITS CAPACITY AS TRUSTEE
By: /s/
-------------------------------------
Name:
Title: Authorized Officer
23
ACCEPTED AND AGREED TO:
AMERICAN RESTAURANT GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
LOCAL FAVORITE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
▇▇▇▇▇▇'▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
ARG ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
24
ARG PROPERTY MANAGEMENT,
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
SPOONS RESTAURANTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer
SPECTRUM FOODS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President &
Chief Financial Officer