SUBORDINATED LIMITED RECOURSE
GUARANTY
This SUBORDINATED
LIMITED RECOURSE GUARANTY (as amended, restated, supplemented or
otherwise modified from time to time, this “ Guaranty
”), dated as of May 12, 2009, is executed and delivered
by each of the signatories hereto (other than the Second-Lien
Trustee, but together with any other entity that may become a party
hereto as provided herein, each a “ Subordinated
Guarantor ”, and collectively, the “
Subordinated Guarantors ”) in favor of WELLS FARGO
BANK, NATIONAL ASSOCATION, in its capacity as trustee for the
Debentureholders (as defined below) under the Second-Lien Notes
Indenture (as defined below) (in such capacity, together with its
successors and assigns, if any, in such capacity, the “
Second-Lien Trustee ”).
WHEREAS, Trico
Marine Services, Inc., a Delaware corporation and the sole
shareholder of Trico Assets and Trico Operators (the “
Issuer ”), is party to those certain Exchange
Agreements, dated as of May 12, 2009, pursuant to which the
Persons party thereto as investors (each an “ Investor
”) exchanged $252,515,000 aggregate principal amount of
6.5% senior convertible debentures due 2028 for
$202,812,000 initial aggregate principal amount of 8.125%
Secured Convertible Debentures due 2013 (as amended, restated,
supplemented and/or modified from time to time, the “
Second-Lien Notes ”), as well as cash and certain
equity interests of the Issuer;
WHEREAS, pursuant
to that certain Indenture (as amended, restated, supplemented, or
otherwise modified from time to time, the “ Second-Lien
Notes Indenture ”), dated as of May 12, 2009,
between the Issuer and the Second-Lien Trustee, the Issuer issued
the Second-Lien Notes to the Investors (each such Investor and each
Person to whom Second-Lien Notes are issued pursuant to the Second
Lien Notes Indenture on or after then date thereof, a “
Debentureholder ”, and collectively, the “
Debentureholders ”);
WHEREAS, Trico
Marine Operators, Inc., a Louisiana corporation (“ Trico
Operators ”) and the Issuer are party to that certain
Pledge Agreement, dated as of May 12, 2009 (as amended,
restated, supplemented or otherwise modified from time to time, the
“ Pledge Agreement ”), made in favor of the
Second-Lien Trustee, pursuant to which Trico Operators and the
Issuer granted to the Second-Lien Trustee a security interest in,
and lien on, certain Collateral (as defined therein) in order to
secure the obligations of the Issuer to the Debentureholders under
the Second-Lien Documents (as defined below) and the obligations of
Trico Assets and Trico Operators hereunder;
WHEREAS, Trico
Marine Assets, Inc., a Delaware corporation (“ Trico
Assets ”) and/or certain other subsidiaries of the Issuer
is, or may become after the date hereof, party to certain vessel
mortgages (each, as amended, restated, supplemented or otherwise
modified from time to time, a “ Vessel Mortgage
” and collectively, the “ Vessel Mortgages
”), made in favor of
the Second-Lien
Trustee, pursuant to which Trico Assets or such other mortgagor has
granted, or will grant, to the Second-Lien Trustee a security
interest in, and mortgage lien on, certain vessels and related
property owned by Trico Assets or such other mortgagor in order to
secure its obligations hereunder and the obligations of the Issuer
and Trico Assets or such other mortgagor to the Second-Lien Trustee
and the Debentureholders under the Second-Lien
Documents;
WHEREAS, Trico
Assets and/or certain other subsidiaries of the Issuer is, or may
become after the date hereof, party to those certain Assignments of
Insurances (each, as amended, restated, supplemented or otherwise
modified from time to time, an “ Assignment of
Insurances ” and collectively, the “ Assignments
of Insurances ”), made in favor of the Second-Lien
Trustee, pursuant to which Trico Assets or such other grantor
granted, or will grant, to the Second-Lien Trustee a security
interest in, and lien on, the insurance proceeds in respect of the
vessels subject to the Vessel Mortgages in order to secure the
obligations of the Issuer and Trico Assets or such mortgagor to the
Second-Lien Trustee and the Debentureholders under the Second-Lien
Documents;
WHEREAS, Trico
Assets and/or certain other subsidiaries of the Issuer is, or may
become after the date hereof, party to those certain Assignments of
Earnings (each as amended, restated, supplemented or otherwise
modified from time to time, an “ Assignment of
Earnings ” and collectively, the “ Assignments
of Earnings ”), made in favor of the Second-Lien Trustee,
pursuant to which Trico Assets or such other grantor granted, or
will grant, to the Second-Lien Trustee a security interest in, and
lien on the earnings derived from, each vessel subject to the
Vessel Mortgages in order to secure its obligations hereunder and
the obligations of the Issuer and Trico Assets or such mortgagor to
the Second-Lien Trustee and the Debentureholders under the
Second-Lien Documents;
WHEREAS, Trico
Assets and/or certain other subsidiaries of the Issuer is, or may
become after the date hereof, party to those certain Assignments of
Charter (each as amended, restated, supplemented or otherwise
modified from time to time, an “ Assignment of
Charters ” and collectively, the “ Assignments
of Charters ”), made in favor of the Second-Lien Trustee,
pursuant to which Trico Assets or such other grantor granted, or
will grant, to the Second-Lien Trustee a security interest in, and
lien on any charter, contract of affreightment or other agreement
relating to each vessel subject to the Vessel Mortgages in order to
secure its obligations hereunder and the obligations of the Issuer
and Trico Assets or such mortgagor to the Second-Lien Trustee and
the Debentureholders under the Second-Lien Documents;
WHEREAS, as of the
date hereof the Subordinated Guarantors are also party to
(a) that certain Amended and Restated Credit Agreement, dated
as of August 29, 2008 and amended on March 10, 2009 and
May 8, 2009 and further amended on May 12, 2009 (as
further amended, restated, replaced, refinanced, supplemented or
otherwise modified from time to time, the “ First-Lien
Credit Agreement ”) among the Issuer, as borrower, Trico
Assets and Trico Operators, as guarantors, the lenders party
thereto from time to time (the “ First-Lien Lenders
”), and Nordea Bank Finland plc, New York Branch (“
Nordea ”), as administrative agent for the First-Lien
Lenders, providing for the making of revolving loans to the Issuer,
and the issuance of, and participation in, letters of credit for
the account of the Issuer, all as provided therein and
(b) that certain Amended and Restated Pledge and Security
Agreement, dated as of August 29, 2008 (as amended, restated,
replaced, refinanced, supplemented or otherwise modified from time
to time, the “ First-Lien Security Agreement ”),
among the Issuer and the Subordinated
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Guarantors, as
pledgors, and Nordea, as collateral agent for the First-Lien
Lenders (in such capacity and together with its successors, assigns
and replacements in such capacity, the “ First-Lien
Collateral Agent ”) and deposit account bank, pursuant to
which the Issuer and the Subordinated Guarantors granted the
First-Lien Collateral Agent a first-priority security interest in,
and lien on, the Collateral (as defined therein), among other
security interests granted therein by the Issuer and the
Subordinated Guarantors, in order to secure the First-Lien
Obligations (as defined in the Intercreditor Agreement);
and
WHEREAS, the
Issuer, the Subordinated Guarantors party thereto from time to
time, the First-Lien Collateral Agent and the Second-Lien Trustee,
as collateral agent for the Debentureholders, are party to an
Intercreditor Agreement, dated as May 12, 2009 (as amended,
restated, supplemented, or otherwise modified from time to time,
the “ Intercreditor Agreement ”, and together
with the Vessel Mortgages, the Assignments of Insurances, the
Assignments of Earnings, the Assignments of Charters, the Pledge
Agreement, this Guaranty, the Second-Lien Notes and the Second-Lien
Notes Indenture, as each may be amended, restated, supplemented, or
otherwise modified from time to time, the “ Second-Lien
Documents ”).
NOW, THEREFORE, in
consideration of the foregoing and other benefits accruing to each
Subordinated Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Subordinated Guarantor hereby agrees with
the Second-Lien Trustee, for the benefit of the Debentureholders,
as follows:
1.
Definitions and Construction .
(a)
Definitions . Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them
in the Second-Lien Notes Indenture. The following terms, as used in
this Guaranty, shall have the following meanings:
“
Assignments of Charters ” has the meaning set forth in
the recitals to this Guaranty.
“
Assignments of Earnings ” has the meaning set forth in
the recitals to this Guaranty.
“
Assignments of Insurances ” has the meaning set forth
in the recitals to this Guaranty.
“
CERCLA ” means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. § 9601 et. seq. and all implementing
regulations.
“ Closing
Date ” means May 12, 2009.
“ Credit
Documents ” has the meaning provided in the First-Lien
Credit Agreement.
“ Credit
Parties ” means the Issuer, Trico Assets and Trico
Operators.
“
Debentureholder ” has the meaning set forth in the
recitals to this Guaranty.
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“
Default ” has the meaning provided in Section 6(a)
hereof.
“
Earnings and Insurance Collateral ” shall mean
(i) all “Earnings Collateral” (as defined in the
Assignments of Earnings) and (ii) all assets of the
Subordinated Guarantors that are subject to the lien of the
Assignments of Insurances, as the case may be.
“
Environmental Claim ” means any written claim, action,
suit, cause of action or notice by any person or entity alleging
potential liability arising out of, based on or resulting from (a)
the Release into the environment, of any Hazardous Material or
(b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law.
“
Environmental Law ” means all applicable foreign,
federal, state and local laws and regulations having the force and
effect of law relating to the protection of the natural environment
or imposing liability or standards of conduct concerning the use,
handling, storage, or management of any Hazardous
Material.
“ Event
of Default ” has the meaning provided in Section
6(a) hereof.
“
First-Lien Collateral Agent ” has the meaning set
forth in the recitals to this Guaranty.
“
First-Lien Credit Agreement ” has the meaning set
forth in the recitals to this Guaranty.
“
First-Lien Lenders ” has the meaning set forth in the
recitals to this Guaranty.
“
First-Lien Obligations ” has the meaning given to such
term in the Intercreditor Agreement.
“
Guaranteed Obligations ” means the full and prompt
payment when due (whether at the stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, fees
and indemnities (including, without limitation, to the extent
permitted by law, all interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy,
insolvency, reorganization or similar proceeding of the Issuer or
any Subordinated Guarantor, whether or not a claim for
post-petition interest is allowed in any such proceeding)) of the
Issuer to the Second-Lien Trustee, on behalf of the
Debentureholders, whether now existing or hereafter incurred under,
arising out of, or in connection with, the Second-Lien Documents
and the due performance and compliance by the Issuer with all of
the terms, conditions and agreements contained in the Second-Lien
Documents to which the Issuer is party.
“
Guaranty ” has the meaning set forth in the preamble
to this Guaranty.
“
Hazardous Materials ” means (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form
that is or could become friable, ureaformaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas,
(b) any chemicals, materials or substances defined as or
included in the definition of “hazardous substances,”
“waste,” “hazardous materials,”
“extremely hazardous substances,” “restricted
hazardous waste,” “toxic substances,”
“toxic
4
pollutants,” “contaminants,”
or “pollutants,” or words of similar import, under any
applicable Environmental Law, and (c) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental
Laws.
“
Insolvency Proceeding ” has the meaning set forth in
Section 2 hereof.
“
Interest Rate Protection Agreement ” means any
interest rate swap agreement, interest rate cap agreement, interest
collar agreement, interest rate hedging agreement or other similar
agreement or arrangement.
“
Intercreditor Agreement ” has the meaning set forth in
the recitals to this Guaranty.
“
Investor ” has the meaning set forth in the recitals
to this Guaranty.
“
Issuer ” has the meaning set forth in the recitals to
this Guaranty.
“
Material Adverse Effect ” shall mean a material
adverse effect on (i) the condition (financial or otherwise),
operations, results of operations, stockholders’ equity,
properties, assets, business or prospects of the Issuer and its
Subsidiaries taken as a whole, or a material adverse effect on the
performance by the Issuer of its obligations under the Security
Documents (taken as a whole), the Second-Lien Notes Indenture, the
Second-Lien Notes, or the consummation of the transactions
contemplated thereby or (ii) on the Second-Lien Collateral,
taken as a whole.
“
Mortgaged Vessel ” shall mean, at any time, any vessel
which is subject, at such time, to a mortgage in favor of the
Second-Lien Trustee.
“
Nordea ” has the meaning set forth in the recitals to
this Guaranty.
“
Obligations ” shall mean any principal, interest,
premium, penalties, fees, indemnities and other liabilities and
obligations (including any guaranty of the foregoing) payable under
the documentation governing any indebtedness (including, without
limitation, all interest after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided
in the governing documentation, whether or not such interest is an
allowed claim in such proceeding).
“ Officer
of the Second-Lien Trustee ” shall mean any officer or
assistant officer of the Second-Lien Trustee assigned by the
Second-Lien Trustee to administer its trust and collateral agent
matters.
“ OPA
” means the Oil Pollution Act of 1990, as amended, 33 U.S.C.
§ 2701 et seq.
“ Other
Creditors ” has the meaning given to such term in the
First-Lien Security Agreement.
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“ Other
Hedging Agreements ” shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other
similar arrangements or arrangements designed to protect against
the fluctuations in currency or commodity values.
“
Person ” shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise
or any government or political subdivision or any agency,
department or instrumentality thereof.
“ Pledge
Agreement ” has the meaning set forth in the recitals to
this Guaranty.
“ Real
Property ” of any Person, means all the right, title and
interest of such Person in and to land, improvements and fixtures,
including leaseholds.
“
Record ” means information that is inscribed on a
tangible medium or which is stored in an electronic or other medium
and is retrievable in perceivable form.
“
Release ” means actively or passively disposing,
discharging, injecting, spilling, pumping, leaking, leaching,
dumping, escaping, emptying, pouring, seeping, migrating or the
like into our upon any land, water or air, or otherwise entering
into the environment.
“
Second-Lien Accounts ” has the meaning given to such
term in Section 18(b)(vi) hereof.
“
Second-Lien Collateral ” means all assets of the
Subordinated Guarantors in which a lien has been granted to the
Second-Lien Trustee for the benefit of the Debentureholders
pursuant to the Second-Lien Documents.
“
Second-Lien Documents ” has the meaning set forth in
the recitals to this Guaranty.
“
Second-Lien Notes ” has the meaning set forth in the
recitals to this Guaranty.
“
Second-Lien Notes Indenture ” has the meaning set
forth in the recitals to this Guaranty.
“
Second-Lien Trustee ” has the meaning set forth in the
preamble to this Guaranty.
“
Subordinated Guarantor ” and “ Subordinated
Guarantors ” each have the meaning set forth in the
preamble to this Guaranty.
“
Subordinated Obligations ” shall have the meaning
provided in Section 5.
“
Subsidiary ” shall mean, as to any Person,
(i) any corporation more than 50% of whose stock of any class
or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective
of whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person
and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association,
joint
6
venture or
other entity in which such Person and/or one or more Subsidiaries
of such Person has more than a 50% equity interest at the
time.
“ Trico
Assets ” has the meaning given to such term in the
Preamble hereto.
“ Trico
Operators ” has the meaning given to such term in the
Preamble hereto.
“ Trico
Supply ” means Trico Supply AS, a limited company
organized under the laws of Norway.
“ Vessel
Mortgage ” and “ Vessel Mortgages ”
each have the meaning set forth in the recitals to this
Guaranty.
(b)
Construction . Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular,
references to the singular include the plural, the part includes
the whole, the terms “includes” and
“including” are not limiting, and the term
“or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,”
“hereby,” “hereunder,” and other similar
terms in this Guaranty refer to this Guaranty as a whole and not to
any particular provision of this Guaranty. Section, subsection,
clause, schedule, and exhibit references herein are to this
Guaranty unless otherwise specified. Any reference in this Guaranty
to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, joinders, and supplements
set forth herein or in the Intercreditor Agreement). Neither this
Guaranty nor any uncertainty or ambiguity herein shall be construed
or resolved against the Second-Lien Trustee, the Debentureholders
or the Subordinated Guarantors, whether under any rule of
construction or otherwise. On the contrary, this Guaranty has been
reviewed by all parties and shall be construed and interpreted
according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of the Subordinated
Guarantors, the Debentureholders and the Second-Lien Trustee. Any
reference herein to the satisfaction or payment in full of the
Guaranteed Obligations shall mean the payment in full in cash of
all Guaranteed Obligations other than contingent indemnification
Guaranteed Obligations that, at such time, are allowed to remain
outstanding and are not required to be repaid pursuant to the
provisions of the Second-Lien Documents. Any reference herein to
any Person shall be construed to include such Person’s
successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record and any
Record transmitted shall constitute a representation and warranty
as to the accuracy and completeness in all material respects of the
information contained therein. The captions and headings are for
convenience of reference only and shall not affect the construction
of this Guaranty.
2.
Guaranty . Subject to Sections 4 and 5 below, each
of the Subordinated Guarantors, jointly and severally, hereby
unconditionally and irrevocably guarantees to the Second-Lien
Trustee, on behalf of the Debentureholders, as primary obligor and
not merely as surety, the full and prompt payment when due, whether
upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations to the Debentureholder. Subject to
Sections 4 and 5 below, if any or all of the Guaranteed
Obligations becomes due and payable hereunder, each of the
Subordinated Guarantors, unconditionally and irrevocably, promises
to pay such
7
indebtedness to
the Second-Lien Trustee, on behalf of the Debentureholders, or
order, on demand, together with any and all reasonable documented
out-of-pocket expenses which may be incurred by the Second-Lien
Trustee and the Debentureholders in enforcing or collecting any of
the Guaranteed Obligations. Subject to Sections 4 and 5 below,
if claim is ever made upon the Second-Lien Trustee or any
Debentureholder for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of
any court or administrative body having jurisdiction over such
payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such
claimant (including the Issuer), then and in such event the
Subordinated Guarantors agree that any such judgment, decree,
order, settlement or compromise shall be binding upon the
Subordinated Guarantors, notwithstanding any revocation of this
Guaranty or other instrument evidencing any liability of the
Issuer, and the Subordinated Guarantors shall be and remain liable
to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally
been received by any such payee. Without limiting the generality of
the foregoing, each Subordinated Guarantor’s liability
hereunder shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Issuer to the
Second-Lien Trustee under the Second-Lien Notes but for the fact
that they are unenforceable or not allowable due to the existence
of any proceeding commenced by or against any Person under any
provision of the Bankruptcy Code (Chapter 11 of Title 11 of
the United States Code) or under any other bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar
relief (an “ Insolvency Proceeding ”) involving
any Credit Party.
3.
Bankruptcy . Additionally, subject to Sections 4
and 5 below, the Subordinated Guarantors unconditionally and
irrevocably guarantee to the Second-Lien Trustee, on behalf of the
Debentureholders, the payment of any and all of the Guaranteed
Obligations whether or not due or payable by the Issuer upon the
occurrence of any of the events specified in Sections 6.01(g)
or 6.01(h) of the Second-Lien Notes Indenture, and unconditionally,
irrevocably, jointly and severally promise to pay such indebtedness
to the Second-Lien Trustee, on behalf of the Debentureholders, or
order, on demand.
4.
Guaranty Non-Recourse . The Second-Lien Trustee, for
itself and on behalf of each Debentureholder, acknowledges and
agrees that, notwithstanding any other provision of this Guaranty
or any other Second-Lien Document (other than the Intercreditor
Agreement), recourse of the Debentureholders against either of the
Subordinated Guarantors hereunder and under the other Second-Lien
Documents to which the Subordinated Guarantors are a party shall be
limited solely to (i) the Mortgaged Vessels,
(ii) Earnings and Insurance Collateral, (iii) the
collateral assigned pursuant to the Assignments of Charters and
(iv) the Collateral (as defined in the Pledge Agreement)
pledged by Trico Operators pursuant to the Pledge Agreement, and
shall not extend to any other assets of either Subordinated
Guarantor or generally to either of the Subordinated Guarantors
themselves, and the Subordinated Guarantors are not granting any
security interest to the Debentureholders pursuant to this Guaranty
in any assets of either of the Subordinated Guarantors or of any
other Person. Any and all rights of the Second-Lien Trustee and the
Debentureholders and the obligations of the Subordinated Guarantors
hereunder shall be interpreted subject to this limitation on
recourse against the
8
Subordinated
Guarantors. Nothing in this Guaranty or in any other Second-Lien
Document (other than the Intercreditor Agreement) shall otherwise
limit any Debentureholder’s rights to, and recourse against,
any other Credit Party or any other Person or any of their
respective assets.
5.
Subordination of Guaranty. The payment of the principal
of, and interest on, and all other amounts owing in respect of, the
Guaranteed Obligations owed by the Subordinated Guarantors (such
principal and interest and all other amounts owed the “
Subordinated Obligations ”) are hereby expressly
subordinated, to the extent and in the manner hereinafter set
forth, to the prior payment in full in cash of all First-Lien
Obligations. The provisions of this Guaranty shall constitute a
continuing offer to all Persons or other entities who, in reliance
upon such provisions, become holders of, or continue to hold,
First-Lien Obligations, and such provisions are made for the
benefit of the holders of First-Lien Obligations, and such holders
are hereby made obligees hereunder the same as if their names were
written herein as such, and they and/or each of them may proceed to
enforce such provisions.
6.
The Subordinated Guarantors Not to Make Payments with Respect to
Subordinated Obligations in Certain Circumstances .
(a) Upon the maturity of any First-Lien Obligations
(including interest thereon or fees or any other amounts owing in
respect thereof), whether at stated maturity, by acceleration or
otherwise, all Obligations due and owing in respect thereof shall
first be paid in full in cash before any payment of any kind or
character (whether in cash, property, securities or otherwise) is
made by any Subordinated Guarantor on account of the principal of
(including installments thereof), or interest on, or any other
amount otherwise owing in respect of, the Subordinated Obligations.
The Subordinated Guarantors may not, directly or indirectly (and no
Person or other entity (other than, subject to the terms of the
Intercreditor Agreement, the Issuer) on behalf of the Subordinated
Guarantors may), make any payment of any principal of, and interest
on, or any other amount owing in respect of, the Subordinated
Obligations and may not acquire all or any part of the Subordinated
Obligations for cash, property or securities until all First-Lien
Obligations have been paid in full in cash if any Default or Event
of Default (each as defined below) is then in existence or would
result therefrom. The Second-Lien Trustee on behalf of each holder
of the Subordinated Obligations hereby agrees that, so long as any
Default or Event of Default in respect of any First-Lien
Obligations exists, it will not ask, demand, sue for, or otherwise
take, accept or receive, any amounts owing in respect of the
Subordinated Obligations. As used herein, the terms “
Default ” and “ Event of Default ”
shall mean any Default or Event of Default, respectively, under and
as defined in, the relevant documentation governing any First-Lien
Obligations and in any event shall include any payment default with
respect to any First-Lien Obligations.
(b) In the
event that, notwithstanding the provisions of the preceding
subsection (a) of this Section 6, any payment shall be
made by a Subordinated Guarantor on account of the principal of, or
interest on, or other amounts otherwise owing in respect of, the
Subordinated Obligations, at a time when payment is not permitted
by the terms of the Intercreditor Agreement, the Subordinated
Obligations or by said subsection (a), such payment shall be held
by the holder of the Subordinated Obligations, in trust for the
benefit of, and shall be paid forthwith over and delivered to, the
holders of First-Lien Obligations or their representative or
representatives under the agreements pursuant to which the
First-Lien Obligations may have been issued, as their respective
interests may appear, for application pro rata to the payment of
all First-Lien Obligations remaining unpaid to the extent necessary
to pay
9
all First-Lien
Obligations in full in cash in accordance with the terms of such
First-Lien Obligations, after giving effect to any concurrent
payment or distribution to or for the holders of First-Lien
Obligations. Without in any way modifying the provisions of this
Guaranty or affecting the subordination effected hereby if such
notice is not given, the Subordinated Guarantors shall give the
Second-Lien Trustee prompt written notice of any maturity of
First-Lien Obligations after which such First-Lien Obligations
remains unsatisfied.
(c) Until the
Discharge of First-Lien Obligations (as defined in the
Intercreditor Agreement), the holders of the Subordinated
Indebtedness shall not take any actions to enforce the Subordinated
Obligations against the Subordinated Guarantors including
instituting legal or bankruptcy or insolvency proceedings against
the Subordinated Guarantors in respect thereof.
(d) The
Second-Lien Trustee, as a holder of the Second-Lien Obligations,
shall not at any time be charged with knowledge of the existence of
any facts that would prohibit the making of any payment to or by
the Second-Lien Trustee or prohibit the Second-Lien Trustee from
taking any actions to enforce the Subordinated Obligations against
the Subordinated Guarantors, including instituting legal or
bankruptcy or insolvency proceedings against the Subordinated
Guarantors in respect thereof, unless and until an Officer of the
Second-Lien Trustee shall have received, no later than the third
Business Day prior to such payment or to the taking of such action,
written notice thereof from a Debentureholder, or the Subordinated
Guarantors, and prior to the receipt of any such written notice,
the Second-Lien Trustee shall be entitled in all respects to
conclusively presume that no such facts exist. Unless the
Second-Lien Trustee shall have received the notice provided for in
the preceding sentence, the Second-Lien Trustee shall have full
power and authority to receive such payment and to apply the same
to the purpose for which it was received or to take any actions to
enforce the Subordinated Obligations against the Subordinated
Guarantors, and shall not be affected by any notice to the contrary
which may be received by it on or after such date. The rights of
the holders of the First-Lien Obligations under the subordination
provisions hereof do not extend to any payments to the extent
applied to the Second-Lien Trustee’s rights to compensation
or indemnity under the Second-Lien Documents.
7.
Subordinated Obligations Subordinated to Prior Payment of All
First-Lien Obligations on Dissolution, Liquidation or
Reorganization of any of the Subordinated Guarantors . Upon
any distribution of assets of any of the Subordinated Guarantors
upon any dissolution, winding up, liquidation or reorganization of
any of the Subordinated Guarantors (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) the
holders of all First-Lien Obligations shall first be entitled to
receive payment in full in cash of all First-Lien Obligations
(including, without limitation, post-petition interest at the rate
provided in the documentation with respect to the First-Lien
Obligations, whether or not such post-petition interest is an
allowed claim against the debtor in any bankruptcy or similar
proceeding) before the holder of the Subordinated Obligations is
entitled to receive any payment of any kind or character under this
Guaranty on account of the principal of or interest on or any other
amount owing in respect of the Subordinated Obligations;
10
(b) any
payment or distribution of assets of any of the Subordinated
Guarantors of any kind or character, whether in cash, property or
securities, to which the holder of the Subordinated Obligations
would be entitled except for the provisions of this Guaranty, shall
be paid by the liquidating trustee or agent or other Person making
such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or other trustee or agent, directly
to the holders of First-Lien Obligations or their representative or
representatives
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