AMENDED AND RESTATED INTERCREDITOR AGREEMENTIntercreditor Agreement |
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Exhibit 10.13
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
Amended and Restated Intercreditor Agreement (this “Agreement”) dated as of April 13, 2007, among JPMorgan Chase Bank, N.A. as administrative agent and collateral agent (in such capacity, with its successors and assigns, the “First Priority Representative”) for the First Priority Secured Parties (as defined below), JPMorgan Chase Bank, N.A., as administrative and collateral agent (in such capacity, with its successors and assigns, the “Second Priority Representative”) for the Second Priority Secured Parties (as defined below), RHI Entertainment, LLC, a limited liability company organized under the Delaware Limited Liability Company Act (the “Borrower”, and collectively with the Guarantors defined herein and each direct or indirect affiliate or shareholder (or equivalent) of the Borrower or any of its affiliates that is now, or hereafter becomes a party to, any First Priority Document or Second Priority Document as a “borrower” or a “guarantor”, the “Credit Parties”) and RHI Entertainment Holdings, LLC, a limited liability company organized under the Delaware Limited Liability Company Act (the “Parent”).
WHEREAS, the Borrower, certain subsidiaries thereof (the “Guarantors”), the First Priority Representative, the Parent and certain financial institutions (with their respective successors and assigns, the “First Priority Lenders”) are parties to an Amended and Restated Credit, Security, Guaranty and Pledge Agreement dated as January 12, 2006, as amended and restated as of April 13, 2007 (as amended, supplemented, restated or otherwise modified from time to time (subject to the limitations on such amendments, supplements, restatements or modifications contained herein), the “Existing First Priority Agreement”), pursuant to which the First Priority Lenders have agreed to make loans and extend other financial accommodations to the Borrower; and
WHEREAS, the Credit Parties, the Parent, the Second Priority Representative and certain financial institutions and other entities (with their respective successors and assigns, the “Second Priority Lenders”) are parties to a Credit, Security, Guaranty and Pledge Agreement dated as of January 12, 2006, as amended and restated as of April 13, 2007 (as the same may be amended, supplemented, restated or otherwise modified from time to time (subject to the limitations on such amendments, supplements, restatements or modifications contained herein), the “Existing Second Priority Agreement”), pursuant to which the Second Priority Lenders have agreed to make term loans to the Borrower in an aggregate principal amount of $260,000,000 (the “Second Priority Loans”); and
WHEREAS, the Credit Parties and the Parent have granted to the First Priority Representative first priority liens and security interests in the Common Collateral (as defined below) as security for payment and performance of the First Priority Obligations (as defined below); and
WHEREAS, the Credit Parties and the Parent have granted to the Second Priority Representative junior liens and security interests in the Common Collateral as security for payment and performance of the Second Priority Obligations (as defined below); and
WHEREAS, the First Priority Representative, the Second Priority Representative, the Credit Parties and the Parent are parties to the Intercreditor Agreement dated as of January 12, 2006 (the “Original Intercreditor Agreement”) relating to the Credit Agreements which are being amended and restated as the Existing First Priority Agreement and the Existing Second Priority Agreement, respectively, and are executing this Amended and Restated Intercreditor Agreement to amend and restate and replace in its entirety the Original Intercreditor Agreement;
WHEREAS, the obligations of the First Priority Secured Parties and the Second Priority Secured Parties to make loans and other financial accommodations to the Borrower under the Existing First Priority Agreement and the Existing Second Priority Agreement are subject to the conditions, among others, that the First Priority Representative, the Second Priority Representative, the Parent and the Credit Parties execute and deliver this Agreement (i) to amend and restate the Original Intercreditor Agreement in its entirety, (ii) to set forth the relative priorities of the interests of the First Priority Secured Parties and the Second Priority Secured Parties in the Common Collateral, (iii) to provide for the orderly realization, collection, liquidation and disposition of the Common Collateral and (iv) to agree upon various matters related thereto;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows:
SECTION 1. Definitions.
1.1 Defined Terms. The following terms, as used herein, have the following meanings:
“Additional First Priority Agreement” means any agreement approved for designation as such by the First Priority Representative and the Second Priority Representative (at the direction of the Second Priority Required Lenders).
“Additional Second Priority Agreement” means any agreement approved for designation as such by the First Priority Representative and the Second Priority Representative (at the direction of the Second Priority Required Lenders).
“Adequate Protection Lien” has the meaning set forth in Section 5.2(a).
“Allowable Dividends” shall mean the dividends and/or distributions allowed pursuant to Section 6.5 of the Existing First Priority Agreement as in effect as of the date hereof.
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“Applicable Library Percentage” shall be as defined in the Existing First Priority Agreement as in effect as of the date hereof or as amended with the consent of the Second Priority Required Lenders.
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.
“Borrower” has the meaning set forth in the introductory paragraph hereof.
“Borrowing Base” shall be as defined in the Existing First Priority Agreement as in effect on the date hereof.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks are required or permitted to close in the State of New York.
“Cap Amount” means as of any date of determination $450 million plus an amount not in excess of $45 million in the aggregate advanced in the context of a workout and/or a debtor-in-possession financing, less an amount equal to the sum, without duplication, of (i) the aggregate amount of all principal payments and prepayments of the Term Loans under the Existing First Priority Agreement as in effect on the date hereof (other than any principal payments made on account or as a result of a Permitted First Lien Refinancing), (ii) the amount of all Proceeds of Common Collateral received after the date hereof by the First Priority Representative, which pursuant to the provisions of Section 2.10(f) of the Existing First Priority Agreement as in effect on the date hereof, are to be applied to pay First Priority Obligations and which are not so applied and (iii) the aggregate amount of all permanent reductions of the Revolving Credit Commitments (as such term (or any term comparable to such term) is defined in the Existing First Priority Agreement) other than a reduction on account of or as a result of a Permitted First Lien Refinancing.
“Cash Management Obligations” means, with respect to any Credit Party, any obligations of such Credit Party for fees or reimbursement of overdrafts that are owed to the First Priority Representative (or any of its affiliates) or to a First Priority Lender (or any of its affiliates) in respect of treasury management arrangements, depositary or other cash management services.
“Closing Date” means April 13, 2007.
“Common Collateral” means all assets that are both First Priority Collateral and Second Priority Collateral at the time of determination.
“Credit Parties” has the meaning set forth in the introductory paragraph hereof.
“DIP Financing” has the meaning set forth in Section 5.2(a).
“Distribution” means, with respect to any indebtedness or obligation of a Person, (a) any payment or distribution by such Person of cash, securities, or other property, by set-off or
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otherwise, on account of such indebtedness or obligation or (b) any redemption, purchase, or other acquisition of such indebtedness or obligation by such Person.
“Eligible Library Amount” shall be as defined in the Existing First Priority Agreement as in effect as of the date hereof.
“Enforcement Action” or “Exercise of Secured Creditor Remedies” means, with respect to the First Priority Obligations or the Second Priority Obligations, the exercise of any rights and remedies provided to a secured creditor with respect to any Common Collateral or Proceeds of Common Collateral securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies under, as applicable, the First Priority Documents or the Second Priority Documents or any law applicable to the exercise of rights or remedies with respect to any Common Collateral, including without limitation, the exercise of any rights or remedies of a secured creditor with respect to the Common Collateral or Proceeds of Common Collateral under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code, or taking of any action to initiate the dissolution, winding-up, liquidation or reorganization of a Credit Party (whether voluntary or involuntary, whether in bankruptcy, insolvency or receivership proceedings, or for the assignment for the benefit of creditors or proceedings for voluntary or involuntary liquidation, dissolution or other winding-up of a Credit Party, whether or not involving insolvency or bankruptcy or any marshalling of the assets and liabilities of a Credit Party).
“Equity Interests” shall be as defined in the Existing First Priority Agreement as in effect as of the date hereof.
“Existing First Priority Agreement” has the meaning set forth in the first WHEREAS clause of this Agreement.
“Existing Second Priority Agreement” has the meaning set forth in the second WHEREAS clause of this Agreement.
“First Priority Agreement” means, collectively, (i) the Existing First Priority Agreement, (ii) any Additional First Priority Agreement, so long as any such Additional First Priority Agreement is not inconsistent with or in violation of any of the terms of this Agreement, and (iii) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred in connection with a Permitted First Lien Refinancing to extend, renew, restructure, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing First Priority Agreement, any Additional First Priority Agreement or any other agreement or instrument referred to in this clause (iii), unless such agreement or instrument expressly provides that it is not intended to be and is not a First Priority Agreement hereunder, so long as any such credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument is not materially inconsistent with the terms of this Agreement or in violation of any of the terms of this Agreement.
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“First Priority Collateral” means all assets, whether now owned or hereafter acquired by any Credit Party, in which a Lien is granted or purported to be granted to any First Priority Secured Party as security for any First Priority Obligation pursuant to a First Priority Security Document.
“First Priority Creditors” means the “Lenders” as defined in the First Priority Agreement, or any Persons that are designated under the First Priority Agreement as the “First Priority Creditors” for purposes of this Agreement and notice of which designation is given in writing to the Second Priority Representative promptly after such designation.
“First Priority Default” shall mean an “Event of Default” as that term is defined in the First Priority Agreement.
“First Priority Documents” means the First Priority Agreement, each First Priority Security Document and each First Priority Guarantee.
“First Priority Guarantee” means any guarantee by any Credit Party of any or all of the First Priority Obligations.
“First Priority Lenders” has the meaning set forth in the first WHEREAS clause of this Agreement.
“First Priority Lien” means any Lien created by the First Priority Security Documents.
“First Priority Majority Lenders” means the “Required Lenders”, as such term is defined in the Existing First Priority Agreement as in effect as of the date hereof.
“First Priority Obligations” means the sum, without duplication, of the following: (i) the outstanding principal amount of all loans made pursuant to the First Priority Agreement to the extent it does not exceed the Cap Amount plus amounts added to the principal amount of such loans as a result of capitalizing other First Priority Obligations not paid in cash, (ii) all interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made pursuant to the First Priority Agreement, (iii) all L/C Exposure (as defined in the First Priority Agreement in existence on the date hereof) and other reimbursement obligations (if any) and interest thereon (including, without limitation, any post-petition interest) with respect to any letter of credit or similar instrument issued pursuant to the First Priority Agreement, (iv) all obligations of any Credit Party in respect of any Swap Agreement, which such Credit Party may enter into from time to time with any Person who was either a First Priority Secured Party (or an affiliate of a First Priority Secured Party) or any other Person who issued a Swap Agreement to the Borrower, in either case, under which the amounts payable constitute “Obligations” under the Existing First Priority Agreement, (v) all Cash Management Obligations and (vi) all guarantee obligations, fees, charges, expenses, indemnities, reasonable attorney’s fees and other amounts due and payable from time to time pursuant to the First Priority Documents, in each case whether direct or indirect, absolute or contingent, joint or several, primary or secondary and whether or not allowed or allowable in an Insolvency Proceeding; provided, that First Priority Obligations shall also include any other obligations that the Second Priority Required Lenders agree shall constitute “First Priority Obligations” hereunder in accordance with the applicable provisions of
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the Existing Second Priority Agreement or any comparable provision of any Additional Second Priority Agreement.
“First Priority Obligations Payment Date” means the first date on which (i) the outstanding First Priority Obligations (other than Unasserted Contingent Obligations and those obligations described in clauses (iii) and (iv) of this definition) have been paid in cash in full (or secured or reserved for in another manner reasonably acceptable to the First Priority Representative), (ii) all commitments to extend credit under the First Priority Documents have expired or been terminated, (iii) all First Priority Obligations then due and outstanding at the time of the occurrence of clause (i) above or which can be reasonably quantified at such time in respect of all Swap Agreements have been paid in full or the Credit Parties shall have entered into such other arrangements reasonably acceptable to the counterparties of such Swap Agreements to provide cash collateral or other reasonably acceptable security for such First Priority Obligations in respect of such Swap Agreements, and (iv) all Cash Management Obligations then due and outstanding at the time of the occurrence of clause (i) above or which can be reasonably quantified at such time have been paid in full or otherwise cash collateralized or secured in a manner reasonably acceptable to the First Priority Representative or the Credit Parties have entered into such other arrangements reasonably acceptable to the obligees of such Cash Management Obligations.
“First Priority Representative” has the meaning set forth in the introductory paragraph hereof. In the case of any new First Priority Agreement that replaces a First Priority Agreement in accordance with the terms hereof or the First Priority Representative is changed pursuant to a First Priority Agreement, the First Priority Representative shall be such replacement or the Person identified as such in such new Agreement.
“First Priority Restricted Provisions” means, collectively, (i) Allowable Dividends, (ii) Applicable Library Percentage, and (iii) Eligible Library Amount.
“First Priority Secured Parties” means the First Priority Representative, the First Priority Creditors and any other holders of the First Priority Obligations.
“First Priority Security Documents” means the First Priority Agreement, the Pledgeholder Agreements, the Copyright Security Agreement, each Copyright Security Agreement Supplement, if any, the Trademark Security Agreement, if any (in each case as defined in the Existing First Priority Agreement), UCC financing statements, and any other security documentation delivered to the First Priority Representative granting or perfecting a lien on any property of any Credit Party to secure First Priority Obligations.
“Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.
“Lien” shall mean any mortgage, copyright mortgage, pledge, security interest, encumbrance, lien or charge of any kind whatsoever (including, without limitation, any conditional sale or other title retention agreement, any agreement to grant a security interest at a
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future date, any lease in the nature of security, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction); provided, however, that this term shall not include contractual encumbrances which do not afford security of the type described in this definition or the rights of a licensee as a licensee.
“Notice of Intent to Exercise” has the meaning set forth in Section 3.2.
“Overadvance” has the meaning set for in Section 3.1.
“Parent” has the meaning set forth in the introductory paragraph hereof.
“Payoff Letter” has the meaning set forth in Section 8.3(b).
“Permitted First Lien Refinancing” means a refinancing of the outstanding principal amount of the loans made under the First Priority Agreement, so long as (i) the Applicable Library Percentage is not increased in connection therewith to a percentage greater than 55% and any larger percentage theretofore agreed by the Second Priority Required Lenders, (ii) the definition of Eligible Library Amount is not modified in a manner materially adverse to the interests of the Second Priority Lenders, (iii) the principal amount of the Loans under such refinancing shall not be increased above the Cap Amount then in effect and (iv) the final maturity thereof is not extended beyond the sixth anniversary of the Closing Date, in each case without the consent of the Second Priority Required Lenders.
“Permitted Refinancing” means a refinancing of the outstanding principal amount of the loans made under the Second Priority Agreement, so long as (i) the terms of such refinancing do not provide for an interest rate margin and/or fees such that the cash portion of the net effective interest rate margin on the loans made under such refinancing facility (after taking into account any prepayment premium payable under Section 2.9(a) of the Existing Second Priority Agreement) is more than two percent (2.00%) per annum in cash pay above the interest rate margin on the existing Second Priority Loans, (ii) the principal amount of Second Priority Obligations is not increased above the principal amount thereof outstanding immediately prior to such refinancing except to the extent permitted under the Existing First Priority Agreement or as the result of the payment of in kind interest, (iii) the maturity of all or any portion of the Second Priority Obligations is not shortened as a result of such refinancing or replacement, (iv) the direct and contingent obligors therefore are not changed as a result of such refinancing or replacement and (v) the relevant Second Priority Document does not modify or add or make more restrictive or onerous any covenant or event of default under the Second Priority Documents, in each case without the consent of the First Priority Majority Lenders.
“Permitted Replacement Lien” has the meaning set forth in Section 5.2(a).
“Person” means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, unincorporated organization, association, institution, entity, party, including any government and any political subdivision, agency or instrumentality thereof.
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“Post-Petition Interest” means any interest, fees, expenses and other charges that pursuant to the First Priority Agreement or the Second Priority Agreement, continue to accrue after the commencement of any Insolvency Proceeding, to the extent such interest, fees, expenses and other charges are allowed or allowable in any such Insolvency Proceeding.
“Proceeds” means, without duplication, (i) any “proceeds” as defined in Article 9 of the UCC, with respect to the Common Collateral and (ii) the amount of any sale, exchange or other disposal of Common Collateral, whether voluntary or involuntary, net of all reasonable cash expenses of such sale, exchange or other disposal.
“Prohibited Plan Distribution” has the meaning set forth in Section 5.11.
“Reorganization Securities” means any debt or equity securities which are distributed to the Second Priority Lenders in an Insolvency Proceeding which are, as to any liens securing such securities, subordinated to the liens securing the First Priority Obligations (or any debt or equity securities issued in substitution of all or any portion of the First Priority Obligations) on terms no less favorable to the First Priority Lenders than the terms hereof.
“Revolving Credit Loans” shall be as defined in the Existing First Priority Agreement as in effect as of the date hereof.
“Second Priority Agreement” means, collectively, (i) the Existing Second Priority Agreement, (ii) any Additional Second Priority Agreement, so long as any such Additional Second Priority Agreement is not materially inconsistent with the terms of this Agreement, or in violation of, any of the terms of this Agreement, and (iii) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred in connection with a Permitted Refinancing to extend, renew, restructure, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing Second Priority Agreement, any Additional Second Priority Agreement or any other agreement or instrument referred to in this clause (iii) so long as any such credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument is not materially inconsistent with the terms of this Agreement or in violation of any of the terms of this Agreement.
“Second Priority Collateral” means all assets, whether now owned or hereafter acquired by any Credit Party, in which a Lien is granted or purported to be granted to any Second Priority Secured Party as security for any Second Priority Obligation pursuant to a Second Priority Security Document.
“Second Priority Creditors” means the Second Priority Representative and the “Lenders” as defined in the Second Priority Agreement, or any Persons that are designated under the Second Priority Agreement as the “Second Priority Creditors” for purposes of this Agreement and notice of which designation is given in writing to the First Priority Representative promptly after such designation.
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“Second Priority Documents” means the Second Priority Agreement, each Second Priority Security Document and each Second Priority Guarantee.
“Second Priority Guarantee” means any guarantee by a Credit Party of any or all of the Second Priority Obligations.
“Second Priority Lenders” has the meaning set forth in the second WHEREAS clause of this Agreement.
“Second Priority Lien” means any Lien created by the Second Priority Security Documents.
“Second Priority Loans” has the meaning set forth in the second WHEREAS clause of this Agreement.
“Second Priority Obligations” means (i) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on the Second Priority Loans and (ii) all guarantee obligations, fees, expenses, indemnities, attorney’s fees, charges and other amounts payable from time to time pursuant to the Second Priority Documents, in each case whether direct or indirect, absolute or contingent, joint or several, primary or secondary and whether or not allowed or allowable in an Insolvency Proceeding; provided, the Second Priority Obligations shall also include any other obligations that the First Priority Representative agrees shall constitute “Second Priority Obligations” hereunder in accordance with the applicable provisions of the Existing First Priority Agreement or any comparable provisions of any Additional First Priority Agreement. To the extent any payment with respect to any Second Priority Obligation (whether by or on behalf of any Credit Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties and the Second Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.
“Second Priority Representative” has the meaning set forth in the introductory paragraph hereof. In the case of any Second Priority Agreement that replaces a Second Priority Agreement in accordance with the terms hereof or the Second Priority Representative is changed pursuant to a Second Priority Agreement, the Second Priority Representative shall be such replacement or the Person identified as such in such new Agreement.
“Second Priority Required Lenders” shall mean the Second Priority Lenders holding more than 50% of the outstanding Second Priority Loans
“Second Priority Secured Parties” means the Second Priority Representative, the Second Priority Creditors and any other holders of the Second Priority Obligations.
“Second Priority Security Documents” means the Second Priority Agreement, the Pledgeholder Agreements, the Copyright Security Agreement, the Copyright Security Agreement
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Supplement, the Copyright Security Agreement Supplement, if any, the Trademark Security Agreement, if any (in each case as defined in the Existing Second Priority Agreement), UCC financing statements and any other security documentation delivered to the First Priority Representative or the Second Priority Representative granting or perfecting a lien on any property of any Credit Party securing the Second Priority Obligations.
“Secured Parties” means the First Priority Secured Parties and the Second Priority Secured Parties.
“Standstill Notice” means a written notice from First Priority Representative to Second Priority Representative stating that it is a “Standstill Notice” and stating that a First Priority Default has occurred and is continuing or that it has received a Notice of Intent to Exercise.
“Standstill Period” means the period beginning on the date that a Standstill Notice is received by Second Priority Representative (but no earlier than 180 days subsequent to the end of any preceding Standstill Period) through and including the first to occur of (a) the date upon which the First Priority Obligations Payment Date shall have occurred, (b) the date upon which First Priority Representative shall have waived or acknowledged in writing the termination of the First Priority Default that gave rise to such Standstill Period, (c) the date that is 180 consecutive days after the receipt of such Standstill Notice by Second Priority Representative or (d) the commencement of an Insolvency Proceeding.
“Swap Agreement” means, as the context so requires, an “Interest Rate Protection Agreement” or a “Currency Agreement”, each as defined in the Existing First Priority Agreement as in effect as of the date hereof.
“Term Loans” shall be as defined in the Existing First Priority Agreement as in effect as of the date hereof.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York.
“Unasserted Contingent Obligations” means, at any time, First Priority Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (i) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any First Priority Obligation and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of First Priority Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.
1.2 Amended Agreements. All references in this Agreement to agreements or other contractual obligations shall, unless otherwise specified, be deemed to refer to such agreements or contractual obligations as amended, supplemented, restated or otherwise modified from time to time, so long as any such amendment, supplement, restatement or modification is not materially inconsistent with the terms of this Agreement or in violation of any of the terms of this Agreement.
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SECTION 2. Lien Priorities.
2.1 Subordination of Liens. (a) Any and all Liens in respect of all or any of the Common Collateral now existing or hereafter created or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and all Liens now existing or hereafter created or arising in favor of the First Priority Secured Parties securing the First Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision of the UCC or any applicable law or any First Priority Document or Second Priority Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured Party securing any of the First Priority Obligations are (x) subordinated to any Lien securing any obligation of any Credit Party other than the Second Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.
(b) No First Priority Secured Party or Second Priority Secured Party shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the Common Collateral granted to the other, and each First Priority Secured Party and each Second Priority Secured Party hereby waives its right to do so.
(c) The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties waives, to the fullest extent permitted by law, any right to request marshalling of assets.
2.2 Nature of First Priority Obligations. The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties acknowledges that a portion of First Priority Obligations is revolving in nature and that the amount of the Revolving Credit Loans that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed and that, subject to the terms hereof, the terms of the First Priority Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the First Priority Obligations (subject to the limitations contained in the definition thereof) may be increased, replaced or refinanced, in each event, without notice to or consent by the Second Priority Secured Parties and without affecting the provisions hereof so long as any such modification, extension or amendment does not violate the restrictions applicable to a Permitted First Lien Refinancing. Subject to the provisions of this Agreement (including but not limited to the limitations contained in the definition of First Priority Obligations and those applicable to a Permitted First Lien Refinancing), the lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the First Priority Obligations or the Second Priority Obligations, or any portion thereof.
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2.3 Agreements Regarding Actions to Perfect Liens. (a) The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties agrees that (i) all UCC-1 financing statements, patent, trademark or copyright filings or other filings or recordings filed or recorded by or on behalf of the Second Priority Representative shall be in form reasonably satisfactory to the First Priority Representative, (ii) all such perfection instruments filed by the Second Priority Representative on or prior to the Closing Date shall be substantially identical to, and shall be filed after, those filed by the First Priority Representative on or prior to the Closing Date and (iii) it shall provide the First Priority Representative with copies of any subsequent perfection instrument filed or recorded within five (5) Business Days of such filing or recordation.
(b) The Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against any tangible or intangible Common Collateral in favor of or for the benefit of the Second Priority Representative shall be in form reasonably satisfactory to the First Priority Representative and shall contain the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as Administrative Agent for certain First Priority Secured Parties, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of April __, 2007 among JPMorgan Chase Bank, N.A., as First Priority Representative, JPMorgan Chase Bank, N.A., as Second Priority Representative, and the Credit Parties referred to therein, as amended from time to time.”
(c) The First Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code including, without limitation, control or possession of money or deposit accounts pursuant to Section 9-313 or 9-314 of the UCC) or as bailee (such bailment, intended among other things to satisfy the requirements of Section 8-106(d)3, 8-301(a)(2) and 9-313(c) of the UCC), over Common Collateral pursuant to the First Priority Security Documents, such possession, control or bailment is also for the benefit of the Second Priority Representative and the other Second Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the First Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second Priority Representative or any other Second Priority Secured Party with any rights with respect to such Common Collateral beyond those specified in this Agreement and the Second Priority Security Documents, provided that subsequent to the occurrence of the First Priority Obligations Payment Date, the First Priority Representative shall, unless otherwise directed by a court of competent jurisdiction, deliver to the Second Priority Representative, at the Credit Parties’ sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the Second Priority Documents, and provided, further, that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties and the Second Priority Secured Parties and shall not impose on the First Priority Secured Parties any obligations in respect of the disposition of any Common Collateral
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(or any Proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
(d) The Second Priority Representative hereby acknowledges that, to the extent that it holds subsequent to the First Priority Obligations Payment Date, or a third party then holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code including, without limitation, control or possession of money or deposit accounts pursuant to Section 9-313 or 9-314 of the UCC) or as bailee (such bailment, intended among other things to satisfy the requirements of Section 8-106(d)3, 8-301(a)(2) and 9-313(c) of the UCC), over Common Collateral pursuant to the Second Priority Security Documents, such possession, control or bailment is also for the benefit of the First Priority Representative and the other First Priority Secured Parties solely to the extent required to perfect their security interest in such Common Collateral for obligations, if any, under the First Priority Documents in excess of the First Priority Obligations. Nothing in the preceding sentence shall be construed to impose any duty on the Second Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the First Priority Representative or any other First Priority Secured Party with any rights with respect to such Common Collateral beyond those specified in this Agreement and the First Priority Security Documents, provided that subsequent to the satisfaction of the obligations under the Second Priority Documents, the Second Priority Representative shall, unless otherwise directed by a court of competent jurisdiction, deliver to the First Priority Representative, at the Credit Parties’ sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the First Priority Documents, and provided, further, that the provisions of this section are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties and the Second Priority Secured Parties subsequent to the satisfaction of the obligations under the Second Priority Documents and shall not impose on the Second Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any Proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.
2.4 No New Liens. Second Priority Representative, for itself and on behalf of the Second Priority Lenders, acknowledges and agrees that First Priority Representative has been granted senior Liens upon all of the Common Collateral in which Second Priority Representative has been granted Liens, and Second Priority Representative hereby consents thereto. If (i) any Credit Party grants in favor of Second Priority Representative or any other Second Priority Secured Party a Lien on any asset of such Credit Party not constituting Common Collateral as of the date hereof (or subsequent thereto as a post-closing item set forth in the Existing Second Priority Agreement as in effect as of the date hereof) or (ii) Second Priority Representative or any other Second Priority Secured Party otherwise obtains a non-consensual lien (including a judgment lien, writ of attachment or writ of execution) on any asset of any Credit Party not constituting Common Collateral as of the date hereof, Second Priority Representative agrees that it shall give First Priority Representative prompt written notice thereof (and in no event later than five (5) Business Days after the date Second Priority Representative has actual knowledge of such grant), containing a detailed description of such asset (it being understood and agreed that the failure by Second Priority Representative to give such notice to First Priority Representative shall not affect the validity, perfection or enforceability of such Lien, and that any amounts distributable to or received by or distributed to any of the Second Priority Secured Parties
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pursuant to or as a result of such Liens shall in any event be subject to Section 4.1), and Second Priority Representative acknowledges that if First Priority Representative obtains a Lien on such asset, whether prior to or after the time that Second Priority Representative obtains a Lien on such asset, then the priority of such Lien will be subject to the terms and provisions of this Agreement. First Priority Representative, for itself and on behalf of the First Priority Lenders, acknowledges and agrees that Second Priority Representative has been granted Liens upon all of the Common Collateral in which First Priority Representative has been granted Liens and First Priority Representative hereby consents thereto. If (i) any Credit Party grants in favor of First Priority Representative or any other First Priority Secured Party a Lien on any asset of such Credit Party not constituting Common Collateral on the date hereof (or subsequent thereto as a post-closing item set forth in the Existing Second Priority Agreement as in effect as of the date hereof) or (ii) First Priority Representative or any other First Priority Secured Party otherwise obtains a non-consensual lien (including a judgment lien, writ of attachment or writ of execution) on any asset of any Credit Party not constituting Common Collateral on the date hereof, First Priority Representative agrees that it shall give Second Priority Representative prompt written notice thereof (and in no event later than five (5) Business Days after the date First Priority Representative has actual knowledge of such grant), containing a detailed description of such asset (it being understood and agreed that the failure by First Priority Representative to give such notice to Second Priority Representative shall not affect the validity, perfection or enforceability of such Lien), and First Priority Representative acknowledges that if Second Priority Representative obtains a Lien on such asset, whether prior to or after the time that First Priority Representative obtains a Lien on such asset, then the priority of such Lien will be subject to the terms and provisions of this Agreement.
SECTION 3. Enforcement Rights.
3.1 Exclusive Enforcement. Until the earlier of the occurrence of the First Priority Obligations Payment Date or the expiration or other termination of the then current Standstill Period, whether or not an Insolvency Proceeding has been commenced by or against any Credit Party, the First Priority Secured Parties shall have the exclusive right to take, continue, oppose, or otherwise prosecute, defend, settle or consent to any Enforcement Action, without any consultation with or consent of any Second Priority Secured Party, and the Second Priority Secured Parties shall not take any position contrary to the First Priority Secured Parties, or support any other Person who takes any position contrary to the First Priority Secured Parties, with respect to such Enforcement Action (it being understood that any Second Priority Secured Party, notwithstanding the foregoing, may (i) at any time demand payment of amounts then due and payable pursuant to the terms of the Second Priority Agreement (other than as a result of an acceleration subsequent to an event of default under the Second Priority Agreement) and pursue unsecured lender remedies with regard to any such payments not made under the Second Priority Agreement, (ii) after the expiration of the Standstill Period, demand payment for or accelerate the payment of the Second Priority Loans in accordance with the terms of the Second Priority Documents, (iii) file a proof of claim or statement of interest, (iv) file all necessary responsive or defensive pleadings in opposition to any motion, claims, proceedings or pleadings made by any Person objecting to or seeking disallowance of the claims of the Second Priority Secured Parties, including claims secured by the Common Collateral, and (v) make any filings, arguments or motions or take other actions to preserve or protect its Liens on the Collateral or any other rights, including to stay any statute of limitations). Upon the occurrence and during the continuance of
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a First Priority Default, the First Priority Representative and the other First Priority Secured Parties may take and continue any Enforcement Action with respect to the First Priority Obligations and the Common Collateral in such order and manner as they may determine in their sole discretion. Notwithstanding the foregoing, if the First Priority Representative and the First Priority Lenders shall have extended loans, credit accommodations or other financial accommodations under the First Priority Documents in excess of the First Priority Obligations (such excess, an “Overadvance”), and the First Priority Obligations Payment Date shall have occurred (notwithstanding that an Overadvance remains outstanding under the First Priority Documents), the provisions of this Section 3.1 shall not prevent the Second Priority Representative and/or the Second Priority Lenders from pursuing any remedies available to it or them as secured or unsecured lenders with regard to the Common Collateral and notwithstanding the provisions of Section 2.1 hereof, the Liens in the Common Collateral held by the Second Priority Representative securing the Second Priority Obligations shall thereafter be senior and prior to the remaining claims of the First Priority Secured Parties with regard to any Overadvance outstanding under the First Priority Documents.
3.2 Remedies Standstill. At any time that a Standstill Period is in effect, Second Priority Representative shall not, without the prior written consent of First Priority Representative, exercise any remedies other than those specifically listed in Section 3.1. In addition, Second Priority Representative may not take any Enforcement Action so long as First Priority Representative or Second Priority Representative are enjoined from any Exercise of Secured Creditor Remedies, in each case, unless and until the First Priority Obligations Payment Date shall have occurred. After the First Priority Obligations Payment Date, the Second Priority Representative may take any Enforcement Action. Second Priority Representative may not exercise any remedies without first providing First Priority Representative at least five (5) Business Days prior written notice stating its intent to exercise remedies and referring to this Section (a “Notice of Intent to Exercise”), it being understood that if First Priority Representative does not deliver a Standstill Notice to Second Priority Representative by the end of such five (5) Business Day period, Second Priority Representative may proceed with the exercise of the remedies listed in such Notice of Intent to Exercise subject to the other provisions hereof; provided, that Second Priority Representative shall not be required to provide a Notice of Intent to Exercise to First Priority Representative in connection with a permitted Exercise of Secured Creditor Remedies upon termination of a Standstill Period, but shall prior to the First Priority Obligations Payment Date provide a written notice at least two (2) Business Days prior to taking any Enforcement Action not listed in a Notice of Intent to Exercise previously delivered to the First Priority Representative.
3.3 Limitation on Standstill Periods. In no event shall a Standstill Period extend beyond the earlier of (i) 180 consecutive days from the date of receipt by Second Priority Representative from First Priority Representative of a Standstill Notice initiating such Standstill Period and (ii) the First Priority Obligation Payment Date. Any number of notices of First Priority Default may be given during a Standstill Period, but no such notice shall extend such Standstill Period. No subsequent Standstill Period m
