AMENDED AND RESTATED INTERCREDITOR AGREEMENT

Exhibit 10.5

EXECUTION COPY

AMENDED AND RESTATED INTERCREDITOR AGREEMENT

This AMENDED AND RESTATED INTERCREDITOR AGREEMENT (this “ Agreement ”) is dated as of August 28, 2009, and entered into by and among SPECTRUM BRANDS, INC. , a Delaware corporation (the “ Company ”); certain Subsidiaries of the Company party hereto (the “ Subsidiary Loan Parties ” and, together with the Company, the “ Loan Parties ”); THE BANK OF NEW YORK MELLON (successor to Goldman Sachs Credit Partners, L.P. (“ GSCP ”)), in its capacity as collateral agent for the Term Secured Parties (as defined below), including its successors and assigns from time to time (the “ Term Collateral Agent ”); WACHOVIA BANK, NATIONAL ASSOCIATION (“ Wachovia ”), in its capacity as collateral agent for the secured parties under the Existing Revolving Credit Agreement (as defined below) (the “ Existing Revolving Collateral Agent ”); and GENERAL ELECTRIC CAPITAL CORPORATION (“ GECC ”), in its capacity as collateral agent for the Revolving Secured Parties (as defined below), including its successors and assigns from time to time (the “ Revolving Collateral Agent ”). Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

The Company, the lenders party thereto and GSCP, as Administrative Agent and Collateral Agent, have entered into a Credit Agreement dated as of March 30, 2007 (as amended, restated, supplemented, extended, waived, modified, replaced or refinanced from time to time, the “ Term Credit Agreement ”).

The Company, the Subsidiary Loan Parties, the lenders party thereto, Wachovia, as Administrative Agent, Collateral Agent and an LC Issuer, and GSCP, as Syndication Agent, have entered into a Credit Agreement dated September 28, 2007 (as amended, restated, supplemented, extended, waived, modified, replaced or refinanced prior to the date hereof, the “ Existing Revolving Credit Agreement ”).

The Term Collateral Agent and the Existing Revolving Collateral Agent are parties to that certain Intercreditor Agreement, dated September 28, 2007 (the “ Existing Intercreditor Agreement ”).

The Company has entered into a Refinancing of the Existing Revolving Credit Agreement pursuant to the Revolving Credit Agreement (as defined below), which Refinancing is permitted by the Term Documents (as defined below).

Pursuant to the Term Credit Agreement, certain current and future Subsidiaries have guaranteed or will in the future guarantee the Term Obligations. Pursuant to the Revolving Credit Agreement, certain current and future Subsidiaries have guaranteed or will in the future guarantee the Revolving Obligations.

The Term Obligations are secured under the Term Collateral Documents by Liens on the ABL Collateral and the Non-ABL Collateral. The Revolving Obligations are being secured on the date hereof under the Revolving Collateral Documents by Liens on the ABL Collateral. The Term Secured Parties and the Revolving Secured Parties have authorized and directed the Term Collateral Agent and the Revolving Collateral Agent, respectively, to enter into this Agreement, pursuant to which (a) the Revolving Obligations will be secured on a first-priority basis by liens on the ABL Collateral and (b) the Term Obligations will be secured on a second priority basis by Liens on the ABL Collateral (as well as on a first-priority basis by Liens on the Non-ABL Collateral).

Pursuant to Section 5.5 of the Existing Intercreditor Agreement, the parties hereto desire to amend and restate the Existing Intercreditor Agreement in its entirety to make certain changes as are more fully set forth herein, which amendment and restatement shall become effective upon the date hereof.

AGREEMENT

In consideration of the foregoing and the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

SECTION 1. Definitions.

1.1 Defined Terms . Capitalized terms used and not defined in this Agreement have the meanings assigned to them in the Term Credit Agreement (as in effect on the date hereof). As used in this Agreement, the following terms shall have the following meanings:

“ ABL Collateral ” means any and all of the following Collateral: (a) all Accounts (other than Accounts arising under contracts for the sale of Non-ABL Collateral) and related Records; (b) all Chattel Paper; (c) all Deposit Accounts and all cash, checks and other negotiable instruments, funds and other evidences of payment held therein (but not any identifiable Proceeds of Non-ABL Collateral); (d) all Inventory; (e) solely to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a), (b), (c) and (d), all Documents, General Intangibles (other than Intellectual Property), Instruments, Investment Property and Letter of Credit Rights; (f) all books and records related to the foregoing; and (g) all Proceeds, including insurance Proceeds, of any and all of the foregoing and all collateral, security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding clause (g) of the immediately preceding sentence, “ABL Collateral” shall not include any assets referred to in clauses (a) through (j) and (l) of the definition of “Non-ABL Collateral” that are not included in clause (e) above, and shall further not include any assets excluded from being collateral pursuant to the terms of the Revolving Collateral Documents. All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the UCC as in effect in the State of New York.

“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, a Person shall be deemed to “ control ” or be “ controlled by ” a Person if such Person possesses, directly or indirectly, power to direct or cause the direction of the management or policies of such Person whether through ownership of equity interests, by contract or otherwise.

“ Agents ” means the Term Collateral Agent and the Revolving Collateral Agent.

“ Agreement ” means this Intercreditor Agreement, as amended, restated, replaced, renewed, extended, supplemented, waived or otherwise modified in writing from time to time.

 

2

“ Bankruptcy Code ” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

“ Bankruptcy Law ” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

“ Cash Collateral ” has the meaning assigned to that term in Section 6.1.

“ Collateral ” means all of the assets and property of any Grantor, whether real, personal or mixed, that are subject to Liens under the Collateral Documents or any of them.

“ Collateral Documents ” means the Revolving Collateral Documents and the Term Collateral Documents.

“ Company ” has the meaning assigned to that term in the preamble to this Agreement.

“ Comparable Term Collateral Document ” means, in relation to any Collateral subject to any Lien created under any Revolving Collateral Document, the Term Document which creates a Lien on the same Collateral, granted by the same Grantor.

“ Credit Documents ” means this Agreement, the Revolving Documents and the Term Documents.

“ Currency Agreement ” means any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement of the Company or any of its Subsidiaries.

“ DIP Financing ” has the meaning assigned to that term in Section 6.1.

“ Discharge of Revolving Obligations ” means, except to the extent otherwise expressly provided in Section 5.5:

(a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding) on all Revolving Obligations;

(b) payment in full in cash of all other Revolving Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid;

(c) termination or expiration of all commitments, if any, to extend credit that would constitute Revolving Obligations; and

(d) termination or cash collateralization of all contingent obligations in respect of Hedging Agreements and Cash Management Obligations (each capitalized term as

 

3

defined in the Revolving Credit Agreement) constituting Revolving Obligations and all letters of credit the reimbursement obligations in respect of which constitute Revolving Obligations.

“ Disposition ” has the meaning assigned to that term in Section 5.1(b).

“ Existing Intercreditor Agreement ” has the meaning assigned to that term in the Recitals of this Agreement.

“ Existing Revolving Credit Agreement ” has the meaning assigned to that term in the Recitals of this Agreement.

“ Existing Revolving Collateral Agent ” has the meaning assigned to that term in the preamble of this Agreement.

“ Governmental Authority ” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency, instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a State of the United States, the United States, or a foreign entity or government.

“ Grantors ” means the Company, each of the Subsidiary Loan Parties and each other Person that has executed and delivered or may from time to time hereafter execute and deliver a Revolving Collateral Document or a Term Collateral Document as a “Grantor” (or the equivalent thereof).

“ Hedge Agreement ” means an Interest Rate Agreement or a Currency Agreement entered into with a Lender Party in order to satisfy the requirements of the Revolving Credit Agreement or the Term Credit Agreement.

“ Indebtedness ” means and includes all obligations that constitute “Indebtedness” within the meaning of the Revolving Credit Agreement or the Term Credit Agreement.

“ Insolvency or Liquidation Proceeding ” means:

(a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Grantor;

(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its respective assets;

(c) any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

(d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor;

 

4

provided that, in the case of any involuntary case or proceeding, such case or proceeding shall have continued for sixty days without having been dismissed, bonded or discharged.

“ Interest Rate Agreement ” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement of the Company or any of its Subsidiaries.

“ Lender Party ” has the meaning assigned to such term in the Revolving Guarantee and Collateral Agreement or the Term Guarantee and Collateral Agreement.

“ Lien ” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust, UCC financing statement or other preferential arrangement having the practical effect of any of the foregoing.

“ Loan Parties ” has the meaning assigned to that term in the preamble to this Agreement.

“ New Revolving Collateral Agent ” has the meaning assigned to that term in Section 5.5.

“ New Revolving Credit Debt Notice ” has the meaning assigned to that term in Section 5.5.

“ Non-ABL Collateral ” means any and all of the following Collateral: (a) all Investment Property; (b) all Documents; (c) all General Intangibles; (d) all Intellectual Property; (e) all Equipment; (f) all real property (including both fee and leasehold interests) and fixtures; (g) all Instruments; (h) all insurance; (i) all Letter of Credit Rights; (j) all Commercial Tort Claims; (k) all other Collateral not constituting ABL Collateral; (l) all books and records related to the foregoing; and (m) all Proceeds, including insurance Proceeds, of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding the foregoing, “Non-ABL Collateral” shall not include any property or assets included in clause (e) of the definition of “ABL Collateral”, or any property or assets excluded from being collateral pursuant to the terms of the Term Collateral Documents. All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the UCC as in effect in the State of New York.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.

“ Pledged Collateral ” has the meaning set forth in Section 5.4.

“ Recovery ” has the meaning set forth in Section 6.5.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other indebtedness, in exchange or replacement for, such Indebtedness in whole or in part. “ Refinanced ” and “ Refinancing ” shall have correlative meanings.

 

5

“ Revolving Collateral Agent ” has the meaning assigned to such term in the preamble to this Agreement.

“ Revolving Collateral Documents ” means the Revolving Guarantee and Collateral Agreement and any other documents now existing or entered into after the date hereof that create Liens on any ABL Collateral of the Company or any of its Subsidiaries to secure any Revolving Obligations.

“ Revolving Credit Agreement ” means the Credit Agreement, dated as of the date hereof, among the Company, the Subsidiary Loan Parties, the lenders party thereto from time to time and GECC, as Administrative Agent, Co-Collateral Agent, Syndication Agent, Swingline Lender and Supplemental Loan Lender, and Bank of America, N.A., as Co-Collateral Agent and L/C Issuer.

“ Revolving Credit Cap Amount ” has the meaning assigned to such term in the definition of “Revolving Obligations”.

“ Revolving Credit Excess Amounts ” has the meaning assigned to such term in the definition of “Revolving Obligations.”

“ Revolving Documents ” means the Revolving Credit Agreement and the Revolving Collateral Documents.

“ Revolving Guarantee and Collateral Agreement ” means the ABL Guarantee and Collateral Agreement dated as of the date hereof, among the Company, the Subsidiary Loan Parties and the Revolving Collateral Agent, as amended, restated, replaced, renewed, extended, supplemented, waived or otherwise modified in writing from time to time.

“ Revolving Liens ” means Liens on the ABL Collateral created under the Revolving Collateral Documents and securing the Revolving Obligations and any Liens incurred in connection with any Refinancing of Revolving Obligations that are deemed to be “Revolving Liens” under Section 5.5.

“ Revolving Obligations ” means all “Obligations” under and as defined in the Revolving Collateral Documents and all Refinancings of such Obligations. “Revolving Obligations” shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of any Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Revolving Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

Notwithstanding the foregoing or any other provision of this Agreement, if the sum of the Revolving Obligations consisting of (a) Indebtedness constituting principal of loans under the Revolving Credit Agreement and the other Revolving Documents ›plus (b) the aggregate face amount of all outstanding letters of credit issued under the Revolving Credit Agreement and the other Revolving Documents plus (c) all other obligations in the nature of principal obligations, including obligations under any Hedge Agreement, under the Revolving Credit Agreement and the other Revolving Documents, shall be in excess of the lesser of (i) $300,000,000 and (ii) the Facilities Reduction Amount (as defined in the Term Credit Agreement as in effect on the date hereof) (the “ Revolving Credit Cap Amount ”), then that portion of such Indebtedness and face amount of letters of credit in excess of the Revolving Credit Cap Amount (the “ Revolving Credit

 

6

Excess Amounts ”), and all interest and reimbursement obligations in respect of such Revolving Credit Excess Amounts, shall be secured by the Revolving Collateral Documents but shall not constitute “Revolving Obligations” under this Agreement, and the Liens created by the Revolving Collateral Documents on the ABL Collateral, insofar as they secure such Revolving Credit Excess Amounts, shall be junior and subordinate in all respects to the Term Liens on such ABL Collateral.

“ Revolving Secured Parties ” means the “Secured Parties” as defined in the Revolving Guarantee and Collateral Agreement.

“ Secured Parties ” means the Revolving Secured Parties and the Term Secured Parties.

“ Standstill Period ” has the meaning set forth in Section 3.1.

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof. Unless the context indicates otherwise, all references herein to a “Subsidiary” or “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.

“ Subsidiary Loan Parties ” has the meaning assigned to such term in the preamble to this Agreement.

“ Term Collateral Agent ” has the meaning assigned to such term in the preamble to this Agreement.

“ Term Collateral Documents ” means the Term Guarantee and Collateral Agreement, each Term Mortgage and any other documents now existing or entered into after the date hereof that create Liens on any assets or properties of the Company or any of its Subsidiaries to secure any Term Obligations.

“ Term Credit Agreement ” has the meaning assigned to such term in the Recitals to this Agreement.

“ Term Documents ” means the Term Credit Agreement and the Term Collateral Documents.

“ Term Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement dated as of March 30, 2007, among the Company, the Subsidiary Loan Parties and the Term Collateral Agent, as amended, restated, replaced, renewed, extended, supplemented, waived or otherwise modified in writing from time to time.

“ Term Liens ” means Liens on the Collateral created under the Term Collateral Documents and securing the Term Obligations and any judgment Liens referred to in Section 3.1(e).

 

7

“ Term Mortgage ” means each mortgage, deed of trust and other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Term Obligations or under which rights or remedies with respect to such Liens are governed.

“ Term Obligations ” means all “Obligations” under and as defined in the Term Collateral Documents and all Refinancings of such Obligations. “Term Obligations” shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of any Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Term Document, whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

“ Term Secured Parties ” means the “Secured Parties” as defined in the Term Guarantee and Collateral Agreement.

“ UCC ” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

1.2 Terms Generally . The definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise:

(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, modified, renewed or extended;

(b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns;

(c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

(d) all references herein to Sections shall be construed to refer to Sections of this Agreement; and

(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 2. Lien Priorities.

2.1 Relative Priorities . Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Term Liens granted on the ABL Collateral or of any Revolving Liens granted on the ABL Collateral and notwithstanding any provision of the UCC or any other applicable law or the Term Documents or the Revolving Documents or any defect or deficiencies in, or failure to perfect, the Revolving Liens or any other circumstance whatsoever,

 

8

the Term Collateral Agent, on behalf of itself and the Term Secured Parties, and the Revolving Collateral Agent, on behalf of itself and the Revolving Secured Parties, hereby agree that:

(a) any Revolving Lien on any ABL Collateral now or hereafter held by or on behalf of the Revolving Collateral Agent, any Revolving Secured Parties or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Term Lien on such ABL Collateral;

(b) any Term Lien on any ABL Collateral now or hereafter held by or on behalf of the Term Collateral Agent, any Term Secured Parties or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Revolving Liens on such ABL Collateral; and

(c) notwithstanding any other provision contained in this Agreement, any Liens on ABL Collateral created by the Revolving Documents, insofar as they secure Revolving Credit Excess Amounts, shall be junior and subordinate in all respects to the Term Liens on such ABL Collateral.

2.2 Prohibition on Contesting Liens . The Term Collateral Agent, for itself and on behalf of each Term Secured Party, agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity or enforceability of any applicable Revolving Lien on any ABL Collateral or the provisions of this Agreement.

SECTION 3. Enforcement.

3.1 Exercise of Remedies .

(a) Until the Discharge of Revolving Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, the Term Collateral Agent and the Term Secured Parties:

(i) will not exercise or seek to exercise any rights or remedies with respect to any ABL Collateral subject to any Revolving Lien (including the exercise of any right of setoff or any right under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Term Collateral Agent or any Term Secured Party is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided , however , that the Term Collateral Agent or any Term Secured Party may exercise any or all such rights or remedies after a period of 180 days has elapsed since the first date on which the Term Collateral Agent shall have (A) declared the existence of any Event of Default under the Term Documents, (B) demanded the repayment of all the principal amount of the Term Obligations and (C) notified the Revolving Collateral Agent of such declaration of an Event of Default and demand (the “ Standstill Period ”); provided further , however , that notwithstanding anything herein to the contrary, in no event shall the Term Collateral Agent or any Term Secured Party exercise any rights or remedies with respect to any ABL Collateral subject to any Revolving Lien, notwithstanding the expiration of the Standstill Period, if the Revolving Collateral Agent or Revolving Secured Parties shall have commenced and be diligently pursuing the

 

9

exercise of rights or remedies with respect to all or any material portion of such ABL Collateral (prompt notice of such exercise to be given to the Term Collateral Agent); provided further , however , that the parties hereto acknowledge and agree that this Section 3.1(a)(i) shall not in any way prohibit the Term Collateral Agent or any Term Secured Party from exercising any of its rights during an Insolvency or Liquidation Proceeding to the extent permitted by the other provisions hereof;

(ii) subject to Section 2.1(c), will not contest, protest or object to any foreclosure proceeding or action brought by the Revolving Collateral Agent or any Revolving Secured Party or any other exercise by the Revolving Collateral Agent or any Revolving Secured Party of any rights and remedies relating to any ABL Collateral, whether under the applicable Revolving Documents or otherwise; and

(iii) subject to clause (a)(i) above and except as may be permitted in Section 3.1(c), will not object to the forbearance by the Revolving Collateral Agent or any Revolving Secured Party from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to any ABL Collateral subject to any Revolving Lien;

provided that, in the case of clauses (i), (ii) and (iii) above, the Liens granted on the ABL Collateral to secure the Term Obligations shall attach to any Proceeds resulting from actions taken by the Revolving Collateral Agent or any Revolving Secured Party in accordance with this Agreement after application of such Proceeds to the extent necessary to meet the requirements of a Discharge of Revolving Obligations.

(b) Subject to the terms and conditions of this Agreement, until the Discharge of Revolving Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, subject to Section 3.1(a)(i), the Revolving Collateral Agent and the Revolving Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including the exercise of any right of set-off, any right under any lockbox agreement, account control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement and the right to credit bid their debt) and, in the course of such exercise, make related determinations regarding the release, disposition or restrictions with respect to any ABL Collateral subject to Revolving Liens without any consultation with or the consent of the Term Collateral Agent or any Term Secured Party; provided that the Liens on any ABL Collateral securing any Term Obligations shall remain on the Proceeds of such Collateral so released or disposed of, subject to the relative priorities described in Section 2. In exercising rights and remedies with respect to the ABL Collateral subject to the Revolving Liens, the Revolving Collateral Agent and each Revolving Secured Party may enforce the provisions of the applicable Revolving Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in their sole discretion. Such exercise and enforcement shall include the right of any agent appointed by them to sell or otherwise dispose of such ABL Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

 

10

(c) Notwithstanding the foregoing, the Term Collateral Agent and any Term Secured Party may:

(i) file a claim or statement of interest with respect to the applicable Term Obligations; provided that an Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor;

(ii) take any action (not adverse to the priority status of any Revolving Liens on the ABL Collateral or the rights of the Revolving Collateral Agent or any Revolving Secured Party to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Term Liens on the ABL Collateral;

(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Term Secured Parties, including any claims secured by the ABL Collateral, in each case in accordance with the terms of this Agreement;

(iv) file any pleadings, objections, motions or agreements to assert rights or interests that are available to unsecured creditors of the Grantors arising under any Insolvency or Liquidation Proceeding or any applicable law and that, in each case, are not inconsistent with the terms of this Agreement;

(v) vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, in accordance with the terms of this Agreement, with respect to the Term Obligations and the Collateral; and ›

(vi) exercise any of its rights or remedies with respect to the ABL Collateral after the termination of the Standstill Period to the extent permitted by Section 3.1(a)(i).

The Term Collateral Agent, on behalf of itself and the Term Secured Parties, agrees that it will not take or receive any ABL Collateral subject to any Revolving Lien or any Proceeds of any such ABL Collateral in connection with the exercise of any right or remedy (including set-off) with respect to such ABL Collateral in its capacity as a creditor in violation of this Agreement. Without limiting the generality of the foregoing, unless and until the Discharge of Revolving Obligations has occurred, except as expressly provided in Section 3.1(a), Section 6.3(b) and this Section 3.1(c), the sole right of the Term Collateral Agent and the Term Secured Parties with respect to any ABL Collateral subject to any Revolving Lien is to hold a Lien on such ABL Collateral pursuant to the applicable Term Collateral Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Revolving Obligations has occurred.

(d) Subject to Sections 3.1(a), 3.1(c) and 6.3(b):

(i) the Term Collateral Agent, for itself and on behalf of the Term Secured Parties, agrees that it and the Term Secured Parties will not take any action that would hinder or delay any exercise of remedies with respect to the ABL Collateral under the applicable Revolving Documents or the realization of the full value of any ABL Collateral in which the Revolving Collateral Agent has Liens or would otherwise be prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of any ABL Collateral subject to any Revolving Lien, whether by foreclosure or otherwise;

 

11

(ii) the Term Collateral Agent, for itself and on behalf of the Term Secured Parties, hereby waives any and all rights it or the Term Secured Parties may have as junior lien creditors or otherwise to object to the manner in which the Revolving Collateral Agent or any Revolving Secured Party seeks to enforce or realize on the Revolving Liens on the ABL Collateral in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of the Revolving Collateral Agent or such Revolving Secured Party is adverse to the interests of the Term Secured Parties; and

(iii) the Term Collateral Agent hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Term Collateral Documents or any other Term Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of the Revolving Collateral Agent or any Revolving Secured Party with respect to the ABL Collateral subject to their Revolving Liens as set forth in this Agreement and the Revolving Documents.

(e) Except as otherwise specifically set forth in Sections 3.1(a) and 3.1(d), the Term Collateral Agent and the Term Secured Parties may exercise rights and remedies as unsecured creditors against the Company or any other Person that has guaranteed or granted Liens to secure the Term Obligations in accordance with the terms of the Term Documents and applicable law; provided that in the event that any Term Secured Party becomes a judgment Lien creditor in respect of any ABL Collateral subject to any Revolving Lien as a result of its enforcement of its rights as an unsecured creditor with respect to the applicable Term Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes of this Agreement.

(f) Nothing in this Agreement shall prohibit the receipt by the Term Collateral Agent or any Term Secured Party of the required or permitted payments of interest, principal and other amounts owed in respect of the applicable Term Obligations so long as such receipt is not the direct or indirect result of the exercise by the Term Collateral Agent or any Term Secured Party of rights or remedies against the ABL Collateral as a secured creditor (including set-off) or enforcement in contravention of this Agreement of any Term Lien on ABL Collateral held by any of them. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies the Revolving Collateral Agent or any Revolving Secured Party may have with respect to any ABL Collateral subject to its Revolving Liens.

SECTION 4. Payments.

4.1 Application of Proceeds . So long as the Discharge of Revolving Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, ABL Collateral or Proceeds thereof received in connection with the sale or other disposition of, or collection on, such ABL Collateral upon the exercise of remedies by the Revolving Collateral Agent or any Revolving Secured Parties shall be applied by the Revolving Collateral Agent to the applicable Revolving Obligations. Upon the Discharge of Revolving Obligations, the Revolving Collateral Agent shall deliver to the Term Collateral Agent any ABL Collateral and Proceeds thereof held by the Revolving Collateral Agent in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, to be applied by the Term Collateral Agent to the Term Obligations.

 

12

4.2 Payments Over in Violation of Agreement . So long as the Discharge of Revolving Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, if the Term Collateral Agent or any Term Secured Party receives any ABL Collateral subject to any Revolving Lien or any Proceeds thereof in connection with (i) the exercise of any right or remedy (including set-off) relating to such ABL Collateral in contravention of this Agreement or (ii) the transfer of such ABL Collateral or Proceeds to the Term Collateral Agent or the Term Secured Party (pursuant to this paragraph or otherwise) by any Person holding a Lien on such ABL Collateral that is subordinate to the Lien of the Term Collateral Agent or the Term Secured Party, such ABL Collateral or Proceeds shall be segregated and held in trust and forthwith paid over to the Revolving Collateral Agent for the benefit of the applicable Revolving Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Revolving Collateral Agent is hereby authorized to make any such endorsements as agent for the Term Collateral Agent or the Term Secured Parties (such authorization being coupled with an interest and irrevocable until the Discharge of Revolving Obligations).

SECTION 5. Other Agreements.

5.1 Releases . (a) If in connection with the exercise of the Revolving Collateral Agent’s remedies in respect of any ABL Collateral subject to its Revolving Liens as provided for in Section 3.1, the Revolving Collateral Agent, for itself or on behalf of any of the Revolving Secured Parties, releases any of its Liens on any part of such ABL Collateral, then the Term Liens of the Term Collateral Agent, for itself or for the benefit of the Term Secured Parties, on such ABL Collateral shall be automatically, unconditionally and simultaneously released. The Term Collateral Agent, for itself and on behalf of the Term Secured Parties, promptly shall execute and deliver to the Revolving Collateral Agent such termination statements, releases and other documents as the Revolving Collateral Agent may request to effectively confirm such release.

(b) If in connection with any sale, lease, exchange, transfer or other disposition of any ABL Collateral (collectively, a “ Disposition ”) permitted under the terms of both the Revolving Documents and the Term Documents (other than in connection with the exercise of the Revolving Collateral Agent’s remedies in respect of any ABL Collateral as provided for in Section 3.1) the Revolving Collateral Agent, for itself or on behalf of any of the Revolving Secured Parties, releases any of its Revolving Liens on any part of ABL Collateral other than (A) in connection with the Discharge of Revolving Obligations or (B) after the occurrence and during the continuance of any Event of Default under and as defined in the Term Documents, then the Term Liens of the Term Collateral Agent on such Collateral shall be automatically, unconditionally and simultaneously released. The Term Collateral Agent, for itself and on behalf of th