This
INTERCREDITOR AGREEMENT (“Agreement”) , is dated
as of December 5, 2005, and entered into by and among Day
International, Inc. (the “Company” ), Goldman
Sachs Credit Partners L.P. ( “GSCP” ), in its
capacity as collateral agent for the First Lien Obligations (as
defined below), including its successors and assigns from time to
time (the “First Lien Collateral Agent” ), and
The Bank of New York ( “BNY” ), in its capacity
as collateral agent for the Second Lien Obligations (as defined
below), including its successors and assigns from time to time (the
“Second Lien Collateral Agent” ). Capitalized
terms used in this Agreement have the meanings assigned to them in
Section 1 below.
The Company, Day
International Group, Inc. and certain Subsidiaries of the Company,
as guarantors party thereto (collectively, the
“Guarantors” ), the lenders and agents party
thereto, and GSCP, as Sole Lead Arranger, Sole Bookrunner and
Syndication Agent (in each such capacity, the
“Arranger” ), and as Administrative Agent and
Collateral Agent, have entered into that Credit and Guaranty
Agreement dated as of the date hereof providing for a first lien
secured revolving credit facility and term loan (as amended,
restated, supplemented, modified, replaced or refinanced from time
to time, the “First Lien Credit Agreement”
);
The Company, the
Guarantors , the lenders and agents party thereto, and GSCP,
as Sole Lead Arranger, Sole Bookrunner and Syndication Agent, and
BNY as Administrative Agent and Collateral Agent, entered into that
Credit and Guaranty Agreement dated as of the date hereof providing
for a second lien secured term loan (as amended, restated,
supplemented, modified, replaced or refinanced from time to time,
the “Second Lien Credit Agreement” );
Pursuant to
(i) the First Lien Credit Agreement, the Guarantors have
agreed to guaranty the First Lien Obligations and have agreed to
cause certain future Subsidiaries of the Company to guaranty the
First Lien Obligations (the “First Lien
Guaranty” ) and (ii) the Second Lien Credit
Agreement, the Guarantors have agreed to guaranty the Second Lien
Obligations and have agreed to cause certain future Subsidiaries of
the Company to guaranty the Second Lien Obligations (the
“Second Lien Guaranty” );
The obligations of
the Company under the First Lien Credit Agreement and any Hedge
Agreements with a Lender Counterparty and the obligations of the
Guarantors under the First Lien Guaranty will be secured on a first
priority basis by liens on substantially all the assets of the
Company and the Guarantors, respectively, pursuant to the terms of
the First Lien Collateral Documents;
The obligations of
the Company under the Second Lien Credit Agreement and the
obligations of the Guarantors under the Second Lien Guaranty will
be secured on a
second priority
basis by liens on substantially all the assets of the Company and
the Guarantors, respectively, pursuant to the terms of the Second
Lien Collateral Documents;
The First Lien
Loan Documents and the Second Lien Loan Documents provide, among
other things, that the parties thereto shall set forth in this
Agreement their respective rights and remedies with respect to the
Collateral; and
In order to induce
the First Lien Collateral Agent and the First Lien Claimholders to
consent to the Grantors incurring the Second Lien Obligations and
to induce the First Lien Claimholders to extend credit and other
financial accommodations and lend monies to or for the benefit of
the Company or any other Grantor, the Second Lien Collateral Agent
on behalf of the Second Lien Claimholders has agreed to the
intercreditor and other provisions set forth in this Agreement.
!
In consideration
of the foregoing, 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:
1.1
Defined Terms . As used in the Agreement, the following
terms shall have the following meanings:
“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.
“Agreement” means this Intercreditor Agreement,
as amended, restated, renewed, extended, supplemented or otherwise
modified from time to time.
“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.
“Cap
Amount” has the meaning assigned to that term within the
definition of “First Lien Obligation”.
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“Collateral” means all of the assets and
property of any Grantor, whether real, personal or mixed,
constituting both First Lien Collateral and Second Lien
Collateral.
“Company” has the meaning assigned to that term
in the Preamble to this Agreement.
“Comparable Second Lien Collateral Document”
means, in relation to any Collateral subject to any Lien created
under any First Lien Collateral Document, the Second Lien Loan
Document which creates a Lien on the same Collateral, granted by
the same Grantor.
“Currency Agreement” means any foreign exchange
contract, currency swap agreement, futures contract, option
contract, synthetic cap or other similar agreement or arrangement,
each of which is for the purpose of hedging the foreign currency
risk associated with the Company’s and the Guarantors’
operations and not for speculative purposes.
“DIP
Financing” has the meaning assigned to that term in
Section 6.1.
“Discharge of First Lien 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
Indebtedness outstanding under the First Lien Loan Documents and
constituting First Lien Obligations;
(b) payment
in full in cash of all other First Lien 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 First Lien Obligations; and
(d) termination
or cash collateralization (in an amount and manner reasonably
satisfactory to the First Lien Collateral Agent, but in no event
greater than 105% of the aggregate undrawn face amount) of all
letters of credit issued under the First Lien Loan Documents and
constituting First Lien Obligations.
“Disposition” has the meaning assigned to that
term in Section 5.1(b).
“First
Lien Claimholders” means, at any relevant time, the
holders of First Lien Obligations at that time, including the First
Lien Lenders and the agents under the First Lien Loan
Documents.
“First
Lien Collateral Agent” has the meaning assigned to that
term in the Recitals to this Agreement.
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“First
Lien Collateral” means all of the assets and property of
any Grantor, whether real, personal or mixed, with respect to which
a Lien is granted as security for any First Lien
Obligations.
“First
Lien Collateral Documents” means the Collateral Documents
(as defined in the First Lien Credit Agreement) and any other
agreement, document or instrument pursuant to which a Lien is
granted securing any First Lien Obligations or under which rights
or remedies with respect to such Liens are governed.
“First
Lien Credit Agreement” has the meaning assigned to that
term in the Recitals to this Agreement.
“First
Lien Guaranty” has the meaning assigned to that term in
the Recitals to this Agreement.
“First
Lien Lenders” means the “Lenders” under and
as defined in the First Lien Loan Documents.
“First
Lien Loan Documents” means the First Lien Credit
Agreement and the Credit Documents (as defined in the First Lien
Credit Agreement), including Hedge Agreements entered into with a
Lender Counterparty, and each of the other agreements, documents
and instruments providing for or evidencing any other First Lien
Obligation, and any other document or instrument executed or
delivered at any time in connection with any First Lien
Obligations, including any intercreditor or joinder agreement among
holders of First Lien Obligations, to the extent such are effective
at the relevant time, as each may be amended, restated,
supplemented, modified, renewed or extended from time to time in
accordance with the provisions of this Agreement.
“First
Lien Mortgages” means a collective reference to 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 First Lien Obligations or under which rights
or remedies with respect to any such Liens are governed.
“First
Lien Obligations” means, subject to the next sentence,
all Obligations outstanding under the First Lien Credit Agreement
and the other First Lien Loan Documents, including Hedge Agreements
entered into with any Lender Counterparty. “First Lien
Obligations” shall include all interest accrued or accruing
(or which would, absent commencement of an Insolvency or
Liquidation Proceeding, accrue) after commencement of an Insolvency
or Liquidation Proceeding in accordance with the rate specified in
the relevant First Lien Loan Document whether or not the claim for
such interest is allowed as a claim in such Insolvency or
Liquidation Proceeding.
Notwithstanding
the foregoing, if the sum of: (1) Indebtedness for borrowed
money constituting principal outstanding under the First Lien
Credit Agreement and the other First Lien Documents; plus
(2) the aggregate face amount of any letters of credit issued
but not reimbursed under the First Lien Credit Agreement, is in
excess of $368.5 million in the aggregate (the “Cap
Amount” ), then only that portion of such Indebtedness
and such aggregate face amount of letters of credit equal to the
Cap Amount shall be
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included in
First Lien Obligations and interest and reimbursement obligations
with respect to such Indebtedness and letters of credit shall only
constitute First Lien Obligations to the extent related to
Indebtedness and face amounts of letters of credit included in the
First Lien Obligations.
“Governmental Authority” means any federal,
state, municipal, national or other government, governmental
department, commission, board, bureau, court, agency or
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, the Guarantors and
each other Person that has or may from time to time hereafter
execute and deliver a First Lien Collateral Document or a Second
Lien Collateral Document as a “Grantor” (or the
equivalent thereof).
“Guarantors” has the meaning set forth in the
Recitals to this Agreement.
“Hedge
Agreements” means
an Interest Rate Agreement or a Currency Agreement entered into
with a Lender Counterparty in order to satisfy the requirements of
the First Lien Credit Agreement or otherwise in the ordinary course
of the Company’s or any of the Guarantors’
businesses.
“Hedging
Obligation” of any Person means any obligation of such
Person pursuant to any Hedge Agreements.
“Indebtedness” means and includes all
Obligations that constitute “Indebtedness” within the
meaning of the First Lien Credit Agreement or the Second Lien
Credit Agreement, as applicable.
“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 their
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.
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“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 each of which is for the purpose of
hedging the interest rate exposure associated with the
Company’s or the Guarantors’ operations and not for
speculative purposes.
“Lender
Counterparty” means the Arranger and each First Lien
Lender or any Affiliate of a First Lien Lender counterparty to a
Hedge Agreement (including any Person who is a First Lien Lender
(and any Affiliate thereof) as of the Closing Date (as defined in
the First Lien Credit Agreement) but subsequently, whether before
or after entering into a Hedge Agreement, ceases to be a First Lien
Lender) including, without limitation, each such Affiliate that
enters into a joinder agreement with the First Lien Collateral
Agent. !
“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.
“New
Agent” has the meaning assigned to that term in
Section 5.5.
“Obligations” means all obligations of every
nature of each Grantor from time to time owed to any agent or
trustee, the First Lien Claimholders, the Second Lien Claimholders
or any of them or their respective Affiliates, in each case under
the First Lien Loan Documents, the Second Lien Loan Documents or
Hedge Agreements, whether for principal, interest or payments for
early termination of Interest Rate Agreements, fees, expenses,
indemnification or otherwise and all guarantees of any of the
foregoing.
“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(a).
“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.
“Second
Lien Claimholders” means, at any relevant time, the
holders of Second Lien Obligations at that time, including the
Second Lien Lenders and the agents under the Second Lien Loan
Documents.
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“Second
Lien Collateral” means all of the assets and property of
any Grantor, whether real, personal or mixed, with respect to which
a Lien is granted as security for any Second Lien
Obligations.
“Second
Lien Collateral Agent” has the meaning assigned to that
term in the Preamble of this Agreement.
“Second
Lien Collateral Documents” means the Collateral Documents
(as defined in the Second Lien Credit Agreement) and any other
agreement, document or instrument pursuant to which a Lien is
granted securing any Second Lien Obligations or under which rights
or remedies with respect to such Liens are governed.
“Second
Lien Credit Agreement” has the meaning assigned to that
term in the Recitals to this Agreement.
“Second
Lien Guaranty” has the meaning assigned to that term in
the Recitals to this Agreement.
“Second
Lien Lenders” means the “Lenders” under and
as defined in the Second Lien Credit Agreement.
“Second
Lien Loan Documents” means the Second Lien Credit
Agreement and the Credit Documents (as defined in the Second Lien
Credit Agreement) and each of the other agreements, documents and
instruments providing for or evidencing any other Second Lien
Obligation, and any other document or instrument executed or
delivered at any time in connection with any Second Lien
Obligations, including any intercreditor or joinder agreement among
holders of Second Lien Obligations to the extent such are effective
at the relevant time, as each may be amended, restated,
supplemented, modified, renewed or extended from time to time in
accordance with the provisions of this Agreement.
“Second
Lien Mortgages” means a collective reference to each
mortgage, deed of trust and any other document or instrument under
which any Lien on real property owned or leased by any Grantor is
granted to secure any Second Lien Obligations or under which rights
or remedies with respect to any such Liens are governed.
“Second
Lien Obligations” means all Obligations outstanding under
the Second Lien Credit Agreement and the other Second Lien Loan
Documents. “Second Lien Obligations” shall include all
interest accrued or accruing (or which would, absent commencement
of an Insolvency or Liquidation Proceeding, accrue) after
commencement of an Insolvency or Liquidation Proceeding in
accordance with the rate specified in the relevant Second Lien Loan
Document whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
“Standstill Period” has the meaning set forth in
Section 3.1(a)(1).
“Subsidiary” means, with respect to any Person,
any corporation, partnership, limited liability company,
association, joint venture or other business entity of
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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.
“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
Liens securing the Second Lien Obligations granted on the
Collateral or of any Liens securing the First Lien Obligations
granted on the Collateral and notwithstanding any provision of the
UCC, or any other applicable law or the Second Lien Loan Documents
or any defect or deficiencies in, or failure to perfect, the Liens
securing the First Lien Obligations or any other circumstance
whatsoever, the Second Lien Collateral Agent, on behalf of itself
and the Second Lien Claimholders, hereby agrees that:
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(a) any Lien
on the Collateral securing any First Lien Obligations now or
hereafter held by or on behalf of the First Lien Collateral Agent
or any First Lien Claimholders 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 Lien on the Collateral securing any
Second Lien Obligations; and
(b) any Lien
on the Collateral securing any Second Lien Obligations now or
hereafter held by or on behalf of the Second Lien Collateral Agent,
any Second Lien Claimholders 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 Liens on the Collateral securing
any First Lien Obligations. All Liens on the Collateral securing
any First Lien Obligations shall be and remain senior in all
respects and prior to all Liens on the Collateral securing any
Second Lien Obligations for all purposes, whether or not such Liens
securing any First Lien Obligations are subordinated to any Lien
securing any other obligation of the Company, any other Grantor or
any other Person.
2.2
Prohibition on Contesting Liens . Each of the Second Lien
Collateral Agent, for itself and on behalf of each Second Lien
Claimholder, and the First Lien Collateral Agent, for itself and on
behalf of each First Lien Claimholder, 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 a Lien held by or on behalf of any of the First
Lien Claimholders in the First Lien Collateral or by or on behalf
of any of the Second Lien Claimholders in the Second Lien
Collateral, as the case may be, or the provisions of this
Agreement; provided that nothing in this Agreement shall be
construed to prevent or impair the rights of the First Lien
Collateral Agent or any First Lien Claimholder to enforce this
Agreement, including the provisions of this Agreement relating to
the priority of the Liens securing the First Lien Obligations as
provided in Sections 2.1 and 3.1.
2.3 No
New Liens . So long as the Discharge of First Lien Obligations
has not occurred, whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against the Company or any
other Grantor, the parties hereto agree that the Company shall not,
and shall not permit any other Grantor to:
(a) grant or
permit any additional Liens on any asset or property to secure any
Second Lien Obligation unless it has granted or concurrently grants
a Lien on such asset or property to secure the First Lien
Obligations; or
(b) grant or
permit any additional Liens on any asset or property to secure any
First Lien Obligations unless it has granted or concurrently grants
a Lien on such asset or property to secure the Second Lien
Obligations.
To the extent
that the foregoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the
First Lien Collateral Agent and/or the First Lien Claimholders, the
Second Lien Collateral Agent, on behalf of Second Lien
Claimholders, agrees that any amounts received by or distributed to
any of them pursuant
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to or as a
result of Liens granted in contravention of this Section 2.3
shall be subject to Section 4.2.
2.4
Similar Liens and Agreements . The parties hereto agree that
it is their intention that the First Lien Collateral and the Second
Lien Collateral be identical. In furtherance of the foregoing and
of Section 8.9, the parties hereto agree, subject to the other
provisions of this Agreement:
(a) upon
request by the First Lien Collateral Agent or the Second Lien
Collateral Agent, to cooperate in good faith (and to direct their
counsel to cooperate in good faith) from time to time in order to
determine the specific items included in the First Lien Collateral
and the Second Lien Collateral and the steps taken to perfect their
respective Liens thereon and the identity of the respective parties
obligated under the First Lien Loan Documents and the Second Lien
Loan Documents; and
(b) that the
documents and agreements creating or evidencing the First Lien
Collateral and the Second Lien Collateral and guarantees for the
First Lien Obligations and the Second Lien Obligations, subject to
Section 5.3(d), shall be in all material respects the same
forms of documents other than with respect to the first lien and
the second lien nature of the Obligations thereunder.
3.1
Exercise of Remedies .
(a) Until the
Discharge of First Lien Obligations has occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or
against the Company or any other Grantor, the Second Lien
Collateral Agent and the Second Lien Claimholders:
(1) will not
exercise or seek to exercise any rights or remedies with respect to
any Collateral (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 Second Lien Collateral Agent or any Second
Lien Claimholder 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 Second
Lien Collateral Agent may exercise any or all such rights or
remedies after the passage of a period of at least 180 days
has elapsed since the later of: (i) the date on which the
Second Lien Collateral Agent declares the existence of any Event of
Default under any Second Lien Loan Documents and demands the
repayment of all the principal amount of any Second Lien
Obligations; and (ii) the date on which the First Lien
Collateral Agent receives notice from the Second Lien Collateral
Agent of such declarations of an Event of Default, (the
“Standstill Period” ); provided ,
further , however , that notwithstanding anything
herein to the contrary, in no event shall the Second Lien
Collateral Agent or any Second Lien Claimholder exercise any rights
or remedies with respect to the Collateral if, notwithstanding the
expiration of the Standstill
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Period, the
First Lien Collateral Agent or First Lien Claimholders shall have
commenced and be diligently pursuing the exercise of their rights
or remedies with respect to all or any material portion of the
Collateral (prompt notice of such exercise to be given to the
Second Lien Collateral Agent);
(2) will not
contest, protest or object to any foreclosure proceeding or action
brought by the First Lien Collateral Agent or any First Lien
Claimholder or any other exercise by the First Lien Collateral
Agent or any First Lien Claimholder of any rights and remedies
relating to the Collateral under the First Lien Loan Documents or
otherwise; and
(3) subject to
their rights under clause (a)(1) above and except as may be
permitted in Section 3.1(c), will not object to the
forbearance by the First Lien Collateral Agent or the First Lien
Claimholders from bringing or pursuing any foreclosure proceeding
or action or any other exercise of any rights or remedies relating
to the Collateral;
provided , that , in the case of (1), (2) and
(3) above, the Liens granted to secure the Second Lien
Obligations of the Second Lien Claimholders shall attach to any
proceeds resulting from actions taken by the First Lien Collateral
Agent or any First Lien Claimholder in accordance with this
Agreement after application of such proceeds to the extent
necessary to meet the requirements of a Discharge of First
Obligations.
(b) Until the
Discharge of First Lien 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)(1), the First Lien Collateral Agent and the
First Lien Claimholders shall have the right to enforce rights,
exercise remedies (including set-off and the right to credit bid
their debt) and make determinations regarding the release,
disposition, or restrictions with respect to the Collateral without
any consultation with or the consent of the Second Lien Collateral
Agent or any Second Lien Claimholder; provided , that the
Lien securing the Second Lien Obligations shall remain on the
proceeds of such Collateral released or disposed of subject to the
relative priorities described in Section 2. In exercising
rights and remedies with respect to the Collateral, the First Lien
Collateral Agent and the First Lien Claimholders may enforce the
provisions of the First Lien Loan Documents and exercise remedies
thereunder, all in such order and in such manner as they may
determine in the exercise of their sole discretion. Such exercise
and enforcement shall include the rights of an agent appointed by
them to sell or otherwise dispose of 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.
(c) Notwithstanding
the foregoing, the Second Lien Collateral Agent and any Second Lien
Claimholder may:
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(1) file a claim
or statement of interest with respect to the Second Lien
Obligations; provided that an Insolvency or Liquidation
Proceeding has been commenced by or against the Company or any
other Grantor;
(2) take any
action (not adverse to the priority status of the Liens on the
Collateral securing the First Lien Obligations, or the rights of
any First Lien Collateral Agent or the First Lien Claimholders to
exercise remedies in respect thereof) in order to create, perfect,
preserve or protect its Lien on the Collateral;
(3) 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 Second Lien Claimholders, including any claims
secured by the Collateral, if any, in each case in accordance with
the terms of this Agreement;
(4) file any
pleadings, objections, motions or agreements which assert rights or
interests available to unsecured creditors of the Grantors arising
under either any Insolvency or Liquidation Proceeding or applicable
non-bankruptcy law, in each case not inconsistent with the terms of
this Agreement;
(5) 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
Second Lien Obligations and the Collateral; and
(6) exercise any
of its rights or remedies with respect to the Collateral after the
termination of the Standstill Period to the extent permitted by
Section 3.1(a)(1).
The Second Lien
Collateral Agent, on behalf of itself and the Second Lien
Claimholders, agrees that it will not take or receive any
Collateral or any proceeds of Collateral in connection with the
exercise of any right or remedy (including set-off) with respect to
any 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 First Lien Obligations has occurred,
except as expressly provided in Sections 3.1(a), 6.3(b) and
this Section 3.1(c), the sole right of the Second Lien
Collateral Agent and the Second Lien Claimholders with respect to
the Collateral is to hold a Lien on the Collateral pursuant to the
Second Lien 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 First Lien Obligations has
occurred.
(d) Subject
to Sections 3.1(a) and (c) and
Section 6.3(b):
(1) the Second
Lien Collateral Agent, for itself and on behalf of the Second Lien
Claimholders, agrees that the Second Lien Collateral Agent and the
Second Lien Claimholders will not take any action that would hinder
any exercise of remedies under the First Lien Loan Documents or is
otherwise prohibited
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hereunder,
including any sale, lease, exchange, transfer or other disposition
of the Collateral, whether by foreclosure or otherwise;
(2) the Second
Lien Collateral Agent, for itself and on behalf of the Second Lien
Claimholders, hereby waives any and all rights it or the Second
Lien Claimholders may have as a junior lien creditor or otherwise
to object to the manner in which the First Lien Collateral Agent or
the First Lien Claimholders seek to enforce or collect the First
Lien Obligations or the Liens securing the First Lien Obligations
granted in any of the First Lien Collateral undertaken in
accordance with this Agreement, regardless of whether any action or
failure to act by or on behalf of the First Lien Collateral Agent
or First Lien Claimholders is adverse to the interest of the Second
Lien Claimholders; and
(3) the Second
Lien Collateral Agent hereby acknowledges and agrees that no
covenant, agreement or restriction contained in the Second Lien
Collateral Documents or any other Second Lien Document (other than
this Agreement) shall be deemed to restrict in any way the rights
and remedies of the First Lien Collateral Agent or the First Lien
Claimholders with respect to the Collateral as set forth in this
Agreement and the First Lien Loan Documents.
(e) Except as
otherwise specifically set forth in Sections 3.1(a) and (d),
the Second Lien Collateral Agent and the Second Lien Claimholders
may exercise rights and remedies as unsecured creditors against the
Company or any other Grantor that has guaranteed or granted Liens
to secure the Second Lien Obligations in accordance with the terms
of the Second Lien Loan Documents and applicable law;
provided that in the event that any Second Lien Claimholder
becomes a judgment Lien creditor in respect of Collateral as a
result of its enforcement of its rights as an unsecured creditor
with respect to the Second Lien Obligations, such judgment Lien
shall be subject to the terms of this Agreement for all purposes
(including in relation to the First Lien Obligations) as the other
Liens securing the Second Lien Obligations are subject to this
Agreement.
(f) Nothing
in this Agreement shall prohibit the receipt by the Second Lien
Collateral Agent or any Second Lien Claimholders of the required
payments of interest, principal and other amounts owed in respect
of the Second Lien Obligations so long as such receipt is not the
direct or indirect result of the exercise by the Second Lien
Collateral Agent or any Second Lien Claimholders of rights or
remedies as a secured creditor (including set-off) or enforcement
in contravention of this Agreement of any Lien held by any of them.
Nothing in this Agreement impairs or otherwise adversely affects
any rights or remedies the First Lien Collateral Agent or the First
Lien Claimholders may have with respect to the First Lien
Collateral.
4.1
Application of Proceeds . So long as the Discharge of First
Lien Obligations has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against the Company
or any other Grantor, Collateral or proceeds thereof received in
connection with the sale or other disposition of, or collection on,
such
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Collateral upon
the exercise of remedies by the First Lien Collateral Agent or
First Lien Claimholders, shall be applied by the First Lien
Collateral Agent to the First Lien Obligations in such order as
specified in the relevant First Lien Loan Documents. Upon the
Discharge of First Lien Obligations, the First Lien Collateral
Agent shall deliver to the Second Lien Collateral Agent any
Collateral and proceeds of Collateral held by it 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
Second Lien Collateral Agent to the Second Lien Obligations in such
order as specified in the Second Lien Collateral
Documents.
4.2
Payments Over in Violation of Agreement . So long as the
Discharge of First Lien Obligations has not occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by
or against the Company or any other Grantor, any Collateral or
proceeds thereof (including assets or proceeds subject to Liens
referred to in the final sentence of Section 2.3) received by
the Second Lien Collateral Agent or any Second Lien Claimholders in
connection with the exercise of any right or remedy (including
set-off) relating to the Collateral in contravention of this
Agreement shall be segregated and held in trust and forthwith paid
over to the First Lien Collateral Agent for the benefit of the
First Lien Claimholders in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may
otherwise direct. The First Lien Collateral Agent is hereby
authorized to make any such endorsements as agent for the Second
Lien Collateral Agent or any such Second Lien Claimholders. This
authorization is coupled with an interest and is irrevocable until
the Discharge of First Lien Obligations.
SECTION 5.
Other Agreements .
(a) If in
connection with the exercise of the First Lien Collateral
Agent’s remedies in respect of the Collateral provided for in
Section 3.1, the First Lien Collateral Agent, for itself or on
behalf of any of the First Lien Claimholders, releases any of its
Liens on any part of
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