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Exhibit 4.8
EXECUTION VERSION
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of November 27, 2006,
and
entered into by and among RSC HOLDINGS II, LLC, a Delaware limited
liability
company ("Holdings"), RSC HOLDINGS III, LLC (the "Parent
Borrower"), a Delaware
limited liability company, RENTAL SERVICE CORPORATION, an Arizona
corporation
("RSC"), each other Grantor (as defined below) from time to time
party hereto,
DEUTSCHE BANK AG, NEW YORK BRANCH ("DBNY"), in its capacity as U.S.
collateral
agent under the First-Lien Loan Documents (as defined below)
((together with its
successors and assigns in such capacity from time to time, the
"U.S. First-Lien
Collateral Agent") and DBNY in its capacity as collateral agent
under the
Second-Lien Loan Documents (as defined below) (together with its
successors and
assigns in such capacity from time to time, the "Second-Lien
Collateral Agent").
Capitalized terms used herein but not otherwise defined herein have
the meanings
set forth in Section 1 below.
RECITALS
WHEREAS, Holdings, the Parent Borrower, RSC and RSC Canada, each
other
entity that becomes a borrower thereunder pursuant to subsection
7.9 thereof
(together with the Parent Borrower, RSC and RSC Canada,
collectively, the
"First-Lien Borrowers" and, each a "First-Lien Borrower"), the
several banks and
other financial institutions from time to time party thereto, DBNY,
as U.S.
administrative agent (in such capacity, the "U.S. First-Lien
Administrative
Agent") and U.S. collateral agent, Deutsche Bank AG, Canada Branch,
as Canadian
administrative agent (in such capacity, the "Canadian First-Lien
Administrative
Agent") and Canadian collateral agent (in such capacity, the
"Canadian
First-Lien Collateral Agent"), Citicorp North America, Inc., as
Syndication
Agent and Bank of America, N.A., LaSalle Credit Business Credit,
LLC and
Wachovia Capital Finance Corporation (Western), as Co-Documentation
Agents have
entered into that certain Credit Agreement, dated as of the date
hereof (as
amended, restated, supplemented, modified and/or Refinanced from
time to time,
the "First-Lien Credit Agreement") providing for the making of term
and
revolving loans to the Borrowers, and the issuance of, and
participation in,
letters of credit for the account of the Borrowers, as provided
therein;
WHEREAS, Holdings, the
Parent Borrower, RSC and each other entity that
becomes a borrower thereunder pursuant to Subsection 6.9 thereof,
the several
banks and other financial institutions from time to time party
thereto (together
with the Parent Borrower and RSC, collectively, the "Second-Lien
Borrowers" and
each a "Second-Lien Borrower"), DBNY, as administrative agent (in
such capacity,
the "Second-Lien Administrative Agent") and Second-Lien Collateral
Agent,
Citicorp North America, Inc., as Syndication Agent, and General
Electric Capital
Corporation, as Documentation Agent have entered into that certain
Second-Lien
Term Loan Credit Agreement, dated as of the date hereof (as
amended, restated,
supplemented, modified and/or Refinanced from time to time, the
"Second-Lien
Credit Agreement") providing for the making of the Second-Lien Term
Loan to the
Second-Lien Borrowers as provided therein;
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WHEREAS, the obligations of Holdings, the First-Lien Borrowers,
and
the other Grantors under the First-Lien Loan Documents, and all
Hedging
Agreements with one or more Hedging Creditors, will be secured by
substantially
all the assets of Holdings, the First-Lien Borrowers and the other
Grantors,
respectively, pursuant to the terms of the First-Lien Security
Documents;
WHEREAS, the obligations of Holdings, the First-Lien Borrowers,
and
the other Grantors under the Second-Lien Loan Documents will be
secured by
substantially all the assets of Holdings, the First-Lien Borrowers
and the other
Grantors, respectively, pursuant to the terms of the Second-Lien
Security
Documents;
WHEREAS, 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;
WHEREAS, in order to induce the First-Lien Collateral Agents and
the
First-Lien Creditors to consent to the Grantors incurring the
Second-Lien
Obligations and to induce the First-Lien Creditors to extend credit
and other
financial accommodations and lend monies to or for the benefit of
the
Second-Lien Borrowers or any other Grantor, the Second-Lien
Collateral Agent on
behalf of the Second-Lien Creditors (and each Second-Lien Creditor
by its
acceptance of the benefits of the Second-Lien Security Documents)
has agreed to
the subordination, intercreditor and other provisions set forth in
this
Agreement; and
WHEREAS, Holdings, the First-Lien Borrowers and the other
Grantors
may, from time to time, incur additional secured debt which the
Second-Lien
Borrowers and the First-Lien Collateral Agents may agree may share
a
first-priority security interest in the Collateral in accordance
with the
First-Lien Loan Documents in existence at the time of such
incurrence;
NOW, THEREFORE, 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:
SECTION 1. Definitions.
1.1 Defined Terms. As used in the Agreement, the following terms
shall
have the following meanings:
"Agreement" means this Intercreditor Agreement, as amended,
renewed,
extended, supplemented or otherwise modified from time to time in
accordance
with the terms hereof.
"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.
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"Borrowers" means the First-Lien Borrowers and the Second-Lien
Borrowers.
"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.
"Canadian First-Lien Administrative Agent" has the meaning provided
in
the recitals hereto.
"Canadian First-Lien Collateral Agent" has the meaning provided in
the
recitals hereto.
"Cap Amount" means $2,000,000,000.
"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.
"Collateral Agent" means, as the context requires, collectively,
the
First-Lien Collateral Agents and the Second-Lien Collateral
Agent.
"Comparable Second-Lien Security Document" means, in relation to
any
Collateral subject to any Lien created under any First-Lien
Security Document,
that Second-Lien Security Document which creates a Lien on the same
Collateral,
granted by the same Grantor.
"Creditors" means, collectively, the First-Lien Creditors and
the
Second-Lien Creditors.
"DBNY" has the meaning provided in the preamble hereof.
"Defaulting Creditor" has the meaning provided in Section 5.7(d)
of
this Agreement.
"Discharge of First-Lien Credit Agreement Obligations" means,
except
to the extent otherwise provided in Section 5.6 hereof (and subject
to Section
6.5 hereof), (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 at the rate provided for in the respective
First-Lien
Loan Documents, whether or not such interest would be allowed in
such Insolvency
or Liquidation Proceeding) and premium, if any, on all Indebtedness
outstanding
under the First-Lien Loan Documents, (b) payment in full in cash of
all other
First-Lien Obligations (other than Hedging Obligations) that are
due and payable
or otherwise accrued and owing at or prior to the time such
principal, interest
and premium are paid, (c) termination (without any prior demand for
payment
thereunder having been made or, if made, with such demand having
been fully
reimbursed in cash) or cash collateralization (in an amount and
manner, and on
terms, satisfactory to each First-Lien Collateral Agent) of all
letters of
credit issued by any First-Lien Creditor and (d) termination of all
other
commitments of the First-Lien Creditors under the First-Lien Loan
Documents.
"Discharge of First-Lien Obligations" means, except to the
extent
otherwise provided in Section 5.6 hereof, (a) payment in full in
cash of the
principal of and interest
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(including interest accruing on or after the commencement of any
Insolvency or
Liquidation Proceeding at the rate provided for in the respective
First-Lien
Loan Documents, whether or not such interest would be allowed in
any such
Insolvency or Liquidation Proceeding) and premium, if any, on all
Indebtedness
outstanding under the First-Lien Documents, (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 (without any prior demand for payment thereunder having
been made
or, if made, with such demand having been fully reimbursed in cash)
or cash
collateralization (in an amount and manner, and on terms,
satisfactory to each
First-Lien Collateral Agent) of all letters of credit and Hedging
Agreements
issued or entered into, as the case may be, by any First-Lien
Creditor and (d)
termination of all other commitments of the First-Lien Creditors
under the
First-Lien Loan Documents.
"Disposition" has the meaning provided in Section 5.1(a)(ii) of
this
Agreement.
"Domestic Subsidiary" means each Subsidiary of Holdings
organized
under the laws of the United States, any State or territory thereof
or the
District of Columbia.
"Eligible Purchaser" has the meaning provided in Section 5.7(a)
of
this Agreement.
"Financing Lease" means any lease of property, real or personal,
the
obligations of the lessee in respect of which are required in
accordance with
generally accepted accounting principals in the United States of
America in
effect from time to time to be capitalized on a balance sheet of
the lessee.
"First-Lien Administrative Agent" means each of the U.S.
First-Lien
Administrative Agent and the Canadian First-Lien Administrative
Agent.
"First-Lien Borrowers" has the meaning provided in the recitals
hereto.
"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 (or purported to be granted) as security for any First-Lien
Obligations.
"First-Lien Collateral Agent" means each of the U.S. First-Lien
Collateral Agent and the Canadian First-Lien Collateral Agent.
"First-Lien Credit Agreement" has the meaning set forth in the
recitals hereto.
"First-Lien Creditors" means, at any relevant time, the holders
of
First-Lien Obligations at such time, including, without limitation,
the
First-Lien Lenders, the Hedging Creditors, each First-Lien
Collateral Agent,
each First-Lien Administrative Agent and the other agents and
arrangers under
the First-Lien Credit Agreement.
"First-Lien Documents" means and includes the First-Lien Loan
Documents and the Hedging Agreements entered into with one or more
Hedging
Creditors.
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"First-Lien Lenders" means the "Lenders" under, and as defined in,
the
First-Lien Credit Agreement; provided that the term "First-Lien
Lender" shall in
any event include each letter of credit issuer and each swingline
lender under
the First-Lien Credit Agreement.
"First-Lien Loan Documents" means the First-Lien Credit Agreement
and
the other Loan Documents (as defined in the First-Lien Credit
Agreement) 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
Obligation
(including any intercreditor or joinder agreement among holders of
First-Lien
Obligations but excluding Hedging Agreements), to the extent such
are effective
at the relevant time, as each may be amended, modified, restated,
supplemented,
replaced and/or Refinanced from time to time.
"First-Lien Obligations" means (i) all Obligations outstanding
under
the First-Lien Credit Agreement and the other First-Lien Loan
Documents, and
(ii) all Hedging Obligations. "First-Lien Obligations" shall in any
event
include: (a) all interest accrued or accruing (or which would,
absent
commencement of an Insolvency or Liquidation Proceeding (and the
effect of
provisions such as Section 502(b)(2) of the Bankruptcy Code),
accrue) after
commencement of an Insolvency or Liquidation Proceeding in
accordance with the
rate specified in the relevant First-Lien Document, whether or not
the claim for
such interest is allowed as a claim in such Insolvency or
Liquidation
Proceeding, (b) any and all fees and expenses (including attorneys'
and/or
financial consultants' fees and expenses) incurred by the U.S.
First-Lien
Collateral Agent, the U.S. First-Lien Administrative Agent and the
other
First-Lien Creditors after the commencement of an Insolvency or
Liquidation
Proceeding, whether or not the claim for fees and expenses is
allowed under
Section 506(b) of the Bankruptcy Code or any other provision of the
Bankruptcy
Code or Bankruptcy Law as a claim in such Insolvency or Liquidation
Proceeding
and (c) all obligations and liabilities of each Grantor under each
First-Lien
Document to which it is a party which, but for the automatic stay
under Section
362(a) of the Bankruptcy Code, would become due. The First-Lien
Obligations
shall not include (x) principal of Loans or stated amounts of
Letters of Credit
in excess of the Cap Amount as in effect at the time incurred or
(y) any amount
in clauses (a) through (c) of the preceding sentence incurred in
connection with
the enforcement of the excess amounts referred to in preceding
clause (x)
(excluding, in either case, any such excess amounts representing
the
capitalization of interest or fees or resulting from fluctuations
in currency
values, which excess amounts shall be First-Lien Obligations).
"First-Lien Required Lenders" means the "Required Lenders" under,
and
as defined in, the First-Lien Credit Agreement.
"First-Lien Security Agreement" means the U.S. Guaranty and
Collateral
Agreement, dated as of the date hereof, among Holdings, the Parent
Borrower,
RSC, the other Grantors from time to time party thereto and the
U.S. First-Lien
Collateral Agent, as the same may be amended, supplemented,
restated, modified
and/or Refinanced from time to time.
"First-Lien Security Documents" means the Security Documents
(as
defined in the First-Lien Credit Agreement) and any other
agreement, document or
instrument pursuant to which a Lien is granted (or purported to be
granted)
securing any First-Lien Obligations or under
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which rights or remedies with respect to such Liens are governed,
as the same
may be amended, supplemented, restated, modified and/or Refinanced
from time to
time, provided that the term "First-Lien Security Documents" shall
not include
the Canadian Security Documents (as such term is defined in the
First-Lien
Credit Agreement).
"Governmental Authority" means the government of the United States
of
America or any other nation, or of any political subdivision
thereof, whether
state or local, and any agency, authority, instrumentality,
regulatory body,
court, central bank or other entity exercising executive,
legislative, judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to
government (including any supra-national bodies such as the
European Union or
the European Central Bank).
"Grantors" means Holdings, each Borrower (other than RSC Canada or
any
other Borrower that is incorporated or organized in Canada or a
province
thereof) and each of the Subsidiary Guarantors that have executed
and delivered,
or may from time to time hereafter execute and deliver, a
First-Lien Security
Document or a Second-Lien Security Document.
"Hedging Agreements" means and includes each Interest Rate
Protection
Agreement and each Other Hedging Agreement.
"Hedging Creditor" means (i) each First-Lien Lender or any
affiliate
thereof (even if the respective First-Lien Lender subsequently
ceases to be a
First-Lien Lender under the First-Lien Credit Agreement for any
reason) party to
a Hedging Agreement with any Grantor and (ii) the respective
successors and
assigns of each such First-Lien Lender, affiliate or other
financial institution
referred to in clause (i) above.
"Hedging Obligations" means (i) the full and prompt payment when
due
(whether at the stated maturity, by acceleration or otherwise) of
all
obligations (including obligations which, but for the automatic
stay under
Section 362(a) of the Bankruptcy Code, would become due) and
liabilities
(including, without limitation, indemnities, fees and interest
thereon and all
interest that accrues after the commencement of any Insolvency or
Liquidation
Proceeding at the rate provided for in the respective Hedging
Agreement, whether
or not a claim for post-petition interest is allowed in any such
Insolvency or
Liquidation Proceeding) of each Grantor owing to the Hedging
Creditors, now
existing or hereafter incurred under, arising out of or in
connection with each
Hedging Agreement (including all such obligations and indebtedness
under any
guarantee to which each Grantor is a party) and (ii) the due
performance and
compliance by each Grantor with the terms, conditions and
agreements of each
Hedging Agreement.
"Holdings" has the meaning set forth in the preamble hereof.
"Indebtedness" means and includes all Obligations that
constitute
"Indebtedness" within the meaning of the First-Lien Credit
Agreement or the
Second-Lien 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
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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.
"Interest Rate Protection 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.
"Letters of Credit" means "Letters of Credit" under, and as
defined
in, the First-Lien Credit Agreement.
"Lien" means any mortgage, pledge, hypothecation, assignment,
security
deposit arrangement, encumbrance, lien (statutory or other), charge
or other
security interest or any preference, priority or other security
agreement or
preferential arrangement of any kind or nature whatsoever
(including, without
limitation, any conditional sale or other title retention agreement
and any
Financing Lease having substantially the same economic effect as
any of the
foregoing).
"Loans" means "Loans" under, and as defined in, the First-Lien
Credit
Agreement.
"Obligations" means any and all obligations (including guaranty
obligations) with respect to the payment and performance of (a) any
principal of
or interest or premium on any indebtedness, including any
reimbursement
obligation in respect of any letter of credit, or any other
liability, including
interest that accrues after the commencement of any Insolvency or
Liquidation
Proceeding of any Grantor at the rate provided for in the
respective
documentation, whether or not a claim for post-petition interest is
allowed in
any such Insolvency or Liquidation Proceeding, (b) any fees,
indemnification
obligations, expense reimbursement obligations or other liabilities
payable
under the documentation governing any indebtedness (including,
without
limitation, the retaking, holding, selling or otherwise disposing
of or
realizing on the Collateral), (c) any obligation to post cash
collateral in
respect of letters of credit or any other obligations, and (d) all
performance
obligations under the documentation governing any indebtedness.
"Other Hedging Agreement" means any foreign exchange contract,
currency swap agreement, commodity agreement or other similar
arrangement
designed to protect against fluctuations in currency values or
commodity prices.
"Parent Borrower" has the meaning set forth in the preamble
hereof.
"Person" means any natural person, corporation, limited
liability
company, trust, joint venture, association, company, partnership,
Governmental
Authority or other entity.
"Pledged Collateral" means Collateral in the possession of the
U.S.
First-Lien Collateral Agent (or its agents or bailees), to the
extent that
possession thereof is taken to perfect a Lien thereon under the
Uniform
Commercial Code.
"Priority Lien" has the meaning provided in Section 5.1(c)
hereof.
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"Recovery" has the meaning set forth in Section 6.5 hereof.
"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. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Remedial Action" has the meaning provided in Section 5.1(a)(i)
hereof.
"Required First-Lien
Creditors" means (i) at all times prior to the
occurrence of the Discharge of First-Lien Credit Agreement
Obligations, the
First-Lien Required Lenders (or, to the extent required by the
First-Lien Credit
Agreement, each of the First-Lien Lenders), and (ii) at all times
after the
occurrence of the Discharge of First-Lien Credit Agreement
Obligations, the
holders of at least the majority of the then outstanding Hedging
Obligations
(determined by the U.S. First-Lien Collateral Agent in such
reasonable manner as
is acceptable to it).
"RSC" has the meaning set forth in the preamble hereof.
"RSC Canada" has the meaning set forth in the preamble hereof.
"Second-Lien Administrative Agent" has the meaning set forth in
the
recitals hereof.
"Second-Lien Collateral" means all of the assets of any
Grantor,
whether real, personal or mixed, with respect to which a Lien is
granted (or
purported to be granted) as security for any Second-Lien
Obligations.
"Second-Lien Collateral Agent" has the meaning set forth in the
preamble hereof.
"Second-Lien Credit Agreement" has the meaning set forth in the
recitals hereto.
"Second-Lien Creditors" means, at any relevant time, the holders
of
Second-Lien Obligations at such time, including without limitation
the
Second-Lien Lenders, the Second-Lien Collateral Agent, the
Second-Lien
Administrative Agent and any other agents and arrangers under the
Second-Lien
Credit 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 Loan 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
Obligation, as the
same may be amended, modified or otherwise supplemented from time
to time in
accordance with the terms hereof, thereof and the First-Lien Credit
Agreement;
provided that any such modification does not increase the aggregate
principal
amount thereof beyond the limit set forth in the First-Lien Credit
Agreement and
is otherwise in accordance with the provisions of this First-Lien
Credit
Agreement.
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"Second-Lien Obligations" means all Obligations outstanding under
the
Second-Lien Credit Agreement and the other Second-Lien Loan
Documents.
"Second-Lien Obligations" shall in any event include: (a) all
interest accrued
or accruing (or which would, absent commencement of an Insolvency
or Liquidation
Proceeding (and the effect of provisions such as Section 502(b)(2)
of the
Bankruptcy Code), 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, (b) any and all fees
and expenses
(including attorneys' and/or financial consultants' fees and
expenses) incurred
by the Second-Lien Collateral Agent, the Second-Lien Administrative
Agent and
the other Second-Lien Creditors after the commencement of an
Insolvency or
Liquidation Proceeding, whether or not the claim for fees and
expenses is
allowed under Section 506(b) of the Bankruptcy Code or any other
provision of
the Bankruptcy Code or Bankruptcy Law as a claim in such Insolvency
or
Liquidation Proceeding and (c) all obligations and liabilities of
each Grantor
under each Second-Lien Loan Document to which it is a party which,
but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would
become due.
"Second-Lien Security Agreement" means the Guaranty and
Collateral
Agreement, dated as of the date hereof, among Holdings, each
Second-Lien
Borrower, the other Grantors from time to time party thereto and
the Second-Lien
Collateral Agent, as the same may be amended, supplemented,
restated or
otherwise modified from time to time in accordance with the terms
hereof and
thereof.
"Second-Lien Security Documents" means the Security Documents
(as
defined in the Second-Lien Credit Agreement) and any other
agreement, document,
mortgage or instrument pursuant to which a Lien is granted (or
purported to be
granted) securing any Second-Lien Obligations or under which rights
or remedies
with respect to such Liens are governed, as the same may be
amended,
supplemented, restated or otherwise modified from time to time in
accordance
with the terms hereof and thereof, provided that the term
"Second-Lien Security
Documents" shall not include the Canadian Security Documents (as
such term is
defined in the First-Lien Credit Agreement).
"Security Documents" means, collectively, the First-Lien
Security
Documents and the Second-Lien Security Documents.
"Subsidiary": as to any Person, a corporation, partnership,
limited
liability company or other entity (a) of which shares of stock or
other
ownership interests having ordinary voting power (other than such
stock or such
other ownership interests having such power only by reason of the
happening of a
contingency) to elect a majority of the board of directors or other
managers of
such corporation, partnership, limited liability company or other
entity are at
the time owned by such Person, or (b) the management of which is
otherwise
controlled, directly or indirectly through one or more
intermediaries, or both,
by such Person and, in the case of this clause (b), which is
treated as a
consolidated subsidiary for accounting purposes.
"Subsidiary Guarantors" means each Domestic Subsidiary of
Holdings
which enters into a guaranty of any First-Lien Obligations or
Second-Lien
Obligations.
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"Uniform Commercial Code" or "UCC" means the Uniform Commercial
Code
as from time to time in effect in the State of New York.
"U.S. First-Lien Administrative Agent" has the meaning provided in
the
recitals hereto.
"U.S. First-Lien Collateral Agent" has the meaning provided in
the
preamble hereof.
1.2 Terms Generally. The definitions of terms herein 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,
supplemented or otherwise modified, (b) any reference herein to any
Person shall
be construed to include such Person's 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) 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, (e) terms defined in the UCC but not otherwise
defined herein
shall have the same meanings herein as are assigned thereto in the
UCC, (f)
reference to any law means such law as amended, modified, codified,
replaced or
re-enacted, in whole or in part, and in effect on the date hereof,
including
rules, regulations, enforcement procedures and any interpretations
promulgated
thereunder, and (g) references to Sections or clauses shall refer
to sections or
clauses of this Agreement, and any references to a clause shall,
unless
otherwise identified, refer to the appropriate clause within the
same Section in
which such reference occurs.
SECTION 2. Priority of Liens.
2.1 Subordination; Etc. Notwithstanding the date, 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 applicable law or the Second-Lien Loan Documents or any
other
circumstance whatsoever (including any non-perfection of any Lien
purporting to
secure the First-Lien Obligations and/or Second-Lien Obligations),
the
Second-Lien Collateral Agent, on behalf of itself and the other
Second-Lien
Creditors, and each other Second-Lien Creditor (by its acceptance
of the
benefits of the Second-Lien Loan Documents) hereby agrees that: (a)
any Lien on
the Collateral securing any First-Lien Obligations now or hereafter
held by or
on behalf of the U.S. First-Lien Collateral Agent or any First-Lien
Creditors 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 of the
Second-Lien Obligations; and (b) any Lien on the Collateral now or
hereafter
held by or on behalf of the Second-Lien Collateral Agent, any
<PAGE>
Page 11
Second-Lien Creditors 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
Holdings, the
Parent Borrower, any other Grantor or any other Person. The parties
hereto
acknowledge and agree that it is their intent that the First-Lien
Obligations
(and the security therefor) constitute a separate and distinct
class (and
separate and distinct claims) from the Second-Lien Obligations (and
the security
therefor).
2.2 Prohibition on Contesting Liens. Each of the Second-Lien
Collateral Agent, for itself and on behalf of each Second-Lien
Creditor, and
U.S. First-Lien Collateral Agent, for itself and on behalf of each
First-Lien
Creditor, agrees that it shall not (and hereby waives any right to)
contest or
support any other Person in contesting, in any proceeding
(including any
Insolvency or Liquidation Proceeding), (i) the validity or
enforceability of any
Security Document or any Obligation thereunder, (ii) the validity,
perfection,
priority or enforceability of the Liens, mortgages, assignments and
security
interests granted pursuant to the Security Documents with respect
to the
First-Lien Obligations or (iii) the relative rights and duties of
the holders of
the First-Lien Obligations and the Second-Lien Obligations granted
and/or
established in this Agreement or any other Security Document with
respect to
such Liens, mortgages, assignments, and security interests;
provided that
nothing in this Agreement shall be construed to prevent or impair
the rights of
the U.S. First-Lien Collateral Agent or any First-Lien Creditor to
enforce this
Agreement, including the priority of the Liens securing the
First-Lien
Obligations as provided in Section 3.1 hereof.
2.3 No New Liens. So long as the Discharge of First-Lien
Obligations
has not occurred, the parties hereto agree that neither Holdings
nor the Parent
Borrower shall, and shall not permit any other Grantor to, grant or
permit any
additional Liens, or take any action to perfect any additional
Liens, on any
asset or property to secure any Second-Lien Obligation unless it
has also
granted a Lien on such asset or property to secure the First-Lien
Obligations
and has taken all actions to perfect such Liens. To the extent that
the
foregoing provisions are not complied with for any reason, without
limiting any
other rights and remedies available to the U.S. First-Lien
Collateral Agent
and/or the other First-Lien Creditors, the Second-Lien Collateral
Agent, on
behalf of itself and the other Second-Lien Creditors, and each
other Second-Lien
Creditor (by its acceptance of the benefits of the Second-Lien Loan
Documents),
agrees that any amounts received by or distributed to any of them
pursuant to or
as a result of Liens granted in contravention of this Section 2.3
shall be
subject to Section 4.2 hereof.
2.4 Similar Liens and Agreements. The parties hereto agree that it
is
their intention that the Second-Lien Collateral not be more
expansive than the
First-Lien Collateral. In furtherance of the foregoing and of
Section 8.9
hereof, the Second-Lien Collateral Agent and the other Second-Lien
Creditors
agree, subject to the other provisions of this Agreement:
(i) upon request by either First-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
Second-Lien Collateral and the steps taken to
<PAGE>
Page 12
perfect the Liens thereon and the identity of the respective
parties
obligated under the Second-Lien Loan Documents; and
(ii) that the guarantees for the First-Lien Obligations and the
Second-Lien Obligations shall be substantially in the same
form.
SECTION 3. Enforcement.
3.1 Exercise of Remedies. (a) 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 Holdings, the Parent
Borrower or any
other Grantor: (i) the Second-Lien Collateral Agent and the other
Second-Lien
Creditors will not exercise or seek to exercise any rights or
remedies
(including setoff) with respect to any Collateral (including,
without
limitation, the exercise of any right under any lockbox agreement,
control
account agreement, landlord waiver or bailee's letter or similar
agreement or
arrangement to which the Second-Lien Collateral Agent or any
Second-Lien
Creditor is a party) or institute or commence, or join with any
Person in
commencing, any action or proceeding with respect to such rights or
remedies
(including any action of foreclosure, enforcement, collection or
execution and
any Insolvency or Liquidation Proceeding), and will not contest,
protest or
object to any foreclosure proceeding or action brought by either
First-Lien
Collateral Agent or any other First-Lien Creditor or any other
exercise by
either First-Lien Collateral Agent or any other First-Lien
Creditor, of any
rights and remedies relating to the Collateral under the First-Lien
Loan
Documents or otherwise, or object to the forbearance by the either
First-Lien
Collateral Agent or the other First-Lien Creditors from bringing or
pursuing any
foreclosure proceeding or action or any other exercise of any
rights or remedies
relating to the Collateral; and (ii) the First-Lien Collateral
Agents shall have
the exclusive right, and the Required First-Lien Creditors shall
have the
exclusive right to instruct the First-Lien Collateral Agents, 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 other Second-Lien Creditor, all
as though
the Second-Lien Obligations did not exist; provided, that (A) in
any Insolvency
or Liquidation Proceeding commenced by or against the Parent
Borrower or any
other Grantor, the Second-Lien Collateral Agent may file a claim or
statement of
interest with respect to the Second-Lien Obligations, (B) the
Second-Lien
Collateral Agent may take any action (not adverse to the prior
Liens on the
Collateral securing the First-Lien Obligations, or the rights of
the First-Lien
Collateral Agents or the other First-Lien Creditors to exercise
remedies in
respect thereof) in order to preserve or protect their Lien on the
Collateral in
accordance with the terms of this Agreement, (C) the Second-Lien
Creditors shall
be entitled to file any necessary responsive or defensive pleading
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 Creditors, including any claim secured by the
Collateral, if any, in
each case in accordance with the terms of this Agreement, (D) the
Second-Lien
Creditors may 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 and (E) the Second-Lien Creditors may 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
<PAGE>
Page 13
with respect to the Second-Lien Obligations and the Collateral. In
exercising
rights and remedies with respect to the Collateral, the First-Lien
Collateral
Agents and the other First-Lien Creditors 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 Uniform
Commercial
Code of any applicable jurisdiction and of a secured creditor under
Bankruptcy
Laws of any applicable jurisdiction.
(b) The Second-Lien Collateral Agent, on behalf of itself and
the
Second-Lien Creditors, 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 setoff) with respect to any Collateral, unless
and until the
Discharge of First-Lien Obligations has occurred. Without limiting
the
generality of the foregoing, unless and until the Discharge of
First-Lien
Obligations has occurred, the sole right of the Second-Lien
Collateral Agent and
the other Second-Lien Creditors with respect to the Collateral is
to hold a Lien
on the Collateral pursuant to the Second-Lien Security 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 the First-Lien Obligations
has occurred
in accordance with the terms of the Second-Lien Loan Documents and
applicable
law.
(c) The Second-Lien Collateral Agent, for itself and on behalf of
the
Second-Lien Creditors, and each other Second-Lien Creditor (by its
acceptance of
the benefits of the Second-Lien Loan Documents), (i) agrees that
the Second-Lien
Collateral Agent and the other Second-Lien Creditors will not take
any action
that would hinder, delay, limit or prohibit any exercise of
remedies under the
First-Lien Loan Documents, including any collection, sale, lease,
exchange,
transfer or other disposition of the Collateral, whether by
foreclosure or
otherwise, or that would limit, invalidate, avoid or set aside any
Lien or
Security Document or subordinate the priority of the First-Lien
Obligations to
the Second-Lien Obligations or grant the Liens securing the
Second-Lien
Obligations equal ranking to the Liens securing the First-Lien
Obligations and
(ii) hereby waives any and all rights it or the Second-Lien
Creditors may have
as a junior lien creditor or otherwise (whether arising under the
UCC or under
any other law) to object to the manner in which any First-Lien
Collateral Agent
or the other First-Lien Creditors seek to enforce or collect the
First-Lien
Obligations or the Liens granted in any of the First-Lien
Collateral, regardless
of whether any action or failure to act by or on behalf of any
First-Lien
Collateral Agent or First-Lien Creditors is adverse to the interest
of the
Second-Lien Creditors.
(d) The Second-Lien Collateral Agent hereby acknowledges and
agrees
that no covenant, agreement or restriction contained in the
Second-Lien Security
Documents or any other Second-Lien Loan Document shall be deemed to
restrict in
any way the rights and remedies of any First-Lien Collateral Agent
or the other
First-Lien Creditors with respect to the Collateral as set forth in
this
Agreement and the First-Lien Loan Documents.
(e) Notwithstanding anything to the contrary in preceding clauses
(a)
through (d) of this Section 3.1, at any time while a payment
default exists with
respect to the Second-Lien Obligations following the final maturity
of the
Second-Lien Obligations, or the acceleration by the relevant
Second-Lien
Creditors of the maturity of all then outstanding Second-Lien
<PAGE>
Page 14
Obligations, and in either case so long as 180 days have elapsed
after notice
thereof (and requesting that enforcement action be taken with
respect to the
Collateral) has been received by the U.S. First-Lien Collateral
Agent and so
long as the respective payment default shall not have been cured or
waived (or
the respective acceleration rescinded), the Second-Lien Collateral
Agent, for
itself and on behalf of the Second-Lien Creditors, and the other
Second-Lien
Creditors may, but only if the U.S. First-Lien Collateral Agent or
the
First-Lien Creditors are not pursuing enforcement preceding with
respect to the
Collateral in a commercially reasonable manner (with any
determination of which
Collateral to proceed against, and in what order, to be made by the
U.S.
First-Lien Collateral Agent or such First-Lien Creditors in their
reasonable
judgment), enforce the Liens on Collateral granted pursuant to the
Second-Lien
Security Documents, provided that (x) any Collateral or any
proceeds of
Collateral received by the Second-Lien Collateral Agent or such
other
Second-Lien Creditor, as the case may be, in connection with the
enforcement of
such Lien shall be applied in accordance with Section 4 hereof and
(y) the U.S.
First-Lien Collateral Agent or any other First-Lien Creditors may
at any time
take over such enforcement proceedings, provided that the U.S.
First-Lien
Collateral Agent or such First-Lien Creditors, as the case may be,
pursues
enforcement proceedings with respect to the Collateral in a
commercially
reasonably manner, with any determination of which Collateral to
proceed
against, and in what order, to be made by the U.S. First-Lien
Collateral Agent
or such First-Lien Creditors in their reasonable judgment, and
provided further
that the Second-Lien Collateral Agent or Second-Lien Creditors, as
the case may
be, shall only be able to recoup (from amounts realized by the U.S.
First-Lien
Collateral Agent or any First-Lien Creditors) in any enforcement
proceeding with
respect to the Collateral (whether initiated by the U.S. First-Lien
Collateral
Agent or First-Lien Creditors or taken over by them as contemplated
above) any
expenses incurred by them in accordance with the priorities set
forth in Section
4 hereof.
SECTION 4. Payments.
4.1 Application of Proceeds. So long as the Discharge of
First-Lien
Obligations has not occurred, any proceeds of any Collateral
pursuant to the
enforcement of any Security Document or the exercise of any
remedial provision
thereunder, together with all other proceeds received by any
Creditor (including
all funds received in respect of post-petition interest or fees and
expenses) as
a result of any such enforcement or the exercise of any such
remedial provision
or as a result of any distribution of or in respect of any
Collateral (whether
or not expressly characterized as such) upon or in any Insolvency
or Liquidation
Proceeding with respect to any Grantor, or the application of any
Collateral (or
proceeds thereof) to the payment thereof or any distribution of
Collateral (or
proceeds thereof) upon the liquidation or dissolution of any
Grantor, shall be
applied by the U.S. First-Lien Collateral Agent to the First-Lien
Obligations in
such order as specified in the relevant First-Lien Security
Document. Upon the
Discharge of the First-Lien Obligations, the U.S. First-Lien
Collateral Agent
shall deliver to the Second-Lien Collateral Agent any 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 Security Documents.
4.2 Payments Over. Until such time as the Discharge of
First-Lien
Obligations has occurred, any Collateral or proceeds thereof
(together with
assets or proceeds subject to Liens referred to in the final
sentence of Section
2.3 hereof) (or any distribution in
<PAGE>
Page 15
respect of the Collateral, whether or not expressly characterized
as such)
received by the Second-Lien Collateral Agent or any other
Second-Lien Creditors
in connection with the exercise of any right or remedy (including
set-off)
relating to the Collateral or otherwise that is inconsistent with
this Agreement
shall be segregated and held in trust and forthwith paid over to
the U.S.
First-Lien Collateral Agent for the benefit of the First-Lien
Creditors in the
same form as received, with any necessary endorsements or as a
court of
competent jurisdiction may otherwise direct. U.S. First-Lien
Collateral Agent is
hereby authorized to make any such endorsements as agent for the
Second-Lien
Collateral Agent or any such other Second-Lien Creditors. This
authorization is
coupled with an interest and is irrevocable until such time as this
Agreement is
terminated in accordance with its terms.
SECTION 5. Other Agreements.
5.1 Releases.
(a) If, in connection with:
(i) the exercise of the U.S. First-Lien Collateral Agent's
remedies in respect of the Collateral provided for in Section 3.1
hereof,
including any sale, lease, exchange, transfer or other disposition
of any such
Collateral (any of the foregoing, a "Remedial Action");
(ii) any sale, lease, exchange, transfer or other disposition
(any of the foregoing, a "Disposition") of any Collateral permitted
under the
terms of the First-Lien Loan Documents (whether or not an "event of
default"
thereunder or under any Second-Lien Loan Document has occurred and
is
continuing); or
(iii) any agreement (not contravening the First-Lien Loan
Documents) between the U.S. First-Lien Collateral Agent and the
Parent Borrower
or any other Grantor (x) to release the U.S. First-Lien Collateral
Agent's Lien
on any portion of the Collateral (other than in connection with, or
in
anticipation of, a Discharge of First-Lien Credit Agreement
Obligations or a
Discharge of First-Lien Obligations) or (y) to release any Grantor
from its
obligations under its guaranty of the First-Lien Obligations (other
than in
connection with, or in anticipation of, a Discharge of First-Lien
Credit
Agreement Obligations or a Discharge of First-Lien
Obligations);
there occurs the release by the U.S. First-Lien Collateral Agent,
acting on its
own or at the direction of the Required First-Lien Creditors, of
any of its
Liens on any part of the Collateral, or of any Grantor from its
obligations
under its guaranty of the First-Lien Obligations, then the Liens,
if any, of the
Second-Lien Collateral Agent, for itself and for the benefit of the
Second-Lien
Creditors, on such Collateral, and the obligations of such Grantor
under its
guaranty of the Second-Lien Obligations, shall be automatically,
unconditionally
and simultaneously released, and the Second-Lien Collateral Agent,
for itself or
on behalf of any such Second-Lien Creditors, promptly shall execute
and deliver
to the U.S. First-Lien Collateral Agent or such Gran
