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EXHIBIT 10.69
EXECUTION VERSION
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INTERCREDITOR AGREEMENT
dated as of August 24, 2007,
among
PACIFIC ENERGY RESOURCES LTD.,
as the First Lien Borrower,
PACIFIC ENERGY ALASKA OPERATING LLC,
as the Second Lien Borrower,
PACIFIC ENERGY ALASKA HOLDINGS, LLC,
J. ARON & COMPANY,
as the First Lien Collateral Agent
and
SILVER POINT FINANCE, LLC,
as the Second Lien Collateral Agent
This is the Intercreditor Agreement referred to in (a) the First
Lien Credit and
Guaranty Agreement dated as of November 30, 2006 among Pacific
Energy Resources
Ltd., the lenders from time to time party thereto and J. Aron &
Company, as
Agent, (b) the First Lien Security and Pledge Agreement dated as of
November 30,
2006 among Pacific Energy Resources Ltd., the other Loan Parties
from time to
time party thereto and J. Aron & Company, as Agent, (c) the
Second Lien Credit
Agreement dated as of the date hereof among Pacific Energy Alaska
Operating LLC,
Pacific Energy Holdings, LLC, the lenders from time to time party
thereto and
Silver Point, as Agent, (d) the Second Lien Security and Pledge
Agreement dated
as of the date hereof among Pacific Energy Resources Ltd., the
other Loan
Parties from time to time party thereto and Silver Point, as Agent,
(e) the
Second Lien Guaranty, dated as of the date hereof, among Pacific
Energy
Resources Ltd., the other Guarantors party thereto, and Silver
Point, as
Administrative Agent, and (f) the other Security Documents referred
to in the
Credit Agreements referred to herein.
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Certain
Defined Terms .........................................
2
SECTION 1.02. Other
Defined Terms ...........................................
2
SECTION 1.03. Terms
Generally ...............................................
7
ARTICLE II
Lien Priorities
SECTION 2.01. Relative
Priorities ........................................... 8
SECTION 2.02.
Prohibition on Contesting Liens ...............................
9
SECTION 2.03. No New
Liens or Alteration of Priority ........................
9
SECTION 2.04. Similar
Liens and Agreements ..................................
9
ARTICLE III
Enforcement of Rights; Matters Relating to Collateral
SECTION 3.01. Exercise
of Rights and Remedies ............................... 10
SECTION 3.02. Second
Lien Secured Parties' Purchase Option ..................
12
SECTION 3.03. No
Interference ...............................................
14
SECTION 3.04. Rights as
Unsecured Creditors ................................. 16
SECTION 3.05. Automatic
Release of Second Priority Liens .................... 16
SECTION 3.06. Insurance
and Condemnation Awards ............................. 17
ARTICLE IV
Payments
SECTION 4.01.
Application of Proceeds .......................................
17
SECTION 4.02. Payment
Over ..................................................
18
SECTION 4.03. Certain
Agreements with Respect to Unenforceable Liens ........
18
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ARTICLE V
Bailment for Perfection of Certain Security Interests
ARTICLE VI
Insolvency or Liquidation Proceedings
SECTION 6.01. Finance
and Sale Matters ......................................
20
SECTION 6.02. Relief
from the Automatic Stay ................................
22
SECTION 6.03.
Reorganization Securities .....................................
22
SECTION 6.04.
Post-Petition Interest ........................................
22
SECTION 6.05. Certain
Waivers by the Second Lien Secured Parties ............
22
SECTION 6.06. Certain
Voting Matters ........................................
23
ARTICLE VII
Other Agreements
SECTION 7.01. Matters
Relating to Loan Documents ............................
23
SECTION 7.02. Effect of
Refinancing of Indebtedness under First
Lien Loan Documents ...........................................
25
SECTION 7.03. No Waiver
by First Lien Secured Parties ....................... 25
SECTION 7.04.
Reinstatement .................................................
25
SECTION 7.05. Further
Assurances ............................................
26
ARTICLE VIII
Representations and Warranties
SECTION 8.01.
Representations and Warranties of Each Party ..................
26
SECTION 8.02.
Representations and Warranties of Each Collateral Agent .......
26
ARTICLE IX
No Reliance; No Liability; Obligations Absolute
SECTION 9.01.
No
Reliance; Information ......................................
26
SECTION 9.02. No
Warranties or Liability ....................................
27
SECTION 9.03.
Obligations Absolute ..........................................
28
ARTICLE X
Miscellaneous
SECTION 10.01. Notices
.......................................................
28
SECTION 10.02. Conflicts
..................................................... 29
SECTION 10.03. Effectiveness;
Survival ....................................... 29
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SECTION 10.04.
Severability...................................................
30
SECTION 10.05. Amendments;
Waivers............................................ 30
SECTION 10.06.
Subrogation....................................................
30
SECTION 10.07. Applicable Law;
Jurisdiction; Consent to Service of Process.... 30
SECTION 10.08. Waiver of Jury
Trial........................................... 31
SECTION 10.09. Parties in
Interest............................................ 31
SECTION 10.10. Specific
Performance........................................... 32
SECTION 10.1l.
Headings.......................................................
32
SECTION 10.12.
Counterparts...................................................
32
SECTION 10.13. Provisions
Solely to Define Relative Rights.................... 32
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INTERCREDITOR AGREEMENT dated as of August 24, 2007 (the
"Agreement"),
among PACIFIC ENERGY RESOURCES LTD. (the "First Lien Borrower"),
PACIFIC ENERGY
ALASKA OPERATING LLC, a limited liability company organized under
the laws of
the State of Delaware (the "Second Lien Borrower"), PACIFIC ENERGY
ALASKA
HOLDINGS, LLC, a limited liability company organized under the laws
of the State
of Delaware ("Alaska Holdings"), J. ARON & COMPANY ("J. Aron"),
as the First
Lien Collateral Agent, and SILVER POINT FINANCE, LLC ("Silver
Point"), as the
Second Lien Collateral Agent.
PRELIMINARY STATEMENT
Reference is made to (a) the First Lien Credit and Guaranty
Agreement
dated as of November 30, 2006 (the "First Lien Credit Agreement"),
among the
First Lien Borrower, certain subsidiaries of the First Lien
Borrower, the
lenders from time to time party thereto (the "First Lien Lenders")
and J. Aron,
as administrative agent for the First Lien Lenders, (b) the Second
Lien Credit
Agreement dated as of August 24, 2007 (the "Second Lien Credit
Agreement" and,
together with the First Lien Credit Agreement, the "Credit
Agreements"), among
the Second Lien Borrower, Alaska Holdings, the lenders from time to
time party
thereto (the "Second Lien Lenders") and Silver Point, as
administrative agent
for the Second Lien Lenders, (c) the First Lien Pledge and Security
Agreement
dated as of November 30, 2007 (the "First Lien Collateral
Agreement"), among the
First Lien Borrower, the other Loan Parties from time to time party
thereto and
J. Aron, as the First Lien Collateral Agent, (d) the Second Lien
Pledge and
Security Agreement dated as of August 24, 2007 (the "Second Lien
Collateral
Agreement"), among the First Lien Borrower, the other Loan Parties
from time to
time party thereto and Silver Point, as the Second Lien Collateral
Agent, (e)
the Second Lien Guaranty (the "Second Lien Guaranty") among the
First Lien
Borrower, the other Guarantors (as defined therein) party thereto,
and Silver
Point and (f) the other Security Documents referred to in the
Credit Agreements.
RECITALS
A. The First Lien Lenders have agreed to make loans to the First
Lien
Borrower pursuant to the First Lien Credit Agreement on the
condition, among
others, that the First Lien Obligations (such term and each other
capitalized
term used but not defined in the preliminary statement or these
recitals having
the meaning given to it in Article I) shall be secured by first
priority Liens
on, and security interests in, the Collateral.
B. The Second Lien Lenders have agreed to make loans to the
Second
Lien Borrower pursuant to the Second Lien Credit Agreement on the
condition,
among others, that the Second Lien Obligations shall be secured by
second
priority Liens on, and security interests in, the Collateral.
C. The Credit Agreements require, among other things, that the
parties
thereto set forth in this Agreement, among other things, their
rights,
obligations and remedies with respect to the Collateral.
Accordingly, the parties hereto agree as follows:
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ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. Each capitalized term used
in
this Agreement and not otherwise defined herein shall have the
meaning set forth
in the First Lien Credit Agreement, the Second Lien Credit
Agreement, the First
Lien Collateral Agreement or the Second Lien Collateral Agreement,
as
applicable.
SECTION 1.02. Other Defined Terms. As used in the Agreement,
the
following terms shall have the meanings specified below:
"Agreement" shall have the meaning assigned to such term in the
introductory paragraph.
"Alaska Holdings" shall have the meaning assigned to such term in
the
introductory paragraph of this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now and hereinafter in effect, or any
successor
statute.
"Bankruptcy Law" shall mean the Bankruptcy Code and any other
Federal,
state or foreign bankruptcy, insolvency, receivership or similar
law.
"Collateral" shall mean, collectively, the First Lien Collateral
and
the Second Lien Guaranty Collateral.
"Comparable Second Lien Security Document" shall mean, in relation
to
any Collateral subject to any Lien created under any First Lien
Security
Document, the Second Lien Security Document that creates a Lien on
the same
Collateral, granted by the same Grantor.
"Credit Agreements" shall have the meaning assigned to such term
in
the preliminary statement to this Agreement.
"DIP Financing" shall have the meaning assigned to such term in
Section 6.01.
"DIP Financing Liens" shall have the meaning assigned to such term
in
Section 6.01.
"Discharge of First Lien Obligations" shall mean (unless
otherwise
required by law or court order), subject to Sections 7.02 and 7.04,
(a) payment
in full in cash of the principal of and interest (including
interest accruing
during the pendency of any Insolvency or Liquidation Proceeding,
regardless of
whether allowed or allowable in such Insolvency or Liquidation
Proceeding) and
premium, if any, on all Indebtedness outstanding under the First
Lien Loan
Documents, (b) payment in full of all other monetary 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 to lend under the First Lien Credit Agreement and (d)
termination or
cash collateralization (in an amount and manner reasonably
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satisfactory to the First Lien 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" shall mean any sale, lease, exchange, transfer or
other
disposition. "Dispose" shall have a correlative meaning.
"Enforcement Action" shall mean upon the occurrence and during
the
continuation of any Event of Default and in connection with the
exercise of
remedies (i) any action by any First Lien Secured Party or Second
Lien Secured
Party to foreclose on the Lien of such Person in any Collateral,
(ii) any action
by any First Lien Secured Party or Second Lien Secured Party to
take possession
of, or sell or otherwise realize upon, or to exercise any other
rights or
remedies with respect to, any Collateral, including a sale or other
disposition
after the occurrence of an Event of Default of any Collateral by
the Borrower
with the consent of, or at the direction of, a First Lien Secured
Party or
Second Lien Secured Party, (iii) the acceleration of any
Obligations, (iv) the
taking of any other actions by a First Lien Secured Party or Second
Lien Secured
Party to collect or enforce all or any part of the Obligations
payable to such
First Lien Secured Party or Second Lien Secured Party or any claims
in respect
thereof (x) against the First Lien Borrower or (y) any of its
property or
assets, including the taking of control or possession of, or the
exercise of any
right of setoff with respect to, any property or assets of First
Lien Borrower
or the sale or other disposition of any interest in such property
or assets
and/or (v) the commencement by any First Lien Secured Party or
Second Lien
Secured Party of any legal proceedings or actions against or with
respect to (x)
the First Lien Borrower or (y) any of its property or assets or any
Collateral
to facilitate the actions described in clauses (i), (ii) and (iii)
above,
including any Insolvency or Liquidation Proceeding and action to
have the
automatic stay lifted in any Insolvency or Liquidation Proceeding
of the First
Lien Borrower; provided that the filing of any notice of or voting
any claim in
any Insolvency or Liquidation Proceeding involving a First Lien
Borrower shall
not be deemed to be an Enforcement Action.
"Event of Default" means each "Event of Default" or similar term,
as
such term is defined in any First Lien Loan Document or any Second
Lien Loan
Document.
"Excess First Lien Loan Amount" means, collectively, as of any date
of
determination, (a) the aggregate principal amount of any extensions
of credit
made by the First Lien Secured Parties to the First Lien Borrower
pursuant to
the First Lien Loan Documents (other than Hedging Contracts (as
defined in the
First Lien Credit Agreement) that constitute First Lien
Obligations) that at the
time of such extensions of credit exceed the Maximum First Lien
Principal
Amount, and (b) any interest, fees, indemnities, costs or expenses
payable on
account of such excess principal amount under the First Lien Loan
Documents or
in respect thereof.
"First Lien Agent"
shall mean J. Aron, as administrative agent for the
First Lien Secured Parties.
"First Lien Borrower" shall have the meaning assigned to such term
in
the introductory paragraph of this Agreement.
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"First Lien Collateral shall mean all "Collateral", as defined in
the
First Lien Security Documents, and any other assets of any Grantor
now or at any
time hereafter subject to Liens securing any First Lien
Obligations.
"First Lien Collateral Agent" shall mean J. Aron, as collateral
agent
for the First Lien Secured Parties.
"First Lien Credit Agreement" shall have the meaning assigned to
such
term in the preliminary statement of this Agreement.
"First
Lien Default Notice" means with respect to any Event of Default
under the First Lien Loan Documents, a written notice from the
First Lien Agent
to the Second Lien Agent describing such Event of Default in
reasonable detail.
"First Lien Lenders" shall have the meaning assigned to such term
in
the preliminary statement of this Agreement.
"First Lien Loan Documents" shall mean the "Transaction Documents,"
as
defined in the First Lien Credit Agreement
"First Lien Loans" shall mean "Loans", as defined in the First
Lien
Credit Agreement.
"First Lien Mortgages" shall mean the "Mortgages", as defined in
the
First Lien Credit Agreement.
"First Lien Obligations" shall mean the "Obligations", as defined
in
the First Lien Credit Agreement.
"First Lien Required Lenders" shall mean the "Required Lenders",
as
defined in the First Lien Credit Agreement.
"First Lien Secured Parties" shall mean the "Secured Party" and
"Lender Parties", as defined in the First Lien Collateral
Agreement.
"First Lien Security Documents" shall mean 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 to secure any
First Lien
Obligations or under which rights or remedies with respect to any
such Lien are
governed.
"First Priority Liens" shall mean all Liens on the First Lien
Collateral securing the First Lien Obligations, whether created
under the First
Lien Security Documents or acquired by possession, statute
(including any
judgment lien), operation of law, subrogation or otherwise.
"Grantors" shall mean the First Lien Borrower and each direct
or
indirect subsidiary of the First Lien Borrower, other than Alaska
Holdings or
the Second Lien Borrower and any of their respective direct or
indirect
subsidiaries, that shall have created or purported to
4
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create any First Priority Lien or Second Priority Lien on all or
any part of its
assets to secure any First Lien Obligations or any Second Lien
Obligations.
"Guarantors" shall mean the First Lien Borrower (with respect to
the
Second Lien Obligations only) and each direct or indirect
subsidiary of the
First Lien Borrower that has Guaranteed, or that may from time to
time hereafter
Guarantee, the First Lien Obligations or the Second Lien
Obligations.
"Indebtedness" shall mean and includes all obligations that
constitute
"Indebtedness", as defined in the First Lien Credit Agreement or
the Second Lien
Credit Agreement, as applicable.
"Insolvency or Liquidation Proceeding" shall mean (a) any voluntary
or
involuntary proceeding under the Bankruptcy Code or any other
Bankruptcy Law
with respect to any Grantor, (b) any voluntary or involuntary
appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for
any Grantor or for a substantial part of the property or assets of
any Grantor,
(c) any voluntary or involuntary winding-up or liquidation of any
Grantor or (d)
a general assignment for the benefit of creditors by any
Grantor.
"Lien" shall mean, with respect to any asset, (a) any mortgage,
deed
of trust, lien, pledge, encumbrance, charge or security interest in
or on such
asset, (b) the interest of a vendor or a lessor under any
conditional sale
agreement, capital lease or title retention agreement (or any
financing lease
having substantially the same economic effect as any of the
foregoing) relating
to such asset and (c) in the case of securities, any purchase
option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean the First Lien Loan Documents and
the
Second Lien Loan Documents.
"Loan Party" shall mean "Loan Party", as defined in the First
Lien
Credit Agreement or the Second Lien Credit Agreement.
"Maximum First Lien Principal Amount" means as of any date of
determination, such amount, not to exceed $110,000,000 as may be
borrowed under
the First Lien Loan Documents.
"New First Lien Collateral Agent" shall have the meaning assigned
to
such term in Section 7.02.
"New First Lien Loan Documents" shall have the meaning assigned
to
such term in Section 7.02.
"New First Lien Obligations" shall have the meaning assigned to
such
term in Section 7.02.
"Obligations" shall mean the First Lien Obligations and the
Second
Lien Obligations.
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"Pledged or Controlled Collateral" shall have the meaning assigned
to
such term in Article V.
"Refinance" shall mean, in respect of any Indebtedness, to
refinance,
extend, renew, restructure or replace or to issue other
Indebtedness in exchange
or replacement for, such Indebtedness, in whole or in part.
"Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Notice" shall have the meaning assigned to such term
in
Section 7.02.
"Release" shall have the meaning assigned to such term in
Section
3.05.
"Second Lien Agent" shall mean Silver Point, as administrative
agent
for the Second Lien Secured Parties.
"Second Lien Borrower" shall have the meaning assigned to such term
in
the introductory paragraph of this Agreement.
"Second Lien Collateral Agent" shall mean Silver Point, as
collateral
agent for the Second Lien Secured Parties.
"Second Lien Collateral Agreement" shall have the meaning assigned
to
such term in the preliminary statement to this Agreement.
"Second Lien Credit Agreement" shall have the meaning assigned to
such
term in the preliminary statement to this Agreement.
"Second Lien Default Notice" means with respect to any Event of
Default under the Second Lien Loan Documents, a written notice from
the Second
Lien Agent to the First Lien Agent describing such Event of Default
in
reasonable detail.
"Second Lien Guaranty" shall have the meaning assigned to such term
in
the preliminary statement to this Agreement.
"Second Lien Guaranty Collateral" shall mean all "Collateral",
as
defined in the Second Lien Security Documents and any other assets
of any
Grantor now or at any time hereafter subject to Liens securing the
Guarantee
Obligations (as defined in the Second Lien Guaranty) of any Grantor
with respect
to the Second Lien Obligations.
"Second Lien Lenders" shall have the meaning assigned to such term
in
the preliminary statement of this Agreement.
"Second Lien Loans" shall mean "Loans", as defined in the Second
Lien
Credit Agreement.
"Second Lien Loan Documents" shall mean the "Loan Documents",
as
defined in the Second Lien Credit Agreement.
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"Second Lien Mortgages" shall mean the "Mortgages", as defined in
the
Second Lien Credit Agreement.
"Second Lien Obligations" shall mean the "Loan Document
Obligations",
as defined in the Second Lien Credit Agreement.
"Second Lien Permitted Actions" shall have the meaning assigned
to
such term in Section 3.01 (a).
"Second Lien Required Lenders" shall mean the "Required Lenders",
as
defined in the Second Lien Credit Agreement.
"Second Lien Secured Parties" shall mean the "Secured Party" and
the
"Lender Parties", as defined in the Second Lien Collateral
Agreement.
"Second Lien Security Documents" shall mean the "Security
Documents",
as defined in the Second Lien Credit Agreement, and any other
agreement,
document or instrument pursuant to which a Lien is granted by the
First Lien
Borrower or any of its direct or indirect subsidiaries, other than
Alaska
Holdings, the Second Lien Borrower or their respective direct or
indirect
subsidiaries, to secure any Second Lien Obligations or under which
rights or
remedies with respect to any such Lien are governed.
"Second Priority Guaranty Liens" shall mean all Liens on the
Second
Lien Collateral to secure the Second Lien Obligations, whether
created under the
Second Lien Security Documents or acquired by possession, statute
(including any
judgment lien), operation of law, subrogation or otherwise.
"Security Documents" shall mean the First Lien Security Documents
and
the Second Lien Security Documents.
"Standstill Period" shall have the meaning assigned to such term
in
Section 3.03(a).
"subsidiary" shall mean, with respect to any person (herein
referred
to as the "parent"), any corporation, partnership, limited
liability company,
association or other business entity (a) of which securities or
other ownership
interests representing more than 50% of the equity or more than 50%
of the
ordinary voting power or more than 50% of the general partnership
interests are,
at the time any determination is being made, directly or
indirectly, owned,
Controlled or held or (b) that is, at the time any determination is
made,
otherwise Controlled, by the parent or one or more subsidiaries of
the parent or
by the parent and one or more subsidiaries of the parent.
"Uniform Commercial Code" or "UCC shall mean the Uniform
Commercial
Code (or any similar or equivalent legislation) as in effect from
time to time
in any applicable jurisdiction.
SECTION 1.03. Terms Generally. The definitions of terms herein
shall
apply equally to the singular and plural forms of the terms
defined. Whenever
the context may
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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";
and the words
"asset" and "property" shall be construed as having 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. All
references herein
to Articles, Sections, Exhibits and Schedules shall be deemed
references to
Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless
the context shall otherwise require. 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
(subject to any restrictions on such amendments, supplements or
modifications
set forth herein), (b) any definition of or reference to any
statute, regulation
or other law herein shall be construed (i) as referring to such
statute,
regulation or other law as from time to time amended, supplemented
or otherwise
modified (including by succession of comparable successor statutes,
regulations
or other laws) and (ii) to include all official rulings and
interpretations
thereunder, (c) any reference herein to any person shall be
construed to include
such person's successors and assigns and (d) 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.
ARTICLE II
Lien Priorities
SECTION 2.01. Relative Priorities.
(a) Notwithstanding the date, manner or order of grant,
attachment or perfection of any Second Priority Guaranty Lien or
any First
Priority Lien, and notwithstanding any provision of the UCC or any
other
applicable law or the provisions of any Security Document or any
other Loan
Document or any other circumstance whatsoever, the Second Lien
Collateral Agent,
for itself and on behalf of the other Second Lien Secured Parties,
hereby agrees
that, so long as the Discharge of First Lien Obligations has not
occurred, (i)
any First Priority Lien now or hereafter held by or for the benefit
of any First
Lien Secured Party shall be senior in right, priority, operation,
effect and all
other respects to any and all Second Priority Guaranty Liens and
(ii) any Second
Priority Guaranty Lien now or hereafter held by or for the benefit
of any Second
Lien Secured Party shall be junior and subordinate in right,
priority,
operation, effect and all other respects to any and all First
Priority Liens.
The First Priority Liens shall be and remain senior in right,
priority,
operation, effect and all other respects to any Second Priority
Guaranty Liens
for all purposes, whether or not any First Priority Liens are
subordinated in
any respect to any other Lien securing any other obligation of the
First Lien
Borrower, any other Grantor or any other person.
(b) Notwithstanding the foregoing clause (a) or anything else
in
this Agreement to the contrary, to the extent that the First Lien
Secured
Parties make any extensions of credit to the First Lien Borrower
pursuant to the
First Lien Loan Documents that at the time of such extensions of
credit
constitute any Excess First Lien Loan Amount, then the amount of
such Excess
First Lien Loan Amount shall not be considered First Lien
Obligations for the
purposes
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of the Lien priorities set forth in clause (a) above. To the extent
provided
under the applicable Documents, all such extensions of credit shall
continue to
be secured by the Collateral; provided, that the Liens upon any of
the
Collateral securing the Excess First Lien Loan Amount shall be
junior and
subordinate to the Liens securing the Second Lien Obligations.
SECTION 2.02. Prohibition on Contesting Liens. Each of the First
Lien
Collateral Agent, for itself and on behalf of the other First Lien
Secured
Parties, and the Second Lien Collateral Agent, for itself and on
behalf of the
other Second Lien Secured Parties, agrees that it will not, and
hereby waives
any right to, (a) contest or support any other person in
contesting, in any
proceeding (including any Insolvency or Liquidation Proceeding),
the priority,
validity or enforceability of any Second Priority Lien or any First
Priority
Lien, as the case may be or (b) subject to the provisions of
Section 6.04
hereof, assert that in any Insolvency or Liquidation Proceeding
that the First
Lien Secured Parties or the Second Lien Secured Parties are not
fully secured or
that the First Lien Secured Parties or the Second Lien Secured
Parties are not
entitled to the payment of any post-petition interests, costs or
expenses;
provided that nothing in this Agreement shall be construed to
prevent or impair
the rights of the First Lien Collateral Agent or any other First
Lien Secured
Party to enforce this Agreement.
SECTION 2.03. No New Liens or Alteration of Priority. The
parties
hereto agree that, so long as the Discharge of First Lien
Obligations has not
occurred, none of the Grantors shall, or shall permit any of its
subsidiaries
to, (a) grant or permit any additional Liens on any asset to secure
any Second
Lien Obligation unless it has granted, or concurrently therewith
grants, a Lien
on such asset to secure the First Lien Obligations or (b) grant or
permit any
additional Liens on any asset of the First Lien Borrower to secure
any First
Lien Obligations unless it has granted, or concurrently therewith
grants, a Lien
on such asset to secure the Second Lien Obligations, with each such
Lien to be
subject to the provisions of this Agreement. To the extent that the
provisions
of the immediately preceding sentence are not complied with for any
reason,
without limiting any other right or remedy available to the First
Lien
Collateral Agent or the other First Lien Secured Parties, the
Second Lien
Collateral Agent agrees, for itself and on behalf of the other
Second Lien
Secured Parties, that any amounts received by or distributed to any
Second Lien
Secured Party pursuant to or as a result of any Lien granted in
contravention of
this Section shall be subject to Section 4.02.
SECTION 2.04. Similar Liens and Agreements. The parties hereto
acknowledge and agree that it is their intention that the First
Lien Collateral
and the Second Lien Collateral be identical. In furtherance of the
foregoing,
the parties hereto agree:
(a) to cooperate in good faith (and to direct their counsel to
cooperate in good faith) in order to determine, upon any reasonable
request by
the First Lien Collateral Agent or the Second Lien Collateral
Agent, the
specific assets included in the First Lien Collateral and the
Second Lien
Guaranty Collateral, the steps taken to perfect the First Priority
Liens and the
Second Priority Guaranty Liens thereon and the identity of the
parties obligated
under the First Lien Loan Documents and the Second Lien Loan
Documents; and
(b) that the documents, agreements and instruments creating or
evidencing the Second Lien Guaranty Collateral and the Second
Priority Guaranty
Liens shall be in all material respects in the same form as the
documents,
agreements and instruments creating
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or evidencing the First Lien Collateral and the First Priority
Liens, other than
with respect to the first priority and second priority nature of
the Liens
created or evidenced thereunder, the identity of the secured
parties that are
parties thereto or secured thereby and other matters contemplated
by this
Agreement.
ARTICLE III
Enforcement of Rights; Matters Relating to Collateral
SECTION 3.01. Exercise of Rights and 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, the First
Lien
Collateral Agent and the other First Lien Secured Parties shall
have the
exclusive right to all Enforcement Actions, in each case, without
any
consultation with or the consent of the Second Lien Collateral
Agent or any
other Second Lien Secured Party; provided that, notwithstanding the
foregoing,
(i) in any Insolvency or Liquidation Proceeding, the Second Lien
Collateral
Agent may file a proof of claim or statement of interest with
respect to the
Second Lien Obligations, (ii) the Second Lien Collateral Agent may
take any
action to create, perfect, preserve or protect the validity and
enforceability
of the Second Priority Guaranty Liens; provided that no such action
is, or could
reasonably be expected to be, (A) adverse to the First Priority
Liens or the
rights of the First Lien Collateral Agent or any other First Lien
Secured Party
to exercise remedies in respect thereof or (B) otherwise
inconsistent with the
terms of this Agreement, including the automatic release of Second
Priority
Guaranty Liens provided in Section 3.05, (iii) the Second Lien
Secured Parties
may file any 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
Secured
Parties, including any claims secured by the Collateral or
otherwise make any
agreements or file any motions pertaining to the Second Lien
Obligations, in
each case, to the extent not inconsistent with the terms of this
Agreement, (iv)
the Second Lien Secured Parties may exercise rights and remedies as
unsecured
creditors, as provided in Section 3.04, (v) vote on any plan of
reorganization,
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
Priority Guaranty Liens, (vi) bid for or purchase Collateral at any
private or
judicial foreclosure sale or sale upon such Collateral, in each
instance,
initiated by the First Lien Secured Parties, (vii) hold a Lien on
the Collateral
pursuant to the Second Lien Collateral Documents for the period and
to the
extent granted therein and (viii) subject to Section 3.03(a), the
Second Lien
Collateral Agent and the other Second Lien Secured Parties may
enforce any of
their rights and exercise any of their remedies with respect to the
Collateral
after the termination of the Standstill Period (the actions
described in this
proviso being referred to herein as the "Second Lien Permitted
Actions"). Except
for the Second Lien Permitted Actions, 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 Secured Parties with respect to the
Collateral
shall be to receive proceeds of the Collateral, if any, after the
Discharge of
First Lien Obligations has occurred and in accordance with the
Second Lien Loan
Documents and applicable law.
(b) In exercising rights and remedies with respect to the
Collateral, the First Lien Collateral Agent and the other First
Lien Secured
Parties may enforce the provisions
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of the First Lien Loan Documents and exercise remedies thereunder,
all in such
order and in such manner as they may determine in their sole
discretion and in
accordance with the First Lien Loan Documents and applicable law.
Such exercise
and enforcement shall include the rights of an agent appointed by
them to
Dispose of Collateral upon foreclosure, to incur expenses in
connection with any
such Disposition and to exercise all the rights and remedies of a
secured
creditor under the Uniform Commercial Code, the Bankruptcy Code or
any other
Bankruptcy Law. The First Lien Collateral Agent agrees to provide
at least five
days' prior written notice to the Second Lien Collateral Agent of
its intention
to foreclose upon or Dispose of any Collateral.
(c) Notices of Default. Each First Lien Secured Party or Second
Lien Secured Party shall give to the other First Lien Secured Party
or Second
Lien Secured Party (or the agent therefor) concurrently with the
giving thereof
to the First Lien Borrower or the Second Lien Borrower (i) a copy
of any written
notice by such First Lien Secured Party or Second Lien Secured
Party of an Event
of Default under the First Lien Loan Documents or Second Lien Loan
Documents or
a written notice of demand for payment from the First Lien Borrower
or the
Second Lien Borrower, and (ii) a copy of any written notice sent by
such First
Lien Secured Party or Second Lien Secured Party to the First Lien
Borrower or
the Second Lien Borrower stating such First Lien Secured Party's or
Second Lien
Secured Party's intention to exercise any rights or remedies with
respect to the
First Lien Collateral or the Second Lien Guaranty Collateral or
other judicial
or non-judicial remedy in respect thereof, and any legal process
served or filed
in connection therewith; provided that except for notices required
to be
provided by a First Lien Secured Party or Second Lien Secured Party
to another
First Lien Secured Party or Second Lien Secured Party under any
other section of
this Agreement the failure of any First Lien Secured Party or
Second Lien
Secured Party to give such required notice shall not result in any
liability to
such First Lien Secured Party or Second Lien Secured Party or
affect the
enforceability of any provision of this Agreement, including the
relative
priorities of the Liens of the First Lien Secured Party or Second
Lien Secured
Party as provided herein, and shall not affect the validity or
effectiveness of
any such notice as against the First Lien Borrower or the Second
Lien Borrower.
Each of First Lien Collateral Agent and Second Lien Collateral
Agent will
provide such information as it may have to the other as the other
may from time
to time reasonably request concerning the status of the exercise of
any
Enforcement Action and First Lien Collateral Agent and Second Lien
Collateral
Agent shall be available on a reasonable basis during normal
business hours to
review with each other alternatives available in exercising such
rights,
including, but not limited to, advising each other of any offers
which may be
made from time to time by prospective purchasers of the Collateral
(except to
the extent the notifying party reasonably believes that a conflict
of interest
may result or a confidentiality provision may be violated),
provided, that, the
failure of any party to do any of the foregoing shall not affect
the relative
priorities of First Lien Collateral Agent's or Second Lien
Collateral Agent's
respective Liens as provided herein or the validity or
effectiveness of any
notices or demands as against either the First Lien Borrower or the
Second Lien
Borrower, as applicable. Each of the First Lien Borrower and the
Second Lien
Borrower hereby consents and agrees to each First Lien Secured
Party or Second
Lien Secured Party providing any such information to the other
First Lien
Secured Parties or Second Lien Secured Parties and to such actions
by the First
Lien Secured Parties or Second Lien Secured Parties and waive any
rights or
claims against any First Lien Secured Parties or Second Lien
Secured Parties
arising as a result of such information or actions.
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(d) The Second Lien Collateral Agent, for itself and on behalf
of
the other Second Lien Secured Parties, hereby acknowledges and
agrees that no
covenant, agreement or restriction contained in any Second Lien
Security
Document or any other Second Lien Loan Document shall be deemed to
restrict in
any way the rights and remedies of the First Lien Collateral Agent
or the other
First Lien Secured Parties with respect to the Collateral as set
forth in this
Agreement and the other First Lien Loan Documents.
SECTION 3.02. Second Lien Secured Parties' Purchase Option.
(a) Purchase Notice. Upon the occurrence of any of the
following,
the First Lien Collateral Agent shall provide notice to the Second
Lien
Collateral Agent (the "Agent's Notice") that (i) First Lien
Collateral Agent or
any First Lien Lender has been contacted by the First Lien Borrower
regarding
(a) the insolvency of the First Lien Borrower including, but not
limited to a
bankruptcy filing, (b) the restructuring of the First Lien
Borrower's debt
obligations, (c) providing additional financing to the First Lien
Borrower
including, but not limited to, debtor-in-possession financing or
(ii) First Lien
Collateral Agent takes or intends to take any Enforcement Action,
(iii) an
Insolvency or Liquidation Proceeding with respect to the First Lien
Borrower has
been commenced (each of (i) through (iii) above, a "Purchase
Trigger"), the
Second Lien Secured Parties (along with other potential lenders)
shall have the
option to purchase from the First Lien Secured Parties all of the
First Lien
Obligations owing to the First Lien Secured Parties by the Second
Lien
Collateral Agent giving a written notice (the "Purchase Notice") to
the First
Lien Collateral Agent no later than fifteen (15) Business Days
after receipt by
the Second Lien Collateral Agent of the Agent's Notice. The
Purchase Notice from
the Second Lien Collateral Agent to the First Lien Collateral Agent
shall be
irrevocable.
(b) Purchase Option Closing. On the date specified by the
Second
Lien Agent in the Purchase Notice (which shall not be less than two
(2) Business
Days nor more than fifteen (15) days, after the receipt by the
First Lien Agent
of the Purchase Notice) (the "Purchase Date"), the First Lien
Secured Parties
shall sell to the applicable Second Lien Secured Parties and any
additional
lenders (designated by the Second Lien Agent), and the applicable
Second Lien
Secured Parties and any additional lenders designated by the Second
Lien Agent
shall purchase from the First Lien Secured Parties, the First Lien
Obligations
owing to the First Lien Secured Parties, and (subject to the last
sentence of
Section 3.02(e)) during such period, the First Lien Secured Parties
shall not
take any Enforcement Action without the consent of the Second Lien
Agent (other
than acceleration of any or all of the First Lien Obligations and
exercise of
control over First Lien Borrower's depository accounts).
(c) Purchase Price. Such purchase and sale shall be made on the
Purchase Date by execution and delivery by the applicable First
Lien Secured
Parties and/or Second Lien Secured Parties of an Assignment
Agreement in the
form attached to the First Lien Credit Agreement. Upon the Purchase
Date, the
applicable Second Lien Secured Parties and any additional lenders
approved by
the Second Lien Agent shall (i) pay to the First Lien Agent for the
benefit of
the First Lien Secured Parties as the purchase price therefor the
sum of (a) the
full amount of all the First Lien Obligations then outstanding and
unpaid
(including principal, interest, fees and expenses, including
reasonable
attorneys' fees and legal expenses and, with respect to Hedging
Contracts that
constitute First Lien Obligations, 100% of the aggregate
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amount of such First Lien Obligations (calculated in accordance
with the terms
of such Hedging Contracts and giving effect to any netting
arrangements) that
the applicable Loan party would be required to pay if such Hedging
Contracts
were terminated at such time) plus (b) any early termination fee,
prepayment fee
or other similar fee payable pursuant to the First Lien Credit
Agreement
(calculated as if such assigned First Lien Obligations were repaid
in full by
the Borrowers at such time, it being understood that no processing
fee will be
changed in connection with such assignment) and (ii) provide for
letters of
credit to back up all outstanding letters of credit issued under
the First Lien
Loan Documents and then outstanding in an amount equal to 101% of
the undrawn
amount of such then outstanding letters of credit or provide cash
collateral to
secure the reimbursement obligations with respect to such letters
of credit in
such amount. Such purchase price and cash collateral shall be
remitted by wire
transfer of immediately available funds to such bank account of the
First Lien
Agent as the First Lien Agent may designate in writing to the
applicable Second
Lien Secured Parties for such purpose. Interest shall be calculated
to but
excluding the Business Day on which such purchase and sale shall
occur if the
amounts so paid by the Second Lien Secured Parties to the bank
account
designated by the First Lien Agent are received in such bank
account prior to
1:00 p.m., New York City time and interest shall be calculated to
and including
such Business Day if the amounts so paid by the applicable Second
Lien Secured
Parties and any additional lenders approved by the Second Lien
Agent to the bank
account designated by the First Lien Agent are received in such
bank account
later than 1:00 p.m., New York City time.
(d) Nature of Sale. Such purchase and sale shall be expressly
made without representation or warranty of any kind by the First
Lien Secured
Parties as to the First Lien Obligations or otherwise and without
recourse to
the First Lien Secured Parties, except for several (not joint)
representations
and warranties as to the following: (i) the amount of the First
Lien Obligations
being purchased (including as to the principal of and accrued and
unpaid
interest on such First Lien Obligations, fees and expenses
thereof), (ii) that
the First Lien Secured Parties own the First Lien Obligations free
and clear of
any Liens (other than Permitted Liens (as defined in the First Lien
Credit
Agreement)), and (iii) each First Lien Lender has the full right
and power to
assign its First Lien Obligations and such assignment has been duly
authorized
by all necessary corporate action by such First Lien Lender.
(e) Notice of Proposed Action. The First Lien Agent agrees that
it will use its reasonable efforts to give the Second Lien Secured
Parties
notice of a Purchase Trigger prior to taking any action
contemplated by a
Purchase Trigger. As soon as practicable after receipt of the
Agent's Notice,
but in no event more than ten (10) Business Days after Second Lien
Agent's
receipt of the Agent's Notice, the Second Lien Agent (if one or
more of the
Second Lien Secured Parties elect to purchase the First Lien
Obligations) shall
send to the First Lien Agent the Purchase Notice. The First Lien
Secured Parties
shall not take any Purchase Trigger actions without the consent of
the Second
Lien Secured Parties electing to purchase the First Lien
Obligations, as long as
the purchase and sale of the First Lien Obligations provided for in
this Section
3.02 shall have closed within fifteen (15) Business Days of Second
Lien Agent's
receipt of the Agent's Notice and the First Lien Secured Parties
shall have
received payment in full of the First Lien Obligations as provided
for in
Section
