GUARANTEE AND COLLATERAL AGREEMENT OF EVEN DATE HEREWITH AMONG THE PARTIES HERETO AND (B) THE OTHER SECURITY DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENTS REFERRED TO HEREIN

Exhibit 10.17

 

INTERCREDITOR AGREEMENT

 

dated as of March 29, 2004,

 

among

 

ATP OIL & GAS CORPORATION,

 

the Subsidiaries of ATP OIL & GAS CORPORATION identified herein,

 

CREDIT SUISSE FIRST BOSTON,

 

as First Lien Collateral Agent

 

and

 

CREDIT SUISSE FIRST BOSTON,

 

as Second Lien Collateral Agent

 

THIS IS THE INTERCREDITOR AGREEMENT REFERRED TO IN (A) THE

GUARANTEE AND COLLATERAL AGREEMENT OF EVEN DATE

HEREWITH AMONG THE PARTIES HERETO AND (B) THE OTHER

SECURITY DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENTS

REFERRED TO HEREIN

 

[CS&M Ref No. 5865-238]

TABLE OF CONTENTS

 

 

 

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INTERCREDITOR AGREEMENT dated as of March 29, 2004, among ATP OIL & GAS CORPORATION, a Texas corporation (the “ Borrower ”), the subsidiaries of the Borrower identified herein, CREDIT SUISSE FIRST BOSTON (“ CSFB ”), as collateral agent for the First Lien Lenders (as defined below) (in such capacity, the “ First Lien Collateral Agent ”), and CSFB, as collateral agent for the Second Lien Lenders (as defined below) (in such capacity, the “ Second Lien Collateral Agent ”).

 

PRELIMINARY STATEMENT

 

Reference is made to (a) the First Lien Credit Agreement dated as of March 29, 2004 (as amended, restated, supplemented, otherwise modified or Refinanced from time to time, the “ First Lien Credit Agreement ”), among the Borrower, the lenders from time to time party thereto (the “ First Lien Lenders ”) and CSFB, as administrative agent (in such capacity, the “ First Lien Administrative Agent ”) and First Lien Collateral Agent, (b) the Second Lien Credit Agreement dated as of March 29, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the “ Second Lien Credit Agreement ” and, together with the First Lien Credit Agreement, the “ Credit Agreements ”), among the Borrower, the lenders from time to time party thereto (the “ Second Lien Lenders ”) and CSFB, as administrative agent (in such capacity, the “ Second Lien Administrative Agent ”) and Second Lien Collateral Agent, (c) the Guarantee and Collateral Agreement dated as of March 29, 2004 (the “ Guarantee and Collateral Agreement ”), among the Borrower, the subsidiaries of the Borrower identified therein as Guarantors (the “ Guarantors ”), the subsidiaries of the Borrower identified therein as Subsidiary Grantors (together with the Borrower, the “ Grantors ”) and CSFB, as First Lien Collateral Agent and Second Lien Collateral Agent, and (d) the other Security Documents referred to in the Credit Agreements.

 

RECITALS

 

A. The First Lien Lenders have agreed to make loans to the Borrower pursuant to the First Lien Credit Agreement, upon, among other terms and conditions, the condition that the First Lien Obligations (such term and each other capitalized term used but not defined in these recitals having the meaning given it in Article I) shall be secured by first priority Liens on, and security interests in, substantially all the assets of the Grantors.

 

B. The Second Lien Lenders have agreed to make loans to the Borrower pursuant to the Second Lien Credit Agreement, upon, among other terms and conditions, the condition that the Second Lien Obligations shall be secured by second priority Liens on, and security interests in, substantially all the assets of the Grantors.

 

C. The Credit Agreements provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the collateral securing the First Lien Obligations and the Second Lien Obligations.

 

D. In order to induce the First Lien Secured Parties to consent to the Grantors incurring the Second Lien Obligations and to induce the First Lien Lenders to make loans to the Borrower under the First Lien Credit Agreement, the Second Lien Collateral Agent on behalf of itself and the other Second Lien Secured Parties has agreed to the lien subordination, intercreditor and other provisions set forth in this Agreement.

 

Accordingly, 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:

 

ARTICLE I

 

Definitions

 

SECTION 1.01. Certain Defined Terms . Capitalized terms used in this Agreement and not otherwise defined herein have the meanings set forth in the First Lien Credit Agreement, the Second Lien Credit Agreement or the Guarantee and Collateral Agreement, as applicable.

 

SECTION 1.02. Other Defined Terms . As used in the Agreement, the following terms shall have the following meanings:

 

“ Agreement ” shall mean this Intercreditor Agreement, as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

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

 

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

 

“ Borrower ” shall have the meaning assigned to such term in the preamble to this Agreement.

 

“ Collateral ” shall mean all of the assets and property of any Grantor, whether real, personal or mixed, constituting both First Lien Collateral and Second Lien Collateral.

 

“ Collateral Documents ” shall mean the collective reference to the First Lien Collateral Documents and the Second Lien Collateral Documents.

 

“ Comparable Second Lien Collateral Document ” shall mean, in relation to any Collateral subject to any Lien created under any First Lien Collateral Document (which instrument does not also create and evidence the Second Lien Collateral as contemplated by Section 2.04(b)), the Second Lien Collateral Document that creates a Lien on the same Collateral, granted by the same Grantor.

 

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“ Credit Agreements ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ CSFB ” shall have the meaning assigned to such term in the preamble to this Agreement.

 

“ DIP Financing ” shall have the meaning assigned to such term in Section 6.01.

 

“ Discharge of First Lien Obligations ” shall mean, except to the extent otherwise provided in Section 5.06 and Section 6.05, (a) payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding under the First Lien Loan Documents and the termination or expiration of all commitments to lend under the First Lien Credit Agreement and (b) payment in full 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.

 

“ Disposition ” shall have the meaning assigned to such term in Section 5.01(a)(ii).

 

“ First Lien Administrative Agent ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ First Lien Collateral Agent ” shall have the meaning assigned to such term in the preamble to this Agreement.

 

“ First Lien Collateral ” shall mean all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any First Lien Obligations.

 

“ First Lien Collateral Documents ” 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 securing any First Lien Obligations or under which rights or remedies with respect to such Liens are governed.

 

“ First Lien Credit Agreement ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ First Lien Loan Documents ” shall mean the “Loan Documents” as defined in the First Lien Credit Agreement.

 

“ First Lien Lenders ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ First Lien Mortgages ” shall mean the collective reference to each mortgage, deed of trust, assignment of leases and rents, assignments of production,

 

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modifications thereto and any other document or instrument under which any Lien on real property owned by any Grantor is granted to secure any First Lien Obligations or under which rights or remedies with respect to any such Liens are governed.

 

“ First Lien Obligations ” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.

 

“ First Lien Secured Parties ” shall mean, at any relevant time, (a) the First Lien Lenders, (b) the First Lien Administrative Agent, (c) the First Lien Collateral Agent, (d) each counterparty to any Hedging Agreement with a Loan Party that either (i) is in effect on the Closing Date if such counterparty is a First Lien Lender or an Affiliate of a First Lien Lender as of the Closing Date or (ii) is entered into after the Closing Date if such counterparty is a First Lien Lender or an Affiliate of a First Lien Lender at the time such Hedging Agreement is entered into, (e) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any First Lien Loan Document and (f) the successors and assigns of each of the foregoing.

 

“ Grantors ” shall have the meaning assigned to such term in the preliminary statement of this Agreement and shall include each subsidiary of the Borrower that may from time to time hereafter execute and deliver a Collateral Document.

 

“ Guarantee and Collateral Agreement ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ Guarantors ” shall have the meaning assigned to such term in the preliminary statement of this Agreement and shall include each subsidiary of the Borrower that may from time to time hereafter guarantee the First Lien Obligations and the Second Lien Obligations by executing and delivering a supplement to the Guarantee and Collateral Agreement in accordance with the terms thereof as required thereunder and under the Credit Agreements.

 

“ Indebtedness ” shall mean and includes all obligations that constitute “Indebtedness” within the meaning of the First Lien Credit Agreement or the Second Lien Credit Agreement, as applicable.

 

“ Insolvency or Liquidation Proceeding ” shall mean (a) any voluntary or involuntary case or proceeding under the Bankruptcy Code or any other Bankruptcy Law with respect to any Grantor, (b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of its 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.

 

“ Lien ” shall mean, with respect to any asset, (a) any mortgage, deed of trust, assignment of leases and rents, assignments of production, lien, pledge,

 

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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 collective reference to the First Lien Loan Documents and the Second Lien Loan Documents.

 

“ Maximum Priority Lien Amount ” shall have the meaning assigned to such term in Section 5.03(a).

 

“ New Agent ” shall have the meaning assigned to such term in Section 5.06.

 

“ Pledged Collateral ” shall have the meaning assigned to such term in Section 5.05(a).

 

“ Recovery ” shall have the meaning assigned to such term in Section 6.05.

 

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

 

“ Second Lien Administrative Agent ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ Second Lien Collateral ” shall mean all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Second Lien Obligations.

 

“ Second Lien Collateral Agent ” shall have the meaning assigned to such term in the preamble to this Agreement.

 

“ Second Lien Collateral 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 securing any Second Lien Obligations or under which rights or remedies with respect to such Liens are governed.

 

“ Second Lien Credit Agreement ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

“ Second Lien Loan Documents ” shall mean the “Loan Documents” as defined in the Second Lien Credit Agreement.

 

“ Second Lien Lenders ” shall have the meaning assigned to such term in the preliminary statement of this Agreement.

 

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“ Second Lien Mortgages ” shall mean the collective reference to each mortgage, deed of trust, assignment of leases and rents, assignments of production, modifications thereto and any other document or instrument under which any Lien on real property owned by any Grantor is granted to secure any Second Lien Obligations or under which rights or remedies with respect to any such Liens are governed.

 

“ Second Lien Obligations ” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement. To the extent any payment with respect to the Second Lien Obligations (whether by or on behalf of any Guarantor or Grantor, as proceeds of security, enforcement of any right of setoff or otherwise) is avoided, set aside or required to be paid to a debtor in possession, trustee, receiver or similar person, then the obligation or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

 

“ Second Lien Permitted Actions ” shall have the meaning assigned to such term in Section 3.01(a)(ii).

 

“ Second Lien Secured Parties ” shall mean, at any relevant time, (a) the Second Lien Lenders, (b) the Second Lien Administrative Agent, (c) the Second Lien Collateral Agent, (d) each counterparty to any Hedging Agreement with a Loan Party that either (i) is in effect on the Closing Date if such counterparty is a Second Lien Lender or an Affiliate of a Second Lien Lender as of the Closing Date or (ii) is entered into after the Closing Date if such counterparty is a Second Lien Lender or an Affiliate of a Second Lien Lender at the time such Hedging Agreement is entered into, (e) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Second Lien Loan Document and (f) the successors and assigns of each of the foregoing.

 

“ Standstill Period ” shall have the meaning assigned to such term in Section 3.01.

 

“ Uniform Commercial Code ” or “ UCC ” shall mean the Uniform Commercial Code (or any similar or equivalent legislation) as in effect 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 require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented 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) all references herein to Articles or Sections shall be

 

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

 

ARTICLE II

 

Lien Priorities

 

SECTION 2.01. Relative Priorities . 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 other applicable law or the provisions of any Loan Document (other than this Agreement) or any Collateral Document or any other circumstance whatsoever, the Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, hereby agrees that: (a) any Lien on the Collateral securing any First Lien Obligations now or hereafter held by or on behalf of the First Lien Collateral Agent or any other First Lien Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Collateral securing any Second Lien Obligations; and (b) any Lien on the Collateral now or hereafter held by or on behalf of the Second Lien Collateral Agent, any other Second Lien Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Collateral securing any First Lien Obligations. All Liens on the Collateral securing any First Lien Obligations shall be and remain senior in all respects and prior to all Liens on the Collateral securing any Second Lien Obligations for all purposes, whether or not such Liens securing any First Lien Obligations are subordinated to any Lien securing any other obligation of the Borrower, any other Grantor or any other person.

 

SECTION 2.02. Prohibition on Contesting Liens . Each of the Second Lien Collateral Agent, for itself and on behalf of each other Second Lien Secured Party, and the First Lien Collateral Agent, for itself and on behalf of each other First Lien Secured Party, 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), the priority, validity or enforceability of any Lien held by or on behalf of any of the First Lien Secured Parties in the First Lien Collateral or by or on behalf of any of the Second Lien Secured Parties in the Second Lien Collateral, as the case may be; 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, including the priority of the Liens securing the First Lien Obligations as provided in Sections 2.01 and 3.01.

 

SECTION 2.03. No New Liens . So long as the Discharge of First Lien Obligations has not occurred, the parties hereto agree that the Borrower shall not, and

 

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shall not permit any other Grantor to, (i) grant or permit any additional Liens on any asset or property to secure any Second Lien Obligation unless it has granted a Lien on such asset or property to secure the First Lien Obligations, or (ii) grant or permit any additional Liens on any asset or property to secure any First Lien Obligations unless it has granted a Lien on such asset or property to secure the Second Lien Obligations, with each such Lien to be subject to the provisions of this Agreement. To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the First Lien Collateral Agent or the other First Lien Secured Parties, the Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, agrees that any amounts received by or distributed to any of them pursuant to or as a result of any Lien granted in contravention of this Section 2.03 shall be subject to Section 4.02.

 

SECTION 2.04. Similar Liens and Agreements . The parties hereto agree that it is their intention that the First Lien Collateral and the Second Lien Collateral be identical. In furtherance of the foregoing, the parties hereto agree, subject to the other provisions of this Agreement:

 

(a) upon request by the First Lien Collateral Agent or the Second Lien Collateral Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the First Lien Collateral and the Second Lien Collateral and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the First Lien Loan Documents and the Second Lien Loan Documents; and

 

(b) that the documents and agreements creating or evidencing the First Lien Collateral and the Second Lien Collateral and guarantees for the First Lien Obligations and the Second Lien Obligations shall, to the extent practicable and permissible under applicable law, be one and the same instruments and, to the extent not practicable or permissible under applicable law, be in all material respects the same forms of documents other than with respect to the first priority and second priority nature of the Liens created thereunder.

 

ARTICLE III

 

Enforcement

 

SECTION 3.01. 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 the Borrower or any other Grantor:

 

(i) the Second Lien Collateral Agent and other the Second Lien Secured Parties (A) will not exercise or seek to exercise any rights or remedies (including any right of setoff) with respect to any Collateral, or institute or seek to institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided , however , that the Second Lien Collateral Agent may exercise any or all such rights after a period of 180 days has elapsed since the

 

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date on which the Second Lien Collateral Agent has delivered to the First Lien Collateral Agent written notice of the occurrence of an Event of Default under any Second Lien Loan Document (the “ Standstill Period ”); provided further , however , that notwithstanding the expiration of the Standstill Period or anything herein to the contrary, in no event shall the Second Lien Collateral Agent or any other Second Lien Secured Party exercise any rights or remedies with respect to Collateral if the First Lien Collateral Agent or any other First Lien Secured Party shall have commenced the exercise of any of their rights or remedies with respect to such Collateral (prompt notice of such exercise to be given to the Second Lien Collateral Agent), (B) will not contest, protest or object to any foreclosure proceeding or action brought by the First Lien Collateral Agent or any other First Lien Secured Party or any other exercise by the First Lien Collateral Agent or any other First Lien Secured Party, of any rights and remedies relating to the Collateral under the First Lien Loan Documents or otherwise, and (C) subject to its rights under clause (A) above, will not object to the forbearance by the First Lien Collateral Agent or the other First Lien Secured Parties from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Collateral, in each case so long as the respective interests of the Second Lien Secured Parties shall continue to attach to the proceeds thereof subject to the relative Lien priorities set forth in Article II; and

 

(ii) the First Lien Collateral Agent and the other First Lien Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including rights of setoff) 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 Secured Party; provided , that (A) in any Insolvency or Liquidation Proceeding commenced by or against the 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 Agent or any other First Lien Secured Party to exercise remedies in respect thereof and not otherwise inconsistent with the term of this Agreement) in order to preserve or protect its second priority Liens on the Collateral, (C) the Second Lien Secured Parties shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Second Lien Secured Parties, including any claims secured by the Collateral, if any, in each case in accordance with the terms of this Agreement, (D) the Second Lien Secured Parties shall be entitled to file any pleadings, objections, motions or agreements that assert rights or interests available to unsecured creditors of the Grantors arising under the Bankruptcy Code, any other Bankruptcy Law or applicable non-bankruptcy law, in each case in accordance with the terms of this Agreement, (E) the Second Lien Secured Parties shall be entitled to file any proof of claim and 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

 

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Lien Obligations and the Collateral and (F) the Second Lien Collateral Agent or any other Second Lien Secured Party may exercise any of its rights or remedies with respect to the Collateral after the termination of the Standstill Period to the extent permitted by clause (i)(A) above (the actions described in this proviso being referred to herein as the “ Second Lien Permitted Actions ”). 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 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 the Bankruptcy Code or any other Bankruptcy Law. The First Lien Collateral Agent agrees to provide at least five day’s notice to the Second Lien Collateral Agent of its intent to exercise and enforce its rights or remedies with respect to the Collateral.

 

(b) The Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, agrees that it will not take or receive any Collateral or any proceeds of any Collateral in connection with the exercise of any right or remedy (including any right of setoff) with respect to any Collateral, unless and until the Discharge of First Lien Obligations has occurred, except for Second Lien Permitted Actions. Without limiting the generality of the foregoing, unless and until the Discharge of First Lien Obligations has occurred, except for Second Lien Permitted Actions, the sole right of the Second Lien Collateral Agent and the other Second Lien Secured Parties with respect to the Collateral is to hold a second priority Lien on the Collateral pursuant to the Second Lien Collateral Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of First Lien Obligations has occurred in accordance with the terms of the this Agreement, the Guarantee and Collateral Agreement and applicable law.

 

(c) Except for Second Lien Permitted Actions, (i) the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties, agrees that the Second Lien Collateral Agent and the other Second Lien Secured Parties will not take any action that would, or could reasonably be expected to, hinder any exercise of remedies under the First Lien Loan Documents or is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Collateral, whether by foreclosure or otherwise, and (ii) the Second Lien Collateral Agent, for itself and on behalf of the other Second Lien Secured Parties, hereby waives any and all rights it or the other Second Lien Secured Parties may have as a junior lien creditor or otherwise to object to the manner in which the First Lien Collateral Agent or the other First Lien Secured Parties 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 the First Lien Collateral Agent or any other First Lien Secured Parties is or could be adverse to the interest of the Second Lien Secured Parties.

 

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(d) The Second Lien Collateral Agent hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Second Lien Collateral Documents or any other Second Lien 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 First Lien Loan Documents.

 

SECTION 3.02. Cooperation . Subject to its rights after the expiration of the Standstill Period and except for Second Lien Permitted Actions, the Second Lien Collateral Agent, on behalf of itself and the other Second Lien Secured Parties, agrees that, unless and until the Discharge of First Lien Obligations has occurred, it will not commence, or join with any person in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding (including any Insolvency or Liquidation Proceeding) with respect to any Lien held by it under the Second Lien Collateral Documents or any other Second Lien Loan Document or otherwise.

 

ARTICLE IV

 

Payments

 

SECTION 4.01. Application of Proceeds . So long as the Discharge of First Lien Obligations has not occurred, any Collateral or proceeds thereof received by the First Lien Collateral Agent in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies, shall be applied by the First Lien Collateral Agent to the First Lien Obligations (and all obligations that have priority in respect of the application of proceeds as set forth in Section 5.02 of the Guarantee and Collateral Agreement) in the order specified in such Section 5.02. Upon the Discharge of First Lien Obligations, the 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 Section 5.02 of the Guarantee and Collateral Agreement or any relevant Second Lien Collateral Documents.

 

SECTION 4.02. Payments Over . So long as the Discharge of First Lien Obligations has not occurred, any Collateral or proceeds thereof (together with assets or proceeds subject to Liens referred to in the final sentence of Section 2.03) received by the Second Lien Collateral Agent or any other Second Lien Secured Party in connection with the exercise of any right or remedy (including any right of setoff) relating to the Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the First Lien Collateral Agent for the benefit of the First Lien Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Collateral Agent is hereby authorized to make any such endorsements as agent for the Second Lien Collateral Agent or any such other Second Lien Secured Parties. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

 

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ARTICLE V

 

Other Agreements

 

SECTION 5.01. Releases .

 

(a) If, in connection with:

 

(i) the exercise of any of the First Lien Collateral Agent’s remedies in respect of the Collateral provided for in Section 3.01, including any sale, lease, exchange, transfer or other disposition of any such Collateral; or

 

(ii) any other sale, lease, exchange, tran