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Exhibit 10.3
EXECUTION COPY
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this
“Agreement” ) is dated as of
September 28, 2007, and entered into by and among
SPECTRUM BRANDS, INC. , a Wisconsin corporation
(the “Company” ); certain Subsidiaries
of the Company party hereto (the “Subsidiary Loan
Parties” and, together with the Company, the
“Loan Parties” ); GOLDMAN
SACHS CREDIT PARTNERS L.P. (
“GSCP” ), in its capacity as
collateral agent for the Term Secured Parties (as defined below),
including its successors and assigns from time to time (the
“Term Collateral Agent” ); and
WACHOVIA BANK, NATIONAL ASSOCIATION (
“Wachovia” ), in its capacity as
collateral agent for the Revolving Secured Parties (as defined
below), including its successors and assigns from time to time (the
“Revolving Collateral Agent”
). Capitalized terms used in this Agreement have the
meanings assigned to them in Section 1 below.
RECITALS
The Company, the lenders party thereto and GSCP, as Administrative
Agent and Collateral Agent, have entered into a Credit Agreement
dated as of March 30, 2007 (as amended, restated,
supplemented, extended, waived, modified, replaced or refinanced
from time to time, the “Term Credit
Agreement” ).
The Company, the Subsidiary Loan Parties, the lenders party
thereto, Wachovia, as Administrative Agent, Collateral Agent and an
LC Issuer, and GSCP, as Syndication Agent, have entered into a
Credit Agreement dated as of the date hereof (as amended, restated,
supplemented, extended, waived, modified, replaced or refinanced
from time to time, the “Revolving Credit
Agreement” ).
Pursuant to the Term Credit Agreement, certain current and future
Subsidiaries have guaranteed or will in the future guarantee the
Term Obligations. Pursuant to the Revolving Credit
Agreement, certain current and future Subsidiaries have guaranteed
or will in the future guarantee the Revolving
Obligations.
The Term Obligations are secured under the Term Collateral
Documents by Liens on the ABL Collateral and the
Non-ABL Collateral. The Revolving Obligations are
being secured on the date hereof under the Revolving Collateral
Documents by Liens on the ABL Collateral. The Term
Secured Parties and the Revolving Secured Parties have authorized
and directed the Term Collateral Agent and the Revolving Collateral
Agent, respectively, to enter into this Agreement, pursuant to
which (a) the Revolving Obligations will be secured on a
first-priority basis by liens on the ABL Collateral and (b)
the Term Obligations will be secured on a second priority basis by
Liens on the ABL Collateral (as well as on a first-priority
basis by Liens on the Non-ABL Collateral).
AGREEMENT
In consideration of the foregoing and the mutual covenants and
obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1.
Definitions.
1.1
Defined Terms.
Capitalized terms used and not defined in this
Agreement have the meanings assigned to them in the Term Credit
Agreement as initially executed by the parties thereto on March 30,
2007. As used in this Agreement, the following terms shall have the
following meanings:
“ABL Collateral”
means any and all of the following
Collateral: (a) all Accounts (other than Accounts
arising under contracts for the sale of Non-ABL Collateral)
and related Records; (b) all Chattel Paper; (c) all
Deposit Accounts and all cash, checks and other negotiable
instruments, funds and other evidences of payment held therein (but
not any identifiable Proceeds of Non-ABL Collateral);
(d) all Inventory; (e) solely to the extent evidencing,
governing, securing or otherwise related to the items referred to
in the preceding clauses (a), (b), (c) and (d), all Documents,
General Intangibles (other than Intellectual Property),
Instruments, Investment Property and Letter of Credit Rights;
(f) all books and records related to the foregoing; and
(g) all Proceeds, including insurance Proceeds, of any and all
of the foregoing and all collateral, security and guarantees given
by any Person with respect to any of the
foregoing. Notwithstanding clause (g) of the immediately
preceding sentence, “ABL Collateral” shall not
include any assets referred to in clauses (a) through (j) and (l)
of the definition of “Non-ABL Collateral” that are
not included in clause (e) above, and shall further not include any
assets excluded from being collateral pursuant to the terms of the
Revolving Collateral Documents. All capitalized terms
used in this definition and not defined elsewhere in this Agreement
have the meanings assigned to them in the UCC as in effect in the
State of New York.
“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by or
is under common control with the Person specified. For
purposes of this definition, a Person shall be deemed to
“control” or be
“controlled by” a Person if such
Person possesses, directly or indirectly, power to direct or cause
the direction of the management or policies of such Person whether
through ownership of equity interests, by contract or
otherwise.
“Agents” means the Term Collateral
Agent and the Revolving Collateral Agent.
“Agreement” means this Intercreditor
Agreement, as amended, restated, replaced, renewed, extended,
supplemented, waived or otherwise modified in writing from time to
time.
“Bankruptcy Code” means Title 11
of the United States Code entitled “Bankruptcy,”
as now and hereafter in effect, or any successor
statute.
“Bankruptcy Law” means the Bankruptcy
Code and any similar federal, state or foreign law for the relief
of debtors.
“Business Day” means a day other than
a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to close.
“Cash Collateral” has the meaning
assigned to that term in Section 6.1.
“Collateral” means all of the assets
and property of any Grantor, whether real, personal or mixed, that
are subject to Liens under the Collateral Documents or any of
them.
“Collateral Documents” means the
Revolving Collateral Documents and the Term Collateral
Documents.
“Company” has the meaning assigned to
that term in the Preamble to this Agreement.
“Comparable Term Collateral Document”
means, in relation to any Collateral subject to any Lien created
under any Revolving Collateral Document, the Term Document which
creates a Lien on the same Collateral, granted by the same
Grantor.
“Credit Documents” means this
Agreement, the Revolving Documents and the Term
Documents.
“Currency Agreement” means any foreign
exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap or other similar agreement or
arrangement of the Company or any of its Subsidiaries.
“DIP Financing” has the meaning
assigned to that term in Section 6.1.
“Discharge of Revolving Obligations”
means, except to the extent otherwise expressly provided in
Section 5.5:
(a) payment
in full in cash of the principal of and interest (including
interest accruing on or after the commencement of any Insolvency or
Liquidation Proceeding, whether or not such interest would be
allowed in such Insolvency or Liquidation Proceeding) on all
Revolving Obligations;
(b) payment
in full in cash of all other Revolving Obligations that are due and
payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid;
(c) termination
or expiration of all commitments, if any, to extend credit that
would constitute Revolving Obligations; and
(d) termination
or cash collateralization of all letters of credit the
reimbursement obligations in respect of which constitute Revolving
Obligations.
“Disposition” has the meaning assigned
to that term in Section 5.1(a)(2).
“Governmental Authority” means any
federal, state, municipal, national or other government,
governmental department, commission, board, bureau, court, agency
or instrumentality or political subdivision thereof or any entity
or officer exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any government or
any court, in each case whether associated with a State of the
United States, the United States, or a foreign entity or
government.
“Grantors” means the Company, each of
the Subsidiary Loan Parties and each other Person that has executed
and delivered or may from time to time hereafter execute and
deliver a Revolving Collateral Document or a Term Collateral
Document as a “Grantor” (or the equivalent
thereof).
“Hedge Agreement” means
an Interest Rate Agreement or a Currency Agreement entered into
with a Lender Party in order to satisfy the requirements of the
Revolving Credit Agreement or the Term Credit
Agreement.
“Indebtedness” means and includes all
obligations that constitute “Indebtedness” within the
meaning of the Revolving Credit Agreement or the Term Credit
Agreement.
“Insolvency or Liquidation Proceeding”
means:
(a) any
voluntary or involuntary case or proceeding under the Bankruptcy
Code with respect to any Grantor;
(b) any
other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding with respect to
any Grantor or with respect to a material portion of its respective
assets;
(c) any
liquidation, dissolution, reorganization or winding up of any
Grantor whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy; or
(d) any
assignment for the benefit of creditors or any other marshalling of
assets and liabilities of any Grantor;
provided that, in the case of any involuntary case or
proceeding, such case or proceeding shall have continued for sixty
days without having been dismissed, bonded or
discharged.
“Interest Rate Agreement” means any
interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedging agreement or other
similar agreement or arrangement of the Company or any of its
Subsidiaries.
“Lender Party” has the meaning
assigned to such term in the Revolving Guarantee and Collateral
Agreement or the Term Guarantee and Collateral
Agreement.
“Lien” means any lien, mortgage,
pledge, assignment, security interest, charge or encumbrance of any
kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any lease
in the nature thereof) and any option, trust, UCC financing
statement or other preferential arrangement having the practical
effect of any of the foregoing.
“Loan Parties” has the meaning
assigned to that term in the preamble to this
Agreement.
“New Revolving Collateral Agent” has
the meaning assigned to that term in Section 5.5.
“New Revolving Credit Debt Notice” has
the meaning assigned to that term in Section 5.5.
“Non-ABL Collateral”
means any and all of the following Collateral: (a)
all Investment Property; (b) all Documents; (c) all General
Intangibles; (d) all Intellectual Property; (e) all Equipment; (f)
all real property (including both fee and leasehold interests) and
fixtures; (g) all Instruments; (h) all insurance; (i) all Letter of
Credit Rights; (j) all Commercial Tort Claims; (k) all other
Collateral not constituting ABL Collateral; (l) all books and
records related to the foregoing; and (m) all Proceeds,
including insurance Proceeds, of any and all of the foregoing and
all collateral security and guarantees given by any Person with
respect to any of the foregoing. Notwithstanding the
foregoing, “Non-ABL Collateral” shall not include
any property or assets included in clause (e) of the definition of
“ABL Collateral”, or any property or assets
excluded from being collateral pursuant to the terms of the Term
Collateral Documents. All capitalized terms used in this
definition and not defined elsewhere in this Agreement have the
meanings assigned to them in the UCC as in effect in the State of
New York.
“Person” means any natural person,
corporation, limited liability company, trust, joint venture,
association, company, partnership, governmental authority or other
entity.
“Pledged Collateral” has the meaning
set forth in Section 5.4.
“Recovery” has the meaning set forth
in Section 6.5.
“Refinance” means, in respect of any
Indebtedness, to refinance, extend, renew, defease, amend, modify,
supplement, restructure, replace, refund or repay, or to issue
other indebtedness, in exchange or replacement for, such
Indebtedness in whole or in part.
“Refinanced” and
“Refinancing” shall have correlative
meanings.
“Revolving Collateral Agent” has the
meaning assigned to such term in the preamble to this
Agreement.
“Revolving Collateral Documents” means
the Revolving Guarantee and Collateral Agreement and any other
documents now existing or entered into after the date
hereof
that create Liens on any ABL Collateral of the Company or any
of its Subsidiaries to secure any Revolving
Obligations.
“Revolving Credit Agreement” has the meaning
assigned to such term in the Recitals to this
Agreement.
“Revolving Credit Cap Amount” has the
meaning assigned to such term in the definition of “Revolving
Obligations”.
“Revolving Credit Excess Amounts” has
the meaning assigned to such term in the definition of
“Revolving Obligations.”
“Revolving Documents” means the
Revolving Credit Agreement and the Revolving Collateral
Documents.
“Revolving Guarantee and Collateral
Agreement” means the ABL Guarantee and
Collateral Agreement dated as of September 28, 2007, among the
Company, the Subsidiary Loan Parties and the Revolving Collateral
Agent, as amended, restated, replaced, renewed, extended,
supplemented, waived or otherwise modified in writing from time to
time.
“Revolving Liens” means Liens on the
ABL Collateral created under the Revolving Collateral
Documents and securing the Revolving Obligations and any Liens
incurred in connection with any Refinancing of Revolving
Obligations that are deemed to be “Revolving Liens”
under Section 5.5.
“Revolving Obligations” means all
“Obligations” under and as defined in the Revolving
Collateral Documents and all Refinancings of such
Obligations. “Revolving Obligations” shall
include all interest accrued or accruing (or which would, absent
commencement of an Insolvency or Liquidation Proceeding, accrue)
after commencement of any Insolvency or Liquidation Proceeding in
accordance with the rate specified in the relevant Revolving
Document, whether or not the claim for such interest is allowed as
a claim in such Insolvency or Liquidation Proceeding.
Notwithstanding the foregoing or any other provision of this
Agreement, if the sum of the Revolving Obligations consisting of
(a) Indebtedness constituting principal of loans under the
Revolving Credit Agreement and the other Revolving Documents
plus (b) the aggregate face amount of all outstanding
letters of credit issued under the Revolving Credit Agreement and
the other Revolving Documents plus (c) all other obligations
in the nature of principal obligations, including obligations under
any Hedge Agreement, under the Revolving Credit Agreement and the
other Revolving Documents, shall be in excess of the lesser of (i)
$300,000,000 and (ii) the Facilities Reduction Amount (as defined
in the Term Credit Agreement as in effect on the date hereof) (the
“Revolving Credit Cap Amount” ), then
that portion of such Indebtedness and face amount of letters of
credit in excess of the Revolving Credit Cap Amount (the
“Revolving Credit Excess Amounts” ),
and all interest and reimbursement obligations in respect of such
Revolving Credit Excess Amounts, shall be secured by the Revolving
Collateral Documents but shall not constitute “Revolving
Obligations” under this Agreement, and the Liens created by
the Revolving Collateral
Documents on the ABL Collateral, insofar as they secure such
Revolving Credit Excess Amounts, shall be junior and subordinate in
all respects to the Term Liens on such
ABL Collateral.
“Revolving Secured Parties” means the
“Secured Parties” as defined in the Revolving Guarantee
and Collateral Agreement.
“Secured Parties” means the Revolving
Secured Parties and the Term Secured Parties.
“Standstill Period” has the meaning
set forth in Section 3.1.
“Subsidiary” means, with respect to
any Person, any corporation, partnership, limited liability
company, association, joint venture or other business entity of
which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the
Person or Persons (whether directors, managers, trustees or other
Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at
the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof. Unless the context indicates
otherwise, all references herein to a “Subsidiary” or
“Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Company.
“Subsidiary Loan Parties” has the
meaning assigned to such term in the preamble to this
Agreement.
“Term Collateral Agent” has the
meaning assigned to such term in the preamble to this
Agreement.
“Term Collateral Documents” means the
Term Guarantee and Collateral Agreement, each Term Mortgage and any
other documents now existing or entered into after the date hereof
that create Liens on any assets or properties of the Company or any
of its Subsidiaries to secure any Term Obligations.
“Term Credit Agreement” has the
meaning assigned to such term in the Recitals to this
Agreement.
“Term Documents” means the Term Credit
Agreement and the Term Collateral Documents.
“Term Guarantee and Collateral
Agreement” means the Guarantee and Collateral
Agreement dated as of March 30, 2007, among the Company, the
Subsidiary Loan Parties and the Term Collateral Agent, as amended,
restated, replaced, renewed, extended, supplemented,
waived or otherwise modified in writing from time to
time.
“Term Liens” means Liens on the
Collateral created under the Term Collateral Documents and securing
the Term Obligations and any judgment Liens referred to in
Section 3.1(e).
“Term Mortgage” means each mortgage,
deed of trust and other document or instrument under which any Lien
on real property owned or leased by any Grantor is granted to
secure any Term Obligations or under which rights or remedies with
respect to such Liens are governed.
“Term Obligations” means all
“Obligations” under and as defined in the Term
Collateral Documents and all Refinancings of such Obligations.
“Term Obligations” shall include all interest accrued
or accruing (or which would, absent commencement of an Insolvency
or Liquidation Proceeding, accrue) after commencement of any
Insolvency or Liquidation Proceeding in accordance with the rate
specified in the relevant Term Document, whether or not the claim
for such interest is allowed as a claim in such Insolvency or
Liquidation Proceeding.
“Term Secured Parties” means the
“Secured Parties” as defined in the Term Guarantee and
Collateral Agreement.
“UCC” means the Uniform Commercial
Code (or any similar or equivalent legislation) as in effect in any
applicable jurisdiction.
1.2
Terms Generally.
The definitions of terms in this Agreement shall apply
equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include,”
“includes” and “including” shall be deemed
to be followed by the phrase “without
limitation.” The word “will” shall be
construed to have the same meaning and effect as the word
“shall.” Unless the context requires
otherwise:
(a) any
definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended,
restated, supplemented, modified, renewed or extended;
(b) any
reference herein to any Person shall be construed to include such
Person’s permitted successors and assigns;
(c) the
words “herein,” “hereof” and
“hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any
particular provision hereof;
(d) all
references herein to Sections shall be construed to refer to
Sections of this Agreement; and
(e) the
words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
SECTION
2. Lien Priorities.
2.1
Relative Priorities.
Notwithstanding the date, time, method, manner or order of grant,
attachment or perfection of any Term Liens granted on the
ABL Collateral or of any Revolving Liens granted on the
ABL Collateral and notwithstanding any provision of the UCC or
any other applicable law or the Term Documents or the Revolving
Documents or any defect or deficiencies in, or failure to perfect,
the Revolving Liens or any other circumstance whatsoever, the Term
Collateral Agent, on behalf of itself and the Term Secured Parties,
and the Revolving Collateral Agent, on behalf of itself and the
Revolving Secured Parties, hereby agree that:
(a) any
Revolving Lien on any ABL Collateral now or hereafter held by
or on behalf of the Revolving Collateral Agent, any Revolving
Secured Parties or any agent or trustee therefor, regardless of how
acquired, whether by grant, possession, statute, operation of law,
subrogation or otherwise, shall be senior in all respects and prior
to any Term Lien on such ABL Collateral;
(b) any
Term Lien on any ABL Collateral now or hereafter held by or on
behalf of the Term Collateral Agent, any Term Secured Parties or
any agent or trustee therefor, regardless of how acquired, whether
by grant, possession, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all
Revolving Liens on such ABL Collateral; and
(c) notwithstanding
any other provision contained in this Agreement, any Liens on
ABL Collateral created by the Revolving Documents, insofar as
they secure Revolving Credit Excess Amounts, shall be junior and
subordinate in all respects to the Term Liens on such
ABL Collateral.
2.2
Prohibition on Contesting Liens.
The Term Collateral Agent, for itself and on behalf of
each Term Secured Party, agrees that it will not (and hereby waives
any right to) contest or support any other Person in contesting, in
any proceeding (including any Insolvency or Liquidation
Proceeding), the perfection, priority, validity or enforceability
of any applicable Revolving Lien on any ABL Collateral or the
provisions of this Agreement.
SECTION 3.
Enforcement.
3.1
Exercise of Remedies.
(a) Until
the Discharge of Revolving Obligations has occurred, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or
against the Company or any other Grantor, the Term Collateral Agent
and the Term Secured Parties:
(i) will
not exercise or seek to exercise any rights or remedies with
respect to any ABL Collateral subject to any Revolving Lien
(including the exercise of any right of setoff or any right under
any lockbox agreement, account control agreement, landlord waiver
or bailee’s letter or similar agreement or arrangement to
which the Term Collateral Agent or any Term Secured Party is a
party) or institute any action or proceeding with respect to such
rights or remedies
(including any action of foreclosure); provided ,
however , that the Term Collateral Agent or any Term Secured
Party may exercise any or all such rights or remedies after a
period of 180 days has elapsed since the first date on which the
Term Collateral Agent shall have (A) declared the existence of any
Event of Default under the Term Documents, (B) demanded the
repayment of all the principal amount of the Term Obligations and
(C) notified the Revolving Collateral Agent of such declaration of
an Event of Default and demand (the “Standstill
Period” ); provided further , however
, that notwithstanding anything herein to the contrary, in no event
shall the Term Collateral Agent or any Term Secured Party exercise
any rights or remedies with respect to any ABL Collateral
subject to any Revolving Lien, notwithstanding the expiration of
the Standstill Period, if the Revolving Collateral Agent or
Revolving Secured Parties shall have commenced and be diligently
pursuing the exercise of rights or remedies with respect to all or
any material portion of such ABL Collateral (prompt notice of
such exercise to be given to the Term Collateral Agent);
provided further , however , that the parties hereto
acknowledge and agree that this Section 3.1(a)(i) shall not in
any way prohibit the Term Collateral Agent or any Term Secured
Party from exercising any of its rights during an Insolvency or
Liquidation Proceeding to the extent permitted by the other
provisions hereof;
(ii) subject
to Section 2.1(c), will not contest, protest or object to any
foreclosure proceeding or action brought by the Revolving
Collateral Agent or any Revolving Secured Party or any other
exercise by the Revolving Collateral Agent or any Revolving Secured
Party of any rights and remedies relating to any
ABL Collateral, whether under the applicable Revolving
Documents or otherwise; and
(iii) subject
to clause (a)(i) above and except as may be permitted in
Section 3.1(c), will not object to the forbearance by the
Revolving Collateral Agent or any Revolving Secured Party from
bringing or pursuing any foreclosure proceeding or action or any
other exercise of any rights or remedies relating to any
ABL Collateral subject to any Revolving Lien;
provided that, in the case of clauses (i), (ii) and
(iii) above, the Liens granted on the ABL Collateral to secure
the Term Obligations shall attach to any Proceeds resulting from
actions taken by the Revolving Collateral Agent or any Revolving
Secured Party in accordance with this Agreement after application
of such Proceeds to the extent necessary to meet the requirements
of a Discharge of Revolving Obligations.
(b) Subject
to the terms and conditions of this Agreement, until the Discharge
of Revolving Obligations has occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or
against the Company or any other Grantor, subject to
Section 3.1(a)(i), the Revolving Collateral Agent and the
Revolving Secured Parties shall have the exclusive right to enforce
rights, exercise remedies (including the exercise of any right of
set-off, any right under any lockbox agreement, account control
agreement, landlord waiver or bailee’s letter or similar
agreement or arrangement and the right to credit bid their debt)
and, in the course of such exercise,
make related determinations regarding the release, disposition or
restrictions with respect to any ABL Collateral subject to
Revolving Liens without any consultation with or the consent of the
Term Collateral Agent or any Term Secured Party; provided
that the Liens on any ABL Collateral securing any Term
Obligations shall remain on the Proceeds of such Collateral so
released or disposed of, subject to the relative priorities
described in Section 2. In exercising rights and
remedies with respect to the ABL Collateral subject to the
Revolving Liens, the Revolving Collateral Agent and each Revolving
Secured Party may enforce the provisions of the applicable
Revolving Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in their sole
discretion. Such exercise and enforcement shall include
the right of any agent appointed by them to sell or otherwise
dispose of such ABL Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition and to
exercise all the rights and remedies of a secured creditor under
the UCC and of a secured creditor under Bankruptcy Laws of any
applicable jurisdiction.
(c) Notwithstanding
the foregoing, the Term Collateral Agent and any Term Secured Party
may:
(i) file
a claim or statement of interest with respect to the applicable
Term Obligations; provided that an Insolvency or Liquidation
Proceeding has been commenced by or against the Company or any
other Grantor;
(ii) take
any action (not adverse to the priority status of any Revolving
Liens on the ABL Collateral or the rights of the Revolving
Collateral Agent or any Revolving Secured Party to exercise
remedies in respect thereof) in order to create, perfect, preserve
or protect its Term Liens on the ABL Collateral;
(iii) file
any necessary responsive or defensive pleadings in opposition to
any motion, claim, adversary proceeding or other pleading made by
any Person objecting to or otherwise seeking the disallowance of
the claims of the Term Secured Parties, including any claims
secured by the ABL Collateral, in each case in accordance with
the terms of this Agreement;
(iv) file
any pleadings, objections, motions or agreements to assert rights
or interests that are available to unsecured creditors of the
Grantors arising under any Insolvency or Liquidation Proceeding or
any applicable law and that, in each case, are not inconsistent
with the terms of this Agreement;
(v) vote
on any plan of reorganization, file any proof of claim, make other
filings and make any arguments and motions that are, in each case,
in accordance with the terms of this Agreement, with respect to the
Term Obligations and the Collateral; and
(vi) exercise
any of its rights or remedies with respect to the
ABL Collateral after the termination of the Standstill Period
to the extent permitted by Section 3.1(a)(i).
The Term Collateral Agent, on behalf of itself
and the Term Secured Parties, agrees that it will not take or
receive any ABL Collateral subject to any Revolving Lien or
any Proceeds of any such ABL Collateral in connection with the
exercise of any right or remedy (including set-off) with respect to
such ABL Collateral in its capacity as a creditor in violation
of this Agreement. Without limiting the generality of
the foregoing, unless and until the Discharge of Revolving
Obligations has occurred, except as expressly provided in
Sections 3.1(a), Section 6.3(b) and this
Section 3.1(c), the sole right of the Term Collateral Agent
and the Term Secured Parties with respect to any
ABL Collateral subject to any Revolving Lien is to hold a Lien
on such ABL Collateral pursuant to the applicable Term
Collateral Documents for the period and to the extent granted
therein and to receive a share of the Proceeds thereof, if any,
after the Discharge of Revolving Obligations has
occurred.
(d) Subject
to Sections 3.1(a), 3.1(c) and 6.3(b):
(i) the
Term Collateral Agent, for itself and on behalf of the Term Secured
Parties, agrees that it and the Term Secured Parties will not take
any action that would hinder or delay any exercise of remedies with
respect to the ABL Collateral under the applicable Revolving
Documents or the realization of the full value of any
ABL Collateral in which the Revolving Collateral Agent has
Liens or would otherwise be prohibited hereunder, including any
sale, lease, exchange, transfer or other disposition of any
ABL Collateral subject to any Revolving Lien, whether by
foreclosure or otherwise;
(ii) the
Term Collateral Agent, for itself and on behalf of the Term Secured
Parties, hereby waives any and all rights it or the Term Secured
Parties may have as junior lien creditors or otherwise to object to
the manner in which the Revolving Collateral Agent or any Revolving
Secured Party seeks to enforce or realize on the Revolving Liens on
the ABL Collateral in accordance with this Agreement,
regardless of whether any action or failure to act by or on behalf
of the Revolving Collateral Agent or such Revolving Secured Party
is adverse to the interests of the Term Secured Parties;
and
(iii) the
Term Collateral Agent hereby acknowledges and agrees that no
covenant, agreement or restriction contained in the Term Collateral
Documents or any other Term Document (other than this Agreement)
shall be deemed to restrict in any way the rights and remedies of
the Revolving Collateral Agent or any Revolving Secured Party with
respect to the ABL Collateral subject to their Revolving Liens
as set forth in this Agreement and the Revolving
Documents.
(e) Except
as otherwise specifically set forth in Sections 3.1(a) and 3.1(d),
the Term Collateral Agent and the Term Secured Parties may exercise
rights and remedies as unsecured creditors against the Company or
any other Person that has guaranteed or granted Liens to secure the
Term Obligations in accordance with the terms of the Term Documents
and applicable law; provided that in the event that any Term
Secured Party becomes a judgment Lien creditor in respect of any
ABL Collateral subject to any Revolving Lien as a result of
its enforcement of its rights as an unsecured creditor
with respect to the applicable Term Obligations, such judgment Lien
shall be subject to the terms of this Agreement for all purposes of
this Agreement.
(f) Nothing
in this Agreement shall prohibit the receipt by the Term Collateral
Agent or any Term Secured Party of the required or permitted
payments of interest, principal and other amounts owed in respect
of the applicable Term Obligations so long as such receipt is not
the direct or indirect result of the exercise by the Term
Collateral Agent or any Term Secured Party of rights or remedies
against the ABL Collateral as a secured creditor (including
set-off) or enforcement in contravention of this Agreement of any
Term Lien on ABL Collateral held by any of
them. Nothing in this Agreement impairs or otherwise
adversely affects any rights or remedies the Revolving Collateral
Agent or any Revolving Secured Party may have with respect to any
ABL Collateral subject to its Revolving Liens.
SECTION 4. Payments.
4.1
Application of Proceeds.
So long as the Discharge of Revolving Obligations has not
occurred, whether or not any Insolvency or Liquidation Proceeding
has been commenced by or against the Company or any other Grantor,
ABL Collateral or Proceeds thereof received in connection with
the sale or other disposition of, or collection on, such
ABL Collateral upon the exercise of remedies by the Revolving
Collateral Agent or any Revolving Secured Parties shall be applied
by the Revolving Collateral Agent to the applicable Revolving
Obligations. Upon the Discharge of Revolving
Obligations, the Revolving Collateral Agent shall deliver to the
Term Collateral Agent any ABL Collateral and Proceeds thereof
held by the Revolving Collateral Agent in the same form as
received, with any necessary endorsements, or as a court of
competent jurisdiction may otherwise direct, to be applied by the
Term Collateral Agent to the Term Obligations.
4.2
Payments Over in Violation of Agreement.
So long as the Discharge of Revolving Obligations has not
occurred, whether or not any Insolvency or Liquidation Proceeding
has been commenced by or against the Company or any other Grantor,
if the Term Collateral Agent or any Term Secured Party receives any
ABL Collateral subject to any Revolving Lien or any Proceeds
thereof in connection with (i) the exercise of any right or
remedy (including set-off) relating to such ABL Collateral in
contravention of this Agreement or (ii) the transfer of such
ABL Collateral or Proceeds to the Term Collateral Agent or the
Term Secured Party (pursuant to this paragraph or otherwise) by any
Person holding a Lien on such ABL Collateral that is
subordinate to the Lien of the Term Collateral Agent or the Term
Secured Party, such ABL Collateral or Proceeds shall be
segregated and held in trust and forthwith paid over to the
Revolving Collateral Agent for the benefit of the applicable
Revolving Secured Parties in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may
otherwise direct. The Revolving Collateral Agent is
hereby authorized to make any such endorsements as agent for the
Term Collateral Agent or the Term Secured Parties (such
authorization being coupled with an interest and irrevocable until
the Discharge of Revolving Obligations).
SECTION 5. Other
Agreements.
5.1
Releases. (a
) If in connection with the exercise of the Revolving
Collateral Agent’s remedies in respect of any
ABL Collateral subject to its Revolving Liens as provided for
in Section 3.1, the Revolving Collateral Agent, for itself or
on behalf of any of the Revolving Secured Parties, releases any of
its Liens on any part of such ABL Collateral, then the Term
Liens of the Term Collateral Agent, for itself or for the benefit
of the Term Secured Parties, on such ABL Collateral shall be
automatically, unconditionally and simultaneously
released. The Term Collateral Agent, for itself and on
behalf of the Term Secured Parties, promptly shall execute and
deliver to the Revolving Collateral Agent such
termination statements, releases and other documents as the
Revolving Collateral Agent may request to effectively confirm such
release.
(b) If
in connection with any sale, lease, exchange, transfer or other
disposition of any ABL Collateral (collectively, a
“Disposition” ) permitted under the
terms of both the Revolving Documents and the Term Documents (other
than in connection with the exercise of the Revolving Collateral
Agent’s remedies in respect of any ABL Collateral as
provided for in Section 3.1) the Revolving Collateral Agent,
for itself or on behalf of any of the Revolving Secured Parties,
releases any of its Revolving Liens on any part of
ABL Collateral other than (A) in connection with the
Discharge of Revolving Obligations or (B) after the occurrence
and during the continuance of any Event of Default under and as
defined in the Term Documents, then the Term Liens of the Term
Collateral Agent on such Collateral shall be automatically,
unconditionally and simultaneously released. The Term
Collateral Agent, for itself and on behalf of the Term Secured
Parties, promptly shall execute and deliver to the Revolving
Collateral Agent such termination statements, releases and other
documents as the Revolving Collateral Agent may request to
effectively confirm such release.
(c) Until
the Discharge of Revolving Obligations occurs, the Term Collateral
Agent, for itself and on behalf of the Term Secured Parties, hereby
irrevocably constitutes and appoints the Revolving Collateral Agent
and any officer or agent of the Revolving Collateral Agent, with
full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of
the Term Collateral Agent or the Term Secured Parties or in the
Revolving Collateral Agent’s own name, from time to time in
the Revolving Collateral Agent’s discretion, for the purpose
of carrying out the terms of this Section 5.1, to take any and
all action and to execute any and all documents and instruments
which may be necessary or appropriate to accomplish the purposes of
this Section 5.1, including any endorsements or other
instruments of transfer or release.
(d) Until
the Discharge of Revolving Obligations occurs, to the extent that
the Revolving Collateral Agent or the Revolving Secured Parties
(i) have released any Revolving Lien on any
ABL Collateral and such Lien is later reinstated or
(ii) obtain any new Liens from any Grantor, then the Term
Collateral Agent, for itself and for the Term Secured Parties,
shall be granted a Lien on any such Collateral, subject, if such
Collateral is ABL Collateral, to the Lien subordination
provisions of this Agreement.
5.2
Insurance.
Unless and until the Discharge of Revolving Obligations has
occurred, subject to the terms of, and the rights of the Grantors
under, the applicable Revolving Documents, the Revolving Collateral
Agent and Revolving Secured Parties shall have the right, in
consultation with and subject to the consent of the Company (unless
an Event of Default shall have occurred and be continuing and
except as otherwise provided in the Revolving Documents), to adjust
settlement for any insurance policy covering any
ABL Collateral subject to the Revolving Liens in the event of
any loss thereunder and, in
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