Exhibit
10.15
EXECUTION VERSION
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is entered into as a deed and
dated as of May 11, 2007 (as amended, restated, renewed,
extended, supplemented or otherwise modified from time to time this
“ Agreement ”), is entered into by and among
(1) EDGEN MERGER CO., a Nevada corporation (which will merge
with and into Edgen Murray Corporation, a Nevada corporation, on
the date hereof, the “ US Company ”),
(2) EDGEN MURRAY CAYMAN CORPORATION, a Cayman Islands exempted
company (the “ Cayman Company ”, together with
the US Company, collectively, the “ Companies
”), (3) EDGEN MURRAY II, L.P., a Delaware limited
partnership (“Holdings”) , (4) certain
subsidiaries of Holdings as guarantors pursuant to the First Lien
Credit Agreement and the Second Lien Credit Agreement (each as
defined below), (5) LEHMAN COMMERCIAL PAPER INC., in its
capacity as security agent (including, in its capacity as UK
security trustee and agent) for the First Lien Term Credit
Obligations (as defined below) (including its successors and
assigns from time to time, the “ First Lien Security
Agent ”), (6) LEHMAN COMMERCIAL PAPER INC., in its
capacity as administrative agent for the First Lien Obligations
(including its successors and assigns from time to time, the
“ First Lien Administrative Agent ”),
(7) LEHMAN COMMERCIAL PAPER INC., in its capacity as security
agent for the Second Lien Term Credit Obligations (as defined
below) (including its successors and assigns from time to time, the
“ Second Lien Security Agent ”) and
(8) LEHMAN COMMERCIAL PAPER INC., in its capacity as
administrative agent for the Second Lien Obligations (including its
successors and assigns from time to time, the “ Second
Lien Administrative Agent ”). Capitalized terms used in
this Agreement have the meanings assigned to them in Section 1
below.
RECITALS
A. The US Company, the Cayman
Company, Holdings, the First Lien Lenders, the agents from time to
time party thereto and the First Lien Security Agent have entered
into a First Lien Credit Agreement dated as of the date hereof
providing for a first lien term loan facility (as amended,
restated, supplemented, modified, replaced or refinanced from time
to time, the “ First Lien Credit Agreement
”);
B. The US Company, Holdings, the
Second Lien Lenders, the agents from time to time party thereto and
the Second Lien Security Agent have entered into a Second Lien
Credit Agreement dated as of the date hereof providing for a second
lien term loan facility (as amended, restated, supplemented,
modified, replaced or refinanced from time to time, the “
Second Lien Credit Agreement ”, together with the
First Lien Credit Agreement, collectively, the “ Term Loan
Credit Agreements ”);
C. Pursuant to (i) the First
Lien Guarantee and Collateral Agreement dated as of the date
hereof, the Cayman Debenture and the UAE Guarantee (collectively,
the “ First Lien Guarantees ”), Holdings and
each Foreign Subsidiary Guarantor (as defined in the First Lien
Credit Agreement) have agreed to guarantee the First Lien
Obligations (solely with respect to the obligations of the Cayman
Company), (ii) the First Lien Guarantee and Collateral
Agreement dated as of the date hereof, Holdings has agreed to
guarantee the First Lien Obligations (with respect to the
obligations of each Company) and (iii) the First Lien Credit
Agreement, Holdings and each Company have agreed to cause certain
current and future Subsidiaries to agree to guarantee the First
Lien Obligations (as it relates to any guarantee of a Foreign
Subsidiary, solely with respect to the obligations of the Cayman
Company) (the “ First Lien Subsidiary Guarantee
”);
D. Pursuant to (i) the Second
Lien Guarantee and Collateral Agreement dated as of the date
hereof, Holdings has agreed to guarantee the Second Lien
Obligations (the “ Second Lien
Holdings
Guarantee ”); and (ii) the Second Lien Credit
Agreement dated as of the date hereof, Holdings and the US Company
have agreed to cause certain current and future domestic
Subsidiaries to agree to guarantee the Second Lien Obligations
pursuant to a Subsidiary Guarantee (the “ Second Lien
Subsidiary Guarantee ”);
E. The obligations of each Company
under the First Lien Credit Agreement and any Hedge Agreements with
the First Lien Lenders (or any of their Affiliates), the
obligations of Holdings under the First Lien Guarantee and the
obligations of each Foreign Subsidiary Guarantor under the First
Lien Guarantees will be secured on a first priority basis by liens
on substantially all the assets of each Company, Holdings and
(solely with respect to the First Lien Obligations of the Cayman
Company) each Foreign Subsidiary Guarantor, pursuant to the terms
of the First Lien Collateral Documents;
F. The obligations of the US Company
under the Second Lien Credit Agreement and the obligations of
Holdings under the Second Lien Holdings Guarantee will be secured
on a second priority basis by liens on substantially all the assets
of the US Company and Holdings pursuant to the terms of the Second
Lien Collateral Documents;
G. The First Lien Loan Documents and
the Second Lien Loan Documents provide, among other things, that
the parties thereto shall set forth in this Agreement their
respective rights and remedies with respect to the Collateral;
and
H. In order to induce the First Lien
Security Agent and the First Lien Claimholders to consent to the
Grantors incurring the Second Lien Obligations and to induce the
First Lien Claimholders to extend credit and other financial
accommodations and lend monies to or for the benefit of each
Company or any other Grantor, the Second Lien Security Agent on
behalf of the Second Lien Claimholders has agreed to the
intercreditor and other provisions set forth in this Agreement.
I. The parties hereto are also
parties to an intercreditor agreement dated the date hereof among
the Companies, Holdings, Edgen Murray Canada Inc., the guarantors
listed therein, JPMorgan Chase Bank, as US revolving collateral
agent and US revolving administrative agent, JPMorgan Chase Bank,
N.A., Toronto Branch, as Canadian revolving collateral agent and
Canadian revolving administrative agent, and J.P. Morgan Europe
Limited, as U.K. revolving collateral agent and U.K. revolving
administrative agent (as amended, restated, amended and restated,
supplemented, replaced or otherwise modified from time to time)
(the “ ABL Intercreditor Agreement ”).
AGREEMENT
In consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1. Definitions .
1.1 Defined Terms . As used
in the Agreement, the following terms shall have the following
meanings:
“ ABL Intercreditor Agreement ” has the meaning
assigned to that term in the Recitals to this Agreement.
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“ Affiliate ” means as to any Person, any other
Person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, “control” of a Person
means the power, directly or indirectly, either to (a) vote
10% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of
such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
“ Agreement ” means this Intercreditor
Agreement, as amended, restated, renewed, extended, supplemented or
otherwise modified from time to time.
“ Asset Sale ” has the meaning assigned to that
term in the First Lien Credit Agreement.
“ 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
in any applicable jurisdiction.
“ Business Day ” means (a) for all purposes
other than as covered by clause (b) below, a day other than a
Saturday, Sunday or other day on which commercial banks in New York
City or London are authorized or required by law to close and
(b) with respect to all notices and determinations in
connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in
clause (a) and which is also a day for trading by and between
banks in Dollar deposits in the interbank eurodollar market.
“ Cap Amount ” has the meaning assigned to that
term in the definition of “First Lien Obligations.”
“ Collateral ” means all of the assets and
property of any Grantor, whether real, personal or mixed,
constituting both First Lien Collateral and Second Lien
Collateral.
“ Companies ” has the meaning assigned to that
term in the Preamble to this Agreement.
“ Comparable Second Lien Collateral Document ”
means, in relation to any Collateral subject to any Lien created
under any First Lien Collateral Document, the Second Lien Loan
Document that creates a Lien on the same Collateral, granted by the
same Grantor.
“ Currency Agreement ” means any foreign
exchange contract, currency swap agreement, futures contract,
option contract, synthetic cap or other similar agreement or
arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with the operations of each
Company and/or its Affiliates and not for speculative purposes.
“ DIP Financing ” has the meaning assigned to
that term in Section 6.1.
“ Discharge of First Lien Obligations ” means,
except to the extent otherwise expressly provided in
Section 5.5:
(a) payment in full in cash of the principal
of and interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether
or
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not such interest would
be allowed in such Insolvency or Liquidation Proceeding), on all
Indebtedness outstanding under the First Lien Loan Documents and
constituting First Lien Obligations;
(b) payment in full in cash of all Hedging
Obligations constituting First Lien Obligations and the expiration
or termination of all Hedge Agreements included in the First Lien
Obligations or the cash collateralization of all such Hedging
Obligations on terms satisfactory to each applicable
counterparty;
(c) payment in full in cash of all other
First Lien Obligations that are due and payable or otherwise
accrued and owing at or prior to the time such principal and
interest are paid (other than any indemnification obligations for
which no claim or demand for payment, whether oral or written, has
been made at such time); and
(d) termination or cash collateralization
(in an amount and manner reasonably satisfactory to the First Lien
Security Agent, but in no event greater than 105% of the aggregate
undrawn face amount) of all letters of credit issued under the
First Lien Loan Documents and constituting First Lien
Obligations.
“ Disposition ” has the meaning assigned to that
term in Section 5.1(b).
“ First Lien Claimholders ” means, at any
relevant time, the holders of First Lien Obligations at that time,
including the First Lien Lenders and the agents under the First
Lien Loan Documents.
“ First Lien Collateral ” means all of the
assets and property of any Grantor, whether real, personal or
mixed, with respect to which a Lien is granted (or purported to be
granted) as security for any First Lien Obligations.
“ First Lien Collateral Documents ” means the
Security Documents (as defined in the First Lien Credit Agreement)
and any other agreement, document or instrument pursuant to which a
Lien is granted (or purported to be granted) securing any First
Lien Obligations or under which rights or remedies with respect to
such Liens are governed.
“ First Lien Credit Agreement ” has the meaning
assigned to that term in the Recitals to this Agreement.
“ First Lien Holdings Guarantee ” has the
meaning assigned to that term in the Recitals to this
Agreement.
“ First Lien Lenders ” means the “Term
Loan Lenders” under and as defined in the First Lien Loan
Documents.
“ First Lien Loan Documents ” means the First
Lien Credit Agreement and the Loan Documents (as defined in the
First Lien Credit Agreement) and each of the other agreements,
documents and instruments providing for or evidencing any other
First Lien Obligation, and any other document or instrument
executed or delivered at any time in connection with any First Lien
Obligations, including any intercreditor or joinder agreement among
holders of First Lien Obligations, to the extent such are effective
at the relevant time, as each may be amended, restated,
supplemented, modified, renewed or extended from time to time in
accordance with the provisions of this Agreement.
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“ First Lien Mortgages ” means a collective
reference to each mortgage, deed of trust and other document or
instrument under which any Lien on real property owned or leased by
any Grantor is granted (or purported to be granted) to secure any
First Lien Obligations or under which rights or remedies with
respect to any such Liens are governed.
“ First Lien Obligations ” means, subject to
clause (c) hereof, the following:
(a) (i) all principal of and interest (including without
limitation any Post-Petition Interest) and premium (if any) on all
loans made pursuant to the First Lien Credit Agreement,
(ii) all reimbursement obligations (if any) and interest
thereon (including without limitation any Post-Petition Interest)
with respect to any letter of credit or similar instruments issued
pursuant to the First Lien Credit Agreement, (iii) all Hedging
Agreements which at the time they were entered into were with the
administrative agent under the First Lien Credit Agreement, any
First Lien Lender (or any of their Affiliates), (iv) all
guarantee obligations, fees, expenses and all other Obligations
under the First Lien Credit Agreement and the other First Lien Loan
Documents, in each case whether or not allowed or allowable in an
Insolvency or Liquidation Proceeding.
(b) To the extent any payment with respect to any First Lien
Obligation (whether by or on behalf of any Grantor, as proceeds of
security, enforcement of any right of setoff or otherwise) is
declared to be a fraudulent conveyance or a preference in any
respect, set aside or required to be paid to a debtor in
possession, any Second Lien Claimholders, receiver or similar
Person, then the obligation or part thereof originally intended to
be satisfied shall, for the purposes of this Agreement and the
rights and obligations of the First Lien Claimholders and the
Second Lien Claimholders, be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent that
any interest, fees, expenses or other charges (including, without
limitation, Post-Petition Interest) to be paid pursuant to the
First Lien Loan Documents are disallowed by order of any court,
including, without limitation, by order of a Bankruptcy Court in
any Insolvency or Liquidation Proceeding, such interest, fees,
expenses and charges (including, without limitation, Post-Petition
Interest) shall, as between the First Lien Claimholders and the
Second Lien Claimholders, be deemed to continue to accrue and be
added to the amount to be calculated as the “First Lien
Obligations”.
(c) Notwithstanding the foregoing, if the sum of:
(1) Indebtedness for borrowed money constituting principal
outstanding under the First Lien Credit Agreement and the other
First Lien Documents; plus (2) the aggregate face
amount of any letters of credit issued but not reimbursed under the
First Lien Credit Agreement, is in excess of $467,500,000 in the
aggregate (the “ Cap Amount ”), then only that
portion of such Indebtedness and such aggregate face amount of
letters of credit equal to the Cap Amount shall be included in
First Lien Obligations and interest (including without limitation
any Post-Petition Interest) and premium (if any) and reimbursement
obligations with respect to such Indebtedness and letters of credit
shall only constitute First Lien Obligations to the extent related
to Indebtedness and face amounts of letters of credit included in
the First Lien Obligations.
“ First Lien Security Agent ” has the meaning
assigned to that term in the Recitals to this Agreement.
“ First Lien Subsidiary Guarantee ” has the
meaning assigned to that term in the Recitals to this
Agreement.
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“ Governmental Authority ” means any nation or
government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
“ Grantors ” means each Company, Holdings, each
of the Guarantor Subsidiaries and each other Person that has or may
from time to time hereafter execute and deliver a First Lien
Collateral Document or a Second Lien Collateral Document as a
“grantor” or “pledgor” (or the equivalent
thereof).
“ Guarantor Subsidiaries ” means each Subsidiary
Guarantor or Foreign Subsidiary Guarantor, to the extent
applicable.
“ Hedge Agreements ” means an Interest Rate
Agreement or a Currency Agreement entered into with a Lender
Counterparty in order to satisfy the requirements of the First Lien
Credit Agreement, the Second Lien Credit Agreement or otherwise not
entered into for speculative purposes by any Company and/or its
Affiliates.
“ Hedging Obligation ” of any Person means any
obligation of such Person pursuant to any Hedge Agreements.
“ Holdings ” has the meaning set forth in the
Recitals to this Agreement.
“ Indebtedness ” means and includes all
Obligations that constitute “Indebtedness” within the
meaning of the First Lien Credit Agreement or the Second Lien
Credit Agreement, as applicable.
“ Insolvency or Liquidation Proceeding ”
means:
(a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code with respect to any
Grantor;
(b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding with respect to any Grantor or with respect to a
material portion of their respective assets;
(c) any liquidation, dissolution,
reorganization or winding up of any Grantor whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy;
or
(d) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of any
Grantor.
“ Intellectual Property ” means the collective
reference to all rights, priorities and privileges relating to
intellectual property, whether arising under United States, Canada,
state, provincial, territorial, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
service-marks, technology, know-how and processes, recipes,
formulas, trade secrets, and all rights to sue at law or in equity
for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
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“ Interest Rate Agreement ” means any interest
rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement or arrangement designed
to protect the Companies or any of their Affiliates against
fluctuations in interest rates and is not for speculative
purposes.
“ Lender Counterparty ” means Person who at the
time such Hedge Agreement was entered into was the administrative
agent under the First Lien Credit Agreement, a First Lien Lender,
the administrative agent under the Second Lien Credit Agreement, a
Second Lien Lender or an Affiliate of any of the foregoing
Persons.
“ Lien ” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect
as any of the foregoing).
“ New Agent ” has the meaning assigned to that
term in Section 5.5.
“ Obligations ” means all obligations of every
nature of each Grantor from time to time owed to any agent or
trustee, the First Lien Claimholders, the Second Lien Claimholders
or any of them or their respective Affiliates under the First Lien
Loan Documents, the Second Lien Loan Documents or Hedge Agreements,
whether for principal, reimbursement payments, interest or payments
for early termination of Interest Rate Agreements, fees, expenses,
indemnification or otherwise and all guarantees of any of the
foregoing.
“ Person ” means an individual, partnership,
corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
“ Pledged Collateral ” has the meaning set forth
in Section 5.4.
“ Post-Petition Interest ” means interest, fees,
expenses and other charges that pursuant to the First Lien Credit
Agreement or the Second Lien Credit Agreement, continue to accrue
after the commencement of any Insolvency or Liquidation Proceeding,
whether or not such interest, fees, expenses and other charges are
allowed or allowable under the Bankruptcy Law or in any such
Insolvency or Liquidation Proceeding.
“ 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 Credit Agreement ” has the meaning
assigned to that term in the ABL Intercreditor Agreement.
“ Second Lien Claimholders ” means, at any
relevant time, the holders of Second Lien Obligations at that time,
including the Second Lien Lenders and the agents under the Second
Lien Loan Documents.
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“ Second Lien Collateral ” means all of the
assets and property of any Grantor, whether real, personal or
mixed, with respect to which a Lien is granted as security for any
Second Lien Obligations.
“ Second Lien Collateral Documents ” means 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 ” has the meaning
assigned to that term in the Recitals to this Agreement.
“ Second Lien Holdings Guarantee ” has the
meaning assigned to that term in the Recitals to this
Agreement.
“ Second Lien Lenders ” means the
“Lenders” under and as defined in the Second Lien
Credit Agreement.
“ Second Lien Loan Documents ” means the Second
Lien Credit Agreement and the Loan Documents (as defined in the
Second Lien Credit Agreement) and each of the other agreements,
documents and instruments providing for or evidencing any other
Second Lien Obligation, and any other document or instrument
executed or delivered at any time in connection with any Second
Lien Obligations, including any intercreditor or joinder agreement
among holders of Second Lien Obligations to the extent such are
effective at the relevant time, as each may be amended, restated,
supplemented, modified, renewed or extended from time to time in
accordance with the provisions of this Agreement.
“ Second Lien Mortgages ” means a collective
reference to each mortgage, deed of trust and any other document or
instrument under which any Lien on real property owned or leased by
any Grantor is granted to secure any Second Lien Obligations or
under which rights or remedies with respect to any such Liens are
governed.
“ Second Lien Obligations ” means all
Obligations outstanding under the Second Lien Credit Agreement and
the other Second Lien Loan Documents, including Hedge Agreements
entered into with the administrative agent under the Second Lien
Credit Agreement, any Second Lien Lender (or any of their
Affiliates) but only to the extent such administrative agent,
Second Lien Lender (or such Affiliate) is not also a First Lien
Lender or administrative agent under the First Lien Credit
Agreement. “Second Lien Obligations” shall include all
interest accrued or accruing (or which would, absent commencement
of an Insolvency or Liquidation Proceeding, accrue) after
commencement of an Insolvency or Liquidation Proceeding in
accordance with the rate specified in the relevant Second Lien Loan
Document whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
“ Second Lien Security Agent ” has the meaning
set assigned to that term in the Preamble of this Agreement.
“ Second Lien Subsidiary Guarantee ” has the
meaning assigned to that term in the Recitals to this
Agreement.
“ Standstill Period ” has the meaning set forth
in Section 3.1.
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“ Subsidiary ” means as to any Person, a
corporation, partnership, limited liability company or other entity
of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership, limited liability
company or other entity are at the time owned, or the management of
which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.
“ UCC ” means the Uniform Commercial Code (or
any similar or equivalent legislation) as in effect in any
applicable jurisdiction.
1.2 Terms Generally . The
definitions of terms in this Agreement shall apply equally to the
singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words
“include,” “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation.” The word
“will” shall be construed to have the same meaning and
effect as the word “shall.” Unless the context requires
otherwise:
(a) any definition of or reference to any
agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as
from time to time amended, restated, supplemented, modified,
renewed or extended;
(b) any reference herein to any Person shall
be construed to include such Person’s permitted successors
and assigns;
(c) the words “herein,”
“hereof” and “hereunder,” and words of
similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof;
(d) all references herein to Sections shall
be construed to refer to Sections of this Agreement; and
(e) the words “asset” and
“property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and
contract rights.
SECTION 2. Lien Priorities .
2.1 Relative Priorities .
Notwithstanding the date, time, method, manner or order of grant,
attachment or perfection of any Liens securing the Second Lien
Obligations granted on the Collateral or of any Liens securing (or
purporting to secure) the First Lien Obligations granted on the
Collateral and notwithstanding any provision of the UCC, or any
other applicable law or the Second Lien Loan Documents or any
defect or deficiencies in, or failure to perfect or lapse in
perfection of, or avoidance as a fraudulent conveyance or otherwise
of, the Liens securing the First Lien Obligations or any other
circumstance whatsoever, the Second Lien Security Agent, on behalf
of itself and the Second Lien Claimholders, hereby agrees that:
(a) any Lien on the Collateral securing (or
purporting to secure) any First Lien Obligations now or hereafter
held by or on behalf of the First Lien Security Agent or any First
Lien Claimholders or any agent or trustee therefor, regardless of
how acquired, whether by grant,
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possession, statute,
operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the Collateral securing any
Second Lien Obligations; and
(b) any Lien on the Collateral securing any
Second Lien Obligations now or hereafter held by or on behalf of
the Second Lien Security Agent, any Second Lien Claimholders or any
agent or trustee therefor regardless of how acquired, whether by
grant, possession, statute, operation of law, subrogation or
otherwise (including pursuant to Section 3.1(e)), shall be
junior and subordinate in all respects to all Liens on the
Collateral securing (or purporting to secure) any First Lien
Obligations. All Liens on the Collateral securing (or purporting to
secure) 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 (or purporting to secure) any First Lien Obligations are
subordinated to any Lien securing any other obligation of the
Companies, any other Grantor or any other Person.
2.2 Prohibition on Contesting
Liens . Each of the Second Lien Security Agent, for itself and
on behalf of each Second Lien Claimholder, and the First Lien
Security Agent, for itself and on behalf of each First Lien
Claimholder, agrees that it will not (and hereby waives any right
to) contest or support any other Person in contesting, in any
proceeding (including any Insolvency or Liquidation Proceeding),
the priority, validity, perfection or enforceability of a Lien held
by or on behalf of any of the First Lien Claimholders in the First
Lien Collateral or by or on behalf of any of the Second Lien
Claimholders in the Second Lien Collateral, as the case may be, or
the provisions of this Agreement; provided that nothing in
this Agreement shall be construed to prevent or impair the rights
of the First Lien Security Agent or any First Lien Claimholder to
enforce this Agreement, including the provisions of this Agreement
relating to the priority of the Liens securing the First Lien
Obligations as provided in Sections 2.1 and 3.1.
2.3 No New Liens . So long
as the Discharge of First Lien Obligations has not occurred,
whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Company or any other Grantor, the
parties hereto agree that each Company shall not, and shall not
permit any other Grantor to:
(a) grant or permit any additional Liens on
any asset or property of Holdings, the US Company and any domestic
subsidiary of the US Company to secure any Second Lien Obligation
unless it has granted or concurrently grants a Lien on such asset
or property to secure the First Lien Obligations, the parties
hereto agreeing that any such Lien shall be subject to
Section 2.1 hereof; or
(b) grant or permit any additional Liens on
any asset or property of Holdings, the US Company and any domestic
subsidiary of the US Company to secure any First Lien Obligations
unless it has granted or concurrently grants a Lien on such asset
or property to secure the Second Lien Obligations. To the extent
that the foregoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the
First Lien Security Agent and/or the First Lien Claimholders, the
Second Lien Security Agent, on behalf of Second Lien Claimholders,
agrees that any amounts received by or distributed to any of them
pursuant to or as a result of Liens granted in contravention of
this Section 2.3 shall be subject to Section 4.2.
2.4 Similar Liens and
Agreements . The parties hereto agree that it is their
intention that the First Lien Collateral and the Second Lien
Collateral be identical with respect to any asset or property of
Holdings, the US Company and any domestic subsidiary of the US
Company. In furtherance of the foregoing and of Section 8.9,
the parties hereto agree, subject to the other provisions of this
Agreement:
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(a) upon request by the First Lien Security
Agent or the Second Lien Security Agent, to cooperate in good faith
(and to direct their counsel to cooperate in good faith) from time
to time in order to determine the specific items included in the
First Lien Collateral and the Second Lien Collateral and the steps
taken to perfect their respective Liens thereon and the identity of
the respective parties obligated under the First Lien Loan
Documents and the Second Lien Loan Documents; and
(b) that the documents and agreements
creating or evidencing the First Lien Collateral and the Second
Lien Collateral and guarantees for the First Lien Obligations and
the Second Lien Obligations, subject to Section 5.3(d), shall
be in all material respects the same forms of documents other than
with respect to the first lien and the second lien nature of the
Obligations thereunder.
SECTION 3. Enforcement .
3.1 Exercise of Remedies
.
(a) Until the Discharge of First Lien
Obligations has occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Company
or any other Grantor, the Second Lien Security Agent and the Second
Lien Claimholders:
(1) will not exercise or seek to exercise
any rights or remedies with respect to any Collateral (including
the exercise of any right of setoff or any right under any lockbox
agreement, account control agreement, landlord waiver or
bailee’s letter or similar agreement or arrangement to which
the Second Lien Security Agent or any Second Lien Claimholder is a
party) or institute any action or proceeding with respect to such
rights or remedies (including any action of foreclosure);
provided , however , that the Second Lien Security
Agent may exercise any or all such rights or remedies after the
passage of a period of at least 180 days has elapsed since the
later of: (i) the date on which the Second Lien Security Agent
declared the existence of any Event of Default under any Second
Lien Loan Documents and demanded the repayment of all the principal
amount of any Second Lien Obligations; and (ii) the date on
which the First Lien Security Agent received notice from the Second
Lien Security Agent of such declarations of an Event of Default,
(the “ Standstill Period ”); provided ,
further , however , that notwithstanding anything
herein to the contrary, in no event shall the Second Lien Security
Agent or any Second Lien Claimholder exercise any rights or
remedies with respect to the Collateral if, notwithstanding the
expiration of the Standstill Period, the First Lien Security Agent
or First Lien Claimholders shall have commenced and be diligently
pursuing the exercise of their rights or remedies with respect to
all or any material portion of the Collateral (prompt notice of
such exercise to be given to the Second Lien Security Agent);
(2) will not contest, protest or object to
any foreclosure proceeding or action brought by the First Lien
Security Agent or any First Lien Claimholder or any other exercise
by the First Lien Security Agent or any First Lien Claimholder of
any rights and remedies relating to the Collateral under the First
Lien Loan Documents or otherwise; and
(3) subject to their rights under clause
(a)(1) above, will not object to the forbearance by the First Lien
Security Agent or the First Lien Claimholders from bringing or
pursuing any foreclosure proceeding or action or any other exercise
of any rights or remedies relating to the Collateral, in each case
so long as the Liens granted to
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secure the Second Lien Obligations of the Second Lien Claimholders
attach to the proceeds thereof subject to the relative priorities
described in Section 2.
(b) Until the Discharge of First Lien
Obligations has occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Company
or any other Grantor, subject to Section 3.1(a)(1), the First
Lien Security Agent and the First Lien Claimholders shall have the
exclusive right to enforce rights, exercise remedies (including
set-off, recoupment and the right to credit bid their debt) and,
subject to Section 5.1, to make determinations regarding the
release, disposition, or restrictions with respect to the
Collateral without any consultation with or the consent of the
Second Lien Security Agent or any Second Lien Claimholder;
provided , that the Lien securing the Second Lien
Obligations shall remain on the proceeds of such Collateral
released or disposed of subject to the relative priorities
described in Section 2. In exercising rights and remedies with
respect to the Collateral, the First Lien Security Agent and the
First Lien Claimholders may enforce the provisions of the First
Lien Loan Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of
their sole discretion. Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise
dispose of Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition, and to exercise all the
rights and remedies of a secured creditor under the UCC and of a
secured creditor under Bankruptcy Laws of any applicable
jurisdiction.
(c) Notwithstanding the foregoing, the
Second Lien Security Agent and any Second Lien Claimholder may:
(1) file one or more claims or statements of
interest with respect to the Second Lien Obligations;
provided that an Insolvency or Liquidation Proceeding has
been commenced by or against any Company or any other Grantor;
(2) take any action (not adverse to the
priority status of the Liens on the Collateral securing the First
Lien Obligations, or the rights of any First Lien Security Agent or
the First Lien Claimholders to exercise remedies in respect
thereof) in order to create, perfect, preserve or, with respect to
any Liens over Intellectual Property, protect, its Lien on the
Collateral;
(3) file any necessary responsive or
defensive pleadings in opposition to any motion, claim, adversary
proceeding or other pleading made by any person objecting to or
otherwise seeking the disallowance of the claims of the Second Lien
Claimholders, including any claims secured by the Collateral, if
any, in each case, not inconsistent with the terms of this
Agreement;
(4) 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, not inconsistent with the terms of
this Agreement, with respect to the Second Lien Obligations and the
Collateral; and
(5) exercise any of its rights or remedies
with respect to the Collateral after the termination of the
Standstill Period to the extent permitted by
Section 3.1(a)(1).
The Second Lien Security Agent, on behalf of itself and the Second
Lien Claimholders, agrees that it will not take or receive any
Collateral or any proceeds of Collateral in connection with the
exercise of any right or remedy (including set-off and recoupment)
with respect
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to any Collateral,
unless and until the Discharge of First Lien Obligations has
occurred, except in connection with any foreclosure expressly
permitted by Section 3.1(a)(1) to the extent the Second Lien
Security Agent and Second Lien Claimholders are permitted to retain
the proceeds thereof in accordance with Section 4.2 of this
Agreement). Without limiting the generality of the foregoing,
unless and until the Discharge of First Lien Obligations has
occurred, except as expressly provided in Sections 3.1(a), 6.3(b)
and this Section 3.1(c), the sole right of the Second Lien
Security Agent and the Second Lien Claimholders with respect to the
Collateral is to hold a Lien on the Collateral pursuant to the
Second Lien Collateral Documents for the period and to the extent
granted therein and to receive a share of the proceeds thereof, if
any, after the Discharge of First Lien Obligations has
occurred.
(d) Subject to Sections 3.1(a) and
(c) and Section 6.3(b):
(1) the Second Lien Security Agent, for
itself and on behalf of the Second Lien Claimholders, agrees that
the Second Lien Security Agent and the Second Lien Claimholders
will not take any action that would hinder any exercise of remedies
under the First Lien Loan Documents or is otherwise prohibited
hereunder, including any sale, lease, exchange, transfer or other
disposition of the Collateral, whether by foreclosure or
otherwise;
(2) the Second Lien Security Agent, for
itself and on behalf of the Second Lien Claimholders, hereby waives
any and all rights it or the Second Lien Claimholders may have as a
junior lien creditor or otherwise to object to the manner in which
the First Lien Security Agent or the First Lien Claimholders seek
to enforce or collect the First Lien Obligations or the Liens
securing the First Lien Obligations granted in any of the First
Lien Collateral undertaken in accordance with this Agreement,
regardless of whether any action or failure to act by or on behalf
of the First Lien Security Agent or First Lien Claimholders is
adverse to the interest of the Second Lien Claimholders; and
(3) the Second Lien Security Agent hereby
acknowledges and agrees that no covenant, agreement or restriction
contained in the Second Lien Collateral Documents or any other
Second Lien Document (other than this Agreement) shall be deemed to
restrict in any way the rights and remedies of the First Lien
Security Agent or the First Lien Claimholders with respect to the
Collateral as set forth in this Agreement and the First Lien Credit
Documents.
(e) Except as specifically set forth in
Sections 3.1(a) and (d), the Second Lien Security Agent and the
Second Lien Claimholders may exercise rights and remedies as
unsecured creditors against any Company or any other Grantor that
has guaranteed or granted Liens to secure the Second Lien
Obligations in accordance with the terms of the Second Lien Loan
Documents and applicable law; provided that in the event
that any Second Lien Claimholder becomes a judgment Lien creditor
in respect of Collateral as a result of its enforcement of its
rights as an unsecured creditor with respect to the Second Lien
Obligations, such judgment Lien shall be subject to the terms of
this Agreement for all purposes (including in relation to the First
Lien Obligations) as the other Liens securing the Second Lien
Obligations are subject to this Agreement.
(f) Except as specifically set forth in
Sections 3.1(a) and (d), nothing in this Agreement shall prohibit
the receipt by the Second Lien Security Agent or any Second Lien
Claimholders of the required payments of interest, principal and
other amounts owed in respect of the Second Lien Obligations so
long as such receipt is not the direct or indirect result of the
exercise by the Second Lien Security Agent or any Second Lien
Claimholders of rights or remedies
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as a secured creditor
(including set-off and recoupment) or enforcement in contravention
of this Agreement of any Lien held by any of them. Nothing in this
Agreement impairs or otherwise adversely affects any rights or
remedies the First Lien Security Agent or the First Lien
Claimholders may have with respect to the First Lien
Collateral.
3.2 Actions Upon Breach . If
any Second Lien Claimholder, in contravention of the terms of this
Agreement, in any way takes, attempts to or threatens to take any
action with respect to the Collateral (including, without
limitation, any attempt to realize upon or enforce any remedy with
respect to this Agreement), or fails to take any action required by
this Agreement, this Agreement shall create an irrebutable
presumption and admission by such Second Lien Claimholder that
relief against such Second Lien Claimholder by injunction, specific
performance and/or other appropriate equitable relief is necessary
to prevent irreparable harm to the First Lien Claimholders, it
being understood and agreed by the Second Lien Security Agent on
behalf of each Second Lien Claimholder that (i) the First Lien
Claimholders’ damages from its actions may at that time be
difficult to ascertain and may be irreparable, and (ii) each
Second Lien Claimholder waives any defense that the Grantors and/or
the First Lien Claimholders cannot demonstrate damage and/or be
made whole by the awarding of damages.
SECTION 4. Payments .
4.1 Application of Proceeds
. So long as the Discharge of First Lien Obligations has not
occurred, whether or not any Insolvency or Liquidation Proceeding
has been commenced by or against the Company or any other Grantor,
Collateral or proceeds thereof received in connection with the sale
or other disposition of, or collection on, such Collateral upon the
exercise of remedies by the First Lien Collateral Agent or First
Lien Claimholders shall be applied by the First Lien Collateral
Agent to the First Lien Obligations in such order as specified in
the relevant First Lien Loan Documents. Upon the Discharge of First
Lien Obligations, the First Lien Collateral Agent shall deliver to
the Second Lien Collateral Agent any Collateral and proceeds of
Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may
otherwise direct to be applied by the Second Lien Collateral Agent
to the Second Lien Obligations in such order as specified in the
Second Lien Collateral Documents.
4.2 Payments Over .
(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 Company or any other Grantor,
any Collateral or proceeds thereof (including assets or proceeds
subject to Liens referred to in the final sentence of
Section 2.3) received by the Second Lien Collateral Agent or
any Second Lien Claimholders in connection with the exercise of any
right or remedy (including set-off or recoupment) relating to the
Collateral in contravention of this Agreement in all cases shall be
segregated and held in trust and forthwith paid over to the First
Lien Collateral Agent for the benefit of the First Lien
Claimholders in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise
direct. The First Lien Collateral Agent is hereby authorized to
make any such endorsements as agent for the Second Lien Collateral
Agent or any such Second Lien Claimholders. This authorization is
coupled with an interest and is irrevocable until the Discharge of
First Lien Obligations.
(b) So long as the Discharge of First Lien
Obligations has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against the Company
or any other Grantor, any Collateral or proceeds thereof (including
assets or proceeds subject to Liens referred to in the final
sentence of Section 2.3) received by the Second Lien
Collateral Agent or any Second Lien Claimholders in connection with
the exercise of any right or remedy (including set-off or
recoupment) relating to the Collateral not in contravention
of t
