EXHIBIT 10.5
INTERCREDITOR AGREEMENT
This
INTERCREDITOR AGREEMENT is dated as of June 10, 2005,
and entered into by and among Spanish Broadcasting System, Inc., a
Delaware corporation (the “ Company ”), Lehman
Commercial Paper Inc. (“ LCPI ”), in its
capacity as collateral agent for the First Lien Obligations (as
defined below), including its permitted successors and assigns from
time to time (the “ First Lien Collateral Agent
”), and LCPI, in its capacity as collateral agent for the
Second Lien Obligations (as defined below), including its permitted
successors and assigns from time to time (the “ Second
Lien 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, Lehman Brothers Inc., as lead
arranger and sole manager, Merrill Lynch, Pierce, Fenner &
Smith, Incorporated, as syndication agent, Wachovia Bank, National
Association, as documentation agent, LCPI, as administrative agent,
and Merrill Lynch, Pierce Fenner & Smith, Incorporated and
Wachovia Capital Markets, LLC, as co-arrangers, have entered into
that First Lien Credit Agreement dated as of the date hereof
providing for a revolving credit facility and term loan (as
amended, restated, supplemented, modified, replaced or refinanced
from time to time, the “ First Lien Credit Agreement
”);
The
Company, the lenders party thereto, Lehman Brothers Inc., as lead
arranger and sole manager, Merrill Lynch, Pierce, Fenner &
Smith, Incorporated, as syndication agent, Wachovia Bank, National
Association, as documentation agent, LCPI, as administrative agent,
and Merrill Lynch, Pierce Fenner & Smith, Incorporated and
Wachovia Capital Markets, LLC, as co-arrangers, have entered into
that Second Lien Credit Agreement dated as of the date hereof
providing for a term loan (as amended, restated, supplemented,
modified, replaced or refinanced from time to time, the “
Second Lien Credit Agreement ”);
Pursuant to
(i) that certain First Lien Guarantee and Collateral Agreement
dated as of the date hereof, certain current and future
subsidiaries of the Company have agreed or will agree to guarantee
the First Lien Obligations (the “ First Lien Guarantee
”) and (ii) that certain Second Lien Guarantee and
Collateral Agreement dated as of the date hereof, the Company and
certain current and future subsidiaries of the Company have agreed
or will agree to guarantee the Second Lien Obligations (the “
Second Lien Guarantee ”);
The
obligations of the Company under the First Lien Credit Agreement
and any Specified Hedge Agreement (as defined in the First Lien
Credit Agreement) and the obligations of the guarantors under the
First Lien Guarantee will be secured on a first priority basis by
liens on substantially all the assets of the Company and the
guarantors (such current and future subsidiaries of the Company
providing a guarantee thereof, the “ Guarantor
Subsidiaries ”), respectively, pursuant to the terms of
the First Lien Collateral Documents;
The
obligations of the Company under the Second Lien Credit Agreement
and the obligations of the Company and the Guarantor Subsidiaries
under the Second Lien Guarantee will be secured on a second
priority basis by liens on substantially all the assets of the
Company
and the Guarantor Subsidiaries,
respectively, pursuant to the terms of the Second Lien Collateral
Documents;
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
In
order to induce the First Lien Collateral 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 the Company or any other Grantor, the Second Lien
Collateral Agent on behalf of the Second Lien Claimholders has
agreed to the intercreditor and other provisions set forth in this
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:
“
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.
“
Agreement ” means this Intercreditor Agreement, as
amended, restated, renewed, extended, supplemented or otherwise
modified 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.
“
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.
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“
Company ” has the meaning assigned to that term in
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 which
creates a Lien on the same Collateral, granted by the same
Grantor.
“ 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
(and subject to Section 6.5):
(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
Indebtedness outstanding under the First Lien Loan Documents and
constituting First Lien Obligations;
(b) payment
in full in cash of all other First Lien Obligations that are due
and payable or otherwise accrued and owing at or prior to the time
such principal and interest are paid;
(c) termination
or expiration of all commitments, if any, to extend credit that
would constitute First Lien Obligations; and
(d) termination
or cash collateralization (in an amount and manner reasonably
satisfactory to the First Lien Collateral Agent) 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 Agent ” has the meaning assigned to that
term in the Preamble to this Agreement.
“ 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 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 securing any First Lien Obligations or under which rights
or remedies with respect to such Liens are governed.
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“ First
Lien Credit Agreement ” has the meaning assigned to that
term in the Recitals to this Agreement.
“ First
Lien Guarantee ” has the meaning assigned to that term in
the Recitals to this Agreement.
“ First
Lien Lenders ” means the “ Lenders ”
under and as defined in the First Lien Loan Documents.
“ First
Lien Loan Documents ” means the First Lien Credit
Agreement and the other Loan Documents (as defined in the First
Lien Credit Agreement) and each of the other agreements, documents
and instruments providing for or evidencing any other First Lien
Obligation, and any other document or instrument executed or
delivered at any time in connection with any First Lien
Obligations, including any intercreditor or joinder agreement among
holders of First Lien Obligations, to the extent such are effective
at the relevant time, in each case as each may be amended,
restated, supplemented, modified, renewed or extended from time to
time in accordance with the provisions of this
Agreement.
“ 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 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 the next sentence,
all Obligations outstanding under the First Lien Credit Agreement
and the other First Lien Loan Documents, including:
(a) Specified
Hedge Agreements; plus
(b) other
additional Obligations designated by the Company and the First Lien
Collateral Agent as “Obligations” under the First Lien
Loan Documents. “First 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 First Lien Loan
Document whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
“ First
Lien Obligations Amount ” has the meaning assigned to
that term in Section 5.1(e) .
“
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.
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“
Grantors ” means the Company, 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 ” 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.
“
LCPI ” has the meaning assigned to that term in the
Preamble to this Agreement.
“
Lien ” with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof,
any option or other agreement to sell or give a security interest
in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
“ New
Agent ” has the meaning assigned to that term in
Section 5.5 .
“ New
First Lien Debt Notice ” 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 Specified Hedge
Agreements, whether for principal, interest or payments for early
termination of Specified Hedge Agreements, fees, expenses,
indemnification or otherwise and all guarantees of any of the
foregoing.
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“
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.
“ 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.
“ 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 Agent ” has the meaning assigned to that
term in the Preamble of this Agreement.
“ 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 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 other 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, in each case 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
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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 Specified Hedge Agreements (as defined in
the Second Lien Credit Agreement) but only to the extent a
Qualified Counterparty (as defined in the Second Lien Credit
Agreement) thereunder is not a Qualified Counterparty 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 Obligations Amount ” has the meaning assigned to
that term in Section 5.1(e) .
“
Standstill Period ” has the meaning set forth in
Section 3.1 .
“ 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.
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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 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, the Liens
securing the First Lien Obligations or any other circumstance
whatsoever, the Second Lien Collateral Agent, on behalf of itself
and the Second Lien Claimholders, 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 First Lien Claimholders 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 securing any Second Lien Obligations now or
hereafter held by or on behalf of the Second Lien Collateral 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, 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 Company, any other Grantor or
any other Person.
2.2. Prohibition on Contesting Liens . Each of the
Second Lien Collateral Agent, for itself and on behalf of each
Second Lien Claimholder, and the First Lien Collateral 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 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
Collateral 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 the Company
or any other Grantor, the parties hereto agree that the Company
shall not, and shall not permit any other Grantor to:
(a) grant or
permit any additional Liens on any asset or property 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; or
(b) grant or
permit any additional Liens on any asset or property to secure any
First Lien Obligations unless it has granted or concurrently grants
a Lien on such asset or
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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 Collateral Agent and/or
the First Lien Claimholders, the Second Lien Collateral 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. In
furtherance of the foregoing and of Section 8.9 , 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, 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 the Company or any other Grantor, the Second Lien
Collateral 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 or
similar agreement or arrangement to which the Second Lien
Collateral 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 subject to clause (c) below, the Second
Lien Collateral 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 Collateral 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
Collateral Agent received notice from the Second Lien Collateral
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
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Collateral 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 Collateral 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 Collateral Agent);
(2) will not
contest, protest or object to any foreclosure proceeding or action
brought by the First Lien Collateral Agent or any First Lien
Claimholder or any other exercise by the First Lien Collateral
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 Collateral 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
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 the Company or any other Grantor, subject to
Section 3.1(a)(1) , the First Lien Collateral Agent and
the First Lien Claimholders shall have the exclusive right to
enforce rights, exercise remedies (including set off and the right
to credit bid their debt) and make determinations regarding the
release, disposition, or restrictions with respect to the
Collateral, in each case, in accordance with the First Lien Credit
Documents and applicable law without any consultation with or the
consent of the Second Lien Collateral Agent or any Second Lien
Claimholder. The First Lien Collateral Agent shall provide at least
five (5) days notice to the Second Lien Collateral Agent of
its intent to exercise and enforce its rights or remedies with
respect to the Collateral. In exercising rights and remedies with
respect to the Collateral, the First Lien Collateral 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, in each case, in accordance with the First
Lien Credit Documents and applicable law. 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, in each case, in accordance with the First
Lien Credit Documents and applicable law.
(c) Notwithstanding
the foregoing, the First Lien Collateral Agent and the First Lien
Claimholders agree that the Second Lien Collateral Agent and any
Second Lien Claimholder may:
(1) file a claim
or statement of interest with respect to the Second Lien
Obligations; provided that an Insolvency or Liquidation
Proceeding has been commenced by or against the Company or any
other Grantor;
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(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 Collateral Agent or the First Lien Claimholders to
exercise remedies in respect thereof) in order to create, perfect,
preserve or 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 in accordance 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, in
accordance 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 Collateral 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) with respect to
any Collateral in its capacity as a creditor, unless and until the
Discharge of First Lien Obligations has occurred, except as
expressly provided in Section 3.1(a)(1) . 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 Collateral 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 Collateral Agent, for itself and on behalf of the Second Lien
Claimholders, agrees that the Second Lien Collateral 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 Collateral 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 Collateral 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
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Collateral Agent or First Lien Claimholders is
adverse to the interest of the Second Lien Claimholders;
and
(3) 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 Document (other than
this Agreement) shall be deemed to restrict in any way the rights
and remedies of the First Lien Collateral 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 Collateral Agent and the Second Lien
Claimholders may exercise rights and remedies as unsecured
creditors against the 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 Collateral 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 Collateral Agent or any Second Lien Claimholders of
rights or remedies as a secured creditor (including set off) 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 Collateral
Agent or the First Lien Claimholders may have with respect to the
First Lien Collateral.
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 or the Grantors, as applicable, 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.
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4.2. Payments Over . 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) 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 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.
SECTION 5. Other Agreements .
5.1. Releases . (a) If in connection with the
exercise of the First Lien Collateral Agent’s rights and
remedies in respect of the Collateral provided for in
Section 3.1 , the First Lien Collateral Agent, for
itself or on behalf of any of the First Lien Claimholders, releases
any of its Liens on any part of the Collateral or releases any
Guarantor Subsidiary from its obligations under its guarantee of
the First Lien Obligations, then the Liens, if any, of the Second
Lien Collateral Agent, for itself or for the benefit of the Second
Lien Claimholders, on such Collateral, and the obligations of such
Guarantor Subsidiary under its guarantee of the Second Lien
Obligations, shall be automatically, unconditionally and
simultaneously released. The Second Lien Collateral Agent, for
itself or on behalf of any such Second Lien Claimholders, promptly
shall execute and deliver to the First Lien Collateral Agent or the
applicable Grantor such termination statements, releases and other
documents as the First Lien Collateral Agent or the applicable
Grantor may request to effectively confirm such release.
(b) If in
connection with any sale, lease, exchange, transfer or other
disposition of any Collateral (collectively, a “
Disposition ”) permitted under the terms of both the
First Lien Loan Documents and the Second Lien Loan Documents (other
than in connection with the exercise of the First Lien Collateral
Agent’s rights and remedies in respect of the Collateral
provided for in Section 3.1 ), the First Lien
Collateral Agent, for itself or on behalf of any of the First Lien
Claimholders, releases any of its Liens on any part of the
Collateral, or releases any Guarantor Subsidiary from its
obligations under its guarantee of the First Lien Obligations, in
each case other than (A) in connection with the Discharge of
First Lien Obligations and (B) after the occurrence and during
the continuance of any Event of Default under the Second Lien
Credit Agreement, then the Liens, if any, of the Second Lien
Collateral Agent, for itself or for the benefit of the Second Lien
Claimholders, on such Collateral, and the obligations of such
Guarantor Subsidiary under its guarantee of the Second Lien
Obligations, shall be automatically, unconditionally and
simultaneously released. The Second Lien Collateral Agent, for
itself or on behalf of any such Second Lien Claimholders, promptly
shall execute and deliver to the First Lien Collateral Agent or the
applicable Grantor such termination statements, releases and other
documents as the First Lien Collateral Agent or such Grantor may
request to effectively confirm such release.
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