EXHIBIT 4.3
EXECUTION VERSION
INTERCREDITOR AGREEMENT
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Intercreditor Agreement (this
“ Agreement ”), dated as of June 15, 2009, among
JPMORGAN CHASE BANK, N.A., as administrative agent (in such
capacity, with its successors and assigns, and as more specifically
defined below, the “ First Priority Representative
”) for the First Priority Secured Parties (such term, and
other capitalized terms used herein but not otherwise defined,
having the meaning set forth in Section 1.1 below), THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., as Trustee and collateral trustee
(in such capacity, with its successors and assigns, and as more
specifically defined below, the “ Second Priority
Representative ”) for the
Second Priority Secured Parties, MOMENTIVE PERFORMANCE MATERIALS
INC. a Delaware corporation (“ Intermediate Holdings ”), MOMENTIVE PERFORMANCE MATERIALS USA
INC., a Delaware corporation (the “ U.S.
Borrower ”), and
each of the other Loan Parties party hereto.
WHEREAS, Momentive Performance
Materials Holdings Inc., a Delaware corporation, Intermediate
Holdings, the U.S. Borrower, Momentive Performance Materials GmbH
(f/k/a Blitz 06-103 GmbH), a company organized under the laws of
Germany (the “ German Borrower ” and,
together with the U.S. Borrower, the “ Borrowers ”), the First Priority Representative and
certain financial institutions and other entities are parties to
the Credit Agreement dated as of December 4, 2006 (the
“ Existing First
Priority Agreement ”), pursuant to which such financial
institutions and other entities have agreed to make loans and
extend other financial accommodations to the Borrowers;
and
WHEREAS, Intermediate Holdings and
the Second Priority Representative are parties to the Indenture
dated as of June 15, 2009 (the “ Existing Second Priority
Agreement ”), pursuant to which Intermediate Holdings has
issued certain notes (the “ Notes ”) guaranteed
by the U.S. Borrower and each other Loan Party thereto;
and
WHEREAS, the U.S. Borrower and the
other Loan Parties have granted to the First Priority
Representative security interests in the Common Collateral as
security for payment and performance of the First Priority
Obligations; and
WHEREAS, pursuant to the terms of
the Existing First Priority Agreement, the U.S. Borrower and the
other Loan Parties may not grant additional security interests in
the Common Collateral to secure the Second Priority Obligations
unless such security interests are permitted by the Existing First
Priority Agreement (which requires that such security interests be
subordinated to the security interests securing the First Priority
Obligations on terms and conditions reasonably satisfactory to the
First Priority Representative); and
WHEREAS, the U.S. Borrower and the
other Loan Parties propose to grant to the Second Priority
Representative junior security interests in the Common Collateral
as security for payment and performance of the Second Priority
Obligations; and
WHEREAS, the Existing First Priority
Agreement permits the grant of such junior security interests on
the terms and conditions of this Agreement;
NOW THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained and other
good and valuable consideration, the existence and sufficiency of
which is expressly recognized by all of the parties hereto, the
parties agree as follows:
SECTION 1 .
Definitions .
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1.1. Defined
Terms . The following
terms, as used herein, have the following meanings: “
Additional
Debt ” has the
meaning set forth in Section 9.3(b)
“ Additional First Priority
Agreement ” means any agreement designated as such in
writing (including by addendum to this Agreement) by the First
Priority Representative and the Second Priority Representative in
accordance with the terms of the First Priority Agreement and
Second Priority Agreement, respectively.
“ Additional Second
Priority Agreement ” means any agreement designated as
such in writing (including by addendum to this Agreement) by the
First Priority Representative and the Second Priority
Representative in accordance with the terms of the First Priority
Agreement and Second Priority Agreement, respectively.
“ Agreement ” has the meaning set forth in the
introductory paragraph hereof.
“ Bankruptcy Code
” means the United States Bankruptcy Code (11 U.S.C.
§101 et seq.), as amended from time to time.
“ Borrowers ” has the meaning set forth in the
first WHEREAS clause of this Agreement.
“ Cash Management
Obligations ” means, with respect to any Loan Party or
any Subsidiary thereof, the due and punctual payment and
performance of all obligations of such Person in respect of cash
management services (including intraday, ACH and purchasing
card/T&E services) that are secured by Liens granted pursuant
to any First Priority Security Documents entered into pursuant to
the Existing First Priority Agreement or any Replacement First
Priority Agreement in respect of the Existing First Priority
Agreement.
“ Common Collateral
” means all assets that are both First Priority Collateral
and Second Priority Collateral.
“ Comparable Second
Priority Security Document ” means, in relation to any
Common Collateral subject to any First Priority Security Document,
that Second Priority Security Document that creates a security
interest in the same Common Collateral, granted by the same Loan
Party, as applicable.
“ DIP Financing ” has the meaning set forth in
Section 5.2.
“ Enforcement Action
” means, with respect to the First Priority Obligations or
the Second Priority Obligations, the exercise of any rights and
remedies with respect to any Common Collateral securing such
obligations or the commencement or prosecution of enforcement of
any of the rights and remedies under, as applicable, the First
Priority Documents or the Second Priority Documents, or applicable
law, including the exercise of any rights of set-off or recoupment
and rights to credit bid debt, and the exercise of any rights or
remedies of a secured creditor under the Uniform Commercial Code of
any applicable jurisdiction or under the Bankruptcy
Code.
“ Existing First Priority
Agreement ” has the meaning set forth in the first
WHEREAS clause of this Agreement.
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“ Existing Second Priority
Agreement ” has the meaning set forth in the second
WHEREAS clause of this Agreement.
“ First Priority
Agreement ” means the collective reference to (a) the
Existing First Priority Agreement, (b) any Additional First
Priority Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture or other
agreement or instrument evidencing or governing the terms of any
indebtedness or other financial accommodation that has been
incurred to extend, replace, refinance or refund in whole or in
part the indebtedness and other obligations outstanding under the
Existing First Priority Agreement, any Additional First Priority
Agreement or any other agreement or instrument referred to in this
clause (c) unless such agreement or instrument expressly provides
that it is not intended to be and is not a First Priority Agreement
hereunder (a “Replacement First Priority
Agreement” ). Any reference to the First Priority
Agreement hereunder shall be deemed a reference to any First
Priority Agreement then extant.
“ First Priority
Collateral ” means all assets, whether now owned or
hereafter acquired by the U.S. Borrower or any other Loan Party, in
which a Lien is granted or purported to be granted to any First
Priority Secured Party as security for any First Priority
Obligation (including any Lien assigned to the First Priority
Representative pursuant to Section 2.4) .
“ First Priority
Creditors ” means the “Lenders” as defined in
the First Priority Agreement, or any Persons that are designated
under the First Priority Agreement as creditors entitled to benefit
from the Liens on the First Priority Collateral under the First
Priority Security Documents.
“ First Priority
Documents ” means the First Priority Agreement, each
First Priority Security Document and each First Priority
Guarantee.
“ First Priority
Guarantee ” means any guarantee by any Loan Party or any
Subsidiary thereof of any or all of the First Priority
Obligations.
“ First Priority
Lien” means any Lien created by the First Priority
Security Documents.
“ First Priority
Obligations ” means (a) the due and punctual payment of
(i) the principal and premium, if any, and interest (including any
Post-Petition Interest) on the loans made under the First Priority
Agreement, (ii) each payment required to be made by the Borrowers
or any of their Subsidiaries in respect of any letter of credit or
similar instrument issued under the First Priority Agreement, when
and as due, including payments in respect of reimbursement of
disbursements made by any “Issuing Bank” (as defined in
the First Priority Agreement) with respect thereto, interest
thereon and obligations to provide, under certain circumstances,
cash collateral in connection therewith and (iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including Post-Petition Interest), of the Loan
Parties or any of their Subsidiaries to the First Priority Secured
Parties under the First Priority Documents, (b) all Hedging
Obligations and (c) all Cash Management Obligations. To the extent
any payment with respect to any First Priority Obligation (whether
by or on behalf of any Loan Party, as proceeds of security,
enforcement of any right of setoff or otherwise) is declared to be
a fraudulent conveyance or a preference in whole or in part, or is
otherwise set aside or required to be returned or paid to a debtor
in possession, any Second Priority Secured Party, any receiver or
any similar Person, then the obligation or part thereof originally
intended to be satisfied by such payment shall, for the purposes of
this Agreement and the rights and obligations of the First Priority
Secured Parties and the Second Priority Secured Parties, be deemed
to be reinstated and outstanding as if such payment had not
occurred.
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“ First Priority
Obligations Payment Date ” means the first date on which
(a) the First Priority Obligations (other than those that
constitute Unasserted Contingent Obligations) have been
indefeasibly paid in cash in full (or cash collateralized or
defeased in accordance with the terms of the First Priority
Documents), (b) all commitments to extend credit under the First
Priority Documents have been terminated, (c) there are no
outstanding letters of credit or similar instruments issued under
the First Priority Documents (other than such as have been cash
collateralized or defeased in accordance with the terms of the
First Priority Security Documents), and (d) the First Priority
Representative has delivered a written notice to the Second
Priority Representative stating that the events described in
clauses (a), (b) and (c) have occurred, such notice not to be
unreasonably withheld.
“ First Priority
Representative ” has the meaning set forth in the
introductory paragraph hereof. In the case of any Replacement First
Priority Agreement, the First Priority Representative shall be the
Person identified as such in such Replacement First Priority
Agreement.
“ First Priority Secured
Party ” means (a) each First Priority Creditor (and any
affiliate of such First Priority Creditor to which any Cash
Management Obligation is owed), (b) each “Issuing Bank”
(as defined in the First Priority Agreement), (c) the First
Priority Representative, (d) each counterparty to any Swap
Agreement the obligations under which constitute Hedging
Obligations, (e) the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any First Priority
Document and (f) the successors and assigns of each of the
foregoing.
“ First Priority Security
Documents ” means the “Security Documents”
(as defined in the Existing First Priority Agreement), and any
other documents that are designated under the First Priority
Agreement as “First Priority Security Documents” for
purposes of this Agreement; provided that no document that
is not entered into pursuant to the Existing First Priority
Agreement will constitute a First Priority Security Document unless
the treatment of such document as a First Priority Security
Document is permitted under each First Priority Agreement then
extant, including, as of the date hereof and any other date if then
extant, the Existing First Priority Agreement.
“
German Borrower ” has the
meaning set forth in the first WHEREAS clause of this
Agreement.
“ Hedging Obligations
” means, with respect to any Loan Party or any Subsidiary
thereof, the due and punctual payment and performance of all
obligations of such Person, monetary or otherwise, under each Swap
Agreement that are secured by Liens granted pursuant to any First
Priority Security Document, provided that such Liens are
permitted by all the First Priority Agreements to be First Priority
Liens.
“ Insolvency Proceeding
” means any proceeding in respect of bankruptcy, insolvency,
winding up, receivership, dissolution or assignment for the benefit
of creditors, in each of the foregoing events whether under the
Bankruptcy Code or any similar federal, state or foreign
bankruptcy, insolvency, reorganization, receivership or similar
law.
“ Intermediate Holdings ” has the
meaning set forth in the introductory paragraph hereof.
“
JPMCB ” means JPMorgan Chase Bank, N.A.
“ Lien
”
means, with respect to any asset, (a) any mortgage, deed of trust,
lien, hypothecation, pledge, charge, security interest or similar
encumbrance in or on such asset and (b) the interest of a vendor or
a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any
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financing lease having
substantially the same economic effect as any of the foregoing)
relating to such asset.
“ Loan Party
”
means (a) the U.S. Borrower, (b) Intermediate Holdings, (c) each
direct or indirect subsidiary of the Borrowers and (d) any other
Person in which any of the Borrowers or any of their subsidiaries
hold an ownership interest, in each case (a) through (d), that is,
at any time of determination, a party to any First Priority
Security Document or Second Priority Security Document. All
references in this Agreement to any Loan Party shall include such
Loan Party as a debtor-in-possession and any receiver or trustee
for such Loan Party in any Insolvency Proceeding.
“ Person
”
means any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability
company or government, individual or family trusts, or any agency
or political subdivision thereof.
“ Post-Petition
Interest ” means any interest or entitlement to fees or
expenses or other charges that accrues after the commencement of
any Insolvency Proceeding, whether or not allowed or allowable as a
claim in any such Insolvency Proceeding.
“ Recovery ” has the meaning set forth in
Section 5.5.
“ Reorganization Securities ” has the
meaning set forth in Section 5.12.
“ Replacement First
Priority Agreement ” has the meaning set forth in the
definition of “First Priority Agreement”.
“ Second Priority
Agreement ” means the collective reference to (a) the
Existing Second Priority Agreement, (b) any Additional Second
Priority Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture, or other
agreement or instrument evidencing or governing the terms of any
indebtedness or other financial accommodation that has been
incurred to extend, replace, refinance or refund in whole or in
part the indebtedness and other obligations outstanding under the
Existing Second Priority Agreement, any Additional Second Priority
Agreement or any other agreement or instrument referred to in this
clause (c). Any reference to the Second Priority Agreement
hereunder shall be deemed a reference to any Second Priority
Agreement then extant.
“ Second Priority
Collateral ” means all assets, whether now owned or
hereafter acquired by the U.S. Borrower or any other Loan Party, in
which a Lien is granted or purported to be granted to any Second
Priority Secured Party as security for any Second Priority
Obligation.
“ Second Priority
Creditors ” means the Trustee and the Noteholders (as
defined in the Existing Second Priority Agreement), or any Persons
that are designated under the Second Priority Documents as
creditors entitled to benefit from the Liens on the Second Priority
Collateral under the Second Priority Security Documents.
“ Second Priority
Documents ” means each Second Priority Agreement, each
Second Priority Security Document and each Second Priority
Guarantee.
“ Second Priority
Guarantee ” means any guarantee by any Loan Party of any
or all of the Second Priority Obligations.
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“ Second Priority Lien ” means any
Lien created by the Second Priority Security Documents.
“ Second Priority
Obligations ” means the due and punctual payment of (a)
all principal of and interest (including any Post-Petition
Interest) and premium (if any) on all indebtedness under the Second
Priority Agreement, and (b) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including
Post-Petition Interest), of the Loan Parties or any of their
Subsidiaries to the Second Priority Secured Parties under the
Second Priority Documents, and other amounts payable from time to
time pursuant to the Second Priority Documents, in each case
whether or not allowed or allowable in an Insolvency Proceeding. To
the extent any payment with respect to any Second Priority
Obligation (whether by or on behalf of any Loan Party, as proceeds
of security, enforcement of any right of setoff or otherwise) is
declared to be a fraudulent conveyance or a preference in whole or
in part, or is otherwise set aside or required to be paid to a
debtor in possession, any First Priority Secured Party, any
receiver or any similar Person, then the obligation or part thereof
originally intended to be satisfied by such payment shall, for the
purposes of this Agreement and the rights and obligations of the
First Priority Secured Parties and the Second Priority Secured
Parties, be deemed to be reinstated and outstanding as if such
payment had not occurred.
“ Second Priority
Representative ” has the meaning set forth in the
introductory paragraph hereof, but shall also include any Person
identified as a “Second Priority Representative” in any
Second Priority Agreement other than the Existing Second Priority
Agreement.
“ Second Priority Secured
Party ” means the Second Priority Representative, the
Second Priority Creditors and any other holders of the Second
Priority Obligations.
“ Second Priority Security
Documents ” means the “Security Documents” as
defined in the Existing Second Priority Agreement and any documents
that are designated under the Second Priority Agreement as
“Second Priority Security Documents” for purposes of
this Agreement.
“ Secured Parties
” means the First Priority Secured Parties and the Second
Priority Secured Parties.
“ Subsidiary ” has the meaning specified in the
Existing First Priority Agreement.
“ Swap Agreement
” means any agreement with respect to any swap, forward,
future, derivative or foreign exchange spot transaction or option
or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions;
provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former
directors, officers, employees or consultants of Intermediate
Holdings or any of the Subsidiaries shall be a Swap
Agreement.
“ Trustee ” means The Bank of New York Mellon
Trust Company, N.A.
“ Unasserted Contingent
Obligations ” means, at any time, First Priority
Obligations for taxes, costs, indemnifications, reimbursements,
damages and other liabilities (excluding (a) the principal of, and
interest and premium (if any) on, and fees and expenses relating
to, any First Priority Obligation and (b) contingent reimbursement
obligations in respect of amounts that may be drawn under
outstanding letters of credit or similar instruments) in respect of
which no assertion of liability (whether oral or written) and no
claim or demand for payment (whether oral or written) has been made
(and, in the case of First Priority
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Obligations for indemnification,
no notice for indemnification has been issued by the indemnitee) at
such time.
“ Uniform Commercial
Code ” means the Uniform Commercial Code as in effect
from time to time in the applicable jurisdiction.
“ U.S. Borrower ” has the meaning set forth in
the introductory paragraph hereof.
1.2 Amended
Agreements . All references in this Agreement to agreements or
other contractual obligations shall, unless otherwise specified, be
deemed to refer to such agreements or contractual obligations as
amended, supplemented, restated or otherwise modified from time to
time.
1.3 Terms
Generally . The definitions in
this Section shall apply equally to both 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”. All
references herein to Sections shall be deemed references to
Sections of this Agreement unless the context shall otherwise
require.
SECTION 2 . Lien
Priorities .
2.1
Subordination of Liens . (a) Any and all Liens in the Common
Collateral now existing or hereafter created or arising in favor of
any Second Priority Secured Party securing the Second Priority
Obligations, regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, are expressly junior in
priority, operation and effect to any and all Liens now existing or
hereafter created or arising in favor of the First Priority Secured
Parties securing the First Priority Obligations, notwithstanding
(i) anything to the contrary contained in any agreement or filing
to which any Second Priority Secured Party may now or hereafter be
a party, and regardless of the time, order or method of grant,
attachment, recording or perfection of any financing statements or
other security interests, assignments, pledges, deeds, mortgages
and other liens, charges or encumbrances or any defect or
deficiency or alleged defect or deficiency in any of the foregoing,
(ii) any provision of the Uniform Commercial Code or any other
applicable law or any First Priority Document or Second Priority
Document or any other circumstance whatsoever and (iii) the fact
that any such Liens in favor of any First Priority Secured Party
securing any of the First Priority Obligations are (x) subordinated
to any Lien securing any obligation of any Loan Party other than
the Second Priority Obligations or (y) otherwise subordinated,
voided, avoided, invalidated or lapsed.
(b) No First Priority
Secured Party or Second Priority Secured Party shall object to or
contest, or support any other Person in contesting or objecting to,
in any proceeding (including any Insolvency Proceeding), the
validity, extent, perfection, priority or enforceability of any
security interest in the Common Collateral granted to the other,
provided that nothing herein shall be construed to prevent
or impair the rights of such parties to enforce this Agreement.
Notwithstanding any failure by any First Priority Secured Party or
Second Priority Secured Party to perfect its security interests in
the Common Collateral or any avoidance, invalidation or
subordination by any third party or court of competent jurisdiction
of the security interests in the Common Collateral granted to the
First Priority Secured Parties or the Second Priority Secured
Parties, the priority and rights as between the First Priority
Secured Parties and the Second Priority Secured Parties with
respect to the Common Collateral shall be as set forth
herein.
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2.2
Nature of First Priority Obligations . The Second
Priority Representative on behalf of itself and the other Second
Priority Secured Parties acknowledges that a portion of the First
Priority Obligations represents debt that is revolving in nature
and that the amount thereof that may be outstanding at any time or
from time to time may be increased or reduced and subsequently
reborrowed, and that the terms of the First Priority Obligations
may be modified, extended or amended from time to time, and that
the aggregate amount of the First Priority Obligations may be
increased, replaced or refinanced, in each event, without notice to
or consent by the Second Priority Secured Parties and without
affecting the provisions hereof. The lien priorities provided in
Section 2.1 shall not be altered or otherwise affected by any such
amendment, modification, supplement, extension, repayment,
reborrowing, increase, replacement, renewal, restatement or
refinancing of the First Priority Obligations, or any portion
thereof, or by any amendment, modification, supplement, extension,
repayment, reborrowing, increase, replacement, renewal, restatement
or refinancing of the Second Priority Obligations, or any portion
thereof.
2.3
Agreements Regarding Actions to Perfect Liens . (a) The
Second Priority Representative on behalf of itself and the other
Second Priority Secured Parties agrees that UCC-1 financing
statements, patent, trademark or copyright filings or other filings
or recordings filed or recorded by or on behalf of the Second
Priority Representative shall be in form reasonably satisfactory to
the First Priority Representative.
(b) The Second Priority
Representative agrees on behalf of itself and the other Second
Priority Secured Parties that all Second Priority Security
Documents entered into on or about the date hereof shall contain
the following notation: “The lien and security interest
created by [this Agreement] on the property described herein is
junior and subordinate, in accordance with the provisions of the
Intercreditor Agreement dated as of June 15, 2009, among JPMorgan
Chase Bank, N.A., as First Priority Representative, The Bank of New
York Mellon Trust Company, N.A., as Second Priority Representative,
Momentive Performance Materials Inc., Momentive Performance
Materials USA Inc. and the other Loan Parties referred to therein,
as amended from time to time, to the lien and security interest on
such property created by any similar instrument now or hereafter
granted to JPMorgan Chase Bank, N.A., as Administrative Agent, and
its successors and assigns, in such property.” The Second
Priority Representative agrees on behalf of itself and the other
Second Priority Secured Parties that all other Second Priority
Security Documents shall bear an identical or, in the event that
the Existing First Priority Agreement is no longer extant or JPMCB
shall cease to be the First Priority Representative, a
substantially similar notation.
(c) The First Priority
Representative hereby agrees that, to the extent that it holds, or
a third party holds on its behalf, physical possession of or
“control” (as defined in the Uniform Commercial Code)
(or any similar concept under foreign law) over Common Collateral
pursuant to the First Priority Security Documents, such possession
or control is also for the benefit of the Second Priority
Representative and the other Second Priority Secured Parties solely
to the extent required to perfect their security interest in such
Common Collateral (such bailment being intended, among other
things, to satisfy the requirements of Sections 8-106(d)(3),
8-301(a)(2) and 9-313(c) of the Uniform Commercial Code). Nothing
in the preceding sentence shall be construed to impose any duty on
the First Priority Representative (or any third party acting on its
behalf) with respect to such Common Collateral or provide the
Second Priority Representative or any other Second Priority Secured
Party with any rights with respect to such Common Collateral beyond
those specified in this Agreement and the Second Priority Security
Documents, provided that subsequent to the occurrence of the
First Priority Obligations Payment Date, the First Priority
Representative shall (i) deliver to the Second Priority
Representative, at the U.S. Borrower’s sole cost and expense,
the Common Collateral in its possession or control together with
any necessary
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endorsements to the extent
required by the Second Priority Documents or (ii) direct and
deliver such Common Collateral as a court of competent jurisdiction
otherwise directs; provided , however
, that the provisions of this
Agreement are intended solely to govern the respective Lien
priorities as between the First Priority Secured Parties and the
Second Priority Secured Parties and shall not impose on the First
Priority Secured Parties any obligations in respect of the
disposition of any Common Collateral (or any proceeds thereof) that
would conflict with prior perfected Liens or any claims thereon in
favor of any other Person that is not a Secured Party.
2.4
No New Liens . So long as the
First Priority Obligations Payment Date has not occurred, the
parties hereto agree that (a) there shall be no Lien, and no Loan
Party shall have any right to create any Lien, on any assets of any
Loan Party securing any Second Priority Obligation if those same
assets are not subject to, and do not become subject to, a Lien
securing the First Priority Obligations and (b) if any Second
Priority Secured Party shall acquire or hold any Lien on any assets
of any Loan Party securing any Second Priority Obligation which
assets are not also subject to the first-priority Lien of the First
Priority Representative under the First Priority Documents, then
the Second Priority Representative, upon demand by the First
Priority Representative, will without the need for any further
consent of any other Second Priority Secured Party, notwithstanding
anything to the contrary in any other Second Priority Document,
either (i) release such Lien or (ii) assign it to the First
Priority Representative as security for the First Priority
Obligations (in which case the Second Priority Representative may
retain a junior lien on such assets subject to the terms hereof).
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 Priority Secured Parties, the Second
Priority Representative and the other Second Priority Secured
Parties agree 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 2.4 shall be subject to Section 4.1.
2.5
Further Assurances . Each of the First Priority
Representative, for itself and on behalf of the other First
Priority Secured Parties, and the Second Priority Representative,
for itself and on behalf of the other Second Priority Secured
Parties, and each Loan Party party hereto, for itself and on behalf
of its subsidiaries, agrees that it will execute, or will cause to
be executed, any and all further documents, agreements and
instruments, and take all such further actions, as may be required
under any applicable law, or which the First Priority
Representative or the Second Priority Representative may reasonably
request, to effectuate the terms of this Agreement, including the
relative Lien priorities provided for herein.
SECTION 3 . Enforcement
Rights .
3.1
Exclusive Enforcement . Until the First Priority Obligations
Payment Date has occurred, whether or not an Insolvency Proceeding
has been commenced by or against any Loan Party, the First Priority
Secured Parties shall have the exclusive right to take and continue
any Enforcement Action with respect to the Common Collateral,
without any consultation with or consent of any Second Priority
Secured Party, but subject to the proviso set forth in Section 5.1.
Upon the occurrence and during the continuance of a default or an
event of default under the First Priority Documents, the First
Priority Representative and the other First Priority Secured
Parties may take and continue any Enforcement Action with respect
to the First Priority Obligations and the Common Collateral in such
order and manner as they may determine in their sole
discretion.
3.2
Standstill and Waivers . The Second Priority
Representative, on behalf of itself and the other Second Priority
Secured Parties, agrees that, until the First Priority Obligations
Payment Date has occurred, subject to the proviso set forth in
Section 5.1:
