Intercreditor
Agreement (this “ Agreement ”), dated as of
October 2, 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 (as defined below), WILMINGTON TRUST FSB,
as Collateral Agent and 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 (as defined below), NEBRASKA BOOK
COMPANY, INC. (the “ Borrower ”) and each of the
other Loan Parties (as defined below) party hereto.
WHEREAS, the
Borrower, the First Priority Representative and certain financial
institutions and other entities are parties to the Amended and
Restated Credit Agreement, dated as of February 13, 1998, as
amended and restated as of December 10, 2003, as further
amended and restated as of March 4, 2004, and as further
amended and restated as of October 2, 2009, among NBC Holdings
Corp., NBC Acquisition Corp., the Borrower, the lenders named
therein, JPMorgan Chase Bank, N.A., as administrative agent and the
other agents named therein (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 Borrower;
and
WHEREAS, the
Borrower, the Second Priority Representative and certain
Subsidiaries of the Borrower are parties to the Indenture dated as
of the date hereof (the “ Existing Second Priority
Agreement ”), pursuant to which the Borrower has issued
senior secured second lien notes (the “ Senior Second Lien
Notes ”); and
WHEREAS, the
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, the
Borrower and certain Subsidiaries of the Borrower 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;
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 are expressly recognized by all of the
parties hereto, the parties agree as follows:
1.1.
Defined Terms . The following terms, as used herein, have
the following meanings:
“
Additional First Priority Agreement ” means any
agreement permitted to be designated as such by the First Priority
Agreement and the Second Priority Agreement.
“
Additional First Priority Debt ” has the meaning set
forth in Section 9.3(b).
“
Additional Second Priority Agreement ” means any
agreement permitted to be designated as such by the First Priority
Agreement and the Second Priority Agreement.
“
Additional Second Priority Debt ” has the meaning set
forth in Section 9.3(b).
2
“
Agreement ” has the meaning set forth in the
introductory paragraph hereof.
“ Banking
Services Obligations ” means, with respect to any Loan
Party, any obligations of such Loan Party owed to any First
Priority Secured Party (or any of its affiliates) in respect of any
agreement with respect to the following banking services:
(a) commercial credit cards, (b) stored value cards,
(c) purchasing cards and cardless e-payables services and
(d) treasury, depositary or cash management services
(including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts, and
interstate depository network services) or any similar
transactions.
“
Bankruptcy Code ” means the United States Bankruptcy
Code (11 U.S.C. §101 et seq.), as amended from time to
time.
“
Borrower ” has the meaning set forth in the
introductory paragraph hereof.
“ Cash
Collateral ” has the meaning set forth in
Section 3.7.
“ 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 with
respect to the Common Collateral under, as applicable, the First
Priority Documents or the Second Priority Documents, or applicable
law, including without limitation the exercise of any rights of
set-off or recoupment, 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.
“
Enforcement Notice ” has the meaning set forth in
Section 3.7.
“
Existing First Priority Agreement ” has the meaning
set forth in the first WHEREAS clause of this Agreement.
“
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, increase, renew, refund, replace
(whether upon or after termination or otherwise) or refinance
(including by means of sales of debt securities to institutional
investors) in whole or in part from time to time 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
3
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 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.
“ First
Priority Creditors ” means each “Secured
Party” as defined in the First Priority Agreement, or any
Persons that are designated under the First Priority Agreement as
the “First Priority Creditors” for purposes of this
Agreement.
“ 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 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) with respect to the
Existing First Priority Agreement, all “Obligations” of
each Loan Party as defined in the Existing First Priority Agreement
and (b) with respect to each other First Priority Agreement,
(i) all principal of and interest (including without
limitation any Post-Petition Interest) and premium (if any) on all
loans made or other indebtedness issued or incurred pursuant to the
First Priority 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 Priority
Agreement, (iii) all Hedging Obligations, (iv) all
Banking Services Obligations and (v) all guarantee
obligations, fees, expenses and other amounts payable from time to
time pursuant to the First Priority Documents, in each case whether
or not allowed or allowable in an Insolvency Proceeding. 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 any
respect, set aside or required to be paid to a debtor in
possession, any Second Priority Secured Party, 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 Priority Secured Parties and
the Second Priority Secured Parties, be deemed to be reinstated and
outstanding as if such payment had not occurred.
“ First
Priority Obligations Payment Date ” means the first date
on which (a) all of the First Priority Liens have been
released in accordance with the terms of the First Priority
Documents and (b) the First Priority Representative has
delivered a written notice to the Second Priority Representative
stating that the event described in clause (a) has occurred to
the satisfaction of the First Priority Secured Parties, which
notice shall be delivered by the First Priority Representative
promptly after the occurrence of the event described in clause
(a).
“ 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 Agreement.
4
“ First
Priority Secured Parties ” means the First Priority
Representative, the First Priority Creditors and any other holders
of the First Priority Obligations.
“ First
Priority Security Documents ” means the “Security
Documents” as defined in the 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.
“ Hedging
Obligations ” means, with respect to any Loan Party, any
obligations of such Loan Party owed to any First Priority Creditor
(or any of its affiliates) in respect of any agreement with respect
to any swap, forward, future or derivative 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
obligations in respect of any phantom stock or similar plan
providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of
the Borrower or its subsidiaries shall not be considered Hedging
Obligations.
“
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.
“
Lien ” means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
“ Loan
Party ” means the Borrower and each direct or indirect
subsidiary, affiliate or shareholder (or equivalent) of the
Borrower or any of its affiliates that is now or hereafter becomes
a party to any First Priority Document or Second Priority 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;
provided that NBC Holdings Corp. and NBC Acquisition Corp.
shall not be Loan Parties for purposes of this Agreement unless and
until such respective parties become party to any Second Priority
Document.
“ Notes
Post-Petition Assets ” has the meaning in
Section 5.2.
“
Person ” means any person, individual, sole
proprietorship, partnership, joint venture, corporation, limited
liability company, unincorporated organization, association,
institution, entity, party, including any government and any
political subdivision, agency or instrumentality
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 in any such Insolvency Proceeding.
“
Purchase ” has the meaning set forth in
Section 3.7.
“
Purchase Notice ” has the meaning set forth in
Section 3.7.
“
Purchase Price ” has the meaning set forth in
Section 3.7.
5
“
Purchasing Parties ” has the meaning set forth in
Section 3.7.
“ Real
Property ” means any right, title or interest in and to
real property, including any fee interest, leasehold interest,
easement, or license and any other right to use or occupy real
property, including any right arising by contract.
“
Replacement First Priority Agreement ” has the meaning
set forth in the definition of “First Priority
Agreement.”
“Second
Lien Notes” has the meaning set forth in the second
“WHEREAS” clause of this 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, increase, renew, refund, replace
(whether upon or after termination or otherwise) or refinance
(including by means of sales of debt securities to institutional
investors) in whole or in part from time to time 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 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 “Holders” as
defined in the Second Priority Agreement and any holder of a Second
Lien Note, the Second Priority Representatives or any Persons that
are designated under the Second Priority Agreement as the
“Second Priority Creditors” for purposes of this
Agreement.
“ 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.
“Second
Priority Lien” means any Lien created by the Second
Priority Security Documents.
“ Second
Priority Obligations ” means (a) with respect to the
Existing Second Priority Agreement, all “Secured
Obligations” of each Loan Party as defined in the
“Security Agreement” referred to in the Second Priority
Agreement and (b) with respect to each other Second Priority
Agreement, (i) all principal of and interest (including
without limitation any Post-Petition Interest) and premium (if any)
on all indebtedness under the Second Priority Agreement, and (ii)
all guarantee obligations, fees, expenses 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 any respect, set aside or required to be paid to a
debtor in
6
possession, any
First Priority Secured Party, 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 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 Parties ” means the Second Priority
Representative, the Second Priority Creditors and any other holders
of the Second Priority Obligations.
“ Second
Priority Security Documents ” means the “Collateral
Documents” as defined in the 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.
“
Standstill Period ” has the meaning set forth in
Section 3.2.
“
Surviving Obligations ” has the meaning set forth in
Section 3.7.
“ Uniform
Commercial Code ” shall mean the Uniform Commercial Code
as in effect from time to time in the applicable
jurisdiction.
1.2
Terms Generally . The definitions of terms herein shall
apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”. The word
“will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires
otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to
time amended, restated, supplemented or otherwise modified,
(ii) any reference herein to any Person shall be construed to
include such Person’s successors or permitted assigns, (iii)
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, (iv) all references herein to
Sections shall be construed to refer to Sections of this Agreement
and (v) 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
Subordination of Liens . (a) Any and all Liens on 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 on
the Common Collateral now existing or hereafter created or arising
in favor of the First Priority Secured Parties securing the First
Priority Obligations, notwithstanding (i) anything
7
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 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 without limitation, any
Insolvency Proceeding), the validity, extent, perfection, priority
or enforceability of any security interest in the Common Collateral
granted to the other. 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.
2.2
Nature of First Priority Obligations . The Second Priority
Representative on behalf of itself and the other Second Priority
Secured Parties acknowledges that the First Priority Obligations
represent 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, but only so long as, except in the case of any
DIP Financing, any such obligations are permitted to be incurred
pursuant to the Second Priority Documents as in effect on the date
of this Agreement. 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
either the First Priority Obligations or 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 with respect to the Common Collateral shall
be in form 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 mortgages, deeds of
trust, deeds and similar instruments (collectively, “
mortgages ”) now or hereafter filed against Real
Property that constitutes Common Collateral in favor of or for the
benefit of the Second Priority Representative and the other Second
Priority Secured Parties shall be in form satisfactory to the First
Priority Representative and shall contain the following notation:
“The lien created by this mortgage on the property described
herein is junior and subordinate to the lien on such property
created by any mortgage, deed of trust or similar instrument now or
hereafter granted to the First Priority Representative, and its
successors and assigns, in such property, in accordance with the
provisions of
8
the
Intercreditor Agreement dated as of October 2, 2009 among
JPMorgan Chase Bank, N.A., as Administrative Agent, Wilmington
Trust FSB, as Collateral Agent, Nebraska Book Company, Inc., as the
Borrower, and the other Loan Parties referred to therein, as
amended from time to time.”
(c) The
First Priority Representative hereby acknowledges 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) over Common Collateral pursuant to the
First Priority Security Documents, such possession or control is
also for the benefit of and on behalf of, and the First Priority
Representative or such third party holds such possession or control
as bailee and agent for, 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 and agency for perfection being intended, among other
things, to satisfy the requirements of Sections 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 Borrower’s sole cost and expense, the
Common Collateral in its possession or control together with any
necessary endorsements to the extent required by the Second
Priority Documents (and to the extent not so required, such
delivery shall be made to the Borrower) or (ii) direct and
deliver such Common Collateral as a court of competent jurisdiction
otherwise directs, and provided , further , 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 these 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.
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
9
Enforcement
Action with respect to the Common Collateral, without any
consultation with or consent of any Second Priority Secured Party,
but subject to the provisos set forth in Sections 3.2 and 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:
(a)
they will not take or cause to be taken any Enforcement Action with
respect to the Common Collateral;
(b)
they will not take or cause to be taken any action, the purpose or
effect of which is to make any Lien in respect of any Second
Priority Obligation pari passu with or senior to, or to give any
Second Priority Secured Party any preference or priority relative
to, the Liens with respect to the First Priority Obligations or the
First Priority Secured Parties with respect to any of the Common
Collateral;
(c)
they will not contest, oppose, object to, interfere with, hinder or
delay, in any manner, whether by judicial proceedings (including
without limitation the filing of an Insolvency Proceeding) or
otherwise, any foreclosure, sale, lease, exchange, transfer or
other disposition of the Common Collateral by any First Priority
Secured Party or any other Enforcement Action taken with respect to
the Common Collateral (or any forbearance from taking any
Enforcement Action with respect to the Common Collateral) by or on
behalf of any First Priority Secured Party;
(d)
they have no right to (i) direct either the First Priority
Representative or any other First Priority Secured Party to
exercise any right, remedy or power with respect to the Common
Collateral or pursuant to the First Priority Security Documents or
(ii) consent or object to the exercise by the First Priority
Representative or any other First Priority Secured Party of any
right, remedy or power with respect to the Common Collateral or
pursuant to the First Priority Security Documents or to the timing
or manner in which any such right is exercised or not exercised
(or, to the extent they may have any such right described in this
clause (d), whether as a junior lien creditor or otherwise, they
hereby irrevocably waive such right);
(e)
they will not institute any suit or other proceeding or assert in
any suit, Insolvency Proceeding or other proceeding any claim
against any First Priority Secured Party seeking damages from or
other relief by way of specific performance, injunction or
otherwise, with respect to, and no First Priority Secured Party
shall be liable for, any action taken or omitted to be taken by any
First Priority Secured Party with respect to the Common Collateral
or pursuant to the First Priority Documents; and
(f)
they will not seek, and hereby waive any right, to have the Common
Collateral or any part thereof marshaled upon any foreclosure or
other disposition of the Common Collateral.
10
provided that, notwithstanding the foregoing, any Second
Priority Secured Party may exercise its rights and remedies in
respect of the Common Collateral under the Second Priority Security
Documents or applicable law after the passage of a period of
180 days (the “ Standstill Period ”) from
the date of delivery of a notice in writing to the First Priority
Representative of its intention to exercise such rights and
remedies, which notice may only be delivered following the
occurrence of and during the continuation of an “Event of
Default” under and as defined in the Second Priority
Agreement; provided , further , however, that,
notwithstanding the foregoing, in no event shall any Second
Priority Secured Party exercise or continue to exercise any such
rights or remedies if, notwithstanding the expiration of the
Standstill Period, (i) any First Priority Secured Party shall
have commenced and be diligently pursuing the exercise of any of
its rights and remedies with respect to any of the Common
Collateral (prompt notice of such exercise to be given to the
Second Priority Representative) or (ii) an Insolvency
Proceeding in respect of any Loan Party shall have been commenced;
and provided , further , that in any Insolvency
Proceeding commenced by or against any Loan Party, the Second
Priority Representative and the Second Priority Secured Parties may
take any action expressly permitted by Section 5.
3.3
Judgment Creditors . In the event that any Second Priority
Secured Party becomes a judgment lien creditor as a result of its
enforcement of its rights as an unsecured creditor, any such
judgment lien on the Common Collateral shall be subject to the
terms of this Agreement for all purposes (including in relation to
the First Priority Liens and the First Priority Obligations) to the
same extent as other Liens on the Common Collateral securing the
Second Priority Obligations are subject to the terms of this
Agreement.
3.4
Cooperation . The Second Priority Representative, on behalf
of itself and the other Second Priority Secured Parties, agrees
that each of them shall take such actions as the First Priority
Representative shall reasonably request in connection with the
exercise by the First Priority Secured Parties of their rights set
forth herein.
3.5
No Additional Rights For the Loan Parties Hereunder . Except
as provided in Section 3.6, if any First Priority Secured
Party or Second Priority Secured Party shall enforce its rights or
remedies in violation of the terms of this Agreement, no Loan Party
shall be entitled to use such violation as a defense to any action
by any First Priority Secured Party or Second Priority Secured
Party, nor to assert such violation as a counterclaim or basis for
set off or recoupment against any First Priority Secured Party or
Second Priority Secured Party.
3.6
Actions Upon Breach . (a) If any Second Priority
Secured Party, contrary to this Agreement, commences or
participates in any action or proceeding against any Loan Party or
the Common Collateral, such Loan Party, with the prior
written
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