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EXHIBIT 99.2
EXECUTION VERSION
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "Agreement"), dated as of
August
26, 2005, is made by and between SILVER
POINT FINANCE, LLC, a Delaware limited
liability company, as the co-agent,
syndication agent, and documentation agent
under and pursuant to the First Lien Credit
Agreement (as hereinafter defined)
(in such capacity, together with its
successors and assigns, the "Original First
Lien Co-Agent"), and WELLS FARGO FOOTHILL,
INC., a California corporation, as
administrative agent and collateral agent
under and pursuant to the First Lien
Credit Agreement (in such capacity,
together with its successors and assigns,
the "Original First Lien Agent"), on the
one hand, and THE BANK OF NEW YORK, a
national banking association, as agent
under and pursuant to the Second Lien
Credit Agreement (as hereinafter defined)
(in such capacity, together with its
successors and assigns, the "Original
Second Lien Agent"), on the other hand,
and is acknowledged by Salton, Inc., a
Delaware corporation ("Parent"), each of
Parent's Subsidiaries identified on the
signature pages of the First Lien Credit
Agreement or otherwise made a party
thereto, as Borrowers (collectively with
Parent, the "Borrowers") and each of
Parent's Subsidiaries identified on the
signature pages of the First Lien Credit
Agreement, or otherwise made a party
thereto, as Guarantors (collectively, the
"Guarantors"):
WHEREAS, Parent, the Borrowers, the Guarantors, the Original
First
Lien Co-Agent, the Original First Lien
Agent, and the lenders party thereto (the
"Original First Lien Lenders") have entered
into that certain Credit Agreement
dated as of May 9, 2003 and amended and
restated as of June 15, 2004 (as amended
as of August 30, 2004, May 11, 2005, and
July 8, 2005 and as it may be further
amended, modified, supplemented or amended
and restated from time to time, the
"Original First Lien Credit Agreement")
pursuant to which such lenders have
agreed, upon the terms and conditions
stated therein, to make loans and advances
to and to issue letters of credit (or
guarantees or other undertakings in
respect thereof) for the account of the
Borrowers up to a principal amount (such
amount, the "First Lien Amount") equal to
$287,000,000 minus the original
principal amount of the Second Lien Term
Loan (as defined in the First Lien
Credit Agreement) as of the Second Lien
Closing Date (as defined in the First
Lien Credit Agreement) at any time
outstanding. The repayment of the Obligations
(as that term is defined in the Original
First Lien Credit Agreement) is secured
by security interests in and liens on
substantially all of the assets of the
Borrowers and the Guarantors pursuant to
certain collateral documents in favor
of the Original First Lien Agent, which
documents, together with the other
collateral and loan documents executed and
delivered in connection with the
Original First Lien Credit Agreement, each
as in effect on the date hereof, are
referred to herein as the "Original First
Lien Loan Documents";
WHEREAS, Parent, the Borrowers, the Guarantors, the Original
Second
Lien Agent, and the lenders party thereto
(the "Original Second Lien Lenders")
have entered into a Credit Agreement dated
as of the date hereof (such agreement
as in effect on the date hereof, the
"Original Second Lien Credit Agreement")
pursuant to which such lenders have agreed,
upon the terms and conditions stated
therein, to make loans and advances to the
Borrowers up to the principal amount
of $110,000,000 at any time outstanding.
The repayment of the Obligations (as
that term is defined in the Original Second
Lien Credit Agreement) is secured by
security interests in and liens on
substantially all of the assets of the
Borrowers and the Guarantors
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pursuant to certain collateral documents in
favor of the Original Second Lien
Agent, which documents, together with the
other collateral and loan documents
executed and delivered in connection with
the Original Second Lien Credit
Agreement, each as in effect on the date
hereof, are referred to herein as the
"Original Second Lien Loan Documents";
and
WHEREAS, each of the Original First Lien Agent and the Original
First Lien Co-Agent, for and on behalf of
itself and the First Lien Lenders, and
the Original Second Lien Agent, for and on
behalf of itself and the Second Lien
Lenders, wish to enter into this Agreement
to establish their respective rights
and priorities in the Collateral.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy
of which is hereby acknowledged, the
Original First Lien Agent and the Original
Second Lien Agent hereby agree as
follows:
1. Definitions;
Rules of Construction.
a. Terms Defined Above and in the Recitals. As used in this
Agreement, the following terms shall have
the respective meanings indicated in
the opening paragraph hereof and in the
above Recitals:
"Agreement"
"Borrowers"
"First Lien Amount"
"Guarantors"
"Original First Lien Agent"
"Original First Lien Co-Agent"
"Original First Lien Credit Agreement"
"Original First Lien Lenders"
"Original First Lien Loan Documents"
"Original Second Lien Agent"
"Original Second Lien Credit Agreement"
"Original Second Lien Lenders"
"Original Second Lien Loan Documents"
"Parent"
b. Other Definitions. As used in this Agreement, the following
terms
shall have the following meanings:
"Adequate Protection Lien" has the meaning set forth in Section
5.d.
"Agent" means First Lien Agent, First Lien Co-Agent and/or
Second
Lien Agent, as the context may require.
"Application of Proceeds Blockage Event" has the meaning set
forth
in Section 4.a.
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"Application of Proceeds Blockage Period" has the meaning set
forth
in Section 4.a.
"Bank Product Obligations" has the meaning set forth in the
Original
First Lien Credit Agreement.
"Bankruptcy Code" shall mean title 11 of the United States Code,
as
in effect from time to time.
"Capital Stock" means (a) in the case of a corporation,
corporate
stock, (b) in the case of an association or
business entity, any and all shares,
interests, participations, rights or other
equivalents (however designated) of
corporate stock, (c) in the case of a
partnership or limited liability company,
partnership or membership interests
(whether general or limited) and (d) any
other interest or participation that
confers on a Person the right to receive a
share of the profits and losses of, or
distributions of property of, the issuing
Person.
"Cash Collateral" means any Collateral consisting of money or
cash
equivalents, any security entitlement (as
defined in the UCC) and any financial
assets (as defined in the UCC).
"Collateral" means all assets and properties upon which either
First
Lien Agent or First Lien Co-Agent, on the
one hand, or Second Lien Agent, on the
other hand, now has or hereafter acquires a
Lien, whether now owned or hereafter
acquired by the Borrowers, any Guarantor or
any other Person, together with all
rents, issues, profits, products, and
Proceeds thereof.
"Control Collateral" means any Collateral consisting of a
certificated security (as defined in the
UCC), investment property (as defined
in the UCC), a deposit account (as defined
in the UCC) and any other Collateral
as to which a Lien may be perfected through
physical possession or control by
the secured party or any agent
therefor.
"DIP Financing" has the meaning set forth in Section 5.d.
"Discharge of First Lien Indebtedness" means payment in full in
cash
(or in the case of letters of credit or
Bank Product Obligations, the cash
collateralization as required by the
Original First Lien Loan Documents) of the
First Lien Indebtedness (other than First
Lien Indebtedness consisting solely of
contingent indemnification obligations
under the First Lien Loan Documents for
which no claim has been asserted in
writing) after or concurrently with
termination of all commitments to extend
credit under any First Lien Credit
Agreement.
"Discharge of Second Lien Indebtedness" means payment in full
in
cash of the Second Lien Indebtedness (other
than Second Lien Indebtedness
consisting solely of contingent
indemnification obligations under the Second
Lien Loan Documents for which no claim has
been asserted in writing) after or
concurrently with termination of all
commitments to extend credit under any
Second Lien Credit Agreement.
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"Equity Interests" means Capital Stock and all warrants, options,
or
other rights to acquire Capital Stock (but
excluding any debt security that is
convertible into, or exchangeable for,
Capital Stock).
"Event of Default" means "Event of Default" as defined in the
First
Lien Credit Agreement and/or "Event of
Default" as defined in the Second Lien
Credit Agreement.
"Exercise Any Secured Creditor Remedies" or "Exercise of
Secured
Creditor Remedies" means (a) the taking of
any action to enforce or realize upon
any Lien, including the institution of any
foreclosure proceedings or the
noticing of any public or private sale or
other disposition pursuant to Article
9 of the UCC, (b) the exercise of any right
or remedy provided to a secured
creditor or otherwise on account of a Lien
under the First Lien Loan Documents,
the Second Lien Loan Documents, applicable
law, in an Insolvency Proceeding or
otherwise, including the election to retain
Collateral in satisfaction of a
Lien, (c) the taking of any action or the
exercise of any right or remedy in
respect of the collection on, set off
against, marshaling of, or foreclosure on
the Collateral or the Proceeds of
Collateral, (d) the sale, lease, license, or
other disposition of all or any portion of
the Collateral, by private or public
sale, other disposition or any other means
permissible under applicable law, (e)
the solicitation of bids from third parties
to conduct the liquidation of all or
a material portion of Collateral to the
extent undertaken and being diligently
pursued in good faith to consummate the
sale of such Collateral within a
commercially reasonable time, (f) the
engagement or retention of sales brokers,
marketing agents, investment bankers,
accountants, appraisers, auctioneers or
other third parties for the purposes of
valuing, marketing, promoting and
selling the Collateral to the extent
undertaken and being diligently pursued in
good faith to consummate the sale of such
Collateral within a commercially
reasonable time, and (g) the exercise of
any other enforcement right relating to
the Collateral (including the exercise of
any voting rights relating to any
Capital Stock and including any right of
recoupment or set-off) whether under
the First Lien Loan Documents, the Second
Lien Loan Documents, applicable law,
in an Insolvency Proceeding or
otherwise.
"First
Lien Agent" means the Original First Lien Agent, together
with its successors, assigns and
transferees under any First Lien Credit
Agreement.
"First Lien Co-Agent" means the Original First Lien Co-Agent,
together with its successors, assigns and
transferees under any First Lien
Credit Agreement.
"First Lien Credit Agreement" means the Original First Lien
Credit
Agreement as amended, restated, modified,
renewed, refunded, replaced, or
refinanced in whole or in part from time to
time, and any other agreement
extending the maturity of, consolidating,
otherwise restructuring (including
adding Subsidiaries or affiliates of any
Obligor or any other Persons as parties
thereto), renewing, replacing or
refinancing all or any portion of the
Obligations or Commitments as those terms
are defined in the Original First Lien
Credit Agreement or all or any portion of
the amounts owed under any other
agreement that itself is a First Lien
Credit Agreement hereunder and whether by
the same or any other agent, lender, or
group of lenders and whether or not
increasing the amount of First Lien
Indebtedness that may be incurred
thereunder, in each case, to the extent
that any such amendment, restatement,
modification, renewal, refunding,
replacement, or refinancing is permitted under
this Agreement.
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"First Lien Default" means any Event of Default under the First
Lien
Credit Agreement.
"First Lien Indebtedness" means all obligations and all other
amounts owing, due or secured under the
terms of the First Lien Credit Agreement
or any other First Lien Loan Document,
including any and all amounts payable to
any First Lien Lender, all principal,
premium, interest, fees, attorneys fees,
costs, charges, expenses, reimbursement
obligations, any obligation to post cash
collateral in respect of letters of credit
or indemnities in respect thereof,
indemnities, guarantees, the Make-Whole
Amount, Bank Product Obligations, Ledger
Product Obligations and all other amounts
payable under any First Lien Loan
Document or in respect thereof (including,
in each case, all amounts accruing on
or after the commencement of any Insolvency
Proceeding relating to any Obligor,
or that would have accrued or become due
under the terms of the First Lien Loan
Documents but for the effect of the
Insolvency Proceeding or other applicable
law, and irrespective of whether a claim
for all or any portion of such amounts
is allowable or allowed in such Insolvency
Proceeding).
"First Lien Lender Sale" has the meaning set forth in Section
2.c(1).
"First Lien Lenders" means the Original First Lien Lenders,
together
with the lenders under any First Lien
Credit Agreement or First Lien Loan
Documents.
"First Lien Loan Documents" means the First Lien Credit
Agreement
and the other Loan Documents (as such term
is defined in the Original First Lien
Credit Agreement), or any other security,
collateral, ancillary or other
document entered into in connection with or
related to any agreement that is a
First Lien Credit Agreement, as such
documents may be amended, restated,
modified, renewed, refunded, replaced, or
refinanced in whole or in part from
time to time, in accordance with this
Agreement.
"First Lien Modification" has the meaning set forth in Section
6.a.
"Forced Obligor Sale" has the meaning set forth in Section
2.c(2).
"Insolvency Proceeding" means any proceeding commenced by or
against
any Person under any provision of the
Bankruptcy Code or under any other state,
federal or foreign bankruptcy or insolvency
law, assignments for the benefit of
creditors, formal or informal moratoria,
compositions, extensions generally with
creditors, or proceedings seeking
reorganization, arrangement, or other similar
relief.
"Ledger Product Obligations" has the meaning set forth in the
Original First Lien Credit Agreement.
"Lender" means a First Lien Lender and/or a Second Lien Lender,
as
the context may require.
"Lien" means any interest in an asset securing an obligation
owed
to, or a claim by, any Person other than
the owner of the asset, irrespective of
whether (a) such interest is based on the
common law, statute, or contract, (b)
such interest is recorded or perfected, and
(c) such interest is contingent upon
the occurrence of some future event or
events or the existence of
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some future circumstance or circumstances.
Without limiting the generality of
the foregoing, the term "Lien" includes the
lien or security interest arising
from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement,
conditional sale or trust receipt, or
from a lease, consignment, or bailment for
security purposes and also includes
reservations, exceptions, encroachments,
easements, rights-of-way, covenants,
conditions, restrictions, leases, and other
title exceptions and encumbrances
affecting real property.
"Notice of Intent to Exercise" means a written notice from or
on
behalf of Second Lien Agent to First Lien
Agent and First Lien Co-Agent (a)
stating that Second Lien Agent intends to
Exercise Secured Creditor Remedies,
(b) stating that it is a "Notice of Intent
to Exercise Secured Creditor
Remedies" and (c) describing the Event(s)
of Default under the Second Lien
Credit Agreement that is(are) the basis for
delivering such notice.
"Obligor" means the Borrowers, each Guarantor and any other
Person
that now or hereafter is, or whose assets
now or hereafter are, liable for all
or any portion of the First Lien
Indebtedness or the Second Lien Indebtedness,
as applicable.
"Payment Collateral" means all accounts, instruments, chattel
paper,
letters of credit, deposit accounts,
securities accounts, and payment
intangibles, together with all supporting
obligations (as those terms are
defined in the UCC), in each case composing
a portion of the Collateral.
"Permitted
Application of Proceeds of Collateral" has the meaning
set forth in Section 3.
"Permitted Replacement Lien" has the meaning set forth in
Section
5.i.
"Person" means any natural person, corporation, limited
liability
company, limited partnership, general
partnership, limited liability
partnership, joint venture, trust, land
trust, business trust, or other
organization, irrespective of whether such
organization is a legal entity, and
shall include a government and any agency
or political subdivision thereof.
"Proceeds" means (a) all "proceeds" as defined in Article 9 of
the
UCC with respect to the Collateral, and (b)
whatever is recoverable or recovered
when Collateral is sold, exchanged,
collected, or disposed of, whether
voluntarily or involuntarily.
"Purchase Notice" has the meaning set forth in Section 10.a.
"Recovery" has the meaning set forth in Section 5.c.
"Reorganization Debt Securities" has the meaning set forth in
Section 5.a.
"Second Lien Agent" means the Original Second Lien Agent,
together
with its successors, assigns and
transferees under any Second Lien Credit
Agreement.
"Second Lien Credit Agreement" means the Original Second Lien
Credit
Agreement as amended, restated, modified,
renewed, refunded, replaced, or
refinanced in whole
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or in part from time to time, and any other
agreement extending the maturity of,
consolidating, otherwise restructuring
(including adding Subsidiaries or
affiliates of any Obligor or any other
Persons as parties thereto), renewing,
replacing or refinancing all or any portion
of the Obligations or Commitments as
those terms are defined in the Original
Second Lien Credit Agreement or all or
any portion of the amounts owed under any
other agreement that itself is a
Second Lien Credit Agreement hereunder and
whether by the same or any other
agent, lender, or group of lenders and
whether or not increasing the amount of
Second Lien Indebtedness that may be
incurred thereunder, in each case, to the
extent that any such amendment,
restatement, modification, renewal, refunding,
replacement, or refinancing is permitted
under this Agreement. "Second Lien
Indebtedness" means all obligations and all
other amounts owing, due or secured
under the terms of the Second Lien Credit
Agreement or any other Second Lien
Loan Document, including any and all
amounts payable to Second Lien Agent or to
any Second Lien Lender, all principal,
premium, interest, fees, attorneys fees,
costs, charges, expenses, reimbursement
obligations, any obligation to post cash
collateral in respect of letters of credit
or indemnities in respect thereof,
indemnities, guarantees, any prepayment or
early termination premium, and all
other amounts payable under any Second Lien
Loan Document or in respect thereof
(including, in each case, all amounts
accruing on or after the commencement of
any Insolvency Proceeding relating to any
Obligor, or that would have accrued or
become due under the terms of the Second
Lien Loan Documents but for the effect
of the Insolvency Proceeding or other
applicable law, and irrespective of
whether a claim for all or any portion of
such amounts is allowable or allowed
in such Insolvency Proceeding).
"Second Lien Lenders" means the Original Second Lien Lenders,
together with the lenders under any Second
Lien Credit Agreement or Second Lien
Loan Documents.
"Second Lien Loan Documents" means the Second Lien Credit
Agreement
and the other Loan Documents (as such term
is defined in the Original Second
Lien Credit Agreement), or any other
security, collateral, ancillary or other
document entered into in connection with or
related to any agreement that is a
Second Lien Credit Agreement, as such
documents may be amended, restated,
modified, renewed, refunded, replaced, or
refinanced in whole or in part from
time to time in accordance with this
Agreement.
"Standstill Notice" means a written notice from First Lien Agent
or
First Lien Co-Agent to Second Lien Agent
stating that a First Lien Default has
occurred and is continuing and stating that
it is a "Standstill Notice".
"Standstill Period" means the period beginning on the date that
a
Standstill Notice is received by Second
Lien Agent through and including the
first to occur of (a) the date upon which
the Discharge of First Lien
Indebtedness shall have occurred, (b) the
date upon which First Lien Agent or
First Lien Co-Agent shall have waived or
acknowledged in writing the termination
of the First Lien Default that gave rise to
such Standstill Period, or (c) the
date that is 270 days after the receipt of
such Standstill Notice by Second Lien
Agent.
"Trigger Event" has the meaning set forth in Section 10.a.
"Trigger Notice" has the meaning set forth in Section 10.a.
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"UCC" means the Uniform Commercial Code as enacted and in
effect
from time to time in the State of New York;
provided, however, that in the event
that, by reason of mandatory provisions of
law, any or all of the attachment,
perfection, priority, or remedies with
respect to Agent's Lien on any Collateral
is governed by the Uniform Commercial Code
as enacted and in effect in a
jurisdiction other than the State of New
York, the term "UCC" shall mean the
Uniform Commercial Code as enacted and in
effect in such other jurisdiction
solely for purposes of the provisions
thereof relating to such attachment,
perfection, priority, or remedies.
c. Terms Defined in the Original First Lien Credit Agreement.
Unless
otherwise defined in this Agreement, any
and all initially capitalized terms set
forth in this Agreement shall have the
meaning ascribed thereto in the Original
First Lien Credit Agreement.
d. Rules of Construction. Unless the context of this Agreement
clearly requires otherwise, references to
the plural include the singular,
references to the singular include the
plural, the term "including" is not
limiting, and the term "or" has, except
where otherwise indicated, the inclusive
meaning represented by the phrase "and/or."
The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in
this Agreement refer to this
Agreement as a whole and not to any
particular provision of this Agreement.
Article, section, subsection, clause,
schedule, and exhibit references herein
are to this Agreement unless otherwise
specified. Any reference herein to any
Person shall be construed to include such
Person's successors and assigns.
2. Subordination
and Standstill.
a. Lien Subordination. Notwithstanding (i) the date, time,
method,
manner or order of grant, attachment, or
perfection of any Liens granted to
First Lien Agent (or First Lien Co-Agent or
any First Lien Lender) or Second
Lien Agent (or any Second Lien Lender) in
respect of all or any portion of the
Collateral, (ii) the order or time of
filing or recordation of any document or
instrument for perfecting the Liens in
favor of First Lien Agent (or First Lien
Co-Agent or any First Lien Lender) or
Second Lien Agent (or any Second Lien
Lender) in any Collateral, (iii) any
provision of the UCC, any other applicable
law, any of the First Lien Loan Documents
or the Second Lien Loan Documents,
(iv) irrespective of whether the Liens
securing the First Lien Loan Documents
are valid, perfected, enforceable, void,
avoidable, subordinated, disputed or
allowed, or (v) any other circumstance
whatsoever, each of First Lien Agent and
First Lien Co-Agent, on behalf of itself
and the First Lien Lenders, and Second
Lien Agent, on behalf of itself and the
Second Lien Lenders, hereby agree that:
(1) any Lien in respect of all or any portion of the Collateral
now
or hereafter held by or on behalf of Second
Lien Agent or any Second Lien Lender
that secures all or any portion of the
Second Lien Indebtedness, shall in all
respects be junior and subordinate to all
Liens granted to First Lien Agent,
First Lien Co-Agent and the First Lien
Lenders in the Collateral to secure all
or any portion of the First Lien
Indebtedness, and
(2) any Lien in respect of all or any portion of the Collateral
now
or hereafter held by or on behalf of First
Lien Agent, First Lien Co-Agent or
any First Lien Lender that secures all or
any portion of the First Lien
Indebtedness shall in all respects be
senior and prior to
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all Liens granted to Second Lien Agent and
the Second Lien Lenders in the
Collateral to secure all or any portion of
the Second Lien Indebtedness.
b. Remedies Standstill. At any time that a Standstill Period is
in
effect, Second Lien Agent and Second Lien
Lenders shall not, without the prior
written consent of First Lien Co-Agent
(acting upon the direction of the
requisite First Lien Lenders),
(1) commence, prosecute, or participate in any lawsuit, action,
or
proceeding, whether private, judicial,
equitable, administrative or otherwise
(including any bankruptcy case against any
Obligor or any Obligor's assets) to
the extent that any such action could
reasonably be expected, in any material
respect, to restrain, hinder, limit, delay
for any material period or otherwise
interfere with the Exercise of Secured
Creditor Remedies by First Lien Co-Agent,
First Lien Agent or First Lien Lenders;
provided that (A) to the extent that
commencing, prosecuting, or participating
in any such lawsuit, action, or
proceeding could not reasonably be
expected, in any material respect, to
restrain, hinder, limit, delay for any
material period or otherwise interfere
with the Exercise of Secured Creditor
Remedies by First Lien Co-Agent, First
Lien Agent or First Lien Lenders and Second
Lien Agent does, in fact, commence,
prosecute, or participate in any such
lawsuit, action, or proceeding, then
Second Lien Agent shall give First Lien
Co-Agent and First Lien Agent prompt
written notice of any such action, and (B)
as more fully set forth in Section 5,
Second Lien Agent and the Second Lien
Lenders may file a proof of claim (such
proof of claim to indicate the
subordination set forth herein) in any Insolvency
Proceeding involving any Obligor,
(2) Exercise Any Secured Creditor Remedies,
(3) send any notice to or otherwise seek to obtain payment
directly
from any account debtor of any Obligor, sue
for an attachment, an injunction to
enjoin any Exercise of Secured Creditor
Remedies by First Lien Co-Agent, First
Lien Agent or First Lien Lenders, a keeper,
a receiver or any other similar
legal or equitable remedy, exercise any
rights of set off or recoupment as
against any Obligor, or
(4) commence or cause to be commenced or join with any creditor
in
commencing any Insolvency Proceeding
against any Obligor or any Obligor's
assets.
Notwithstanding any other provision hereof, (i) Second Lien
Agent
and Second Lien Lenders may not Exercise
Any Secured Creditor Remedies with
respect to any Payment Collateral at any
time unless and until the Discharge of
First Lien Indebtedness shall have
occurred; (ii) Second Lien Agent may not
exercise any of the remedies described in
clauses (1) through (4) above so long
as (A) First Lien Co-Agent or First Lien
Agent at such time has commenced and
diligently is pursuing in good faith any
Exercise of Secured Creditor Remedies
with respect to all or a material portion
of the Collateral or (B) First Lien
Co-Agent, First Lien Agent and Second Lien
Agent are enjoined from the Exercise
of Secured Creditor Remedies, in each case,
unless and until the Discharge of
First Lien Indebtedness shall have
occurred; and (iii) Second Lien Agent may not
exercise any of the remedies described in
clauses (1) through (4) above without
first providing First Lien Co-Agent and
First Lien Agent at least 10 days prior
written notice in the form of a Notice of
Intent to Exercise (it being
understood that (x) notwithstanding
anything to the contrary contained herein,
such Notice of Intent to Exercise may
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only be delivered by Second Lien Agent if
there is an Event of Default under
Section 9.1(a), Section 9.1(c) (solely with
respect to a default under Section
7.23 of the Second Lien Credit Agreement),
or Section 9.1(d) (solely with
respect to a default in the payment when
due of interest or principal on the
Senior Notes under the Indentures) of the
Second Lien Credit Agreement; and (y)
if First Lien Co-Agent or First Lien Agent
does not deliver a Standstill Notice
to Second Lien Agent by the end of such 10
day period, Second Lien Agent may
proceed with the exercise of such remedies,
and if Second Lien Agent elects to
exercise such remedies, neither First Lien
Agent nor First Lien Co-Agent may
exercise any of the remedies of the type
described in clauses (1) through (4)
above so long as Second Lien Agent at such
time has commenced and diligently is
pursuing in good faith any Exercise of
Secured Creditor Remedies with respect to
all or a material portion of the
Collateral, unless and until the Discharge of
Second Lien Indebtedness shall have
occurred); provided, that Second Lien Agent
shall not be required to provide a Notice
of Intent to Exercise to First Lien
Agent and First Lien Co-Agent in connection
with a permitted Exercise of Secured
Creditor Remedies upon the termination of
any Standstill Period.
c. Limitation on Standstill Periods. Subject to clause (ii) in
the
last paragraph of Section 2.b, in no event
shall a Standstill Period extend
beyond 270 days from the date of receipt by
Second Lien Agent from First Lien
Agent or First Lien Co-Agent of a
Standstill Notice initiating such Standstill
Period. Any number of notices of a First
Lien Default may be given during a
Standstill Period, but no such notice shall
extend such Standstill Period. Only
2 Standstill Periods may be commenced
within any 360 day period, and no
subsequent Standstill Period may be
commenced within 60 days after the
termination of the immediately preceding
Standstill Period. No First Lien
Default that existed or was continuing on
the date of the commencement of any
Standstill Period and that was known to
First Lien Agent, First Lien Co-Agent or
any First Lien Lender will be, or can be,
made the basis for the commencement of
a second Standstill Period, whether or not
within a period of 360 consecutive
days, unless such First Lien Default has
been cured or waived for a period of
not less than 60 consecutive days.
d. Release of Liens.
(1) In the event of any private or public sale or other
disposition
of all or any portion of the Collateral by
First Lien Agent or First Lien
Co-Agent after the occurrence and during
the continuance of a First Lien Default
(and prior to the date upon which the
Discharge of First Lien Indebtedness shall
have occurred) in connection with the
liquidation by First Lien Agent or First
Lien Co-Agent of all or any material
portion of the Collateral and the
collection by First Lien Agent or First
Lien Co-Agent of the First Lien
Indebtedness through the sale or other
disposition of such Collateral (whether
prior to or after the occurrence of an
Insolvency Proceeding) (any such sale or
other disposition, a "First Lien Lender
Sale"), then Second Lien Agent, on
behalf of itself and the Second Lien
Lenders, agrees that such First Lien Lender
Sale will be free and clear of the Liens
securing the Second Lien Indebtedness
(and, if the First Lien Lender Sale
includes Equity Interests in any Obligor,
Second Lien Agent, on behalf of itself and
the Second Lien Lenders, further
agrees to release the entities whose Equity
Interests are sold from all Second
Lien Indebtedness); provided that (x) First
Lien Agent, First Lien Co-Agent and
the First Lien Lenders also release their
Liens on such Collateral (and, if the
First Lien Lender Sale includes Equity
Interests in any Obligor, the entities
whose Equity Interests are sold from all
First Lien Indebtedness), (y) the
Proceeds of any such First Lien Lender Sale
are applied in
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accordance with Section 9, and (z) First
Lien Agent or First Lien Co-Agent shall
have conducted such First Lien Lender Sale
in a commercially reasonable manner
and in accordance with the UCC.
(2) In the event of any private or public sale or other
disposition
of all or substantially all of the
Collateral by any Obligor with the consent of
First Lien Co-Agent and/or First Lien Agent
after the occurrence and during the
continuance of a First Lien Default (and
prior to the date upon which the
Discharge of First Lien Indebtedness shall
have occurred), which sale or other
disposition is conducted by such Obligor
with the consent of First Lien Co-Agent
and/or First Lien Agent (any such sale or
other disposition, a "Forced Obligor
Sale"), then Second Lien Agent, on behalf
of itself and the Second Lien Lenders,
agrees that such Forced Obligor Sale will
be free and clear of the Liens
securing the Second Lien Indebtedness (and,
if the Forced Obligor Sale includes
Equity Interests in any Obligor, Second
Lien Agent, on behalf of itself and the
Second Lien Lenders, further agrees to
release the entities whose Equity
Interests are sold from all Second Lien
Indebtedness); provided that (x) First
Lien Agent, First Lien Co-Agent and the
First Lien Lenders also release their
Liens on such Collateral (and, if the
Forced Obligor Sale includes Equity
Interests in any Obligor, the entities
whose Equity Interests are sold from all
First Lien Indebtedness), (y) the Proceeds
of any such Forced Obligor Sale are
applied in accordance with Section 9 (as if
it were Proceeds received in
connection with any Exercise of Secured
Creditor Remedies), and (z) the Obligor
conducting such Forced Obligor Sale shall
have conducted such Forced Obligor
Sale in a commercially reasonable manner as
if such Forced Obligor Sale were
being conducted by a secured creditor in
accordance with the UCC.
(3) Second Lien Agent agrees that, in connection with any First
Lien
Lender Sale or Forced Obligor Sale, upon
the prior written request of First Lien
Co-Agent or First Lien Agent (which request
shall specify the proposed terms of
the sale and the type and amount of
consideration to be received in connection
therewith), it will execute and/or file any
and all Lien releases or other
documents reasonably requested by First
Lien Co-Agent or First Lien Agent in
connection therewith (copies of which are
provided to Second Lien Agent) without
recourse, representation or warranty and at
the sole expense of the Obligors;
provided, that (w) in the case of a First
Lien Lender Sale, no such release
documents shall be delivered to any
Obligor, (x) in the case of a Forced Obligor
Sale, no such release documents shall be
delivered to any Obligor unless First
Lien Co-Agent or First Lien Agent has
delivered its release documents to such
Obligor, (y) no such release documents
shall be delivered to Second Lien Agent
for execution more than 5 days prior to the
anticipated closing date of such
sale or disposition, and (z) the
effectiveness of any such release or
termination by Second Lien Agent shall be
subject to the sale or other
disposition of the Collateral described in
such request and on the terms
described in such request or on
substantially similar terms and shall lapse in
the event such sale or other disposition
does not occur within 10 days of the
anticipated closing date (at which time
First Lien Co-Agent, First Lien Agent or
the Obligors, as the case may be, shall
promptly return all release documents to
Second Lien Agent). Subject to the proviso
in the immediately preceding
sentence, in the event that Second Lien
Agent fails to so execute or file any
such Lien releases or other documents
within 5 Business Days after receipt of
written request from First Lien Agent or
First Lien Co-Agent, each of First Lien
Co-Agent and First Lien Agent is hereby
irrevocably authorized to execute and/or
file such Lien releases and other documents
(provided that such Lien releases
and other documents shall not be filed or
recorded except substantially
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contemporaneous with such sale or
disposition or until such sale or disposition
has been consummated).
e. Waiver of Right to Contest First Lien Indebtedness. Second
Lien
Agent agrees that it and the Second Lien
Lenders shall not, and hereby waives
any right to, take any action to contest or
challenge (or assist or support any
other Person in contesting or challenging),
directly or indirectly, whether or
not in any proceeding (including in any
Insolvency Proceeding), the validity,
priority, enforceability, or perfection of
the Liens of First Lien Agent (on
behalf of itself, the First Lien Co-Agent
and the First Lien Lenders) in any
Collateral, the validity, priority,
enforceability or allowance of any of the
claims of First Lien Agent or any holder of
First Lien Indebtedness against any
Obligor or the validity or enforceability
of this Agreement or any of the
provisions hereof. Second Lien Agent agrees
that neither it nor the Second Lien
Lenders will take any action that would
interfere with any Exercise of Secured
Creditor Remedies undertaken by First Lien
Co-Agent or First Lien Agent under
the First Lien Loan Documents, including
any public or private sale, lease,
exchange, transfer, or other disposition of
any Collateral, whether by
foreclosure or otherwise, in any case so
long as First Lien Co-Agent or First
Lien Agent does not act in contravention of
this Agreement or applicable law.
Second Lien Agent hereby waives any and all
rights it and the Second Lien
Lenders may have as a junior lien creditor
or otherwise to contest, protest,
object to, interfere with the manner in
which First Lien Co-Agent or First Lien
Agent seeks to enforce the Liens in any
Collateral so long as First Lien
Co-Agent or First Lien Agent does not act
in contravention of this Agreement or
applicable law.
f. Waiver of Right to Contest Second Lien Indebtedness. Each of
First Lien Agent and First Lien Co-Agent
agrees that it and the First Lien
Lenders shall not, and hereby waives any
right to, take any action to contest or
challenge (or assist or support any other
Person in contesting or challenging),
directly or indirectly, whether or not in
any proceeding (including in any
Insolvency Proceeding), the validity,
priority (except to the extent expressly
provided by this Agreement),
enforceability, or perfection of the Liens of
Second Lien Agent (on behalf of itself and
the Second Lien Lenders) in any
Collateral, the validity, priority (except
to the extent expressly provided by
this Agreement), enforceability or
allowance of any of the claims of Second Lien
Agent or any holder of Second Lien
Indebtedness against any Obligor or the
validity or enforceability of this
Agreement or any of the provisions hereof.
Solely to the extent that Second Lien Agent
is permitted to Exercise Secured
Creditor Remedies under this Agreement,
each of First Lien Agent and First Lien
Co-Agent agrees that neither it nor the
First Lien Lenders will take any action
that would interfere with any Exercise of
Secured Creditor Remedies undertaken
by Second Lien Agent under the Second Lien
Loan Documents, including any public
or private sale, lease, exchange, transfer,
or other disposition of any
Collateral, whether by foreclosure or
otherwise, in any case so long as Second
Lien Agent does not act in contravention of
this Agreement or applicable law.
g. Acknowledgement of Liens. The Second Lien Agent acknowledges
and
agrees that the First Lien Agent, for the
benefit of itself, the First Lien
Co-Agent and the First Lien Lenders, has
been and may be granted Liens upon all
of the Collateral in which the Second Lien
Agent has been granted Liens and the
Second Lien Agent hereby consents thereto.
Each of First Lien Agent and First
Lien Co-Agent acknowledges and agrees that
Second Lien Agent, for the benefit of
itself and the Second Lien Lenders, has
been or, subject to the terms of this
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Agreement, may be granted Liens upon all of
the Collateral in which the First
Lien Agent and First Lien Co-Agent has been
granted Liens and each of the First
Lien Agent and First Lien Co-Agent hereby
consents thereto. The Second Lien
Agent agrees that neither it nor any Second
Lien Lender shall obtain a Lien on
any asset or Collateral to secure all or
any portion of the Second Lien
Indebtedness unless concurrently therewith,
the First Lien Agent (on behalf of
itself, the First Lien Co-Agent and the
First Lien Lenders) obtains a Lien on
such asset or Collateral and the parties
hereby agree that all such Liens are
and will be subject to this Agreement. The
subordination of Liens by the Second
Lien Agent in favor of the First Lien
Agent, the First Lien Co-Agent and the
First Lien Lenders shall not be de
