INTERCREDITOR AGREEMENT

 

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                                                                    Exhibit 4.11

                             INTERCREDITOR AGREEMENT

 

     INTERCREDITOR AGREEMENT, dated as of September 9, 2004, among ING CAPITAL

LLC ("ING"), as Intercreditor Agent, THE BANK OF NEW YORK TRUST COMPANY, N.A.,

as Trustee, SECURUS TECHNOLOGIES INC., a Delaware corporation (the "COMPANY")

and each Subsidiary of the Company listed on Schedule I hereto.

 

          A. The Company and the Company's Subsidiaries (such term and each

other capitalized term used herein having the meanings set forth in Section 1

below) have entered into a Credit Agreement dated as of September 9, 2004 (as

further amended, restated, refinanced, replaced, supplemented or otherwise

modified from time to time, the "CREDIT AGREEMENT") with, among others, ING, as

administrative agent for the lenders and certain lenders named therein;

 

          B. The Company and certain of the Company's Subsidiaries have entered

into a Pledge Agreement dated as of September 9, 2004 (as further amended,

restated, supplemented, replaced or otherwise modified from time to time, the

"PLEDGE AGREEMENT") with, among others, ING, as administrative agent for the

lenders and certain lenders named therein;

 

          C. The Company and the Company's Subsidiaries have entered into a

Security Agreement dated as of September 9, 2004 (as further amended, restated,

supplemented, replaced or otherwise modified from time to time, the "SECURITY

AGREEMENT") with, among others, ING, as administrative agent for the lenders and

certain lenders named therein;

 

          D. The Obligations of the Company under the Credit Agreement are

secured on a first-priority basis by all personal property and certain real

property assets of the Company and certain of the Company's Subsidiaries;

 

          E. The Company, the Company's Subsidiaries and the Trustee have

entered into an Indenture dated as of September 9, 2004 (as amended,

supplemented or otherwise modified from time to time, the "INDENTURE"), pursuant

to which the Notes shall be governed;

 

          F. The obligations of the Company and the Subsidiary Guarantors under

the Indenture and the Notes are secured on a second-priority basis by certain

personal property and certain real property assets of the Company and certain of

the Company's Subsidiaries.

 

          G. The Company, certain of the Company's subsidiaries, the Trustee and

the Intercreditor Agent are entering into this Agreement to set forth, among

other things, certain rights and priorities with respect to the "Senior Lender

Collateral" and the "Noteholder Collateral" (each as defined below);

 

          Accordingly, in consideration of the foregoing, the mutual covenants

and obligations herein set forth and for other good and valuable consideration,

the sufficiency and receipt of which are hereby acknowledged, the parties

hereto, intending to be legally bound, hereby agree as follows:

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          SECTION 1. DEFINITIONS.

 

          1.1 Defined Terms.   As used in this Agreement, the following terms

have the meanings specified below:

 

          "AGREEMENT" shall mean this Agreement, as amended, renewed, extended,

supplemented or otherwise modified from time to time in accordance with the

terms hereof.

 

          "BANKRUPTCY LAW" shall mean Title 11 of the United States Code and any

similar Federal, state or foreign law for the relief of debtors.

 

          "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a

day that is a legal holiday under the laws of the State of New York or the State

of Georgia or on which banking institutions in the State of New York or the

State of Georgia are required or authorized by law or other governmental action

to close.

 

          "COMMON COLLATERAL" shall mean all of the assets of any Grantor,

whether real, personal or mixed, constituting both Senior Lender Collateral and

Noteholder Collateral.

 

          "COMPANY" shall have the meaning set forth in the preamble.

 

          "COMPARABLE NOTEHOLDER COLLATERAL DOCUMENT" shall mean, in relation to

any Common Collateral subject to any Lien created under any Senior Collateral

Document, that Noteholder Collateral Document that creates a Lien on the same

Common Collateral, granted by the same Grantor.

 

          "CREDIT AGREEMENT" shall have the meaning set forth in the recitals.

 

          "DEPOSIT ACCOUNT" shall have the meaning set forth in the Uniform

Commercial Code.

 

          "DEPOSIT ACCOUNT COLLATERAL" shall mean that part of the Common

Collateral comprised of or contained in (i) Deposit Accounts relating to

proceeds of Common Collateral or (ii) Securities Accounts.

 

          "DIP FINANCING" shall have the meaning set forth in Section 6.1.

 

          "DISCHARGE OF SENIOR LENDER CLAIMS" shall mean, except to the extent

otherwise provided in Section 5.6, payment in full in cash (except for

contingent indemnities and cost and reimbursement obligations to the extent no

claim has been made) of (a) all Obligations in respect of all outstanding

First-Lien Indebtedness and, with respect to letters of credit or letter of

credit guaranties outstanding thereunder, delivery of cash collateral or

backstop letters of credit in respect thereof in compliance with the Senior

Credit Agreement, in each case after or concurrently with the termination of all

commitments to extend credit thereunder and (b) any other Senior Lender Claims

that are due and payable or otherwise accrued and owing at or prior to the time

such principal and interest are paid.

 

          "FIRST-LIEN INDEBTEDNESS" shall mean (a) all Indebtedness incurred by

the

 

 

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Company and its Subsidiaries pursuant to the Senior Lender Documents, that is

secured by a Permitted Lien (as defined in the Indenture on the date hereof and

incurred or deemed incurred pursuant to clause (7) of the definition thereof),

(b) all other Obligations (not constituting Indebtedness) of the Company and its

Subsidiaries under the Senior Lender Documents and (c) all other Obligations of

the Company and its Subsidiaries in respect of Hedging Obligations entered into

with ING, any of the Senior Lenders or any of their affiliates that are secured

under any of the Senior Lender Documents.

 

          "FUTURE FIRST-LIEN INDEBTEDNESS" shall mean any First-Lien

Indebtedness other than First-Lien Indebtedness referred to in clauses (a) and

(b) of the definition of First-Lien Indebtedness incurred pursuant to the Credit

Agreement and the Senior Lender Documents entered into in connection therewith.

 

          "GRANTORS" shall mean the Company and each of the Subsidiaries that

has executed and delivered a Noteholder Collateral Document or a Senior

Collateral Document.

 

          "HEDGING OBLIGATIONS" shall mean, with respect to any Person, all

obligations and liabilities, whether now owing or hereafter arising, of such

Person in respect of (a) interest rate or commodity swap agreements, interest

rate or commodity cap agreements, and interest rate or commodity collar

agreements and (b) other agreements or arrangements designed to protect such

Person against fluctuations in interest rates or commodity prices.

 

          "INDEBTEDNESS" shall mean and include all obligations that constitute

"Indebtedness" or "Debt" within the meaning of the Indenture or the Senior

Credit Agreement.

 

          "INDENTURE" shall have the meaning set forth in the recitals.

 

          "INSOLVENCY OR LIQUIDATION PROCEEDING" shall mean (a) any voluntary or

involuntary case or proceeding under any Bankruptcy Law with respect to any

Grantor, (b) any other voluntary or involuntary insolvency, reorganization or

bankruptcy case or proceeding, or any receivership, liquidation, reorganization

or other similar case or proceeding with respect to any Grantor or with respect

to any of its assets, (c) any liquidation, dissolution, reorganization or

winding up of any Grantor whether voluntary or involuntary and whether or not

involving insolvency or bankruptcy or (d) any assignment for the benefit of

creditors or any other marshalling of assets and liabilities of any Grantor.

 

          "INTERCREDITOR AGENT" shall mean ING, in its capacity as

Administrative Agent for the Senior Lenders under the Credit Agreement and the

other Senior Lender Documents, together with its successors (or if there is more

than one Senior Credit Agreement or a subsequent Senior Credit Agreement, such

agent or trustee as is designated "Intercreditor Agent" by Senior Lenders

holding a majority of the Senior Lender Claims then outstanding) and permitted

successors and assigns under the Senior Credit Agreement exercising

substantially the same rights and powers.

 

          "LIEN" shall mean, with respect to any asset, any mortgage, deed of

trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,

on or of such asset.

 

          "NOTEHOLDER CLAIMS" shall mean all Obligations in respect of the Notes

or arising under the Noteholder Documents or any of them, including all fees and

expenses of the Trustee

 

 

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thereunder.

 

          "NOTEHOLDER COLLATERAL" shall mean all of the assets of any Grantor,

whether real, personal or mixed, with respect to which a Lien is granted as

security for any Noteholder Claim.

 

          "NOTEHOLDER COLLATERAL DOCUMENTS" shall mean the Noteholder Pledge

Agreement, the Noteholder Security Agreement and any other document or

instrument pursuant to which a Lien is granted by any Grantor to secure any

Noteholder Claims or under which rights or remedies with respect to any such

Lien are governed.

 

          "NOTEHOLDER DOCUMENTS" shall mean (a) the Indenture, the Notes, the

Noteholder Collateral Documents and (b) any other related document or instrument

executed and delivered pursuant to any Noteholder Document described in clause

(a) above evidencing or governing any Obligations thereunder.

 

          "NOTEHOLDER PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as

of September 9, 2004, among the Company, certain other domestic Grantors and the

Trustee.

 

          "NOTEHOLDER SECURITY AGREEMENT" shall mean the Security Agreement

dated as of September 9, 2004, among the Company, certain other domestic

Grantors and the Trustee.

 

          "NOTEHOLDERS" shall mean the Persons holding Noteholder Claims.

 

          "NOTES" shall mean (a) the initial $154,000,000 in aggregate principal

amount of 11% second-priority senior secured notes due 2011 to be issued by the

Company pursuant to the Indenture, (b) the exchange notes issued in exchange

therefor as contemplated by the Registration Rights Agreement dated as of

September 9, 2004, among the Company, certain of the Company's Subsidiaries and

the initial purchasers party thereto, and (c) any additional notes issued under

the Indenture by the Company, to the extent permitted by the Indenture and the

Credit Agreement.

 

          "OBLIGATIONS" shall mean, with respect to any Indebtedness, any and

all obligations, whether now owing or hereafter arising, with respect to the

payment of (a) any principal of or interest (including interest accrued on or

accruing after the commencement of any Insolvency or Liquidation Proceeding,

whether or not a claim for post-filing interest is allowed in such proceeding)

or premium on any Indebtedness, including any reimbursement obligation in

respect of any letter of credit or letter of credit guaranty, (b) any fees,

indemnification obligations, expense reimbursement obligations or other

liabilities payable under the documentation governing such Indebtedness, (c) any

obligation to post cash collateral in respect of letters of credit or letter of

credit guaranties and any other obligations and (d) with respect to any

Indebtedness constituting Senior Lender Claims, any Hedging Obligations owing to

any of the Senior Lenders holding such Senior Lender Claims or any affiliates

thereof.

 

          "OFFICERS' CERTIFICATE" shall mean a certificate signed by any two of

the Chairman of the Board, the President, any Vice President, the Treasurer and

the Secretary of the Company.

 

          "PLEDGE AGREEMENT" shall have the meaning set forth in the recitals.

 

 

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          "PERSON" shall mean any natural person, corporation, limited liability

company, trust, joint venture, association, company, partnership, entity or

other party, including any government and any political subdivision, agency or

instrumentality thereof.

 

          "PLEDGED COLLATERAL" shall mean the Common Collateral in the

possession of the Intercreditor Agent (or its agents or bailees), to the extent

that possession thereof is necessary or effective to perfect a Lien thereon

under the Uniform Commercial Code.

 

          "RECOVERY" shall have the meaning set forth in Section 6.4.

 

          "REQUIRED LENDERS" shall mean, with respect to any Senior Credit

Agreement, those Senior Lenders the approval of which is required to approve an

amendment or modification of, termination or waiver of any provision of or

consent to any departure from such Senior Credit Agreement (or would be required

to effect such consent under this Agreement if such consent were treated as an

amendment of the Senior Credit Agreement).

 

          "SECOND-PRIORITY LIEN" shall mean any Lien or any assets of the

Company or any other Grantor securing any Noteholder Claims.

 

          "SECURITIES ACCOUNT" shall have the meaning set forth in the Uniform

Commercial Code.

 

          "SECURITY AGREEMENT" shall have the meaning set forth in the recitals.

 

          "SENIOR COLLATERAL DOCUMENTS" shall mean the Pledge Agreement, the

Security Agreement and any other agreement, document or instrument pursuant to

which a Lien is now or hereafter granted securing any Senior Lender Claims or

under which rights or remedies with respect to such Liens are at any time

governed.

 

          "SENIOR CREDIT AGREEMENT" shall mean the Credit Agreement and any

other agreement governing any Future First-Lien Indebtedness.

 

          "SENIOR LENDER CLAIMS" shall mean (a) all First-Lien Indebtedness

outstanding, including any Future First-Lien Indebtedness, and (b) all other

Obligations (not constituting Indebtedness under any such First-Lien

Indebtedness) with respect to First-Lien Indebtedness, including, without

limitation, all "Obligations" (as defined in the Senior Credit Agreement) and

all Senior Lender Hedging Obligations. Senior Lender Claims shall include all

interest and expenses accrued or accruing (or that would, absent the

commencement of an Insolvency or Liquidation Proceeding, accrue) after the

commencement of an Insolvency or Liquidation Proceeding in accordance with and

at the rate specified in the relevant Senior Lender Document whether or not the

claim for such interest or expenses is allowed as a claim in such Insolvency or

Liquidation Proceeding.

 

          "SENIOR LENDER COLLATERAL" shall mean all of the assets of any

Grantor, whether real, personal or mixed, with respect to which a Lien is

granted as security for any Senior Lender Claim.

 

          "SENIOR LENDER DOCUMENTS" shall mean the Senior Credit Agreement, the

Senior

 

 

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Collateral Documents and each of the other agreements, documents and instruments

(including each agreement, document or instrument providing for or evidencing a

Senior Lender Hedging Obligation) providing for, evidencing or securing any

Obligation under the Credit Agreement or any Future First-Lien Indebtedness and

any other related document or instrument executed or delivered pursuant to any

Senior Lender Document at any time or otherwise evidencing or securing any

Indebtedness arising under any Senior Lender Document.

 

          "SENIOR LENDER HEDGING OBLIGATIONS" shall mean any Hedging Obligations

secured under the Senior Collateral Documents.

 

          "SENIOR LENDERS" shall mean the Persons holding Senior Lender Claims,

including the Intercreditor Agent.

 

          "SUBSIDIARY" shall mean any "Subsidiary" of the Company as defined in

the Indenture.

 

          "TRUSTEE" shall mean The Bank of New York, in its capacity as trustee

under the Indenture and collateral agent under the Noteholder Collateral

Documents, and its permitted successors.

 

           "UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial

Code as from time to time in effect in the State of New York.

 

          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 (a) any definition of or reference to any

agreement, instrument or other document herein shall be construed as referring

to such agreement, instrument or other document as from time to time amended,

supplemented or otherwise modified in accordance with this Agreement, (b) any

reference herein to any Person shall be construed to include such Person's

successors and assigns, (c) the words "herein," "hereof" and "hereunder," and

words of similar import, shall be construed to refer to this Agreement in its

entirety and not to any particular provision hereof, (d) all references herein

to Sections shall be construed to refer to Sections of this Agreement and (e)

the words "asset" and "property" shall be construed to have the same meaning and

effect and to refer to any and all tangible and intangible assets and

properties, including cash, securities, accounts and contract rights.

 

 

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          SECTION 2. LIEN PRIORITIES.

 

          2.1 Subordination.   Notwithstanding the date, time, manner or order of

filing or recordation of any document or instrument or grant, attachment or

perfection of any Liens granted to the Trustee or the Noteholders on the Common

Collateral or of any Liens granted to the Intercreditor Agent or the Senior

Lenders on the Common Collateral or on the Senior Lender Collateral and

notwithstanding any provision of the UCC, or any applicable law or the

Noteholder Documents or the Senior Lender Documents or any other circumstance

whatsoever, the Trustee, on behalf of itself and each Noteholder, hereby agrees

that: (a) any Lien on the Common Collateral securing any Senior Lender Claims

now or hereafter held by or on behalf of the Intercreditor Agent or any Senior

Lenders or any agent or trustee therefor regardless of how acquired, whether by

grant, statute, operation of law, subrogation or otherwise, shall have priority

over and be senior in all respects and prior to any Lien on the Common

Collateral securing any Noteholder Claims and (b) any Lien on the Common

Collateral securing any Noteholder Claims now or hereafter held by or on behalf

of the Trustee or any Noteholders or any agent or trustee therefor regardless of

how acquired, whether by grant, statute, operation of law, subrogation or

otherwise, shall be junior and subordinate in all respects to all Liens on the

Common Collateral securing any Senior Lender Claims. All Liens on the Common

Collateral securing any Senior Lender Claims shall be and remain senior in all

respects and prior to all Liens on the Common Collateral securing any Noteholder

Claims for all purposes, whether or not such Liens securing any Senior Lender

Claims are subordinated to any Lien securing any other obligation of the

Company, any other Grantor or any other Person.

 

          2.2 Prohibition on Contesting Liens.   Each of the Trustee, for itself

and on behalf of each Noteholder, and the Intercreditor Agent, for itself and on

behalf of each Senior Lender, agrees that it shall not (and hereby waives any

right to) contest or support any other Person in contesting, in any proceeding

(including any Insolvency or Liquidation Proceeding), the validity, perfection,

priority, validity or enforceability of (a) a Lien securing any Senior Lender

Claims held (or purported to be held) by or on behalf of the Intercreditor Agent

or any of the Senior Lenders or any agent or trustee therefor in any Senior

Lender Collateral or (b) a Lien securing any Noteholder Claims held (or

purported to be held) by or on behalf of any Noteholder in the Common

Collateral, as the case may be; provided, however, that nothing in this

Agreement shall be construed to prevent or impair the rights of the

Intercreditor Agent or any Senior Lender to enforce this Agreement (including

the priority of the Liens securing the Senior Lender Claims as provided in

Section 2.1) or any of the Senior Lender Documents.

 

          2.3 No New Liens.   So long as the Discharge of Senior Lender Claims

has not occurred, the parties hereto agree that, after the date hereof, if the

Trustee shall hold any Lien on any assets of the Company or any other Grantor

securing any Noteholder Claims that are not also subject to the first-priority

Lien in respect of the Senior Lender Claims under the Senior Lender Documents,

the Trustee, upon demand by the Intercreditor Agent or the Company, will assign

or release such Lien to the Intercreditor Agent as security for the Senior

Lender Claims (in the case of an assignment, the Trustee may retain a junior

lien on such assets subject to the terms hereof).

 

          2.4 Perfection of Liens.   Neither the Intercreditor Agent, the Trustee

nor the Senior Lenders shall be responsible for perfecting and maintaining the

perfection of Liens with respect to the Common Collateral for the benefit of the

Trustee and the Noteholders. The

 

 

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provisions of this Intercreditor Agreement are intended solely to govern the

respective Lien priorities as between the Senior Lenders and the Noteholders and

shall not impose on the Intercreditor Agent, the Trustee, the Noteholders or the

Senior Lenders or any agent or trustee therefor any obligations in respect of

the disposition of proceeds of any Common Collateral which would conflict with

prior perfected claims therein in favor of any other Person or any order or

decree of any court or governmental authority or any applicable law.

 

          SECTION 3. ENFORCEMENT.

 

           3.1 Exercise of Remedies.

 

          (a) So long as the Discharge of Senior Lender Claims has not occurred,

whether or not any Insolvency or Liquidation Proceeding has been commenced by or

against the Company or any other Grantor, (i) neither the Trustee nor any

Noteholder will (x) exercise or seek to exercise any rights or remedies

(including setoff) with respect to any Common Collateral in respect of any

Noteholder Claims, institute any action or proceeding with respect to such

rights or remedies (including any action of foreclosure), (y) contest, protest

or object to any foreclosure proceeding or action brought with respect to the

Common Collateral by the Intercreditor Agent or any Senior Lender in respect of

the Senior Lender Claims, the exercise of any right by the Intercreditor Agent

or any Senior Lender (or any agent or sub-agent on their behalf) in respect of

the Senior Lender Claims under any lockbox agreement, control agreement,

landlord waiver or bailee's letter or similar agreement or arrangement, or other

comparable Noteholder Collateral Document, to which the Trustee or any

Noteholder either is a party or may have rights as a third party beneficiary, or

any other exercise by any such party, of any rights and remedies relating to the

Common Collateral under the Senior Lender Documents or otherwise in respect of

Senior Lender Claims, or (z) object to the forbearance by the Senior Lenders

from bringing or pursuing any foreclosure proceeding or action or any other

exercise of any rights or remedies relating to the Common Collateral in respect

of Senior Lender Claims and (ii) except as otherwise provided herein, the

Intercreditor Agent and the Senior Lenders shall have the exclusive right to

enforce rights, exercise remedies (including setoff and the right to credit bid

their debt) and make determinations regarding the release, disposition or

restrictions with respect to the Common Collateral without any consultation with

or the consent of the Trustee or any Noteholder; provided, however, that (A) in

any Insolvency or Liquidation Proceeding commenced by or against the Company or

any other Grantor, the Trustee may file a claim or statement of interest with

respect to the Noteholder Claims and (B) the Trustee may take any action (not

adverse to the prior Liens on the Common Collateral securing the Senior Lender

Claims, or the rights of the Intercreditor Agent or the Senior Lenders to

exercise remedies in respect thereof) in order to create, prove, perfect,

preserve or protect (but not enforce) its rights in, and perfection and priority

of its Lien on, the Common Collateral subject to the limitations set forth in

Section 6.3. In exercising rights and remedies with respect to the Senior Lender

Collateral, the Intercreditor Agent and the Senior Lenders may enforce the

provisions of the Senior Lender Documents and exercise remedies thereunder, all

in such order and in such manner as they may determine in the exercise of their

sole discretion. Such exercise and enforcement shall include the rights of an

agent appointed by them to sell or otherwise dispose of Common Collateral upon

foreclosure, to incur expenses in connection with such sale or disposition, and

to exercise all the rights and remedies of a secured lender under the Uniform

Commercial Code of any applicable jurisdiction and of a secured creditor under

Bankruptcy

 

 

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Laws of any applicable jurisdiction.

 

          (b) So long as the Discharge of Senior Lender Claims has not occurred,

the Trustee, on behalf of itself and each Noteholder, agrees that it will not

take or receive any Common Collateral or any proceeds of Common Collateral in

connection with the exercise of any right or remedy (including setoff) with

respect to any Common Collateral in respect of Noteholder Claims. Without

limiting the generality of the foregoing, unless and until the Discharge of

Senior Lender Claims has occurred, except as expressly provided in the proviso

in clause (ii) of Section 3.1(a), the sole right of the Trustee and the

Noteholders with respect to the Common Collateral is to hold a Lien on the

Common Collateral in respect of Noteholder Claims pursuant to the Noteholder

Documents for the period and to the extent granted therein and to receive a

share of the proceeds thereof, if any, after the Discharge of the Senior Lender

Claims has occurred.

 

          (c) Subject to the proviso in clause (ii) of Section 3.1(a), (i) the

Trustee, for itself and on behalf of each Noteholder, agrees that neither the

Trustee nor any Noteholder will take any action that would hinder any exercise

of remedies undertaken by the Intercreditor Agent or the Senior Lenders with

respect to the Common Collateral under the Senior Loan Documents, including any

sale, lease, exchange, transfer or other disposition of the Common Collateral,

whether by foreclosure or otherwise, and (ii) the Trustee, for itself and on

behalf of each Noteholder, hereby waives any and all rights it or any Noteholder

may have as a junior lien creditor or otherwise to object to the manner in which

the Intercreditor Agent or the Senior Lenders seek to enforce or collect the

Senior Lender Claims or the Liens granted in any of the Senior Lender

Collateral, regardless of whether any action or failure to act by or on behalf

of the Intercreditor Agent or Senior Lenders is adverse to the interests of the

Noteholders.

 

          (d) The Trustee hereby acknowledges and agrees that no covenant,

agreement or restriction contained in any Noteholder Document shall be deemed to

restrict in any way the rights and remedies of the Intercreditor Agent or the

Senior Lenders with respect to the Senior Lender Collateral as set forth in this

Agreement and the Senior Lender Documents.

 

          3.2 Cooperation.   Subject to the proviso in clause (ii) of Section

3.1(a), the Trustee, on behalf of itself and each Noteholder, agrees that,

unless and until the Discharge of Senior Lender Claims has occurred, it will not

commence, or join with any Person (other than the Senior Lenders and the

Intercreditor Agent upon the request thereof) in commencing, any enforcement,

collection, execution, levy or foreclosure action or proceeding with respect to

any Lien held by it in the Common Collateral under any of the Noteholder

Documents or otherwise in respect of the Noteholder Claims.

 

          SECTION 4. PAYMENTS.

 

          4.1 Application of Proceeds.   After an event of default under any

First-Lien Indebtedness has occurred with respect to which the Intercreditor

Agent has provided written notice to the Trustee, and until such event of

default is cured or waived, so long as the Discharge of Senior Lender Claims has

not occurred, the Common Collateral or proceeds thereof received in connection

with the sale or other disposition of, or collection on, such Common Collateral

upon the exercise of remedies, shall be applied by the Intercreditor Agent to

the Senior Lender

 

 

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Claims in such order as specified in the relevant Senior Lender Documents until

the Discharge of Senior Lender Claims has occurred. Upon the Discharge of the

Senior Lender Claims, the Intercreditor Agent shall deliver promptly to the

Trustee any Common Collateral or proceeds thereof held by it in the same form as

received, with any necessary endorsements or as a court of competent

jurisdiction may otherwise direct to be applied by the Trustee to the Noteholder

Claims in such order as specified in the relevant Noteholder Documents.

 

          4.2 Payments Over.   Any Common Collateral or proceeds thereof received

by the Trustee or any Noteholder in connection with the exercise of any right or

remedy (including setoff) relating to the Common Collateral in contravention of

this Agreement shall be segregated and held in trust for the benefit of and

forthwith paid over to the Intercreditor Agent for the benefit of the Senior

Lenders in the same form as received, with any necessary endorsements or as a

court of competent jurisdiction may otherwise direct. The Intercreditor Agent is

hereby authorized to make any such endorsements as agent for the Trustee or any

such Noteholder. This authorization is coupled with an interest and is

irrevocable.

 

          SECTION 5. OTHER AGREEMENTS.

 

          5.1 Releases.

 

          (a) If, at any time, any Grantor or the holder of any Senior Lender

Claim delivers notice to the Trustee that any specified Common Collateral

(including, without limitation, all or substantially all of the equity interests

of a Grantor or any of its Subsidiaries) is sold, transferred or otherwise

disposed of:

 

           (i) by the owner of such Common Collateral, other than to another

     Grantor or to any subsidiary of the Company, in a transaction permitted

     under the Senior Credit Agreement and the Indenture; or

 

          (ii) during the existence of any Event of Default under (and as

     defined in) the Senior Credit Agreement to the extent the Intercreditor

     Agent has consented to such sale, transfer or disposition;

 

then (whether or not any Insolvency or Liquidation Proceeding is pending at the

time) the Liens in favor of the Trustee upon such Collateral will automatically

be released and discharged as and when, but only to the extent, such Liens on

such Collateral securing Senior Lender Claims are released and discharged. At

the sole discretion of the Intercreditor Agent, upon delivery to the Trustee of

a notice from the Intercreditor Agent stating that any release of Liens securing

or supporting the Senior Lender Claims has become effective (or shall become

effective upon Trustee's release) pursuant to the first sentence of this clause

(a), the Trustee will prom