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EXHIBIT 10.3
INTERCREDITOR AGREEMENT
Intercreditor
Agreement (this "AGREEMENT"), dated as of May 3, 2005, among
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, and BANK OF AMERICA, N.A.,
as Collateral Agent (in such capacities,
with their respective successors and
assigns, and as more specifically defined
below, together the "FIRST PRIORITY
REPRESENTATIVE"), for the First Priority
Secured Parties (as defined below),
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, and WILMINGTON TRUST
COMPANY, as Collateral Agent (in such
capacities, with their respective
successors and assigns, and as more
specifically defined below, together the
"SECOND PRIORITY REPRESENTATIVE"), for the
Second Priority Secured Parties (as
defined below); DURA OPERATING CORP. (the
"BORROWER"); and each of the other
Loan Parties (as defined below) party
hereto.
WHEREAS, the
Borrower, the other borrower and guarantors named therein, the
First Priority Representative and certain
financial institutions and other
entities are parties to that certain Fifth
Amended and Restated Credit Agreement
of even date herewith (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 the other borrower
named therein; and
WHEREAS, the
Borrower, the guarantors named therein, the Second Priority
Representative and certain financial
institutions and other entities are parties
to that certain Credit Agreement of even
date herewith (the "EXISTING SECOND
PRIORITY AGREEMENT"), pursuant to which
such financial institutions and other
entities have agreed to make loans to the
Borrower; and
WHEREAS, the
Borrower and the other Loan Parties have granted to the First
Priority Representative security interests
in the Common Collateral (as defined
below) as security for payment and
performance of the First Priority Obligations
(as defined below); and
WHEREAS, the
Borrower and the other Loan Parties have granted to the Second
Priority Representative junior security
interests in the Common Collateral as
security for payment and performance of the
Second Priority Obligations (as
defined below); and
WHEREAS, the
First Priority Creditors under the Existing First Priority
Agreement have agreed to permit the grant
of such junior security interests on
the terms and conditions of this Agreement;
and
WHEREAS, this
Agreement sets forth the relative priorities of the security
interests in the Common Collateral securing
the First Priority Obligations and
the security interests in the Common
Collateral securing 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 is expressly
recognized by all of the parties hereto, the
parties agree as follows:
SECTION 1.
Definitions.
1.1. Defined
Terms. The following terms, as used herein, have the following
meanings:
"ADDITIONAL
FIRST PRIORITY AGREEMENT" means any agreement approved for
designation as such by the First Priority
Representative and the Second Priority
Representative (other than Wilmington Trust
Company).
"ADDITIONAL
SECOND PRIORITY AGREEMENT" means any agreement approved for
designation as such by the First Priority
Representative and the Second Priority
Representative.
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"BANKRUPTCY CODE" means the
United States Bankruptcy Code (11 U.S.C.
Section 101 et seq.), as amended from time
to time.
"BORROWER" has
the meaning set forth in the introductory paragraph hereof.
"CASH MANAGEMENT
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 treasury
management arrangements, depositary or
other cash management services.
"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 of a
secured creditor with respect to any Common
Collateral securing such obligations
or the commencement or prosecution of
enforcement of any of the rights and
remedies under, as applicable, the First
Priority Documents or the Second
Priority Documents, or applicable law,
including 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.
"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, replace, refinance or
refund in whole or in part the
indebtedness and other obligations
outstanding under the Existing First Priority
Agreement, any Additional First Priority
Agreement or any other agreement or
instrument referred to in this clause (c)
unless such agreement or instrument
expressly provides that it is not intended
to be and is not a First Priority
Agreement hereunder (a "REPLACEMENT FIRST
PRIORITY AGREEMENT"). Any reference to
the First Priority Agreement hereunder
shall be deemed a reference to any First
Priority Agreement then extant.
"FIRST PRIORITY
COLLATERAL" means all assets, whether now owned or
hereafter acquired by the 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 the "Lenders" 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.
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"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) all principal of and interest
(including without limitation any
Post-Petition Interest) and premium (if any)
on all loans made pursuant to the First
Priority Agreement, (b) 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, (c) all
Hedging Obligations, (d) all Cash
Management Obligations and (e) 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 any Loan Party as
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,
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)
the First Priority Obligations (other than
those that constitute Unasserted
First Priority Contingent Obligations) have
been paid in cash in full (or cash
collateralized or defeased in accordance
with the terms of the First Priority
Documents), (b) all commitments to extend
credit under the First Priority
Documents have been terminated, (c) there
are no outstanding letters of credit
or similar instruments issued under the
First Priority Documents (other than
such as have been cash collateralized or
defeased in accordance with the terms
of the First Priority Security Documents),
and (d) so long as the Second
Priority Obligations Payment Date has not
occurred, the First Priority
Representative has delivered a written
notice to the Second Priority
Representative stating that the events
described in clauses (a), (b) and (c)
have occurred to the reasonable
satisfaction of the First Priority Secured
Parties (it being understood that, upon the
request of the Borrower or the
Second Priority Representative after the
occurrence of the events described in
clauses (a), (b) and (c) to the reasonable
satisfaction of the First Priority
Secured Parties, the First Priority
Representative shall deliver the notice
described in this clause (d)).
"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.
"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 "Collateral 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.
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"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 swap
agreement or hedge agreement in respect
of interest rates, currency exchange rates
or commodity prices.
"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,
with respect to any asset, (a) any mortgage, deed of trust,
deed to secure debt, lien, pledge,
hypothecation, assignment, encumbrance,
charge or security interest in, on or of
such asset, (b) the interest of a
vendor or a lessor under any conditional
sale agreement, capital lease or title
retention agreement (or any financing lease
having substantially the same
economic effect as any of the foregoing)
relating to such asset and (c) in the
case of securities, any purchase option,
call or similar right of a third party
with respect to such securities.
"LOAN PARTY"
means the Borrower and each direct or indirect 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 and that now or hereafter owns or
acquires any assets constituting
Common Collateral. All references in this
Agreement to any Loan Party shall
include such Loan Party as a
debtor-in-possession and any receiver or trustee
for such Loan Party in any Insolvency
Proceeding.
"PERSON" means
any 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.
"REPLACEMENT
FIRST PRIORITY AGREEMENT" has the meaning set forth in the
definition of "First Priority
Agreement".
"SECOND PRIORITY
AGREEMENT" means the collective reference to (a) the
Existing Second Priority Agreement, (b) any
Additional Second Priority Agreement
and (c) any other credit agreement, loan
agreement, note agreement, promissory
note, indenture, or other agreement or
instrument evidencing or governing the
terms of any indebtedness or other
financial accommodation that has been
incurred to extend, replace, refinance or
refund in whole or in part the
indebtedness and other obligations
outstanding under the Existing Second
Priority Agreement, any Additional Second
Priority Agreement or any other
agreement or instrument referred to in this
clause (c). Any reference to the
Second Priority Agreement hereunder shall
be deemed a reference to any Second
Priority Agreement then extant.
"SECOND PRIORITY
COLLATERAL" means all assets, whether now owned or
hereafter acquired by the 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 "Lenders" as defined in the Second
Priority Agreement, or any Persons that are
designated under the Second Priority
Agreement as the "Second Priority
Creditors" for purposes of this Agreement.
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"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) 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 (b) 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 any Loan Party as
a debtor-in-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 Second Priority Secured Parties,
be deemed to be reinstated and outstanding
as if such payment had not occurred.
"SECOND PRIORITY
OBLIGATIONS PAYMENT DATE" means the first date on which
(a) the Second Priority Obligations (other
than those that constitute Unasserted
Second Priority Contingent Obligations)
have been paid in cash in full (or cash
collateralized or defeased in accordance
with the terms of the Second Priority
Documents), (b) all commitments to extend
credit under the Second Priority
Documents have been terminated, (c) there
are no outstanding letters of credit
or similar instruments issued under the
Second Priority Documents (other than
such as have been cash collateralized or
defeased in accordance with the terms
of the Second Priority Security Documents),
and (d) so long as the First
Priority Obligations Payment Date has not
occurred, the Second Priority
Representative (other than Wilmington Trust
Company) has delivered a written
notice to the First Priority Representative
stating that the events described in
clauses (a), (b) and (c) have occurred to
the reasonable satisfaction of the
Second Priority Secured Parties (it being
understood that, upon the request of
the Borrower or the First Priority
Representative after the occurrence of the
events described in clauses (a), (b) and
(c) to the reasonable satisfaction of
the Second Priority Secured Parties, the
Second Priority Representative (other
than Wilmington Trust Company) shall
deliver the notice described in this clause
(d)).
"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.
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"UNASSERTED
FIRST PRIORITY CONTINGENT OBLIGATIONS" shall mean, at any time,
First Priority Obligations for taxes,
costs, indemnifications, reimbursements,
damages and other liabilities (excluding
(a) the principal of, and interest and
premium (if any) on, and fees and expenses
relating to, any First Priority
Obligation and (b) contingent reimbursement
obligations in respect of amounts
that may be drawn under outstanding letters
of credit) in respect of which no
outstanding assertion of liability (whether
oral or written) and no outstanding
claim or demand for payment (whether oral
or written) has been made (and, in the
case of First Priority Obligations for
indemnification, no outstanding notice
for indemnification has been issued by the
indemnitee) at such time.
"UNSECURED
SECOND PRIORITY CONTINGENT OBLIGATIONS" shall mean, at any
time,
Second Priority Obligations for taxes,
costs, indemnifications, reimbursements,
damages and other liabilities (excluding
(a) the principal of, and interest and
premium (if any) on, and fees and expenses
relating to, any Second Priority
Obligation and (b) contingent reimbursement
obligations in respect of amounts
that may be drawn under outstanding letters
of credit) in respect of which no
outstanding assertion of liability (whether
oral or written) and no outstanding
claim or demand for payment (whether oral
or written) has been made (and, in the
case of Second Priority Obligations for
indemnification, no outstanding notice
for indemnification has been issued by the
indemnitee) at such time.
"UNIFORM
COMMERCIAL CODE" shall mean the Uniform Commercial Code as in
effect from time to time in the applicable
jurisdiction.
1.2 Amended
Agreements. All references in this Agreement to agreements or
other contractual obligations shall, unless
otherwise specified, be deemed to
refer to such agreements or contractual
obligations as amended, supplemented,
restated or otherwise modified from time to
time.
SECTION 2. Lien
Priorities.
2.1
Subordination of Liens. (a) Any and all Liens 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 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
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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.
(c) This
Agreement is intended to implement the subordination of any and
all Liens in the Common Collateral securing
the Second Priority Obligations to
any and all Liens in the Common Collateral
securing the First Priority
Obligations and is not intended to create a
subordination in right of payment of
any Second Priority Obligations to any
First Priority Obligations.
2.2 Nature of
First Priority Obligations. The Second Priority
Representative on behalf of itself and the
other Second Priority Secured Parties
acknowledges that a portion of the First
Priority Obligations represents debt
that is revolving in nature and that the
amount thereof that may be outstanding
at any time or from time to time may be
increased or reduced and subsequently
reborrowed, and that the terms of the First
Priority Obligations may be
modified, extended or amended from time to
time, and that the aggregate amount
of the First Priority Obligations may be
increased, replaced or refinanced, in
each event, without notice to or consent by
the Second Priority Secured Parties
and without affecting the provisions
hereof. The lien priorities provided in
Section 2.1 shall not be altered or
otherwise affected by any such amendment,
modification, supplement, extension,
repayment, reborrowing, increase,
replacement, renewal, restatement or
refinancing of 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 shall be in form
satisfactory to the First Priority
Representative (the First Priority
Representative agreeing to review promptly
any such financing statements, filings and
recordings and it being understood
that any such financing statements, filings
and recordings in a form
substantially similar to a form previously
approved by the First Priority
Representative shall be deemed to be
satisfactory).
(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 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 Bank
of America, N.A., as Collateral Agent, with
respect to the First Priority
Documents, and their respective successors
and assigns, in such property, in
accordance with the provisions of the
Intercreditor Agreement dated as of May 3,
2005 among JPMorgan Chase Bank, N.A., as
Administrative Agent, and Bank of
America, N.A., as Collateral Agent, with
respect to the First Priority
Documents; JPMorgan Chase Bank, N.A., as
Administrative Agent, and Wilmington
Trust Company, as Collateral Agent, with
respect to the Second Priority
Documents; and the 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 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. Nothing in the preceding
sentence shall be construed to impose any
duty on the First Priority
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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 and so
long as the Second Priority Obligations
Payment Date has not occurred, 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
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.
Notwithstanding
any other provision of this Agreement to the contrary
(other than this Section 2.3 and Section
4.2), the Second Priority
Representative may take all actions as it
reasonably deems necessary to continue
or create the perfection of the Second
Priority Lien on any Common Collateral so
long as such actions are not in
contravention of actions taken by the First
Priority Representative.
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, securing any Second
Priority Obligation on any assets of any
Loan Party 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 securing any Second Priority
Obligation on any assets of any Loan Party
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
Enforcement Action with respect to the
Common Collateral, without any consultation
with or consent of any Second
Priority Secured Party, but subject to the
proviso set forth in Section 5.1.
Upon the occurrence and during the
continuance of 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 in accordance
with the terms and conditions of the First
Priority Documents.
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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 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;
(b) they will not contest, oppose, object to, interfere with,
hinder
or delay, in any
manner, whether by judicial proceedings 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 (or any forbearance from taking any Enforcement
Action) by or on
behalf of any First Priority Secured Party;
(c) 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 (c),
whether as a
junior lien creditor or otherwise, they hereby irrevocably
waive such
right);
(d) 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, instructions or otherwise, with respect to, and no
First Priority
Secured Party shall be liable to any Second Priority Secured
Party 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;
(e) they will not make any judicial or nonjudicial claim or demand
or
commence any
judicial or non-judicial proceedings against any Loan Party or
any of its
subsidiaries or affiliates under or with respect to any Second
Priority
Security Document seeking payment or damages from or other
relief
by way of
specific performance, instructions or otherwise under or with
respect to any
Second Priority Security Document (other than filing a proof
of claim) or
exercise any right, remedy or power under or with respect to,
or otherwise
take any action to enforce, other than filing a proof of
claim, any
Second Priority Security Document;
(f) they will
not commence judicial or nonjudicial foreclosure
proceedings with
respect to, seek to have a trustee, receiver, liquidator
or similar
official appointed for or over, attempt any action to take
possession of
any Common Collateral, exercise any right, remedy or power
with respect to,
or otherwise take any action to enforce their interest in
or realize upon,
the Common Collateral or pursuant to the Second Priority
Security
Documents; and
(g) 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.
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Nothing in this
Agreement shall prevent the Second Priority Representative,
on behalf of itself and Second Priority
Secured Parties, from asserting or
seeking to enforce any provision of this
Agreement.
3.3 Judgment
Creditors. In the event that any Second Priority Secured Party
becomes a judgment lien creditor in respect
of Common Collateral as a result of
its enforcement of its rights as an
unsecured creditor, such judgment lien 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 all other Liens 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
