Exhibit 10.5
Execution Version
INTERCREDITOR AGREEMENT
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INTERCREDITOR AGREEMENT (this "Agreement") dated as of January 10,
2008, by and between the First Lien Administrative Agent, the First Lien
Collateral Agent and the Second Lien Agent (each as defined below).
RECITALS:
WHEREAS, GoAmerica, Inc., a Delaware corporation (together with its
successors and assigns, including any receiver, trustee or debtor-in-possession,
the "Borrower"), the Lenders (as defined therein) (together with their
successors and assigns, the "First Lien Lenders"), Churchill Financial LLC, as
administrative agent, and Ableco Finance LLC, as collateral agent, are parties
to a Credit Agreement dated as of January 10, 2008 (as amended or otherwise
modified from time to time in accordance with the terms of this Agreement, the
"Initial First Lien Loan Agreement"), pursuant to which the First Lien Lenders
have made and will from time to time make loans and provide other financial
accommodations to the Borrower;
WHEREAS, the Borrower, the Lenders (as defined therein) (together
with their successors and assigns, the "Second Lien Lenders") and Clearlake
Capital Group, L.P., as agent, are parties to a Second Lien Credit Agreement
dated as of January 10, 2008 (as amended or otherwise modified from time to time
in accordance with the terms of this Agreement, the "Initial Second Lien Loan
Agreement") pursuant to which the Second Lien Lenders have made certain loans to
the Borrower;
WHEREAS, the Borrower and the other Obligors (as defined herein)
have granted to the First Lien Collateral Agent, for the benefit of the First
Lien Creditors (as defined below), a Lien (as defined below) on substantially
all of their assets and properties, all as more particularly described in the
First Lien Documents (as defined below);
WHEREAS, the Borrower and the other Obligors have granted to the
Second Lien Agent, for the benefit of the Second Lien Creditors (as defined
below), a Lien on substantially all of their assets and properties, all as more
particularly described in the Second Lien Documents (as defined below);
WHEREAS, the Second Lien Agent, on behalf of the Second Lien
Creditors, and the First Lien Agents, on behalf of the First Lien Creditors,
wish to set forth their agreement as to certain of their respective rights and
obligations with respect to the Collateral and their understanding relative to
their respective positions in the Collateral; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. Definitions.
1.1 General Terms. As used in this Agreement, the following terms shall
have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and the plural forms of the terms defined:
"Agent" means the First Lien Agents or the Second Lien Agent, as
applicable.
"Agent's Notice" shall have the meaning set forth in Section 5.1.
"Agreement" shall have the meaning set forth in the preamble hereof.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. ss.ss.101 et seq.
"Bankruptcy Law" means the Bankruptcy Code and any other federal,
state or foreign bankruptcy, insolvency, receivership or similar law.
"Borrower" shall have the meaning set forth in the recitals hereof.
"Business Day" means any day of the year that is not a Saturday, a
Sunday or a day on which banks are required or authorized to close in New York
City.
"Collateral" means all assets and properties of any kind whatsoever,
real or personal, tangible or intangible and wherever located, of any Obligor,
whether now owned or hereafter acquired, upon which a Lien (including, without
limitation, any Liens granted in any Insolvency Proceeding) is now or hereafter
granted or purported to be granted by such Person in favor of a Secured
Creditor, as security for all or any part of the Obligations.
"Debt Action" means (a) the filing of a lawsuit by any Secured
Creditor solely to collect the Obligations owed to such Secured Creditor and not
to exercise their secured creditor remedies in respect of the collateral, (b)
the demand by any Secured Creditor for accelerated payment of any and all of the
Obligations owed to such Secured Creditor, (c) the filing of any notice of claim
and the voting of any such claim in any Insolvency Proceeding involving an
Obligor, (d) the filing of any motion in any Insolvency Proceeding consistent
with the term of this Agreement, (e) the filing of any defensive pleading in any
Insolvency Proceeding consistent with the terms of this Agreement or (f) the
filing of any pleadings, objections, motions or agreements which assert rights
or interests available to unsecured creditors of the Obligors arising under any
Insolvency Proceeding or applicable non-bankruptcy law.
"DIP Financing" shall have the meaning set forth in Section 6.2.
"DIP Liens" shall have the meaning set forth in Section 6.2.
"Disposition" means any sale, lease, exchange, transfer or other
disposition, and "Dispose" and "Disposed of" shall have correlative meanings.
"Documents" means the First Lien Documents and the Second Lien
Documents, or any of them.
"Enforcement Action" means (a) any action by any Secured Creditor to
foreclose on the Lien of such Person in any Collateral, (b) any action by any
Secured Creditor to take possession of, or sell or otherwise realize upon, or to
exercise any other rights or remedies with respect to, any Collateral, including
any Disposition after the occurrence of an Event of
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Default of any Collateral by an Obligor with the consent of, or at the direction
of, a Secured Creditor, (c) the taking of any other actions by a Secured
Creditor against any Collateral, including the taking of control or possession
of, or the exercise of any right of setoff with respect to, any Collateral
and/or (d) the commencement by any Secured Creditor of any legal proceedings or
actions against or with respect to any Obligor or any of such Obligor's property
or assets or any Collateral to facilitate any of the actions described in
clauses (a), (b) and (c) above, including the commencement of any Insolvency
Proceeding; provided that this definition shall not include any Debt Action.
"Event of Default" means each "Event of Default" or similar term, as
such term is defined in any First Lien Document or any Second Lien Document.
"Final Order" means an order of the Bankruptcy Court or any other
court of competent jurisdiction as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending, or, in the event that an appeal, writ of
certiorari, or reargument or rehearing thereof has been filed or sought, such
order of the Bankruptcy Court or other court of competent jurisdiction shall
have been affirmed by the highest court to which such order was appealed, or
from which certiorari, reargument or rehearing was sought, and the time to take
any further appeal, petition for certiorari or move for reargument or rehearing
shall have expired; provided that the possibility that a motion under Rule 59 or
Rule 60 of the Federal Rules of Civil Procedure or any analogous rule under the
Federal Rules of Bankruptcy Procedure or applicable state court rules of civil
procedure, may be filed with respect to such order shall not cause such order
not to be a Final Order.
"First Lien Administrative Agent" means Churchill Financial LLC in
its capacity as administrative agent for the First Lien Creditors under the
First Lien Documents, and its successors and assigns in such capacity (including
one or more other agents or similar contractual representatives for one or more
lenders that at any time succeeds to or refinances, replaces or substitutes for
any or all of the First Lien Obligations at any time and from time to time).
"First Lien Agents" means the First Lien Administrative Agent and
the First Lien Collateral Agent, collectively.
"First Lien Avoidance" shall have the meaning set forth in Section
6.4.
"First Lien Collateral Agent" means Ableco Finance LLC in its
capacity as collateral agent for the First Lien Creditors under the First Lien
Documents, and its successors and assigns in such capacity (including one or
more other agents or similar contractual representatives for one or more lenders
that at any time succeeds to or refinances, replaces or substitutes for any or
all of the First Lien Obligations at any time and from time to time).
"First Lien Creditors" means the First Lien Agents, the First Lien
Lenders and the other Persons from time to time holding First Lien Obligations.
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"First Lien Deficiency" means any portion of the First Lien
Obligations consisting of an allowed unsecured claim under Section 506(a) of the
Bankruptcy Code (or any similar provision under any other Bankruptcy Law) as
determined by a Final Order.
"First Lien Documents" means the First Lien Loan Agreement, all Loan
Documents (as such term is defined in the First Lien Loan Agreement) and all
other agreements, documents and instruments at any time executed and/or
delivered by any Obligor or any other Person with, to or in favor of the First
Lien Agents or any First Lien Creditor in connection therewith or related
thereto, including such documents evidencing successive Refinancings of the
First Lien Obligations, in each case, as amended, amended and restated,
supplemented, modified, replaced, substituted or renewed from time to time in
accordance with the terms of this Agreement.
"First Lien Lenders" shall have the meaning set forth in the
recitals hereto.
"First Lien Letter of Credit Obligations" means all outstanding
obligations incurred by or owing to the First Lien Creditors, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of letters of credit by a First Lien Creditor or another issuer
pursuant to the First Lien Documents or the purchase of a participation with
respect to any such letter of credit, including any unpaid reimbursement
obligations in respect thereof. The amount of such First Lien Letter of Credit
Obligations shall equal the maximum amount that may be payable at such time or
at any time thereafter by or to the First Lien Creditors thereupon or pursuant
thereto.
"First Lien Loan Agreement" means (a) the Initial First Lien Loan
Agreement and (b) each loan or credit agreement evidencing any initial or
subsequent replacement, substitution, renewal, or Refinancing of the Obligations
under the Initial First Lien Loan Agreement, in each case only as the same may
from time to time be amended, amended and restated, supplemented, modified,
replaced, substituted, renewed or Refinanced in accordance with the terms of
this Agreement.
"First Lien Loans" means any loans or advances outstanding under the
First Lien Documents.
"First Lien Obligations" means all obligations, liabilities and
indebtedness of every kind, nature and description owing by one or more of the
Obligors to one or more of the First Lien Creditors evidenced by or arising
under one or more of the First Lien Documents (including any First Lien Loans,
First Lien Letter of Credit Obligations and Hedging Obligations), whether direct
or indirect, absolute or contingent, joint or several, due or not due, primary
or secondary, liquidated or unliquidated, including principal, interest,
charges, fees, costs, indemnities and expenses, however evidenced (including any
costs, expenses or other amounts incurred or advanced in connection with any
Enforcement Action or Release Event), and whether as principal, surety,
endorser, guarantor or otherwise, whether now existing or hereafter arising,
whether arising before, during or after the initial or any renewal term of the
First Lien Loan Agreement and whether arising before, during or after the
commencement of any Insolvency Proceeding with respect to one or more of the
Obligors (and including the payment of any principal, interest, fees, cost,
expenses and other amounts (including default rate interest)
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which would accrue and become due but for the commencement of such Insolvency
Proceeding whether or not such amounts are allowed or allowable in whole or in
part in any such Insolvency Proceeding).
"First Lien Secured Claims" means any portion of the First Lien
Obligations not constituting a First Lien Deficiency.
"First Lien Termination Date" means the date on which all First Lien
Obligations have been Paid in Full.
"Hedging Obligations" means all obligations of any Obligor under and
in respect of any Secured Hedging Agreement (or any similar or equivalent term)
under and as defined in the First Lien Loan Agreement.
"Initial First Lien Loan Agreement" shall have the meaning set forth
in the recitals hereto.
"Initial Second Lien Loan Agreement" shall have the meaning set
forth in the recitals hereto.
"Insolvency Proceeding" means, as to any Obligor, any of the
following: (a) any case or proceeding with respect to such Person under the
Bankruptcy Code or any other federal or state bankruptcy, insolvency,
reorganization or other law affecting creditors' rights or any other or similar
proceedings seeking any stay, reorganization, arrangement, composition or
readjustment of the obligations and indebtedness of such Obligor, (b) any
proceeding seeking the appointment of any trustee, receiver, liquidator,
custodian or other insolvency official with similar powers with respect to such
Obligor or any of its assets, (c) any proceeding for liquidation, dissolution or
other winding up of the business of such Obligor or (d) any assignment for the
benefit of creditors or any marshalling of assets of such Obligor.
"Junior Adequate Protection Liens" shall have the meaning set forth
in Section 6.2(b).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory
or otherwise), security interest or other security arrangement and any other
preference, priority or preferential arrangement of any kind or nature
whatsoever, including any conditional sale contract or other title retention
arrangement, the interest of a lessor under a capital lease and any synthetic or
other financing lease having substantially the same economic effect as any of
the foregoing.
"Maximum First Lien Principal Amount" means, as of any date of
determination, (a) $66,000,000 minus (b) the sum of all principal payments of
term loans constituting First Lien Obligations (including voluntary and
mandatory prepayments) and permanent reductions of revolving loan commitments
under the First Lien Documents after the date hereof plus (c) solely as a
component of a DIP Financing, the additional amount permitted pursuant to
Section 6.2(a)(iii) plus (d) interest, fees, costs, expenses, indemnities and
other amounts payable pursuant to the terms of the First Lien Documents, whether
or not the same are added to the principal amount of the First Lien Obligations
and including the same as would
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accrue and become due but for the commencement of an Insolvency Proceeding,
whether or not such amounts are allowed or allowable in whole or in part in any
such Insolvency Proceeding.
"Maximum Second Lien Principal Amount" means as of any date of
determination, an amount equal to (a) $30,000,000, minus (b) the sum of all
principal payments of term loans constituting Second Lien Obligations (including
voluntary and mandatory prepayments) after the date hereof, plus (c) interest,
fees, costs, expenses, indemnities and other amounts payable pursuant to the
terms of the Second Lien Documents, whether or not the same are added to the
principal amount of the Second Lien Obligations and including the same as would
accrue and become due but for the commencement of an Insolvency Proceeding,
whether or not such amounts are allowed or allowable in whole or in part in any
such Insolvency Proceeding.
"New First Lien Agents" shall have the meaning set forth in Section
4.5(a).
"New First Lien Documents" shall have the meaning set forth in
Section 4.5(a).
"New First Lien Obligations" shall have the meaning set forth in
Section 4.5(a).
"New Second Lien Agent" shall have the meaning set forth in Section
4.5(b).
"New Second Lien Documents" shall have the meaning set forth in
Section 4.5(b).
"New Second Lien Obligations" shall have the meaning set forth in
Section 4.5(b).
"Obligations" means the First Lien Obligations and the Second Lien
Obligations, or any of them.
"Obligor" means Borrower and each other Person liable on or in
respect of the Obligations or that has granted a Lien on any property or assets
as Collateral, together with such Person's successors and assigns, including a
receiver, trustee or debtor-in-possession on behalf of such Person.
"Paid in Full" or "Payment in Full" means, with respect to any
Obligations, that: (a) all of such Obligations (other than contingent
indemnification obligations for which no underlying claim has been asserted)
have been paid, performed or discharged in full (with all such Obligations
consisting of monetary or payment obligations having been paid in full in cash),
(b) no Person has any further right to obtain any loans, letters of credit,
bankers' acceptances, or other extensions of credit under the documents relating
to such Obligations and (c) any and all letters of credit, bankers' acceptances
or similar instruments issued under such documents have been cancelled and
returned (or backed by stand-by guarantees or cash collateralized) in accordance
with the terms of such documents.
"Pay-Over Amount" shall have the meaning set forth in Section
6.2(b).
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"Permitted Collateral Sale" means any Disposition of Collateral so
long as such Disposition is permitted under the First Lien Loan Agreement and
the Second Lien Loan Agreement, each as in effect on the date hereof. The term
Permitted Collateral Sale shall not include any Disposition occurring or
effected under any circumstance or condition described in the definition of
"Release Event".
"Person" means an individual, partnership, corporation (including a
business trust and a public benefit corporation), joint stock company, estate,
association, firm, enterprise, trust, limited liability company, unincorporated
association, joint venture, governmental authority or any other entity or
regulatory body.
"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" shall have the meaning set forth in Section 5.1.
"Refinance", "Refinancings" and "Refinanced" means, in respect of
any Obligations, to issue other indebtedness in exchange or replacement for such
Obligations, in whole or in part.
"Release Documents" shall have the meaning set forth in Section 2.5.
"Release Event" means the taking of any Enforcement Action by the
First Lien Creditors against all or any portion of the Collateral (including a
Disposition conducted by any Obligor with the consent of the First Lien Agents)
or, after the closing of a sale of all or any portion of the Collateral pursuant
to an order of the Bankruptcy Court under Section 363 of the Bankruptcy Code
authorizing the sale of all or any portion of the Collateral.
"Requisite Second Lien Creditors" means Second Lien Creditors
holding more than 50% of the outstanding principal balance of the Second Lien
Loans.
"Second Lien Adequate Protection Payments" shall have the meaning
set forth in Section 6.2(b).
"Second Lien Agent" means Clearlake Capital Group, L.P. in its
capacity as administrative agent for the Second Lien Creditors under the Second
Lien Documents, and its permitted successors and assigns in such capacity
(including one or more other administrative agents or similar contractual
representatives for one or more lenders that at any time succeeds to or
refinances, replaces or substitutes for any or all of the Second Lien
Obligations at any time and from time to time).
"Second Lien Creditors" means the Second Lien Agent, the Second Lien
Lenders and the other Persons from time to time holding Second Lien Obligations.
"Second Lien Default" means any "Event of Default" under the Second
Lien Documents.
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"Second Lien Default Notice" means with respect to any Second Lien
Default, a written notice from the Second Lien Agent to the First Lien Agents,
with a copy to the Obligors, indicating that such Second Lien Default has
occurred and describing such Second Lien Default in reasonable detail.
"Second Lien Deficiency" means any portion of the Second Lien
Obligations consisting of an allowed unsecured claim under Section 506(a) of the
Bankruptcy Code (or any similar provision under any other Bankruptcy Law) as
determined by a Final Order.
"Second Lien Documents" means the Second Lien Loan Agreement, all
Loan Documents (as such term is defined in the Second Lien Loan Agreement) and
all other agreements, documents and instruments at any time executed and/or
delivered by any Obligor or any other Person with, to or in favor of the Second
Lien Agent or any Second Lien Creditor in connection therewith or related
thereto, including such documents evidencing successive Refinancings of the
Second Lien Obligations in each case, as amended, amended and restated,
supplemented, modified, replaced, substituted or renewed from time to time in
accordance with the terms of this Agreement.
"Second Lien Lenders" shall have the meaning set forth in the
recitals hereto.
"Second Lien Loan Agreement" means (a) the Initial Second Lien Loan
Agreement and (b) each loan or credit agreement evidencing any replacement,
substitution, renewal, or Refinancing of the Obligations under the Second Lien
Loan Agreement, in each case as amended, restated, supplemented, replaced,
substituted or Refinanced in accordance with the terms of this Agreement.
"Second Lien Loans" means the loans or advances outstanding under
the Second Lien Documents.
"Second Lien Obligations" means all obligations, liabilities and
indebtedness of every kind, nature and description owing by one or more Obligors
to one or more of the Second Lien Creditors evidenced by or arising under one or
more of the Second Lien Documents (including the Second Lien Loans), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, including principal, interest,
charges, fees, costs, indemnities and reasonable expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the Second Lien Loan Agreement and whether
arising before, during or after the commencement of any Insolvency Proceeding
with respect to any Obligor (and including the payment of interest which would
accrue and become due but for the commencement of such Insolvency Proceeding,
whether or not such interest is allowed or allowable in whole or in part in any
such Insolvency Proceeding).
"Second Lien Payment Default" means an "Event of Default" under the
Second Lien Documents as a result of the failure to pay when due, any principal,
interest, premium or fees under the Second Lien Documents.
"Second Lien Secured Claims" means any portion of the Second Lien
Obligations not constituting a Second Lien Deficiency.
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"Second Lien Termination Date" means January 10, 2015.
"Secured Claims" means the First Lien Secured Claims and/or the
Second Lien Secured Claims as the context may require.
"Secured Creditors" means the First Lien Creditors and the Second
Lien Creditors, or any of them.
"Senior Adequate Protection Liens" shall have the meaning set forth
in Section 6.2(a).
"Short Fall" shall have the meaning set forth in Section 6.2(b).
"Standstill Period" means the period commencing on the date of a
Second Lien Default and ending upon the date which is the earlier of (a) 180
days after the First Lien Agents have received a Second Lien Default Notice with
respect to such Second Lien Default and (b) the date on which the First Lien
Obligations have been Paid in Full; provided that in the event that as of any
day during such 180 days, no Second Lien Default is continuing, then the
Standstill Period shall be deemed not to have commenced.
"UCC" means the Uniform Commercial Code of any applicable
jurisdiction and, if the applicable jurisdiction shall not have any Uniform
Commercial Code, the Uniform Commercial Code as in effect in the State of New
York.
"UCC Notice" shall have the meaning set forth in Section 3.1.
1.2 Certain Matters of Construction. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement and section references are to this Agreement unless otherwise
specified. For purposes of this Agreement, the following additional rules of
construction shall apply: (a) wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, the feminine and the neuter, (b) the term
"including" shall not be limiting or exclusive, unless specifically indicated to
the contrary, (c) all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations and
(d) unless otherwise specified, all references to any instruments or agreements,
including references to any of this Agreement and the Documents, shall include
any and all modifications or amendments thereto and any and all extensions or
renewals thereof, in each case, made in accordance with the terms hereof.
Section 2. Security Interests; Priorities.
2.1 Priorities. Each Secured Creditor hereby acknowledges that other
Secured Creditors have been granted Liens upon the Collateral to secure their
respective Obligations. The Liens of the First Lien Agents on the Collateral are
and shall be senior and prior in right to the Liens of the Second Lien Agent on
the Collateral, and such Liens of the Second Lien Agent on the Collateral are
and shall be junior and subordinate to the Liens of the First Lien Agents.
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The priorities of the Liens provided in this Section 2.1 shall not be altered or
otherwise affected by any amendment, modification, supplement, extension,
renewal, restatement, replacement or Refinancing of any of the Obligations, nor
by any action or inaction which any of the Secured Creditors may take or fail to
take in respect of the Collateral. All Liens on the Collateral securing any
First Lien Obligations shall be and remain senior in all respects and prior to
all Liens on the Collateral securing any Second Lien Obligations for all
purposes, whether or not such Liens securing any First Lien Obligations are
subordinated to any Lien securing any other obligation of the Borrower, any
other Obligor or any other Person. The Second Lien Agent for itself and on
behalf of the Second Lien Creditors expressly agrees that any Lien purported to
be granted on any Collateral as security for the First Lien Obligations shall be
and remain senior in all respects and prior to all Liens on the Collateral
securing any Second Lien Obligations for all purposes regardless of whether the
Lien purported to be granted is found to be improperly granted, improperly
perfected, a fraudulent conveyance or legally or otherwise deficient in any
manner. Notwithstanding the foregoing and any other provision to the contrary
contained in this Agreement, the subordination of Liens provided for in this
Agreement shall not be effective with respect to any part of the Collateral in
which the Liens of the First Lien Agents and the First Lien Lenders are
equitably subordinated or not allowed in a Final Order pursuant to Section
510(c) of the Bankruptcy Code, in each case, as a result of the willful bad acts
of the First Lien Agents or the First Lien Lenders, in which event the Second
Lien Agent and the Second Lien Lenders shall be entitled to receive and retain
all Proceeds with respect to such Collateral to the extent the Liens of Second
Lien Agent and the Second Lien Lenders are not also equitably subordinated or
not allowed in a Final Order pursuant to Section 510(c) of the Bankruptcy Code,
in each case, as a result of the willful bad acts of the Second Lien Agent or
the Second Lien Lenders.
2.2 No Alteration of Priority. The priorities set forth in this Agreement
are applicable irrespective of the order or time of attachment, or the order,
time or manner of perfection, or the order or time of filing or recordation of
any document or instrument, or other method of perfecting a Lien in favor of
each Secured Creditor in any Collateral, and notwithstanding any conflicting
terms or conditions which may be contained in any of the Documents.
2.3 Perfection; Contesting Liens. Each Secured Creditor shall be solely
responsible for perfecting and maintaining the perfection of its Lien in the
Collateral in which such Secured Creditor has been granted a Lien. The foregoing
provisions of this Agreement are intended solely to govern the respective Lien
priorities as among the Secured Creditors and shall not impose on any Secured
Creditor any obligations in respect of the Disposition of proceeds of any
Collateral that 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. Each Secured Creditor agrees that it will not institute
or join in any contest of the validity, perfection, priority or enforceability
of the Liens of the other Secured Creditor in the Collateral or the
enforceability of the First Lien Obligations or the Second Lien Obligations;
provided that nothing in this Agreement shall be construed to prevent or impair
the rights of the First Lien Agents or the Second Lien Agent to enforce this
Agreement, including the provisions hereof relating to Lien priority.
2.4 Proceeds of Collateral. Any Collateral or Proceeds received by any
Second Lien Creditor including, without limitation, any such Collateral
constituting Proceeds, or any payment prohibited under Section 4.3(b), that may
be received by any Second Lien Creditor in violation
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of this Agreement, shall be segregated and held in trust and promptly paid over
to the First Lien Agents, for the benefit of the First Lien Creditors, in the
same form as received, with any necessary endorsements, and each Second Lien
Creditor hereby authorize the First Lien Agents to make any such endorsements as
agent for the Second Lien Agent (which authorization, being coupled with an
interest, is irrevocable). All Collateral and Proceeds received by any First
Lien Creditor prior to the First Lien Termination Date shall be applied to the
First Lien Obligations, and Collateral and all Proceeds received after the First
Lien Termination Date shall be forthwith paid over, in the kind or funds and
currency received, to the Second Lien Creditors for application to the Second
Lien Obligations (unless otherwise required by law or court order).
2.5 Release of Collateral Upon Permitted Collateral Sale. The Second Lien
Agent, on behalf of the Second Lien Creditors, shall at any time in connection
with any Permitted Collateral Sale: (a) upon the request of the First Lien
Agents with respect to the Collateral subject to such Permitted Collateral Sale,
release or otherwise terminate its Liens on such Collateral (and/or, in the case
of a Permitted Collateral Sale consisting of the sale or disposition of all or
substantially all of the equity interests or assets of any Obligor, release such
Obligor from its obligations under the relevant Documents), (b) promptly deliver
such terminations of financing statements, partial lien releases, mortgage
satisfactions and discharges, endorsements, assignments or other instruments of
transfer, termination or release (collectively, "Release Documents") and take
such further actions as the First Lien Agents shall reasonably require in order
to release and/or terminate such Second Lien Agent's Liens on the Collateral (or
release such Obligor) subject to such Permitted Collateral Sale (the First Lien
Agents acknowledge and agree that the Release Documents relating to the Second
Lien Agent's Lien on any such Collateral shall not be filed or recorded unless
and until the Release Documents relating to the First Lien Agents' Lien on such
Collateral are filed or recorded); provided that if the closing of the
Disposition of the Collateral is not consummated within 30 days from the
proposed closing date or any agreement governing such Permitted Collateral Sale
is terminated by any of the parties thereto, the First Lien Agents shall
promptly return all Release Documents to the Second Lien Agent and (c) be deemed
to have consented under the Second Lien Documents to such Permitted Collateral
Sale free and clear of the Second Lien Agent's security interest (it being
understood that the Second Lien Agent shall still, subject to the terms of this
Agreement, have a security interest with respect to the proceeds of such
Collateral) and to have waived the provisions of the Second Lien Documents to
the extent necessary to permit such transaction.
2.6 Release of Collateral Upon Release Event. The Second Lien Agent, on
behalf of the Second Lien Creditors, shall, at any time in connection with a
Release Event with respect to any Collateral: (a) upon the request of the First
Lien Agents with respect to the Collateral subject to such Release Event (which
request will specify the principal proposed terms of the sale and the type and
amount of consideration expected to be received in connection therewith),
release or otherwise terminate its Liens on such Collateral (and/or, in the case
of a Disposition consisting of the sale or disposition of all or substantially
all of the equity interests or assets of any Obligor, release such Obligor from
its obligations under the relevant Documents), to the extent the Disposition of
such Collateral is either by (i) the First Lien Agents or their agents or
representatives or (ii) any Obligor with the consent of the First Lien
Creditors, (b) be deemed to have consented under the Second Lien Documents to
such Disposition free and clear of the Second Lien Agent's Liens (it being
understood that the Second Lien Agent shall still, subject to the terms of this
Agreement, have a security interest with respect to the proceeds of such
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Collateral) and to have waived the provisions of the Second Lien Documents
(other than this Agreement) to the extent necessary to permit such transaction
and (c) deliver such Release Documents and take such further actions as First
Lien Agents may reasonably require in connection therewith; provided that, (i)
such release by the Second Lien Creditors shall not extend to or otherwise
affect any of the rights of the Second Lien Creditors to the proceeds from any
such Disposition of Collateral, (ii) the First Lien Creditors shall promptly
apply such proceeds to permanently pay the First Lien Obligations until the same
have been Paid in Full, (iii) after such application, any excess proceeds from
such Disposition shall be applied in accordance with the provisions of Section
2.4 hereof and (iv) no such release and/or authorization documents shall be
delivered (A) to any Obligor or (B) more than 2 Business Days prior to the date
of the closing of the Disposition of such Collateral; provided further that if
the closing of the Disposition of the Collateral subject to such Release Event
is not consummated within 30 days of the proposed date of closing or any
agreement governing such Disposition is terminated, the First Lien Agents shall
promptly return all Release Documents to the Second Lien Agent.
2.7 Power of Attorney. The Second Lien Agent, on behalf of each Second
Lien Creditor, hereby irrevocably constitutes and appoints the First Lien Agents
and any officers of the First Lien Agents, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of the Second Lien Agent and in the name of the Second
Lien Agent or in the First Lien Agents' own name, from time to time in such
First Lien Agents' discretion, for the purpose of carrying out the terms of
Sections 2.5 and 2.6 hereof, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
reasonably desirable to accomplish the purposes of such Sections, including any
Release Documents, and, in addition, to take any and all other appropriate and
commercially reasonable action for the purpose of carrying out the terms of such
Sections, such power of attorney being coupled with an interest and irrevocable
until the First Lien Termination Date. The Second Lien Agent hereby ratifies all
that said attorneys shall lawfully do or cause to be done pursuant to and in
accordance with the power of attorney granted in this Section 2.7. No Person to
whom this power of attorney is presented, as authority for the First Lien Agents
to take any action or actions contemplated hereby, shall be required to inquire
into or seek confirmation from any Second Lien Creditor as to the authority of
the First Lien Agents to take any action described herein, or as to the
existence of or fulfillment of any condition to this power of attorney, which is
intended to grant to the First Lien Agents the authority to take and perform the
actions contemplated herein. The Second Lien Agent irrevocably waives any right
to commence any suit or action, in law or equity, against any Person which acts
in reliance upon or acknowledges the authority granted under this power of
attorney.
2.8 Waiver. Each of the First Lien Agents, on behalf of each of the First
Lien Creditors, and the Second Lien Agent, on behalf of each of the Second Lien
Creditors, (a) waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations under the Documents and notice of or proof of
reliance by the Secured Creditors upon this Agreement and protest, demand for
payment or notice except to the extent otherwise specified herein and (b)
acknowledges and agrees that the other Secured Creditors have relied upon the
Lien priority and other provisions hereof in entering into the Documents and in
making funds available to the Obligors thereunder.
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2.9 Notice of Interest In Collateral. This Agreement is intended, in part,
to constitute an authenticated notification of a claim by each Secured Creditor
to the other Secured Creditors of an interest in the Collateral in accordance
with the provisions of Sections 9-611 and 9-621 of the UCC.
2.10 New Liens. Subject to the other terms of this Agreement in all
respects,
(a) the parties hereto agree that no additional Liens shall be
granted or permitted on any asset of the Borrower or any other Obligor to secure
any Second Lien Obligation unless, subject to the terms of this Agreement,
immediately after giving effect to such grant or concurrently therewith, a
senior and prior Lien shall be granted on such asset to secure the First Lien
Obligations. 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 Lien Agents and/or the First Lien Creditors, the Second Lien Agent, on
behalf of the Second Lien Creditors, agrees 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 2.10 shall be subject to the terms of this
Agreement; and
(b) the parties hereto agree that no additional Liens shall be
granted or permitted on any asset of the Borrower or any other Obligor to secure
any First Lien Obligation unless, subject to the terms of this Agreement,
immediately after giving effect to such grant or concurrently therewith, a
junior and subordinate Lien shall be granted on such asset to secure the Second
Lien Obligations. To the extent that the foregoing provisions are not complied
with for any reason, without limiting any other rights and remedies available to
the Second Lien Agent and/or the Second Lien Creditors, the First Lien Agents,
on behalf of the First Lien Creditors, 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 2.10 shall be subject to the terms of this
Agreement.
2.11 Similar Liens and Agreements. The parties hereto acknowledge and
agree that it is their intention that the Collateral securing the First Lien
Obligations and the Collateral securing the Second Lien Obligations be identical
in all material respects. In furtherance of the foregoing, the parties hereto
agree:
(a) to cooperate in good faith in order to determine, upon any
request by the First Lien Agents or the Second Lien Agent, the specific assets
included in the Collateral securing their respective Obligations, the steps
taken to perfect the Liens thereon and the identity of the respective parties
obligated under any Document;
(b) that the documents, agreements and instruments creating or
evidencing the Liens of such parties in the Collateral, are in all material
respects substantively similar, other than with respect to the relative priority
of the Liens created or evidenced thereunder; and
(c) any Lien obtained by any Secured Creditor in respect of any
judgment obtained in respect of any Obligations shall be subject in all respects
to the terms of this Agreement.
Section 3. Enforcement of Security.
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3.1 Management of Collateral. Subject to the other terms and conditions of
this Agreement, the First Lien Creditors shall have the exclusive right to
manage, perform and enforce the terms of the First Lien Documents with respect
to the Collateral, to exercise and enforce all privileges and rights thereunder
according to their sole discretion and the exercise of their sole business
judgment, including the exclusive right to take or retake control or possession
of the Collateral and to hold, prepare for sale, process, Dispose of, or
liquidate the Collateral and to incur expenses in connection with such
Disposition and to exercise all the rights and remedies of a secured lender
under the UCC of any applicable jurisdiction. In conducting any public or
private sale under the UCC, the First Lien Agents shall give the Second Lien
Agent such notice (a "UCC Notice") of such sale as may be required by the
applicable UCC; provided, however, that 10 days' written notice shall be deemed
to be commercially reasonable notice. Except as specifically provided in this
Section 3.1 or Section 3.3 below, notwithstanding any rights or remedies
available to a Second Lien Creditor under any of the Second Lien Documents,
applicable law or otherwise, no Second Lien Creditor shall, directly or
indirectly, take any Enforcement Action; provided that, subject at all times to
the provisions of Section 2, upon the expiration of the Standstill Period, the
Second Lien Creditors may take any Enforcement Action (provided that they give
the First Lien Agents at least 10 Business Days written notice prior to taking
such Enforcement Action); provided, however, that notwithstanding the expiration
of the Standstill Period or anything herein to the contrary, in no event shall
any Second Lien Creditor take or continue to take any Enforcement Action if any
First Lien Agent or any First Lien Creditor or any representative thereof shall
have commenced and is diligently pursuing an Enforcement Action (including,
without limitation, any of the following (if undertaken and pursued to
consummate a Disposition of such Collateral in good faith): the solicitation of
bids from third parties to conduct the liquidation of all or any material
portion of the Collateral, the engagement or retention of sales brokers,
marketing agents, investment bankers, accountants, auctioneers or other third
parties for the purpose of valuing, marketing, promoting or selling all or any
material portion of the Collateral, the notification of account debtors to make
payments to the First Lien Agents or their agents, the initiation of any action
to take possession of all or any material portion of the Collateral or the
commencement of any legal proceedings or actions against or with respect to the
foreclosure and sale of all or any material portion of the Collateral), or
diligently attempting in good faith to vacate any stay prohibiting an
Enforcement Action with respect to all or any material portion of the Collateral
or diligently attempting in good faith to vacate any stay prohibiting an
Enforcement Action. For the avoidance of doubt, the parties hereto acknowledge
and agree that the Second Lien Agent may engage or retain an expert to value any
Collateral or the business of the Obligors irrespective of whether the First
Lien Agents do the same.
3.2 Notices of Default. Each Agent shall give to the other Agent
concurrently with the giving thereof to any Obligor (a) a copy of any written
notice by any Secured Creditor of an Event of Default under any of its Documents
or a written notice of demand for payment from any Obligor and (b) a copy of any
written notice sent by such Secured Creditor to any Obligor stating such Secured
Creditor's intention to exercise any material enforcement rights or remedies
against such Obligor, including written notice pertaining to any foreclosure on
all or any material part of the Collateral or other judicial or non-judicial
remedy in respect thereof, and any legal process served or filed in connection
therewith; provided that the failure of any Agent to give such required notice
shall not result in any liability to such Agent or affect the enforceability of
any provision of this Agreement, including the relative priorities of the Liens
of the Secured
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Creditors as provided herein, and shall not affect the validity or effectiveness
of any such notice as against any Obligor; provided, further, that the foregoing
shall not in any way impair any claims that any Secured Creditor may have
against any other Secured Creditor as a result of any failure of any Agent to
provide a UCC Notice in accordance with the provisions of this Agreement and
applicable law (including without limitation any liability that any Secured
Creditor may have to any other Secured Creditor as a result of any such
failure). Each Agent will provide such information as it may have to the other
Agent as the other may from time to time reasonably request concerning the
status of the exercise of any Enforcement Action and each Agent shall be
available on a reasonable basis during normal business hours to review with the
other Agent alternatives available in exercising such rights, including, but not
limited to, advising each other of any offers which may be made from time to
time by prospective purchasers of the Collateral; provided that (i) the failure
of any party to do any of the foregoing shall not affect the relative priorities
of the Agent's respective Liens as provided herein or the validity or
effectiveness of any notices or demands as against any Borrower or any Obligor
and (ii) in no event will the First Lien Agents or any First Lien Creditor have
any obligation to obtain the consent of any Second Lien Creditor with respect to
any actions taken or contemplated to be taken (or not taken) with respect to any
Enforcement Action in accordance with this Agreement. Each Obligor, by its
acknowledgment hereto, hereby consents and agrees to each Secured Creditor
providing any such information to the other Secured Creditors and to such
actions by the Secured Creditors and waives any rights or claims against any
Secured Creditors arising as a result of such information or actions.
3.3 Permitted Actions. Section 3.1 shall not be construed to limit or
impair in any way the right of: (a) any Secured Creditor to bid for or purchase
Collateral at any private or judicial foreclosure upon such Collateral initiated
by any Secured Creditor, (b) any Secured Creditor to join (but not control) any
foreclosure or other judicial lien enforcement proceeding with respect to the
Collateral initiated by another Secured Creditor for the sole purpose of
protecting such Secured Creditor's Lien on the Collateral, so long as it does
not delay or interfere with the exercise by such other Secured Creditor of its
rights under this Agreement, the Documents and under applicable law and (c) the
Second Lien Creditors to receive any remaining proceeds of Collateral after the
First Lien Obligations have been Paid in Full. Any proceeds of Collateral
received in connection with any such Enforcement Action shall be applied in
accordance with Section 2.4 of this Agreement.
3.4 Collateral In Possession.
(a) In the event that either of the First Lien Agents take
possession of or have "control" (as such term is used in the UCC as in effect in
each applicable jurisdiction) over any Collateral for purposes of perfecting its
Lien therein, the First Lien Agents shall be deemed to be holding such
Collateral as representative for the Secured Creditors, including the Second
Lien Creditors, solely for purposes of perfection of its Lien under the UCC;
provided that the First Lien Agents shall not have any duty or liability to
protect or preserve any rights pertaining to any of the Collateral for the
Second Lien Creditors. Promptly following the First Lien Termination Date, the
First Lien Agents shall deliver the remainder of the Collateral, if any, in its
possession to the designee of the Second Lien Agent (except as may otherwise be
required by applicable law or court order).
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(b) In the event that any Second Lien Creditor takes possession of
or has "control" (as such term is used in the UCC as in effect in each
applicable jurisdiction) over any Collateral for purposes of perfecting its Lien
therein, such Second Lien Creditor shall be deemed to be holding such Collateral
as representative for the Secured Creditors, including the First Lien Creditors,
solely for purposes of perfection of its Lien under the UCC; provided that such
Second Lien Creditor shall not have any duty or liability to protect or preserve
any rights pertaining to any of the Collateral for the First Lien Creditors.
(c) It is understood and agreed that this Section 3.4 is intended
solely to assure continuous perfection of the Liens granted under the applicable
Documents, and nothing in this Section 3.4 shall be deemed or construed as
altering the priorities or obligations set forth elsewhere in this Agreement.
The duties of each party under this Section 3.4 shall be mechanical and
administrative in nature, and no party shall have, or be deemed to have, by
reason of this Agreement or otherwise a fiduciary relationship in respect of the
other party.
3.5 Waiver of Marshalling and Similar Rights. Each Secured Creditor, to
the fullest extent permitted by applicable law, waives as to each other Secured
Creditor any requirement regarding, and agrees not to demand, request, plead or
otherwise claim the benefit of, any marshalling, appraisement, valuation or
other similar right that may otherwise be available under applicable law. For
the avoidance of doubt, the parties hereto acknowledge and agree that the Second
Lien Agent may engage or retain an expert to value any Collateral or the
business of the Obligors irrespective of whether the First Lien Agents do the
same.
3.6 Insurance and Condemnation Awards. So long as the First Lien
Termination Date has not occurred, the First Lien Agents shall have the
exclusive right, subject to the rights of the Obligors under the First Lien
Documents, to settle and adjust claims in respect of Collateral under policies
of insurance and to approve any award granted in any condemnation or similar
proceeding, or any deed in lieu of condemnation, in respect of the Collateral.
After the occurrence of the First Lien Termination Date, the Second Lien Agent
shall have the exclusive right, subject to the rights of the Obligors under the
Second Lien Documents, to settle and adjust claims in respect of Collateral
under policies of insurance and to approve any award granted in condemnation or
similar proceeding, or any deed in lieu of condemnation, in respect of the
Collateral.
3.7 Debt Action. Notwithstanding anything to the contrary set forth in
this Agreement, (i) the First Lien Creditors may take any Debt Action without
the consent of the Second Lien Creditors and (ii) the Second Lien Creditors may
take any Debt Action without the consent of the First Lien Creditors.
Section 4. Covenants
4.1 Amendment of First Lien Documents. The First Lien Creditors may at any
time and from time to time and without consent of or notice to any Second Lien
Creditor, without incurring any liability to any Second Lien Creditor and
without impairing or releasing any rights or obligations hereunder or otherwise,
amend, restate, supplement, modify, substitute, renew or replace any or all of
the First Lien Documents; provided, however, that without the consent of the
Requisite Second Lien Creditors, the First Lien Creditors shall not amend,
restate,
16
supplement, modify substitute, renew or replace any or all of the First Lien
Documents to (a) directly increase the interest rates on the First Lien
Obligations to an amount greater than 3.0% per annum above rates as are in
effect on the date hereof (excluding, without limitation, fluctuations in
underlying rate indices and imposition of a default rate of 2% per annum), (b)
change the final maturity date of the First Lien Obligations to a date later
than the Second Lien Termination Date or shorten the maturity or weighted
average life to maturity of the First Lien Obligations or require that any
payment on the First Lien Obligations be made earlier than the date originally
scheduled for such payment or that any commitment expire any earlier than the
date originally scheduled therefor, (c) increase the principal amount of the
First Lien Obligations in excess of the Maximum First Lien Principal Amount,
other than as a result of the capitalization of accrued interest and expenses or
(d) modify or add any covenant or event of default under the First Lien
Documents which directly restricts one or more Obligors from making payments
under the Second Lien Documents which would otherwise be permitted under the
First Lien Documents as in effect on the date hereof.
4.2 Amendments to Second Lien Documents. Until the First Lien Termination
Date has occurred, and notwithstanding anything to the contrary contained in the
Second Lien Documents, the Second Lien Creditors shall not, without the prior
written consent of the First Lien Agents, agree to any amendment, restatement,
modification, supplement, substitution, renewal or replacement of or to any or
all of the Second Lien Documents that (a) would directly or indirectly result in
an increase in the interest rates in respect of the Second Lien Obligations
(excluding, without limitation, fluctuations in underlying rate indices and
imposition of a default rate of 2% per annum) by more than 3.0% per annum, (b)
shorten the maturity or weighted average life to maturity of the Second Lien
Obligations or require that any payment on the Second Lien Obligations be made
earlier than the date originally scheduled for such payment or that any
commitment expire any earlier than the date originally scheduled therefor, (c)
add or modify in a manner adverse to any Obligor or any First Lien Creditor any
covenant, agreement or event of default under the Second Lien Documents
(provided, that, if the First Lien Documents are amended or otherwise modified
to provide for additional covenants or events of default, or to make more
restrictive or onerous any existing covenants or events of default applicable to
the Obligors, then the Second Lien Documents may be similarly amended or
modified to provide for such additional covenants or events of default or such
more restrictive covenants or events of default, as the case may be, so long as,
in each case, any cushion or step-back between the First Lien Documents and the
Second Lien Documents is maintained in connection therewith (or otherwise is
consistent with the approach currently in effect), and provided that no such
amendment to the Second Lien Documents shall have the effect of making any such
event of default or covenant more restrictive than those set forth in the First
Lien Documents, as so amended or otherwise modified) or (d) increase the amount
of the Second Lien Obligations.
4.3 Enforcement Actions by Second Lien Creditors; Prepayments.
(a) The Second Lien Creditors shall give the First Lien Agents at
least 10 Business Days' written notice prior to taking any Enforcement Action,
which notice may be given during the pendency of any Standstill Period.
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(b) Without the prior written consent of the First Lien Agents or an
amendment or waiver to the First Lien Documents providing otherwise, no Second
Lien Creditor will take, demand or receive from any Obligor any prepayment of
principal (whether optional, voluntary, mandatory or otherwise or by redemption,
defeasance or other payment or distribution) with respect to any Second Lien
Obligations.
4.4 Cure Rights. The First Lien Agents shall have the right, but not the
obligation, to cure a Second Lien Payment Default at any time during the 180-day
period provided for in clause (a) of the definition of Standstill Period in
Section 1 or thereafter with the prior written consent of the Second Lien Agent.
In the event that such Second Lien Payment Default shall be so cured, the rights
of the Second Lien Creditors in respect of such Second Lien Payment Default
shall cease until the occurrence of any other Second Lien Payment Default. In no
event shall the First Lien Creditors, by virtue of the payment of any such
amounts, or performance of any obligation required to be paid or performed by
any Obligor, be deemed to have assumed any obligation of any Obligor to the
Second Lien Creditors or any other Person.
4.5 Effect of Refinancing.
(a) If the Payment in Full of the First Lien Obligations is being
effected through a Refinancing; provided that (i) the Borrower give written
notice of such Refinancing to the Second Lien Agent at least 2 Business Days
prior to such Refinancing and (ii) the credit agreement and the other documents
evidencing such new First Lien Obligations (the "New First Lien Documents") do
not effect an amendment, supplement or other modification of the terms of the
First Lien Obligations in a manner that is prohibited by Section 4.1, then (A)
such Payment in Full of First Lien Obligations shall be deemed not to have
occurred for all purposes of this Agreement, (B) the indebtedness under such
Refinancing and all other obligations under the credit documents evidencing such
indebtedness (the "New First Lien Obligations") shall be treated as First Lien
Obligations for all purposes of this Agreement, (C) the New First Lien Documents
shall be treated as the First Lien Documents for all purposes of this Agreement
and (D) the agents under the New First Lien Documents (the "New First Lien
Agents") shall be deemed to be the First Lien Agents for all purposes of this
Agreement. Upon receipt of a notice of Refinancing under the preceding sentence,
which notice shall include the identity of the New First Lien Agents, the Second
Lien Agent shall promptly enter into such documents and agreements (including
amendments or supplements to this Agreement) as the New First Lien Agents may
reasonably request in order to provide to the New First Lien Agents the rights
and powers set forth herein.
(b) If the Payment in Full of the Second Lien Obligations is being
effected through a Refinancing; provided that (i) the Second Lien Agent gives a
notice of such Refinancing to the First Lien Agents at least 2 Business Days
prior to such Refinancing and (ii) the credit agreement and the other documents
evidencing such New Second Lien Obligations (the "New Second Lien Documents") do
not effect an amendment, supplement or other modification of the terms of the
Second Lien Obligations in a manner that is prohibited by Section 4.2, then (A)
such Payment in Full of Second Lien Obligations shall be deemed not to have
occurred for all purposes of this Agreement, (B) the indebtedness under such
Refinancing and all other obligations under the credit documents evidencing such
indebtedness (the "New Second Lien Obligations") shall be treated as Second Lien
Obligations for all purposes of this
18
Agreement, (C) the New Second Lien Documents shall be treated as the Second Lien
Documents for all purposes of this Agreement and (D) the agent under the New
Second Lien Documents (the "New Second Lien Agent") shall be deemed to be the
Second Lien Agent for all purposes of this Agreement. Upon receipt of a notice
of Refinancing under the preceding sentence, which notice shall include the
identity of the New Second Lien Agent, the First Lien Agents shall promptly
enter into such documents and agreements (including amendments or supplements to
this Agreement) as the New Second Lien Agent may reasonably request in order to
provide to the New Second Lien Agent the rights and powers set forth herein.
(c) By their acknowledgement hereto, Obligors agree to cause the
agreement, document or instrument pursuant to which any New First Lien Agents or
any New Second Lien Agent is appointed to provide that the New First Lien Agents
or New Second Lien Agent, as applicable, agrees to be bound by the terms of this
Agreement.
Section 5. Second Lien Creditors Purchase Option.
5.1 Purchase Notice. Upon the Second Lien Agent's receipt of a notice from
the First Lien Agents (the "Agent's Notice") that the First Lien Agents have
accelerated the First Lien Obligations, the Second Lien Creditors shall have the
option, but not the obligation, to purchase all, but not less than all, of the
First Lien Obligations owing to the First Lien Creditors from the First Lien
Creditors, and assume all, but not less than all, of the then existing funding
commitments under the First Lien Documents by giving a written notice (the
"Purchase Notice") to the First Lien Agents no later than the 10th Business Day
after receipt by the Second Lien Agent of the Agent's Notice. A Purchase Notice
once delivered shall be irrevocable.
5.2 Purchase Option Closing. On the date specified by the Second Lien
Agent in the Purchase Notice (which shall not be less than 3 Business Days nor
more than 5 Business Days, after the receipt by the First Lien Agents of the
Purchase Notice), the First Lien Creditors shall sell to the Second Lien
Creditors, and the Second Lien Creditors shall purchase from the First Lien
Creditors, all, but not less than all, of the First Lien Obligations, and the
First Lien Lenders shall assign to the purchasing Second Lien Lenders, and the
purchasing Second Lien Lenders shall assume from the First Lien Lenders all, but
not less than all, of the then existing funding commitments under the First Lien
Documents.
5.3 Purchase Price. Such purchase and sale shall be made by execution and
delivery by the applicable Secured Creditors of an Assignment Agreement in the
form attached to the First Lien Loan Agreement. Upon the date of such purchase
and sale, the Second Lien Creditors shall (a) pay to the First Lien Agents for
the benefit of the First Lien Creditors as the purchase price therefor the sum
of (i) the full amount of all the First Lien Obligations then outstanding and
unpaid (including principal, interest, fees, indemnities and expenses, including
reasonable attorneys' fees and legal expenses) plus (ii) any early termination
fee, prepayment fee, breakage fee or other similar fee payable pursuant to the
First Lien Loan Agreement as in effect on the date of hereof (calculated as if
the First Lien Obligations were repaid in full by the Obligors at such time),
(b) furnish cash collateral to the First Lien Agents with respect to the
outstanding First Lien Letter of Credit Obligations and amounts owing with
respect to Secured Hedging Agreements (as defined in the First Lien Loan
Agreement), in each case, in such amounts as are required under the First Lien
Loan Agreement and (c) agree to reimburse the First Lien Creditors
19
for any loss, cost, damage or expense (including reasonable attorneys' fees and
legal expenses) in connection with any commissions, fees, costs or expenses
related to any issued and outstanding First Lien Letter of Credit Obligations as
described above and any checks or other payments provisionally credited to the
First Lien Obligations, and/or as to which the First Lien Creditors have not yet
received final payment. Such purchase price and cash collateral shall be
remitted by wire transfer of immediately available funds to such bank account of
one of the First Lien Agents (as determined at the time) in New York, New York,
as such First Lien Agent may designate in writing to the Second Lien Creditors
for such purpose. Interest shall be calculated to but excluding the Business Day
on which such purchase and sale shall occur if the amounts so paid by the Second
Lien Creditors to the bank account designated by the First Lien Agents are
received in such bank account prior to 1:00 p.m., New York City time and
interest shall be calculated to and including such Business Day if the amounts
so paid by the Second Lien Creditors to the bank account designated by the First
Lien Agents are received in such bank account later than 1:00 p.m., New York
City time.
5.4 Nature of Sale. Such purchase and sale shall be expressly made without
representation or warranty of any kind by the First Lien Creditors as to the
First Lien Obligations or otherwise and without recourse to the First Lien
Creditors, except for representations and warranties as to the following: (a)
the amount of the First Lien Obligations being purchased (including as to the
principal of and accrued and unpaid interest on such First Lien Obligations,
fees and expenses thereof), (b) that the First Lien Creditors own the First Lien
Obligations free and clear of any Liens and (c) each First Lien Creditor has the
full right and power to assign its First Lien Obligations and such assignment
has been duly authorized by all necessary corporate action by such First Lien
Creditor.
5.5 Notice of Election to Purchase. As soon as practicable after receipt
of the Agent's Notice, but in no event more than 10 Business Days after the
Second Lien Agent's receipt of the Agent's Notice, the Second Lien Creditors (if
they elect to do so) shall send to the First Lien Agents the Purchase Notice.
The First Lien Creditors shall not complete any Enforcement Action (other than
the exercise of control over any Obligor's deposit or securities accounts), as
long as the purchase and sale of the First Lien Obligations provided for in this
Section 5 shall have closed within 5 Business Days of Second Lien Agent's
receipt of the Agent's Notice and the First Lien Creditors shall have received
Payment in Full of the First Lien Obligations as provided for in Section 5.3
within such 5 Business Day period. For the avoidance of doubt, during the period
between Second Lien Agent's receipt of the Agent's Notice and First Lien Agents'
receipt of the Purchase Notice, First Lien Agents shall not be restricted from
pursuing or completing any Enforcement Action.
Section 6. Bankruptcy Matters.
6.1 Bankruptcy. This Agreement shall be applicable both before and after
the filing of any petition by or against any Obligor under the Bankruptcy Code
or any other Insolvency Proceeding and all converted or succeeding cases in
respect thereof, and all references herein to any Obligor shall be deemed to
apply to the trustee for such Obligor and such Obligor as a
debtor-in-possession. The relative rights of the First Lien Creditors and the
Second Lien Creditors in respect of any Collateral or Proceeds shall continue
after the filing of such petition or the commencement of such Insolvency
Proceeding on the same basis as prior to the date of
20
such filing or commencement, subject to any court order approving the financing
of, or use of cash collateral by, any Obligor. This Agreement shall constitute a
"subordination agreement" for the purposes of Section 510(a) of the Bankruptcy
Code and shall be enforceable in any Insolvency Proceeding in accordance with
its terms.
6.2 Post Petition Financing; Adequate Protection.
(a) If any Obligor or Obligors shall become subject to Insolvency
Proceedings and such Obligor or Obligors as debtor(s)-in-possession (or a
trustee appointed on behalf of such Obligor or Obligors) shall move for either
approval of financing ("DIP Financing") to be provided by one or more of the
First Lien Creditors (or to be provided by any other person or group of persons
with the consent of the First Lien Agents, provided that the First Lien Agents
expressly retain their right to object to any DIP Financing) under Section 364
of the Bankruptcy Code or the use of cash collateral with the consent of the
First Lien Creditors under Section 363 of the Bankruptcy Code, then subject to
Section 6.2(b), the Second Lien Creditors agree as follows: (i) adequate notice
to Second Lien Creditors for such DIP Financing or use of cash collateral shall
be deemed to have been given to the Second Lien Creditors if the Second Lien
Agent receives the notice filed with the bankruptcy court (provided that if such
bankruptcy court orders notice, such notice shall be received by Second Lien
Agent in compliance with such order) in advance of the hearing to approve such
DIP Financing or use of cash collateral on an interim basis and court ordered or
5 Business Days, whichever is greater, notice in advance of the hearing to
approve such DIP Financing or use of cash collateral on a final basis, (ii) such
DIP Financing (and any First Lien Obligations which arose prior to the
Insolvency Proceeding) may be secured by Liens on all or a part of the assets of
the Obligors which shall be superior in priority to the Liens on the assets of
the Obligors held by any other Person, so long as the aggregate principal amount
of loans and letter of credit accommodations outstanding under any such DIP
Financing, together with the outstanding principal amount of the pre-petition
First Lien Obligations, does not exceed the Maximum First Lien Principal Amount,
(iii) so long as the aggregate principal amount of loans and letter of credit
accommodations outstanding under any such DIP Financing, together with the
outstanding principal amount of the pre-petition First Lien Obligations, does
not exceed the Maximum First Lien Principal Amount (determined without giving
effect to clause (c) of the definition thereof) plus $11,000,000, the Second
Lien Creditors will not request or accept adequate protection or any other
relief in connection with the use of such cash collateral or such DIP Financing
except as set forth in Section 6.2(b) below, (iv) so long as the aggregate
principal amount of loans and letter of credit accommodations outstanding under
any such DIP Financing, together with the outstanding principal amount of the
pre-petition First Lien Obligations, does not exceed the Maximum First Lien
Principal Amount, the Second Lien Creditors will subordinate (and will be deemed
hereunder to have subordinated) the Second Priority Liens (A) to the Liens
securing such DIP Financing (the "DIP Liens") on the same terms (but on a basis
junior to the Liens of the First Lien Creditors) as the Liens of the First Lien
Creditors are subordinated thereto (and such subordination will not alter in any
manner the terms of this Agreement), (B) to any "replacement Liens" granted to
the First Lien Creditors as adequate protection of their interests in the
Collateral (the "Senior Adequate Protection Liens") and (C) to any "carve-out"
agreed to by the First Lien Agents or the other First Lien Creditors in an
amount not to exceed $1,000,000 and (v) subject to Section 6.2(b) below, the
Second Lien Creditors shall not contest or oppose in any manner any adequate
protection provided to the First Lien Creditors as adequate protection of their
interests in the Collateral, any DIP Financing or
21
any cash collateral use and shall be deemed to have waived any objections to
such adequate protection, DIP Financing or cash collateral use, including,
without limitation, any objection alleging Obligors' failure to provide
"adequate protection" of the interests of the Second Lien Creditors in the
Collateral, so long as (i) the aggregate principal amount of loans and letter of
credit accommodations outstanding under any such DIP Financing, together with
the outstanding principal amount of the pre-petition First Lien Obligations,
does not exceed the Maximum First Lien Principal Amount, (ii) (a) the DIP
Financing does not compel any Obligor to seek confirmation of a specific plan of
reorganization for which all or substantially all of the material terms are set
forth in the DIP Financing documentation or a related document or (b) the DIP
Financing documentation or cash collateral order does not expressly require the
liquidation of the Collateral prior to a default under the DIP Financing
documentation or cash collateral order and (iii) the DIP Financing is not
secured by any Lien on any asset or property of any Obligor on a basis that is
senior to or pari passu with the Liens securing the Second Lien Obligations
unless such Liens are senior to the Liens securing the First-Lien Obligations.
(b) Adequate Protection. Notwithstanding the foregoing provisions in
this Section 6.2(a), in any Insolvency Proceeding, if the First Lien Creditors
(or any subset thereof) are granted adequate protection in the form of Senior
Adequate Protection Liens, the Second Lien Creditors may seek (and the First
Lien Creditors may not oppose) adequate protection of their interests in the
Collateral in the form of (i) a replacement Lien on all of the collateral that
is subject to the Senior Adequate Protection Liens (the "Junior Adequate
Protection Liens"), which Junior Adequate Protection Liens, if granted, will be
subordinate to all Liens securing the First Lien Obligations (including, without
limitation, the Senior Adequate Protection Liens and any "carve-out" agreed to
by the First Lien Agents or the other First Lien Creditors as permitted by
Section 6.2(a)) and any Liens securing debtor-in-possession financing (whether
or not constituting DIP Financing) on the same basis as the other Liens securing
the Second Lien Obligations are so subordinated under this Agreement (provided
that any failure of the Second Lien Creditors to obtain such Junior Adequate
Protection Liens shall not impair or otherwise affect the agreements,
undertakings and consents of the Second Lien Creditors pursuant to Section
6.2(a)) and (ii) superpriority claims under Section 507(b) of the Bankruptcy
Code junior in all respects to the superpriority claims granted under Section
507(b) of the Bankruptcy Code to the First Lien Creditors on account of any of
the First Lien Obligations or granted under Section 364(c)(1) of the Bankruptcy
Code with respect to any debtor-in-possession financing (whether or not
constituting DIP Financing) or use of cash collateral; provided that the
inability of the Second Lien Creditors to receive a Lien on actions under
Chapter 5 of the Bankruptcy Code or proceeds thereof shall not affect the
agreements and waivers set forth in this Section 6.2. Except as expressly set
forth in this Section 6.2(b), the Second Lien Creditors may not seek
post-petition interest and/or adequate protection payments in any Insolvency
Proceeding, and the First Lien Creditors may oppose any payments proposed to be
made by any Obligor to the Second Lien Creditors (including, without limitation,
any payments which the Second Lien Lenders may seek under the last paragraph of
this Section 6.2(b)). Furthermore, in the event that any Second Lien Creditor
actually receives any post-petition interest and/or adequate protection payments
in any Insolvency Proceeding in violation of this Agreement, the same shall be
segregated and held in trust and promptly paid over to the First Lien Agents,
for the benefit of the First Lien Creditors, in the same form as received, with
any necessary endorsements, and each Second Lien Creditor hereby authorize the
First Lien Agents to make any such endorsements as agent for the Second Lien
Agent (which authorization, being coupled with an interest, is irrevocable) to
be
22
held and/or applied by the First Lien Agents in accordance with the terms of the
First Lien Documents until all First Lien Obligations are Paid in Full before
any of the same shall be made to one or more of the Second Lien Creditors, and
each Second Lien Creditor irrevocably authorizes, empowers and directs any
debtor, debtor in possession, receiver, trustee, liquidator, custodian,
conservator or other Person having authority, to pay or otherwise deliver all
such payments to the First Lien Agents.
Notwithstanding the foregoing provisions in this Section 6.2(b), in
any Insolvency Proceeding, the Second Lien Agent and Second Lien Creditors shall
only be permitted to seek adequate protection with respect to their rights in
the Collateral in any Insolvency Proceeding in the form of (A) additional
collateral including replacement Liens on post-petition collateral; provided
that, as adequate protection for the First Lien Obligations, the First Lien
Agents, on behalf of the First Lien Creditors, are also granted a senior Lien on
such additional collateral; (B) replacement Liens on the Collateral; provided
that, as adequate protection for the First Lien Obligations, the First Lien
Agents, on behalf of the First Lien Creditors, are also granted senior
replacement Liens on the Collateral; (C) an administrative expense claim;
provided that, as adequate protection for the First Lien Obligations, the First
Lien Agents, on behalf of the First Lien Creditors, are also granted an
administrative expense claim which is senior and prior to the administrative
expense claim of the Second Lien Agent and the Second Lien Creditors; and (D)
cash payments with respect to interest on the Second Lien Obligations; provided
either (1) as adequate protection for the First Lien Obligations, the First Lien
Agents, on behalf of the First Lien Claimholders, are also granted cash payments
with respect to interest on the First Lien Obligations, or (2) such cash
payments do not exceed an amount equal to the interest accruing on the principal
amount of Second Lien Obligations outstanding on the date such relief is granted
at the interest rate under the Second Lien Credit Documents and accruing from
the date the Second Lien Agent is granted such relief. If any Second Lien
Creditor receives post-petition interest and/or other cash adequate protection
payments in an Insolvency Proceeding ("Second Lien Adequate Protection
Payments"), and the First Lien Creditors do not receive payment in full in cash
of all First Lien Obligations upon the effectiveness of the plan of
reorganization for, or conclusion of, that Insolvency Proceeding, then, each
Second Lien Creditor shall pay over to the First Lien Creditors an amount (the
"Pay-Over Amount") equal to the lesser of (i) the Second Lien Adequate
Protection Payments received by such Second Lien Creditors and (ii) the amount
of the short-fall (the "Short Fall") in payment in full of the First Lien Loan
Obligations; provided that to the extent any portion of the Short Fall
represents payments received by the First Lien Creditors in the form of
promissory notes, equity or other property, equal in value to the cash paid in
respect of the Pay-Over Amount, the First Lien Creditors shall, upon receipt of
the Pay-Over Amount, transfer those promissory notes, equity or other property,
equal in value to the cash paid in respect of the Pay-Over Amount to the
applicable Second Lien Creditors in exchange for the Pay-Over Amount.
Notwithstanding anything herein to the contrary, the First Lien Creditors shall
not be deemed to have consented to, and expressly retain their rights to object
to the grant of adequate protection in the form of additional collateral,
administrative expense claims and cash payments to the Second Lien Creditors
made pursuant to this paragraph.
6.3 Sale of Collateral; Waivers. The Second Lien Creditors agree that they
will not object to or oppose a Disposition of any Collateral securing the First
Lien Obligations (or any portion thereof) free and clear of Liens or other
claims under Section 363 of the Bankruptcy Code or any other provision of the
Bankruptcy Code, if the First Lien Creditors have consented
23
to such or Disposition of such assets, as long as all proceeds of such
Disposition received by the First Lien Creditors on account of the First Lien
Obligations will be applied to the First Lien Obligations to permanently reduce
the Maximum First Lien Principal Amount; provided that the Second Lien Agent, on
behalf of itself and the other Second Lien Creditors, may raise any objections
to any such Disposition of such Collateral that could be raised by any creditor
of the Obligors whose claims were not secured by any Liens on such Collateral,
provided such objections are not inconsistent with any other term or provision
of this Agreement and are not based on the status of the Second Lien Agent or
the Second Lien Creditors as secured creditors (without limiting the foregoing,
neither the Second Lien Agent nor the Second Lien Creditors may raise any
objections based on rights afforded by Sections 363(e) and (f) of the Bankruptcy
Code to secured creditors (or by any comparable provision of any Bankruptcy
Law)) with respect to the Liens granted to the Second Lien Agent. The Second
Lien Agent and the Second Lien Creditors waive any claim they may now or
hereafter have arising out of the First Lien Creditors' election in any
proceeding instituted under Chapter 11 of the Bankruptcy Code of the application
of Section 1111(b)(2) of the Bankruptcy Code. The Second Lien Agent and the
Second Lien Creditors agree not to initiate or prosecute or join with any other
Person to initiate or prosecute any claim, action or other proceeding (i)
challenging the enforceability of the First Lien Creditors' claims as fully
secured claims with respect to all or part of the First Lien Obligations or for
allowance of any First Lien Obligations (including those consisting of
post-petition interest, fees or expenses) or opposing any action by the First
Lien Agents or the First Lien Creditors to enforce their rights or remedies
arising under the First Lien Documents in a manner which is not prohibited by
the terms of this Agreement, (ii) challenging the enforceability, validity,
priority or perfected status of any Liens on assets securing the First Lien
Obligations under the First Lien Documents, (iii) asserting any claims which the
Obligors may hold with respect to the First Lien Creditors, (iv) seeking to lift
the automatic stay to the extent that such action is opposed by the First Lien
Agents or (v) opposing a motion by the First Lien Agents to lift the automatic
stay. The First Lien Creditors agree not to initiate or prosecute or join with
any person to initiate or prosecute any claim, action or other proceeding (i)
challenging the enforceability of the Second Lien Creditors' claims as fully
secured claims with respect to all or part of the Second Lien Obligations or for
allowance of any Second Lien Obligations (including those consisting of
post-petition interest, fees or expenses) or opposing any action by the Second
Lien Agent or the Second Lien Creditors to enforce their rights or remedies
arising under the Second Lien Documents in a manner which is not prohibited by
the terms of this Agreement, (ii) challenging the enforceability, validity,
priority or perfected status of any Liens on assets securing the Second Lien
Obligations under the Second Lien Documents or (iii) asserting any claims which
the Obligors may hold with respect to the Second Lien Creditors.
6.4 Invalidated Payments. To the extent that the First Lien Creditors
receive payments on the First Lien Obligations or proceeds of Collateral for
application to the First Lien Obligations which are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any Bankruptcy Law,
common law, equitable cause or otherwise (and whether as a result of any demand,
settlement, litigation or otherwise) (each a "First Lien Avoidance"), then to
the extent of such payment or proceeds received, such Obligations, or part
thereof, intended to be satisfied by such payment or proceeds shall be revived
and continue in full force and effect as if such payments or proceeds had not
been received by the First Lien Creditors, and this Agreement, if theretofore
terminated, shall be reinstated in full force and effect as of the date of such
First Lien Avoidance,
24
and such prior termination shall not diminish, release, discharge, impair or
otherwise affect the Lien priorities and the relative rights and obligations of
the First Lien Creditors and the Second Lien Creditors provided for herein with
respect to any event occurring on or after the date of such First Lien Avoidance
except to the extent the Second Lien Creditors share in any such benefit as
unsecured creditors. The Second Lien Creditors agree that none of them shall be
entitled to benefit from any First Lien Avoidance, whether by preference or
otherwise, it being understood and agreed that the benefit of such First Lien
Avoidance otherwise allocable to them shall instead be allocated and turned over
for application in accordance with the priorities set forth in this Agreement
except to the extent the Second Lien Creditors share in any such benefit as
unsecured creditors.
6.5 Payments. In the event of any Insolvency Proceeding involving one or
more Obligors, all Proceeds (including, without limitation, any Proceeds which
would otherwise, but for the terms hereof, be payable or deliverable in respect
of the Second Lien Secured Claim) shall be paid or delivered directly to First
Lien Agents (to be held and/or applied by First Lien Agents in accordance with
the terms of the First Lien Documents) until all First Lien Obligations are Paid
in Full before any of the same shall be made to one or more of the Second Lien
Creditors on account of any Second Lien Secured Claim, and each Second Lien
Creditor irrevocably authorizes, empowers and directs any debtor, debtor in
possession, receiver, trustee, liquidator, custodian, conservator or other
Person having authority, to pay or otherwise deliver all such Proceeds in
respect of any Second Lien Secured Claim to the First Lien. Each Second Lien
Creditor also irrevocably authorizes and empowers the First Lien Agents, in the
name of each Second Lien Creditor, to demand, sue for, collect and receive any
and all such Proceeds in respect of any Second Lien Secured Claim to which the
First Lien Creditors are entitled hereunder. In the event of any payment or
distribution received by the Second Lien Creditors in respect of any Second Lien
Deficiency, the Second Lien Creditors shall be entitled to retain such payment
or distribution to the extent the same have been paid pursuant to a plan of
reorganization which is confirmed pursuant to a Final Order regardless of
whether such plan of reorganization has received the affirmative vote of all
classes composed of the First Lien Creditors' claims.
6.6 Separate Grants of Security and Separate Classification. Each Second
Lien Creditor acknowledges and agrees that (a) the grants of Liens pursuant to
the First Lien Documents and the Second Lien Documents constitute two separate
and distinct grants of Liens and (b) because of their differing rights in the
Collateral, the Second Lien Secured Claims are fundamentally different from the
First Lien Secured Claims and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency Proceeding. The Second Lien
Creditors shall not seek in any Insolvency Proceeding to be treated as part of
the same class of creditors as the First Lien Creditors and shall not oppose any
pleading or motion by the First Lien Creditors for the First Lien Creditors and
the Second Lien Creditors to be treated as separate classes of creditors.
Notwithstanding the foregoing, if it is held that the Secured Claims of the
First Lien Creditors and the Second Lien Creditors in respect of the Collateral
constitute only one secured claim (rather than separate classes of senior and
junior secured claims), then the Second Lien Creditors hereby acknowledge and
agree that all distributions shall be made as if there were separate classes of
senior and junior secured claims against the Obligors in respect of the
Collateral, with the effect being that, to the extent that the aggregate value
of the Collateral exceeds the amount of the First Lien Obligations, the First
Lien Creditors shall be entitled to
25
receive, in addition to amounts distributed to them in respect of principal,
pre-petition interest and other claims, all amounts owing in respect of
post-petition interest, and fees, costs and charges incurred subsequent to the
commencement of the applicable Insolvency Proceeding before any distribution is
made in respect of any of the claims held by the Second Lien Creditors. The
Second Lien Creditors hereby acknowledge and agree to turn over to the First
Lien Creditors amounts otherwise received or receivable by them to the extent
necessary to effectuate the intent of the preceding sentence, even if such
turnover has the effect of reducing the claim or recovery of the Second Lien
Creditors.
6.7 Rights as Unsecured Lenders. In any Insolvency Proceeding, to the
extent not expressly prohibited by this Agreement, the Second Lien Creditors may
take any action, file any pleading, appear in any proceeding and exercise rights
and remedies whether as unsecured lenders or otherwise. In any Insolvency
Proceeding, to the extent not prohibited by this Agreement, the First Lien
Creditors may take any action, file any pleading, appear in any proceeding and
exercise rights and remedies whether as unsecured lenders or otherwise.
6.8 Reorganization Securities. If, in any Insolvency Proceeding, debt
obligations of the reorganized debtor secured by Liens upon any property of the
reorganized debtor are distributed pursuant to a plan of reorganization or
similar dispositive restructuring plan, both on account of First Lien
Obligations and on account of Second Lien Obligations, then, to the extent the
debt obligations distributed on account of the First Lien Obligations and on
account of the Second Lien Obligations are secured by Liens upon the same
property, the provisions of this Agreement will survive the distribution of such
debt obligations pursuant to such plan and will apply with like effect to the
Liens securing such debt obligations.
Section 7. Miscellaneous.
7.1 Termination. Subject to Section 5.5, this Agreement shall terminate
and be of no further force and effect upon the first to occur of the Payment in
Full of (a) the First Lien Obligations or (b) the Second Lien Obligations.
7.2 Successors and Assigns; No Third Party Beneficiaries.
(a) This Agreement shall be binding upon each Secured Creditor and
its respective successors and assigns and shall inure to the benefit of each
Secured Creditor and its respective successors, participants and assigns. No
other Person shall have or be entitled to assert rights or benefits hereunder.
(b) Each Secured Creditor reserves the right to grant participations
in, or otherwise sell, assign, transfer or negotiate all or any part of, or any
interest in, their respective Obligations; provided that no Secured Creditor
shall be obligated to give any notices to or otherwise in any manner deal
directly with any participant in the Obligations and no participant shall be
entitled to any rights or benefits under this Agreement, except through the
Secured Creditor with which it is a participant.
(c) In connection with any participation or other transfer or
assignment, a Secured Creditor (i) may, subject to its respective Documents,
disclose to such assignee, participant or other transferee or assignee all
documents and information which such Secured
26
Creditor now or hereafter may have relating to any Obligor or the Collateral and
(ii) shall disclose to such participant or other transferee or assignee the
existence and terms and conditions of this Agreement.
7.3 Notices. All notices and other communications provided for hereunder
shall be in writing and shall be mailed, sent by overnight courier, telecopied
or delivered, as follows:
(a) if to First Lien Agents, to them at the following addresses:
c/o Churchill Financial LLC, as First Lien Administrative Agent
400 Park Avenue, Suite 1510
New York, New York 10022
Attention: Carey Davidson, Vice President
Telephone: (212) 763-4640
Telecopier: (212) 763-4641
with a copy to:
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Attention: Mario J. Ippolito, Esq.
Telephone: (212) 318-6000
Telecopier: (212) 319-4090
and:
Ableco Finance LLC, as First Lien Collateral Agent
c/o Cerberus Capital Management
299 Park Avenue
New York, New York 10171
Attention: Keith Read
Telephone: (212) 891-2100
Telecopier: (212) 739-1212
with a copy to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Eliot Relles, Esq.
Telephone: (212) 756-2199
Telecopier: (212) 593-5955
27
(b) if to Second Lien Agent, to it at the following address:
Clearlake Capital Group, L.P.
650 Madison Avenue, Third Floor
New York, New York 10022
Attention: Behdad Eghbali and Jose Feliciano
Telephone: (212) 610-9000
Telecopier: (212) 610-9121
with a copy to:
Milbank, Tweed, Hadley & McCloy LLP
601 S. Figueroa St, 30th Floor
Los Angeles, CA 90017
Attention: Melainie K. Mansfield, Esq.
Telephone: (213) 892-4611
Telecopier: (213) 629-5063
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 7.3. All such notices and other communications shall be
effective (i) if sent by registered mail, return receipt requested, when
received or 3 Business Days after mailing, whichever first occurs, (ii) if
telecopied, when transmitted and a confirmation is received, provided the same
is on a Business Day and, if not, on the next Business Day or (iii) if delivered
by messenger or overnight courier, upon delivery, provided the same is on a
Business Day and, if not, on the next Business Day.
7.4 Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, and each such counterpart shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
7.5 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. THIS AGREEMENT AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. EACH OF THE PARTIES HERETO HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES AMONG THE PARTIES
HERETO PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT; PROVIDED THAT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK,
NEW YORK. EACH OF THE PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE
TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS.
28
7.6 MUTUAL WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE PARTIES ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS RELATED
THERETO.
7.7 Amendments. No amendment or waiver of any provision of this Agreement,
and no consent to any departure by any Person from the terms hereof, shall in
any event be effective unless it is in writing and signed by the Second Lien
Agent, with the consent of the Requisite Second Lien Creditors and the First
Lien Agents, with the consent of the "Required Lenders" (as defined in the First
Lien Loan Agreement). In no event shall the consent of any Obligor be required
in connection with any amendment or other modification of this Agreement.
7.8 No Waiver. No failure or delay on the part of any Secured Creditor in
exercising any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right.
7.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provisions in any other jurisdiction.
7.10 Further Assurances. Each party hereto agrees to cooperate fully with
each other party hereto to effectuate the intent and provisions of this
Agreement and, from time to time, to execute and deliver any and all other
agreements, documents or instruments, and to take such other actions, as may be
reasonably necessary or desirable to effectuate the intent and provisions of
this Agreement.
7.11 Headings. The section headings contained in this Agreement are and
shall be without meaning or content whatsoever and are not part of this
Agreement.
7.12 Lien Priority Provisions. This Agreement and the rights and benefits
hereunder shall inure solely to the benefit of the First Lien Agents, the First
Lien Creditors, the Second Lien Agent, and the Second Lien Creditors and their
respective successors and permitted assigns and no other Person (including the
Obligors or any trustee, receiver, debtor in possession or bankruptcy estate in
a bankruptcy or like proceeding) shall have or be entitled to assert rights or
benefits hereunder. Nothing contained in this Agreement is intended to or shall
impair the obligation of any Obligor to pay the Obligations as and when the same
shall become due and payable in accordance with their respective terms, or to
affect the relative rights of the lenders of any Obligor, other than the First
Lien Agents, the First Lien Creditors, the Second Lien Agent, and the Second
Lien Creditors as between themselves.
7.13 Credit Analysis. The Secured Creditors shall each be responsible for
keeping themselves informed of (a) the financial condition of the Obligors and
all other all endorsers,
29
obligors and/or guarantors of the Obligations and (b) all other circumstances
bearing upon the risk of nonpayment of the Obligations. No Secured Creditor
shall have any duty to advise any other Secured Creditor of information known to
it regarding such condition or any such other circumstances. No Secured Creditor
assumes any liability to any other Secured Creditor or to any other Person with
respect to: (i) the financial or other condition of Obligors under any
instruments of guarantee with respect to the Obligations, (ii) the
enforceability, validity, value or collectibility of the Obligations, any
Collateral therefor or any guarantee or security which may have been granted in
connection with any of the Obligations or (iii) any Obligor's title or right to
transfer any Collateral or security.
7.14 Waiver of Claims. To the maximum extent permitted by law, each party
hereto waives any claim it might have against any Secured Creditor with respect
to, or arising out of, any action or failure to act or any error of judgment or
negligence, mistake or oversight whatsoever on the part of any other party
hereto or their respective directors, officers, employees or agents with respect
to any exercise of rights or remedies under the Documents or any transaction
relating to the Collateral in accordance with this Agreement other than claims
resulting primarily from the gross negligence or willful conduct of any Secured
Creditor or its directors, officers, employees or agents as determined by a
court of competent jurisdiction in a final non-appealable judgment or order.
None of the Secured Creditors, nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or, except as
specifically provided herein, shall be under any obligation to Dispose of any
Collateral upon the request of any Obligor or any Secured Creditor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof.
7.15 Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of the Documents, the provisions of this
Agreement shall govern.
7.16 Specific Performance. Each of First Lien Agents and Second Lien Agent
may demand specific performance of this Agreement and, on behalf of itself and
the respective other Secured Creditors, hereby irrevocably waives any defense
based on the adequacy of a remedy at law and any other defense that might be
asserted to bar the remedy of specific performance in any action which may be
brought by the respective Secured Creditors.
7.17 Provisions Solely to Define Relative Rights. The provisions of this
Agreement are and are intended solely for the purpose of defining the relative
rights of the Secured Creditors. None of the Obligors or any other creditor
thereof shall have any rights hereunder, and none of the Obligors may rely on
the terms hereof. Nothing in this Agreement is intended to or shall impair the
obligations of Obligors, which are absolute and unconditional, to pay the First
Lien Obligations and the Second Lien Obligations as and when the same shall
become due and payable in accordance with their terms.
7.18 Subrogation. The Second Lien Agent and the other Second Lien
Creditors hereby agree that until the First Lien Termination Date has occurred
they will not assert any rights of subrogation it or they may acquire as a
result of any payment hereunder; provided that as between the Obligors, on the
one hand, and the Second Lien Creditors, on the other hand, any
30
such payment that is paid over to the First Lien Agents pursuant to this
Agreement shall be deemed not to reduce any of the Second Lien Obligation.
7.19 Entire Agreement. This Agreement and the Documents embody the entire
agreement of the Obligors, the First Lien Agents, the First Lien Creditors, the
Second Lien Agent and the Second Lien Creditors with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings
relating to the subject matter hereof and thereof and any draft agreements,
negotiations and/or discussions involving any Obligor and any of the First Lien
Agents, the First Lien Creditors, the Second Lien Agent and the Second Lien
Creditors relating to the subject matter hereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
FIRST LIEN ADMINISTRATIVE AGENT:
--------------------------------
CHURCHILL FINANCIAL LLC, as First Lien
Administrative Agent
By:/s/ Christopher Cox
---------------------
Name: Christopher Cox
Title: Managing Director
FIRST LIEN COLLATERAL AGENT:
----------------------------
ABLECO FINANCE LLC, as First Lien Collateral Agent
By: /s/ Daniel Wolf
---------------
Name: Daniel Wolf
Title: President
SECOND LIEN AGENT:
------------------
CLEARLAKE CAPITAL GROUP, L.P.
By: CCG Operations, LLC
Its: General Partner
By: /s/ Behdad Eghbali
-----------------------
Name: Behdad Eghbali
Title: Authorized Signatory
32
Each of the undersigned hereby acknowledges and agrees to the
foregoing terms and provisions.
BORROWER:
---------
GOAMERICA, INC.
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
OBLIGORS:
---------
HOVRS ACQUISITION CORPORATION
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
GOAMERICA RELAY SERVICES CORP.
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
GOAMERICA COMMUNICATIONS CORP.
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
WYND COMMUNICATIONS CORPORATION
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
33
HANDS ON VIDEO RELAY SERVICES INC.
By: /s/ Daniel R. Luis
-----------------------------
Name: Daniel R. Luis
Title: Co-Chief Executive Officer
HOTPAPER.COM, INC.
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
OUTBACK RESOURCE GROUP, INC.
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
HOSLS ACQUISITION CORPORATION
By: /s/ Daniel R. Luis
--------------------------
Name: Daniel R. Luis
Title: Chief Executive Officer
34