EXHIBIT 10.68
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INTERCREDITOR AGREEMENT
dated as of August 24, 2007,
among
PACIFIC ENERGY ALASKA OPERATING LLC,
as the Borrower,
PACIFIC ENERGY ALASKA HOLDINGS, LLC,
SILVER POINT FINANCE, LLC,
as the First Lien Collateral Agent
and
SILVER POINT FINANCE, LLC,
as the Second Lien Collateral Agent
This is the Intercreditor Agreement referred to in (a) the First Lien Credit
Agreement dated as of the date hereof among Pacific Energy Alaska Operating LLC,
Pacific Energy Holdings, LLC, the lenders from time to time party thereto and
Silver Point, as Agent, (b) the First Lien Collateral and Guarantee Agreement
dated as of the date hereof among Pacific Energy Alaska Operating LLC, Pacific
Energy Holdings, LLC, the other Loan Parties from time to time party thereto and
Silver Point, as Agent, (c) the Second Lien Credit Agreement dated as of the
date hereof among Pacific Energy Alaska Operating LLC, Pacific Energy Holdings,
LLC, the lenders from time to time party thereto and Silver Point, as Agent, (d)
the Second Lien Collateral and Guarantee Agreement dated as of the date hereof
among Pacific Energy Alaska Operating LLC, Pacific Energy Holdings, LLC, the
other Loan Parties from time to time party thereto and Silver Point, as Agent
and (e) the other Security Documents referred to in the Credit Agreements
referred to herein.
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms................................... 2
SECTION 1.02. Other Defined Terms..................................... 2
SECTION 1.03. Terms Generally......................................... 10
ARTICLE II
Lien Priorities
SECTION 2.01. Relative Priorities..................................... 10
SECTION 2.02. Prohibition on Contesting Liens......................... 11
SECTION 2.03. No New Liens or Alteration of Priority ................. 11
SECTION 2.04. Similar Liens and Agreements............................ 12
ARTICLE III
Enforcement of Rights; Matters Relating to Collateral
SECTION 3.01. Exercise of Rights and Remedies......................... 12
SECTION 3.02. Second Lien Secured Parties' Purchase Option............ 14
SECTION 3.03. No Interference......................................... 16
SECTION 3.04. Rights as Unsecured Creditors........................... 18
SECTION 3.05. Automatic Release of Second Priority Liens ............. 18
SECTION 3.06. Insurance and Condemnation Awards....................... 19
ARTICLE IV
Payments
SECTION 4.01. Application of Proceeds................................. 20
SECTION 4.02. Payment Over............................................ 20
SECTION 4.03. Certain Agreements with Respect to Unenforceable Liens.. 20
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SECTION 10.03. Effectiveness; Survival................................. 32
SECTION 10.04. Severability............................................ 32
SECTION 10.05. Amendments; Waivers..................................... 33
SECTION 10.06. Subrogation............................................. 33
SECTION 10.07. Applicable Law; Jurisdiction; Consent to Service of
Process.............................................. 33
SECTION 10.08. Waiver of Jury Trial.................................... 34
SECTION 10.09. Parties in Interest..................................... 34
SECTION 10.10. Specific Performance.................................... 34
SECTION 10.1l. Headings................................................ 35
SECTION 10.12. Counterparts............................................ 35
SECTION 10.13. Provisions Solely to Define Relative Rights............. 35
iii
INTERCREDITOR AGREEMENT dated as of August 24, 2007 (the "Agreement"),
among PACIFIC ENERGY ALASKA OPERATING LLC, a limited liability company organized
under the laws of the State of Delaware (the "Borrower"), PACIFIC ENERGY
HOLDINGS, LLC, a limited liability company organized under the laws of the State
of Delaware ("Holdings"), SILVER POINT FINANCE, LLC ("Silver Point"), as the
First Lien Collateral Agent and the Second Lien Collateral Agent.
PRELIMINARY STATEMENT
Reference is made to (a) the First Lien Credit Agreement dated as of
August 24, 2007 (the "First Lien Credit Agreement"), among the Borrower,
Holdings, the lenders from time to time party thereto (the "First Lien Lenders")
and Silver Point, as administrative agent for the First Lien Lenders, (b) the
Second Lien Credit Agreement dated as of August 24, 2007 (the "Second Lien
Credit Agreement" and, together with the First Lien Credit Agreement, the
"Credit Agreements"), among the Borrower, Holdings, the lenders from time to
time party thereto (the "Second Lien Lenders") and Silver Point, as
administrative agent for the Second Lien Lenders, (c) the First Lien Guarantee
and Collateral Agreement dated as of August 24, 2007 (the "First Lien Collateral
Agreement"), among the Borrower, Holdings, the other Loan Parties from time to
time party thereto and Silver Point, as the First Lien Agent, (d) the Second
Lien Guarantee and Collateral Agreement dated as of August 24, 2007 (the "Second
Lien Collateral Agreement"), among the Borrower, Holdings, the other Loan
Parties from time to time party thereto and Silver Point, as the Second Lien
Collateral Agent, (e) the Second Lien Guaranty (the "Second Lien Guaranty")
among Pacific Energy Resources Ltd. ("PERL"), the other Guarantors (as defined
therein) party thereto, and Silver Point, (f) the Second Lien Pledge and
Security Agreement (the "Second Lien Pledge and Security Agreement") dated as of
August 24, 2007 between each of the Grantors party thereto and Silver Point, as
collateral agent for the Lender Parties and (g) the other Security Documents
referred to in the Credit Agreements.
RECITALS
A. The First Lien Lenders have agreed to make loans to the Borrower
pursuant to the First Lien Credit Agreement on the condition, among others, that
the First Lien Obligations (such term and each other capitalized term used but
not defined in the preliminary statement or these recitals having the meaning
given to it in Article I) shall be secured by first priority Liens on, and
security interests in, the Collateral.
B. The Second Lien Lenders have agreed to make loans to the Borrower
pursuant to the Second Lien Credit Agreement on the condition, among others,
that the Second Lien Obligations shall be secured by second priority Liens on,
and security interests in, the Collateral.
C. The Credit Agreements require, among other things, that the parties
thereto set forth in this Agreement, among other things, their rights,
obligations and remedies with respect to the Collateral.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Certain Defined Terms. Each capitalized term used in
this Agreement and not otherwise defined herein shall have the meaning set forth
in the First Lien Credit Agreement, the Second Lien Credit Agreement, the First
Lien Collateral Agreement or the Second Lien Collateral Agreement, as
applicable.
SECTION 1.02. Other Defined Terms. As used in the Agreement, the
following terms shall have the meanings specified below:
"Agreement" shall have the meaning assigned to such term in the
introductory paragraph.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now and hereinafter in effect, or any successor
statute.
"Bankruptcy Law" shall mean the Bankruptcy Code and any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law.
"Borrower" shall have the meaning assigned to such term in the
introductory paragraph to this Agreement.
"Collateral" shall mean, collectively, the First Lien Collateral and
the Second Lien Collateral (other than Collateral as defined in the Second Lien
Pledge and Security Agreement to secured Guaranteed Obligations pursuant to the
Second Lien Guaranty).
"Comparable Second Lien Security Document" shall mean, in relation to
any Collateral subject to any Lien created under any First Lien Security
Document, the Second Lien Security Document that creates a Lien on the same
Collateral, granted by the same Grantor.
"Credit Agreements" shall have the meaning assigned to such term in
the preliminary statement to this Agreement.
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"DIP Financing" shall have the meaning assigned to such term in
Section 6.01.
"DIP Financing Liens" shall have the meaning assigned to such term in
Section 6.01.
"Discharge of First Lien Obligations" shall mean (unless otherwise
required by law or court order), subject to Sections 7.02 and 7.04, (a) payment
in full in cash of the principal of and interest (including interest accruing
during the pendency of any Insolvency or Liquidation Proceeding, regardless of
whether allowed or allowable in such Insolvency or Liquidation Proceeding) and
premium, if any, on all Indebtedness outstanding under the First Lien Loan
Documents, (b) payment in full of all other monetary First Lien Obligations that
are due and payable or otherwise accrued and owing at or prior to the time such
principal and interest are paid and (c) termination or expiration of all
commitments to lend under the First Lien Credit Agreement.
"Disposition" shall mean any sale, lease, exchange, transfer or other
disposition. "Dispose" shall have a correlative meaning.
"Enforcement Action" shall mean upon the occurrence and during the
continuation of any Event of Default and in connection with the exercise of
remedies (i) any action by any First Lien Secured Party or Second Lien Secured
Party to foreclose on the Lien of such Person in any Collateral, (ii) any action
by any First Lien Secured Party or Second Lien Secured Party to take possession
of, or sell or otherwise realize upon, or to exercise any other rights or
remedies with respect to, any Collateral, including a sale or other disposition
after the occurrence of an Event of Default of any Collateral by the Borrower
with the consent of, or at the direction of, a First Lien Secured Party or
Second Lien Secured Party, (iii) the acceleration of any Obligations, (iv) the
taking of any other actions by a First Lien Secured Party or Second Lien Secured
Party to collect or enforce all or any part of the Obligations payable to such
First Lien Secured Party or Second Lien Secured Party or any claims in respect
thereof (x) against the Borrower or (y) any of its property or assets, including
the taking of control or possession of, or the exercise of any right of setoff
with respect to, any property or assets of Borrower or the sale or other
disposition of any interest in such property or assets and/or (v) the
commencement by any First Lien Secured Party or Second Lien Secured Party of any
legal proceedings or actions against or with respect to (x) the Borrower or (y)
any of its property or assets or any Collateral to facilitate the actions
described in clauses (i), (ii) and (iii) above, including any Insolvency or
Liquidation Proceeding and action to have the automatic stay lifted in any
Insolvency or Liquidation Proceeding of the Borrower; provided that the filing
of any notice of or voting any claim in any Insolvency or Liquidation Proceeding
involving a Borrower shall not be deemed to be an Enforcement Action.
"Enforcement Actions Against Collateral" means the actions described
in clauses (i), (ii), (iv)(y) and (v)(y) of the definition of Enforcement
Action.
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"Event of Default" means each "Event of Default" or similar term, as
such term is defined in any First Lien Loan Document or any Second Lien Loan
Document.
"Excess First Lien Loan Amount" means, collectively, as of any date of
determination, (a) the aggregate principal amount of any extensions of credit
made by the First Lien Secured Parties to Borrower pursuant to the First Lien
Loan Documents (other than Hedging Agreements (as defined in the First Lien
Credit Agreement) that constitute First Lien Obligations) that at the time of
such extensions of credit exceed the Maximum First Lien Principal Amount, and
(b) any interest, fees, indemnities, costs or expenses payable on account of
such excess principal amount under the First Lien Loan Documents or in respect
thereof.
"First Lien Agent" shall mean Silver Point, as administrative and
collateral agent for the First Lien Secured Parties.
"First Lien Collateral" shall mean all "Collateral", as defined in the
First Lien Security Documents, and any other assets of any Grantor now or at any
time hereafter subject to Liens securing any First Lien Obligations.
"First Lien Collateral Agent" shall mean Silver Point, as collateral
agent for the First Lien Secured Parties.
"First Lien Credit Agreement" shall have the meaning assigned to such
term in the preliminary statement of this Agreement.
"First Lien Default Notice" means with respect to any Event of Default
under the First Lien Loan Documents, a written notice from the First Lien Agent
to the Second Lien Agent describing such Event of Default in reasonable detail.
"First Lien Lenders" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"First Lien Loan Documents" shall mean the "Loan Documents," as
defined in the First Lien Credit Agreement
"First Lien Loans" shall mean "Loans", as defined in the First Lien
Credit Agreement.
"First Lien Mortgages" shall mean the "Mortgages", as defined in the
First Lien Credit Agreement.
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"First Lien Obligations" shall mean the "Obligations", as defined in
the First Lien Credit Agreement.
"First Lien Required Lenders" shall mean the "Required Lenders", as
defined in the First Lien Credit Agreement.
"First Lien Secured Parties" shall mean the "Secured Parties", as
defined in the First Lien Collateral Agreement.
"First Lien Security Documents" shall mean the "Security Documents",
as defined in the First Lien Credit Agreement, and any other agreement, document
or instrument pursuant to which a Lien is granted by Holdings, the Borrowers or
their respective direct or indirect subsidiaries to secure any First Lien
Obligations or under which rights or remedies with respect to any such Lien are
governed.
"First Priority Liens" shall mean all Liens on the First Lien
Collateral securing the First Lien Obligations, whether created under the First
Lien Security Documents or acquired by possession, statute (including any
judgment lien), operation of law, subrogation or otherwise.
"Grantors" shall mean Holdings, the Borrower and each direct or
indirect subsidiary of Holdings or the Borrower, that shall have created or
purported to create any First Priority Lien or Second Priority Lien on all or
any part of its assets to secure any First Lien Obligations or any Second Lien
Obligations.
"Guarantors" shall mean Holdings, the Borrower and each direct or
indirect subsidiary of Holdings or the Borrower, that has Guaranteed, or that
may from time to time hereafter Guarantee, the First Lien Obligations or the
Second Lien Obligations.
"Indebtedness" shall mean and includes all obligations that constitute
"Indebtedness", as defined in the First Lien Credit Agreement or the Second Lien
Credit Agreement, as applicable.
"Insolvency or Liquidation Proceeding" shall mean (a) any voluntary or
involuntary proceeding under the Bankruptcy Code or any other Bankruptcy Law
with respect to any Grantor, (b) any voluntary or involuntary appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Grantor or for a substantial part of the property or assets of any Grantor,
(c) any voluntary or involuntary winding-up or liquidation of any Grantor or (d)
a general assignment for the benefit of creditors by any Grantor.
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"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean the First Lien Loan Documents and the
Second Lien Loan Documents.
"Loan Party" shall mean "Loan Party", as defined in the First Lien
Credit Agreement or the Second Lien Credit Agreement.
"Maximum First Lien Principal Amount" means, as of any date of
determination, the sum of (a) the least of (i) the most recently established
Borrowing Base under the First Lien Credit Agreement, determined by the First
Lien Agent in its sole discretion in accordance with the terms of the First Lien
Credit Agreement, (ii) the Aggregate Maximum Credit Amounts less any reductions
thereof or (iii) $200,000,000 and (b) any of the following which is applicable
(but without duplication): (i) the principal amount of any Borrowing Base
Deficiency or (ii) any outstanding principal under the First Lien Credit
Agreement not repaid in connection with a reduction of the Aggregate Maximum
Credit Amounts which results in Revolving Credit Exposures exceeding the
Aggregate Maximum Credit Amounts then in effect; provided, however, the amount
set forth in clause (b) shall not include (A) any additional amounts in respect
of principal to the extent such excess is the result of additional Loans
advanced or letters of credit issued (other than renewal of outstanding letters
of credit in amounts not exceeding the outstanding face amounts) while a
Borrowing Base Deficiency is in effect or (B) any Loans or letters of credit to
the extent advancing such funds or issuing such letter of credit (other than
renewal of outstanding letters of credit in amounts not exceeding the
outstanding face amounts) would cause a Borrowing Base Deficiency or would
exceed the Aggregate Maximum Credit Amounts then in effect. For the avoidance of
doubt the calculation of Maximum First Lien Principal Amount refers only to the
outstanding principal balance of Loans and the face amount of outstanding
Letters of Credit under the First Lien Loan Documents and does not include
interest, fees and other amounts due under the First Lien Credit Agreement.
"New First Lien Collateral Agent" shall have the meaning assigned to
such term in Section 7.02.
"New First Lien Loan Documents" shall have the meaning assigned to
such term in Section 7.02.
"New First Lien Obligations" shall have the meaning assigned to such
term in Section 7.02.
6
"Non Funding Event" means the occurrence of one or more Events of
Default under the First Lien Loan Agreement which remain continuing and unwaived
as a result of which the First Lien Agent and/or the First Lien Lenders refuse
to fund loans under the Revolving Loan (as defined in the First Lien Loan
Agreement) for a period of five (5) or more consecutive Business Days (a
"Funding Suspension"); provided that a "Non Funding Event" shall cease to remain
continuing (and shall not be deemed to be a Trigger Event) if, after a Funding
Suspension, the First Lien Agent and/or First Lien Lenders make loans available
under the Revolving Loan for a period of three (3) or more consecutive Business
Days (a "Funding Resumption"). Following a Funding Resumption, if a Funding
Suspension shall occur again, a new "Non Funding Event" shall be deemed to occur
and shall remain continuing unless and until a subsequent Funding Resumption
shall occur.
"Obligations" shall mean the First Lien Obligations and the Second
Lien Obligations.
"Obligor" shall mean Holdings, the Borrower and each other Person that
is a subsidiary of Holdings liable on or in respect of the Obligations or that
has granted a Lien on any property or assets as collateral for the Obligations,
together with such Person's successors and assigns, including a receiver,
trustee or debtor-in-possession on behalf of such Person.
"PERL" shall have the meaning assigned to such term in the preliminary
statement of this Agreement.
"PERL First Lien Credit Agreement" shall mean that certain First
Lien Credit and Guaranty Agreement dated as of November 30, 2006, among PERL,
certain subsidiaries of PERL the lenders from time to time party thereto and X.
Xxxx & Company, as administrative agent for the First Lien Lenders.
"PERL First Lien Loan Documents" shall mean the "Transaction
Documents," as defined in the PERL First Lien Credit Agreement
"Pledged or Controlled Collateral" shall have the meaning assigned to
such term in Article V.
"Refinance" shall mean, in respect of any Indebtedness, to refinance,
extend, renew, restructure or replace or to issue other Indebtedness in exchange
or replacement for, such Indebtedness, in whole or in part. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Notice" shall have the meaning assigned to such term in
Section 7.02.
7
"Release" shall have the meaning assigned to such term in Section
3.05.
"Second Lien Collateral" shall mean all "Collateral", as defined in
the Second Lien Security Documents and any other assets of any Grantor now or at
any time hereafter subject to Liens securing any Second Lien Obligations.
"Second Lien Collateral Agent" shall mean Silver Point, as collateral
agent for the Second Lien Secured Parties.
"Second Lien Agent" shall mean Silver Point, as administrative and
collateral agent for the Second Lien Secured Parties.
"Second Lien Collateral Agreement" shall have the meaning assigned to
such term in the preliminary statement to this Agreement.
"Second Lien Credit Agreement" shall have the meaning assigned to such
term in the preliminary statement to this Agreement.
"Second Lien Default Notice" means with respect to any Event of
Default under the Second Lien Loan Documents, a written notice from the Second
Lien Agent to the First Lien Agent describing such Event of Default in
reasonable detail.
"Second Lien Guaranty" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Second Lien Lenders" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.
"Second Lien Loans" shall mean "Loans", as defined in the Second Lien
Credit Agreement.
"Second Lien Loan Documents" shall mean the "Loan Documents", as
defined in the Second Lien Credit Agreement.
"Second Lien Mortgages" shall mean the "Mortgages", as defined in the
Second Lien Credit Agreement.
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"Second Lien Obligations" shall mean the "Loan Document Obligations",
as defined in the Second Lien Credit Agreement.
"Second Lien Permitted Actions" shall have the meaning assigned to
such term in Section 3.01(a).
"Second Lien Required Lenders" shall mean the "Required Lenders", as
defined in the Second Lien Credit Agreement.
"Second Lien Secured Parties" shall mean the "Secured Parties", as
defined in the Second Lien Collateral Agreement.
"Second Lien Security Documents" shall mean the "Security Documents",
as defined in the Second Lien Credit Agreement, and any other agreement,
document or instrument pursuant to which a Lien is granted by Holdings, Borrower
or any of their respective direct or indirect subsidiaries to secure any Second
Lien Obligations or under which rights or remedies with respect to any such Lien
are governed, but excluding any security documents pursuant to which PERL or any
of its direct or indirect subsidiaries (other than Borrower, Holdings or their
respective direct or indirect subsidiaries) grant security interests.
"Second Priority Liens" shall mean all Liens on the Second Lien
Collateral to secure the Second Lien Obligations, whether created under the
Second Lien Security Documents or acquired by possession, statute (including any
judgment lien), operation of law, subrogation or otherwise.
"Security Documents" shall mean the First Lien Security Documents and
the Second Lien Security Documents.
"Standstill Period" shall have the meaning assigned to such term in
Section 3.03(a).
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, limited liability company,
association or other business entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or more than 50% of the general partnership interests are,
at the time any determination is being made, directly or indirectly, owned,
Controlled or held or (b) that is, at the time any determination is made,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
9
"Subsidiary" shall mean any subsidiary of the Borrower.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code (or any similar or equivalent legislation) as in effect from time to time
in any applicable jurisdiction.
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall"; and
the words "asset" and "property" shall be construed as having the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless the context
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any definition
of or reference to any statute, regulation or other law herein shall be
construed (i) as referring to such statute, regulation or other law as from time
to time amended, supplemented or otherwise modified (including by succession of
comparable successor statutes, regulations or other laws) and (ii) to include
all official rulings and interpretations thereunder, (c) any reference herein to
any person shall be construed to include such person's successors and assigns
and (d) the words "herein", "hereof' and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof.
ARTICLE II
Lien Priorities
SECTION 2.01. Relative Priorities.
(a) Notwithstanding the date, manner or order of grant,
attachment or perfection of any Second Priority Lien or any First Priority Lien,
and notwithstanding any provision of the UCC or any other applicable law or the
provisions of any Security Document or any other Loan Document or any other
circumstance whatsoever, the Second Lien Collateral Agent, for itself and on
behalf of the other Second Lien Secured Parties, hereby agrees that, so long as
the Discharge of First Lien Obligations has not occurred, (i) any First Priority
Lien now or hereafter held by or for the benefit of any First Lien Secured Party
shall be senior in right, priority, operation, effect and all other respects to
any and all Second Priority Liens and (ii) any Second Priority Lien now or
hereafter held by or for the benefit of any Second Lien Secured Party shall be
junior and subordinate in right, priority, operation, effect and all other
respects to any and all First Priority Liens.
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(b) Notwithstanding the foregoing clause (a) or anything else in
this Agreement to the contrary, to the extent that the First Lien Secured
Parties make any extensions of credit to the Borrower pursuant to the First Lien
Loan Documents that at the time of such extensions of credit constitute any
Excess First Lien Loan Amount, then the amount of such Excess First Lien Loan
Amount shall not be considered First Lien Obligations for the purposes of the
Lien priorities set forth in clause (a) above. To the extent provided under the
applicable Documents, all such extensions of credit shall continue to be secured
by the Collateral; provided, that the Liens upon any of the Collateral securing
the Excess First Lien Loan Amount shall be junior and subordinate to the Liens
securing the Second Lien Obligations.
SECTION 2.02. Prohibition on Contesting Liens. Each of the First Lien
Collateral Agent, for itself and on behalf of the other First Lien Secured
Parties, and the Second Lien Collateral Agent, for itself and on behalf of the
other Second Lien Secured Parties, agrees that it will not, and hereby waives
any right to, (a) contest or support any other person in contesting, in any
proceeding (including any Insolvency or Liquidation Proceeding), the priority,
validity or enforceability of any Second Priority Lien or any First Priority
Lien, as the case may be or (b) subject to the provisions of Section 6.04
hereof, assert that in any Insolvency or Liquidation Proceeding that the First
Lien Secured Parties or the Second Lien Secured Parties are not fully secured or
that the First Lien Secured Parties or the Second Lien Secured Parties are not
entitled to the payment of any post-petition interests, costs or expenses;
provided that nothing in this Agreement shall be construed to prevent or impair
the rights of the First Lien Collateral Agent or any other First Lien Secured
Party to enforce this Agreement.
SECTION 2.03. No New Liens or Alteration of Priority.
(a) The parties hereto agree that, so long as the Discharge of
First Lien Obligations has not occurred, none of the Grantors shall, or shall
permit any of its subsidiaries to, (i) grant or permit any additional Liens on
any asset to secure any Second Lien Obligation unless it has granted, or
concurrently therewith grants, a Lien on such asset to secure the First Lien
Obligations or (ii) grant or permit any additional Liens on any asset to secure
any First Lien Obligations unless it has granted, or concurrently therewith
grants, a Lien on such asset to secure the Second Lien Obligations, with each
such Lien to be subject to the provisions of this Agreement. To the extent that
the provisions of the immediately preceding sentence are not complied with for
any reason, without limiting any other right or remedy available to the First
Lien Collateral Agent or the other First Lien Secured Parties, the Second Lien
Collateral Agent agrees, for itself and on behalf of the other Second Lien
Secured Parties, that any amounts received by or distributed to any Second Lien
Secured Party pursuant to or as a result of any Lien granted in contravention of
this Section shall be subject to Section 4.02.
(b) Except as set permitted by Section 3.02 of this Agreement,
the First Lien Agent agrees not to enter into any agreement with another
creditor of Borrower or any other Obligor to (i) subordinate the Liens of the
First Lien Secured Parties in all or substantially all Collateral under the
First Lien Loan Documents to the Liens securing Indebtedness (for this paragraph
as defined in the First Lien Credit Agreement) of such other creditor in the
Collateral, or (ii) subordinate the right of the First Lien Secured Parties to
the payment of the First Lien
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Obligations to the payment of the indebtedness or claim of any other creditor of
Borrower, in each case without the prior written consent of the Second Lien
Collateral Agent or the Second Lien Required Lenders.
SECTION 2.04. Similar Liens and Agreements. The parties hereto
acknowledge and agree that, other than with respect to the liens granted to the
Second Lien Lenders pursuant to the Second Lien Pledge and Security Agreement,
it is their intention that the First Lien Collateral and the Second Lien
Collateral be identical. In furtherance of the foregoing, the parties hereto
agree:
(a) to cooperate in good faith (and to direct their counsel to
cooperate in good faith) in order to determine, upon any reasonable request by
the First Lien Collateral Agent or the Second Lien Collateral Agent, the
specific assets included in the First Lien Collateral and the Second Lien
Collateral, the steps taken to perfect the First Priority Liens and the Second
Priority Liens thereon and the identity of the parties obligated under the First
Lien Loan Documents and the Second Lien Loan Documents; and
(b) that the documents, agreements and instruments creating or
evidencing the Second Lien Collateral and the Second Priority Liens shall be in
all material respects in the same form as the documents, agreements and
instruments creating or evidencing the First Lien Collateral and the First
Priority Liens, other than with respect to the first priority and second
priority nature of the Liens created or evidenced thereunder, the identity of
the secured parties that are parties thereto or secured thereby and other
matters contemplated by this Agreement.
ARTICLE III
Enforcement of Rights; Matters Relating to Collateral
SECTION 3.01. Exercise of Rights and Remedies, (a) So long as the
Discharge of First Lien Obligations has not occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced, the First Lien Agent
and the other First Lien Secured Parties shall have the exclusive right to take
Enforcement Actions Against Collateral without any consultation with or the
consent of the Second Lien Agent or any other Second Lien Secured Party;
provided that, notwithstanding the foregoing, (i) in any Insolvency or
Liquidation Proceeding, the Second Lien Collateral Agent may file a proof of
claim or statement of interest with respect to the Second Lien Obligations, (ii)
the Second Lien Collateral Agent may take any action to create, perfect,
preserve or protect the validity and enforceability of the Second Priority
Liens; provided that no such action is, or could reasonably be expected to be,
(A) adverse to the First Priority Liens or the rights of the First Lien
Collateral Agent or any other First Lien Secured Party to exercise remedies in
respect thereof or (B) otherwise inconsistent with the terms of this Agreement,
including the automatic release of Second Priority Liens provided in Section
3.05, (iii) the Second Lien Secured Parties may file any responsive or defensive
pleadings in opposition to any motion, claim, adversary proceeding or other
pleading made by any person objecting to or otherwise seeking the disallowance
of the claims of the Second Lien Secured
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Parties, including any claims secured by the Collateral or otherwise make any
agreements or file any motions pertaining to the Second Lien Obligations, in
each case, to the extent not inconsistent with the terms of this Agreement, (iv)
the Second Lien Secured Parties may exercise rights and remedies as unsecured
creditors, as provided in Section 3.04, (v) the Second Lien Secured Parties may
vote on any plan of reorganization, make other filings, and make any arguments
and motions that are, in each case, in accordance with the terms of this
Agreement with respect to the Second Priority Liens, (vi) the Second Lien
Secured Parties may bid for (including, but not limited to a credit bid) or
purchase Collateral at any private or judicial foreclosure sale or sale upon
such Collateral, in each instance, initiated by the First Lien Secured Parties,
(vii) the Second Lien Secured Parties may hold a Lien on the Collateral pursuant
to the Second Lien Collateral Documents for the period and to the extent granted
therein and (viii) subject to Section 3.03(a), the Second Lien Collateral Agent
and the other Second Lien Secured Parties may enforce any of their rights and
exercise any of their remedies with respect to the Collateral after the
termination of the Standstill Period (the actions described in this proviso
being referred to herein as the "Second Lien Permitted Actions"). Except for the
Second Lien Permitted Actions, unless and until the Discharge of First Lien
Obligations has occurred, the sole right of the Second Lien Collateral Agent and
the other Second Lien Secured Parties with respect to the Collateral shall be to
receive proceeds of the Collateral, if any, after the Discharge of First Lien
Obligations has occurred and in accordance with the Second Lien Loan Documents
and applicable law.
(b) In exercising rights and remedies with respect to the
Collateral, the First Lien Collateral Agent and the other First Lien Secured
Parties may enforce the provisions of the First Lien Loan Documents and exercise
remedies thereunder, all in such order and in such manner as they may determine
in their sole discretion and in accordance with the First Lien Loan Documents
and applicable law. Such exercise and enforcement shall include the rights of an
agent appointed by them to Dispose of Collateral upon foreclosure, to incur
expenses in connection with any such Disposition and to exercise all the rights
and remedies of a secured creditor under the Uniform Commercial Code, the
Bankruptcy Code or any other Bankruptcy Law. The First Lien Collateral Agent
agrees to provide at least five days' prior written notice to the Second Lien
Collateral Agent of its intention to foreclose upon or Dispose of any
Collateral.
(c) Notices of Default. Each First Lien Secured Party or Second
Lien Secured Party shall give to the other First Lien Secured Party or Second
Lien Secured Party (or the agent therefor) concurrently with the giving thereof
to the Borrower (i) a copy of any written notice by such First Lien Secured
Party or Second Lien Secured Party of an Event of Default under the First Lien
Loan Documents or Second Lien Loan Documents or a written notice of demand for
payment from the Borrower, and (ii) a copy of any written notice sent by such
First Lien Secured Party or Second Lien Secured Party to the Borrower stating
such First Lien Secured Party's or Second Lien Secured Party's intention to
exercise any Enforcement Action rights or remedies against the Borrower,
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 except for notices required to be provided by a First Lien Secured Party or
Second Lien Secured Party to another First Lien Secured Party or Second Lien
Secured Party under any other section of this
13
Agreement the failure of any First Lien Secured Party or Second Lien Secured
Party to give such required notice shall not result in any liability to such
First Lien Secured Party or Second Lien Secured Party or affect the
enforceability of any provision of this Agreement, including the relative
priorities of the Liens of the First Lien Secured Party or Second Lien Secured
Party as provided herein, and shall not affect the validity or effectiveness of
any such notice as against the Borrower. Each of First Lien Collateral Agent and
Second Lien Collateral Agent will provide such information as it may have to the
other as the other may from time to time reasonably request concerning the
status of the exercise of any Enforcement Action and First Lien Collateral Agent
and Second Lien Collateral Agent shall be available on a reasonable basis during
normal business hours to review with each other 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 (except to the extent the notifying party reasonably believes that a
conflict of interest may result or a confidentiality provision may be violated),
provided, that, the failure of any party to do any of the foregoing shall not
affect the relative priorities of First Lien Collateral Agent's or Second Lien
Collateral Agent's respective Liens as provided herein or the validity or
effectiveness of any notices or demands as against Borrower. The Borrower hereby
consents and agrees to each First Lien Secured Party or Second Lien Secured
Party providing any such information to the other First Lien Secured Parties or
Second Lien Secured Parties and to such actions by the First Lien Secured
Parties or Second Lien Secured Parties and waive any rights or claims against
any First Lien Secured Parties or Second Lien Secured Parties arising as a
result of such information or actions.
SECTION 3.02. Second Lien Secured Parties' Purchase Option.
(a) Purchase Notice. Upon the occurrence of any of the following,
the First Lien Collateral Agent shall provide notice to the Second Lien
Collateral Agent (the "Agent's Notice") that (i) First Lien Collateral Agent or
any First Lien Lender has been contacted by the Borrower regarding (a) the
insolvency of the Borrower including, but not limited to a bankruptcy filing,
(b) the restructuring of the Borrower's debt obligations, (c) providing
additional financing to the Borrower including, but not limited to,
debtor-in-possession financing, (ii) First Lien Collateral Agent takes or
intends to take any Enforcement Action, (iii) a Non-Funding Event shall have
occurred and remain continuing or (iv) an Insolvency or Liquidation Proceeding
with respect to the Borrower has been commenced (each of (i) through (iv) above,
a "Purchase Trigger"), the Second Lien Secured Parties (along with other
potential lenders) shall have the option to purchase from the First Lien Secured
Parties all of the First Lien Obligations owing to the First Lien Secured
Parties by the Second Lien Collateral Agent giving a written notice (the
"Purchase Notice") to the First Lien Collateral Agent no later than fifteen (15)
Business Days after receipt by the Second Lien Collateral Agent of the Agent's
Notice. The Purchase Notice from the Second Lien Collateral Agent to the First
Lien Collateral Agent shall be irrevocable.
(b) Purchase Option Closing. On the date specified by the Second
Lien Agent in the Purchase Notice (which shall not be less than six (6) Business
Days nor more than thirty (30) days, after the receipt by the First Lien Agent
of the Purchase Notice) (the "Purchase Date"), the First Lien Secured Parties
shall sell to the applicable Second Lien Secured Parties
14
and any additional lenders (designated by the Second Lien Agent), and the
applicable Second Lien Secured Parties and any additional lenders designated by
the Second Lien Agent shall purchase from the First Lien Secured Parties, the
First Lien Obligations owing to the First Lien Secured Parties, and (subject to
the last sentence of Section 3.02(e)) during such period, the First Lien Secured
Parties shall not take any Enforcement Action without the consent of the Second
Lien Agent (other than acceleration of any or all of the First Lien Obligations
and exercise of control over Borrower's depository accounts).
(c) Purchase Price. Such purchase and sale shall be made on the
Purchase Date by execution and delivery by the applicable First Lien Secured
Parties and/or Second Lien Secured Parties of an Assignment Agreement in the
form attached to the First Lien Credit Agreement. Upon the Purchase Date, the
applicable Second Lien Secured Parties and any additional lenders approved by
the Second Lien Agent shall (i) pay to the First Lien Agent for the benefit of
the First Lien Secured Parties as the purchase price therefor the sum of (a) the
full amount of all the First Lien Obligations then outstanding and unpaid
(including principal, interest, fees and expenses, including reasonable
attorneys' fees and legal expenses and, with respect to Hedging Agreements that
constitute First Lien Obligations, 100% of the aggregate amount of such First
Lien Obligations (calculated in accordance with the terms of such Hedging
Agreements and giving effect to any netting arrangements) that the applicable
Loan Party would be required to pay if such Hedging Agreements were terminated
at such time) plus (b) any early termination fee, prepayment fee or other
similar fee payable pursuant to the First Lien Credit Agreement (calculated as
if such assigned First Lien Obligations were repaid in full by the Borrowers at
such time, it being understood that no processing fee will be changed in
connection with such assignment) and (ii) provide for letters of credit to back
up all outstanding letters of credit issued under the First Lien Loan Documents
and then outstanding in an amount equal to 101% of the undrawn amount of such
then outstanding letters of credit or provide cash collateral to secure the
reimbursement obligations with respect to such letters of credit in such amount.
Such purchase price and cash collateral shall be remitted by wire transfer of
immediately available funds to such bank account of the First Lien Agent as the
First Lien Agent may designate in writing to the applicable Second Lien Secured
Parties 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 Secured Parties to the bank account designated by the First
Lien Agent 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 applicable Second Lien Secured Parties and any additional
lenders approved by the Second Lien Agent to the bank account designated by the
First Lien Agent are received in such bank account later than 1:00 p.m., New
York City time.
(d) Nature of Sale. Such purchase and sale shall be expressly made
without representation or warranty of any kind by the First Lien Secured Parties
as to the First Lien Obligations or otherwise and without recourse to the First
Lien Secured Parties, except for several (not joint) representations and
warranties as to the following: (i) 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), (ii) that
the First Lien Secured Parties own the First Lien Obligations free and clear of
any Liens, and (iii) each First
15
Lien Lender 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 Lender.
(e) Notice of Proposed Action. The First Lien Agent agrees that
it will use its best efforts to give the Second Lien Secured Parties written
notice of a Purchase Trigger prior to taking any action contemplated by a
Purchase Trigger. As soon as practicable after receipt of the Agent's Notice,
but in no event more than fifteen (15) Business Days after Second Lien Agent's
receipt of the Agent's Notice, the Second Lien Agent (if one or more of the
Second Lien Secured Parties elect to purchase the First Lien Obligations) shall
send to the First Lien Agent the Purchase Notice. The First Lien Secured Parties
shall not take any Purchase Trigger actions without the consent of the Second
Lien Secured Parties electing to purchase the First Lien Obligations, as long as
the purchase and sale of the First Lien Obligations provided for in this Section
3.02 shall have closed within thirty (30) Business Days of Second Lien Agent's
receipt of the Agent's Notice and the First Lien Secured Parties shall have
received payment in full of the First Lien Obligations as provided for in
Section 3.02(c) within such thirty (30) Business Day period. The First Lien
Agent shall not be required to provide Agent's Notice if in the good faith
determination of the First Lien Agent (i) a fraud has been committed by Borrower
in connection with its obligations under the First Lien Loan Documents,
including any withholding of collections of accounts receivable or other
proceeds of Collateral in violation of the terms of the First Lien Loan
Documents or (ii) delay in taking any such Purchase Trigger Actions would have a
reasonable likelihood as determined by First Lien Agent of (A) causing a
material diminution in the value of the Collateral, or (B) endangering the First
Lien Secured Parties' ability to realize upon the Collateral, provided that in
no event shall First Lien Agent or any First Lien Lender enter into or commit to
enter into any new financing (including debtor-in-possession financing) without
having previously sent the Agent's Notice.
SECTION 3.03. No Interference. The Second Lien Collateral Agent, for
itself and on behalf of the other Second Lien Secured Parties, agrees that,
whether or not any Insolvency or Liquidation Proceeding has been commenced, the
Second Lien Secured Parties:
(a) except for Second Lien Permitted Actions, will not, so long
as the Discharge of First Lien Obligations has not occurred, (i) enforce or
exercise, or seek to enforce or exercise, any rights or remedies (including any
right of setoff) with respect to any Collateral (including the enforcement of
any right under any account control agreement, landlord waiver or bailee's
letter or any similar agreement or arrangement to which the Second Lien
Collateral Agent or any other Second Lien Secured Party is a party) or (ii)
commence or join with any person (other than the First Lien Collateral Agent) in
commencing, or petition for or vote in favor of any resolution for, any action
or proceeding with respect to such rights or remedies (including any foreclosure
action) regarding any collateral; provided, however, that the Second Lien
Collateral Agent may enforce or exercise any or all such rights and remedies, or
commence, join with any person in commencing, or petition for or vote in favor
of any resolution for, any such action or proceeding, after a period of 60 days
has elapsed since the date on which the Second Lien Collateral Agent has
delivered to the First Lien Collateral Agent written notice of an Event of
Default (as defined in the Second Lien Credit Agreement) under the Second Lien
Credit Agreement (the "Standstill Period") (with respect to any Enforcement
Action after the
16
expiration of the Standstill Period, the First Lien Collateral Agent shall
deliver any notices (including, without limitation, notices to appropriate
parties, that the First Lien Collateral Agent has ceased to be the "Controlling
Party" and notices of termination pursuant to control agreements) and take any
other actions reasonably requested by the Second Lien Collateral Agent to
terminate First Lien Agent's "control" status with respect to Collateral and the
First Lien Agent, for itself and on behalf of each First Lien Secured Party,
hereby appoints the Second Lien Agent, and any officer or agent of the Second
Lien Collateral Agent, with full power of substitution, the attorney-in-fact of
each First Lien Secured Party for the limited purpose of carrying out any
Enforcement Action after the Standstill Period, which appointment is irrevocable
and coupled with an interest); provided further, however, that (i)
notwithstanding the expiration of the Standstill Period or anything herein to
the contrary, in no event shall the Second Lien Collateral Agent or any other
Second Lien Secured Party enforce or exercise any rights or remedies with
respect to any Collateral, or commence, join with any person in commencing, or
petition for or vote in favor of any resolution for, any such action or
proceeding, if the First Lien Collateral Agent or any other First Lien Secured
Party shall have commenced, and shall be diligently and in good faith pursuing
(or shall have sought or requested relief from or modification of the automatic
stay or any other stay in any Insolvency or Liquidation Proceeding to enable the
commencement and pursuit thereof), the enforcement or exercise of any rights or
remedies with respect to any material portion of the Collateral or any such
action or proceeding (prompt written notice thereof to be given to the Second
Lien Collateral Agent by the First Lien Collateral Agent) and (ii) after the
expiration of the Standstill Period, so long as neither the First Lien
Collateral Agent nor the other First Lien Secured Parties have commenced any
action to enforce their Lien on any material portion of the Collateral, in the
event that and for so long as the Second Lien Secured Parties (or the Second
Lien Collateral Agent on their behalf) have commenced any actions to enforce
their Lien with respect to any material portion of the Collateral to the extent
permitted hereunder and are diligently and in good faith pursuing such actions,
neither the First Lien Secured Parties nor the First Lien Collateral Agent shall
take any action of a similar nature with respect to such Collateral; provided
that all other provisions of this Intercreditor Agreement (including the
turnover provisions of Article IV) are complied with;
(b) subject to the rights of the Second Lien Secured Parties
under clause (a) above, will not contest, protest or object to any foreclosure
action or proceeding brought by the First Lien Collateral Agent or any other
First Lien Secured Party, or any other enforcement or exercise by any First Lien
Secured Party of any rights or remedies relating to the Collateral under the
First Lien Loan Documents or otherwise, so long as Second Priority Liens attach
to the proceeds thereof subject to the relative priorities set forth in Section
2.01;
(c) subject to the rights of the Second Lien Secured Parties
under clause (a) above, will not object to the forbearance by the First Lien
Collateral Agent or any other First Lien Secured Party from commencing or
pursuing any foreclosure action or proceeding or any other enforcement or
exercise of any rights or remedies with respect to the Collateral;
(d) will not, so long as the Discharge of First Lien Obligations
has not occurred and except for Second Lien Permitted Actions, take or receive
any Collateral, or any
17
proceeds thereof or payment with respect thereto, in connection with the
exercise of any right or enforcement of any remedy (including any right of
setoff) with respect to any Collateral or in connection with any insurance
policy award under a policy of insurance relating to any Collateral or any
condemnation award (or deed in lieu of condemnation) relating to any Collateral;
(e) will not, except for Second Lien Permitted Actions, take any
action that would, or could reasonably be expected to, hinder, in any manner,
any exercise of remedies under the First Lien Loan Documents, including any
Disposition of any Collateral, whether by foreclosure or otherwise; and
(f) will not, except for Second Lien Permitted Actions, object to
the manner in which the First Lien Agent or any other First Lien Secured Party
may seek to enforce or collect the First Lien Obligations or the First Priority
Liens, and will not assert, and hereby waives, to the fullest extent permitted
by law, any right to demand, request, plead or otherwise assert or claim the
benefit of any marshalling, appraisal, valuation or other similar right that may
be available under applicable law with respect to the Collateral or any similar
rights a junior secured creditor may have under applicable law.
SECTION 3.04. Rights as Unsecured Creditors. The Second Lien
Collateral Agent and the other Second Lien Secured Parties may, in accordance
with the terms of the Second Lien Loan Documents and applicable law, enforce
rights and exercise remedies against the Borrower and any Guarantor as unsecured
creditors; provided that no such action is otherwise inconsistent with the terms
of this Agreement. Nothing in this Agreement shall prohibit the receipt by the
Second Lien Collateral Agent or any other Second Lien Secured Party of the
required payments of principal, premium, interest, fees and other amounts due
under the Second Lien Loan Documents so long as such receipt is not the direct
or indirect result of the enforcement or exercise by the Second Lien Collateral
Agent or any other Second Lien Secured Party of rights or remedies as a secured
creditor (including any right of setoff) or enforcement of any Second Priority
Lien (including any judgment Lien resulting from the exercise of remedies
available to an unsecured creditor) in contravention of this Agreement.
SECTION 3.05. Automatic Release of Second Priority Liens. (a) If, in
connection with the enforcement or exercise of any rights or remedies with
respect to the Collateral, including any Disposition of Collateral, the First
Lien Collateral Agent, for itself and on behalf of the other First Lien Secured
Parties, (x) releases any of the First Priority Liens or (y) releases any
Guarantor from its obligations under its guarantee of the First Lien Obligations
(in each case, a "Release"), other than any such Release granted in connection
with the Discharge of First Lien Obligations, then, subject to paragraph (b)
below, the Second Priority Liens on such Collateral, and the obligations of such
Guarantor under its guarantee of the Second Lien Obligations, shall be
automatically, unconditionally and simultaneously released, and the Second Lien
Collateral Agent shall, for itself and on behalf of the other Second Lien
Secured Parties, promptly execute and deliver to the First Lien Collateral
Agent, the applicable Grantor or such Guarantor such termination statements,
releases and other documents as the First Lien Collateral Agent or the
applicable Grantor or Guarantor may reasonably request to effectively confirm
such Release; provided that, in the case of a Disposition of Collateral (other
than any such Disposition
18
in connection with the enforcement or exercise of any rights or remedies with
respect to the Collateral), the Second Priority Liens shall not be so released
if such Disposition is not permitted under the terms of the Second Lien Credit
Agreement.
(b) Except in the case of a Release in connection with a
Disposition of Collateral in connection with the enforcement or exercise of any
rights or remedies with respect to the collateral permitted hereunder or a
Disposition of Collateral permitted by both the First Lien Loan Documents and
the Second Lien Loan Documents, any Release shall require the consent of the
holders of First Lien Obligations and Second Lien Obligations representing in
the aggregate more than 50% (or such greater percentage as required by the First
Lien Loan Documents or the Second Lien Loan Documents) of the sum of (A) the
aggregate principal amount of First Lien Loans at such time plus (B) the
aggregate principal amount of Second Lien Loans at such time.
(c) Until the Discharge of First Lien Obligations occurs, the
Second Lien Collateral Agent, for itself and on behalf of each other Second Lien
Secured Party, hereby appoints the First Lien Collateral Agent, and any officer
or agent of the First Lien Collateral Agent, with full power of substitution, as
the attorney-in-fact of each Second Lien Secured Party for the purpose of
carrying out the provisions of this Section and taking any action and executing
any instrument that the First Lien Collateral Agent may deem necessary or
advisable to accomplish the purposes of this Section (including any endorsements
or other instruments of transfer or release), which appointment is irrevocable
and coupled with an interest; provided that the First Lien Collateral Agent
shall only exercise such rights upon the failure of the Second Lien Collateral
Agent to take any action when required to do so.
SECTION 3.06. Insurance and Condemnation Awards. So long as the
Discharge of First Lien Obligations has not occurred, the First Lien Collateral
Agent and the other First Lien Secured Parties shall have the exclusive right,
subject to the rights of the Grantors under the First Lien Loan Documents, to
settle and adjust claims in respect of Collateral under policies of insurance
covering Collateral and to approve any award granted in any condemnation or
similar proceeding, or any deed in lieu of condemnation, in respect of the
Collateral. All proceeds of any such policy and any such award, or any payments
with respect to a deed in lieu of condemnation, shall (a) first, prior to the
Discharge of First Lien Obligations and subject to the rights of the Grantors
under the First Lien Loan Documents, be paid in an amount equal to the Maximum
First Lien Principal Amount to the First Lien Collateral Agent for the benefit
of First Lien Secured Parties pursuant to the terms of the First Lien Loan
Documents, (b) second, after the Discharge of First Lien Obligations and subject
to the rights of the Grantors under the Second Lien Loan Documents, be paid to
the Second Lien Collateral Agent for the benefit of the Second Lien Secured
Parties pursuant to the terms of the Second Lien Loan Documents, (c) third,
after the Discharge of the Second Lien Obligations and subject to the rights of
the Grantors under the First Lien Loan Documents, be paid an amount equal to the
Excess First Lien Loan Amount to the First Lien Collateral Agent for the benefit
of the First Lien Secured Parties pursuant to the terms of the First Lien Loan
Documents, and (d) fourth, if no First Lien Obligations or Second Lien
Obligations are outstanding, be paid to the owner of the subject property, such
other person as may be entitled thereto or as a court of competent
19
jurisdiction may otherwise direct. Until the Discharge of First Lien Obligations
has occurred, if the Second Lien Collateral Agent or any other Second Lien
Secured Party shall, at any time, receive any proceeds of any such insurance
policy or any such award or payment, it shall transfer and pay over such
proceeds to the First Lien Collateral Agent in accordance with Section 4.02.
ARTICLE IV
Payments
SECTION 4.01. Application of Proceeds. So long as the Discharge of
First Lien Obligations has not occurred, any Collateral or net proceeds thereof
received by the First Lien Collateral Agent in connection with any Disposition
of, or collection on, such Collateral upon the enforcement or exercise of any
right or remedy (including any right of setoff) shall be applied by the First
Lien Collateral Agent to the First Lien Obligations. Upon the Discharge of First
Lien Obligations, the First Lien Collateral Agent shall deliver to the Second
Lien Collateral Agent any remaining Collateral and any net proceeds thereof then
held by it in the same form as received, together with any necessary
endorsements, or as a court of competent jurisdiction may otherwise direct, to
be applied by the Second Lien Collateral Agent to the Second Lien Obligations.
SECTION 4.02. Payment Over. So long as the Discharge of First Lien
Obligations has not occurred, any Collateral, or any net proceeds thereof or
payment with respect thereto (together with assets or proceeds subject to Liens
referred to in the final sentence of Section 2.03), received by the Second Lien
Collateral Agent or any other Second Lien Secured Party in connection with any
Disposition of, or collection on, such Collateral upon the enforcement or the
exercise of any right or remedy (including any right of setoff) with respect to
the Collateral, or in connection with any insurance policy claim or any
condemnation award (or deed in lieu of condemnation), shall be segregated and
held in trust and forthwith transferred or paid over to the First Lien
Collateral Agent for the benefit of the First Lien Secured Parties in the same
form as received, together with any necessary endorsements, or as a court of
competent jurisdiction may otherwise direct. Until the Discharge of First Lien
Obligations occurs, the Second Lien Collateral Agent, for itself and on behalf
of each other Second Lien Secured Party, hereby appoints the First Lien
Collateral Agent, and any officer or agent of the First Lien Collateral Agent,
with full power of substitution, the attorney-in-fact of each Second Lien
Secured Party for the limited purpose of carrying out the provisions of this
Section and taking any action and executing any instrument that the First Lien
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Section, which appointment is irrevocable and coupled with an interest.
Notwithstanding anything in this Agreement or any other agreement, including the
First Lien Loan Documents, to the contrary, any prepayment of the Second Lien
Obligations made pursuant to the provisions of the PERL First Lien Loan
Documents is permitted and shall reduce the Second Lien Obligations.
SECTION 4.03. Certain Agreements with Respect to Unenforceable Liens.
Notwithstanding anything to the contrary contained herein, if in any Insolvency
or Liquidation Proceeding a determination is made that any Lien encumbering any
Collateral is not enforceable for any reason, then the Second Lien Collateral
Agent and the other Second Lien Secured
20
Parties agree that any distribution or recovery they may receive with respect
to, or allocable to, the value of the assets intended to constitute such
Collateral or any proceeds thereof shall (for so long as the Discharge of First
Lien Obligations has not occurred) be segregated and held in trust and forthwith
paid over to the First Lien Collateral Agent for the benefit of the First Lien
Secured Parties in the same form as received without recourse, representation or
warranty (other than a representation of the Second Lien Collateral Agent that
it has not otherwise sold, assigned, transferred or pledged any right, title or
interest in and to such distribution or recovery) but with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct until
such time as the Discharge of First Lien Obligations has occurred. Until the
Discharge of First Lien Obligations occurs, the Second Lien Collateral Agent,
for itself and on behalf of each other Second Lien Secured Party, hereby
appoints the First Lien Collateral Agent, and any officer or agent of the First
Lien Collateral Agent, with full power of substitution, the attorney-in-fact of
each Second Lien Secured Party for the limited purpose of carrying out the
provisions of this Section and taking any action and executing any instrument
that the First Lien Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Section, which appointment is irrevocable and
coupled with an interest.
ARTICLE V
Bailment for Perfection of Certain Security Interests
(a) The First Lien Collateral Agent agrees that if it shall at
any time hold a First Priority Lien on any Collateral that can be perfected by
the possession or control of such Collateral or of any account in which such
Collateral is held, and if such Collateral or any such account is in fact in the
possession or under the control of the First Lien Collateral Agent, or of agents
or bailees of the First Lien Collateral Agent (such Collateral being referred to
herein as the "Pledged or Controlled Collateral"), the First Lien Collateral
Agent shall, solely for the purpose of perfecting the Second Priority Liens
granted under the Second Lien Loan Documents and subject to the terms and
conditions of this Article V, also hold such Pledged or Controlled Collateral as
gratuitous bailee for the Second Lien Collateral Agent.
(b) For purposes of this Article, so long as the Discharge of
First Lien Obligations has not occurred, the First Lien Collateral Agent shall
be entitled to deal with the Pledged or Controlled Collateral in accordance with
the terms of this Agreement and the other First Lien Loan Documents as if the
Second Priority Liens did not exist. The obligations and responsibilities of the
First Lien Collateral Agent to the Second Lien Collateral Agent and the other
Second Lien Secured Parties under this Article V shall be limited solely to
holding or controlling the Pledged or Controlled Collateral as gratuitous bailee
in accordance with this Article V. Without limiting the foregoing, the First
Lien Collateral Agent shall have no obligation or responsibility to ensure that
any Pledged or Controlled Collateral is genuine or owned by any of the Grantors.
The First Lien Collateral Agent acting pursuant to this Article V shall not, by
reason of this Agreement, any other Security Document or any other document,
have a fiduciary relationship in respect of any other First Lien Secured Party,
the Second Lien Collateral Agent or any other Second Lien Secured Party.
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(c) Upon the Discharge of First Lien Obligations, the First Lien
Collateral Agent shall transfer the possession and control of the Pledged or
Controlled Collateral, together with any necessary endorsements but without
recourse or warranty, (i) if the Second Lien Obligations are outstanding at such
time, to the Second Lien Collateral Agent and (ii) if no Second Lien Obligations
are outstanding at such time, to the applicable Grantor, in each case so as to
allow such person to obtain possession and control of such Pledged or Controlled
Collateral. In connection with any transfer under clause (i) of the immediately
preceding sentence, the First Lien Collateral Agent shall deliver any notices
(including, without limitation, notices to appropriate parties, that the First
Lien Collateral Agent has ceased to be the "Controlling Party" and notices of
termination pursuant to control agreements) and take all actions in its power as
shall be reasonably requested by the Second Lien Collateral Agent to permit the
Second Lien Collateral Agent to obtain, for the benefit of the Second Lien
Secured Parties, a first priority security interest in the Pledged or Controlled
Collateral or as directed by a court of competent jurisdiction. Until the Second
Lien Collateral Agent obtains, for the benefit of the Second Lien Secured
Parties, a first priority secured interest in the Pledged or Controlled
Collateral pursuant to this section, the First Lien Collateral Agent, for itself
and on behalf of each other First Lien Secured Party, hereby appoints the Second
Lien Collateral Agent, and any officer or agent of the Second Lien Collateral
Agent, with full power of substitution, the attorney-in-fact of each First Lien
Secured Party for the limited purpose of carrying out the provisions of this
Section and taking any action and executing any instrument that the Second Lien
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Section, which appointment is irrevocable and coupled with an interest.
(d) In the event that any Second Lien Secured Party takes
possession of or has "control" (as such term is used in the Uniform Commercial
Code as in effect in each applicable jurisdiction) over any Collateral for
purposes of perfecting its Lien therein, such Second Lien Secured Party shall be
deemed to be holding such Collateral as representative for the Second Lien
Secured Parties solely for purposes of perfection of its Lien under the Uniform
Commercial Code; provided that such Second Lien Secured Party shall not have any
duty or liability to protect or preserve any rights pertaining to any of the
Collateral for the First Lien Secured Parties and, each First Lien Secured Party
hereby waives and releases the Second Lien Secured Parties from all claims and
liabilities arising pursuant to its role as such representative, except for
claims and liabilities arising from gross negligence or willful misconduct as
finally determined pursuant to a final order of a court of competent
jurisdiction.
(e) It is understood and agreed that this Section 5 is intended
solely to assure continuous perfection of the Liens granted under the applicable
Documents, and nothing in this Section 5 shall be deemed or construed as
altering the priorities or obligations set forth elsewhere in this Agreement.
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ARTICLE VI
Insolvency or Liquidation Proceedings
SECTION 6.01. Finance. (a) Until the Discharge of First Lien
Obligations has occurred, the Second Lien Collateral Agent, for itself and on
behalf of the other Second Lien Secured Parties, agrees that, in the event of
any Insolvency or Liquidation Proceeding, the Second Lien Secured Parties:
(i) will not oppose or object to the use of any Collateral
constituting "Cash Collateral" under Section 363 of the Bankruptcy Code, or
any comparable provision of any other Bankruptcy Law, unless the First Lien
Secured Parties, or a representative authorized by the First Lien Secured
Parties, shall oppose or object to such use of cash collateral;
(ii) will not oppose or object to any post-petition financing,
whether provided by any of the First Lien Secured Parties or any other
person, under Section 364 of the Bankruptcy Code, or any comparable
provision of any other Bankruptcy Law (a "DIP Financing"), or the Liens
securing any DIP Financing ("DIP Financing Liens"), unless the First Lien
Secured Parties, or a representative authorized by the First Lien Secured
Parties, shall then oppose or object to such DIP Financing or such DIP
Financing Liens, and, to the extent that such DIP Financing Liens are
senior to, or rank pari passu with, the First Priority Liens, the Second
Lien Collateral Agent will, for itself and on behalf of the other Second
Lien Secured Parties, subordinate the Second Priority Liens to the First
Priority Liens and the DIP Financing Liens on the terms of this Agreement;
provided that the foregoing shall not prevent the Second Lien Secured
Parties from proposing any other DIP Financing to any Grantors or to a
court of competent jurisdiction;
(iii) except to the extent permitted by paragraph (c) of this
Section 6.01, in connection with the use of cash collateral as described in
clause (i) above or a DIP Financing, will not request adequate protection
or any other relief in connection with such use of Cash Collateral, DIP
Financing or DIP Financing Liens; and
(iv) subject to Section 3.04, will not oppose or object to any
Disposition of any Collateral free and clear of the Second Priority Liens
or other claims under Section 363 of the Bankruptcy Code, or any comparable
provision of any other Bankruptcy Law, if the First Lien Secured Parties,
or a representative authorized by the First Lien Secured Parties, shall
consent to such Disposition, provided that (A) the Second Lien Secured
Parties shall be entitled to a second priority Lien with respect to the net
proceeds of such sale subject to the terms and conditions of this Agreement
and (B) all amounts received by the First Lien Secured Parties shall be
applied to permanently reduce the First Lien Obligations.
23
(b) To the extent that post-petition financing will be provided
by any of the First Lien Secured Parties, the First Lien Secured Parties shall
provide five (5) Business Days notice of such financing to the Second Lien
Secured Parties prior to the entry of any order (interim or final) approving
such financing.
(c) The Second Lien Collateral Agent, for itself and on behalf of
the other Second Lien Secured Parties, agrees that no Second Lien Secured Party
shall contest, or support any other person in contesting, (i) any request by the
First Lien Collateral Agent or any other First Lien Secured Party for adequate
protection or (ii) any objection, based on a claim of a lack of adequate
protection, by the First Lien Collateral Agent or any other First Lien Secured
Party to any motion, relief, action or proceeding. Notwithstanding the
immediately preceding sentence and Section 6.04 hereof, if, in connection with
any DIP Financing or use of cash collateral, (A) any First Lien Secured Party is
granted adequate protection in the form of a Lien on additional collateral, the
Second Lien Collateral Agent may, for itself and on behalf of the other Second
Lien Secured Parties, seek or request adequate protection in the form of a Lien
on such additional collateral, which Lien will be subordinated to the First
Priority Liens and DIP Financing Liens on the same basis as the other Second
Priority Liens are subordinated to the First Priority Liens under this Agreement
or (B) any Second Lien Secured Party is granted adequate protection in the form
of a Lien on additional collateral, the First Lien Collateral Agent, for itself
and on behalf of the other First Lien Secured Parties, and the secured parties
under any DIP Financing, shall be granted adequate protection in the form of a
Lien on such additional collateral that is senior to such Second Priority Lien
as security for the First Lien Obligations and for such DIP Financing.
(d) Notwithstanding the foregoing, the applicable provisions of
Section 6.01(a) and (b) shall only be binding on the Second Lien Secured Parties
with respect to any DIP Financing to the extent the sum of (i) the aggregate
principal amount of such DIP Financing plus (ii) the aggregate amount of the
pre-petition First Lien Obligations (to the extent they are not included in such
DIP Financing) does not exceed the sum of (A) the aggregate amount of the
pre-petition First Lien Obligations plus (B) $10,000,000.
(e) Notwithstanding anything to the contrary herein, the Second
Lien Secured Parties may object, on grounds other than lack of adequate
protection, to any term of any DIP Financing or cash collateral arrangement that
(i) compels Borrower 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 or cash collateral documentation or the order approving same, or
(ii) requires the liquidation of all or substantially all of the Collateral
prior to a default under the DIP Financing or cash collateral documentation or
the order approving same.
SECTION 6.02. Relief from the Automatic Stay. The Second Lien
Collateral Agent, for itself and on behalf of the other Second Lien Secured
Parties, agrees that, so long as the Discharge of First Lien Obligations has not
occurred, no Second Lien Secured Party shall, without the prior written consent
of the First Lien Collateral Agent, seek or request relief from or modification
of the automatic stay or any other stay in any Insolvency or
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Liquidation Proceeding in respect of any part of the Collateral, any proceeds
thereof or any Second Priority Lien.
SECTION 6.03. Reorganization Securities. If, in any Insolvency or
Liquidation 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, on account of
both the First Lien Obligations and the 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
assets or 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 6.04. Post-Petition Interest. (a) The Second Lien Collateral
Agent, for itself and on behalf of the other Second Lien Secured Parties, agrees
that no Second Lien Secured Party shall oppose or seek to challenge any claim by
the First Lien Collateral Agent or any other First Lien Secured Party for the
cash payment in any Insolvency or Liquidation Proceeding of First Lien
Obligations of post-petition interest, fees or expenses to the extent of the
value of the First Priority Liens (it being understood and agreed that such
value shall be determined without regard to the existence of the Second Priority
Liens on the Collateral).
(b) The First Lien Collateral Agent, for itself and on behalf of
the other First Lien Secured Parties, agrees that no First Lien Secured Party
shall oppose or seek to challenge any claim by the Second Lien Collateral Agent
or any other Second Lien Secured Party for the cash payment in any Insolvency or
Liquidation Proceeding of Second Lien Obligations of post-petition interest at
the contract rate (or the default rate to the same extent First Lien Secured
Parties are paid at such default rate), fees or expenses to the extent of the
value of the Second Priority Liens (it being understood and agreed that such
value shall be determined taking into account the First Priority Liens on the
Collateral).
SECTION 6.05. Certain Waivers by the Second Lien Secured Parties. The
Second Lien Collateral Agent, for itself and on behalf of the other Second Lien
Secured Parties, waives any claim any Second Lien Secured Party may hereafter
have against any First Lien Secured Party arising out of (a) the election by any
First Lien Secured Party of the application of Section 1111(b)(2) of the
Bankruptcy Code or any comparable provision of any other Bankruptcy Law or (b)
any use of cash collateral or financing arrangement, or any grant of a security
interest in the Collateral, in any Insolvency or Liquidation Proceeding.
SECTION 6.06. Certain Voting Matters. Each of the First Lien
Collateral Agent, on behalf of the First Lien Secured Parties, and the Second
Lien Collateral Agent, on behalf of the Second Lien Secured Parties, agrees
that, without the written consent of the other, it will not seek to vote with
the other as a single class in connection with any plan of reorganization in any
Insolvency or Liquidation Proceeding. Except as provided in this Section,
nothing in this Agreement is intended, or shall be construed, to limit the
ability of the Second Lien Collateral Agent or the Second Lien Secured Parties
to vote on any plan of reorganization.
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ARTICLE VII
Other Agreements
SECTION 7.01. Matters Relating to Loan Documents. (a) Unless a similar
amendment, supplement or modification to the applicable First Lien Loan
Documents has been, or is concurrently being, made, without the prior written
consent of the First Lien Agent, no Second Lien Loan Document may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Second Lien Loan Document,
if (i) the effect thereof would be to shorten the maturity of the Second Lien
Obligations or shorten the average life or increase the amount of any payment of
principal thereof or increase the interest rate or scheduled recurring fee or
add call or pre-payment premiums or shorten any period for payment of interest
thereon, (ii) such action requires the payment of a consent fee (howsoever
described) in excess of two percent (2%) per annum of the outstanding principal
amount of the Second Lien Obligations, (iii) such action adds additional Second
Lien Collateral to secure the Second Lien Obligations unless the Borrower
complies with Section 5.12 of the First Lien Credit Agreement or (iv) such
action adds any covenants or defaults without the First Lien Credit Agreement
being contemporaneously amended to add substantially similar covenants or
defaults, provided that the foregoing shall not prohibit the execution of
supplemental agreements to add guarantors if required by the terms thereof
provided that any such guarantor also guarantees the First Lien Obligations.
(b) The First Lien Loan Documents and any agreements relating to
Hedging Agreements constituting First Lien Obligations may be amended,
supplemented, waived or otherwise modified in accordance with their terms, and
the First Lien Credit Agreement may be Refinanced, in each case, without the
consent of the Second Lien Agent or the Second Lien Lenders; provided, however,
that any such amendment, supplement, waiver, modification or Refinancing shall
not (i) increase any applicable interest rate or scheduled recurring fees with
respect to the First Lien Obligations more than 200 basis points, except in
connection with the imposition of a default rate of interest in accordance with
the terms of the First Lien Loan Documents (as in effect on the date hereof);
(ii) require the payment of a consent fee (howsoever described) in excess of two
percent (2%) per annum of the outstanding principal amount of the First Lien
Obligations; (iii) modify the scheduled amortization of any portion of the
principal amount of the First Lien Obligations (as set forth in the First Lien
Loan Documents in effect on the date hereof); (iv) add or make more restrictive
any event of default or any covenant with respect to the First Lien Obligations
or make any change to any event of default or any covenant which would have the
effect of making such event of default or covenant more restrictive, unless a
corresponding amendment is offered to the Second Lien Lenders; (v) change any
redemption, put or prepayment provisions of the First Lien Obligations (other
than in respect of Hedging Agreements); (vi) directly prohibit or restrict the
payment of principal of, interest on, or other amounts payable with respect to
the Second Lien Obligations in a manner that is more restrictive than the
prohibitions and restrictions currently contained in the First Lien Credit
Agreement; (vii) subordinate in right of payment any of the First Lien
Obligations, or subordinate the Lien on any of the Collateral securing the First
Lien Obligations; (viii) change the definitions of "Borrowing Base", "Oil and
Gas Properties", or any of the component definitions thereof; (ix) add
additional Collateral to secure the First Lien Obligations unless the
26
Borrower complies with Section 5.12 of the Second Lien Loan Agreement; (x)
extend the final scheduled maturity of the First Lien Obligations (other than
Hedging Agreements) or any other scheduled payment date for principal, interest
or any other amount in respect thereof, (xi) amend Section 2.21 of the First
Lien Credit Agreement or (xii) increase the aggregate Commitments in excess of
the Maximum First Lien Principal Amount; provided that the foregoing shall not
prohibit the execution of supplemental agreements to add guarantors if required
by the terms thereof provided that any such guarantor also guarantees the Second
Lien Obligations.
(c) Each of the Borrower and the Second Lien Collateral Agent
agrees that the Second Lien Credit Agreement and each Second Lien Security
Document shall contain the applicable provisions set forth on Annex I hereto, or
similar provisions approved by the First Lien Agent, which approval shall not be
unreasonably withheld or delayed. Each of the Borrower and the Second Lien
Collateral Agent further agrees that each Second Lien Mortgage covering any
Collateral shall contain such other language as the First Lien Collateral Agent
may reasonably request to reflect the subordination of the Liens created by such
Second Lien Mortgage to the Liens created by the First Lien Security Document
covering such Collateral pursuant to this Agreement.
(d) In the event that the First Lien Collateral Agent or the
other First Lien Secured Parties and the applicable Grantor enter into any
amendment, modification, waiver or consent in respect of any of the First Lien
Security Documents (other than this Agreement), then such amendment,
modification, waiver or consent shall apply automatically to any comparable
provisions of the applicable Comparable Second Lien Security Document, in each
case, without the consent of any Second Lien Secured Party and without any
action by the Second Lien Collateral Agent, the Borrower or any other Grantor;
provided that (i) no such amendment, modification, waiver or consent shall (A)
remove assets subject to the Second Priority Liens or release any such Liens or
guarantees, except to the extent that such release is permitted or required by
Section 3.05 and provided that there is a concurrent release of the
corresponding First Priority Liens or guarantees, (B) amend, modify or otherwise
affect the rights or duties of the Second Lien Collateral Agent without its
prior written consent or (C) permit Liens on the Collateral (other than DIP
Financing Liens) which are not permitted under the terms of the Second Lien Loan
Documents and (ii) notice of such amendment, modification waiver or consent
shall have been given to the Second Lien Collateral Agent no later than the
tenth Business Day following the effective date of such amendment, modification,
waiver or consent.
SECTION 7.02. Effect of Refinancing of Indebtedness under First Lien
Loan Documents. If, substantially contemporaneously with the Discharge of First
Lien Obligations, the Borrower Refinances Indebtedness outstanding under the
First Lien Loan Documents and provided that (a) such Refinancing is permitted
hereby and (b) the Borrower gives to the Second Lien Collateral Agent written
notice (the "Refinancing Notice") electing the application of the provisions of
this Section 7.02 to such Refinancing Indebtedness, then (i) such Discharge of
First Lien Obligations shall automatically be deemed not to have occurred for
all purposes of this Agreement, (ii) such Refinancing Indebtedness and all other
obligations under the loan documents evidencing such Indebtedness (the "New
First Lien Obligations")
27
shall automatically be treated as First Lien Obligations for all purposes of
this Agreement, including for purposes of the Lien priorities and rights in
respect of Collateral set forth herein, (iii) the credit agreement and the other
loan documents evidencing such Refinancing Indebtedness (the "New First Lien
Loan Documents") shall automatically be treated as the First Lien Credit
Agreement and the First Lien Loan Documents and, in the case of New First Lien
Loan Documents that are security documents, as the First Lien Security Documents
for all purposes of this Agreement and (iv) the collateral agent under the New
First Lien Loan Documents (the "New First Lien Collateral Agent") shall be
deemed to be the First Lien Collateral Agent for all purposes of this Agreement.
Upon receipt of a Refinancing Notice, which notice shall include the identity of
the New First Lien Collateral Agent, the Second Lien Collateral Agent shall
promptly enter into such documents and agreements (including amendments or
supplements to this Agreement) as the Borrower or such New First Lien Collateral
Agent may reasonably request in order to provide to the New First Lien
Collateral Agent the rights and powers contemplated hereby, in each case
consistent in all material respects with the terms of this Agreement. The
Borrower shall cause the agreement, document or instrument pursuant to which the
New First Lien Collateral Agent is appointed to provide that the New First Lien
Collateral Agent agrees to be bound by the terms of this Agreement. In
furtherance of Section 2.03, if the New First Lien Obligations are secured by
assets of the Grantors that do not also secure the Second Lien Obligations, the
applicable Grantors shall promptly grant a Second Priority Lien on such assets
to secure the Second Lien Obligations.
SECTION 7.03. No Waiver by First Lien Secured Parties. Other than with
respect to the Second Lien Permitted Actions, nothing contained herein shall
prohibit or in any way limit the First Lien Collateral Agent or any other First
Lien Secured Party from opposing, challenging or objecting to, in any Insolvency
or Liquidation Proceeding or otherwise, any action taken, or any claim made, by
the Second Lien Collateral Agent or any other Second Lien Secured Party,
including any request by the Second Lien Collateral Agent or any other Second
Lien Secured Party for adequate protection or any exercise by the Second Lien
Collateral Agent or any other Second Lien Secured Party of any of its rights and
remedies under the Second Lien Loan Documents or otherwise.
SECTION 7.04. Reinstatement. If, in any Insolvency or Liquidation
Proceeding or otherwise, all or part of any payment with respect to the First
Lien Obligations previously made shall be rescinded for any reason whatsoever,
then the First Lien Obligations shall be reinstated to the extent of the amount
so rescinded and, if theretofore terminated, this Agreement shall be reinstated
in full force and effect 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 Secured Parties and the Second Lien
Secured Parties provided for herein.
SECTION 7.05. Further Assurances. Each of the First Lien Collateral
Agent, for itself and on behalf of the other First Lien Secured Parties, the
Second Lien Collateral Agent, for itself and on behalf of the other Second Lien
Secured Parties, and Holdings and the Borrower, for itself and on behalf of its
subsidiaries, agrees that it will execute, or will cause to be executed, any and
all further documents, agreements and instruments, and take all such further
actions, as may be required under any applicable law, or which the First
28
Lien Collateral Agent or the Second Lien Collateral Agent may reasonably
request, to effectuate the terms of this Agreement, including the relative Lien
priorities provided for herein.
ARTICLE VIII
Representations and Warranties
SECTION 8.01. Representations and Warranties of Each Party. Each party
hereto represents and warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to execute and deliver this Agreement and perform
its obligations hereunder.
(b) This Agreement has been duly executed and delivered by such
party and constitutes a legal, valid and binding obligation of such party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
(c) The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or filing
with or any other action by any governmental authority and (ii) will not violate
any provision of law, statute, rule or regulation, or of the certificate or
articles of incorporation or other constitutive documents or by-laws of such
party or any order of any governmental authority or any provision of any
indenture, agreement or other instrument binding upon such party.
SECTION 8.02. Representations and Warranties of Each Collateral Agent.
Each of the First Lien Collateral Agent and the Second Lien Collateral Agent
represents and warrants to the other parties hereto that it has been authorized
by the Lenders under and as defined in the First Lien Credit Agreement or the
Second Lien Credit Agreement, as the case may be, to enter into this Agreement.
ARTICLE IX
No Reliance; No Liability; Obligations Absolute
SECTION 9.01. No Reliance; Information. Each Collateral Agent, for
itself and on behalf of the applicable other Secured Parties, acknowledges that
(a) such Secured Parties have, independently and without reliance upon, in the
case of the First Lien Secured Parties, any Second Lien Secured Party and, in
the case of the Second Lien Secured Parties, any First Lien Secured Party, and
based on such documents and information as they have deemed appropriate, made
their own credit analysis and decision to enter into the Loan Documents to
29
which they are party and (b) such Secured Parties will, independently and
without reliance upon, in the case of the First Lien Secured Parties, any Second
Lien Secured Party and, in the case of the Second Lien Secured Parties, any
First Lien Secured Party, and based on such documents and information as they
shall from time to time deem appropriate, continue to make their own credit
decision in taking or not taking any action under this Agreement or any other
Loan Document to which they are party. The First Lien Secured Parties and the
Second Lien Secured Parties shall have no duty to disclose to any Second Lien
Secured Party or to any First Lien Secured Party, as the case may be, any
information relating to the Borrower, Holdings or any of the Subsidiaries, or
any other circumstance bearing upon the risk of nonpayment of any of the
Obligations, that is known or becomes known to any of them or any of their
Affiliates. In the event any First Lien Secured Party or any Second Lien Secured
Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to, as the case may be, any Second Lien Secured
Party or any First Lien Secured Party, it shall be under no obligation (i) to
make, and shall not make or be deemed to have made, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of the information so provided, (ii) to
provide any additional information or to provide any such information on any
subsequent occasion or (iii) to undertake any investigation.
SECTION 9.02. No Warranties or Liability. (a) The First Lien
Collateral Agent, for itself and on behalf of the other First Lien Secured
Parties, acknowledges and agrees that, except for the representations and
warranties set forth in Article VIII, neither the Second Lien Collateral Agent
nor any other Second Lien Secured Party has made any express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Second
Lien Loan Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon. Except as otherwise provided herein, the Second
Lien Secured Parties will be entitled to manage and supervise their loans and
extensions of credit. The Second Lien Collateral Agent, for itself and on behalf
of the other Second Lien Secured Parties, acknowledges and agrees that, except
for the representations and warranties set forth in Article VIII, neither the
First Lien Collateral Agent nor any other First Lien Secured Party has made any
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability of
any of the First Lien Loan Documents, the ownership of any Collateral or the
perfection or priority of any Liens thereon.
(b) The Second Lien Collateral Agent and the other Second Lien
Secured Parties shall have no express or implied duty to the First Lien Agent or
any other First Lien Secured Party, and the First Lien Collateral Agent and the
other First Lien Secured Parties shall have no express or implied duty to the
Second Lien Collateral Agent or any other Second Lien Secured Party, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of a default or an event of default under any First Lien Loan
Document and any Second Lien Loan Document (other than, in each case, this
Agreement), regardless of any knowledge thereof which they may have or be
charged with.
(c) The Second Lien Collateral Agent, for itself and on behalf of
the other Second Lien Secured Parties, agrees no First Lien Secured Party shall
have any liability to
30
the Second Lien Collateral Agent or any other Second Lien Secured Party, and
hereby waives any claim against any First Lien Secured Party, arising out of any
and all actions which the First Lien Agent or the other First Lien Secured
Parties may take or permit or omit to take with respect to (i) the First Lien
Loan Documents (other than this Agreement), (ii) the collection of the First
Lien Obligations or (iii) the maintenance of, the preservation of, the
foreclosure upon or the Disposition of any Collateral.
SECTION 9.03. Obligations Absolute. The Lien priorities provided for
herein and the rights, interests, agreements and obligations hereunder of the
First Lien Collateral Agent and the other First Lien Secured Parties and the
Second Lien Collateral Agent and the other Second Lien Secured Parties shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Loan Document;
(b) any change in the time, place or manner of payment of, or in
any other term of (including, subject to the limitations set forth in Section
7.01(a), the Refinancing of), all or any portion of the First Lien Obligations
or the Second Lien Obligations, it being specifically acknowledged that a
portion of the First Lien Obligations consists or may consist of Indebtedness
that is revolving in nature, and the amount thereof that may be outstanding at
any time or from time to time may be increased or reduced and subsequently
reborrowed;
(c) any release of any security interest or any amendment, waiver
or other modification, whether by course of conduct or otherwise, of any Loan
Document;
(d) the securing of any First Lien Obligations or Second Lien
Obligations with any additional collateral or Guarantees, or any exchange,
release, voiding, avoidance or non-perfection of any security interest in any
Collateral or any other collateral or any release of any Guarantee securing any
First Lien Obligations or Second Lien Obligations; or
(e) any other circumstances that otherwise might constitute a
defense available to, or a discharge of, Holdings, the Borrower or any other
Loan Party in respect of the First Lien Obligations or this Agreement, or any of
the Second Lien Secured Parties in respect of this Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:
31
(a) if to the Borrower or Holdings, to it at 000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxxxxxxx 00000, Attention of Xxxxxx Xxxxx,
President (Fax No. (000) 000-0000; e-mail xxxxxx@xxxxxxxxx.xxx), with a copy to
Xxxxx & Xxxxxx, LLP, 000 Xxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx
00000, Attention of Xxxxx X. X'Xxxx, Esq. (Fax No. (000) 000-0000; e-mail
xxxxxx@xxxxx.xxx); and
(b) if to the First Lien Collateral Agent or the Second Lien
Collateral Agent, to Silver Point Finance, LLC, Silver Point Finance, LLC
(Borrowings, Paydowns, Interest, Fees, Rate Settings) 0 Xxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention Xxx Xxxxxxx (Fax No. (000) 000-0000;
e-mail xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx); with a copy to Silver Point Finance, LLC
(Financials, Credit Agreements, Amendments, Waivers, Compliance) 0 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention Xxxxxxx Xxxxxxxxxx (Fax No. (203)
000-0000; e-mail creditadmin@silverpoint xxxxxxx.xxx); with a copy to Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000, Attention Xxxx X. Xxxxxxxx (Fax No. (000) 000-0000; e-mail
xxxxxxxx@xxxxxxx.xxx);
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 10.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 10.01. As agreed to between the Borrower, the First Lien Collateral
Agent and the Second Lien Collateral Agent from time to time, notices and other
communications may also be delivered by e-mail to the e-mail address of a
representative of the applicable person provided from time to time by such
person.
SECTION 10.02. Conflicts. In the event of any conflict or
inconsistency between the provisions of this Agreement and the provisions of the
other Loan Documents, the provisions of this Agreement shall control.
SECTION 10.03. Effectiveness; Survival. This Agreement shall become
effective when executed and delivered by the parties hereto. All covenants,
agreements, representations and warranties made by any party in this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement. The terms of this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding. The Second Lien Collateral Agent, for
itself and on behalf of the other Second Lien Secured Parties, hereby waives any
and all rights the Second Lien Secured Parties may now or hereafter have under
applicable law to revoke this Agreement or any of the provisions of this
Agreement.
SECTION 10.04. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
32
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10.05. Amendments; Waivers. (a) No failure or delay on the
part of any party hereto in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the parties
hereto are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by any party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 10.05, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the First Lien Collateral Agent and the Second Lien
Collateral Agent; provided that no such agreement shall amend, modify or
otherwise adversely affect the rights or obligations of any Grantor without such
person's prior written consent.
SECTION 10.06. Subrogation. The Second Lien Collateral Agent, for
itself and on behalf of the other Second Lien Secured Parties, hereby waives
any rights of subrogation it or they may acquire as a result of any payment
hereunder until the Discharge of First Lien Obligations has occurred; provided,
however, that, as between the Borrower and the other Grantors, on the one hand,
and the Second Lien Secured Parties, on the other hand, any such payment that
is paid over to the First Lien Collateral Agent pursuant to this Agreement
shall be deemed not to reduce any of the Second Lien Obligations unless and
until the Discharge of First Lien Obligations shall have occurred and the First
Lien Collateral Agent delivers any such payment to the Second Lien Collateral
Agent.
SECTION 10.07. Applicable Law; Jurisdiction; Consent to Service
of Process. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) Each party hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined only in such New York State court or, to
the extent permitted by law, in such Federal court. Each party hereto agrees
that a final judgment in any such action or
33
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State court or in any such Federal court. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.08. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.08.
SECTION 10.09. Parties in Interest. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and assigns, as well as the other First Lien Secured Parties and
Second Lien Secured Parties, all of whom are intended to be bound by, and to be
third party beneficiaries of, this Agreement. No other person shall have or be
entitled to assert rights or benefits hereunder. Each First Lien Secured Party
and Second Lien Secured Party agrees that any party that consummates a
refinancing, renewal or replacement of any Obligations permitted by the
Documents at such time may rely on and enforce this Agreement. Each First Lien
Secured Party and Second Lien Secured Party further agrees that it will, at the
request of any other First Lien Secured Party or Second Lien Secured Party,
enter into an agreement, in the form of this Agreement, mutatis mutandis, with
the party that consummates such permitted refinancing, renewal or replacement of
any Obligations; provided, that the failure of such other First Lien Secured
Party or Second Lien Secured Party to execute such an agreement shall not affect
such party's right to rely on and enforce the terms of this Agreement.
SECTION 10.10. Specific Performance. The First Lien Collateral Agent
and the Second Lien Collateral Agent may demand specific performance of this
Agreement and, on behalf of itself and the other Secured Parties, hereby
irrevocably waives any defense based on
34
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
Secured Parties.
SECTION 10.11. Headings. Article and Section headings used herein and
the Table of Contents hereto are for convenience of reference only, are not part
of this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
10.03. Delivery of an executed signature page to this Agreement by facsimile
transmission or other electronic imaging means shall be as effective as delivery
of a manually signed counterpart of this Agreement.
SECTION 10.13. 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 First Lien Secured Parties, on the one hand,
and the Second Lien Secured Parties, on the other hand. Nothing in this
Agreement shall apply to the Second Lien Agent or the Second Lien Secured
Parties in their capacity as holders of debt or equity under documentation not
subject to this Agreement. Except as expressly provided in this Agreement, none
of the Borrower, any other Grantor, any Guarantor or any other creditor thereof
shall have any rights or obligations hereunder and none of the Borrower, any
other Grantor or any Guarantor may rely on the terms hereof. Nothing in this
Agreement is intended to or shall impair the obligations of the Borrower or any
other Grantor or any Guarantor, 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.
35
IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
PACIFIC ENERGY ALASKA
OPERATING LLC,
by /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: President
PACIFIC ENERGY ALASKA HOLDINGS,
LLC
by /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: President
SILVER POINT FINANCE, LLC, as the
First Lien Collateral Agent,
by
-------------------------------------
Name:
Title:
by
-------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
PACIFIC ENERGY ALASKA OPERATING LLC,
by
-------------------------------------
Name:
Title:
PACIFIC ENERGY ALASKA HOLDINGS, LLC
by
-------------------------------------
Name:
Title:
SILVER POINT FINANCE, LLC, as the
First Lien Collateral Agent,
by /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
by
-------------------------------------
Name:
Title:
SILVER POINT FINANCE, LLC, as the
Second Lien Collateral Agent,
by /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name:
Title:
by
--------------------------------------
Name:
Title:
ANNEX I
Provision for the Second Lien Credit Agreement
"Reference is made to the Intercreditor Agreement. Each Lender hereunder (a)
acknowledges that it has received a copy of the Intercreditor Agreement, (b)
acknowledges and agrees to Silver Point acting as the Agent and the First Lien
Agent, (c) consents to the subordination of Liens provided for in the
Intercreditor Agreement, (c) agrees that it will be bound by and will take no
action contrary to the provisions of the Intercreditor Agreement and (d)
authorizes and instructs the Agent to enter into the Intercreditor Agreement as
collateral agent and on behalf of such Lender. The foregoing provisions are
intended as an inducement to the First Lien Secured Parties to permit the
incurrence of Indebtedness under this Agreement and to extend credit to the
Borrower and such First Lien Secured Parties are intended third party
beneficiaries of such provisions."
Provision for the Second Lien Security Documents
"Reference is made to the Intercreditor Agreement dated as of August 24, 2007
(as amended, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among the Borrower, Holdings, Silver Point, as the
First Lien Collateral Agent (as defined therein) and Silver Point, as the Second
Lien Collateral Agent (as defined therein). Notwithstanding anything herein to
the contrary, the lien and security interest granted to the Agent, for the
benefit of the Secured Parties, pursuant to this Agreement and the exercise of
any right or remedy by the Agent and the other Secured Parties hereunder are
subject to the provisions of the Intercreditor Agreement. In the event of any
conflict or inconsistency between the provisions of the Intercreditor Agreement
and this Agreement, the provisions of the Intercreditor Agreement shall
control."
