EXHIBIT 10.7
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COLLATERAL TRUST AGREEMENT
dated as of July 7, 2004
among
XXXXXX & XXXXX CORPORATION,
the other Pledgors from time to time party hereto,
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Administrative Agent under the Credit Agreement,
X. XXXX & COMPANY,
as Hedge Counterparty under the Hedge Agreement,
BNY MIDWEST TRUST COMPANY,
as Trustee under the Indenture
and
XXXXX FARGO BANK, N.A.,
as Collateral Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION............................................... 2
SECTION 1.1 Defined Terms................................................................. 2
SECTION 1.2 Rules of Interpretation....................................................... 14
ARTICLE 2. THE TRUST ESTATES..................................................................... 15
SECTION 2.1 Declaration of Senior Trust................................................... 15
SECTION 2.2 Declaration of Junior Trust................................................... 16
SECTION 2.3 Priority of Liens............................................................. 17
SECTION 2.4 Restrictions on Enforcement of Junior Priority Liens.......................... 17
SECTION 2.5 Waiver of Right of Marshalling................................................ 19
SECTION 2.6 Discretion in Enforcement of Priority Liens................................... 20
SECTION 2.7 Discretion in Enforcement of Priority Lien Obligations........................ 20
SECTION 2.8 Insolvency or Liquidation Proceedings......................................... 21
SECTION 2.9 Collateral Shared Equally and Ratably within Class............................ 22
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE.......................................... 22
SECTION 3.1 Undertaking of the Collateral Trustee......................................... 22
SECTION 3.2 Release or Subordination of Liens............................................. 23
SECTION 3.3 Enforcement of Liens.......................................................... 24
SECTION 3.4 Application of Proceeds....................................................... 24
SECTION 3.5 Appointment and Powers of the Collateral Trustee.............................. 26
SECTION 3.6 Documents and Communications.................................................. 26
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured Obligations.............. 26
SECTION 3.8 Additional Secured Debt....................................................... 27
ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE BORROWER AND THE OTHER PLEDGORS........................ 28
SECTION 4.1 Release of Liens on Collateral................................................ 28
SECTION 4.2 Delivery of Copies to Secured Debt Representatives............................ 30
SECTION 4.3 Collateral Trustee not Required to Serve, File or Record...................... 30
SECTION 4.4 Release of Liens in Respect of Notes.......................................... 31
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE.................................................. 31
SECTION 5.1 No Implied Duty............................................................... 31
SECTION 5.2 Appointment of Agents and Advisors............................................ 31
SECTION 5.3 Other Agreements.............................................................. 31
SECTION 5.4 Solicitation of Instructions.................................................. 32
SECTION 5.5 Limitation of Liability....................................................... 32
SECTION 5.6 Documents in Satisfactory Form................................................ 32
SECTION 5.7 Entitled to Rely.............................................................. 32
SECTION 5.8 Secured Debt Default.......................................................... 33
SECTION 5.9 Actions by Collateral Trustee................................................. 33
SECTION 5.10 Security or Indemnity in favor of the Collateral Trustee...................... 33
SECTION 5.11 Rights of the Collateral Trustee.............................................. 33
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SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral............ 34
SECTION 5.13 Assumption of Rights, Not Assumption of Duties................................ 34
SECTION 5.14 No Liability for Clean Up of Hazardous Materials.............................. 35
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE..................................... 35
SECTION 6.1 Resignation or Removal of Collateral Trustee.................................. 35
SECTION 6.2 Appointment of Successor Collateral Trustee................................... 35
SECTION 6.3 Succession.................................................................... 36
SECTION 6.4 Merger, Conversion or Consolidation of Collateral Trustee..................... 36
ARTICLE 7. MISCELLANEOUS PROVISIONS.............................................................. 37
SECTION 7.1 Amendment..................................................................... 37
SECTION 7.2 Voting........................................................................ 38
SECTION 7.3 Further Assurances; Insurance................................................. 39
SECTION 7.4 Perfection of Junior Trust Estate............................................. 40
SECTION 7.5 Successors and Assigns........................................................ 40
SECTION 7.6 Delay and Waiver.............................................................. 40
SECTION 7.7 Notices....................................................................... 40
SECTION 7.8 Notice Following Discharge of Priority Lien Obligations....................... 42
SECTION 7.9 Entire Agreement.............................................................. 42
SECTION 7.10 Compensation; Expenses........................................................ 42
SECTION 7.11 Indemnity..................................................................... 43
SECTION 7.12 Severability.................................................................. 44
SECTION 7.13 Headings...................................................................... 44
SECTION 7.14 Obligations Secured........................................................... 44
SECTION 7.15 GOVERNING LAW................................................................. 44
SECTION 7.16 CONSENT TO JURISDICTION....................................................... 44
SECTION 7.17 WAIVER OF JURY TRIAL.......................................................... 45
SECTION 7.18 Counterparts.................................................................. 46
SECTION 7.19 Effectiveness................................................................. 46
SECTION 7.20 Additional Pledgors........................................................... 46
SECTION 7.21 Continuing Nature of this Agreement........................................... 46
SECTION 7.22 Insolvency.................................................................... 46
SECTION 7.23 Rights and Immunities of Secured Debt Representatives......................... 47
EXHIBIT A - Form of Collateral Trust Joinder
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This Collateral Trust Agreement (this "AGREEMENT") is dated as of
July 7, 2004 and is by and among Xxxxxx & Xxxxx Corporation, an Ohio corporation
(the "BORROWER"), the Pledgors from time to time party hereto, Xxxxxxx Sachs
Credit Partners L.P., as Administrative Agent (as defined below), X. Xxxx &
Company, as Hedge Counterparty (as defined below), BNY Midwest Trust Company, as
Trustee (as defined below), and Xxxxx Fargo Bank, N.A., as Collateral Trustee
(in such capacity and together with its successors in such capacity, the
"COLLATERAL TRUSTEE").
RECITALS
The Borrower intends to enter into a Credit Agreement dated as of
the date hereof (as amended, supplemented, amended and restated or otherwise
modified and in effect from time to time, the "CREDIT AGREEMENT") among the
Borrower, certain subsidiaries of the Borrower, as guarantors (the "GUARANTOR
SUBSIDIARIES"), the lenders party thereto, and Xxxxxxx Xxxxx Credit Partners
L.P., as sole lead arranger, sole bookrunner, sole syndication agent and as
administrative agent (in such capacity and together with its successors, the
"ADMINISTRATIVE AGENT"), which will provide for a $170,000,000 credit facility.
Capital C Ohio Inc. has previously entered into an ISDA Master
Agreement dated as of June 30, 2004, a Credit Support Annex and a Schedule
thereto and Confirmations thereunder relating to one or more Transactions (each
such term as defined therein) under such ISDA Master Agreement (collectively, as
amended, supplemented, amended and restated or otherwise modified and in effect
from time to time, the "HEDGE AGREEMENT") by and between X. Xxxx & Company (the
"HEDGE COUNTERPARTY") and Capital C Ohio, Inc., which will provide for
cash-settled hedge transactions and which Hedge Agreement is being assumed by
the Borrower upon the merger of Capital C Ohio, Inc. into the Borrower.
Pursuant to the terms of the Credit Agreement, certain lenders under
the Credit Agreement have agreed to issue letters of credit in support of the
Borrower's obligations under the Hedge Agreement.
To the extent the Borrower's obligations under the Hedge Agreement
exceed letters of credit issued under the Credit Agreement to secure such
obligations, such excess amounts shall be secured by a second priority lien on
the Collateral in favor of the Hedge Counterparty pursuant to the terms of the
Parity Debt Documents.
The Borrower intends to issue 8.75% Senior Secured Notes (including
any related exchange notes, the "NOTES") in an aggregate principal amount of
$192,500,000 pursuant to an Indenture dated as of the date hereof (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time, the "INDENTURE") among the Borrower, the guarantors party thereto and
BNY Midwest Trust Company, as trustee (in such capacity and together with its
successors in such capacity, the "TRUSTEE").
The Borrower and the other Pledgors intend to (i) secure the
Obligations under the Credit Agreement and any future Priority Lien Debt on a
first priority basis and (ii) and, subject to such priority, intend to secure
the Obligations under the Hedge Agreement and the Indenture and any future
Parity Lien Debt, with Liens on all present and future Collateral.
This Agreement sets forth the terms on which each Secured Party has
appointed the Collateral Trustee to act as the trustee for the present and
future holders of the Secured Obligations to receive, hold, maintain, administer
and distribute the Collateral at any time delivered to the Collateral Trustee or
the subject of the Security Documents, and to enforce the Security Documents and
all interests, rights, powers and remedies of the Collateral Trustee with
respect thereto or thereunder and the proceeds thereof.
Capitalized terms used in this Agreement have the meanings assigned
to them above or in Article 1 below.
AGREEMENT
In consideration of the premises and the mutual agreements herein
set forth, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby agree as follows:
ARTICLE 1. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 Defined Terms.
The following terms will have the following meanings:
"ACT OF REQUIRED CREDITORS" means, as to any matter at any time:
(1) prior to the Discharge of Priority Lien Obligations, a
direction in writing delivered to the Collateral Trustee by or with
the written consent of the Required Priority Creditors;
(2) after the Discharge of Priority Lien Obligations, a
direction in writing delivered to the Collateral Trustee by or with
the written consent of the Required Parity Creditors.
For purposes of this definition, (a) Secured Debt registered in the name of, or
beneficially owned by, the Borrower or any Affiliate of the Borrower will be
deemed not to be outstanding and (b) votes will be determined in accordance with
Section 7.2.
"ADDITIONAL SECURED DEBT" has the meaning set forth in Section 3.8.
"ADMINISTRATIVE AGENT" has the meaning set forth in the recitals.
"AFFILIATE" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
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"AGREEMENT" has the meaning set forth in the preamble.
"BOARD OF DIRECTORS" means
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership;
(3) with respect to a limited liability company, the managing
member or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of
such Person serving a similar function.
"BORROWER" has the meaning set forth in the preamble.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions in the City of New York or at a place of
payment are authorized by law, regulation or executive order to remain closed.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership interests (whether general or limited) or
membership interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person,
but excluding from all of the foregoing any debt securities convertible into
Capital Stock, whether or not such debt securities include any right of
participation with Capital Stock.
"CLASS" means (1) in the case of Parity Lien Debt, every Series of
Parity Lien Debt, taken together and (2) in the case of Priority Lien Debt,
every Series of Priority Lien Debt, taken together.
"COLLATERAL" means, in the case of each Series of Secured Debt, all
properties and assets of the Borrower and the other Pledgors now owned or
hereafter acquired in which Liens have been granted to the Collateral Trustee to
secure the Secured Obligations, and shall exclude any properties and assets in
which the Collateral Trustee is required to release its Liens pursuant to
Section 3.2; provided, that, if such Liens are required to be released as a
result of the sale, transfer or other disposition of any properties or assets of
the Borrower or any other Pledgor,
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such assets or properties will cease to be excluded from the Collateral if the
Borrower or any other Pledgor thereafter acquires or reacquires such assets or
properties.
"COLLATERAL TRUSTEE" has the meaning set forth in the preamble.
"COLLATERAL TRUST JOINDER" means an agreement substantially in the
form of Exhibit A.
"CREDIT AGREEMENT" has the meaning set forth in the recitals.
"CREDIT FACILITIES" means, one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise) or refinanced
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time.
"DEFEASANCE ACCOUNT" means any deposit account to be titled
"Defeasance Account" or words of similar nature established or maintained for
the benefit of the holders of Senior Secured Note Obligations.
"DISCHARGE OF PRIORITY LIEN OBLIGATIONS" means the occurrence of all
of the following:
(1) termination or expiration of all commitments to extend
credit that would constitute Priority Lien Debt;
(2) payment in full in cash of the principal of and interest
and premium (if any) on all Priority Lien Debt (other than any
undrawn letters of credit);
(3) discharge or cash collateralization (at the lower of (A)
105% of the aggregate undrawn amount and (B) the percentage of the
aggregate undrawn amount required for release of liens under the
terms of the applicable Priority Lien Document) of all outstanding
letters of credit constituting Priority Lien Debt; and
(4) payment in full in cash of all other Priority Lien
Obligations that are outstanding and unpaid at the time the Priority
Lien Debt is paid in full in cash (other than any obligations for
taxes, costs, indemnifications, reimbursements, damages and other
liabilities in respect of which no claim or demand for payment has
been made at such time).
"EQUALLY AND RATABLY" means, in reference to sharing of Liens or
proceeds thereof as between holders of Secured Obligations within the same
Class, that such Liens or proceeds:
(1) will be allocated and distributed first to the Secured
Debt Representative for each outstanding Series of Secured Debt
within that Class, for the account of the holders of such Series of
Secured Debt, ratably in proportion to the principal of, and
interest and premium (if any) and reimbursement obligations
(contingent or otherwise) with respect to letters of credit, if any,
outstanding (whether or not drawings have been
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made under such letters of credit) on each outstanding Series of
Secured Debt within that Class when the allocation or distribution
is made, and thereafter
(2) will be allocated and distributed (if any remain after
payment in full of all of the principal of, and interest and premium
(if any) and reimbursement obligations (contingent or otherwise)
with respect to letters of credit, if any, outstanding (whether or
not drawings have been made on such letters of credit) on all
outstanding Secured Obligations within that Class) to the Secured
Debt Representative for each outstanding Series of Secured
Obligations within that Class, for the account of the holders of any
remaining Secured Obligations within that Class, ratably in
proportion to the aggregate unpaid amount of such remaining Secured
Obligations within that Class due and demanded (with written notice
to the applicable Secured Debt Representative and the Collateral
Trustee) prior to the date such distribution is made.
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).
"GUARANTOR SUBSIDIARIES" as defined in the recitals hereto.
"HEDGE AGREEMENT" as defined in the recitals hereto.
"HEDGE AGREEMENT DEBT" means any and all amounts owing (whether or
not then due or subject to any contingency) by the Borrower and/or its
Subsidiaries under the Hedge Agreement, and any ISDA Master Agreement entered
into after the date hereof by the Borrower and/or its Subsidiaries as may be
permitted under Section 6.1(k) of the Credit Agreement and/or Section 4.09 of
the Indenture, that was permitted to be incurred and secured under each
applicable Secured Debt Document (or as to which the counterparties under the
Hedge Agreement obtained an Officer's Certificate at the time of incurrence to
the effect that such Indebtedness was permitted to be incurred and secured by
all applicable Secured Debt Documents); provided, that Hedging Obligations, if
any, that constitute Priority Lien Debt shall be excluded from this definition.
"HEDGE AGREEMENT DOCUMENTS" means the Hedge Agreement, the credit
support annex, and any ISDA Master Agreement entered into after the date hereof
by the Borrower and/or its Subsidiaries with respect to Hedge Agreement Debt,
and the Security Documents (other than any Security Documents that do not secure
Hedge Agreement Obligations).
"HEDGE AGREEMENT OBLIGATIONS" means the Hedge Agreement Debt and all
other Obligations in respect of Hedge Agreement Debt.
"HEDGE AGREEMENT OUTSTANDING AMOUNT" as defined in Section 7.2
hereof.
"HEDGE AGREEMENT REPRESENTATIVE" means:
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(1) in the case of the Hedge Agreement, X. Xxxx & Company or
any successor under the Hedge Agreement; or
(2) in the case of any other Series of Hedge Agreement Debt,
the trustee, agent or representative of the holders of such Series of Hedge
Agreement Debt who (A) is appointed as a Hedge Agreement Representative (for
purposes related to the administration of the Security Documents) pursuant to
the agreement governing such Series of Hedge Agreement Debt, together with its
successors in such capacity, and (B) that has executed a Collateral Trust
Joinder.
"HEDGE LETTERS OF CREDIT" means, collectively, any Hedge Letter of
Credit (as defined in the Credit Agreement) and any Hedge Support Letter of
Credit (as defined in the Credit Agreement).
"HEDGING OBLIGATIONS" means, with respect to any specified Person,
the obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to
floating or from floating to fixed), interest rate cap agreements
and interest rate collar agreements;
(2) other agreements or arrangements designed to manage
interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect
such Person against fluctuations in currency exchange rates or
commodity prices; provided, that in each case above, such
agreements, arrangements or obligations shall not include the Hedge
Agreement or the obligations or arrangements thereunder.
"INDEBTEDNESS" means and includes all obligations that constitute
"Indebtedness" as defined under the Credit Agreement and the Indenture and all
obligations of the Borrower under the Hedge Agreement or future hedge agreements
to the extent permitted under Section 6.1(k) of the Credit Agreement and/or
Section 4.09 of the Indenture.
"INDEMNIFIED LIABILITIES" means any and all liabilities (including
all environmental liabilities), obligations, losses, damages, penalties,
actions, judgments, suits, costs, taxes, expenses or disbursements of any kind
or nature whatsoever with respect to the execution, delivery, performance,
administration or enforcement of this Agreement or any of the other Security
Documents, including any of the foregoing relating to the use of proceeds of any
Secured Debt or the violation of, noncompliance with or liability under, any law
(including environmental laws) applicable to or enforceable against the
Borrower, any of its Subsidiaries or any other Pledgor or any of the Collateral
and all reasonable costs and expenses (including reasonable fees and expenses of
legal counsel selected by the Indemnitee) incurred by any Indemnitee in
connection with any claim, action, investigation or proceeding in any respect
relating to any of the foregoing, whether or not suit is brought.
"INDEMNITEE" has the meaning set forth in Section 7.11(a).
"INDENTURE" has the meaning set forth in the recitals.
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"INSOLVENCY OR LIQUIDATION PROCEEDING" means:
(1) any case commenced by or against the Borrower or any
other Pledgor under Title 11, U.S. Code or any similar federal or
state law for the relief of debtors, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the
assets or liabilities of the Borrower or any other Pledgor, any
receivership or assignment for the benefit of creditors relating to
the Borrower or any other Pledgor or any similar case or proceeding
relative to the Borrower or any other Pledgor or its creditors, as
such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to the Borrower or
any other Pledgor, in each case whether or not voluntary and whether
or not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Borrower or any other
Pledgor are determined and any payment or distribution is or may be
made on account of such claims.
"JUNIOR TRUST ESTATE" has the meaning set forth in Section 2.2.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the UCC (or equivalent statutes) of any jurisdiction.
"LIEN SHARING AND PRIORITY CONFIRMATION" means:
(1) as to any Series of Parity Lien Debt, the written
agreement of the holders of such Series of Parity Lien Debt, as set
forth in the Hedge Agreement, the Indenture or other agreement
governing such Series of Parity Lien Debt, for the enforceable
benefit of all holders of each existing and future Series of
Priority Lien Debt, each existing and future Priority Lien
Representative and each existing and future holder of Permitted
Prior Liens:
(a) that all Parity Lien Obligations will be and are
secured equally and ratably by all Parity Liens at any time
granted by the Borrower or any other Pledgor to secure any
Obligations in respect of such Series of Parity Lien Debt,
whether or not upon property otherwise constituting collateral
for such Series of Parity Lien Debt, and that all such Parity
Liens will be enforceable by the Collateral Trustee for the
benefit of all holders of Parity Lien Obligations equally and
ratably;
(b) that the holders of Obligations in respect of such
Series of Parity Lien Debt are bound by the provisions of this
Agreement, including the provisions relating to the ranking of
Parity Liens and the order of application of proceeds from the
enforcement of Parity Liens; and
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(c) consenting to and directing the Collateral Trustee
to perform its obligations under this Agreement and the other
Security Documents; and
(2) as to any Series of Priority Lien Debt, the written
agreement of the holders of such Series of Priority Lien Debt, as
set forth in the Credit Agreement or other agreement governing such
Series of Priority Lien Debt, for the enforceable benefit of all
holders of each existing and future Series of Parity Lien Debt, each
existing and future Parity Lien Representative and each existing and
future holder of Permitted Prior Liens:
(a) that all Priority Lien Obligations will be and are
secured equally and ratably by all Priority Liens at any time
granted by the Borrower or any other Pledgor to secure any
Obligations in respect of such Series of Priority Lien Debt,
whether or not upon property otherwise constituting collateral
for such Series of Priority Lien Debt, and that all such
Priority Liens will be enforceable by the Collateral Trustee
for the benefit of all holders of Priority Lien Obligations
equally and ratably;
(b) that the holders of Obligations in respect of such
Series of Priority Lien Debt are bound by the provisions of
this Agreement, including the provisions relating to the
ranking of Priority Liens and the order of application of
proceeds from enforcement of Priority Liens; and
(c) consenting to and directing the Collateral Trustee
to perform its obligations under this Agreement and the other
Security Documents.
"NON-SHARED COLLATERAL" means the following exclusions from the
definition of "Collateral": (i) with respect to the Collateral for the holders
of Priority Lien Obligations and Senior Secured Note Obligations, the Hedge
Letters of Credit; and (ii) with respect to the Collateral for the holders of
Priority Lien Obligations and the holders of Hedge Agreement Obligations, any
Redemption Account or Defeasance Account.
"NOTES" has the meaning set forth in the recitals.
"OBLIGATIONS" means any principal (including reimbursement
obligations with respect to letters of credit whether or not drawn), interest
(including all interest accrued thereon after the commencement of any Insolvency
or Liquidation Proceeding at the rate, including any applicable post-default
rate, specified in the Priority Lien Documents, even if such interest is not
enforceable, allowable or allowed as a claim in such proceeding), premium (if
any), fees, indemnifications, reimbursements, expenses and other liabilities
payable under the documentation governing any Indebtedness.
"OFFICER'S CERTIFICATE" means a certificate with respect to
compliance with a condition or covenant provided for in this Agreement, signed
on behalf of the Borrower by an officer of the Borrower (in his capacity as
officer and not in his individual capacity), including:
(a) a statement that the Person making such
certificate has read such covenant or condition;
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(b) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate are based;
(c) a statement that, in the opinion of such Person,
he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been satisfied.
"PARITY LIEN" means a Lien granted by a Security Document to the
Collateral Trustee, at any time, upon any property of the Borrower or any other
Pledgor to secure Parity Lien Obligations.
"PARITY LIEN DEBT" means (i) the Hedge Agreement Debt and (ii) the
Senior Secured Note Debt.
"PARITY LIEN DOCUMENTS" means the Hedge Agreement Documents and the
Senior Secured Note Documents.
"PARITY LIEN OBLIGATIONS" means Parity Lien Debt and all other
Obligations in respect thereof.
"PARITY LIEN REPRESENTATIVE" means each Hedge Agreement
Representative and the Senior Secured Note Representative.
"PERMITTED PRIOR LIENS" means:
(1) Liens described in clauses (1), (4), (5), (7), (10),
(14), (15) or (16) of the definition of "Permitted Liens" under the
Indenture; and
(2) Permitted Liens (as defined in the Indenture) that arise
by operation of law and are not voluntarily granted, to the extent
entitled by law to priority over the Liens created by the Security
Documents.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PLEDGORS" means the Sponsor, the Borrower, the Guarantor
Subsidiaries and any other Person (if any) that at any time provides collateral
security for any Secured Obligations.
"PRIORITY LIEN" means a Lien granted by a Security Document to the
Collateral Trustee, at any time, upon any property of the Borrower or any other
Pledgor to secure Priority Lien Obligations.
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"PRIORITY LIEN DEBT" means:
(1) Indebtedness and other Obligations under the Credit
Agreement;
(2) Indebtedness under any other Credit Facility that is
secured equally and ratably with the Credit Agreement by a Priority
Lien that was permitted to be incurred and so secured under each
applicable Secured Debt Document; provided, in the case of any
Indebtedness referred to in this clause (2), that:
(a) on or before the date on which such Indebtedness
is incurred by the Borrower such Indebtedness is designated by
the Borrower, in an Officer's Certificate delivered to each
Priority Lien Representative and the Collateral Trustee, as
"Priority Lien Debt" for the purposes of the Secured Debt
Documents; provided, that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt;
(b) such Indebtedness is governed by a credit
agreement, an indenture or other agreement that includes a
Lien Sharing and Priority Confirmation; and
(c) all requirements set forth in this Agreement as to
the confirmation, grant or perfection of the Collateral
Trustee's Lien to secure such Indebtedness or Obligations in
respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (c) will
be conclusively established if the Borrower delivers to the
Collateral Trustee an Officer's Certificate stating that such
requirements and other provisions have been satisfied and that
such Indebtedness is "Priority Lien Debt"); and
(3) Hedging Obligations incurred to hedge or manage interest
rate risk with respect to Priority Lien Debt; provided, that such
Hedging Obligations are secured equally and ratably with the Credit
Agreement by a Priority Lien on all of the assets and properties
that secure Indebtedness under the Credit Facility in respect of
which such Hedging Obligations are incurred.
"PRIORITY LIEN DOCUMENTS" means the Credit Agreement and any other
Credit Facility pursuant to which any Priority Lien Debt is incurred and the
Security Documents (other than any Security Documents that do not secure
Priority Lien Obligations).
"PRIORITY LIEN OBLIGATIONS" means the Priority Lien Debt and all
other Obligations in respect of Priority Lien Debt.
"PRIORITY LIEN REPRESENTATIVE" means:
(a) in the case of the Credit Agreement, the Administrative
Agent or any other person appointed as the Priority Lien Representative by the
Administrative Agent; or
(b) in the case of any other Series of Priority Lien Debt,
the trustee, agent or representative of the holders of such Series of Priority
Lien Debt who maintains the transfer register for such Series of Priority Lien
Debt and is appointed as a representative of the Priority
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Lien Debt (for purposes related to the administration of the Security Documents)
pursuant to the Credit Agreement or other agreement governing such Series of
Priority Lien Debt, and who has executed a Collateral Trust Joinder.
"REDEMPTION ACCOUNT" means any deposit account to be titled
"Redemption Account" or words of similar nature established or maintained for
the benefit of the holders of Senior Secured Note Obligations.
"REQUIRED PARITY CREDITORS" means, at any time, the holders of more
than 50% of the sum of: (i) the Hedge Agreement Outstanding Amount, plus (ii)
the sum of (a) the aggregate outstanding principal amount of Senior Secured Note
Debt and (b) other than in connection with the exercise of remedies, the
aggregate unfunded commitments, if any, to extend credit which, when funded,
would constitute Senior Secured Note Debt.
For purposes of this definition, (a) Senior Secured Note Debt
registered in the name of, or beneficially owned by, the Borrower or any
Affiliate of the Borrower will be deemed not to be outstanding, and (b) votes
will be determined in accordance with the provisions of Section 7.2.
"REQUIRED PRIORITY CREDITORS" means, at any time, the holders of
more than 50% of the sum of:
(1) the aggregate outstanding principal amount of Priority Lien
Debt (including outstanding letters of credit whether or not
then available or drawn); and
(2) other than in connection with the exercise of remedies, the
aggregate unfunded commitments to extend credit which, when
funded, would constitute Priority Lien Debt.
For purposes of this definition, (a) Priority Lien Debt registered
in the name of, or beneficially owned by, the Borrower or any Affiliate of the
Borrower will be deemed not to be outstanding, and (b) votes will be determined
in accordance with the provisions of Section 7.2.
"SECURED DEBT" means Parity Lien Debt and Priority Lien Debt.
"SECURED DEBT DEFAULT" means any event or condition which, under the
terms of any credit agreement, indenture or other agreement governing any Series
of Secured Debt causes, or permits holders of Secured Debt outstanding
thereunder (with or without the giving of notice or lapse of time, or both, and
whether or not notice has been given or time has lapsed) to cause, the Secured
Debt outstanding thereunder to become immediately due and payable.
"SECURED DEBT DOCUMENTS" means the Parity Lien Documents and the
Priority Lien Documents.
"SECURED DEBT REPRESENTATIVE" means each Parity Lien Representative
and each Priority Lien Representative.
"SECURED OBLIGATIONS" means Parity Lien Obligations and Priority
Lien Obligations.
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"SECURED PARTIES" means the holders of Secured Obligations and the
Secured Debt Representatives.
"SECURITY DOCUMENTS" means this Agreement, each Lien Sharing and
Priority Confirmation, and all security agreements, pledge agreements,
collateral assignments, mortgages, collateral agency agreements, control
agreements, deeds of trust or other grants or transfers for security executed
and delivered by the Borrower or any other Pledgor creating (or purporting to
create) a Lien upon Collateral in favor of the Collateral Trustee, for the
benefit of the Secured Parties, in each case, as amended, modified, renewed,
restated or replaced, in whole or in part, from time to time, in accordance with
its terms and Section 7.2.
"SENIOR SECURED NOTE DEBT" means (1) the Notes issued on the date
hereof (including any related exchange notes); and (2) any other Indebtedness
(including additional Notes) that is secured equally and ratably with the Notes
by a Parity Lien that was permitted to be incurred and so secured under each
applicable Secured Debt Document; provided, that in the case of any Indebtedness
referred to in clause (2) of this definition, that:
(a) on or before the date on which such Indebtedness
is incurred by the Borrower or by a Restricted Subsidiary (as
defined under the Indenture) of the Borrower, such
Indebtedness is designated by the Borrower, in an Officer's
Certificate delivered to each Parity Lien Representative and
the Collateral Trustee, as "Parity Lien Debt" for the purposes
of the Secured Debt Documents; provided, that no Obligation or
Indebtedness may be designated as both Parity Lien Debt and
Priority Lien Debt;
(b) such Indebtedness is governed by an indenture,
credit agreement or other agreement that includes a Lien
Sharing and Priority Confirmation; and
(c) all requirements set forth in this Agreement as to
the confirmation, grant or perfection of the Collateral
Trustee's Lien to secure such Indebtedness or Obligations in
respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (c) will
be conclusively established if the Borrower delivers to the
Collateral Trustee an Officer's Certificate stating that such
requirements and other provisions have been satisfied and that
such Indebtedness is "Parity Lien Debt").
"SENIOR SECURED NOTE DOCUMENTS" means, collectively, the Indenture,
the Notes and each indenture, credit agreement or other agreement governing each
other Series of Senior Secured Note Debt and the Security Documents (other than
any Security Documents that do not secure Senior Secured Note Obligations).
"SENIOR SECURED NOTE OBLIGATIONS" means Senior Secured Note Debt and
all other Obligations in respect thereof.
"SENIOR SECURED NOTE REPRESENTATIVE" means:
(1) in the case of the Notes, the Trustee; or
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(2) in the case of any other Series of Senior Secured Note
Debt, the trustee, agent or representative of the holders of such Series of
Senior Secured Note Debt who maintains the transfer register for such Series of
Senior Secured Note Debt and (A) is appointed as a Senior Secured Note
Representative (for purposes related to the administration of the Security
Documents) pursuant to the indenture, credit agreement or other agreement
governing such Series of Senior Secured Note Debt, together with its successors
in such capacity, and (B) that has executed a Collateral Trust Joinder.
"SENIOR TRUST ESTATE" has the meaning set forth in Section 2.1.
"SERIES OF HEDGE AGREEMENT DEBT" means obligations under the Hedge
Agreement Debt and the obligations to each other counterparty, if any, under any
other Hedging Obligations; provided, that Hedging Obligations, if any, that
constitute Priority Lien Debt shall be excluded from this definition.
"SERIES OF PARITY LIEN DEBT" means (i) with respect to Senior
Secured Note Debt, each Series of Senior Secured Note Debt and (ii) with respect
to Hedge Agreement Debt, each Series of Hedge Agreement Debt.
"SERIES OF PRIORITY LIEN DEBT" means indebtedness under the Credit
Agreement and each other issue or series of Priority Lien Debt for which a
single transfer register is maintained.
"SERIES OF SECURED DEBT" means, severally, each Series of Priority
Lien Debt and each Series of Parity Lien Debt.
"SERIES OF SENIOR SECURED NOTE DEBT" means the Notes and each other
issue or series of Parity Lien Debt for which a single transfer register is
maintained.
"SPONSOR" means Capital C Energy Operations, LP.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency
and after giving effect to any voting agreement or stockholders'
agreement that effectively transfers voting power) to vote in the
election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof);
and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that
Person or one or more Subsidiaries of that Person (or any
combination thereof).
"TRUSTEE" has the meaning set forth in the recitals.
"TRUST ESTATES" has the meaning set forth in Section 2.2.
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"UCC" means the Uniform Commercial Code as in effect in the State of
New York or any other applicable jurisdiction.
"VOTING STOCK" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
SECTION 1.2 Rules of Interpretation.
(a) All terms used in this Agreement that are defined in
Article 9 of the UCC and not otherwise defined herein have the meanings assigned
to them in Article 9 of the UCC.
(b) Unless otherwise indicated, any reference to any
agreement or instrument will be deemed to include a reference to that agreement
or instrument as assigned, amended, supplemented, amended and restated, or
otherwise modified and in effect from time to time or replaced in accordance
with the terms of this Agreement.
(c) The use in this Agreement or any of the other Security
Documents of the word "include" or "including," when following any general
statement, term or matter, will not be construed to limit such statement, term
or matter to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting language (such
as "without limitation" or "but not limited to" or words of similar import) is
used with reference thereto, but will be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter. The word "will" shall be construed to have the same meaning and
effect as the word "shall."
(d) References to "Sections," "clauses," "recitals" and the
"preamble" will be to Sections, clauses, recitals and the preamble,
respectively, of this Agreement unless otherwise specifically provided.
References to "Articles" will be to Articles of this Agreement unless otherwise
specifically provided. References to "Exhibits" and "Schedules" will be to
Exhibits and Schedules, respectively, to this Agreement unless otherwise
specifically provided.
(e) Notwithstanding anything to the contrary in this
Agreement, any references contained herein to any section, clause, paragraph,
definition or other provision of the Indenture (including any definition
contained therein) shall be deemed to be a reference to such section, clause,
paragraph, definition or other provision as in effect on the date of this
Agreement; provided, that any reference to any such section, clause, paragraph
or other provision shall refer to such section, clause, paragraph or other
provision of the Indenture (including any definition contained therein) as
amended or modified from time to time if such amendment or modification has been
(1) made in accordance with the Indenture and (2) prior to the Discharge of
Priority Lien Obligations, approved in a writing delivered to the Trustee and
the Collateral Trustee by, or on behalf of, the requisite holders of Priority
Lien Obligations as are needed (if any) under the terms of the applicable
Priority Lien Documents to approve such amendment or modification.
(f) This Agreement and the other Security Documents will be
construed without regard to the identity of the party who drafted it and as
though the parties participated
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equally in drafting it. Consequently, each of the parties acknowledges and
agrees that any rule of construction that a document is to be construed against
the drafting party will not be applicable either to this Agreement or the other
Security Documents.
ARTICLE 2. THE TRUST ESTATES
SECTION 2.1 Declaration of Senior Trust.
To secure the payment of the Priority Lien Obligations and in
consideration of the mutual agreements set forth in this Agreement, each of the
Pledgors hereby grants to the Collateral Trustee, and the Collateral Trustee
hereby accepts and agrees to hold, in trust under this Agreement for the benefit
of all present and future holders of Priority Lien Obligations, all of such
Pledgor's right, title and interest in, to and under all Collateral granted to
the Collateral Trustee under any Security Document for the benefit of the
holders of Priority Lien Obligations, together with all of the Collateral
Trustee's right, title and interest in, to and under the Security Documents, and
all interests, rights, powers and remedies of the Collateral Trustee thereunder
or in respect thereof and all cash and non-cash proceeds thereof (collectively,
the "SENIOR TRUST ESTATE").
The Collateral Trustee and its successors and assigns under this
Agreement will hold the Senior Trust Estate in trust for the benefit solely and
exclusively of all present and future holders of Priority Lien Obligations as
security for the payment of all present and future Priority Lien Obligations.
Notwithstanding the foregoing, if at any time:
(1) all Liens securing the Priority Lien Obligations have been
released as provided in Section 4.1;
(2) the Collateral Trustee holds no other property in trust as part
of the Senior Trust Estate;
(3) no monetary obligation (other than indemnification and other
contingent obligations not then due and payable and letters of credit that
have been cash collateralized as provided in clause (3) of the definition
of "Discharge of Priority Lien Obligations") is outstanding and payable
under this Agreement to the Collateral Trustee or any of its co-trustees
or agents (whether in an individual or representative capacity); and
(4) the Borrower delivers to the Collateral Trustee an Officer's
Certificate stating that all Priority Liens of the Collateral Trustee have
been released in compliance with all applicable provisions of the Priority
Lien Documents and that the Pledgors are not required by any Priority Lien
Document to grant any Priority Lien upon any property,
then the senior trust arising hereunder will terminate, except that all
provisions set forth in Sections 7.10 and 7.11 that are enforceable by the
Collateral Trustee or any of its co-trustees or
15
agents (whether in an individual or representative capacity) will remain
enforceable in accordance with their terms.
The parties further declare and covenant that the Senior Trust
Estate will be held and distributed by the Collateral Trustee subject to the
further agreements herein.
SECTION 2.2 Declaration of Junior Trust.
To secure the payment of the Parity Lien Obligations and in
consideration of the premises and the mutual agreements set forth herein, each
of the Pledgors hereby grants to the Collateral Trustee, and the Collateral
Trustee hereby accepts and agrees to hold, in trust under this Agreement for the
benefit of all present and future holders of Parity Lien Obligations, all of
such Pledgor's right, title and interest in, to and under all Collateral granted
to the Collateral Trustee under any Security Document for the benefit of the
holders of Parity Lien Obligations, together with all of the Collateral
Trustee's right, title and interest in, to and under the Security Documents, and
all interests, rights, powers and remedies of the Collateral Trustee thereunder
or in respect thereof and all cash and non-cash proceeds thereof (collectively,
the "JUNIOR TRUST ESTATE," and together with the Senior Trust Estate, the "TRUST
ESTATES").
The Collateral Trustee and its successors and assigns under this
Agreement will hold the Junior Trust Estate in trust for the benefit solely and
exclusively of all present and future holders of Parity Lien Obligations as
security for the payment of all present and future Priority Lien Obligations.
Notwithstanding the foregoing, if at any time:
(1) all Liens securing the Parity Lien Obligations have been
released as provided in Section 4.1;
(2) the Collateral Trustee holds no other property in trust as part
of the Junior Trust Estate;
(3) no monetary obligation (other than indemnification and other
contingent obligations not then due and payable and letters of credit that
have been cash collateralized as provided in clause (3) of the definition
of "Discharge of Priority Lien Obligations") is outstanding and payable
under this Agreement to the Collateral Trustee or any of its co-trustees
or agents (whether in an individual or representative capacity); and
(4) the Borrower delivers to the Collateral Trustee an Officer's
Certificate stating that all Parity Liens of the Collateral Trustee have
been released in compliance with all applicable provisions of the Parity
Lien Documents and that the Pledgors are not required by any Parity Lien
Document to grant any Parity Lien upon any property,
then the junior trust arising hereunder will terminate, except that all
provisions set forth in Sections 7.10 and 7.11 that are enforceable by the
Collateral Trustee or any of its co-trustees or
16
agents (whether in an individual or representative capacity) will remain
enforceable in accordance with their terms.
The parties further declare and covenant that the Junior Trust
Estate will be held and distributed by the Collateral Trustee subject to the
further agreements herein.
SECTION 2.3 Priority of Liens.
Notwithstanding anything else contained herein or in any other
Security Document, it is the intent of the parties that:
(1) this Agreement and the other Security Documents create two
separate and distinct Trust Estates and Liens: (a) the Senior Trust
Estate and Priority Lien securing the payment and performance of the
Priority Lien Obligations and (b) the Junior Trust Estate and Parity
Lien securing the payment and performance of the Parity Lien
Obligations; and
(2) the Liens securing the Parity Lien Obligations are subject
and subordinate to the Liens securing the Priority Lien Obligations.
SECTION 2.4 Restrictions on Enforcement of Junior Priority Liens.
(a) Until the Discharge of Priority Lien Obligations, the
holders of the Priority Lien Obligations will have, subject to the exceptions
set forth below in clauses (1) through (4) and subject to the rights of the
holders of Permitted Prior Liens, the exclusive right to authorize and direct
the Collateral Trustee with respect to the Security Documents and the Collateral
including, without limitation, the exclusive right to authorize or direct the
Collateral Trustee to enforce, collect or realize on any Collateral or exercise
any other right or remedy with respect to the Collateral and no Parity Lien
Representative nor the holders of Parity Lien Obligations may authorize or
direct the Collateral Trustee with respect to such matters. Notwithstanding the
foregoing, the Parity Lien Representatives (together with any other holder of
Parity Lien Obligations) may, subject to the rights of the holders of other
Permitted Prior Liens, direct the Collateral Trustee:
(1) without any condition or restriction whatsoever, at
any time after the Discharge of Priority Lien Obligations;
(2) as necessary to redeem any Collateral in a
creditor's redemption permitted by law or to deliver any notice or
demand necessary to enforce (subject to the prior Discharge of
Priority Lien Obligations) any right to claim, take or receive
proceeds of Collateral remaining after the Discharge of Priority
Lien Obligations in the event of foreclosure or other enforcement of
any Permitted Prior Lien;
(3) as necessary to perfect or establish the priority
(subject to Priority Liens and other Permitted Prior Liens) of the
Parity Liens upon any Collateral, provided that, unless otherwise
agreed to by the Collateral Trustee in the Security Documents, the
17
Parity Lien Representatives and the holders of Parity Lien
Obligations may not require the Collateral Trustee to take any
action to perfect any Collateral through possession or control other
than the Collateral Trustee taking any action for possession or
control required by the holders of Priority Lien Obligations and the
Collateral Trustee agreeing pursuant to Section 7.4 that the
Collateral Trustee as agent for the benefit of the holders of
Priority Lien Obligations agrees to act as agent for the
Administrative Agent for the benefit of the holders of Parity Lien
Obligations; or
(4) as necessary to create, prove, preserve or protect
(but not enforce) the Parity Liens upon any Collateral.
(b) Until the Discharge of Priority Lien Obligations, none of
the holders of Parity Lien Obligations, the Collateral Trustee or any Parity
Lien Representative will:
(1) request judicial relief, in an Insolvency or
Liquidation Proceeding or in any other court, that would hinder,
delay, limit or prohibit the lawful exercise or enforcement of any
right or remedy otherwise available to the holders of any Priority
Lien Obligations in respect of any Priority Liens or that would
limit, invalidate, avoid or set aside any Priority Liens or
subordinate any Priority Liens to the Parity Liens or grant the
Parity Liens equal ranking to any Priority Liens;
(2) oppose or otherwise contest any motion for relief
from the automatic stay or for any injunction against foreclosure or
enforcement of Priority Liens made by any holder of Priority Lien
Obligations or any Priority Lien Representative in any Insolvency or
Liquidation Proceeding;
(3) oppose or otherwise contest any lawful exercise by
any holder of Priority Lien Obligations or any Priority Lien
Representative of the right to credit bid Priority Lien Debt at any
sale in foreclosure of Priority Liens;
(4) oppose or otherwise contest any other request for
judicial relief made in any court by any holder of Priority Lien
Obligations or any Priority Lien Representative relating to the
lawful enforcement of any Priority Lien; or
(5) challenge the validity, enforceability, perfection
or priority of the Priority Liens.
Notwithstanding the foregoing, (i) both before and during an Insolvency or
Liquidation Proceeding, the holders of Parity Lien Obligations and the Parity
Lien Representatives may take any actions and exercise any and all rights that
would be available to a holder of unsecured claims, including, without
limitation, the commencement of an Insolvency or Liquidation Proceeding against
the Borrower or any other Pledgor in accordance with applicable law; provided,
that the holders of Parity Lien Obligations and the Parity Lien Representatives
may not take any of the actions prohibited by clauses (1) through (5) of this
Section 2.4(b) or oppose or contest any order that it has agreed not to oppose
or contest under Section 2.8; and (ii) the Hedge Agreement Representative or the
holders of Hedge Agreement Obligations may establish an "Early Termination Date"
under the Hedge Agreement as provided therein and terminate, liquidate, net and
set-off in respect of "Transactions" under the Hedge Agreement and draw on
18
or otherwise exercise any rights or remedies under any Hedge Letter of Credit or
any other letter of credit delivered to the Hedge Agreement Representative and
may retain the proceeds thereof without regard to any other provisions of this
Agreement.
(c) Except for payments that are received by the Collateral
Trustee, any Parity Lien Representative or any holder of Parity Lien Obligations
at any time prior to the Discharge of Priority Lien Obligations and after (1)
the commencement of any Insolvency or Liquidation Proceeding in respect of the
Borrower or any other Pledgor or (2) the Collateral Trustee and each Parity Lien
Representative have received written notice from any Priority Lien
Representative at the direction of an Act of Required Creditors stating that (A)
any Series of Priority Lien Debt has become due and payable in full (whether at
maturity, upon acceleration or otherwise) or (B) the holders of Priority Liens
securing one or more Series of Priority Lien Debt have become entitled under any
Priority Lien Documents to and desire to enforce any or all of the Priority
Liens by reason of a default under such Priority Lien Documents:
(1) no payment of money (or the equivalent of money)
made by the Borrower or any other Pledgor to any Parity Lien
Representative or the Collateral Trustee or any other holder of
Parity Lien Obligations (including, without limitation, payments and
prepayments made for application to Parity Lien Obligations and all
other payments and deposits made pursuant to any provision of any
Parity Lien Document) will in any event be subject to the provisions
of Sections 2.4(a) and (b); and
(2) all payments permitted to be received under this
Section 2.4(c) will be received by the Parity Lien Representatives,
the Collateral Trustee and the other holders of Parity Lien
Obligations free from the Priority Liens and all other Liens except
the Parity Liens.
(d) Except for payments received free from the Priority Liens
as provided in Section 2.4(c), all proceeds of Collateral received by the
Collateral Trustee, any Parity Lien Representative or any holder of Parity Lien
Obligations at any time prior to the Discharge of Priority Lien Obligations will
be held by the Collateral Trustee, the applicable Parity Lien Representative or
the applicable holder of Parity Lien Obligations for the account of the holders
of Priority Liens and remitted to any Priority Lien Representative upon demand
by such Priority Lien Representative. The Parity Liens will remain attached to
and enforceable against all proceeds so held or remitted.
SECTION 2.5 Waiver of Right of Marshalling.
(a) Prior to the Discharge of Priority Lien Obligations, the
holders of Parity Lien Obligations, each Parity Lien Representative and the
Collateral Trustee may not assert or enforce any right of marshalling accorded
to a junior lienholder, as against the holders of any Priority Liens (in their
capacity as priority lienholders).
(b) Following the Discharge of Priority Lien Obligations, the
holders of Parity Lien Obligations and any Parity Lien Representative may assert
their right under the UCC or otherwise to any proceeds remaining following a
sale or other disposition of Collateral by, or on behalf of, the holders of
Priority Lien Obligations.
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SECTION 2.6 Discretion in Enforcement of Priority Liens.
In exercising rights and remedies with respect to the Collateral,
the Priority Lien Representatives may enforce (or refrain from enforcing) the
provisions of the Priority Lien Documents and exercise (or refrain from
exercising) remedies thereunder or any such rights and remedies, all in such
order and in such manner as they may determine in the exercise of their sole and
exclusive discretion, including:
(1) the exercise or forbearance from exercise of all
rights and remedies in respect of the Collateral and/or the Priority
Lien Obligations;
(2) the enforcement or forbearance from enforcement of
any Priority Lien in respect of the Collateral;
(3) the exercise or forbearance from exercise of rights
and powers of a holder of shares of stock included in the Senior
Trust Estate to the extent provided in the Security Documents;
(4) the acceptance of the Collateral in full or partial
satisfaction of the Priority Lien Obligations; and
(5) the exercise or forbearance from exercise of all
rights and remedies of a secured lender under the UCC or any similar
law of any applicable jurisdiction or in equity.
SECTION 2.7 Discretion in Enforcement of Priority Lien Obligations.
(a) Without in any way limiting the generality of Section 2.6,
the holders of Priority Lien Obligations and the Priority Lien Representatives
may, at any time and from time to time, without the consent of or notice to
holders of Parity Lien Obligations or the Parity Lien Representatives, without
incurring responsibility to holders of Parity Lien Obligations and the Parity
Lien Representatives and without impairing or releasing the subordination
provided in this Agreement or the obligations hereunder of holders of Parity
Lien Obligations and the Parity Lien Representatives, do any one or more of the
following:
(1) subject to the other provisions hereof, change the
manner, place or terms of payment or extend the time of payment of,
or renew or alter, the Priority Lien Obligations, or otherwise amend
or supplement in any manner the Priority Lien Obligations, or any
instrument evidencing the Priority Lien Obligations or any agreement
under which the Priority Lien Obligations are outstanding or any
Security Document related thereto;
(2) subject to the other provisions hereof, release any
Person or entity liable in any manner for the collection of the
Priority Lien Obligations;
(3) subject to the other provisions hereof, release the
Priority Lien on any Collateral; and
20
(4) exercise or refrain from exercising any rights
against any Pledgor.
SECTION 2.8 Insolvency or Liquidation Proceedings.
(a) If in any Insolvency or Liquidation Proceeding and prior
to the Discharge of Priority Lien Obligations, the holders of any Priority Lien
Obligations by an Act of Required Creditors consent to any order:
(1) for use of cash collateral;
(2) approving a debtor-in-possession financing secured
by a Lien that is senior to or on a parity with all Priority Liens
upon any property of the estate in such Insolvency or Liquidation
Proceeding;
(3) granting any relief on account of Priority Lien
Obligations as adequate protection (or its equivalent) for the
benefit of the holders of Priority Lien Obligations in the
Collateral subject to Priority Liens; or
(4) relating to a sale of assets of the Borrower or any
other Pledgor that provides, to the extent the Collateral sold is to
be free and clear of Liens, that all Priority Liens and Parity Liens
will attach to the proceeds of the sale; provided, that in the case
of the above subsections (1) - (4), such collateral shall not
include the Non-Shared Collateral;
then, the holders Parity Lien Obligations and the Parity Lien Representatives,
in their capacity as holders or representatives of secured claims, will not
oppose or otherwise contest the entry of such order, so long as none of the
holders of Priority Lien Obligations or any Priority Lien Representative in any
respect opposes or otherwise contests any request made by the holders of Parity
Lien Obligations or a Parity Lien Representative for the grant to the Collateral
Trustee, for the benefit of the holders of Parity Lien Obligations and the
Parity Lien Representatives, of a junior Lien upon any property on which a Lien
is (or is to be) granted under such order to secure the Priority Lien
Obligations, co-extensive in all respects with, but subordinated (as set forth
in Section 2.3) to, such Lien and all Priority Liens on such property.
Notwithstanding the foregoing, both before and during an
Insolvency or Liquidation Proceeding, the holders of Parity Lien Obligations and
the Parity Lien Representatives may take any actions and exercise any and all
rights that would otherwise be available to a holder of unsecured claims,
including, without limitation, the commencement of Insolvency or Liquidation
Proceedings against any Pledgors in accordance with applicable law; provided,
however, that, both before and during an Insolvency or Liquidation Proceeding,
the holders of Parity Lien Obligations and the Parity Lien Representatives may
not take any of the actions prohibited under Section 2.4(b) or oppose or contest
any order that it has agreed not to oppose or contest under clauses (1) through
(4) of the preceding paragraph.
(b) The holders of Parity Lien Obligations or any Parity Lien
Representative will not file or prosecute in any Insolvency or Liquidation
Proceeding any motion for adequate
21
protection (or any comparable request for relief) based upon their interest in
the Collateral under the Parity Liens, except that:
(1) they may freely seek and obtain relief: (A) granting
a junior Lien co-extensive in all respects with, but subordinated
(as set forth in Section 2.4) to, all Liens granted in such
Insolvency or Liquidation Proceeding to, or for the benefit of, the
holders of any Priority Lien Obligations; or (B) in connection with
the confirmation of any plan of reorganization or similar
dispositive restructuring plan; and
(2) they may freely seek and obtain any relief upon a
motion for adequate protection (or any comparable relief), without
any condition or restriction whatsoever, at any time after the
Discharge of Priority Lien Obligations, in each case other than with
respect to the Non-Shared Collateral.
SECTION 2.9 Collateral Shared Equally and Ratably within Class.
The parties to this Agreement agree that the payment and
satisfaction of all of the Secured Obligations within each Class will be secured
equally and ratably by the Liens established in favor of the Collateral Trustee
for the benefit of the Secured Parties belonging to such Class (except with
respect to Non-Shared Collateral). It is understood and agreed that nothing in
this Section 2.9 is intended to alter the priorities among Secured Parties
belonging to different Classes as provided in Section 2.3.
ARTICLE 3. OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE
SECTION 3.1 Undertaking of the Collateral Trustee.
(a) Subject to, and in accordance with, this Agreement, the
Collateral Trustee will, as trustee and as representative (for the purposes of
Section 9-502(a)(2) of the UCC), for the benefit solely and exclusively of the
present and future Secured Parties:
(1) accept, enter into, hold, maintain, administer and
enforce all Security Documents, including all Collateral subject
thereto, and all Liens created thereunder, perform its obligations
under the Security Documents and protect, exercise and enforce the
interests, rights, powers and remedies granted or available to it
under, pursuant to or in connection with the Security Documents;
(2) take all lawful and commercially reasonable actions
permitted under the Security Documents that it may deem necessary or
advisable to protect or preserve its interest in the Collateral
subject thereto and such interests, rights, powers and remedies;
(3) deliver and receive notices pursuant to the Security
Documents;
(4) sell, assign, collect, assemble, foreclose on,
institute legal proceedings with respect to, or otherwise exercise
or enforce the rights and remedies of a
22
secured party (including a mortgagee, trust deed beneficiary and
insurance beneficiary or loss payee) with respect to the Collateral
under the Security Documents and its other interests, rights, powers
and remedies;
(5) remit as provided in Section 3.4 all cash proceeds
received by the Collateral Trustee from the collection, foreclosure
or enforcement of its interest in the Collateral under the Security
Documents or any of its other interests, rights, powers or remedies;
(6) execute and deliver amendments to the Security
Documents as from time to time authorized pursuant to Section 7.1
accompanied by an Officer's Certificate and an opinion of counsel to
the Borrower complying with the requirements of Section 7.1; and
(7) release any Lien granted to it by any Security
Document upon any Collateral if and as required by Section 4.1(b).
(b) Each party to this Agreement acknowledges and consents to
the undertaking of the Collateral Trustee set forth in Section 3.1(a) and agrees
to each of the other provisions of this Agreement applicable to the Collateral
Trustee.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Trustee will not commence any exercise of remedies or
any foreclosure actions or otherwise take any action or proceeding against any
of the Collateral (other than actions as necessary to prove, protect or preserve
the Liens securing the Secured Obligations) unless and until it shall have been
directed by written notice of an Act of Required Creditors and then only in
accordance with the provisions of this Agreement.
(d) Notwithstanding anything to the contrary contained in this
Agreement, no Parity Lien Representative or Priority Lien Representative may
serve as Collateral Trustee.
SECTION 3.2 Release or Subordination of Liens.
The Collateral Trustee will not release or subordinate any Lien of
the Collateral Trustee or consent to the release or subordination of any Lien of
the Collateral Trustee, except:
(a) as directed by an Act of Required Creditors accompanied by
an Officer's Certificate to the effect that the release or subordination was
permitted by each applicable Secured Debt Document;
(b) as required by Article 4;
(c) as ordered pursuant to applicable law under a final and
nonappealable order or judgment of a court of competent jurisdiction; or
(d) for the subordination of (i) the Junior Trust Estate and
the Parity Liens to the Senior Trust Estate and the Priority Liens.
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SECTION 3.3 Enforcement of Liens.
If the Collateral Trustee at any time receives written notice that
any event has occurred that constitutes a default under any Secured Debt
Document entitling the Collateral Trustee to foreclose upon, collect or
otherwise enforce its Liens hereunder, the Collateral Trustee will promptly
deliver written notice thereof to each Secured Debt Representative. Thereafter,
the Collateral Trustee may await direction by an Act of Required Creditors and
will act, or decline to act, as directed by an Act of Required Creditors, in the
exercise and enforcement of the Collateral Trustee's interests, rights, powers
and remedies in respect of the Collateral or under the Security Documents or
applicable law and, following the initiation of such exercise of remedies, the
Collateral Trustee will act, or decline to act, with respect to the manner of
such exercise of remedies as directed by an Act of Required Creditors. Once
notice has been delivered to each Secured Debt Representative pursuant to the
provisions of this paragraph, the Collateral Trustee may (but will not be
obligated to), unless it has been directed to the contrary by an Act of Required
Creditors, take or refrain from taking such action with respect to any default
under any Secured Debt Document as it may deem advisable and in the best
interest of the holders of Secured Obligations.
SECTION 3.4 Application of Proceeds.
(a) Subject to the payment of Permitted Prior Liens to the
extent required by applicable law, the Collateral Trustee will apply the
proceeds of any collection, sale, foreclosure or other realization upon any
Collateral and the proceeds of any title insurance policy required under any
Priority Lien Document or Parity Lien Document in the following order of
application:
FIRST, to the payment of all amounts payable under this
Agreement on account of the Collateral Trustee's fees and any
reasonable legal fees, costs and expenses or other liabilities of
any kind incurred by the Collateral Trustee or any co-trustee or
agent of the Collateral Trustee in connection with any Security
Document;
SECOND, to the respective Priority Lien Representatives for
application to the payment of all outstanding Priority Lien Debt and
any other Priority Lien Obligations that are then due and payable in
such order as may be provided in the Priority Lien Documents in an
amount sufficient to pay in full in cash all outstanding Priority
Lien Debt and all other Priority Lien Obligations that are then due
and payable (including all interest accrued thereon after the
commencement of any Insolvency or Liquidation Proceeding at the
rate, including any applicable post-default rate, specified in the
Priority Lien Documents, even if such interest is not enforceable,
allowable or allowed as a claim in such proceeding, and including
the discharge or cash collateralization (at the lower of (1) 105% of
the aggregate undrawn amount and (2) the percentage of the aggregate
undrawn amount required for release of Liens under the terms of the
applicable Priority Lien Document) of all outstanding letters of
credit constituting Priority Lien Debt);
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THIRD, to the respective Parity Lien Representatives, on a pro
rata basis according to the percentage of Parity Lien Obligations
represented by the Hedge Agreement Obligations (after taking into
account any letters of credit that are available to be drawn upon by
the holders of the Hedge Agreement Obligations to provide credit
support for such Hedge Agreement Obligations), on the one hand, and
the Senior Secured Note Obligations, on the other hand, for
application to the payment of all outstanding Parity Lien Debt and
any other Parity Lien Obligations that are then due and payable in
such order as may be provided in the Parity Lien Documents in an
amount sufficient to pay in full (after taking into account any
letters of credit that are available to be drawn upon by the holders
of the Hedge Agreement Obligations to provide credit support for
such Hedge Agreement Obligations) in cash all outstanding Parity
Lien Debt and all other Parity Lien Obligations that are then due
and payable and, in the case of Parity Lien Obligations constituting
Hedge Agreement Obligations, the Hedge Outstanding Amount (including
all interest accrued thereon after the commencement of any
Insolvency or Liquidation Proceeding at the rate, including any
applicable post-default rate, specified in the Parity Lien
Documents, even if such interest is not enforceable, allowable or
allowed as a claim in such proceeding, and including the discharge
or cash collateralization (at the lower of (1) 105% of the aggregate
undrawn amount and (2) the percentage of the aggregate undrawn
amount required for release of Liens under the terms of the
applicable Parity Lien Document) of all outstanding letters of
credit, if any, constituting Parity Lien Debt); and
FOURTH, any surplus remaining after the payment in full in
cash of amounts described in the preceding clauses will be paid to
the Borrower or the applicable Pledgor, as the case may be, its
successors or assigns, or as a court of competent jurisdiction may
direct.
(b) If any Parity Lien Representative or any holder of a
Parity Lien Obligation collects or receives any proceeds of such foreclosure,
collection or other enforcement that should have been applied to the payment of
any Priority Lien Obligations in accordance with Section 3.4(a) above, whether
after the commencement of an Insolvency or Liquidation Proceeding or otherwise,
such Parity Lien Representative or such holder of a Parity Lien Obligation, as
the case may be, will forthwith deliver the same to the Collateral Trustee, for
the account of the holders of such Priority Lien Obligations and other
Obligations secured by a Permitted Prior Lien, to be applied in accordance with
Section 3.4(a). Until so delivered, such proceeds will be held by that Parity
Lien Representative or that holder of a Parity Lien Obligation, as the case may
be, for the benefit of the holders such Priority Lien Obligations and other
Obligations secured by a Permitted Prior Lien.
(c) This Section 3.4 is intended for the benefit of, and will
be enforceable as a third party beneficiary by, each present and future holder
of Secured Obligations, each present and future Secured Debt Representative and
the Collateral Trustee as holder of Priority Liens and Parity Liens. The Secured
Debt Representative of each future Series of Secured Debt will be required to
deliver a Lien Sharing and Priority Confirmation to the Collateral Trustee and
each other Secured Debt Representative at the time of incurrence of such Series
of Secured Debt.
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(d) In connection with the application of proceeds pursuant to
Section 3.4(a), except as otherwise directed by an Act of Required Creditors,
the Collateral Trustee may sell any non-cash proceeds for cash prior to the
application of the proceeds thereof.
SECTION 3.5 Appointment and Powers of the Collateral Trustee.
(a) The Administrative Agent on behalf of the holders of
Priority Lien Obligations hereby appoints the Collateral Trustee and the
Collateral Trustee hereby accepts to act as collateral trustee hereunder and the
other Security Documents for the benefit of the holders of Priority Lien
Obligations. Each of the Hedge Counterparty and the Trustee on behalf of the
holders of Notes hereby appoints the Collateral Trustee and the Collateral
Trustee hereby accepts to act as collateral trustee hereunder and the other
Security Documents for the benefit of the holders of Parity Lien Obligations.
(b) The Collateral Trustee is irrevocably authorized and
empowered to enter into and perform its obligations and protect, perfect,
exercise and enforce its interest, rights, powers and remedies under the
Security Documents and applicable law and in equity and to act as set forth in
this Article 3 or as requested in any lawful directions given to it from time to
time in respect of any matter by an Act of Required Creditors.
(c) No Secured Debt Representative or holder of Secured
Obligations will have any liability whatsoever for any act or omission of the
Collateral Trustee.
SECTION 3.6 Documents and Communications.
The Collateral Trustee will permit each Secured Debt Representative
and each holder of Secured Obligations upon reasonable written notice from time
to time to inspect and copy, at the cost and expense of the party requesting
such copies, any and all Security Documents and other documents, notices,
certificates, instructions or communications received by the Collateral Trustee
in its capacity as such.
SECTION 3.7 For Sole and Exclusive Benefit of Holders of Secured
Obligations.
The Collateral Trustee will accept, hold, administer and enforce
all Liens on the Collateral at any time transferred or delivered to it and all
other interests, rights, powers and remedies at any time granted to or
enforceable by the Collateral Trustee and all other property of the Trust
Estates solely and exclusively for the benefit of the present and future holders
of present and future Secured Obligations, and will distribute all proceeds
received by it in realization thereon or from enforcement thereof solely and
exclusively pursuant to the provisions of Section 3.4.
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SECTION 3.8 Additional Secured Debt.
(a) The Collateral Trustee will, as trustee hereunder, perform
its undertakings set forth in Section 3.1(a) with respect to each holder of
Secured Obligations of a Series of Secured Debt that is issued or incurred after
the date hereof that:
(1) holds Secured Obligations that are identified as
Parity Lien Debt or Priority Lien Debt in accordance with the
procedures set forth in Section 3.8(b);
(2) signs, through its designated Secured Debt
Representative identified pursuant to Section 3.8(b), a Collateral
Trust Joinder; and
(3) delivers a Lien Sharing and Priority Confirmation.
(b) The Borrower or other applicable Pledgor will be permitted
to designate as an additional holder of Secured Obligations hereunder each
Person who is, or who becomes, the registered holder of Parity Lien Debt or the
registered holder of Priority Lien Debt incurred by the Borrower or such other
Pledgor after the date of this Agreement in accordance with the terms of all
applicable Secured Debt Documents. The Borrower or other applicable Pledgor may
effect such designation by delivering to the Collateral Trustee, with copies to
each previously identified Secured Debt Representative, each of the following:
(1) an Officer's Certificate stating that:
(A) the Borrower or such other Pledgor intends to
incur additional Secured Debt ("ADDITIONAL SECURED DEBT")
which will either be (i) Priority Lien Debt permitted by each
applicable Secured Debt Document to be secured by a Priority
Lien equally and ratably with all previously existing and
future Priority Lien Debt or (ii) Parity Lien Debt permitted
by each applicable Secured Debt Document to be secured with a
Parity Lien equally and ratably with all previously existing
and future Parity Lien Debt;
(2) evidence that the Borrower or such other Pledgor has
duly authorized, executed (if applicable) and recorded (or caused to
be recorded) in each appropriate governmental office all relevant
filings and recordations to ensure that the Additional Secured Debt
is secured by the Collateral in accordance with the Security
Documents; and
(3) a written notice specifying the name and address of
the Secured Debt Representative for such series of Additional
Secured Debt for purposes of Section 7.7.
Notwithstanding the foregoing, nothing in this Agreement will be construed to
allow the Borrower or any other Pledgor to incur additional Indebtedness unless
otherwise permitted by the terms of all applicable Secured Debt Documents.
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ARTICLE 4. OBLIGATIONS ENFORCEABLE BY THE BORROWER AND THE OTHER PLEDGORS
SECTION 4.1 Release of Liens on Collateral.
(a) The Collateral Trustee's Liens upon the Collateral will be
released as provided in any of the following clauses:
(1) in whole, upon (A) payment in full and discharge of
all outstanding Secured Debt and all other Secured Obligations that
are outstanding, due and payable at the time all of the Secured Debt
is paid in full and discharged and (B) termination or expiration of
all commitments to extend credit under all Secured Debt Documents
and the cancellation or termination or cash collateralization (at
the lower of (1) 105% of the aggregate undrawn amount and (2) the
percentage of the aggregate undrawn amount required for release of
Liens under the terms of the applicable Secured Debt Documents) of
all outstanding letters of credit issued pursuant to any Secured
Debt Documents;
(2) until the Discharge of Priority Lien Obligations has
occurred and upon notice from the Priority Lien Representative, as
to any Collateral that is sold, transferred or otherwise disposed of
by the Borrower or any other Pledgor to a Person that is not (either
before or after such sale, transfer or disposition) the Borrower or
a Subsidiary (as defined under the Credit Agreement) of the Borrower
in a transaction or other circumstance that complies with Section
6.9 of the Credit Agreement, if any, and is otherwise permitted by
the terms of the Credit Agreement, the Hedge Agreement and all of
the other Secured Debt Documents, at the time of such sale, transfer
or other disposition or to the extent of the interest sold,
transferred or otherwise disposed of;
(3) after the Discharge of Priority Lien Obligations has
occurred and upon notice from the Parity Lien Representative, as to
any Collateral that is sold, transferred or otherwise disposed of by
the Borrower or any other Pledgor to a Person that is not (either
before or after such sale, transfer or disposition) the Borrower or
a Restricted Subsidiary (as defined under the Indenture) of the
Borrower in a transaction or other circumstance that complies with
Section 4.10 of the Indenture, if any, and Section 5(a)(ix) of the
Hedge Agreement (as added thereto by the Schedule thereto, dated as
of June 30, 2004) to the extent such Section 5(a)(ix) incorporates
Section 6.9 of the Credit Agreement and is permitted by all of the
other Secured Debt Documents, at the time of such sale, transfer or
other disposition or to the extent of the interest sold, transferred
or otherwise disposed of; provided, that the Collateral Trustee's
Liens upon the Collateral will not be released if the sale or
disposition is subject to the "Merger, Consolidation or Sale of
Assets" provisions of the Indenture or and Section 5(a)(ix) of the
Hedge Agreement (as added thereto by the Schedule thereto, dated as
of June 30, 2004) to the extent such Section 5(a)(ix) incorporates
the provisions of Section 6.9 of the Credit Agreement restricting
mergers or the sale of all of its assets;
28
(4) as to a release of less than all or substantially
all of the Collateral, if consent to the release of all Priority
Liens on such Collateral has been given by an Act of Required
Creditors;
(5) as to a release of all or substantially all of the
Collateral, if (A) consent to release of that Collateral has been
given by the requisite percentage or number of holders of each
Series of Secured Debt at the time outstanding as provided for in
the applicable Secured Debt Documents and (B) the Borrower has
delivered an Officer's Certificate to the Collateral Trustee
certifying that any such necessary consents have been obtained; or
(6) as to sales or other dispositions of assets referred
to in subsections (b),(d),(f) of Section 6.9 of the Credit Agreement, the
Collateral Trustee's Liens upon such Collateral shall be released automatically;
provided, that upon request by any holder of Priority Lien Obligations, the
Collateral Trustee will execute (with such acknowledgements and/or notarizations
as are required) and deliver such release to the Borrower or other applicable
Pledgor as so reasonably requested.
(b) The Collateral Trustee agrees for the benefit of the
Borrower and the other Pledgors that if the Collateral Trustee at any time
receives:
(1) an Officer's Certificate stating that (A) the
signing officer has read Article 4 of this Agreement and understands
the provisions and the definitions relating hereto, (B) such officer
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not the
conditions precedent in this Agreement and all other Secured Debt
Documents, if any, relating to the release of the Collateral have
been complied with and (C) in the opinion of such officer, such
conditions precedent, if any, have been complied with;
(2) the proposed instrument or instruments releasing
such Lien as to such property in recordable form, if applicable; and
(3) prior to the Discharge of Priority Lien Obligations,
the written confirmation of each Priority Lien Representative (or at
any time after the Discharge of Priority Lien Obligations, each
Parity Lien Representative) (such confirmation to be given following
receipt of, and based solely on, the Officer's Certificate described
in clause (1) above) that, in its view, such release is permitted by
Section 4.1(a) and the respective Secured Debt Documents governing
the Secured Obligations the holders of which such Secured Debt
Representative represents;
then the Collateral Trustee will execute (with such acknowledgements and/or
notarizations as are required) and deliver such release to the Borrower or other
applicable Pledgor on or before the later of (x) the date specified in such
request for such release and (y) the fifth Business Day after the date of
receipt of the items required by this Section 4.1(b) by the Collateral Trustee.
29
(c) The Collateral Trustee hereby agrees that:
(1) in the case of any release pursuant to clause (2) of
Section 4.1(a), if the terms of any such sale, transfer or other
disposition require the payment of the purchase price to be
contemporaneous with the delivery of the applicable release, then,
at the written request of and at the expense of the Borrower or
other applicable Pledgor, the Collateral Trustee will either (A) be
present at and deliver the release at the closing of such
transaction or (B) deliver the release under customary escrow
arrangements that permit such contemporaneous payment and delivery
of the release; and
(2) at any time when a Secured Debt Default under a
Series of Secured Debt that constitutes Parity Lien Debt has
occurred and is continuing, within one Business Day of the receipt
by it of any Act of Required Creditors pursuant to Section
4.1(a)(4), the Collateral Trustee will deliver a copy of such Act of
Required Creditors to each Secured Debt Representative.
(d) Each Secured Debt Representative hereby agrees that:
(1) as soon as reasonably practicable after receipt of
an Officer's Certificate from the Borrower pursuant to Section
4.1(b)(1) it will, to the extent required by such Section, either
provide (A) the written confirmation required by Section 4.1(b)(3),
(B) a written statement that such release is not permitted by
Section 4.1(a) or (C) a request for further information from the
Borrower reasonably necessary to determine whether the proposed
release is permitted by Section 4.1(a) and after receipt of such
information such Secured Debt Representative will as soon as
reasonably practicable either provide the written confirmation or
statement required pursuant to clause (A) or (B), as applicable; and
(2) within one Business Day of the receipt by it of any
notice from the Collateral Trustee pursuant to Section 4.1(c)(2),
such Secured Debt Representative will deliver a copy of such notice
to each registered holder of the Series of Priority Lien Debt or
Series of Parity Lien Debt for which it acts as Secured Debt
Representative.
SECTION 4.2 Delivery of Copies to Secured Debt Representatives.
The Borrower will deliver to each Secured Debt Representative a
copy of each Officer's Certificate delivered to the Collateral Trustee pursuant
to Section 4.1(b), together with copies of all documents delivered to the
Collateral Trustee with such Officer's Certificate. The Secured Debt
Representatives will not be obligated to take notice thereof or to act thereon,
subject to Section 4.1(d).
SECTION 4.3 Collateral Trustee not Required to Serve, File or
Record.
The Collateral Trustee is not required to serve, file, register or
record any instrument releasing or subordinating its Liens on any Collateral;
provided, however, that if the Borrower or any other Pledgor shall make a
written demand for a termination statement under Section 9-513(c) of the UCC (or
an amendment to a UCC-1 showing a release of specified items of Collateral), the
Collateral Trustee shall comply with the written request of the Borrower or such
30
Pledgor to comply with the requirements of such UCC provision; provided,
further, that the Collateral Trustee must first confirm with the Secured Debt
Representatives that the requirements of such UCC provisions have been
satisfied.
SECTION 4.4 Release of Liens in Respect of Notes.
The Collateral Trustee's Parity Lien will no longer secure the
Notes outstanding under the Indenture or any other Obligations under the
Indenture, and the right of the holders of the Notes and such Obligations to the
benefits and proceeds of the Collateral Trustee's Parity Lien on the Collateral
will terminate and be discharged:
(1) upon satisfaction and discharge of the Indenture as
set forth under Article 12 of the Indenture;
(2) upon a Legal Defeasance or Covenant Defeasance (each
as defined under the Indenture) of the Notes as set forth under
Article 8 of the Indenture;
(3) upon payment in full and discharge of all Notes
outstanding under the Indenture and all Obligations that are
outstanding, due and payable under the Indenture at the time the
Notes are paid in full and discharged;
(4) in whole or in part, with the consent of the holders
of the requisite percentage of Notes in accordance with Article 9 of
the Indenture; or
(5) upon release of the Liens securing the Priority Lien
Debt and the Hedge Agreement Debt; provided, however, that if at any
time following such release, any Liens upon the Collateral are
granted to secure any Priority Lien Debt or any Hedge Agreement
Debt, then such Liens shall also be granted to secure the Notes.
ARTICLE 5. IMMUNITIES OF THE COLLATERAL TRUSTEE
SECTION 5.1 No Implied Duty.
The Collateral Trustee will not have any fiduciary duties nor will
it have responsibilities or obligations other than those expressly assumed by it
in this Agreement and the other Security Documents. The Collateral Trustee will
not be required to take any action that is contrary to applicable law or any
provision of this Agreement or the other Security Documents.
SECTION 5.2 Appointment of Agents and Advisors.
The Collateral Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, accountants, appraisers or other experts or advisors selected
by it in good faith as it may reasonably require and will not be responsible for
any misconduct or negligence on the part of any of them.
SECTION 5.3 Other Agreements.
31
The Collateral Trustee has accepted and is bound by the Security
Documents executed by the Collateral Trustee as of the date of this Agreement
and, as directed by an Act of Required Creditors, the Collateral Trustee shall
execute additional Security Documents delivered to it after the date of this
Agreement; provided, however, that such additional Security Documents do not
adversely affect the rights, privileges, benefits and immunities of the
Collateral Trustee. The Collateral Trustee will not otherwise be bound by, or be
held obligated by, the provisions of any credit agreement, indenture or other
agreement governing Secured Debt (other than this Agreement and the other
Security Documents).
SECTION 5.4 Solicitation of Instructions.
(a) The Collateral Trustee may at any time solicit written
confirmatory instructions, in the form of an Act of Required Creditors, an
Officer's Certificate or an order of a court of competent jurisdiction, as to
any action that it may be requested or required to take, or that it may propose
to take, in the performance of any of its obligations under this Agreement or
the other Security Documents, and shall be fully justified in failing or
refusing to act whether under this Agreement or any other Security Document
until it shall have received such requested instructions.
(b) No written direction given to the Collateral Trustee by an
Act of Required Creditors that in the sole judgment of the Collateral Trustee
imposes, purports to impose or might reasonably be expected to impose upon the
Collateral Trustee any obligation or liability not set forth in or arising under
this Agreement and the other Security Documents will be binding upon the
Collateral Trustee unless the Collateral Trustee elects, at its sole option, to
accept such direction.
SECTION 5.5 Limitation of Liability.
The Collateral Trustee will not be responsible or liable for any
action taken or omitted to be taken by it hereunder or under any other Security
Document, except for its own gross negligence, bad faith or willful misconduct
as determined by a court of competent jurisdiction by a final and non-appealable
decision.
SECTION 5.6 Documents in Satisfactory Form.
The Collateral Trustee will be entitled to require that all
agreements, certificates, opinions, instruments and other documents at any time
submitted to it, including those expressly provided for in this Agreement, be
delivered to it in a form and with substantive provisions reasonably
satisfactory to it.
SECTION 5.7 Entitled to Rely.
The Collateral Trustee shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message
statement or other document or conversation believed by it to be genuine and
correct
32
and to have been signed, sent or made by the proper Person or Persons. The
Collateral Trustee may seek and rely upon, and shall be fully protected in
relying upon, any judicial order or judgment, upon any advice, opinion or
statement of legal counsel, independent consultants and other experts selected
by it in good faith and upon any certification, instruction, notice or other
writing delivered to it by the Borrower or any other Pledgor in compliance with
the provisions of this Agreement or delivered to it by any Secured Debt
Representative as to the holders of Secured Obligations for whom it acts,
without being required to determine the authenticity thereof or the correctness
of any fact stated therein or the propriety or validity of service thereof. The
Collateral Trustee may act in reliance upon any instrument comporting with the
provisions of this Agreement or any signature reasonably believed by it to be
genuine and may assume that any Person purporting to give notice or receipt or
advice or make any statement or execute any document in connection with the
provisions hereof or the other Security Documents has been duly authorized to do
so. To the extent an Officer's Certificate or opinion of counsel is required or
permitted under this Agreement to be delivered to the Collateral Trustee in
respect of any matter, the Collateral Trustee may rely conclusively on Officer's
Certificate or opinion of counsel as to such matter and such Officer's
Certificate or opinion of counsel shall be full warranty and protection to the
Collateral Trustee for any action taken, suffered or omitted by it under the
provisions of this Agreement and the other Security Documents.
SECTION 5.8 Secured Debt Default.
The Collateral Trustee will not be required to inquire as to the
occurrence or absence of any Secured Debt Default and will not be affected by or
required to act upon any notice or knowledge as to the occurrence of any Secured
Debt Default unless and until it is directed by an Act of Required Creditors.
SECTION 5.9 Actions by Collateral Trustee.
As to any matter not expressly provided for by this Agreement or
the other Security Documents, the Collateral Trustee will act or refrain from
acting as directed by an Act of Required Creditors and will be fully protected
if it does so, and any action taken, suffered or omitted pursuant to hereto or
thereto shall be binding on the holders of Secured Obligations.
SECTION 5.10 Security or Indemnity in favor of the Collateral
Trustee.
The Collateral Trustee will not be required to advance or expend
any funds or otherwise incur any financial liability in the performance of its
duties or the exercise of its powers or rights hereunder unless it has been
provided with security or indemnity reasonably satisfactory to it against any
and all liability or expense which may be incurred by it by reason of taking or
continuing to take such action.
SECTION 5.11 Rights of the Collateral Trustee.
In the event of any conflict between any terms and provisions set
forth in this Agreement and those set forth in any other Security Document, the
terms and provisions of this Agreement shall supersede and control the terms and
provisions of such other Security Document. In the event there is any bona fide,
good faith disagreement between the other parties to this Agreement or any of
the other Security Documents resulting in adverse claims being
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made in connection with Collateral held by the Collateral Trustee and the terms
of this Agreement or any of the other Security Documents do not unambiguously
mandate the action the Collateral Trustee is to take or not to take in
connection therewith under the circumstances then existing, or the Collateral
Trustee is in doubt as to what action it is required to take or not to take
hereunder or under the other Security Documents, it will be entitled to refrain
from taking any action (and will incur no liability for doing so) until directed
otherwise in writing by a request signed jointly by the parties hereto entitled
to give such direction or by order of a court of competent jurisdiction.
SECTION 5.12 Limitations on Duty of Collateral Trustee in Respect of
Collateral.
(a) Beyond the exercise of reasonable care in the custody of
Collateral in its possession, the Collateral Trustee will have no duty as to any
Collateral in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to preservation of rights against
prior parties or any other rights pertaining thereto and the Collateral Trustee
will not be responsible for filing any financing or continuation statements or
recording any documents or instruments in any public office at any time or times
or otherwise perfecting or maintaining the perfection of any Liens on the
Collateral. The Collateral Trustee will be deemed to have exercised reasonable
care in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property, and the Collateral Trustee will not be liable or responsible for any
loss or diminution in the value of any of the Collateral by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Collateral Trustee in good faith.
(b) The Collateral Trustee will not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Liens in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross negligence, bad faith or willful misconduct on the part of the
Collateral Trustee, for the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, for the validity of the title of any
Pledgor to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Trustee hereby disclaims any
representation or warranty to the present and future holders of the Secured
Obligations concerning the perfection of the Liens granted hereunder or in the
value of any of the Collateral.
SECTION 5.13 Assumption of Rights, Not Assumption of Duties.
Notwithstanding anything to the contrary contained herein:
(1) each of the parties thereto will remain liable under each
of the Security Documents (other than this Agreement) to the extent
set forth therein to perform all of their respective duties and
obligations thereunder to the same extent as if this Agreement had
not be executed;
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(2) the exercise by the Collateral Trustee of any of its
rights, remedies or powers hereunder will not release such parties
from any of their respective duties or obligations under the other
Security Documents; and
(3) the Collateral Trustee will not be obligated to perform
any of the obligations or duties of any of the parties thereunder
other than the Collateral Trustee.
SECTION 5.14 No Liability for Clean Up of Hazardous Materials.
In the event that the Collateral Trustee is required to acquire
title to an asset for any reason, or take any managerial action of any kind in
regard thereto, in order to carry out any fiduciary or trust obligation for the
benefit of another, which in the Collateral Trustee's sole discretion may cause
the Collateral Trustee to be considered an "owner or operator" under any
environmental laws or otherwise cause the Collateral Trustee to incur, or be
exposed to, any environmental liability or any liability under any other
federal, state or local law, the Collateral Trustee reserves the right, instead
of taking such action, either to resign as Collateral Trustee or to arrange for
the transfer of the title or control of the asset to a court appointed receiver.
The Collateral Trustee will not be liable to any Person for any environmental
liability or any environmental claims or contribution actions under any federal,
state or local law, rule or regulation by reason of the Collateral Trustee's
actions and conduct as authorized, empowered and directed hereunder or relating
to any kind of discharge or release or threatened discharge or release of any
hazardous materials into the environment.
ARTICLE 6. RESIGNATION AND REMOVAL OF THE COLLATERAL TRUSTEE
SECTION 6.1 Resignation or Removal of Collateral Trustee.
Subject to the appointment of a successor Collateral Trustee as
provided in Section 6.2 and the acceptance of such appointment by the successor
Collateral Trustee:
(a) the Collateral Trustee may resign at any time by giving
not less than 30 days' notice of resignation to each Secured Debt Representative
and the Borrower; and
(b) the Collateral Trustee may be removed at any time, with or
without cause, by an Act of Required Creditors.
SECTION 6.2 Appointment of Successor Collateral Trustee.
Upon any such resignation or removal, a successor Collateral
Trustee may be appointed by an Act of Required Creditors. If no successor
Collateral Trustee has been so appointed and accepted such appointment within 30
days after the predecessor Collateral Trustee gave notice of resignation or was
removed, the retiring Collateral Trustee may (at the expense of the Borrower),
at its option, appoint a successor Collateral Trustee, or petition a court of
competent jurisdiction for appointment of a successor Collateral Trustee, which
must be a bank or trust company:
(1) authorized to exercise corporate trust powers;
(2) having a combined capital and surplus of at least
$500,000,000;
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(3) maintaining an office in New York, New York; and
(4) that is not a Secured Debt Representative.
The Collateral Trustee will fulfill its obligations hereunder until
a successor Collateral Trustee meeting the requirements of this Section 6.2 has
accepted its appointment as Collateral Trustee and the provisions of Section 6.3
have been satisfied.
SECTION 6.3 Succession.
When the Person so appointed as successor Collateral Trustee
accepts such appointment:
(1) such Person will succeed to and become vested with
all the rights, powers, privileges and duties of the predecessor
Collateral Trustee, and the predecessor Collateral Trustee will be
discharged from its duties and obligations hereunder; and
(2) the predecessor Collateral Trustee will (at the
expense of the Borrower) promptly transfer all Liens and collateral
security and other property of the Trust Estates within its
possession or control to the possession or control of the successor
Collateral Trustee and will execute instruments and assignments as
may be necessary or desirable or reasonably requested by the
successor Collateral Trustee to transfer to the successor Collateral
Trustee all Liens, interests, rights, powers and remedies of the
predecessor Collateral Trustee in respect of the Security Documents
or the Trust Estates.
Thereafter the predecessor Collateral Trustee will remain entitled to enforce
the immunities granted to it in Article 5 and the provisions of Sections 7.10
and 7.11.
SECTION 6.4 Merger, Conversion or Consolidation of Collateral
Trustee.
Any Person into which the Collateral Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Collateral Trustee shall be a
party, or any Person succeeding to the business of the Collateral Trustee shall
be the successor of the Collateral Trustee pursuant to Section 6.3, provided
that (i) without the execution or filing of any paper with any party hereto or
any further act on the part of any of the parties hereto, except where an
instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding, such Person
satisfies the eligibility requirements specified in clauses (1) through (4) of
Section 6.2 and (ii) prior to any such merger, conversion or consolidation, the
Collateral Trustee shall have notified the Borrower, each Priority Lien
Representative and each Parity Lien Representative thereof in writing.
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ARTICLE 7. MISCELLANEOUS PROVISIONS
SECTION 7.1 Amendment.
(a) No amendment or supplement to the provisions of any
Security Document will be effective without the approval of the Collateral
Trustee acting as directed by an Act of Required Creditors, except that:
(1) any amendment or supplement that has the effect
solely of adding or maintaining Collateral, securing additional
Secured Debt that was otherwise permitted by the terms of the
Secured Debt Documents to be secured by the Collateral or
preserving, perfecting or establishing the Liens thereon or the
rights of the Collateral Trustee therein will become effective when
executed and delivered by the Borrower or any other applicable
Pledgor party thereto and the Collateral Trustee;
(2) no amendment or supplement that reduces, impairs or
adversely affects the right of any holder of Secured Obligations:
(A) to vote its outstanding Secured Debt as to any
matter described as subject to an Act of Required Creditors
(or amends the provisions of this clause (2) or the definition
of "Act of Required Creditors", "Required Priority Creditors"
or "Required Parity Creditors"),
(B) to share in the order of application described
in Section 3.4 in the proceeds of enforcement of or
realization on any Collateral that has not been released in
accordance with the provisions described in Section 4.1 or
(C) to require that Liens securing Secured
Obligations be released only as set forth in the provisions
described in Section 4.1,
will become effective without the consent of the requisite percentage or number
of holders of each Series of Secured Debt so affected under the applicable
Secured Debt Documents; and
(3) no amendment or supplement that imposes any
obligation upon the Collateral Trustee or any Secured Debt
Representative or adversely affects the rights of the Collateral
Trustee or any Secured Debt Representative, respectively, in its
individual capacity as such will become effective without the
consent of the Collateral Trustee or such Secured Debt
Representative, respectively.
(b) Notwithstanding Section 7.1(a) but subject to Sections
7.1(a)(2) and 7.1(a)(3):
(1) any mortgage or other Security Document that secures
Parity Lien Obligations (but not Priority Lien Obligations) may be
amended or supplemented with the approval of the Collateral Trustee
acting as directed in writing by the Required Parity Creditors,
unless such amendment or supplement would not be permitted under the
terms of this Agreement or the other Priority Lien Documents; and
37
(2) any amendment or waiver of, or any consent under,
any provision of this Agreement or any other Security Document that
secures any Priority Lien Obligations will apply automatically to
any comparable provision of any comparable Parity Lien Document,
without the consent of or notice to any other holder of Parity Lien
Obligations and without any action by the Borrower or any other
Pledgor or any holder of Notes or other Parity Lien Obligations.
(c) The Collateral Trustee will not enter into any amendment
or supplement unless it has received an Officer's Certificate to the effect that
such amendment or supplement will not result in a breach of any provision or
covenant contained in any of the Secured Debt Documents. Prior to executing any
amendment or supplement pursuant to this Section 7.1, the Collateral Trustee
will be entitled to receive an opinion of counsel of the Borrower to the effect
that the execution of such document is authorized or permitted hereunder, and
with respect to amendments adding Collateral, an opinion of counsel of the
Borrower addressing customary perfection, and if such additional Collateral
consists of equity interests of any Person, priority matters with respect to
such additional Collateral.
(d) The holders of Parity Lien Obligations and the Parity Lien
Representatives agree that each Security Document that secures Parity Lien
Obligations (but not also securing Priority Lien Obligations) will include the
following language:
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Collateral Trustee pursuant to this Agreement
and the exercise of any right or remedy by such Collateral Trustee hereunder are
subject to the provisions of the Collateral Trust Agreement, dated as of July 7,
2004, among Xxxxxx & Xxxxx Corporation, the Pledgors from time to time party
thereto, Xxxxxxx Sachs Credit Partners L.P., as Administrative Agent under the
Credit Agreement (as defined therein), X. Xxxx & Company, as Hedge Counterparty
under the Hedge Agreement (as defined therein), BNY Midwest Trust Company, as
Trustee under the Indenture (as defined therein) and Xxxxx Fargo Bank, N.A., as
Collateral Trustee (as amended, supplemented, amended and restated or otherwise
modified and in effect from time to time, the "Collateral Trust Agreement"). In
the event of any conflict between the terms of the Collateral Trust Agreement
and this Agreement, the terms of the Collateral Trust Agreement will govern."
; provided, however, that if the jurisdiction in which any such Parity Lien
Document will be filed prohibits the inclusion of the language above or would
prevent a document containing such language from being recorded, the Parity Lien
Representatives and the Priority Lien Representatives agree, prior to such
Parity Lien Document being entered into, to negotiate in good faith replacement
language stating that the lien and security interest granted under such Parity
Lien Document is subject to the provisions of this Agreement.
SECTION 7.2 Voting.
In connection with any matter under this Agreement requiring a
vote of holders of Secured Debt, each Series of Secured Debt will cast its votes
in accordance with the Secured Debt Documents governing such Series of Secured
Debt. The amount of Secured Debt to be voted by a Series of Secured Debt will
equal (1) the aggregate principal amount of Secured Debt held by such Series of
Secured Debt (including outstanding letters of credit whether or not then
38
available or drawn), plus (2) other than in connection with an exercise of
remedies, the aggregate unfunded commitments to extend credit which, when
funded, would constitute Indebtedness of such Series of Secured Debt plus, in
the case of Hedge Agreement Obligations, the amount that would be payable in the
reasonable good faith judgment of the Hedge Agreement Representative under, and
in accordance with the terms of, the applicable Hedge Agreement Documents if
such Hedge Agreement Documents were terminated on the business day prior to the
date of any such vote based on an Event of Default under the applicable Hedge
Agreement Documents with respect to the Borrower or, if the applicable Hedge
Agreement Documents were previously terminated, the termination amount
determined in accordance with Section 6(e) of the Hedge Agreement (and related
provisions thereunder) which remains unpaid as of the business day preceding
such date (the "HEDGE AGREEMENT OUTSTANDING AMOUNT"). Following and in
accordance with the outcome of the applicable vote under its Secured Debt
Documents, the Secured Debt Representative of each Series of Secured Debt will
cast all of its votes as a block in respect of any vote under this Agreement.
SECTION 7.3 Further Assurances; Insurance.
(a) The Borrower and each of the other Pledgors will do or
cause to be done all acts and things that may be required, or that the
Collateral Trustee from time to time may reasonably request, to assure and
confirm that the Collateral Trustee holds, for the benefit of the holders of
Secured Obligations, duly created and enforceable and perfected Liens upon the
Collateral (including any property or assets that are acquired or otherwise
become Collateral after the date hereof), in each case as contemplated by, and
with the Lien priority required under, the Secured Debt Documents.
(b) Upon the reasonable request of the Collateral Trustee or
any Secured Debt Representative at any time and from time to time, the Borrower
and each of the other Pledgors will promptly execute, acknowledge and deliver
such security documents, instruments, certificates, notices and other documents,
and take such other actions as may be reasonably required, or that the
Collateral Trustee may reasonably request, to create, perfect, protect, assure
or enforce the Liens and benefits intended to be conferred, in each case as
contemplated by the Secured Debt Documents for the benefit of holders of Secured
Obligations.
(c) The Borrower and the other Pledgors will maintain such
insurance as may be required by the Priority Lien Documents, the Parity Lien
Documents and the Security Documents.
(f) Upon the request of the Collateral Trustee, the Borrower
and the other Pledgors will permit the Collateral Trustee or any of its agents
or representatives, at reasonable times and intervals upon reasonable prior
notice, to visit their offices and sites and inspect any of the Collateral and
to discuss matters relating to the Collateral with their respective officers and
independent public accountants. The Borrower and the other Pledgors shall, at
any reasonable time and from time to time upon reasonable prior notice, permit
the Collateral Trustee or any of its agents or representatives to examine and
make copies of and abstracts from the records and
39
books of account of the Borrower and the other Pledgors and their Subsidiaries,
all at the Borrower's expense.
SECTION 7.4 Perfection of Junior Trust Estate.
Solely for purposes of perfecting the Liens of the Collateral
Trustee in its capacity as agent of the holders of Parity Lien Obligations and
the Parity Lien Representatives in any portion of the Junior Trust Estate in the
possession or control of the Collateral Trustee (or its agents or bailees) as
part of the Senior Trust Estate including, without limitation, any instruments,
goods, negotiable documents, tangible chattel paper, electronic chattel paper,
certificated securities, money, deposit accounts and securities accounts, the
Collateral Trustee, the holders of Priority Lien Obligations and the Priority
Lien Representatives hereby acknowledge that the Collateral Trustee also holds
such property as agent for the benefit of the Collateral Trustee for the benefit
of the holders of Parity Lien Obligations and the Parity Lien Representatives.
SECTION 7.5 Successors and Assigns.
(a) Except as provided in Section 5.2, the Collateral Trustee
may not, in its capacity as such, delegate any of its duties or assign any of
its rights hereunder, and any attempted delegation or assignment of any such
duties or rights will be null and void. All obligations of the Collateral
Trustee hereunder will inure to the sole and exclusive benefit of, and be
enforceable by, each Secured Debt Representative and each present and future
holder of Secured Obligations, each of whom will be entitled to enforce this
Agreement as a third-party beneficiary hereof, and all of their respective
successors and assigns.
(b) Neither the Borrower nor any other Pledgor may delegate
any of its duties or assign any of its rights hereunder, and any attempted
delegation or assignment of any such duties or rights will be null and void. All
obligations of the Borrower and the other Pledgors hereunder will inure to the
sole and exclusive benefit of, and be enforceable by, the Collateral Trustee,
each Secured Debt Representative and each present and future holder of Secured
Obligations, each of whom will be entitled to enforce this Agreement as a
third-party beneficiary hereof, and all of their respective successors and
assigns.
SECTION 7.6 Delay and Waiver.
No failure to exercise, no course of dealing with respect to the
exercise of, and no delay in exercising, any right, power or remedy arising
under this Agreement or any of the other Security Documents will impair any such
right, power or remedy or operate as a waiver thereof. No single or partial
exercise of any such right, power or remedy will preclude any other or future
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
SECTION 7.7 Notices.
40
Any communications, including notices and instructions, between
the parties hereto or notices provided herein to be given may be given to the
following addresses:
If to the Collateral Trustee: Xxxxx Fargo Bank, N.A.
Sixth & Marquette; X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Fax: 000-000-0000
If to the Borrower or any
other Pledgor: Xxxxxx & Xxxxx Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx, CFO
Fax: 000-000-0000
If to the Administrative
Agent: Xxxxxxx Xxxxx Credit
Partners L.P.
Attention:
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: Xxx Xxxxxxxxx
Fax: 000-000-0000
If to the Hedge Counterparty: X. Xxxx & Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: 000-000-0000
If to the Trustee: BNY Midwest Trust Company
0 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: 000-000-0000
and if to any other Secured Debt Representative, to such address as it may
specify by written notice to the parties named above.
All notices and communications will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery, to the relevant address set forth above or, as
to holders of Secured Debt, its address shown on the register kept by the office
or agency where the relevant Secured Debt may be presented for registration of
transfer or for exchange. To the extent applicable, any notice or communication
will also be so mailed to any Person described in Section 313(c) of the Trust
Indenture Act of 1939, as amended, to the extent required thereunder. Failure to
mail a notice or communication to a holder of Secured Debt or any defect in it
will not affect its sufficiency with respect to other holders of Secured Debt.
41
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
SECTION 7.8 Notice Following Discharge of Priority Lien Obligations.
Promptly following the Discharge of Priority Lien Obligations with
respect to one or more Series of Priority Lien Debt, each Priority Lien
Representative with respect to each applicable Series of Priority Lien Debt that
is so discharged will provide written notice of such discharge to the Collateral
Trustee and to each other Secured Debt Representative.
SECTION 7.9 Entire Agreement.
This Agreement states the complete agreement of the parties
relating to the undertaking of the Collateral Trustee set forth herein and
supersedes all oral negotiations and prior writings in respect of such
undertaking.
SECTION 7.10 Compensation; Expenses.
The Pledgors jointly and severally agree to pay, promptly upon
demand:
(1) such compensation to the Collateral Trustee and its agents
as the Borrower and the Collateral Trustee may agree in writing from
time to time;
(2) all reasonable costs and expenses incurred by the
Collateral Trustee and its agents in the preparation, execution,
delivery, filing, recordation, administration or enforcement of this
Agreement or any other Security Document or any consent, amendment,
waiver or other modification relating hereto or thereto;
(3) all reasonable fees, expenses and disbursements of legal
counsel and any auditors, accountants, consultants or appraisers or
other professional advisors and agents engaged by the Collateral
Trustee or any Secured Debt Representative incurred in connection
with the negotiation, preparation, closing, administration,
performance or enforcement of this Agreement and the other Security
Documents or any consent, amendment, waiver or other modification
relating hereto or thereto and any other document or matter
requested by the Borrower or any other Pledgor;
(4) all reasonable costs and expenses incurred by the
Collateral Trustee and its agents in creating, perfecting,
preserving, releasing or enforcing the Collateral Trustee's Liens on
the Collateral, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, and title insurance
premiums;
(5) all other reasonable costs and expenses incurred by the
Collateral Trustee and its agents in connection with the
negotiation, preparation and execution of the Security Documents and
any consents, amendments, waivers or other modifications thereto and
the transactions contemplated thereby or the exercise of rights or
performance of obligations by the Collateral Trustee thereunder; and
42
(6) after the occurrence of any Secured Debt Default, all
reasonable costs and expenses incurred by the Collateral Trustee,
its agents and any Secured Debt Representative in connection with
the preservation, collection, foreclosure or enforcement of the
Collateral subject to the Security Documents or any interest, right,
power or remedy of the Collateral Trustee or in connection with the
collection or enforcement of any of the Secured Obligations or the
proof, protection, administration or resolution of any claim based
upon the Secured Obligations in any Insolvency or Liquidation
Proceeding, including all reasonable fees and disbursements of
attorneys, accountants, auditors, consultants, appraisers and other
professionals engaged by the Collateral Trustee, its agents or the
Secured Debt Representatives.
The agreements in this Section 7.10 will survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.
SECTION 7.11 Indemnity.
(a) The Pledgors jointly and severally agree to defend
(subject to Indemnitees' selection of counsel; it being understood that the
holders of Priority Lien Obligations and the holders of Parity Lien Obligations
shall be entitled to select a single transaction counsel and local counsel),
indemnify, pay and hold harmless the Collateral Trustee, each Secured Debt
Representative, each holder of Secured Obligations and each of their respective
Affiliates and each and all of the directors, officers, partners, trustees,
employees, attorneys and agents, and (in each case) their respective heirs,
representatives, successors and assigns (each of the foregoing, an "INDEMNITEE")
from and against any and all Indemnified Liabilities; provided, no Indemnitee
will be entitled to indemnification hereunder with respect to any Indemnified
Liability to the extent such Indemnified Liability is found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee.
(b) All amounts due under this Section 7.11 will be payable
upon demand.
(c) To the extent that the undertakings to defend, indemnify,
pay and hold harmless set forth in Section 7.11(a) may be unenforceable in whole
or in part because they violate any law or public policy, each of the Pledgors
will contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
(d) No Pledgor will ever assert any claim against any
Indemnitee, on any theory of liability, for any lost profits or special,
indirect or consequential damages or (to the fullest extent a claim for punitive
damages may lawfully be waived) any punitive damages arising out of, in
connection with, or as a result of, this Agreement or any other Secured Debt
Document or any agreement or instrument or transaction contemplated hereby or
relating in any respect to any Indemnified Liability, and each of the Pledgors
hereby forever waives, releases and agrees not to xxx upon any claim for any
such lost profits or special, indirect, consequential
43
or (to the fullest extent lawful) punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
(e) The agreements in this Section 7.11 will survive repayment
of all other Secured Obligations and the removal or resignation of the
Collateral Trustee.
SECTION 7.12 Severability.
If any provision of this Agreement is invalid, illegal or
unenforceable in any respect or in any jurisdiction, the validity, legality and
enforceability of such provision in all other respects and of all remaining
provisions, and of such provision in all other jurisdictions, will not in any
way be affected or impaired thereby.
SECTION 7.13 Headings.
Section headings herein have been inserted for convenience of
reference only, are not to be considered a part of this Agreement and will in no
way modify or restrict any of the terms or provisions hereof.
SECTION 7.14 Obligations Secured.
All obligations of the Pledgors set forth in or arising under this
Agreement will be Secured Obligations and are secured by all Liens granted by
the Security Documents.
SECTION 7.15 GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
SECTION 7.16 CONSENT TO JURISDICTION.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY HERETO ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX,
XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
PARTY HERETO, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:
(1) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
44
(2) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(3) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO SUCH PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 7.7;
(4) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (3) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH PARTY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND
(5) AGREES EACH PARTY HERETO RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST ANY PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 7.17 WAIVER OF JURY TRIAL.
EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER THIS AGREEMENT OR ANY
OF THE OTHER SECURITY DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT OR THE INTENTS AND PURPOSES OF THE OTHER
SECURITY DOCUMENTS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY
HERETO HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH PARTY HERETO WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 7.17 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS OF OR TO THIS AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS
45
RELATING THERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
SECTION 7.18 Counterparts.
This Agreement may be executed in any number of counterparts
(including by facsimile), each of which when so executed and delivered will be
deemed an original, but all such counterparts together will constitute but one
and the same instrument.
SECTION 7.19 Effectiveness.
This Agreement will become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by each party of
written notification of such execution and written or telephonic authorization
of delivery thereof.
SECTION 7.20 Additional Pledgors.
The Borrower will cause each Person that becomes a Pledgor or is
required by any Secured Debt Document to become a party to this Agreement to
become a party to this Agreement, for all purposes of this Agreement, by causing
such Person to execute and deliver to the parties hereto a Collateral Trust
Joinder, whereupon such Person will be bound by the terms hereof to the same
extent as if it had executed and delivered this Agreement as of the date hereof.
The Borrower shall promptly provide each Secured Debt Representative with a copy
of each Collateral Trust Joinder executed and delivered pursuant to this Section
7.20.
SECTION 7.21 Continuing Nature of this Agreement.
This Agreement, including the subordination provisions hereof,
will be reinstated if at any time any payment or distribution in respect of any
of the Priority Lien Obligations is rescinded or must otherwise be returned in
an Insolvency or Liquidation Proceeding or otherwise by any holder of Priority
Lien Obligations or Priority Lien Representative or any representative of any
such party (whether by demand, settlement, litigation or otherwise). In the
event that all or any part of a payment or distribution made with respect to the
Priority Lien Obligations is recovered from any holder of Priority Lien
Obligations or any Priority Lien Representative in an Insolvency or Liquidation
Proceeding or otherwise, such payment or distribution received by any holder of
Parity Lien Obligations or Parity Lien Representative with respect to the Parity
Lien Obligations from the proceeds of any Collateral or any title insurance
policy required by any real property mortgage at any time after the date of the
payment or distribution that is so recovered, whether pursuant to a right of
subrogation or otherwise, that Parity Lien Representative or that holder of a
Parity Lien Obligation, as the case may be, will forthwith deliver the same to
the Collateral Trustee, for the account of the holders of the Priority Lien
Obligations and other Obligations secured by a Permitted Prior Lien, to be
applied in accordance with Section 3.4. Until so delivered, such proceeds will
be held by that Parity Lien Representative or that holder of a Parity Lien
Obligation, as the case may be, for the benefit of the holders of the Priority
Lien Obligations and other Obligations secured by a Permitted Prior Lien.
SECTION 7.22 Insolvency.
46
This Agreement will be applicable both before and after the
commencement of any Insolvency or Liquidation Proceeding by or against any
Pledgor. The relative rights, as provided for in this Agreement, will continue
after the commencement of any such Insolvency or Liquidation Proceeding on the
same basis as prior to the date of the commencement of any such case, as
provided in this Agreement.
SECTION 7.23 Rights and Immunities of Secured Debt Representatives.
The Administrative Agent will be entitled to all of the rights,
protections, immunities and indemnities set forth in the Credit Agreement, the
Hedge Counterparty will be entitled to all of the rights, protections,
immunities and indemnities set forth in the Hedge Agreement, the Trustee will be
entitled to all of the rights, protections, immunities and indemnities set forth
in the Indenture and any future Secured Debt Representative will be entitled to
all of the rights, protections, immunities and indemnities set forth in the
credit agreement, indenture or other agreement governing the applicable Secured
Debt with respect to which such Person will act as representative, in each case
as if specifically set forth herein. In no event will any Secured Debt
Representative be liable for any act or omission on the part of the Pledgors or
the Collateral Trustee hereunder.
[The remainder of this page is intentionally left blank.]
47
IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Agreement to be executed by their respective officers or representatives as of
the day and year first above written.
XXXXXX & XXXXX CORPORATION
By: /s/ Frost X. Xxxxxxx
-------------------------------------
Name: Frost X. Xxxxxxx
Title: President
THE CANTON OIL & GAS COMPANY
By: /s/ Frost X. Xxxxxxx
-------------------------------------
Name: Frost X. Xxxxxxx
Title: President
XXXX LAKE DRILLING, INC.
By: /s/ Frost X. Xxxxxxx
-------------------------------------
Name: Frost X. Xxxxxxx
Title: Chief Executive Officer
S-1
CAPITAL C ENERGY OPERATIONS, LP
BY: CAPITAL C ENERGY, LP, ITS GENERAL PARTNER
BY: CAPITAL C ENERGY, LLC, ITS GENERAL PARTNER
By: /s/ Frost X. Xxxxxxx
-------------------------------------
Name: Frost X. Xxxxxxx
Title: President
S-2
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
S-3
X. XXXX & COMPANY, as Hedge Counterparty
By: /s/ L. Xxxxx X'Xxxxx
-------------------------------------
Name: L. Xxxxx X'Xxxxx
Title:
S-4
BNY MIDWEST TRUST COMPANY, as Trustee
under the Indenture
By: /s/ X. Xxxxxx
-------------------------------------
Name: X. Xxxxxx
Title: Assistant Vice President
S-5
XXXXX FARGO BANK, N.A., as Collateral Trustee
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
S-6
EXHIBIT A
to Collateral Trust Agreement
[FORM OF]
COLLATERAL TRUST JOINDER
The undersigned, _____________________, a _______________, hereby agrees
to become party as [a Pledgor] [a Parity Lien Representative] [a Priority Lien
Representative] under the Collateral Trust Agreement dated as of July ___, 2004
(the "COLLATERAL TRUST AGREEMENT") among Xxxxxx & Blake Corporation, the
Pledgors from time to time party thereto, Xxxxxxx Xxxxx Credit Partners L.P., as
Administrative Agent under the Credit Agreement (as defined therein), X. Xxxx &
Company, as Hedge Counterparty (as defined therein), BNY Midwest Trust Company,
as Trustee under the Indenture (as defined therein) and Xxxxx Fargo Bank, N.A.,
as Collateral Trustee, as amended, supplemented, amended and restated or
otherwise modified and in effect from time to time, for all purposes thereof on
the terms set forth therein, and to be bound by the terms of the Collateral
Trust Agreement as fully as if the undersigned had executed and delivered the
Collateral Trust Agreement as of the date thereof.
The provisions of Article 7 of the Collateral Trust Agreement will apply
with like effect to this Joinder.
IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Joinder to be executed by their respective officers or representatives as of
___________________, 20____.
[________________________________]
By:_______________________________________
Name: _________________________________
Title: ________________________________
EXHIBIT A
