Exhibit 10.3
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of June 2, 2003, is entered
into among XXXXXX TRUST AND SAVINGS BANK, as Senior Agent (as defined below),
MANUFACTURERS AND TRADERS TRUST COMPANY, as trustee and collateral agent under
the Indenture referred to below, and RENT-WAY, INC., a Pennsylvania corporation
(the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower, the financial institutions party to the Senior
Credit Agreement referred to below as lenders and issuing banks, and Xxxxxx
Trust and Savings Bank, as administrative agent and collateral agent for such
lenders and issuing banks (in such capacity, the "Senior Agent") (as such
agreement may be amended, amended and restated, supplemented or otherwise
modified, from time to time at the option of the parties thereto and any other
agreements pursuant to which any of the indebtedness, commitments, obligations,
costs, expenses, fees, reimbursements, indemnities or other obligations payable
or owing thereunder may be refinanced, restructured, renewed, extended,
increased, refunded or replaced as any such other agreements may from time to
time at the option of the parties thereto be amended, amended and restated,
supplemented, renewed or otherwise modified, being collectively referred to
herein the "Senior Credit Agreement"); and
WHEREAS, the Borrower and Manufacturers and Traders Trust Company, as
the trustee and the collateral agent (in its capacity as collateral agent, the
"Trustee") under the Indenture referred to below, propose to enter into an
Indenture, dated as of June 2, 2003 (as such Indenture may be amended, amended
and restated, supplemented or otherwise modified, from time to time at the
option of the parties thereto, the "Indenture") governing the rights and duties
of the Borrower and its Subsidiaries under the 11 7/8% Senior Secured Notes due
2010 (the "Senior Secured Notes"); and
WHEREAS, it is a condition precedent to the effectiveness of the Senior
Credit Agreement that the Senior Agent (for itself and for the benefit of the
Senior Lenders), the Trustee (for itself and for the benefit of the Noteholders)
and the Borrower enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, and in reliance upon
the representations, warranties and covenants herein contained, the parties
hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural form of the terms indicated) and capitalized terms defined in the Senior
Credit Agreement used (but not otherwise defined) herein shall have the meanings
ascribed to them in the Senior Credit Agreement:
"Agreement" shall mean this Agreement, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"Bankruptcy Code" shall mean title 11 of the United States Code (11
U.S.C. 101 et seq.), as amended from time to time and any successor statute.
"Business Day" shall mean any day other than Saturday, Sunday and a day
that is a legal holiday under the laws of the State of New York or on which
banking institutions in the State of New York are required or authorized by law
or other governmental action to close.
"Common Collateral" shall mean all of the assets of the Borrower or any
of its Subsidiaries whether real, personal or mixed, constituting both Senior
Lender Collateral and Noteholder Collateral.
"Comparable Noteholder Collateral Document" means, in relation to any
Common Collateral subject to any Senior Lender Collateral Document, that
Noteholder Collateral Document which creates a security interest in the same
Common Collateral, granted by the Borrower or same Guarantor, as applicable.
"Discharge of Senior Lender Claims" shall mean, except to the extent
otherwise provided in Section 5.6, payment in full of the principal of, interest
and premium, if any, on all indebtedness outstanding under the Senior Credit
Agreement and any other Future First-Lien Credit Facility or, with respect to
Hedging Obligations or letters of credit outstanding thereunder, delivery of
cash collateral or backstop letters of credit in respect thereof in compliance
with the Senior Credit Agreement or such First-Lien Credit Facility, as
applicable, in each case after or concurrently with termination of all
commitments to extend credit thereunder, and payment in full of any other Senior
Lender Claims that are due and payable at or prior to the time such principal
and interest are paid.
"Excess Cash Flow Collateral Account" shall mean that certain
securities account maintained by Trustee for the deposit of certain excess cash
flow proceeds as required by Section 4.19 of the Indenture pursuant to an
Account Control Agreement in the form attached as Exhibit A hereto.
"Future First-Lien Credit Facility" shall mean any First-Lien Credit
Facility (as defined in the Indenture) that is designated by the Borrower as a
"First-Lien Credit Facility" for purposes of the Indenture and as permitted by
the Indenture (other than the Senior Credit Agreement referenced in the recitals
hereto), provided that the Required Lenders under any Senior Credit Agreement
then in effect have consented to such designation.
"Future Other First-Lien Obligations" shall mean all Obligations of the
Borrower or any of its Subsidiaries in respect of cash management services or
Hedging Obligations that are designated by the Borrower as "Credit Agreement
Obligations" for purposes of the Indenture (other than any Senior Lender Cash
Management Obligations and Senior Lender Hedging Obligations), provided that the
Required Lenders under any Senior Credit Agreement then in effect have consented
to such designation.
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"Guarantor" means each Subsidiary of the Borrower that is a guarantor
of the Noteholder Claims.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate agreements, interest rate cap
agreements, interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Indebtedness" means, with respect to any specified Person without
duplication, any indebtedness of such Person, whether or not contingent (a) in
respect of borrowed money; (b) evidenced by bonds, notes, debentures or other
similar instruments or letters of credit (or reimbursement agreements in respect
thereof); (c) in respect of banker's acceptances; (d) representing obligations
in connection with Capital Leases; (e) representing the balance deferred and
unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
preceding items (other than letters of credit) would appear as a liability upon
a balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of other Persons
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) to the extent of the fair
market value of such asset where the Indebtedness so secured is not the
Indebtedness of such Person and, to the extent not otherwise included, the
guaranty by the specified Person of the Indebtedness of any other Person. The
amount of any Indebtedness outstanding as of any date will be (i) the accreted
value of the Indebtedness, in the case of any Indebtedness issued with original
issue discount; and (ii) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in the case
of any other Indebtedness. Hedging Obligations shall not constitute
Indebtedness, except to the extent they appear on the balance sheet of the
Borrower or as included in the Indenture. Indebtedness of the Borrower and its
Restricted Subsidiaries (as defined in the Indenture) shall not include any
Indebtedness of the Borrower or any of its Restricted Subsidiaries that has been
either satisfied and discharged or defeased through covenant defeasance or legal
defeasance.
"Indenture" shall have the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" shall mean (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to the
Borrower or any Guarantor, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
the Borrower or any Guarantor or with respect to any of their respective assets,
(c) any liquidation, dissolution, reorganization or winding up of the Borrower
or any Guarantor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (d) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Borrower or any
Guarantor.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, deposit arrangement, encumbrance, lien or
preference priority or other security agreement or other preferential
arrangement whatsoever, including, without limitation, any right
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of setoff, any conditional sale or other title retention agreement, the interest
of a lessor under a lease or any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement naming the owner of the asset to which such Lien relates as debtor.
"Noteholder Claims" shall mean all indebtedness, obligations and other
liabilities (contingent or otherwise) arising under or with respect to the
Noteholder Documents or any of them.
"Noteholder Collateral" shall mean all of the assets of the Borrower or
any Guarantor whether real, personal or mixed, in which the Noteholders or the
Trustee or any of them now or hereafter holds a Lien as security for any
Noteholder Claim.
"Noteholder Collateral Documents" shall mean the Noteholder Security
Agreement, the Noteholder Mortgages, and any document or instrument executed and
delivered pursuant to any Noteholder Document at any time or otherwise pursuant
to which a Lien is granted by the Borrower or a Guarantor to secure the
Noteholder Claims or under which rights or remedies with respect to any such
Lien are governed, as the same may be amended, renewed, extended, supplemented
or modified from time to time.
"Noteholder Documents" shall mean the Indenture, the Notes (as defined
in the Indenture), the Noteholder Collateral Documents, any document or
instrument evidencing any Obligations (as defined in the Indenture) under the
Indenture and any other related document or instrument executed and delivered
pursuant to any Noteholder Document at any time or otherwise evidencing any
Noteholder Claims, as the same may be amended, renewed, extended, supplemented
or modified from time to time.
"Noteholder Mortgages" shall mean a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by the Borrower or any Subsidiary is granted to
secure the Noteholder Claims or under which rights or remedies with respect to
any such Liens are governed, as the same may be amended, renewed, extended,
supplemented or modified.
"Noteholder Security Agreement" shall mean the Security and Pledge
Agreement, dated as of June __, 2003, between the Borrower, the Guarantors and
the Trustee, as the same may be amended, renewed, extended, supplemented or
modified.
"Noteholders" shall mean the Persons holding Noteholder Claims.
"Obligations" shall mean any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including any obligation to post
cash collateral in respect of letters of credit and any other obligations), or
any obligation for cash management services or Hedging Obligations.
"Person" shall mean any person, individual, sole proprietorship,
partnership, joint venture, corporation, unincorporated organization,
association, institution, entity or other party,
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including, without limitation, any government and any political subdivision,
agency or instrumentality thereof.
"Pledged Collateral" shall mean the "Pledged Notes" and the "Pledged
Stock" under, and as defined in, the Security Agreement, cash and other items in
lockbox accounts established pursuant to the Senior Lender Documents and the
Excess Cash Flow Collateral Accounts, and any other property in the possession
of the Senior Agent (or its agents or bailees).
"Recovery" shall have the meaning set forth in Section 6.5 hereof.
"Required Lenders" shall mean, with respect to any amendment or
modification of the Senior Credit Agreement, or any termination or waiver of any
provision of the Senior Credit Agreement, or any consent or departure by the
Borrower therefrom, those Senior Lenders, the approval of which is required to
approve such amendment or modification, termination or waiver or consent or
departure.
"Senior Agent" shall include, in addition to the Senior Agent referred
to in the recitals hereto, the then acting collateral agent for the Senior
Lenders (or if there is more than one agent, a majority of them) under the
Senior Lender Documents and any successor thereto exercising substantially the
same rights and powers, or if there is no acting Senior Agent under the Senior
Credit Agreement, the Required Lenders.
"Senior Credit Agreement" shall have the meaning set forth in the
recitals hereto; provided that if at any time a Discharge of Senior Lender
Claims occurs with respect to the Senior Credit Agreement referenced in the
recitals hereto (without giving effect to Section 5.6), then, to the extent
provided in Section 5.6, the term "Senior Credit Agreement" shall mean the
Future First-Lien Credit Facility designated by the Borrower in accordance with
the terms of such section.
"Senior Lender Cash Management Obligations" means all Obligations (as
defined in the Senior Credit Agreement or any Future First-Lien Credit Facility)
of the Borrower or any of its Subsidiaries in respect of cash management
services.
"Senior Lender Claims" shall mean (a) all Indebtedness outstanding
under one or more of the Senior Lender Documents, including any Future
First-Lien Credit Facilities, the Indebtedness under each of which (i)
constitutes Permitted Debt (as defined in the Indenture) or is otherwise
permitted by the Indenture and (ii) is designated by the Borrower as "Credit
Agreement Obligations" for purposes of the Indenture, (b) all other Obligations
not constituting Indebtedness of the Borrower or a Guarantor under the Senior
Lender Documents or any such other Future First-Lien Credit Facility, including,
without limitation, all Senior Lender Hedging Obligations and Senior Lender Cash
Management Obligations and (c) all Future Other First-Lien Obligations. Senior
Lender Claims shall include all interest accrued or accruing (or which would,
absent the commencement of an Insolvency or Liquidation Proceeding, accrue)
after the commencement of an Insolvency or Liquidation Proceeding in accordance
with and at the rate specified in the Senior Credit Agreement whether or not the
claim for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to
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the Senior Lender Claims (whether by or on behalf of any Borrower, as proceeds
of security, enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
"Senior Lender Collateral" shall mean all of the assets of the Borrower
or any of the Borrower's Subsidiaries whether real, personal or mixed, in which
the Senior Lenders or the Senior Agent or any of them now or hereafter holds a
Lien as security for any Senior Lender Claim.
"Senior Lender Collateral Documents" shall mean the Security Agreement,
the Mortgages, and any Loan Document or other document or instrument pursuant to
which a Lien is granted securing the Senior Lender Claims, as the same may be
amended, renewed, extended, supplemented or modified from time to time.
"Senior Lender Documents" shall mean the Senior Credit Agreement and
each of the other Loan Documents (including, without limitation, each document
or instrument evidencing a Senior Lender Hedging Obligation or Senior Lender
Cash Management Obligation), all documents and instruments evidencing any other
obligation under the Senior Credit Agreement or any Future First-Lien Credit
Facility or any Future Other First-Lien Obligations, and any other related
document or instrument executed or delivered pursuant to any Senior Lender
Document at any time or otherwise evidencing any Senior Lender Claims, as any
such document or instrument may from time to time be amended, renewed, restated,
supplemented or otherwise modified.
"Senior Lender Hedging Obligations" means Obligations (as defined in
the Senior Credit Agreement or any Future First-Lien Credit Facility)
constituting Hedging Obligations of the Borrower or any of its Subsidiaries.
"Senior Lenders" shall mean the Persons holding Senior Lender Claims,
including, without limitation, the Senior Agent.
"TIA" shall mean the Trust Indenture Act of 1939, as amended.
"Trustee" shall include, in addition to the Trustee referred to in the
recitals hereto, the then acting collateral agent under the Indenture and any
successor thereto exercising substantially the same rights and powers, or if
there is no acting collateral agent under the Indenture, the Noteholders holding
a majority in principal amount of Noteholder Claims then outstanding.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of the State of New York, as amended.
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SECTION 2. LIEN PRIORITIES.
Section 2.1. Subordination. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Trustee or the
Noteholders on the Common Collateral or of any Liens granted to the Senior Agent
or the Senior Lenders on the Common Collateral and notwithstanding any provision
of the UCC, or any applicable law or the Noteholder Documents or the Senior
Lender Documents or any other circumstance whatsoever, the Trustee, on behalf of
itself and the Noteholders, hereby agrees that: (a) any Lien on the Common
Collateral securing the Senior Lender Claims now or hereafter held by the Senior
Agent or the Senior Lenders shall be senior and prior to any Lien on the Common
Collateral securing the Noteholder Claims; and (b) any Lien on the Common
Collateral now or hereafter held by the Trustee or the Noteholders regardless of
how acquired, whether by grant, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all Liens on the
Common Collateral securing the Senior Lender Claims. All Liens on the Common
Collateral securing the Senior Lender Claims shall be and remain senior to all
Liens on the Common Collateral securing the Noteholder Claims for all purposes,
whether or not such Liens securing the Senior Lender Claims are subordinated to
any Lien securing any other obligation of the Borrower or any Guarantor.
Section 2.2. Prohibition on Contesting Liens. Each of the Trustee, for
itself and on behalf of each Noteholder, and the Senior Agent, for itself and on
behalf of each Senior Lender, agrees that it shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including, without limitation, any Insolvency or Liquidation Proceeding), the
priority, validity or enforceability of a Lien held by the Senior Lenders in the
Senior Lender Collateral or by the Noteholders in the Common Collateral, as the
case may be.
Section 2.3. No New Liens. So long as the Discharge of Senior Lender
Claims has not occurred, (a) the parties hereto agree that, after the date
hereof, if the Trustee shall hold any Lien on any assets of the Borrower or any
of its Subsidiaries securing the Noteholder Claims that are not also subject to
the first-priority Lien of the Senior Agent under the Senior Lender Documents,
the Trustee, upon demand by the Senior Agent, will either release such Lien or
assign it to the Senior Agent as security for the Senior Lender Claims, and (b)
the Borrower agrees not to grant any Lien on any of its assets, or permit any
Subsidiary of the Borrower to xxxxx x Xxxx on any of its assets, in favor of the
Trustee or the Noteholders unless it, or such Subsidiary, has granted a similar
Lien on such assets in favor of the Senior Agent or the Senior Lenders.
SECTION 3. ENFORCEMENT.
Section 3.1. Exercise of Remedies. (a) So long as the Discharge of
Senior Lender Claims has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Borrower or
Guarantor, (i) the Trustee and the Noteholders will not exercise or seek to
exercise any rights or remedies (including setoff) with respect to any Common
Collateral, institute any action or proceeding with respect to such rights or
remedies, including, without limitation, any action of foreclosure, contest,
protest or object to any foreclosure proceeding or action brought by the Senior
Agent or any Senior Lender, the exercise of any right under any lockbox
agreement, control agreement, landlord waiver or bailee's letter or
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similar agreement or arrangement to which the Trustee or any Noteholder is a
party, or any other exercise by any such party, of any rights and remedies
relating to the Common Collateral under the Senior Lender Documents or
otherwise, or object to the forbearance by the Senior Lenders from bringing or
pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Common Collateral and (ii) the Senior Agent
and the Senior Lenders shall have the exclusive right to enforce rights,
exercise remedies (including, without limitation, setoff and the right to credit
bid their debt) and make determinations regarding release, disposition, or
restrictions with respect to the Common Collateral without any consultation with
or the consent of the Trustee or any Noteholder; provided, however, (A) that in
any Insolvency or Liquidation Proceeding commenced by or against the Borrower or
any Guarantor, the Trustee may file a claim or statement of interest with
respect to the Noteholder Claims, and (B) the Trustee may take any action not
adverse to the Liens on the Common Collateral securing the Senior Lender Claims
in order to preserve or protect its rights in the Common Collateral. In
exercising rights and remedies with respect to the Common Collateral, the Senior
Agent and the Senior Lenders may enforce the provisions of the Senior Lender
Documents and exercise remedies thereunder, all in such order and in such manner
as they may determine in the exercise of their sole discretion. Such exercise
and enforcement shall include, without limitation, the rights of an agent or
other representative appointed by them to sell or otherwise dispose of Common
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under bankruptcy or similar laws of any applicable
jurisdiction.
(b) The Trustee, on behalf of itself and the Noteholders, agrees
that it will not take or receive any Common Collateral or any proceeds of Common
Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to any Common Collateral, unless and until the Discharge of
Senior Lender Claims has occurred. Without limiting the generality of the
foregoing, unless and until the Discharge of Senior Lender Claims has occurred,
except as expressly provided in the proviso in Section 3.1(a)(ii) above, the
sole right of the Trustee and the Noteholders with respect to the Common
Collateral is to hold a Lien on the Common Collateral pursuant to the Noteholder
Documents for the period and to the extent granted therein and to receive a
share of the proceeds thereof, if any, after the Discharge of the Senior Lender
Claims has occurred.
(c) Subject to the proviso in Section 3.1(a)(ii) above, (a) the
Trustee, for itself or on behalf of the Noteholders, agrees that the Trustee and
the Noteholders will not take any action that would hinder any exercise of
remedies undertaken by the Senior Agent under the Senior Loan Documents,
including any sale, lease, exchange, transfer or other disposition of the Common
Collateral, whether by foreclosure or otherwise, and (b) the Trustee, for itself
and on behalf of the Noteholders, hereby waives any and all rights it or the
Noteholders may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Agent or the Senior Lenders seek to enforce or
collect the Senior Lender Claims or the Liens granted in any of the Senior
Lender Collateral.
Section 3.2. Cooperation. Subject to the proviso in Section 3.1(a)(ii)
above, the Trustee, on behalf of itself and the Noteholders, agrees that, unless
and until the Discharge of Senior
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Lender Claims has occurred, it will not commence, or join with any Person (other
than the Senior Lenders and the Senior Agent upon the request thereof) in
commencing any enforcement, collection, execution, levy or foreclosure action or
proceeding with respect to any Lien held by it under any of the Noteholder
Documents or otherwise.
SECTION 4. PAYMENTS.
Section 4.1. Application of Proceeds. As long as the Discharge of
Senior Lender Claims has not occurred, the cash proceeds of Common Collateral
received in connection with the sale of, or collection on, such Common
Collateral upon the exercise of remedies, shall be applied by the Senior Agent
to the Senior Lender Claims in such order as specified in the Senior Credit
Agreement until Discharge of Senior Lender Claims has occurred. Upon Discharge
of the Senior Lender Claims, the Senior Agent shall deliver to the Trustee any
proceeds of Common Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.
Section 4.2. Payments Over. Any Common Collateral or proceeds thereof
received by the Trustee or any Noteholder in connection with the exercise of any
right or remedy (including setoff) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Senior Agent for the benefit of the Senior Lenders in
the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. The Senior Agent is hereby
authorized to make any such endorsements as agent for the Trustee or any such
Noteholder. This authorization is coupled with an interest and is irrevocable.
SECTION 5. OTHER AGREEMENTS.
Section 5.1. Releases. (a) If in connection with:
(i) the exercise of the Senior Agent's remedies in
respect of the Common Collateral provided for in Section 3.1,
including any sale, lease, exchange, transfer or other disposition
of such Common Collateral;
(ii) any sale, lease, exchange, transfer or other
disposition of Common Collateral permitted under the terms of the
Senior Credit Agreement (whether or not an event of default under,
and as defined therein, has occurred and is continuing) and
permitted or not prohibited under Section 4.11 of the Indenture
(Asset Sales); or
(iii) any agreement between the Senior Agent and the
Borrower to release the Senior Agent's Lien on any portion of the
Common Collateral or to release any Guarantor from its obligations
under its guaranty of the Senior Lender Claims, unless an event of
default exists under the Noteholder Documents or such release would
be prevented by Section 5.1(a)(ii) above or the event giving rise to
the agreement to release Common Collateral would cause an event of
default under the Noteholder Documents other than
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the general covenant that the Borrower maintain a second priority
lien on the collateral contemplated by the Indenture;
the Senior Agent, for itself or on behalf of any of the Senior Lenders, releases
any of its Liens on any part of the Common Collateral (or any Guarantor from its
obligations under its guaranty of the Senior Lender Claims), the Liens, if any,
of the Trustee, for itself or for the benefit of the Noteholders, on such Common
Collateral (and the obligations of such Guarantor under its guaranty of the
Noteholder Claims) shall be automatically, unconditionally and simultaneously
released and the Trustee, for itself or on behalf of any such Noteholder,
promptly shall execute and deliver to the Senior Agent or the Borrower such
termination statements, releases and other documents as the Senior Agent or the
Borrower may request to effectively confirm such release.
(b) The Trustee, for itself and on behalf of the Noteholders, hereby
irrevocably constitutes and appoints the Senior Agent and any officer or agent
of the Administrative Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Trustee or such holder or in the Senior Agent's own name, from
time to time in the Senior Agent's discretion, for the purpose of carrying out
the terms of this Section 5.1, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Section 5.1, including, without
limitation, any financing statements, endorsements or other instruments or
transfer or release.
Section 5.2. Insurance. Unless and until the Discharge of Senior Lender
Claims has occurred, the Senior Agent and the Senior Lenders shall have the sole
and exclusive right, subject to the rights of the Borrower and the Guarantors
under the Senior Lender Documents, to adjust settlement for any insurance policy
covering the Common Collateral in the event of any loss thereunder and to
approve any award granted in any condemnation or similar proceeding affecting
the Common Collateral. Unless and until the Discharge of Senior Lender Claims
has occurred, all proceeds of any such policy and any such award if in respect
to the Common Collateral shall be paid to the Senior Agent for the benefit of
the Senior Lenders to the extent required under the Senior Credit Agreement and
thereafter to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct;
provided, however, that from and after the Revolving Loan Commitment Termination
Date, all such proceeds shall be paid to the Senior Agent for the benefit of the
Senior Lenders until the Discharge of Senior Lender Claims has occurred and
thereafter to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct.
If the Trustee or any Noteholder shall, at any time, receive any proceeds of any
such insurance policy or any such award in contravention of this Agreement, it
shall pay such proceeds over to the Senior Agent in accordance with the terms of
Section 4.2.
Section 5.3. Amendments to Noteholder Collateral Documents. (a) The
Trustee agrees that each Noteholder Mortgage covering any Common Collateral
shall contain such other language as the Senior Agent may reasonably request to
reflect the subordination of such Noteholder Mortgage to the Mortgage covering
such Common Collateral.
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(b) In the event the Senior Agent or the Senior Lenders enter into
any amendment, waiver or consent in respect of any of the Senior Lender
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any Senior Lender
Collateral Document or changing in any manner the rights of the Senior Agent,
the Senior Lenders, the Borrower or the Guarantors thereunder, then such
amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Noteholder Collateral Document without the consent
of the Trustee or the Noteholders and without any action by the Trustee, the
Borrower or any Guarantor; provided, however, (i) that no such amendment, waiver
or consent shall apply automatically to the Noteholder Collateral Documents if
it (A) shall have the effect of removing assets subject to the Lien of the
Noteholder Collateral Documents, except to the extent that a release of such
Lien is permitted by Section 5.1, (B) increases the principal amount of
Indebtedness under the Senior Credit Agreement to exceed the amounts of first
priority lien indebtedness permitted pursuant to the Indenture (being (x)
$60,000,000, (y) such additional amounts of up to $15,000,000 (pursuant to
Section 4.8(b)(ix) of the Indenture to the extent such $15,000,000 is not
incurred by Borrower outside of the Senior Credit Facility and (z) such
additional amounts permitted under Section 4.8(b)(v) of the Indenture to the
extent provided for in the Senior Credit Facility), (C) modifies any material
remedy provided for under the Noteholder Collateral Documents, (D) secures
indebtedness or obligations owed in favor of any other creditor or group of
creditors except as contemplated by Section 6, or (E) changes the priority of or
subordinates the Liens created under the Noteholder Collateral Documents, except
as contemplated by Section 6, and (ii) notice of such amendment, waiver or
consent shall have been given to the Trustee.
Section 5.4. Rights As Unsecured Creditors. Notwithstanding anything to
the contrary in this Agreement, the Trustee and the Noteholders may exercise
rights and remedies as an unsecured creditor against the Borrower and its
Subsidiaries in accordance with the terms of the Noteholder Documents and
applicable law. Nothing in this Agreement shall prohibit the receipt by the
Trustee or any Noteholders of the required payments of interest and principal so
long as such receipt is not the direct or indirect result of the exercise by the
Trustee or any Noteholder of rights or remedies as a secured creditor or
enforcement of any Lien held by any of them in contravention of this Agreement.
In the event the Trustee or any Noteholder becomes a judgment lien creditor in
respect of Common Collateral as a result of its enforcement of its rights as an
unsecured creditor, such judgment lien shall be subordinated to the Liens
securing Senior Lender Claims on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to such Senior Lender Claims under this
Agreement. Nothing in this Agreement modifies any rights or remedies the Senior
Agent or the Senior Lenders may have with respect to the Senior Lender
Collateral.
Section 5.5. Bailee for Perfection. (a) The Senior Agent agrees to hold
the Pledged Collateral that is part of the Common Collateral in its possession
or control (or in the possession or control of its agents or bailees) as bailee
for the Trustee and any assignee solely for the purpose of perfecting the
security interest granted in such Pledged Collateral pursuant to the Noteholder
Security Agreement, subject to the terms and conditions of this Section 5.5.
(b) Until the Discharge of Senior Lender Claims has occurred, the
Senior Agent shall be entitled to deal with the Pledged Collateral in accordance
with the terms of the Senior Lender
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Documents as if the Lien of the Trustee under the Noteholder Security Agreement
did not exist. The rights of the Trustee shall at all times be subject to the
terms of this Agreement and to the Senior Agent's rights under the Senior Lender
Documents.
(c) The Senior Agent shall have no obligation whatsoever to the
Trustee or any Noteholder to assure that the Pledged Collateral is genuine or
owned by the Borrower or one of its Subsidiaries or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.5. The
duties or responsibilities of the Senior Agent under this Section 5.5 shall be
limited solely to holding the Pledged Collateral as bailee for the Trustee for
purposes of perfecting the Lien held by the Trustee.
(d) The Senior Agent shall not have by reason of the Noteholder
Security Agreement or this Agreement or any other document a fiduciary
relationship in respect of the Trustee or any Noteholder.
(e) Upon the Discharge of Senior Lender Claims, the Senior Agent
shall deliver to the Trustee the Pledged Collateral together with any necessary
endorsements (or otherwise allow such Trustee to obtain control of such Pledged
Collateral) or as a court of competent jurisdiction may otherwise direct.
(f) In addition to the foregoing, the parties hereby acknowledge and
agree that the Excess Cash Flow Collateral Account has been established in the
name of the Company and subject to the control of the Senior Agent for the
Senior Lenders and the Trustee for the Noteholders to be maintained by
Manufacturers and Traders Trust Company as securities intermediary and that the
Senior Agent shall be deemed the "entitlement holder" as defined in Section
8-102(a)(7) of the New York UCC for benefit of the Senior Lenders and Trustee
shall be deemed to be the "entitlement holder" (as so defined) on behalf of the
Noteholders. By its execution of this agreement Senior Agent agrees to take all
such actions and direct all "entitlement orders" (as defined in Section 8-102(8)
of the New York UCC) as may be required to make such payments as required under
Section 4.19 of the Indenture to the extent permitted by Sections 4.5 and 8.21
of the Credit Agreement. In addition, upon the Discharge of the Senior Lender
Claims, the Senior Agent shall take such actions as shall be necessary to
terminate its Lien in and control over the Excess Cash Flow Collateral Account
including issuance of entitlement orders as may be necessary to relinquish
control over the Excess Cash Flow Collateral Account and to deliver such
certificates or instruments representing or evidencing a portion of the
Collateral that are not carried or credited in the Excess Cash Flow Collateral
Account to the Trustee. In addition, the Company hereby grants to the Trustee
for the benefit of the Holders control over the Excess Cash Flow Collateral
Account and all securities, accounts and monies deposited therein effective on
the relinquishment of control by the Senior Agent. The Company agrees to execute
such additional instruments to confirm the Senior Agent's control over the
Excess Cash Flow Collateral Account and all securities, accounts and monies
deposited therein and confirm the status of the Senior Agent as a protected
purchaser with respect to the Excess Cash Flow Collateral Account and collateral
therein as provided in Section 8-3-3 of the New York UCC and to confirm the
foregoing grant of control to the Trustee and confirm the status of Trustee to
be a protected purchaser with respect to the Excess Cash Flow Collateral Account
and collateral therein as provided in Section 8-3-3 of the New York UCC.
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Section 5.6. When Discharge of Senior Lender Claims Deemed to Not Have
Occurred. If at any time after the Discharge of Senior Lender Claims has
occurred the Borrower designates any Future First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder in accordance with the terms of the
Indenture, then such Discharge of Senior Lender Claims shall automatically be
deemed not to have occurred for all purposes of this Agreement (other than with
respect to any actions taken prior to the date of such designation as a result
of the occurrence of such first Discharge of Senior Lender Claims), and such
Future First-Lien Credit Facility shall automatically be treated as the Senior
Credit Agreement for all purposes of this Agreement, including without
limitation for purposes of the Lien priorities and rights in respect of
Collateral set forth herein. Upon receipt of notice of such designation
(including the identity of the new Senior Agent), the Trustee shall promptly
deliver to the Senior Agent the Pledged Collateral together with any necessary
endorsements (or otherwise allow such Senior Agent to obtain control of such
Pledged Collateral).
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
Section 6.1. Financing Issues. If any Borrower or Guarantor shall be
subject to any Insolvency or Liquidation Proceeding and the Senior Agent shall
desire to permit the use of cash collateral or to permit the Borrower to obtain
financing under section 363 or section 364 of the Bankruptcy Code ("DIP
Financing"), then the Trustee, on behalf of itself and the Noteholders, agrees
that it will raise no objection to such use or DIP Financing and will not
request adequate protection or any other relief in connection therewith (except
to the extent permitted by Section 6.3) and, to the extent the Liens securing
the Senior Lender Claims are subordinated or pari passu with such DIP Financing,
will subordinate its Liens in the Common Collateral to such DIP Financing (and
all Obligations relating thereto) on the same basis as the other Liens securing
the Noteholder Claims are so subordinated to Senior Lender Claims under this
Agreement.
Section 6.2. Relief from the Automatic Stay. Until the Discharge of
Senior Lender Claims has occurred, the Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Common Collateral, without the prior written consent of the Senior Agent and the
Required Lenders.
Section 6.3. Adequate Protection. The Trustee, on behalf of itself and
the Noteholders, agrees that none of them shall contest (or support any other
Person contesting) (a) any request by the Senior Agent or the Senior Lenders for
adequate protection or (b) any objection by the Senior Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Senior Agent or
the Senior Lenders claiming a lack of adequate protection. Notwithstanding the
foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of its cash collateral under section 363 or section 364 of
the Bankruptcy Code, then the Trustee, on behalf of itself or any of the
Noteholders, may seek or request adequate protection in the form of a
replacement Lien on such additional collateral, which Lien is subordinated to
the Liens securing the Senior Lender Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to the Senior Lender Claims under this
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Agreement, and (ii) in the event the Trustee, on behalf of itself and the
Noteholders, seeks or requests adequate protection and such adequate protection
is granted in the form of additional collateral, then the Trustee, on behalf of
itself or any of the Noteholders, agrees that the Senior Agent shall also be
granted a senior Lien on such additional collateral as security for the Senior
Lender Claims and any such DIP Financing and that any Lien on such additional
collateral securing the Noteholder Claims shall be subordinated to the Liens on
such collateral securing the Senior Lender Claims and any such DIP Financing
(and all Obligations relating thereto) and any other Liens granted to the Senior
Lenders as adequate protection on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to such Senior Lender Claims under this
Agreement.
Section 6.4. No Waiver. Nothing contained herein shall prohibit or in
any way limit the Senior Agent or any Senior Lender from objecting in any
Insolvency or Liquidation Proceeding or otherwise to any action taken by the
Trustee or any of the Noteholders, including, without limitation, the seeking by
the Trustee or any Noteholder of adequate protection or the asserting by the
Trustee or any Noteholder of any of its rights and remedies under the Noteholder
Documents or otherwise.
Section 6.5. Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Borrower or any Guarantor any amount (a "Recovery"), then
the Senior Lender Claims shall be reinstated to the extent of such Recovery and
the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims with
respect to all such recovered amounts. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full
force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.
SECTION 7. RELIANCE; WAIVERS; ETC.
Section 7.1. Reliance. The consent by the Senior Lenders to the
execution and delivery of the Noteholder Documents and the grant to the Trustee
on behalf of the Noteholders of a Lien on the Common Collateral and all loans
and other extensions of credit made or deemed made on and after the date hereof
by the Senior Lenders to the Borrower shall be deemed to have been given and
made in reliance upon this Agreement. The Trustee, on behalf of itself and the
Noteholders, acknowledges that it and the Noteholders have, independently and
without reliance on the Senior Agent or any Senior Lender, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the Indenture, this Agreement and the
transactions contemplated hereby and thereby and they will continue to make
their own credit decision in taking or not taking any action under the Indenture
or this Agreement.
Section 7.2. No Warranties or Liability. The Trustee, on behalf of
itself and Noteholders, acknowledges and agrees that each of the Senior Agent
and the Senior Lenders have made no express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents. The Senior Lenders will be entitled to manage and
supervise their
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respective loans and extensions of credit to the Borrower in accordance with law
and as they may otherwise, in their sole discretion, deem appropriate, and the
Senior Lenders may manage their loans and extensions of credit without regard to
any rights or interests that the Trustee or any of the Noteholders have in the
Common Collateral or otherwise, except as otherwise provided in this Agreement.
Neither the Senior Agent nor any Senior Lender shall have any duty to the
Trustee or any of the Noteholders to act or refrain from acting in a manner
which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with the Borrower (including, without
limitation, the Noteholder Documents), regardless of any knowledge thereof which
they may have or be charged with.
Section 7.3. No Waiver of Lien Priorities. (a) No right of the Senior
Lenders, the Senior Agent or any of them to enforce any provision of this
Agreement shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Borrower or the Guarantors or by any act or
failure to act by any Senior Lender or the Senior Agent, or by any noncompliance
by any Person with the terms, provisions and covenants of this Agreement, any of
the Senior Lender Documents or any of the Noteholder Documents, regardless of
any knowledge thereof which the Senior Agent or the Senior Lenders, or any of
them, may have or be otherwise charged with;
(b) Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Borrower and the Guarantors under
the Senior Lender Documents), the Senior Lenders, the Senior Agent and any of
them, may, at any time and from time to time, without the consent of, or notice
to, the Trustee or any Noteholder, without incurring any liabilities to the
Trustee or any Noteholder and without impairing or releasing the lien priorities
and other benefits provided in this Agreement (even if any right of subrogation
or other right or remedy of the Trustee or any Noteholder is affected, impaired
or extinguished thereby) do any one or more of the following:
(i) change the manner, place or terms of payment or
change or extend the time of payment of, or renew, exchange, amend,
increase or alter, the terms of any of the Senior Lender Claims or
any Lien in any Senior Lender Collateral or guaranty thereof or any
liability of the Borrower or any Guarantor, or any liability
incurred directly or indirectly in respect thereof (including,
without limitation, any increase in or extension of the Senior
Lender Claims), without any restriction as to the amount, tenor or
terms of any such increase or extension or otherwise amend, renew,
exchange, extend, modify or supplement in any manner any Liens held
by the Senior Lenders, the Senior Lender Claims or any of the Senior
Lender Documents;
(ii) sell, exchange, release, surrender, realize upon,
enforce or otherwise deal with in any manner and in any order any
part of the Senior Lender Collateral or any liability of the
Borrower or any Guarantor to the Senior Lenders or the Senior Agent,
or any liability incurred directly or indirectly in respect thereof;
(iii) settle or compromise any Senior Lender Claim or any
other liability of the Borrower or any Guarantor or any security
therefor or any liability incurred directly or indirectly in respect
thereof and apply any sums by whomsoever paid and however
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realized to any liability (including, without limitation, the Senior
Lender Claims) in any manner or order; and
(iv) exercise or delay in or refrain from exercising any
right or remedy against the Borrower or any security or any
Guarantor or any other Person, elect any remedy and otherwise deal
freely with the Borrower and the Senior Lender Collateral and any
security and any guarantor or any liability of the Borrower or any
Guarantor to the Senior Lenders or any liability incurred directly
or indirectly in respect thereof;
provided, however, that nothing contained in this Section 7.3(b) is intended as
a waiver or modification by the Trustee or any Noteholder of the terms and
conditions of the Noteholder Documents.
(c) The Trustee, on behalf of itself and the Noteholders, also
agrees that the Senior Lenders and the Senior Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Senior
Agent, arising out of any and all actions which the Senior Lenders or the Senior
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the Senior Lender Claims or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, the Senior
Lender Collateral. The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Senior Agent have no duty to them in respect of
the maintenance or preservation of the Senior Lender Collateral, the Senior
Lender Claims or otherwise; and
(d) The Trustee, on behalf of itself and the Noteholders, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may otherwise
be available under applicable law or any other similar rights a junior secured
creditor may have under applicable law.
Section 7.4. Obligations Unconditional. All rights, interests,
agreements and obligations of the Senior Agent and the Senior Lenders and the
Trustee and the Noteholders, respectively, hereunder shall remain in full force
and effect irrespective of:
(a) any lack of validity or enforceability of the Senior
Lender Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or
in any other terms of, all or any of the Senior Lender Claims or
Noteholder Claims, or any amendment or waiver or other modification,
including, without limitation, any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of the
Senior Credit Agreement or any other Senior Lender Document or of
the terms of the Indenture or any other Noteholder Document;
(c) any exchange of any security interest in any Common
Collateral or any other collateral, or any amendment, waiver or
other modification, whether in writing or
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by course of conduct or otherwise, of all or any of the Senior
Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of the Borrower or any Guarantor; or
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, any Borrower or Guarantor
in respect of the Senior Lender Claims, or of the Trustee or any
Noteholder in respect of this Agreement.
SECTION 8. MISCELLANEOUS.
Section 8.1. Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the Senior Lender Documents
or the Noteholder Documents, the provisions of this Agreement shall govern.
Section 8.2. Continuing Nature of this Agreement. This Agreement shall
continue to be effective until the Discharge of Senior Lender Claims shall have
occurred. This is a continuing agreement of lien subordination and the Senior
Lenders may continue, at any time and without notice to the Trustee or any
Noteholder, to extend credit and other financial accommodations and lend monies
to or for the benefit of the Borrower constituting Senior Lender Claims on the
faith hereof. The Trustee, on behalf of itself and the Noteholders, hereby
waives any right it may have under applicable law to revoke this Agreement or
any of the provisions of this Agreement. The terms of this Agreement shall
survive, and shall continue in full force and effect, in any Insolvency or
Liquidation Proceeding.
Section 8.3. Amendments; Waivers. No amendment, modification or waiver
of any of the provisions of this Agreement by the Trustee or the Senior Agent
shall be deemed to be made unless the same shall be in writing signed on behalf
of the party making the same or its authorized agent and each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations
of the other parties to such party in any other respect or at any other time.
The Borrower and Guarantors shall not have any right to amend, modify or waive
any provision of this Agreement without the consent of the Trustee or the Senior
Agent, as applicable, nor shall any consent or signed writing be required of any
of them to effect any amendment, modification or waiver of any provision of this
Agreement, except that no amendment, modification or waiver affecting any
obligation or right of the Borrower or any Guarantor hereunder shall be made
without the consent of the Borrower.
Section 8.4. Information Concerning Financial Condition of the Borrower
and its Subsidiaries. The Senior Agent and the Senior Lenders, on the one hand,
and the Trustee and the Noteholders, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
the Borrower and its Subsidiaries and all endorsers and/or guarantors of the
Noteholder Claims or the Senior Lender Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the Senior
Lender Claims. The Senior Agent and the Senior Lenders shall have no duty to
advise the Trustee or any Noteholder
-17-
of information known to it or them regarding such condition or any such
circumstances or otherwise. In the event the Senior Agent or any of the Senior
Lenders, in its or their sole discretion, undertakes at any time or from time to
time to provide any such information to the Trustee or any Noteholder, it or
they shall be under no obligation (x) to provide any additional information or
to provide any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential.
Section 8.5. Section 8.5. Subrogation. The Trustee, on behalf of itself
and the Noteholders, hereby waives any rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.
Section 8.6. Application of Payments. All payments received by the
Senior Lenders may be applied, reversed and reapplied, in whole or in part, to
such part of the Senior Lender Claims as the Senior Lenders, in their sole
discretion, deem appropriate. The subordination of the Liens of the Noteholders
and other agreements of the Trustee will not be affected by any extension or
postponement of the time of payment of the Senior Lender Claims or any part
thereof and to any other indulgence with respect thereto, to any substitution,
exchange or release of any security which may at any time secure any part of the
Senior Lender Claims and to the addition or release of any other Person
primarily or secondarily liable therefor.
Section 8.6. Consent to Jurisdiction; Waivers. The parties hereto
consent to the jurisdiction of any state or federal court located in New York,
New York, and consent that all service of process may be made by registered mail
directed to such party as provided in Section 8.7 below for such party. Service
so made shall be deemed to be completed three (3) days after the same shall be
posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.
Section 8.7. Notices. All notices to the Noteholders and the Senior
Lenders permitted or required under this Agreement may be sent to the Trustee
and the Senior Agent, respectively. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied,
electronically mailed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy or electronic mail or four Business Days after deposit in
the U.S. mail (registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the parties hereto shall
be as set forth below each party's name on the signature pages hereto, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.
Section 8.8. Further Assurances. The Trustee, on behalf of itself and
the Noteholders, agrees that each of them shall take such further action and
shall execute and deliver to the Senior
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Agent and the Senior Lenders such additional documents and instruments (in
recordable form, if requested) as the Senior Agent or the Senior Lenders may
reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.
Section 8.9. Governing Law. This Agreement has been delivered and
accepted at and shall be deemed to have been made at New York, New York and
shall be interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
Section 8.10. Binding on Successors and Assigns. This Agreement shall
be binding upon the Senior Agent, the Senior Lenders, the Trustee, the
Noteholders and their respective permitted successors and assigns.
Section 8.11. Specific Performance. The Senior Agent may demand
specific performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Senior Agent.
Section 8.12. Compliance With TIA. Nothing contained herein shall
impair the ability of the Trustee to take any action necessary to comply with
any obligations imposed under applicable law, including without limitation, the
TIA.
Section 8.13. Section Titles; Time Periods. The section titles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement. In the
computation of time periods, unless otherwise specified, the word "from" means
"from and including" and each of the words "to" and "until" means "to but
excluding" and the word "through" means "to and including".
Section 8.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which shall
together constitute one and the same document.
Section 8.15. Authorization. By its signature, each Person executing
this Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
Section 8.16. No Third Party Beneficiaries. This Agreement and the
rights and benefits hereof shall inure to the benefit of the Senior Agent and
the Senior Lenders and their respective successors and assigns and, to the
extent applicable, the Borrower, the Guarantors, the Trustee and the Noteholders
and their respective permitted successors and assigns. No other Person, shall
have or be entitled to assert rights or benefits hereunder. Notwithstanding
anything to the contrary in this Agreement, the Borrower shall cause the
Guarantors to comply with the terms of this Agreement.
-19-
Section 8.17. Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to the Borrower or Guarantors shall include any
Borrower or Guarantor as debtor and debtor-in-possession and any receiver or
trustee for the Borrower or any Guarantor (as the case may be) in any Insolvency
or Liquidation Proceeding.
[Signature Pages to Follow]
-20-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SENIOR AGENT:
XXXXXX TRUST AND SAVINGS BANK,
as Senior Agent
/s/ Xxxx Xxxxxx
By: ____________________________________
Xxxx Xxxxxx
Name: ______________________________
Vice President
Title: _____________________________
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy no.: (000) 000-0000
\
TRUSTEE:
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Collateral Agent
/s/ Xxxxxxx X. Xxxxxxx
By: _____________________________________
Xxxxxxx X. Xxxxxxx
Name: _______________________________
Assistant Vice President
Title: ______________________________
Address:
Xxx X&X Xxxxx
Xxxxxxx, XX 00000
Corporate Trust Department
Attention: ______________________________
Telecopy no.: (000) 000-0000
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RENT-WAY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
_____________________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
______________________________
Title: Chief Executive Officer
______________________________
Address:
Xxx Xxxx Xxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy no.: (000) 000-0000
-22-
EXHIBIT A TO INTERCREDITOR AGREEMENT
ACCOUNT CONTROL AGREEMENT
This Account Control Agreement (as amended, supplemented or otherwise
modified and in effect from time to time, this "Agreement") is by and among
Rent-Way, Inc., a Pennsylvania corporation (the "Company"), Manufacturers and
Traders Trust Company (the "Bank") and Xxxxxx Trust and Savings Bank, as
administrative agent and secured party (in such capacity, the "Administrative
Agent").
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Account. (a) The Company hereby notifies you (the "Bank") that
the Company has granted a security interest in, and has transferred control
over, account no. __________ maintained with the Bank (the "Account") to the
Administrative Agent. The Account is registered on the books and records of the
Bank in the name of "Rent-Way Excess Cash Flow Collateral Account". The Company
hereby irrevocably directs Bank to, and the Bank hereby agrees that it will,
comply with all entitlement orders (as such term is defined in the UCC) and
other instructions originated by the Administrative Agent concerning the Account
and all financial assets, cash, and other property on deposit therein or
otherwise held therein (the "Account Collateral") without further consent by the
Company. In addition, the Company, the Administrative Agent and the Bank agree
that until such time as the Administrative Agent shall have delivered to the
Bank a direction notice in substantially the form of Exhibit A hereto (the
"Direction Notice"), the Bank is hereby authorized to:
(i) follow its usual operating procedures for crediting
funds to the Account, except as modified by this Agreement;
(ii) charge the Account for all returned funds, service
charges, and other fees and charges associated with the Account;
(iii) follow its usual procedures in the event the Account
or any monies, financial assets or other property credited thereto
should be or become the subject of any writ, levy, order or other
similar judicial or regulatory order or process;
(iv) permit the Company to operate and transact business
through the Account in its normal fashion; provided that the Bank shall
neither accept nor comply with any entitlement order from the Company
requiring a free delivery of any financial asset from the Account or
deliver any such financial asset to the Company nor pay any free credit
balance or other amount owing from the Bank to the Company with respect
to the Account or the Account Collateral except in accordance with the
Intercreditor Agreement; and
(v) permit the Company and the Administrative Agent to
obtain upon request any information relating to the Account, including,
without limitation, any information regarding the balance or activity
of the Account.
(b) Following delivery by the Administrative Agent of a Direction
Notice, the Bank shall take sole and exclusive instruction from the
Administrative Agent as to the disposition of all amounts deposited in the
Account, and the Bank shall not comply with any entitlement order or other
request or direction by the Company or any other person with respect to the
Account or the Account Collateral.
(c) The Account is either a "securities account" (as defined in
Section 8-501 of the Uniform Commercial Code (the "UCC")) or a "deposit account"
(as defined in Section 9-102(a)(29) of the UCC)). To the extent the Account is a
securities account, each item of property (whether constituting investment
property, a financial asset, a security, an instrument or cash) shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC. All
securities or other property underlying any financial assets credited to the
Account shall be registered in the name of the Bank, indorsed to the Bank or in
blank or credited to another securities account maintained in the name of the
Bank, and in no case will any financial asset credited to the Account be
registered in the name of the Company or its affiliates, payable to the order of
the Company or its affiliates or specially indorsed to the Company or its
affiliates except to the extent the foregoing have been specially indorsed to
the Bank or in blank.
(d) The Company and Administrative Agent acknowledge that Bank has
been granted a security interest in the Account pursuant to that certain
Indenture dated June 2, 2003 from the Company securing the repayment of the
11-7/8ths Senior Secured Notes Due 2010 and ("Indenture") and related security
agreements which liens and security interests have been expressly subordinated
to the lien and security interests granted to the Administrative Agent in
accordance with that certain Intercreditor Agreement dated as of June 2, 2003 by
and among Administrative Agent, Bank and the Company ("Intercreditor
Agreement"). Pursuant to said Intercreditor Agreement the Administrative Agent
has agreed to issue entitlement orders (Direction Notices hereunder) as may be
required to make certain payments under the Indenture.
(e) The Bank hereby confirms that except for the liens and
security interests of the Bank as Trustee for the Noteholders under the
Indenture which have been made expressly subordinate to the liens and security
interests of the Administrative Agent pursuant to the Intercreditor Agreement
(i) there are no other agreements entered into between the Bank, on the one
hand, and the Company or any of their affiliates, on the other hand, with
respect to the Account, (ii) it has not entered into, and until the termination
of this Agreement will not enter into, any agreement with any other person
relating to the Account and/or any property credited thereto pursuant to which
the Bank has agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the UCC) or instructions (within the meaning of Section 9-104 of
the UCC) of such other person, (iii) it has not entered into, and until the
termination of this Agreement will not enter into, any agreement with the
Administrative Agent, the Company, or any of their affiliates purporting to
limit or condition the obligation of the Bank to comply with entitlement orders
or instructions and (iv) except for the claims and interests of the
Administrative Agent, and the Company in the Account, the Bank does not know of
any lien on, or claim to, or interest in, the Account or in any financial asset
(as defined in Section 8-102(a) of the UCC) credited thereto. The Bank shall
give the Administrative Agent prompt written notice of any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Account or in any financial asset
carried therein.
-2-
(f) The Bank shall not change the name, location or account number
of the Account without the prior written consent of the Administrative Agent.
2. Other Agreements. The Bank shall not be deemed to have any
knowledge (imputed or otherwise) of: (i) any of the terms or conditions of any
other agreement (any "Other Agreement") involving the Administrative Agent and
the Company or (ii) any breach of any term or condition of any Other Agreement.
The Bank has no obligation to inform any person of any such breach or take any
action in connection with any of the foregoing, except such actions regarding
the Account as are specified in this Agreement. The Bank is not responsible for
the effectiveness, enforceability, genuineness or validity of any provision of
the Other Agreements or for the observance or performance of any of the terms or
conditions thereof.
3. Set-Off; Etc. The Bank hereby agrees that it shall not
exercise any right of set-off, banker's lien or any other right in favor of any
person other than the Administrative Agent with respect to the Account except as
expressly provided herein, until it has been advised in writing by
Administrative Agent that all amounts due and owing by the Company under the
Credit Agreement dated as of June 2, 2003 by and among the Company, the
Guarantors from time to time Parties thereto, the Lenders from time to time
Parties thereto and Xxxxxx Trust and Savings Bank, as Administrative Agent and
National City Bank, as Syndication Agent and BMO Xxxxxxx Xxxxx, as Lead Arranger
("Credit Agreement") have been paid in full. The Administrative Agent shall
notify Bank promptly in writing upon payment in full of all such obligations,
and this Agreement shall automatically terminate upon receipt of such notice.
All expenses for the maintenance and administration of the Account are the
responsibility of the Company. The Company, the Bank and the Administrative
Agent agree that the Bank may debit the Account for (i) any items deposited in
the Account which may be returned and (ii) all customary service charges and
fees, to the extent that the same is not paid by the Company within thirty (30)
days after the due date thereof.
4. Indemnification. The Company agrees to indemnify and hold the
Bank harmless against actual loss incurred by the Bank with respect to this
Agreement, including, without limitation: (i) any funds which are returned for
any reason and (ii) any failure of the Company to pay any invoice or charge of
the Bank for services with respect to the Agreement or the Account or any amount
owing to the Bank from the Company or the Administrative Agent under this
Agreement. The Company shall indemnify the Bank against, and hold it harmless
from, any and all liabilities, claims, costs, expenses and damages of any nature
(including but not limited to allocated costs of staff counsel, other reasonable
attorney's fees and any fees and expenses incurred in enforcing this Agreement)
in any way arising out of or relating to disputes or legal actions concerning
this Agreement, the Account or any funds on deposit in the Account; provided
that this Section 4 shall not apply to any cost or damage attributable to the
gross negligence or willful misconduct of the Bank or its officers, agents or
employees. The Company also agrees to pay to the Bank, upon receipt of the
Bank's invoice, all reasonable costs, expenses and attorneys' fees (including
allocated costs for in-house legal services) incurred by the Bank in connection
with the enforcement of this Agreement and any instrument or agreement required
hereunder including, but not limited to, any such costs, expenses and fees
arising out of the resolution of any conflict, dispute, motion regarding
entitlement to rights or rights of action, or other action to enforce the Bank's
rights in a case arising under Title 11, United States Code.
-3-
The Company agrees to pay the Bank, promptly upon receipt of the Bank's invoice,
all reasonable costs, expenses and attorneys' fees incurred by the Bank in the
preparation and administration of this Agreement (including any amendments
hereto or instruments or agreements required hereunder). The Company's
obligations under this Section 4 shall survive termination of this Agreement.
5. Limitation of Liability. The Bank shall not be liable to the
Company or the Administrative Agent for any expense, claim, loss, damage or cost
(collectively, "Damages") arising out of or relating to its performance under
this Agreement, other than those Damages which result directly from its acts or
omissions (including acts or omissions of its officers, agents or employees)
constituting negligence.
6. Failure to Perform. The Bank will excused from failing to act
or delay in acting, and no such failure or delay shall constitute a breach of
this Agreement or otherwise give rise to any liability of the Bank, if such
failure or delay is caused by circumstances beyond the Bank's reasonable
control, including, but not limited to, legal constraint, emergency conditions,
action or inaction of governmental, civil or military authority, fire, strike,
lockout or other labor dispute, war, riot, theft, flood, earthquake or other
natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure.
7. Termination. The Administrative Agent may terminate this
Agreement by written notice to the Bank, with a copy to the Company, no later
than ten (10) days prior to the termination date specified in such notice. The
Bank may terminate this Agreement by written notice to the Administrative Agent,
with a copy to the Company, no later than sixty (60) days prior to the
termination date specified in such notice. Upon receipt of such notice, whether
or not a default exists under the agreement between the Company and the
Administrative Agent, the Administrative Agent is hereby authorized to issue a
Direction Notice and take such steps as the Administrative Agent may require to
protect its security interest in the Account Collateral, including, but not
limited to, transferring all of the financial assets and credit balances in the
Account to another securities account in the name of the Administrative Agent or
its designee. No such termination shall affect any claim or cause of action of
any party hereto that existed under this Agreement prior to, or at any time of,
such termination.
8. Notices. Any notice under this Agreement shall be given (i) in
writing through first class United States or express mail service, charges
prepaid by the person giving such notice or (ii) by telecopy and confirmed in
writing in accordance with clause (i) of this Section 8. All other notices
required or permitted to be given under this Agreement shall be given by any
commercially reasonable means. Except as otherwise provided in this Agreement or
by applicable law, all notices shall be effective when delivered. Each written
notice given pursuant to this Agreement shall be addressed to the address of
such person specified below. The Administrative Agent, the Company, and the Bank
may each change the address for service of notice upon it by a notice in writing
to the others.
-4-
If to the Company:
Rent-Way, Inc.
Xxx Xxxx-Xxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Administrative Agent:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (312) 461-573
If to the Bank:
Manufacturers and Traders Trust Company
Xxx X&X Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Corporate Trust Department
9. Amendments and Waivers. The provisions of this Agreement may
not be amended, supplemented or otherwise modified or waived without the prior
written consent of each party hereto.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
11. No Extension of Credit. Nothing in this Agreement constitutes
a commitment of the Bank, or otherwise obligates the Bank, to extend any credit
to the Administrative Agent, or the Company, nor shall any course of dealing
between or among the Company, the Administrative Agent or the Bank be deemed to
be, or constitute, any such commitment or obligation.
12. Availability of Funds. The availability of funds contemplated
by this Agreement will be in accordance with the Bank's then current applicable
availability policy or, if such funds are not subject to such policy, upon such
funds becoming final and irrevocable funds. Even if an account statement for the
Account shows such funds have been credited to the Account, the Bank may delay
credit on its books for such funds in accordance with the Bank's then current
applicable availability policy. Anything in this Agreement or in any course of
dealing between or among the Company, the Administrative Agent or the Bank to
the contrary notwithstanding, the
-5-
Bank, upon prompt written notice to the Company and the Administrative Agent (as
permitted by any applicable laws, regulations, rules and operating circulars of
governmental agencies, funds transfer and clearing house rules and clearing
arrangements, whether or not the Bank is party thereto (the "Rules")), may
change the time in which funds deposited in the Account become available to the
Administrative Agent or the Company, provided such change does not extend such
time beyond the maximum, if any, permitted by the applicable Rules.
13. Taxes. The Company, is responsible for all tariffs, duties and
taxes (excluding United States Federal and state taxation on the overall net
income of the Bank) imposed by any government or governmental agency in
connection with this Agreement, however designated, levied or based, including
without limitation, state and local lease, personal, sales and use taxes.
14. Assignments. This Agreement will inure to the benefit of, and
be binding upon, the parties hereto and their respective successors and assigns.
No party hereto may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the other parties hereto;
provided that the Bank may freely assign its rights and obligations if this
Agreement to any successor by merger of the Bank or to any entity that is
directly or indirectly (i) in control of the Bank, (ii) under the control of the
Bank or (iii) under common control with the Bank.
15. Other Agreements and Services. Except as specifically set
forth in this Agreement, nothing in this Agreement limits or otherwise affects:
any other agreement now or hereafter existing between the Company and its
affiliates and the Bank relating to any other financial services provided by the
Bank to the Company or its affiliates or the Bank's right to accept deposits
from, lend money to and generally engage in any kind of banking or trust
business with the Company or its affiliates. This Agreement controls in the
event of any conflict between this Agreement and any other document or written
or oral statement. This Agreement supersedes all prior understandings, writings,
proposals, representations and communications, oral or written, of any party
relating to the subject matter hereof.
16. Representations and Warranties. Each of the parties hereto
represents and warrants that (i) it is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) it
has the requisite power and authority to execute, deliver and perform its
obligations under this Agreement, (iii) this Agreement has been duly authorized,
executed and delivered by it and (iv) this Agreement constitutes a valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar process,
whether considered in a proceeding in law or at equity.
17. Counterparts. (a) This Agreement may be executed by the
Administrative Agent, the Company and the Bank individually or in several
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
(b) The parties hereto unconditionally and irrevocably waive any
right to trial by jury in any legal proceeding relating to any dispute arising
under this Agreement.
-6-
Please agree to the terms of this Account Control Agreement by signing
in the space provided below.
Very truly yours,
-7-
EXHIBIT A
[FORM OF DIRECTION NOTICE]
_______________, 20___
[Name and Address of Lockbox Bank]
Re: Account No._______
Ladies and Gentlemen:
Reference is hereby made to that certain Account Control Agreement,
dated as of _______, 2003 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Agreement"), by and among [______________], and
you. Capitalized terms used herein and not defined herein shall have the meaning
assigned to such terms in the Agreement.
This is a Direction Notice referred to in the Agreement. We hereby give
you notice that, on and after the date hereof, you shall take sole and exclusive
instruction from the Administrative Agent as to the disposition of the Account
and financial assets and funds credited thereto. You are hereby instructed not
to accept any direction, instructions or entitlement orders or instructions with
respect to the Account or the financial assets and funds credited thereto from
any person other than the Administrative Agent, unless otherwise ordered by a
court of competent jurisdiction.
Kindly acknowledge your receipt and understanding of this letter and
its terms in the space provided below.
Very truly yours,
[____________], as Administrative Agent
By: ____________________________________
Name:
Title:
Accepted and agreed:
[BANK]
By: _________________________________
Name:
Title:
