Exhibit 4.3
INTERCREDITOR AND COLLATERAL
AGENCY AGREEMENT
THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT is dated as of May 20,
2005, by and among each of the banks listed on the signature page hereof
(together with its successors and assigns, other than the Company and its
subsidiaries and affiliates, collectively the "Domestic Banks"), Fleet National
Bank, a Bank of America company, as Administrative Agent for the Domestic Banks
(together with its successors and assigns, the "Agent") and the holders of the
Senior Notes listed on the signature pages hereof (together with their
respective successors and assigns, other than the Company and its subsidiaries
and affiliates, the "Noteholders" and, together with the Domestic Banks, the
"Lenders") and Fleet National Bank, a Bank of America company, as Collateral
Agent on behalf of the Lenders (the "Collateral Agent"). Capitalized terms used
herein have the respective meanings ascribed thereto in Section 1.1 of this
Agreement.
PRELIMINARY STATEMENT
1. American Biltrite Inc., a Delaware corporation (the "Company"), K&M
Associates L.P., a Rhode Island limited partnership ("K&M"), and American
Biltrite (Canada) Ltd, a corporation governed by the Canada Business
Corporations Act ("Canadian Company"), the Domestic Banks, certain other lenders
from time to time providing loans and letters of credit to the Canadian Company
(the "Canadian Banks") and the Agent are parties to that certain Amended and
Restated Credit Agreement (together with any amendment, modification,
supplement, restatement or replacement thereof, the "Credit Agreement"), dated
as of May 20, 2005, pursuant to which the Domestic Banks are providing a credit
facility to the Company and K&M in an amount up to $20,000,000.
2. Pursuant to the terms and conditions of that certain Note Purchase and
Private Shelf Agreement and Facility Guarantee, dated October 14, 2003, as
amended, and as further amended and restated pursuant to an Amended and Restated
Note Purchase and Facility Guarantee, dated May 20, 2005 (together with any
other amendment, modification or replacement thereof, the "Note Agreement"), the
Noteholders purchased from the Company its 7.91% Series A Senior Notes due
August 28, 2010, in the aggregate principal amount of $20,000,000 (together with
any amendment, modification, supplement, restatement or replacement thereof, the
"Senior Notes").
3. The Subsidiary Guarantors have jointly and severally guaranteed to the
Agent and the Domestic Banks, pursuant to the terms of the Bank Guaranty
Agreement, the Bank Guaranteed Obligations.
4. The Subsidiary Guarantors have jointly and severally guaranteed to the
Noteholders, pursuant to the terms of the Note Agreement, the Noteholder
Guaranteed Obligations.
5. The Company and the Subsidiary Guarantors are parties to that certain
Security Agreement, dated as of October 14, 2003.
6. The Agent, the Domestic Banks and the Noteholders are parties to that
certain Intercreditor and Collateral Agency Agreement, dated as of October 14,
2003 (the "Existing Intercreditor Agreement"), and in connection with the Credit
Agreement and the Note Agreement, the parties wish to replace the Existing
Intercreditor Agreement with this Agreement, in which the parties shall define
their rights and obligations with respect to each other such that any payments
received by the Agent, the Domestic Banks or any Noteholder, as the case may be,
through any Enforcement, payments by K&M under the Credit Agreement after any
Sharing Event or from any Subsidiary Guarantor on account of the Bank Guaranteed
Obligations or the Noteholder Guaranteed Obligations, as the case may be, shall
be shared among the Lenders equally and ratably in accordance with the
respective amounts of the Senior Indebtedness then held by each of them, all as
set forth in this Agreement.
ARTICLE I
INTERPRETATION OF THIS AGREEMENT
Section 1.1. Defined Terms. As used in this Agreement, capitalized terms
have the respective meanings specified below or set forth in the Section of this
Agreement referred to immediately following such term (such definitions, unless
otherwise expressly provided, to be equally applicable to both the singular and
plural forms of the terms defined):
"Additional Lien" has the meaning set forth in Section 3.3 of this
Agreement.
"Agent" has the meaning set forth in the first paragraph of this
Agreement.
"Agreement" means this Intercreditor and Collateral Agency Agreement, as
it may be amended, modified, supplemented or restated from time to time.
"Bank Guaranteed Obligations" means, collectively, all amounts payable by
the Subsidiary Guarantors to the Agent and the Domestic Banks pursuant to the
terms of the Bank Guaranty Agreement and the Joinder Agreements.
"Bank Guaranty Agreement" means the Guarantee Agreement, dated as of
October 14, 2003, executed by the Subsidiary Guarantors in favor of the Agent
and the Domestic Banks (or any replacement, modification or amendment thereof).
"Canadian Banks" has the meaning set forth in the first paragraph of the
Preliminary Statement of this Agreement.
"Canadian Company" has the meaning set forth in the first paragraph of the
Preliminary Statement of this Agreement.
"Canadian Security Agreement" means that Deed of Hypothec and Issue of
Mortgage Bonds executed by the Canadian Company in favor of the Bank of America,
National Association, acting through its Canada branch, as collateral agent for
the benefit of the Canadian Banks, as it may be amended, modified or
supplemented from time to time in accordance with its terms.
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"Collateral" means all property and assets, and interest in property and
assets, upon or in which any Obligor has granted a lien or security interest to
the Collateral Agent to secure the Senior Indebtedness and all balances held by
the Collateral Agent or any Lender for the account of any Obligor or any other
property held or owing by the Collateral Agent or any Lender to or for the
credit or for the account of any Obligor with respect to which the Collateral
Agent or any Lender has rights to setoff or appropriate or a common law lien.
"Collateral Agent" has the meaning set forth in the first paragraph of
this Agreement.
"Collateral Agent Expenses" means, without limitation, all costs and
expenses incurred by the Collateral Agent in connection with the performance of
its duties under this Agreement, including the realization upon or protection of
the Collateral or enforcing or defending any lien upon or security interest in
the Collateral or any other action taken in accordance with the provisions of
this Agreement, expenses incurred for legal counsel in connection with the
foregoing, and any other costs, expenses or liabilities incurred by the
Collateral Agent for which the Collateral Agent is entitled to be reimbursed or
indemnified by a Obligor pursuant to any Collateral Document or the Bank
Guaranty Agreement or by the Lenders pursuant to this Agreement.
"Collateral Agent Obligations" means all obligations of any Obligor or any
Lender to pay, reimburse or indemnify the Collateral Agent for any Collateral
Agent Expenses.
"Collateral Documents" means (i) the Security Agreement, (ii) the Joinder
Agreements, (iii) any other agreement, document or instrument executed and
delivered by the Company, K&M, or a direct or indirect subsidiary of the Company
pursuant to the requirements of Sections 3.2 or 3.3 of the Security Agreement or
paragraph 5R of the Note Agreement after the date hereof, (iv) any other
agreement, document or instrument executed and delivered by any Obligor after
the date hereof under which such Obligor has granted a lien upon or security
interest in any property or assets to the Collateral Agent to secure all or any
part of the Senior Indebtedness and (v) all financing statements, certificates,
documents and instruments relating thereto or executed or provided in connection
therewith, each as amended, restated, supplemented or otherwise modified from
time to time. For the avoidance of doubt, the Canadian Security Agreement is not
a Collateral Document.
"Company" has the meaning set forth in the Preliminary Statement of this
Agreement.
"Credit Agreement" has the meaning set forth in the Preliminary Statement
of this Agreement.
"Credit Document" shall have the meaning set forth in the Credit
Agreement.
"Default" has the meaning set forth in Section 3.6(a) of this Agreement.
"Default Notice" has the meaning set forth in Section 3.6(a) of this
Agreement.
"Domestic Banks" has the meaning set forth in the first paragraph of this
Agreement.
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"Enforcement" means (a) for one or more of the Agent or any Lender to make
demand for payment of or accelerate the time for payment prior to the scheduled
payment date of any Revolving Loan, any Revolving Note or any Senior Note, (b)
for the Agent or any Lender to terminate in accordance with the Credit Agreement
its commitment to make Revolving Loans or issue Letters of Credit pursuant to
the Credit Agreement, (c) for one or more of the Agent or any Lender to commence
the judicial enforcement of any rights or remedies under or with respect to the
Credit Agreement, any Revolving Note, the Note Agreement, any Senior Note or any
Senior Indebtedness, or to set off or appropriate any balances held by it for
the account of any Obligor or any other property at any time held or owing by it
to or for the credit or for the account of any Obligor, (d) for the Agent or any
Domestic Bank to call for funding of a Letter of Credit prior to its due date,
(e) for the Collateral Agent to commence the judicial enforcement of any rights
or remedies under any Collateral Document (other than an action solely for the
purpose of establishing or defending the lien or security interest intended to
be created by any Collateral Document upon or in any Collateral as against or
from claims of third parties on or in such Collateral), to set off, freeze or
otherwise appropriate any balances held by it for the account of any Obligor or
any other property at any time held or owing by it to or for the credit or for
the account of any Obligor or to otherwise take any action, including the
exercise of self-help, to realize upon the Collateral, (f) the commencement by,
against or with respect to any Obligor of any proceeding under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law or for the appointment or a receiver
for such Obligor or its assets, (g) for one or more of the Agent or any Domestic
Bank to make a demand for payment under the Bank Guaranty Agreement, (h) for any
Noteholder to make a demand for payment under the Facility Guarantee (as defined
in the Note Agreement), and (i) the payment by any Subsidiary Guarantor of any
Bank Guarantee Obligations or Noteholder Guaranteed Obligations, as the case may
be.
"Events of Default" means any event or condition the occurrence or
existence of which would permit or results in (i) the acceleration of any of the
obligations of the Company under the Credit Agreement, (ii) the suspension or
cancellation of all or part of the credit facility referred to in the Credit
Agreement or (iii) the acceleration of any of the obligations of the Company
under the Note Purchase Agreement.
"Fleet" means Fleet National Bank, a Bank of America company.
"Guaranteed Obligations" means, collectively, the Bank Guaranteed
Obligations and the Noteholder Guaranteed Obligations.
"Indemnitees" has the meaning set forth in Section 2.10 of this Agreement.
"Joinder Agreement" shall mean those agreements between the Agent and each
of K&M Legendary Services, Inc., AbItalia, Inc., American Biltrite Far East,
Inc. and Abimex, LLC, pursuant to which these Subsidiaries of the Company shall
become Subsidiary Guarantors.
"K&M" has the meaning set forth in the Preliminary Statement of this
Agreement.
"Lenders" has the meaning set forth in the first paragraph of this
Agreement.
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"Letter of Credit" means any "Domestic Letters of Credit", as defined in
the Credit Agreement as in effect on the date hereof, issued for the account of
the Company or K&M (but not the Canadian Company).
"Letter of Credit Collateral Obligations" means, without duplication, (a)
all of the obligations of the Company and K&M under Section 4.3 of the Credit
Agreement to deposit cash with the Agent or any Domestic Bank with respect to
Outstanding Letters of Credit Exposure and (b) all of the obligations of any
Guarantor to pay any amount described in clause (a) of this definition under the
Bank Guaranty Agreement. For the avoidance of doubt, obligations of the Canadian
Company under Section 4.3 of the Credit Agreement shall not constitute Letter of
Credit Collateral Obligations.
"Note Agreement" has the meaning set forth in the Preliminary Statement of
this Agreement.
"Noteholder Guaranteed Obligations" means, collectively, all amounts
payable by the Subsidiary Guarantors to the Noteholders pursuant to the terms of
the Note Agreement.
"Noteholders" has the meaning specified in the first paragraph of this
Agreement.
"Obligor" means the Company, K&M, and each Subsidiary Guarantor. For the
avoidance of doubt, the Canadian Company is not an Obligor.
"Outstanding Letters of Credit Exposure" at any time, means the undrawn
face amount of all outstanding Letters of Credit at such time.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company or partnership, joint stock company,
trust unincorporated association, joint venture, governmental agency or other
authority.
"Pro Rata Expenses Share" with respect to any Lender, means the percentage
set forth opposite such Lender's name below:
Fleet 50%
Noteholders 50%
---
Total 100%
; subject to any permitted assignment whereupon the assignee or transferee of
such Lender shall be deemed to acquire the Pro Rata Expenses Share appropriate
to the Senior Indebtedness assigned or transferred to it.
"Required Holders" shall have the meaning set forth in the Note Agreement.
"Required Lenders" shall have the meaning set forth in the Credit
Agreement.
"Required Senior Lenders" means Required Holders and Required Lenders.
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"Revolving Loan" shall mean all "Domestic Revolving Loans", as defined in
the Credit Agreement as in effect on the date hereof.
"Revolving Loan and Reimbursement Obligations" means principal amount of
the Revolving Loans and the reimbursement obligations due the Domestic Banks
with respect to Letters of Credit.
"Revolving Notes" shall mean all "Revolving Notes", as defined in the
Credit Agreement as in effect on the date hereof.
"Security Agreement" means each Security Agreement executed by the
Company, K&M or a Subsidiary Guarantor in favor of the Collateral Agent for the
benefit of the Lenders, as it may be amended, modified or supplemented from time
to time in accordance with its terms.
"Senior Indebtedness" means the Collateral Agent Obligations, the
Revolving Loan and Reimbursement Obligations, the principal amount of the Senior
Notes, the Letter of Credit Collateral Obligations and all of the other present
or future indebtedness, liabilities and obligations of all and each of the
Obligors now or hereafter owed to any or all of the Collateral Agent, the Agent
or the Lenders, evidenced by or arising under, by virtue of or pursuant to any
Credit Document, the Note Agreement, any Collateral Document or any document
executed in connection with the foregoing or any Bank Guaranteed Obligation or
Note Guaranteed Obligation, whether such indebtedness, liabilities and
obligations are direct or indirect, joint, several or joint and several, or now
exist or hereafter arise, and all renewals and extensions thereof, including,
without limitation, all interest on the Revolving Notes and the Senior Notes and
any Yield-Maintenance Amount. The term "Senior Indebtedness" shall include all
of the foregoing indebtedness, liabilities and obligations whether or not
allowed as a claim in any bankruptcy, insolvency, receivership or similar
proceeding.
"Senior Notes" has the meaning set forth in the Preliminary Statement of
this Agreement.
"Sharing Date" means the first date on which a Sharing Event shall occur.
"Sharing Event" means (a) an Enforcement, (b) the occurrence of any Event
of Default under the Credit Agreement or the Note Purchase Agreement and the
earlier of (i) actual knowledge of the Collateral Agent of such Event of Default
or (ii) receipt of notice of such Event of Default by the Collateral Agent or
(c) any refusal by the Agent or any Bank to advance or continue any Revolving
Credit Loans or issue any Letter of Credit requested by the Company or K&M
(irrespective of whether the conditions precedent thereto specified in the
Credit Agreement have been satisfied) where such Revolving Credit Loans or
issuance would not cause the limitations set forth in Section 2.1.2 of the
Credit Agreement to be exceeded.
"Special Cash Collateral Account" has the meaning set forth in Section
3.1(c) of this Agreement.
"Subsidiary Guarantors" means each domestic Subsidiary of the Company
(other than Tullahoma Properties, L.L.C. and, solely with respect to the Credit
Agreement, K&M) as of the date of this Agreement and each other Subsidiary of
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the Company that may hereafter become (or should have become, in accordance with
the Company's contractual arrangements with the Agent and the Banks or the
Noteholders) a guarantor of the Senior Indebtedness. For the avoidance of doubt,
the Canadian Company is not a Subsidiary Guarantor.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Third Party Guarantee" has the meaning set forth in Section 3.3 of this
Agreement.
"Transferee" has the meaning set forth in Section 5.7 of this Agreement
"Yield-Maintenance Amount" shall mean the "Yield-Maintenance Amount", as
defined in the Note Agreement.
Section 1.2. Certain Other Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not in any particular provision of this
Agreement. Section references are to this Agreement unless otherwise specified.
All terms defined in this Agreement in the singular shall have comparable
meanings when used in the plural and vice versa, unless otherwise specified.
ARTICLE II
APPOINTMENT OF FLEET AS COLLATERAL AGENT
FOR THE LENDERS AND THE AGENT
Section 2.1. Appointment of Collateral Agent. Subject in all respects to
the terms and provisions of this Agreement, each of the Lenders and the Agent
hereby appoint Fleet to act as agent for the benefit of each of the Lenders and
the Agent with respect to the liens upon and the security interests in the
Collateral and the rights and remedies granted under and pursuant to the
Collateral Documents, and Fleet hereby accepts such appointment and agrees to
act as such agent. The appointment of the Collateral Agent pursuant to this
Agreement shall be effective with respect to all financing statements filed in
any filing office with respect to any Obligor, if any, prior to the date of this
Agreement on and as of the date filed. The agency created hereby shall in no way
impair or affect any of the rights and powers of, or impart any duties or
obligations upon, Fleet in its individual capacity as a Lender or in its
capacity as Agent. To the extent legally necessary to enable the Collateral
Agent to enforce or otherwise foreclose and realize upon any of the liens or
security interests in the Collateral in any legal proceeding which the
Collateral Agent either commences or joins as a party in accordance with the
terms hereof, the Agent and each of the Lenders agree to join as a party in such
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proceeding and take such action therein concurrently to enforce and obtain a
judgment for the payment of the Senior Indebtedness held by it.
Section 2.2. Duties of Collateral Agent. Subject to the Collateral Agent
having been directed to take such action in accordance with the terms of this
Agreement, the Agent and each Lender hereby irrevocably authorizes the
Collateral Agent to take such action on its behalf under the provisions of the
Collateral Documents and any other instruments, documents and agreements
referred to therein and to exercise such powers thereunder as are specifically
delegated to the Collateral Agent by the terms thereof and such other powers as
are reasonably incidental thereto. Subject to the provisions of Section 4.3
hereof, the Collateral Agent is hereby irrevocably authorized to take all
actions on behalf of the Agent and the Lenders to enforce the rights and
remedies of the Collateral Agent, the Agent and the Lenders provided for in the
Collateral Documents or by applicable law with respect to the liens upon and
security interests in the Collateral granted to secure the Senior Indebtedness;
provided, however, that, notwithstanding any provision to the contrary in any
Collateral Documents, (i) except as otherwise provided herein, the Collateral
Agent shall act solely at and in accordance with the written direction of the
Required Senior Lenders, (ii) the Collateral Agent shall not, without the
written consent of all of the Lenders, release, reconvey or terminate by
affirmative action or consent to any lien upon or security interest in any
Collateral granted under any Collateral Documents (except (x) upon dispositions
of Collateral by an Obligor as permitted in accordance with the terms of the
Credit Agreement and the Note Agreement prior to the occurrence of an Event of
Default, (y) upon disposition of such Collateral after an Event of Default
pursuant to direction given under clause (i) hereof and (z) with respect to
property in or on which, by the terms of the Credit Agreement and the Note
Agreement, a security interest or lien is not required to be granted to the
Collateral Agent) and (iii) the Collateral Agent shall not accept any Senior
Indebtedness in whole or partial consideration for the disposition of any
Collateral without the written consent of all of the Lenders. The Collateral
Agent agrees to make such demands and give such notices under the Collateral
Documents as may be requested by, and to take such action to enforce the
Collateral Documents and to foreclose or otherwise realize upon, collect and
dispose of the Collateral or any portion thereof as may be directed by, the
Required Senior Lenders; provided, however, that the Collateral Agent shall not
be required to take any action that is contrary to law or the terms of the
Collateral Documents or this Agreement. Once a direction to take any action has
been given by the Required Senior Lenders to the Collateral Agent, and subject
to any other directions which may be given from time to time by the Required
Senior Lenders, decisions regarding the manner in which any such action is to be
implemented and conducted (with the exception of any decision to settle,
compromise or dismiss any legal proceeding, with or without prejudice, which
shall require the written direction of the Required Senior Lenders) shall be
made by the Collateral Agent, with the assistance and upon the advice of its
counsel. Notwithstanding the provisions of the preceding sentence, any and all
decisions to settle, compromise or dismiss any legal proceeding, with or without
prejudice, which implements, approves or results in or has the effect of causing
any release, change or occurrence, where such release, change or occurrence
otherwise would require unanimous approval of all of the Lenders pursuant to the
terms of this Agreement, also shall require the unanimous approval of all of the
Lenders. The Collateral Agent shall be entitled to assume that no Event of
Default or Enforcement exists until either notice has been given to the
Collateral Agent of an Event of Default or Enforcement by an Obligor or a
Lender, or the Collateral Agent shall have actual knowledge that an Event of
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Default or Enforcement has occurred (and for this purpose the actual knowledge
of the Collateral Agent which is also a Lender or the Agent shall include any
actual knowledge which the Collateral Agent may have in its capacity as a Lender
or the Agent).
Section 2.3. Requesting Instructions. The Collateral Agent may at any time
request directions from the Lenders as to any course of action or other matter
relating to the performance of its duties under this Agreement and the
Collateral Documents and the Lenders shall respond to such request in a
reasonably prompt manner.
Section 2.4. Emergency Actions. If the Collateral Agent has asked the
Lenders for instructions following the receipt of any notice of an Event of
Default and if the Required Senior Lenders have not responded to such request
within ten business days, the Collateral Agent shall be authorized to take such
actions with regard to such Event of Default which the Collateral Agent, in good
faith, believes to be reasonably required to protect the Collateral from damage
or destruction; provided, however, that (i) prior to the expiration of such ten
day period the Collateral Agent shall be authorized to take such actions with
regard to such Event of Default which the Collateral Agent, in good faith,
believes to be reasonably required to prevent irreparable damage to the
Collateral which might result from a delay and (ii) once instructions have been
received from the Required Senior Lenders, the actions of the Collateral Agent
shall be governed thereby and the Collateral Agent shall not take any further
action which would be contrary thereto.
Section 2.5. Document Amendments. An amendment, supplement, modification,
restatement or waiver of any provision of any Collateral Document, any consent
to any departure by any Obligor therefrom, or the execution or acceptance by the
Collateral Agent of any Collateral Document not in effect on the date hereof
shall be effective if and only if, consented to in writing by the Required
Senior Lenders; provided, however, that, (i) no such amendment, supplement,
modification, restatement, waiver, consent or such Collateral Document not in
effect on the date hereof which imposes any additional responsibilities upon the
Collateral Agent shall be effective without the written consent of the
Collateral Agent and (ii) no such amendment, supplement, modification, waiver or
consent shall release, reconvey or terminate the security interest in or lien on
any Collateral from the lien or security interest created by any Collateral
Document not subject to the exception in Section 2.2(ii) hereof or narrow the
scope of the property or assets in which a lien or security interest is granted
pursuant to any Collateral Document without the written consent of all Lenders.
Section 2.6. Administrative Actions. The Collateral Agent shall have the
right, but not the obligation, to take such actions hereunder and under the
Collateral Documents, not inconsistent with the instructions of the Required
Senior Lenders or the terms of the Collateral Documents and this Agreement, as
the Collateral Agent in good xxxxx xxxxx necessary or appropriate to perfect or
continue the perfection of the liens on the Collateral for the benefit of the
Lenders.
Section 2.7. Collateral Agent Action Through Others. The Collateral Agent
may perform any of its duties under this Agreement and the Collateral Documents
by or through attorneys (which attorneys may be the same attorneys who represent
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the Agent or any Lender), agents or other Persons reasonably deemed appropriate
by the Collateral Agent. The Collateral Agent shall not be liable to the Lenders
for the misconduct of any such attorneys, agents or other Persons selected by
the Collateral Agent with reasonable care. In addition, the Collateral Agent may
act in good faith reliance upon the opinion or advice of attorneys selected by
the Collateral Agent. In all cases the Collateral Agent may pay customary and
reasonable compensation to all such attorneys, agents or other Persons as may be
employed in connection with the performance of its duties under this Agreement
and the Collateral Documents and the same shall constitute Collateral Agent
Expenses for purposes hereof.
Section 2.8. Resignation and Removal of Collateral Agent.
(a) The Collateral Agent (i) may resign at any time upon notice to the
Lenders and (ii) may be removed at any time upon the written request of the
Required Senior Lenders sent to the Collateral Agent and the other Lenders.
(b) If the Collateral Agent shall resign or be removed, the Required
Senior Lenders shall have the right to select a replacement Collateral Agent by
notice to the Collateral Agent and the other Lenders.
(c) Upon any replacement of the Collateral Agent, the Collateral Agent
shall assign all of the liens upon and security interests in all Collateral
under the Collateral Documents, and all right, title and interest of the
Collateral Agent under all the Collateral Documents, to the replacement
Collateral Agent, without recourse to the Collateral Agent or any Lender and at
the expense of the Company. In addition, the Collateral Agent shall execute such
assignments and amendments of UCC financing statements and perform such other
acts as are necessary or appropriate to maintain the due perfection of the
security interests in and liens on the Collateral.
(d) No resignation or removal of the Collateral Agent shall become
effective until a replacement Collateral Agent shall have been selected as
provided herein and shall have executed and delivered to each Lender a joinder
agreement in the form attached hereto as Exhibit A. In the event that a
replacement Collateral Agent shall not have been selected as provided herein or
shall not have assumed such obligations within 90 days after the resignation or
removal of the Collateral Agent, then the Lender holding the largest outstanding
amount of Senior Indebtedness may appoint the replacement Collateral Agent.
(e) Any replacement Collateral Agent shall be a Lender or a bank, trust
company, or insurance company having capital, surplus and undivided profits of
at least $500 million.
Section 2.9. Indemnification of Collateral Agent. Each Obligor, by their
consent hereto, hereby jointly and severally agree to indemnify and hold the
Collateral Agent, its officers, directors, employees and agents (including, but
not limited to, any attorneys acting at the direction or on behalf of the
Collateral Agent) harmless against any and all costs, claims, damages,
penalties, liabilities, losses and expenses (including, but not limited to,
court costs and attorneys' fees and disbursements) which may be incurred by or
asserted against the Collateral Agent or any such officers, directors, employees
and agents by reason of its status as agent hereunder or which pertain, whether
directly or indirectly, to this Agreement, the Collateral Documents, or to any
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action or failure to act of the Collateral Agent as agent hereunder, except to
the extent any such action or failure to act by the Collateral Agent constitutes
gross negligence or willful misconduct. The obligations of the Obligor under
this Section 2.9 shall survive the payment in full of the Senior Indebtedness
and the termination of this Agreement.
Section 2.10. Liability of Collateral Agent. In absence of gross
negligence or willful misconduct, the Collateral Agent will not be liable to the
Agent or any Lender for any action or failure to act or any error of judgment,
negligence, mistake or oversight on its part or on the part of any of its
officers, directors, employees or agents. To the extent not paid by the Obligor,
each Lender hereby severally, and not jointly, agrees to indemnify and hold the
Collateral Agent and each of its officers, directors, employees and agents
(collectively, "Indemnitees") harmless from and against any and all liabilities,
costs, claims, damages, penalties, losses and actions of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for any Indemnitee) incurred by or asserted against any Indemnitee arising out
of or in relation to this Agreement, the Collateral Documents, or its status as
agent hereunder or any action taken or omitted to be taken by any Indemnitee
pursuant to and in accordance with any of the Collateral Documents and this
Agreement, except to the extent arising from the gross negligence or willful
misconduct, with each Lender being liable only for its Pro Rata Expenses Share
of any such indemnification liability. The obligations of the Lenders under this
Section 2.10 shall survive the payment in full of the Senior Indebtedness and
the termination of this Agreement.
Section 2.11. No Reliance on Collateral Agent. Neither the Collateral
Agent nor any of its officers, directors, employees or agents (including, but
not limited to, any attorneys acting at the direction or on behalf of the
Collateral Agent) shall be deemed to have made any representations or
warranties, express or implied, with respect to, nor shall the Collateral Agent
or any such officer, director, employee or agent be liable to the Agent or any
Lender or responsible for (i) any warranties or recitals made by any Obligor in
the Collateral Documents or any other agreement, certificate, instrument or
document executed by any Obligor in connection therewith, (ii) the due or proper
execution or authorization of this Agreement or any Collateral Documents by any
party other than the Collateral Agent, or the effectiveness, enforceability,
validity, genuineness or collectibility as against any Obligor of any Collateral
Document or any other agreement, certificate, instrument or document executed by
any Obligor in connection therewith, (iii) the present or future solvency or
financial worth of any Obligor or (iv) the value, condition, existence or
ownership of any of the Collateral or the perfection of any lien upon or
security interest in the Collateral (whether now or hereafter held or granted)
or the sufficiency of any action, filing, notice or other procedure taken or to
be taken to perfect, attach or vest any lien or security interest in the
Collateral. Except as may be required by Section 2.2 hereof, the Collateral
Agent shall not be required, either initially or on a continuing basis, to (A)
make any inquiry, investigation, evaluation or appraisal respecting, or enforce
performance by any Obligor of, any of the covenants, agreements or obligations
of any Obligor under any Collateral Document or (B) undertake any other actions
(other than actions expressly required to be taken by it under this Agreement).
Nothing in any of the Collateral Documents, expressed or implied, is intended to
or shall be so construed as to impose upon the Collateral Agent any obligations,
duties or responsibilities except as set forth in this Agreement and therein.
The Collateral Agent shall be protected in acting upon any notice, request,
consent, certificate, order, affidavit, letter, telegram, telefacsimile or other
paper or document given to it by any Person reasonably and in good faith
11
believed by it to be genuine and correct and to have been signed or sent by such
Person. The Collateral Agent shall have no duty to inquire as to the performance
or observance of any of the terms, covenants or conditions of the Credit
Agreement or the Note Agreement. Except upon the direction of the Required
Senior Lenders pursuant to Section 2.2 of this Agreement, the Collateral Agent
will not be required to inspect the properties or books and records of any
Obligor for any purpose, including to determine compliance by the Obligors with
their respective covenants respecting the perfection of security interests.
Section 2.12. Limited Agency. The Collateral Agent, the Agent and the
Lenders agree that it is the intent of the Lenders to limit the scope of the
powers of the Collateral Agent to the specific powers delegated hereunder,
together with such powers as are reasonably incidental thereto, and the
Collateral Agent does not and shall not have any right or authority to bind the
Agent or any Lender in any other manner or thing whatsoever.
ARTICLE III
SHARING PROVISIONS
Section 3.1. Sharing of Payments and Proceeds After Sharing Event.
(a) On and after the occurrence of any Sharing Event, all proceeds of
Collateral held or received by the Collateral Agent, the Agent or any Lender
(including, without limitation, any amount of any balances held by the
Collateral Agent, the Agent or any Lender for the account of any Obligor or any
other property held or owing by it to or for the credit or for the account of
any Obligor to the extent set off or appropriated by it, but excluding, except
as otherwise provided in paragraph (c) of this Section 3.1, amounts on deposits
in the Special Cash Collateral Account provided for in such paragraph (c)) and
any other payments received, directly or indirectly, by the Collateral Agent,
the Agent or any Lender on or with respect to any Senior Indebtedness
(including, without limitation, any payment made by K&M under the Credit
Agreement or any payment under any Bank Guaranty Agreement or with respect to
any Guaranteed Obligations, any payment in any insolvency or reorganization
proceeding and the proceeds from any sale of any Senior Indebtedness or any
interest therein to any Obligor or any affiliate of any Obligor) shall be
delivered to the Collateral Agent and distributed as follows:
(i) First, to the Collateral Agent in the amount of any unpaid
Collateral Agent Obligations;
(ii) Next, to the Lenders in the amount of any unreimbursed amounts
paid by the Lenders to any Indemnitee pursuant to Section 2.10 hereof, pro
rata in proportion to the respective unreimbursed amounts thereof paid by
each Lender;
(iii) Next, to the Lenders in the amount of any unpaid interest
accrued on the Senior Indebtedness, pro rata in proportion to the
respective amounts thereof owed to each Lender as of the applicable
Sharing Date;
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(iv) Next, to the Lenders in the amount of any outstanding principal
amount of the Revolving Loan and Reimbursement Obligations, any unpaid
Letter of Credit Collateral Obligations, any outstanding principal amount
of the Senior Notes and any Yield-Maintenance Amount that may be due upon
any prepayment of the Senior Indebtedness, pro rata in proportion to the
respective amounts thereof owed to each Lender as of the applicable
Sharing Date (and, for this purpose, Letter of Credit Collateral
Obligations shall be considered to have been paid to the extent of any
amount then on deposit in the Special Cash Collateral Account provided for
in paragraph (c) of this Section 3.1); provided, however, in no event
shall an amount in excess of $2,500,000 be distributed under this clause
(iv) with respect to Yield-Maintenance Amount;
(v) Next, to the holders of the Senior Notes in the amount of the
balance, if any, of any Yield-Maintenance Amount that may be due upon any
prepayment of the Senior Indebtedness; and
(vi) Next, to the Lenders in the amount of any other unpaid Senior
Indebtedness, pro rata in proportion to the respective amounts thereof
owed to each Lender as of such Enforcement.
After all Senior Indebtedness has been indefeasibly paid in full in cash,
the balance of the proceeds of the Collateral, if any, shall be paid to the
Obligors, as applicable, or as otherwise required by law.
(b) For the purposes of this Section 3.1, any reduction in the Outstanding
Letters of Credit Exposure after an Enforcement which is achieved due to a
payment by or on behalf of any Obligor to any beneficiary of any Letter of
Credit which discharges an obligation which otherwise would have been the basis
for a payment or acceptance of a draft pursuant to such Letter of Credit shall,
to the extent of such reduction, be deemed to be a payment with respect to the
Senior Indebtedness received on the date of such reduction by the Lender or
Lenders issuing such Letter of Credit.
(c) Any payment pursuant to clause (a)(iv) above with respect to Letter of
Credit Collateral Obligations shall be paid to the Collateral Agent for deposit
in an account (the "Special Cash Collateral Account") to be held as collateral
for the Senior Indebtedness and disposed of as provided herein. On each date
after the occurrence of an Enforcement on which a payment is made to a
beneficiary pursuant to a draw on a Letter of Credit, the Collateral Agent shall
distribute to the Agent from the Special Cash Collateral Account for application
to the payment of the reimbursement obligation due to the Banks with respect to
such draw on amount equal to the product of (1) the amount then on deposit in
the Special Cash Collateral Account and (2) a fraction, the numerator of which
is the amount of such draw and the denominator of which is the amount of the
Outstanding Letter of Credit Exposure immediately prior to such draw. On each
date after the occurrence of an Enforcement on which a reduction in the
Outstanding Letters of Credit Exposure occurs other than on account of a payment
made to a beneficiary pursuant to a draw on a Letter of Credit, then the
Collateral Agent shall distribute from the Special Cash Collateral Account an
amount equal to the product of (1) the amount then on deposit in the Special
Cash Collateral Account and (2) a fraction the numerator of which is the amount
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of such reduction and the denominator of which is the amount of the Outstanding
Letters of Credit Exposure immediately prior to such reduction, which amount
shall be distributed as provide in clauses (a)(i) through (vi) above. At such
time as the amount of the Outstanding Letters of Credit Exposure is reduced to
zero, any amount remaining in the Special Cash Collateral Account, after the
distribution therefrom as provided above, shall be distributed as provided in
clauses (a)(i) through (vi), above.
(d) Except as otherwise provided in this subsection (d), the distribution
provisions of this Section 3.1 are for the purpose of determining the relative
amounts of payments to be distributed to the Lenders and not for the purposes of
creating an agreement among the parties as to the manner in which any proceeds
or other payments distributed to them are actually to be applied to pay the
Senior Indebtedness. Each Lender shall be free, in its own discretion, to apply
any proceeds or other payments distributed to it hereunder to the Senior
Indebtedness held by such Lender in such order as it may determine. Each
Obligor, by its consent hereto, agrees that in the event any payment is made
pursuant to the distribution provisions of this Section 3.1, the amount
distributed to each Lender shall be applied to the Senior Indebtedness owing to
such Lender in the manner in which such Lender elects as provided in the
preceding sentence. Notwithstanding the foregoing, for all purposes of this
Agreement the Senior Indebtedness shall be deemed paid to the same extent that
proceeds and other payments are distributed with respect to it pursuant to
Section 3.1(a) notwithstanding the actual application thereof by any individual
Lender to the Senior Indebtedness owing to it. Each Obligor, by its consent
hereto, agrees that, notwithstanding anything to the contrary in this Agreement,
the Credit Agreement or the Note Agreement, the amount of the obligations in
respect of Senior Indebtedness owed by any Obligor to a Lender (1) shall be
reduced by the amount of the proceeds or other payments received by such Lender
pursuant to the distribution provisions of this Section 3.1 and (2) shall not be
reduced by the amount of the proceeds or other payments paid over to the
Collateral Agent by such Lender pursuant to the provisions of subsections (a),
(b) and (c) of this Section 3.1.
Section 3.2. Invalidated Payments. If any amount paid by any Lender to the
Collateral Agent for distribution in accordance with the provisions of this
Agreement is subsequently required to be returned or repaid, whether by court
order, settlement or otherwise, such Lender shall promptly notify the Collateral
Agent of such requirement, the Collateral Agent shall notify each of the Lenders
thereof, and each Lender shall, promptly upon its receipt of such notice from
the Collateral Agent, pay to the Collateral Agent the pro rata portion received
by it of such amount, without any interest thereon, for payment to the
appropriate party in interest. If any such amounts are subsequently recovered by
any Lender, such Lender shall remit such amounts to the Collateral Agent and the
Collateral Agent shall redistribute such amounts to the Lenders, without any
interest thereon, on the same basis as such amounts were originally distributed.
The obligations of the Lenders and the Collateral Agent under this Section 3.2
shall survive the repayment of the Senior Indebtedness and termination of the
Bank Guaranty Agreement and the Note Agreement.
Section 3.3. Additional Collateral. Each of the Lenders hereby covenants
and agrees that (i) such Lender will not accept from any Person on behalf of the
Company or any Subsidiary any guarantee (a "Third-Party Guarantee") of any of
the Senior Indebtedness or any other Senior Indebtedness owing to such Lender
unless such Person also guarantees substantially contemporaneously, by the same
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or separate instrument, the payment of all of the Senior Indebtedness owing to
all Lenders (or, if such Third-Party Guarantee guarantees only a portion thereof
owing to such Lender, such Lender will not accept such Third-Party Guarantee
unless such Guarantor simultaneously guarantees the same proportion of Senior
Indebtedness owing to the other Lenders) and (ii) such Lender will not take,
accept or obtain any security interest in, or lien or encumbrance upon (an
"Additional Lien"), any assets of any of the Company or any Subsidiary or any
other Person (other than assets which, if obtained by the Lenders, would be
shared pro rata as provided herein) to secure the payment and performance of the
Senior Indebtedness or any other Senior Indebtedness owed to such Lender except
by virtue of all of the Lenders being granted a security interest in, or lien
upon, such assets, in either case, pursuant to documents in form and substance
satisfactory to all of the Lenders, to secure the Senior Indebtedness pro rata
as provided herein.
Section 3.4. Turnover of Collateral. If the Agent or any Lender acquires
custody, control or possession of any Collateral or any proceeds thereof or any
payment of any Guaranteed Obligation other than pursuant to the terms of this
Agreement, the Agent or such Lender, as the case may be, shall promptly cause
such Collateral or the proceeds thereof or any such payment to be delivered to
or put in the custody, possession or control of the Collateral Agent for
disposition and distribution in accordance with the provisions of Section 3.1 of
this Agreement. Until such time as the Agent or such Lender, as the case may be,
shall have complied with the provisions of the immediately preceding sentence,
the Agent or such Lender, as the case may be, shall be deemed to hold such
Collateral and the proceeds thereof or any such payment in trust for the parties
entitled thereto under this Agreement.
Section 3.5. Accounting; Adjustments.
(a) The Collateral Agent, the Agent and each Lender agrees to render at
any time an accounting to any of the others of the amounts of the outstanding
Senior Indebtedness, receipts of payments from the Obligors or from the
Collateral and of other items relevant to the provisions of this Agreement upon
the request from one of the other Lenders as soon as reasonably practicable
after such request, giving effect to the application of payments and the
proceeds of Collateral as hereinbefore provided in this Agreement.
(b) Each party hereto agrees that to the extent any payment of any Senior
Indebtedness made to it hereunder is in excess of the amount due to be paid to
it hereunder, then it shall pay to the other parties hereto such amounts so
that, after giving effect to such payments, the amounts received by all parties
are equal to the amounts to be paid to them hereunder.
(c) Any payments to be made hereunder to the Banks shall be paid to the
Agent for the account of the Banks.
Section 3.6. Notice; Cooperation of Lender. Each Lender hereby agrees and
covenants with each other Lender that:
(a) Promptly after having actual knowledge of the occurrence of any
default (without taking into account any grace or cure period applicable
thereto) under the terms of or as defined in the Credit Agreement or the Note
Purchase Agreement or any Collateral Document (a "Default") or an Event of
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Default, each Lender (with the Banks acting as a group through direction to the
Agent) will deliver to the Collateral Agent and to each other Lender written
notice of such Default or such Event of Default, as the case may be (a "Default
Notice") identifying the nature of such Default or such Event of Default, as the
case may be, and specifying the document under which such Default or such Event
of Default, as the case may be, arose;
(b) it will from time to time provide such information that is available
to it to the Collateral Agent as may be necessary to enable the Collateral Agent
to make any calculation hereunder or otherwise required for any other purpose
hereof;
(c) it will from time to time consult with the Collateral Agent and the
other Lenders in good faith regarding the Enforcement of its rights with a view
to recovering amounts due under any of the Collateral Documents; and
(d) it will not amend, modify, supplement or waive any of the terms or
provisions of any Collateral Document in any manner detrimental to any other
Lender or in any manner impair the Collateral without the consent of the
Required Senior Lenders.
ARTICLE IV
NO CONTEST; BANKRUPTCY
Section 4.1. Contesting Liens or Security Interests; No Partitioning or
Marshalling of Collateral; Contesting Senior Indebtedness.
(a) Neither the Collateral Agent, the Agent nor any Lender shall contest
the validity, perfection, priority or enforceability of or seek to avoid, have
declared fraudulent or have set aside any lien or security interest granted to
the Collateral Agent or any Noteholder Guaranteed Obligations or any Bank
Guaranteed Obligations and each party hereby agrees to cooperate in the defense
of any action contesting the validity, perfection, priority or enforceability of
such liens or security interests or Guaranteed Obligations. Each party shall
also use its best efforts to notify the other parties of any change in the
location of any of the Collateral or the business operations of any Obligor or
of any change in law which would make it necessary or advisable to file
additional financing statements in another location to be created by the
Collateral Documents, but the failure to do so shall not create a cause of
action against the party failing to give such notice or create any claim or
right on behalf of any other party hereto and any third party.
(b) Notwithstanding anything to the contrary in this Agreement or in any
Collateral Document, neither the Agent nor any Lender shall have the right to
have any of the Collateral, or any security interest or other property being
held as security for all or any part of the Senior Indebtedness by the
Collateral Agent, partitioned, or to file a complaint or institute any
proceeding at law or in equity to have any of the Collateral or any such
security interest or other property partitioned, and the Agent and each Lender
hereby waives any such right. The Collateral Agent, the Agent and each Lender
16
hereby waive any and all rights to have the Collateral, or any part thereof,
marshaled upon any foreclosure of any of the liens of security interests
securing the Senior Indebtedness.
(c) Neither the Collateral Agent, the Agent nor any Lender shall contest
the validity or enforceability of or seek to avoid, have declared fraudulent or
have set aside any Senior Indebtedness. In the event any Senior Indebtedness is
invalidated, avoided, declared fraudulent or set aside for the benefit of any
Obligor, the Collateral Agent, the Agent and the Lenders agree that such Senior
Indebtedness shall nevertheless by considered to be outstanding for all purposes
of this Agreement.
(d) Each party hereto agrees to cooperate fully with the other parties
hereto, in the exercise of its reasonable judgment, to the end that the terms
and provisions of this Agreement may be promptly and fully carried out. Each
party hereto also agrees, from time to time, to execute and deliver any and all
other agreements, documents or instruments and to take such other actions, all
as may be reasonably necessary or desirable to effectuate the terms, provisions
and intent of this Agreement.
Section 4.2. Lien Priorities. The parties hereto expressly agree that the
security interests and liens granted to the Collateral Agent shall secure the
Senior Indebtedness on a pari passu basis for the benefit of the Collateral
Agent, the Agent and the Lenders and that, notwithstanding the relative priority
or the time of grant, creation, attachment or perfection under applicable law of
any security interests and liens, if any, of any of the Collateral Agent, the
Agent or any Lender upon or in any of the Collateral to secure any Senior
Indebtedness, whether such security interests and liens are now existing or
hereafter acquired or arising and whether such security interests and liens are
in or upon now existing or hereafter arising Collateral, such security interests
and liens shall be first and prior security interests and liens in favor of the
Collateral Agent to secure the Senior Indebtedness on a pari passu basis for the
benefit of the Collateral Agent, the Agent and the Lenders.
Section 4.3. Bankruptcy Proceedings. Nothing contained herein shall limit
or restrict the independent right of any Lender to initiate an action or actions
in any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar proceeding in its
individual capacity and to appear or be heard on any matter before the
bankruptcy or other applicable court in any such proceeding, including, without
limitation, with respect to any question concerning the post-petition usage of
Collateral and post-petition financing arrangements. The Collateral Agent is not
entitled to initiate such actions on behalf of any Lender or to appear and be
heard on any matter before the bankruptcy or other applicable court in any such
proceeding to enter into any agreement for, or give any authorization or consent
with respect to, the post-petition usage of Collateral, unless such agreement,
authorization or consent with respect to the post-petition usage of Collateral
has been approved in writing by the Required Lenders and Required Holders. This
Agreement shall survive the commencement of any such bankruptcy, reorganization,
compromised, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar proceeding.
Section 4.4. Other Rights. Nothing contained in this Agreement shall (i)
prevent any Lender from imposing a default rate of interest in accordance with
the Credit Agreement, the Revolving Notes, the Note Agreement or the Senior
17
Notes, as applicable, or prevent a Lender from raising any defenses in any
action in which it has been made a party defendant or has been joined as a third
party, except that the Collateral Agent may direct and control any defense
directly relating to the Collateral or any one or more of the Collateral
Documents as directed by the Required Senior Lenders, which shall be governed by
the provisions of this Agreement or (ii) affect or impair the right any Lender
may have under the terms and conditions governing the Senior Indebtedness to
accelerate and demand repayment of such Senior Indebtedness. Subject only to the
express limitations set forth in this Agreement, each Lender retains the right
to freely exercise its rights and remedies as a general creditor of the Obligors
in accordance with applicable law and agreements with the Obligors, including,
without limitation, the right to file a lawsuit and obtain a judgment therein
against the Obligors and to enforce such judgment.
ARTICLE V
MISCELLANEOUS
Section 5.1. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED
AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
Section 5.2. Certain Notices. Each of the Collateral Agent, the Agent and
each Lender agrees to use its reasonable efforts to give to the others (a)
copies of any notice of the occurrence or existence of an Event of Default sent
to any Obligors, simultaneously with, and in the same manner as, the sending of
such notice to such Obligors, (b) notice of the occurrence or existence of an
Event of Default of which such party has knowledge, promptly after obtaining
knowledge thereof, (c) notice of the refusal of the Agent or any Bank to make
any Revolving Loans or issue any Letter of Credit, promptly after such refusal
and (d) notice of an Enforcement by such party, prior to commencing such
Enforcement, but the failure to give any of the foregoing notices shall not
affect the validity of such notice of an Event of Default given to an Obligor or
create a cause of action against or cause a forfeiture of any rights of the
party failing to give such notice or create any claim or right on behalf of any
third party.
Section 5.3. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one agreement, and shall constitute a binding agreement when executed
by each of the parties hereto.
Section 5.4. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successor and assigns of the parties
hereto including any assignees of the Senior Indebtedness and Persons
subsequently becoming parties to the Credit Agreement as a "Bank" thereunder.
Section 5.5. Amendments to Agreement and Documentation. This Agreement and
the provisions hereof may be amended, modified or waived only by a writing
signed by the Collateral Agent, the Agent and all of the Lenders. Neither
Section 2.5, nor any other provision of this Agreement, shall in any way limit
the ability of any Lender to waive, amend or otherwise modify any document
relating to the Senior Indebtedness (including, without limitation, increasing
18
the respective amounts thereof), except that, without the consent of all
Lenders, no Lender shall release any Subsidiary Guarantor from its liabilities
in respect of such obligations unless the portion of such Senior Indebtedness
owing to such Lender shall have been finally and indefeasibly paid in full
except as permitted by each of the Credit Agreement and the Note Purchase
Agreement or any Collateral Document.
Section 5.6. Termination. This Agreement shall terminate upon the payment
in full of all Senior Indebtedness and the termination of the Credit Agreement,
Bank Guaranty Agreement and the Note Agreement.
Section 5.7. Transfer. In connection with an assignment of all, or of a
proportionate part of all, of any Lender's right, title and interest under the
Credit Agreement or Note Purchase Agreement, as the case may be, to any bank,
insurance company, other financial institution or other Person (the
"Transferee"), such Transferee shall become a Lender hereunder only upon, and
each of the Lenders party hereto hereby covenants and agrees that prior to the
effectiveness of any transfer it shall cause to occur, (i) the written agreement
of such transferor Lender and such Transferee and (ii) the receipt by the
Collateral Agent of a supplement to this Agreement in the form of Exhibit B
hereto executed by such Transferee.
Section 5.8. No Waiver. No failure or delay on the part of any Lender in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder.
Section 5.9. Notices. All written communications provided for hereunder
shall be sent (x) by telecopier if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service, with charges
prepaid, or (y) by first class mail or nationwide overnight delivery service,
with charges prepaid and
(i) if to a Bank, addressed to such Bank at the address specified on
the signature page hereof or any such other address as the Bank shall have
specified to the Noteholders and the Collateral Agent in writing,
(ii) if to any Noteholder, addressed to such Noteholder at the
address specified on the signature page hereof, or at such other address
as such Noteholder shall have specified to the Agent and the Collateral
Agent (if one has been appointed) in writing, and
(iii) if to the Collateral Agent, addressed to the Collateral Agent
at such address specified on the signature page hereof, or at such other
address as the Collateral Agent shall have specified to each Lender in
writing.
Section 5.10. Third Party Beneficiary. No Person, including, without
limitation, the Subsidiary Guarantors, K&M, the Canadian Company, and the
Company, other than the Lenders, the Collateral Agent and their respective
successors and assigns, shall have any rights under this Agreement.
19
Section 5.11. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 5.12. Headings. The descriptive headings of the several sections
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
Section 5.13. Submission to Jurisdiction; Waiver of Jury Trial. EACH OF
THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK OR
BUFFALO, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT. NONE OF THE PARTIES HERETO SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR OTHER LITIGATION PROCEDURE BASED UPON OR
ARISING OUT OF OR OTHERWISE RELATED TO THIS AGREEMENT AND EACH OF THE PARTIES
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT
TO ANY SUCH JURY TRIAL AND ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY SUCH PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 5.13.
Section 5.14. Entire Agreement. This Agreement embodies the entire
agreement and understanding among the parties hereto and supersedes all prior
agreements and understandings related to the subject matter hereof.
Section 5.15. Replacement of Existing Intercreditor Agreement. Upon the
execution and delivery of this Agreement, the Existing Intercreditor Agreement
shall be deemed replaced by this Agreement and no longer of any force or effect.
Section 5.16. Affirmation of Security Agreement. Each of the Lenders
agrees that each reference in the Security Agreement to the "Credit Agreement"
and the "Note Agreement" shall be deemed to refer to the Credit Agreement and
the Note Agreement, as defined herein.
[Signatures On Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date and year first written above.
Collateral Agent:
FLEET NATIONAL BANK, as Collateral
Agent on behalf of the Lenders
By: /s/ Xxxx X. Xxxxxxxxx
---------------------
Name: Xxxx X. Xxxxxxxxx
Title: SVP
Address:
Fleet National Bank
Massachusetts Middle Market Division
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Banks:
FLEET NATIONAL BANK, as Agent for the Banks and
individually as Domestic Bank
By: /s/ Xxxx X. Xxxxxxxxx
---------------------
Name: Xxxx X. Xxxxxxxxx
Title: SVP
Address:
Fleet National Bank
Massachusetts Middle Market Division
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Signature Page to Intercreditor Agreement
Noteholders:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Vice President
Address:
The Prudential Insurance Company of
America
c/o Prudential Capital Group
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Managing Director
Telecopier: 000-000-0000
Signature Page to Intercreditor Agreement
ACKNOWLEDGMENT OF AND CONSENT AND AGREEMENT
TO INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
The undersigned, the Obligors described in the Intercreditor and
Collateral Agency Agreement set forth above, acknowledge and, to the extent
required, consent to the terms and conditions thereof. The undersigned Obligors
do hereby further acknowledge and agree to their joint and several agreements
under Sections 2.9 and 3.1(d) of the Intercreditor and Collateral Agency
Agreement and acknowledge and agree that no Obligor is a third-party beneficiary
of, or has any rights under, the Intercreditor and Collateral Agency Agreement.
If the Collateral Agent, the Agent or any Lender shall violate the terms
of the Intercreditor and Collateral Agency Agreement, each Obligor agrees, by
its consent hereto, that it shall not use such violation as a defense to any
enforcement by any such party nor assert such violation as a counterclaim or
basis for setoff or recoupment against any such party.
This Acknowledgment of and Agreement to Intercreditor and Collateral
Agency Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which, when so
executed and delivered, shall be an original, but all of which together shall
constitute but one of the same instrument.
IN WITNESS WHEREOF, the parties below have caused this Acknowledgment of
and Consent and Agreement to Intercreditor and Collateral Agency Agreement to be
executed by their respective duly authorized officer as of May __, 2005.
AMERICAN BILTRITE INC., a Delaware corporation
By /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP Finance
K&M ASSOCIATES L.P.
By: AIMPAR, INC., its General Partner
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP
Signature Page to Intercreditor Agreement
ABTRE, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP
AIMPAR, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
AMERICAN BILTRITE INTELLECTUAL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
IDEAL TAPE CO., INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
ABITALIA, INC.
By: /s/ Xxxxxx X. Xxxxx III:
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
AMERICAN BILTRITE FAR EAST, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
Signature Page to Intercreditor Agreement
MAJESTIC JEWELRY, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
OCEAN STATE JEWELRY, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title:VP
425 DEXTER ASSOCIATES, L.P.
By: AIMPAR, INC., its General Partner
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP
K&M LEGENDARY SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP
ABIMEX, LLC
By: /s/ Xxxxxx X. Xxxxx III
-----------------------
Name: Xxxxxx X. Xxxxx III
Title: VP
Signature Page to Intercreditor Agreement
EXHIBIT A TO
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
FORM OF JOINDER
REPLACEMENT COLLATERAL AGENT
Upon execution of this signature page, the undersigned acknowledges that
it has been appointed as a replacement Collateral Agent pursuant to Section 2.8
of the Agreement (as defined below) and shall, from the date set forth below,
become the "Collateral Agent" under the Intercreditor and Collateral Agency
Agreement, dated as of May __, 2005 (as amended, restated, supplemented or
otherwise modified, the "Agreement"), by and among Fleet National Bank, as Agent
and as a Bank, the Bank party thereto, The Prudential Insurance Company of
America and Fleet National Bank, in its capacity as the original Collateral
Agent. As a party to the Agreement, the undersigned agrees to be bound by all of
the terms and conditions of the Agreement in its capacity as the "Collateral
Agent". Capitalized terms used and not defined in this joinder instrument shall
have meanings given in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to
Intercreditor and Collateral Agency Agreement to be duly executed by its
authorized officer as of the date set forth opposite such officer's signature.
REPLACEMENT COLLATERAL AGENT: [NAME]
By: __________________________________________
Title: _______________________________________
ADDRESS:
______________________________________________
______________________________________________
______________________________________________
Telephone: ___________________________________
Telecopy: ___________________________________
Dated: ________________________
A-1
EXHIBIT B
FORM OF INTERCREDITOR AND
COLLATERAL AGENCY AGREEMENT SUPPLEMENT
THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT SUPPLEMENT (the
"Supplement") is made and entered into as of this __ day of ___________, 20__,
by and between ________________________ (the "Assignor") and
________________________ (the "Assignee"). Reference is hereby made to that
certain Intercreditor and Collateral Agency Agreement dated as of May __, 2005
(as it may be modified, amended, supplemented or restated from time to time, the
"Intercreditor Agreement") by and among each of the banks listed on the
signature page thereof (together with its successors and assigns, other than the
Company and its subsidiaries and affiliates, collectively the "Banks"), Fleet
National Bank, as Collateral Agent for the Lenders and as Administrative Agent
for the Banks (together with its successors and assigns, the "Agent") and the
holders of the Senior Notes listed on the signature pages thereof (together with
their respective successors and assigns, other than the Company and its
subsidiaries and affiliates, the "Noteholders" and together with the Bank and
the Agent, the "Lenders").
WITNESSETH
WHEREAS, pursuant to that certain ____________ dated as of __________,
20__ among the Assignor and the Assignee, the Assignor has assigned all, or a
proportionate part of all, of its right, title and interest under the [Credit
Agreement] [Note Purchase Agreement] (as defined in the Intercreditor Agreement)
to the Assignee and the Assignee has accepted such assignment; and
WHEREAS, pursuant to the terms of the Intercreditor Agreement, such
assignment requires the delivery of this Supplement to the Collateral Agent (as
defined in the Intercreditor Agreement); and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Assignee hereby acknowledges and agrees that it is a party to
and is bound by the terms and conditions of the Intercreditor Agreement to the
same degree and extent as if it were an original signatory thereto.
B-1
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Supplement as of the date first above
written.
ASSIGNEE:
By: _____________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR:
By: ______________________________
Name: ____________________________
Title: _____________________________
B-2
