EXHIBIT 10.15
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INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT
among
XXXXX FARGO FOOTHILL, INC.,
as Lender,
THE BANK OF NEW YORK,
as Collateral Agent,
XXXXXX'X RESTAURANT GROUP, INC.,
as Borrower,
and certain of its SUBSIDIARIES,
as Guarantors
Dated as of July 7, 2003
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INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT dated as of July 7,
2003 (this "AGREEMENT") is made by and among XXXXX FARGO FOOTHILL, INC., as
senior secured lender (the "ORIGINAL LENDER") under and pursuant to the Loan
Agreement (as hereinafter defined), THE BANK OF NEW YORK ("BNY"), solely in its
capacity as collateral agent under the Indenture Loan Documents (as hereinafter
defined) (in such capacity, the "COLLATERAL AGENT"), Xxxxxx'x Restaurant Group,
Inc., a Delaware corporation (the "BORROWER" ) and those certain subsidiaries of
the Borrower party hereto (the "GUARANTORS").
RECITALS
A. Borrower, Guarantors, Collateral Agent, and BNY, in its capacity as
Trustee (in such capacity, the "TRUSTEE"), have entered into an Indenture, dated
as of July 7, 2003 (the "INDENTURE"), pursuant to which the Borrower incurred
indebtedness for certain notes (such notes, together with all other notes issued
after the date hereof and exchange notes issued in exchange therefore, the
"NOTES") in an aggregate principal amount at maturity of $105,000,000. The
repayment of the Indenture Secured Obligations (as hereinafter defined) is
secured by security interests in and liens on the assets and properties (the
"COLLATERAL") described in the Security Agreement dated as of the date hereof
(the "INDENTURE SECURITY AGREEMENT") made by the Borrower and the Guarantors in
favor of the Collateral Agent for the benefit of the Collateral Agent, the
Trustee, and the Noteholders, the Pledge Agreement dated as of the date hereof
(the "INDENTURE PLEDGE AGREEMENT"), made by the Borrower and the Guarantors
parties thereto in favor of the Collateral Agent for the benefit of the
Collateral Agent, the Trustee, and the Noteholders, the Trademark Security
Agreement, dated as of the date hereof, made by Xxxxxx'x of Chicago, Inc. in
favor of the Collateral Agent for the benefit of the Collateral Agent, the
Trustee, and the Noteholders, and the Trademark Security Agreement, dated as of
the date hereof, made by Xxxxxxxxx'x Restaurants, Inc. in favor of the
Collateral Agent for the benefit of the Collateral Agent, the Trustee, and the
Noteholders (collectively, the "INDENTURE TRADEMARK SECURITY AGREEMENTS"), and
certain real property mortgages (made as of the date hereof and from time to
time hereafter, in each case, by the Borrower or a Guarantor in favor of the
Collateral Agent for the benefit of the Collateral Agent, the Trustee, and the
Noteholders, each a "MORTGAGE" and, together with the Indenture, the Indenture
Security Agreement, the Indenture Pledge Agreement, the Indenture Trademark
Security Agreement, and all Control Agreements (as defined in the Indenture
Security Agreement) executed and delivered in connection therewith, the
"INDENTURE AGREEMENTS").
B. The Borrower and the Original Lender have entered into a Loan and
Security Agreement dated as of July 7, 2003 (the "ORIGINAL LOAN AGREEMENT") and
the Guarantors and the Original Lender have entered into those certain guarantys
and guarantor security agreements (the "GUARANTOR DOCUMENTS") pursuant to which
the
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Original Lender agreed, upon the terms and conditions stated therein, to make
loans and advances to and to issue letters of credit on account of the Borrower
and the Guarantors up to the principal amount of $15,000,000, together with the
fees, interest, expenses and other obligations due under the Original Loan
Agreement. The repayment of the Obligations (as that term is defined in the
Original Loan Agreement) is secured by first priority security interests in and
liens on the Collateral.
C. One of the conditions of the Original Loan Agreement is that the
priority of the security interests in and liens on the Collateral to secure the
Loan Agreement Secured Obligations be senior to the security interests in and
liens on the Collateral to secure the Indenture Secured Obligations (as
hereinafter defined), in the manner and to the extent provided in this
Agreement.
D. The Lender and the Collateral Agent desire to enter into this
Agreement concerning the respective rights of the Lender and the Collateral
Agent with respect to the priority of their respective security interests in and
liens on the Collateral.
E. The terms of the Indenture permit the Borrower and the Guarantors to
enter into the Original Loan Documents, subject to compliance with certain
conditions, and in connection therewith authorize and direct the Collateral
Agent to enter into a subordination agreement substantially in the form of this
Agreement.
F. In order to induce the Lender to extend credit to the Borrower and the
Guarantors and for purposes of certain conditions precedent and covenants of the
Original Loan Agreement, the Lender and the Collateral Agent hereby agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.01 TERMS DEFINED ABOVE AND IN THE RECITALS. As used in this
Agreement, the following terms shall have the respective meanings indicated in
the opening paragraph hereof and in the above Recitals:
"Agreement"
"Borrower"
"Collateral"
"Collateral Agent"
"Guarantor Documents"
"Indenture Agreements"
"Indenture"
"Original Lender"
"Original Loan Agreement"
"Original Loan Documents"
"Trustee"
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Section 1.02 LOAN AGREEMENT DEFINITIONS. All capitalized terms which are
used but not defined herein shall have the same meaning as in the Original Loan
Agreement, as in effect on the date hereof.
Section 1.03 OTHER DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings set forth below:
"CAPITAL STOCK" means (a) in the case of a corporation, corporate
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of property of, the issuing
Person.
"CASH COLLATERAL" means any Collateral consisting of cash or cash
equivalents, any security entitlement (as defined in the New York Commercial
Code) and any financial assets (as defined in the New York Commercial Code).
"CONTROL COLLATERAL" means any Collateral consisting of a certificated
security (as defined in the New York Commercial Code), investment property (as
defined in the New York Commercial Code), a deposit account (as defined in the
New York Commercial Code and any other Collateral as to which a Lien may be
perfected through possession or control by the secured party, or any agent
therefor.
"DISCHARGE OF LOAN AGREEMENT SECURED OBLIGATIONS" means payment in
full in cash of the Loan Agreement Secured Obligations (other than Loan
Agreement Secured Obligations consisting of contingent indemnification
obligations under the Lender Loan Documents) up to (but not in excess of) the
Maximum Loan Agreement Debt Amount including, with respect to amounts available
to be drawn under outstanding letters of credit issued thereunder (or
indemnities issued pursuant thereto in respect of outstanding letters of
credit), delivery of cash collateral or backstop letters of credit in respect
thereof in compliance with the terms of the Loan Agreement, in each case, after
or concurrently with termination of all commitments to extend credit thereunder.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"GUARANTOR" means the Subsidiaries of Borrower that are organized
under the laws of a jurisdiction within the United States.
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"INDENTURE LOAN DOCUMENTS" shall mean the Indenture, the Notes, the
Mortgages, the Indenture Agreements, and such other agreements, instruments and
certificates as defined or referred to in the Indenture.
"INDENTURE SECURED OBLIGATIONS" shall mean all indebtedness
represented by the Notes, together with interest, premiums, fees, costs and
expenses in respect thereof (including, without limitation, attorneys fees and
disbursements and including interest accrued after the initiation of any
Insolvency Proceeding, whether or not allowed or allowable in any Insolvency
Proceeding).
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"LENDER" means the Original Lender, together with all successors,
assigns, transferees, participants, replacement or refinancing lenders, of the
Original Lender, including any Person designated as a Lender under any Loan
Agreement; PROVIDED, that for purposes of this Agreement, the Collateral Agent
shall be entitled to deal only with the Original Lender until such time as the
Original Lender shall have assigned to another Lender all of its rights and
obligations hereunder to such other Lender pursuant to an assignment which has
been provided by the Original Lender to the Collateral Agent and until receipt
thereof, Collateral Agent shall not be liable for any such dealings (including
the turning over of any Collateral or proceeds thereof to the Original Lender at
a time when any other Lender and not the Original Lender was entitled thereto).
"LENDER COLLATERAL" means all of Borrower's and each Guarantor's
right, title and interest in, to, and under all real and personal property and
assets of the Borrower and such Guarantor, including, without limitation, all
Collateral and all "Collateral" as defined in the Loan Agreement.
"LENDER LOAN DOCUMENTS" means the Loan Agreement, the Guarantor
Documents, the "Loan Documents" as defined in the Original Loan Agreement, the
collateral documents and instruments executed and delivered in connection
therewith or in connection with any other Loan Agreement hereunder, and such
other agreements, instruments and certificates as defined in a Loan Agreement.
"LIEN" means any interest in an asset securing an obligation owed to,
or a claim by, any Person other than the owner of the asset, irrespective of
whether (a) such interest is based on the common law, statute, or contract, (b)
such interest is recorded or perfected, and (c) such interest is contingent upon
the occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term "Lien" includes the lien or security interest arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment,
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deposit arrangement, security agreement, conditional sale or trust receipt, or
from a lease, consignment, or bailment for security purposes and also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and encumbrances
affecting Real Property.
"LIEN PRIORITY" means with respect to any Lien of the Lender or the
Collateral Agent in the Collateral, the order of priority of such Lien as
specified in Section 2.01.
"LOAN AGREEMENT" means the Original Loan Agreement as amended,
restated, modified, renewed, refunded, replaced, or refinanced in whole or in
part from time to time, including any agreement extending the maturity of,
consolidating, otherwise restructuring (including adding Subsidiaries or
affiliates of the Borrower or any other Persons as parties thereto) or
refinancing all or any portion of the Obligations or Commitments as those terms
are defined in the Original Loan Agreement (or in any other agreement that
itself is a Loan Agreement hereunder) and whether by the same or any other
agent, lender, or group of lenders and whether or not increasing the amount of
indebtedness that may be incurred thereunder.
"LOAN AGREEMENT SECURED OBLIGATIONS" means all Obligations and all
other amounts owing or due under the terms of the Loan Agreement and the other
Lender Loan Documents, including any and all amounts payable under or in respect
of the Lender Loan Documents, as amended, restated, modified, renewed, refunded,
replaced, or refinanced in whole or in part from time to time, including
principal, premium, interest, fees, attorneys' fees, costs, charges, expenses,
reimbursement obligations, any obligation to post cash collateral in respect of
letters of credit or indemnities in respect thereof, indemnities, guarantees,
and all other amounts payable thereunder or in respect thereof (including, in
each case, all amounts accruing on or after the commencement of any Insolvency
Proceeding relating to Borrower, any Guarantor or any other Person irrespective
of whether a claim for all or any portion of such amounts is allowable or
allowed in any Insolvency Proceeding).
"LOAN DOCUMENTS" means the Lender Loan Documents and the Indenture
Loan Documents.
"MAXIMUM PRIORITY DEBT AMOUNT" means, as of any date of determination,
(a) the GREATER of (i) the principal amount (including the undrawn amount of
Letters of Credit) of Loan Agreement Secured Obligations as of such date up to,
but not in excess of, $15,000,000, and (ii) 7.5% of Total Assets (as defined in
the Indenture) (including, for each of (i) and (ii), without duplication, all
guaranties in respect thereof), PLUS (b) the excess of (i) $7,500,000 over (ii)
the aggregate outstanding principal amount of Indebtedness represented by
Capitalized Lease Obligations and Purchase Money Indebtedness of Borrower and
its Subsidiaries incurred in the ordinary course of business as of such date
(including, without duplication, all guaranties in respect thereof), PLUS (c)
the excess of (i) $2,000,000 over (ii) the aggregate principal amount of
Indebtedness of
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Foreign Subsidiaries of Borrower as of such date (including, without
duplication, all guaranties in respect thereof), PLUS (d) $5,000,000, PLUS (e)
any premium, interest, fees, attorneys' fees, costs, charges, expenses,
indemnities, and all other amounts payable under the Loan Agreement or the other
Lender Loan Documents or in respect of the Loan Agreement Secured Obligations
(other than Bank Product Obligations that exceed $3,600,000) or clauses (a),
(b), (c), or (d) (including, without duplication, all guaranties in respect
thereof); and including, for each amount specified in clauses (a) through (e),
all amounts accruing on or after the commencement of any Insolvency Proceeding
relating to Borrower, any Guarantor or any other Person irrespective of whether
a claim for all or any portion of such amount is allowable or allowed in any
Insolvency Proceeding.
"NOTEHOLDERS" means each of the holders of the Notes.
"ORIGINAL LOAN AGREEMENT" shall have the meaning assigned to such term
in the recitals to this Agreement.
"PARTY" means Lender and Collateral Agent.
"PERSON" means any natural person, corporation, limited liability
company, limited partnership, general partnership, limited liability
partnership, joint venture, trust, land trust, business trust, or other
organization, irrespective of whether such organization is a legal entity, and
shall include a government and any agency or political subdivision thereof.
"PROCEEDS" means (i) all "proceeds" as defined in Article 9 of the New
York Commercial Code with respect to the Collateral, and (ii) whatever is
recoverable or recovered when Collateral is sold, exchanged, collected, or
disposed of, whether voluntarily or involuntarily.
"RECOVERY" has the meaning set forth in Section 5.03.
"STANDSTILL NOTICE" means a written notice from or on behalf of Lender
to the Collateral Agent stating that an Event of Default has occurred and
stating that such written notice is a "Standstill Notice".
"STANDSTILL PERIOD" has the meaning set forth in Section 2.03.
RULES OF CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Article, section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement to any
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agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns.
ARTICLE II.
LIEN PRIORITY
Section 2.01 AGREEMENT TO SUBORDINATE. Notwithstanding the date, time,
method, manner or order of grant, attachment, or perfection of any Liens granted
to the Collateral Agent, the Trustee, or the Noteholders in respect of all or
any portion of the Collateral or of any Liens granted to the Lender in respect
of all or any portion of the Lender Collateral, or the order or time of filing
or recordation of any document or instrument for perfecting the Liens in favor
of Lender or the Collateral Agent (or the Trustee or any Noteholder) in any
Collateral or any provision of the Uniform Commercial Code, any other applicable
law, the Indenture, the Loan Documents or any other circumstance whatsoever, the
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, hereby
agrees that:
(a) (i) any Lien in respect of all or any portion of the Collateral
now or hereafter held by or on behalf of the Collateral Agent, the Trustee, or
any Noteholder that secures all or any portion of the Indenture Secured
Obligations, shall in all respects be junior and subordinate to all Liens
granted to the Lender in the Lender Collateral to secure all or any portion of
the Loan Agreement Secured Obligations up to (but not in excess of) the Maximum
Priority Debt Amount, and (ii) any Lien in respect of all or any portion of the
Collateral now or hereafter held by or on behalf of the Lender that secures all
or any portion of the Loan Agreement Secured Obligations in excess of the
Maximum Priority Debt Amount, shall in all respects be junior and subordinate to
all Liens granted to the Collateral Agent, the Trustee or any Noteholder in the
Collateral to secure all or any portion of the Indenture Secured Obligations,
and
(b) (i) any Lien in respect of all or any portion of the Lender
Collateral now or hereafter held by or on behalf of the Lender that secures all
or any portion of the Loan Agreement Secured Obligations up to (but not in
excess of) the Maximum Priority Debt Amount, shall in all respects be senior and
prior to all Liens granted to the Collateral Agent (or the Trustee or any
Noteholder) in the Collateral to secure all or any portion of the Indenture
Secured Obligations, and (ii) any Lien in respect of all or any portion of the
Collateral now or hereafter held by or on behalf of the Collateral Agent, the
Trustee, or any Noteholder that secures all or any portion of the Indenture
Secured Obligations, shall in all respects be senior and prior to all Liens
granted to the Lender in
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the Collateral to secure all or any portion of the Loan Agreement Secured
Obligations in excess of the Maximum Priority Debt Amount,
The Collateral Agent, for and on behalf of itself, the Trustee and the
Noteholders, acknowledges and agrees that, concurrently herewith, the Lender has
been granted Liens upon all of the Collateral in which the Collateral Agent has
been granted Liens and the Collateral Agent hereby consents thereto. The Lender
acknowledges and agrees that the Collateral Agent, for the benefit of itself,
the Trustee, and the Noteholders, has been granted Liens upon all of the Lender
Collateral and the Lender hereby consents thereto. The subordination of Liens
(up to the Maximum Priority Debt Amount) by the Collateral Agent, on behalf of
itself, the Trustee, and the Noteholders in favor of the Lender herein shall not
be deemed to subordinate the Collateral Agent's Liens to the Liens of any other
Person. The subordination of Liens (in excess of the Maximum Priority Debt
Amount) in favor of the Collateral Agent, for the benefit of itself, the Trustee
and the Noteholders herein shall not be deemed to subordinate such Lender's
Liens to the Liens of any other Person.
Section 2.02 WAIVER OF RIGHT TO CONTEST LIENS. The Collateral Agent
agrees, on behalf of itself, the Trustee, and the Noteholders, that it and they
shall not (and hereby waives, on behalf of itself and the Noteholders any right
to) take any action to contest or challenge (or assist or support any other
Person in contesting or challenging), directly or indirectly, whether or not in
any proceeding (including in any Insolvency Proceeding), the validity, priority,
enforceability, or perfection of the Liens of the Lender in respect of the
Collateral. The Collateral Agent, for itself, the Trustee, and on behalf of the
Noteholders, agrees that none of the Collateral Agent, the Trustee, or the
Noteholders will take any action that would hinder any exercise of remedies
undertaken by the Lender under the Lender Loan Documents, including any public
or private sale, lease, exchange, transfer, or other disposition of the
Collateral, whether by foreclosure or otherwise. The Collateral Agent, for
itself, the Trustee, and on behalf of the Noteholders, hereby waives any and all
rights it, the Trustee, or the Noteholders may have as a junior lien creditor or
otherwise to contest, protest, object to, interfere with the manner in which the
Lender seeks to enforce the Liens in any portion of the Collateral (it being
understood and agreed that the terms of this Agreement shall govern with respect
to the Collateral even if any portion of the Liens securing the Loan Agreement
Secured Obligations are avoided, disallowed, set aside, or otherwise invalidated
in any judicial proceeding or otherwise). The Lender agrees that it shall not
(and hereby waives any right to) take any action to contest or challenge (or
assist or support any other Person in contesting or challenging), directly or
indirectly, whether or not in any proceeding (including in any Insolvency
Proceeding), the validity, priority, enforceability, or perfection of the Liens
of the Collateral Agent in respect of the Collateral. Following the Discharge of
Loan Agreement Secured Obligations, the Lender agrees that it will not take any
action that would hinder any exercise of remedies undertaken by the Collateral
Agent, the Trustee, or any Noteholder under the Indenture Loan Documents,
including any public or private sale, lease, exchange, transfer, or other
disposition of the Collateral, whether by
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foreclosure or otherwise. Following the Discharge of Loan Agreement Secured
Obligations, the Lender hereby waives any and all rights it may have as a junior
lien creditor or otherwise to contest, protest, object to, interfere with the
manner in which the Collateral Agent, the Trustee or any Noteholder seeks to
enforce the Liens in any portion of the Collateral (it being understood and
agreed that the terms of this Agreement shall govern with respect to the
Collateral even if any portion of the Liens securing the Indenture Secured
Obligations are avoided, disallowed, set aside, or otherwise invalidated in any
judicial proceeding or otherwise).
Section 2.03 REMEDIES STANDSTILL. At any time after the occurrence and
during the continuation of an Event of Default under any of the Loan Documents,
the Lender may send a Standstill Notice to the Collateral Agent. The Collateral
Agent, on behalf of itself, the Trustee, and the Noteholders, agrees that from
and after the date of its receipt of any Standstill Notice, none of the
Collateral Agent, the Trustee, or any Noteholder will exercise any of its rights
or remedies in respect of the collection on, set off against, marshalling of, or
foreclosure on the Collateral or any other right relating to any Collateral
(including the exercise of any voting rights relating to any Capital Stock
constituting Collateral) under the Indenture Loan Documents, applicable law or
otherwise as a secured creditor and will not take or receive any Collateral in
connection with the exercise of any such right or remedy (including recoupment
or set-off), whether under the Indenture Loan Documents, applicable law, in an
Insolvency Proceeding or otherwise unless and until (a) the Lender has expressly
waived or acknowledged the cure of the applicable Event of Default in writing or
the Discharge of the Loan Agreement Secured Obligations shall have occurred, or
(b) 120 days shall have elapsed from the date of the Collateral Agent's receipt
of such Standstill Notice, except with respect to any Collateral which the
Lender is pursuing its rights or remedies as a secured creditor to effect the
collection, foreclosure, sale, or other realization upon or disposition of such
collateral. From and after the earlier to occur of (i) the Collateral Agent's
receipt of such waiver or cure notice, or (ii) the elapsing of such 120th day
period, any of the Collateral Agent, the Trustee, or any Noteholder may commence
to exercise any of its rights and remedies as a secured creditor under the
Indenture Loan Documents, applicable law or otherwise (subject to the provisions
of this Agreement, including Section 4.02 hereof and except with respect to any
such Collateral as to which the Lender is effecting the collection, foreclosure,
sale or other realization upon or disposition of). The Lender may only send 3
Standstill Notices following the date hereof (it being understood and agreed as
clarification to the foregoing that no more than 3 Standstill Notices may be
provided whether delivered hereunder or under any corresponding provision of any
other agreement similar hereto that may be delivered pursuant to Section 7.16)
and no Event of Default may serve as the basis for any subsequent Standstill
Notice unless 120 consecutive days shall have elapsed from the date that such
event of Default was cured or waived by the Lender, and no more than one
Standstill Notice may be given by the Lender in any consecutive 365-day period.
The time period during which the Collateral Agent is not permitted to exercise
rights or remedies under this section is referred to herein as the "STANDSTILL
PERIOD".
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Section 2.04 Exercise of Rights.
(a) NO OTHER RESTRICTIONS. Except as expressly set forth in this
Agreement, each of the Collateral Agent, the Trustee, the Noteholders, and the
Lender shall have any and all rights and remedies it may have as a creditor
under applicable law, including the rights to exercise all rights and remedies
in foreclosure or otherwise with respect to any of the Collateral; PROVIDED,
HOWEVER, that any such exercise by the Collateral Agent, the Trustee or the
Noteholders, and any collection or sale of all or any portion of the Collateral
by the Collateral Agent, the Trustee or the Noteholders, shall be subject to the
Liens of the Lender on the Collateral to the extent provided in Section 2.01 and
to the provisions of this Agreement including Section 4.02 hereof. In exercising
rights and remedies with respect to the Collateral, the Lender may enforce the
provisions of the Lender Loan Documents and exercise remedies thereunder, all in
such order and in such manner as it may determine in the exercise of its sole
discretion. Such exercise and enforcement shall include the sale, lease,
license, or other disposition of all or any portion of the Collateral by private
or public sale or any other means permissible under applicable law; PROVIDED,
that the Lender agrees to provide copies of any notices that it is required
under applicable law to deliver to the Company or any Guarantor to the
Collateral Agent; PROVIDED FURTHER, that the failure to provide any such copies
to the Collateral Agent shall not impair any of the Lender's rights hereunder.
(b) RELEASE OF LIENS. In the event of any such private or public sale,
Collateral Agent agrees, on behalf of itself, the Trustee, and the Noteholders,
that such sale will be free and clear of the Liens securing the Indenture
Secured Obligations and, if the sale or other disposition includes the Equity
Interests in Borrower or any Guarantor, agrees to release the entities whose
Equity Interests are sold from all Indenture Secured Obligations so long as
Lender also releases the entities whose Equity Interests are sold from all Loan
Agreement Secured Obligations. In furtherance thereof, Collateral Agent agrees
that it will execute any and all Lien releases or other documents reasonably
requested by Lender in connection therewith, so long as the proceeds from such
sale or other disposition of the Collateral are applied in accordance with the
terms of this Agreement.
(c) Subject to Section 3.01, the Collateral Agent, the Trustee and the
Noteholders may exercise, and nothing herein shall constitute a waiver of, any
right it may have at law or equity to receive notice of, or to commence or join
with any creditor in commencing any Insolvency Proceeding or to join or
participate in, any action or proceeding or other activity described in Section
3.01; PROVIDED, HOWEVER, that exercise of any such right by the Collateral Agent
shall be subject to all of the terms and conditions of this Agreement, including
the obligation to turn over Collateral and Proceeds to the Lender for
application to the Loan Agreement Secured Obligations as provided in Section
4.02.
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(d) The Collateral Agent may make such demands or file such claims in
respect of the Indenture Secured Obligations as may be necessary to prevent the
waiver or bar of such claims under applicable statutes of limitations or other
statutes, court orders or rules of procedure, but except as provided in this
Section 2.04, the Collateral Agent shall not take any actions restricted by this
Agreement until the Discharge of Loan Agreement Secured Obligations shall have
occurred.
(e) Following the Discharge of Loan Agreement Secured Obligations, the
other provisions of this Section 2.04 shall apply to the Collateral Agent, for
the benefit of itself, the Trustee and the Noteholders as if it was the Lender
and the Lender was the Collateral Agent, MUTATIS MUTANDIS.
ARTICLE III.
ACTIONS OF THE PARTIES
Section 3.01 LIMITATION ON CERTAIN ACTIONS. Notwithstanding any other
provision hereof, during any Standstill Period prior to the date that the
Discharge of Loan Agreement Secured Obligations occurs, the Collateral Agent
will not:
(a) commence receivership or foreclosure proceedings against Borrower,
any Guarantor, or any Collateral;
(b) sell, collect, transfer or dispose of any Collateral or Proceeds;
or
(c) notify third party account debtors to make payment directly to it
or any of its agents or other Persons acting on its behalf.
Section 3.02 AGENT FOR PERFECTION. Each of the Lender and the Collateral
Agent, for and on behalf of itself, the Trustee, and each Noteholder, as
applicable, agree to hold all Control Collateral and Cash Collateral that is
part of the Collateral in its respective possession, custody, or control (or in
the possession, custody, or control of agents or bailees for either, as
applicable) as agent for the other solely for the purpose of perfecting the
security interest granted to each in such Control Collateral or Cash Collateral
subject to the terms and conditions of this Section 3.02. None of the Lender,
the Collateral Agent, the Trustee, or the Noteholders, as applicable, shall have
any obligation whatsoever to the others to assure that the Control Collateral is
genuine or owned by Borrower, any Guarantor or any other Person or to preserve
rights or benefits of any Person. The duties or responsibilities of the Lender
and the Collateral Agent under this Section 3.02 are and shall be limited solely
to holding or maintaining control of the Control Collateral and the Cash
Collateral as agent for the other for purposes of perfecting the Lien held by
the Collateral Agent or the Lender, as applicable. The Lender is not and shall
not be deemed to be a fiduciary of any kind for the Collateral Agent, the
Trustee, the Noteholders or any other Person. The Collateral Agent is not and
shall not be deemed to be a fiduciary of any kind for the Lender or any other
Person. In the event
11
that (a) any of the Collateral Agent, the Trustee, or any Noteholder receives
any Proceeds or Lender Collateral in contravention of the Lien Priority, or (b)
the Lender receives any Proceeds or Collateral in contravention of the Lien
Priority, it shall promptly pay over such Proceeds or Collateral to (i) in the
case of clause (a), the Lender, or (ii) in the case of clause (b), the
Collateral Agent, in the same form as received with any necessary endorsements,
for application in accordance with the provisions of Section 4.02 of this
Agreement.
ARTICLE IV.
NOTICES AND APPLICATION OF PROCEEDS
Section 4.01 NOTICES OF EXERCISE. Concurrently with any exercise by the
Collateral Agent of any of its rights and remedies under the Indenture Loan
Documents following the occurrence of any default under the Indenture, the
Notes, or the Indenture Loan Documents, the Collateral Agent shall give notice
of such exercise to the Lender and shall only exercise such rights or remedies
in a manner consistent with the terms of this Agreement. Concurrently with any
exercise by the Lender of any of its rights and remedies under the Lender Loan
Documents following the occurrence of any default under the Lender Loan
Documents, the Lender shall give notice of such exercise to the Collateral Agent
and shall only exercise such rights or remedies in a manner consistent with the
terms of this Agreement.
Section 4.02 Application of Proceeds.
(a) REVOLVING NATURE OF LOAN AGREEMENT SECURED OBLIGATIONS. As long as
the Lender is not exercising any of its remedies as a secured creditor under the
Lender Loan Documents and including during any Standstill Period, the Lender may
apply any and all of the proceeds of the Collateral consisting of accounts
receivable, other rights to payment or Cash Collateral in accordance with the
provisions of the Lender Loan Documents, subject to the provisions of this
Agreement, including Sections 3.02 and 4.02 hereof. The Collateral Agent, for
and on behalf of itself, the Trustee, and the Noteholders, expressly
acknowledges and agrees that (a) any such application of the proceeds of
accounts receivable, other rights to payment or Cash Collateral or the release
of any Lien by the Lender upon any portion of the Collateral in connection with
a Permitted Disposition (as that term is defined in the Loan Agreement) shall
not be considered to be the exercise of remedies under this Agreement; and (b)
all Proceeds or Cash Collateral received by Lender in connection therewith may
be applied, reversed, reapplied, credited or reborrowed, in whole or in part, as
Loan Agreement Secured Obligations without reducing the Maximum Priority Debt
Amount.
(b) TURNOVER OF CASH COLLATERAL AFTER PAYMENT. Upon the Discharge of
the Loan Agreement Secured Obligations, the Lender shall deliver to the
Collateral Agent or execute such documents as the Collateral Agent may
reasonably request to cause the Collateral Agent to have control over any Cash
Collateral or Control Collateral still in
12
Lender's possession, custody or control in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct, to be applied by the Collateral Agent to the Indenture Secured
Obligations. Proceeds of any exercise by the Lender or the Collateral Agent, as
applicable, of any of their respective secured creditor rights or remedies under
any of the Loan Documents, under applicable law, or otherwise with respect to
any Collateral or Proceeds, shall be (a) until the Discharge of the Loan
Agreement Secured Obligations, retained by the Lender or promptly turned over by
the Collateral Agent, the Trustee, or any Noteholder, as the case may be, to the
Lender in the same form as received, with any necessary endorsements, (b) after
the Discharge of the Loan Agreement Secured Obligations and until all Indenture
Secured Obligations have been paid in full in cash, retained by the Collateral
Agent or promptly turned over by the Lender to the Collateral Agent in the same
form as received, with any necessary endorsements, and (c) if there are any
amounts still due or any obligations outstanding to the Lender under the Lender
Loan Documents in excess of the Maximum Priority Debt Amount after the payment
in full in cash of all Indenture Secured Obligations, shall be retained by the
Lender or promptly turned over by the Collateral Agent to the Lender in the same
form as received, with any necessary endorsements.
(c) APPLICATION OF PROCEEDS. The Lender and the Collateral Agent
hereby agree that all Collateral and all Proceeds received by either of them
upon the exercise of any their secured creditor rights or remedies under any of
the Loan Documents, applicable law, or otherwise shall be applied,
FIRST, to the payment of costs and expenses of the Lender, or of the
Collateral Agent, the Trustee, and the Noteholders, as applicable, in connection
with such exercise,
SECOND, to the payment of the Loan Agreement Secured Obligations up to
(but not in excess of) the Maximum Priority Debt Amount,
THIRD, to the payment of the Indenture Secured Obligations, and
FOURTH, to the payment of any Loan Agreement Secured Obligations in
excess of the Maximum Priority Debt Amount.
In exercising remedies, whether as a secured creditor or otherwise, the Lender
shall have no obligation or liability to the Collateral Agent, the Trustee, or
to any Noteholder and the Collateral Agent shall have no obligation or liability
to the Lender regarding the adequacy of any Proceeds or for any action or
omission save and except solely an action or omission that breaches the express
obligations undertaken by each Party under the terms of this Agreement.
Section 4.03 SPECIFIC PERFORMANCE. Each of the Lender and the Collateral
Agent is hereby authorized to demand specific performance of this Agreement,
whether or not the Borrower, any Subsidiary or any Guarantor shall have complied
with any of the
13
provisions of any of the Loan Documents, at any time when the other shall have
failed to comply with any of the provisions of this Agreement applicable to it;
PROVIDED, HOWEVER, the remedy of specific performance shall not be available,
and the asserting party shall be free to assert any and all legal defenses it
may possess, if such remedy would result in, or otherwise constitute, a
violation of the Employee Retirement Income Security Act of 1974, as amended.
Each of the Lender and the Collateral Agent hereby irrevocably waives any
defense based on the adequacy of a remedy at law, which might be asserted as a
bar to such remedy of specific performance.
ARTICLE V.
INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
Section 5.01 NOTICE OF ACCEPTANCE AND OTHER WAIVERS.
(a) All Loan Agreement Secured Obligations at any time made or
incurred by Borrower, any of its Subsidiaries or any Guarantor shall be deemed
to have been made or incurred in reliance upon this Agreement, and the
Collateral Agent, on behalf of itself, the Trustee, and the Noteholders, hereby
waives (i) notice of acceptance, or proof of reliance, by the Lender of this
Agreement, and (ii) notice of the existence, renewal, extension, accrual,
creation, or non-payment of all or any part of the Loan Agreement Secured
Obligations. Neither the Lender nor any of its affiliates, directors, officers,
employees, or agents shall be liable for failure to demand, collect, or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral or to take any other
action whatsoever with regard to the Collateral or any part thereof, except as
specifically provided in this Agreement. If the Lender honors (or fails to
honor) a request by the Borrower for an extension of credit pursuant to the Loan
Agreement or any of the Lender Loan Documents, whether Lender has knowledge that
the honoring of (or failure to honor) any such request would constitute a
default under the terms of the Indenture or any Indenture Loan Document or an
act, condition, or event that, with the giving of notice or the passage of time,
or both, would constitute such a default, or if Lender otherwise should exercise
any of its contractual rights or remedies under the Lender Loan Documents
(subject to the express terms and conditions hereof), Lender shall not have any
liability whatsoever to the Collateral Agent, the Trustee or any Noteholder as a
result of such action, omission, or exercise (so long as any such exercise does
not breach the express terms and provisions of this Agreement). The Lender will
be entitled to manage and supervise its loans and extensions of credit under the
Loan Agreement and other Lender Loan Documents as the Lender may, in its sole
discretion, deem appropriate, and the Lender may manage its loans and extensions
of credit without regard to any rights or interests that the Collateral Agent,
the Trustee, or any of the Noteholders have in the Collateral or otherwise
except as otherwise expressly set forth in this Agreement. The Collateral Agent,
on behalf of itself, the Trustee, and the Noteholders, agrees that the Lender
shall not incur any liability as a result of a sale, lease, license, or other
disposition of the Collateral, or any part
14
thereof, pursuant to the Lender Loan Documents conducted in accordance with
mandatory provisions of applicable law.
(b) None of Collateral Agent, Trustee, or any of the Noteholders nor
any of their affiliates, directors, officers, employees, or agents shall be
liable for failure to demand, collect, or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral or to take any other action whatsoever with regard to
the Collateral or any part thereof, except as specifically provided in this
Agreement. If Collateral Agent, Trustee, or any of the Noteholders should
exercise any of their contractual rights or remedies under the Indenture
Agreements (subject to the express terms and conditions hereof), none of
Collateral Agent, Trustee, or any of the Noteholders shall have any liability
whatsoever to the Lender as a result of such action, omission, or exercise (so
long as any such exercise does not breach the express terms and provisions of
this Agreement). The Collateral Agent, Trustee, and Noteholders will be entitled
to manage and supervise their loans and extensions of credit under the Indenture
Agreements as they may, in their sole discretion, deem appropriate, and they may
manage their loans and extensions of credit without regard to any rights or
interests that the Lender has in the Collateral or otherwise except as otherwise
expressly set forth in this Agreement. Subject to Section 2.03, the Lender
agrees that none of the Collateral Agent, the Trustee, or the Noteholders shall
incur any liability as a result of a sale, lease, license, or other disposition
of the Collateral, or any part thereof, pursuant to the Indenture Agreements
conducted in accordance with mandatory provisions of applicable law.
Section 5.02 MODIFICATIONS TO LENDER LOAN DOCUMENTS AND INDENTURE
AGREEMENTS.
(a) The Collateral Agent, on behalf of itself, the Trustee, and the
Noteholders, hereby agrees that, without affecting the obligations of the
Collateral Agent, the Trustee and the Noteholders hereunder, the Lender may, at
any time and from time to time, in its sole discretion without the consent of or
notice to the Collateral Agent, the Trustee or any Noteholder (except to the
extent such notice or consent is required pursuant to the express provisions of
this Agreement), and without incurring any liability to the Collateral Agent,
the Trustee or any Noteholder or impairing or releasing the subordination
provided for herein, amend, restate, supplement, replace, refinance, extend,
consolidate, restructure, or otherwise modify the Loan Agreement or any of the
Lender Loan Documents in any manner whatsoever, including, to
(i) change the manner, place, time, or terms of payment or
renew or alter, all or any of the Loan Agreement Secured Obligations
or otherwise amend, restate, supplement, or otherwise modify in any
manner, or grant any waiver or release with respect to, all or any
part of the Loan Agreement Secured Obligations or any of the Lender
Loan Documents,
15
(ii) retain or obtain a Lien on any property of any Person to
secure any of the Loan Agreement Secured Obligations, and in that
connection to enter into any additional Lender Loan Documents,
(iii) amend, or grant any waiver, compromise or release with
respect to, or consent to any departure from, any guaranty or other
obligations of any Person obligated in any manner under or in respect
of the Loan Agreement Secured Obligations,
(iv) release its Lien on any Collateral or other property,
(v) exercise or refrain from exercising any rights against
Borrower, any Guarantor or any other Person,
(vi) retain or obtain the primary or secondary obligation of
any other Person with respect to any of the Loan Agreement Secured
Obligations, and
(vii) otherwise manage and supervise the Loan Agreement Secured
Obligations as the Lender shall deem appropriate.
(b) The Lender hereby agrees that Collateral Agent, on behalf of
itself, the Trustee, and the Noteholders may, at any time and from time to time,
in its sole discretion without the consent of or notice to the Lender (except to
the extent such notice or consent is required pursuant to the express provisions
of this Agreement), and without incurring any liability to the Lender or
impairing or releasing the subordination provided for herein, amend, restate,
supplement, replace, refinance, extend, consolidate, restructure, or otherwise
modify the Indenture Agreements in any manner whatsoever, PROVIDED, HOWEVER,
that in no event shall Collateral Agent, the Trustee, or any Noteholder obtain a
Lien on any assets of Borrower or any Guarantor not constituting Collateral
unless (i) Lender also obtains a Lien on such assets or (ii) Lender declines in
a writing to Collateral Agent to obtain a Lien on such assets.
(c) Notwithstanding anything to the contrary herein, this Section 5.02
shall not be construed to constitute a waiver by the Collateral Agent, the
Trustee, or any Noteholder of Section 4.12 of the Indenture.
(d) Notwithstanding anything to the contrary herein, in no event shall
Indebtedness represented by any notes issued pursuant to the Indenture,
including any Notes (or represented by any other evidence of indebtedness for
borrowed money under the Notes or the Indenture) at any time exceed an aggregate
principal amount equal to $105,000,000.
Section 5.03 REINSTATEMENT AND CONTINUATION OF AGREEMENT.
16
(a) If Lender is required in any Insolvency Proceeding or otherwise to
turn over or otherwise pay to the estate of the Borrower, any of its
Subsidiaries, any Guarantor or any other Person any amount (a "RECOVERY"), then
the Loan Agreement Secured Obligations shall be reinstated to the extent of such
Recovery. 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. All
rights, interests, agreements, and obligations of the Collateral Agent, the
Trustee, the Lender, and the Noteholders under this Agreement shall remain in
full force and effect and shall continue irrespective of the commencement of, or
any discharge, confirmation, conversion, or dismissal of any Insolvency
Proceeding by or against Borrower, any of its Subsidiaries or any Guarantor or
any other circumstance which otherwise might constitute a defense available to,
or a discharge of the Borrower, any Subsidiary or any Guarantor in respect of
the Loan Agreement Secured Obligations. No priority or right of the Lender shall
at any time be prejudiced or impaired in any way by any act or failure to act on
the part of the Borrower, any of its Subsidiaries or any Guarantor or by the
noncompliance by any Person with the terms, provisions, or covenants of the Loan
Agreement, the Indenture or any of the other Loan Documents, regardless of any
knowledge thereof which the Lender may have.
(b) If Collateral Agent, the Trustee, or any Noteholder is required in
any Insolvency Proceeding or otherwise to turn over or otherwise pay to the
estate of the Borrower, any of its Subsidiaries, any Guarantor or any other
Person a Recovery, then the Indenture Secured Obligations shall be reinstated to
the extent of such Recovery. No priority or right of the Collateral Agent, the
Trustee, or any Noteholder shall at any time be prejudiced or impaired in any
way by any act or failure to act on the part of the Borrower, any of its
Subsidiaries or any Guarantor or by the noncompliance by any Person with the
terms, provisions, or covenants of the Loan Agreement, the Indenture or any of
the other Indenture Agreements, regardless of any knowledge thereof which the
Collateral Agent, the Trustee, or any Noteholder may have.
ARTICLE VI.
INSOLVENCY PROCEEDINGS
Section 6.01 DIP FINANCING. If the Borrower, any of its Subsidiaries or
any Guarantor shall be subject to any Insolvency Proceeding and the Lender shall
desire, prior to the Discharge of Loan Agreement Secured Obligations, to permit
the use of cash collateral or to permit Borrower, any of its Subsidiaries or any
Guarantor to obtain financing under Section 363 or Section 364 of Title 11 of
the United States Code or any similar provision under the law applicable to any
Insolvency Proceeding ("DIP FINANCING") to be secured by all or any portion of
the Collateral, then the Collateral Agent, on behalf of itself, the Trustee, and
the Noteholders, agrees that it will raise no objection to such use of cash
collateral or DIP Financing and will not request adequate
17
protection or any other relief in connection with its or their interest in any
such Collateral except to the extent specified in this Section 6.01. To the
extent the Liens securing the Loan Agreement Secured Obligations are
subordinated or PARI PASSU with such DIP Financing, the Collateral Agent, for
and on behalf of itself, the Trustee, and the Noteholders, hereby agrees that
its Liens in the Collateral shall be subordinated to such DIP Financing (and all
obligations relating thereto) upon the terms and conditions specified in this
Agreement. Until the Discharge of Loan Agreement Secured Obligations has
occurred, the Collateral Agent, on behalf of itself, the Trustee, and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency Proceeding in respect of the Collateral and
will not provide or offer to provide any DIP Financing secured by a Lien senior
to or PARI PASSU with the Liens securing the Loan Agreement Secured Obligations,
in each case unless the Lender otherwise has provided its express written
consent.
Section 6.02 NO CONTEST. The Collateral Agent, on behalf of itself, the
Trustee, and the Noteholders, agrees that, prior to the Discharge of Loan
Agreement Secured Obligations, none of them shall contest (or support any other
Person contesting) (a) any request by the Lender for adequate protection, or (b)
any objection by the Lender to any motion, relief, action, or proceeding based
on Lender claiming that their interests in the Collateral are not adequately
protected or any other similar request under any law applicable to an Insolvency
Proceeding. Notwithstanding the foregoing, in any Insolvency Proceeding, if the
Lender is granted adequate protection in the form of additional collateral in
connection with any DIP Financing or use of cash collateral under Section 363 or
Section 364 of Title 11 of the United States Code or any similar law applicable
to any Insolvency Proceeding, then the Collateral Agent, on behalf of itself,
the Trustee, or any of the Noteholders, may seek or request adequate protection
in the form of a Lien on such additional collateral, which Lien hereby is and
shall be deemed to be subordinated to the Liens securing the Loan Agreement
Secured Obligations up to (but not in excess of) the Maximum Priority Debt
Amount and such DIP Financing (and all obligations relating thereto) on the same
basis as the Lien Priority. In the event the Collateral Agent, on behalf of
itself, the Trustee, and the Noteholders, seeks or requests adequate protection
and such adequate protection is granted in the form of Liens in respect of
additional collateral, then the Collateral Agent, on behalf of itself, the
Trustee, and each of the Noteholders, agrees that the Lender also shall be
granted a senior Lien on such additional collateral as security for the Loan
Agreement Secured Obligations (and for any such DIP Financing) and that any Lien
on such additional collateral securing the Indenture Secured Obligations shall
be subordinated to the Liens in respect of such additional collateral securing
the Loan Agreement Secured Obligations and any such DIP Financing and any other
Liens granted to the Lender as adequate protection on the same basis as the
other Liens securing the Indenture Secured Obligations are subordinated to the
Loan Agreement Secured Obligations under this Agreement up to the Maximum
Priority Debt Amount. Nothing contained herein shall prohibit or in any way
limit the Lender, prior to the Discharge of Loan Agreement Secured Obligations,
from objecting in any Insolvency Proceeding or otherwise to any action taken by
the Collateral Agent, the
18
Trustee or any of the Noteholders, including the seeking by the Collateral
Agent, the Trustee or any Noteholder of adequate protection or the asserting by
the Collateral Agent, the Trustee or any Noteholder of any of its rights and
remedies under the Indenture Loan Documents or otherwise.
Section 6.03 ASSET SALES. The Collateral Agent agrees, on behalf of
itself, the Trustee, and the Noteholders, that it will not oppose any sale
consented to by Lender of Shared Collateral pursuant to Section 365(f) of Title
11 of the United States Code (or any similar provision in any other applicable
Bankruptcy Law) so long as the proceeds of such sale are applied in accordance
with this Agreement.
Section 6.04 ENFORCEABILITY. The provisions of this Agreement are
intended to be and shall be enforceable under Section 510 of Title 11 of the
United States Code. The Collateral Agent, on behalf of itself, the Trustee, and
the Noteholders, agrees that all distributions that the Collateral Agent, the
Trustee, or any Noteholder receives in any Insolvency Proceeding on account of
the Collateral or Proceeds shall be held in trust by such Person and turned over
to the Lender for application in accordance with Section 4.02 of this Agreement.
To the extent that any amounts received by the Collateral Agent, the Trustee, or
any Noteholder are paid over in connection with this provision, the obligations
owed by the Borrower to such Person will be deemed to be reinstated to the
extent of the amounts so paid over.
ARTICLE VII.
MISCELLANEOUS
Section 7.01 RIGHTS OF SUBROGATION. The Collateral Agent agrees that no
payment or distribution to the Lender pursuant to the provisions of this
Agreement shall entitle the Collateral Agent, the Trustee, or any Noteholder to
exercise any rights of subrogation in respect thereof until the Discharge of
Loan Agreement Secured Obligations shall have occurred. Following the Discharge
of Loan Agreement Secured Obligations, the Lender agrees to execute such
documents, agreements, and instruments as the Collateral Agent, the Trustee or
any Noteholder may reasonably request to evidence the transfer by subrogation to
any such Person of an interest in the Loan Agreement Secured Obligations
resulting from payments or distributions to the Lender by such Person, so long
as all costs and expenses (including all reasonable legal fees and
disbursements) incurred in connection therewith by the Lender are paid by such
Person upon request for payment thereof.
Section 7.02 FURTHER ASSURANCES. The Parties will, at their own expense
and at any time and from time to time, promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that either Party may reasonably request, in order to protect any
right or interest granted or purported to be granted hereby or to enable the
Lender or the Collateral Agent to exercise and enforce its rights and remedies
hereunder; PROVIDED, HOWEVER, that no Party shall be
19
required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this Section 7.02 to the
extent that such action would contravene any law, order or other legal
requirement, and in the event of a controversy or dispute, such Party may
interplead any payment or distribution in any court of competent jurisdiction,
without further responsibility in respect of such payment or distribution under
this Section 7.02.
Section 7.03 REPRESENTATIONS. The Original Lender represents and warrants
to the Collateral Agent that it has the requisite power and authority under the
Original Loan Agreement to enter into, execute, deliver, and carry out the terms
of this Agreement. The Collateral Agent represents and warrants that it has the
requisite power and authority under the Indenture to enter into, execute,
deliver, and carry out the terms of this Agreement on behalf of itself, the
Trustee, and the Noteholders.
Section 7.04 AMENDMENTS. No amendment or waiver of any provision of this
Agreement nor consent to any departure by any Party hereto shall be effective
unless it is in a written agreement executed by the Collateral Agent and the
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 7.05 ADDRESSES FOR NOTICES. All demands, notices and other
communications provided for hereunder shall be in writing and, if to the
Collateral Agent, mailed or sent by telecopy or delivered to it, addressed to it
as follows:
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department/Xxxxxx'x Restaurant Group, Inc.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Mayer, Brown, Xxxx & Maw LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxx Xxxxx, Esq.
Facsimile: (000) 000-0000
and if to the Lender, mailed, sent or delivered thereto, addressed to it as
follows:
Foothill Capital Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
20
Attention: Structured Finance Division Management
Facsimile: (000) 000-0000
With a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx Hilson, Esq.
Facsimile: (000) 000-0000
or as to any party at such other address as shall be designated by such party in
a written notice to the other parties complying as to delivery with the terms of
this Section 7.05. All such demands, notices and other communications shall be
effective, when mailed, two business days after deposit in the mails, postage
prepaid, when sent by telecopy, when receipt is acknowledged by the receiving
telecopy equipment (or at the opening of the next business day if receipt is
after normal business hours), or when delivered, as the case may be, addressed
as aforesaid.
Section 7.06 NO WAIVER, REMEDIES. No failure on the part of any Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 7.07 CONTINUING AGREEMENT, TRANSFER OF SECURED OBLIGATIONS. This
Agreement is a continuing agreement and shall (i) remain in full force and
effect until the Discharge of the Loan Agreement Secured Obligations shall have
occurred and the Indenture Secured Obligations shall have been paid in full,
(ii) be binding upon the Parties and their successors and assigns, and (iii)
inure to the benefit of and be enforceable by the Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (iii), the Lender or the Collateral Agent, the Trustee, or any
Noteholder may assign or otherwise transfer all or any portion of the Loan
Agreement Secured Obligations or the Indenture Secured Obligations, as
applicable, to any other Person (other than Borrower, any Guarantor or any
Affiliate of Borrower and any Subsidiary of Borrower or any Guarantor), and such
other Person shall thereupon become vested with all the rights and obligations
in respect thereof granted to the Lender or the Collateral Agent, the Trustee,
or any Noteholder, as the case may be, herein or otherwise.
Section 7.08 GOVERNING LAW: ENTIRE AGREEMENT. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
except as otherwise preempted by applicable federal law. This Agreement
constitutes the entire
21
agreement and understanding among the Parties with respect to the subject matter
hereof and supersedes any prior agreements, written or oral, with respect
thereto.
Section 7.09 COUNTERPARTS. This Agreement maybe executed in any number of
counterparts, and it is not necessary that the signatures of all Parties be
contained on any one counterpart hereof, each counterpart will be deemed to be
an original, and all together shall constitute one and the same document.
Section 7.10 NO THIRD PARTY BENEFICIARY. This Agreement is solely for the
benefit of the Parties (and their permitted assignees). No other Person
(including Borrower, any Guarantor or any Affiliate of Borrower and any
Subsidiary of Borrower or any Guarantor) shall be deemed to be a third party
beneficiary of this Agreement.
Section 7.11 HEADINGS. The headings of the articles and sections of this
Agreement are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof
Section 7.12 SEVERABILITY. If any of the provisions in this Agreement
shall, for any reason, be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement and shall not invalidate the Lien Priority or any
other priority set forth in this Agreement.
Section 7.13 COLLATERAL AGENT STATUS. Nothing in this Agreement shall be
construed to operate as a waiver by the Collateral Agent, with respect to the
Borrower, any of its Subsidiaries, any Guarantor, the Trustee, or any
Noteholder, of the benefit of any exculpatory rights, privileges, immunities,
indemnities, or reliance rights contained in the Indenture or any of the other
Indenture Loan Documents. For all purposes of this Agreement, the Collateral
Agent may (a) rely in good faith, as to matters of fact, on any representation
of fact believed by the Collateral Agent to be true (without any duty of
investigation) and that is contained in a written certificate of any authorized
representative of the Borrower or of the Lender, and (b) assume in good faith
(without any duty of investigation), and rely upon, the genuineness, due
authority, validity, and accuracy of any certificate, instrument, notice, or
other document believed by it in good faith to be genuine and presented by the
proper person. Borrower and Lender expressly acknowledge that the subordination
and related agreements set forth herein by the Collateral Agent are made solely
in its capacity as Collateral Agent under the Indenture with respect to the
Notes issued thereunder and the other Indenture Loan Documents and are not made
by the Collateral Agent in its individual commercial capacity.
Section 7.14 ACKNOWLEDGMENT. Each of Borrower and each Guarantor hereby
acknowledges that it has received a copy of this Agreement and consents thereto,
and agrees to recognize all rights granted thereby to the Lender and the
Collateral Agent and will not do any act or perform any obligation which is not
in accordance with the agreements set forth in this Agreement. Each of Borrower
and each Guarantor further
22
acknowledges and agrees that it is not an intended beneficiary or third party
beneficiary under this Agreement.
Section 7.15 VENUE; JURY TRIAL WAIVER.
(a) THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK OR THE SOUTHERN DISTRICT OF
NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS
OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY HERETO WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE
DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.17.
(b) EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 7.16 INTERCREDITOR AGREEMENT. This Agreement is the Intercreditor
Agreement referred to in the Indenture. If this Agreement or all or any portion
of either Party's rights or obligations hereunder are assigned or otherwise
transferred to any other Person, such other Person shall execute and deliver an
agreement containing terms substantially identical to those contained in this
Agreement.
23
IN WITNESS WHEREOF, the Lender, the Collateral Agent, the Borrower and each
Guarantor has caused this Agreement to be duly executed and delivered as of the
date first above written.
LENDER: XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Xxxx Xxxxxx
----------------
Name: Xxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
COLLATERAL THE BANK OF NEW YORK,
AGENT: solely in its capacity as Collateral Agent (and not
individually)
By: /s/ Xxxxx Xxxxxxxxx-Xxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx-Xxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
BORROWER:
XXXXXX'X RESTAURANT GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
GUARANTORS:
PORTERHOUSE, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO, INC., an
Illinois corporation
XXXXXX'X OF CHICAGO/ADDISON,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/ATLANTA,
INC., an Illinois corporation
XXXXXX'X OF CHICAGO/
BALTIMORE, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/BOCA
RATON, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
BUCKHEAD, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/CHICAGO,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
CINCINNATI, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/XXXXXXX,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
CLEVELAND, INC., an Illinois
corporation
XXXXXX'X OF CHICAGO/
COLUMBUS, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/DALLAS,
INC., an Illinois corporation
XXXXXX'X OF CHICAGO/DENVER,
INC., an Illinois corporation
XXXXXX'X OF CHICAGO/DETROIT,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/FIFTH
AVENUE, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
FLAMINGO ROAD CORP., a Delaware
corporation
XXXXXX'X OF CHICAGO/HOUSTON,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/MIAMI,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
MINNEAPOLIS, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/
NASHVILLE, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/NORTH
MIAMI BEACH, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/ORLANDO,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PALM
BEACH INC., a Delaware corporation
XXXXXX'X OF CHICAGO/PALM
DESERT, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
XXXXXX'X OF CHICAGO/
PHILADELPHIA, INC., an Illinois
corporation
XXXXXX'X OF CHICAGO/PHOENIX,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
PITTSBURGH, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/
PORTLAND, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/PUERTO
RICO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
ROSEMONT, INC., an Illinois corporation
XXXXXX'X OF CHICAGO/
SACRAMENTO, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/SAN
ANTONIO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SAN
DIEGO, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/SAN
FRANCISCO, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/SANTA
XXX, INC., a Delaware corporation
XXXXXX'X OF CHICAGO/
SCOTTSDALE, INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/SEATTLE,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/VIRGINIA,
INC., an Illinois corporation
XXXXXX'X OF CHICAGO/
WASHINGTON D.C. INC., a Delaware
corporation
XXXXXX'X OF CHICAGO/
WASHINGTON SQUARE, INC., a
Delaware corporation
XXXXXX'X OF CHICAGO/
XXXXXXXXX, INC., an Illinois
corporation
PORTERHOUSE OF LOS ANGELES,
INC., a Delaware corporation
MOCGC CORP., a Virginia corporation
XXXXXX'X OF CHICAGO HOLDING,
INC., a Delaware corporation
XXXXXX'X OF CHICAGO/BOSTON
LLC, a Delaware limited liability company
XXXXX XXXXXX'X OF CHICAGO/
BURBANK LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
CHARLOTTE LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/CRYSTAL
CITY LLC, a Delaware limited liability
company
XXXXXX'X OF CHICAGO/DENVER
CRESCENT TOWN CENTER, LLC, a
Delaware limited liability company
XXXXX XXXXXX'X OF
CHICAGO/XXXXXXXX LLC, a Delaware
limited liability company
XXXXXX'X OF CHICAGO/GREAT
NECK LLC, a Delaware limited liability
company
XXXXXX'X OF CHICAGO/
HACKENSACK LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
HARTFORD LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
HONOLULU LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
INDIANAPOLIS LLC, a Delaware
limited liability company
XXXXXX'X OF CHICAGO/
JACKSONVILLE LLC, a Delaware
limited liability company
XXXXXX'X OF CHICAGO/KANSAS
CITY LLC, a Delaware limited liability
company
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
XXXXXX'X OF CHICAGO/KING OF
PRUSSIA LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
LOUISVILLE LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/NEW
ORLEANS LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
PITTSBURGH LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/RESTON
LLC, a Delaware limited liability company
XXXXXX'X OF CHICAGO/
RICHMOND LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
SCHAUMBURG LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/
STAMFORD LLC, a Delaware limited
liability company
XXXXXX'X OF CHICAGO/WHITE
PLAINS LLC, a Delaware limited liability
company
ITALIAN RESTAURANTS HOLDING
CORP., a Delaware corporation
XXXXXXXXX'X RESTAURANTS, INC., a
Delaware corporation
XXXXXXXXX'X OF CIRCLE CENTRE,
INC., a Delaware corporation
XXXXXXXXX'X/XXXX OF PRUSSIA,
INC., a Delaware corporation
XXXXXXXXX'X OF LAS VEGAS, INC., a
Delaware corporation
XXXXXXXXX'X AT VILLAGE SQUARE,
INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and Chief
Financial Officer of the above
corporations
ADDISON STEAKHOUSE, INC.,
a Texas corporation
CHICAGO STEAKHOUSE, INC.,
a Texas corporation
HOUSTON STEAKHOUSE, INC.,
a Texas corporation
SAN ANTONIO STEAKHOUSE, INC.,
a Texas corporation
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
