INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of June 19, 2003, among
JPMORGAN CHASE BANK, as Credit Agent, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Trustee and as Collateral Agent, and TENNECO AUTOMOTIVE, INC.
W I T N E S S E T H
WHEREAS, the Company (such term and each other capitalized
term used herein having the meanings set forth in Section 1 below), certain
lenders (including lenders acting as syndication agent and co-documentation
agents), and JPMorgan Chase Bank, as administrative agent and collateral agent,
are parties to the Credit Agreement dated as of September 30, 1999, as amended
to the date hereof (as further amended, supplemented or otherwise modified from
time to time in a manner consistent with the definition of "Credit Agreement"
below, the "Existing Credit Agreement");
WHEREAS, the Obligations of the Company under the Credit
Agreement are secured (together with certain other obligations) by various
assets of the Company and certain Subsidiaries thereof;
WHEREAS, the Company, certain Subsidiaries of the Company and
the Trustee have entered into the Indenture dated as of June 19, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
pursuant to which the Company intends to issue the Notes;
WHEREAS, the Company and certain lenders under the Existing
Credit Agreement have entered into the Fourth Amendment dated as of May 29, 2003
(the "Fourth Amendment"), to the Existing Credit Agreement that, among other
things, permits, subject to certain terms and conditions, (a) the issuance of
the Notes by the Company and (b) a second priority Lien on the Common Collateral
to secure the Second Priority Claims; and
WHEREAS, it is a condition precedent to the effectiveness of
the Fourth Amendment that the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. (a) Definitions. As used in this Agreement, the following
terms have the meanings specified below:
"Agreement" means this Agreement, as amended, renewed,
extended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
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"Bankruptcy Law" means Title 11 of the United States Code and
any similar Federal, state or foreign law for the relief of debtors.
"Business Day" means any day other than a Saturday, a Sunday
or a day that is a legal holiday under the laws of the State of New
York or on which banking institutions in the State of New York are
required or authorized by law or other governmental action to close.
"Cash Management Obligations " means, with respect to any
Person, all obligations of such Person in respect of overdrafts and
related liabilities owed to any other Person that arise from treasury,
depositary or cash management services, including in connection with
any automated clearing house transfers of funds, or any similar
transactions.
"Common Collateral" means all of the assets of any Grantor,
whether real, personal or mixed, constituting both First Priority
Collateral and Second Priority Collateral.
"Company" means Tenneco Automotive Inc.
"Comparable Second Priority Collateral Document" means, in
relation to any Common Collateral subject to any Lien created under any
First Priority Collateral Document, that Second Priority Collateral
Document which creates a Lien on the same Common Collateral, granted by
the same Grantor.
"Credit Agent" means (i) JPMorgan Chase Bank in its capacity
as collateral agent under the Existing Credit Agreement and the Loan
Documents (as defined therein) and also includes its successors
thereunder as collateral agent for the First Priority Lenders (or if
there is more than one agent, a majority of them) under the First
Priority Documents exercising substantially the same rights and powers,
or if there is no acting Credit Agent under the Existing Credit
Agreement, the Required Lenders or, if designated by the Credit Agent
under the Existing Credit Agreement, the lead agent under any other
First-Lien Credit Facility; and (ii) if the Existing Credit Agreement
is no longer the Senior Credit Agreement, the financial institution
then acting as lead agent or collateral agent (in its capacity as such)
under the Senior Credit Agreement and the related loan documents and
also includes its successors thereunder as lead agent or collateral
agent for the First Priority Lenders thereunder (or if there is more
than one agent, a majority of them) under such First Priority Documents
exercising substantially the same rights and powers, or if there is no
acting lead agent or collateral agent under the Senior Credit
Agreement, First Priority Lenders thereunder holding more than 50% of
the aggregate outstanding term Indebtedness and revolving credit
commitments thereunder.
"Credit Agreement" means the Existing Credit Agreement,
together with any documents evidencing or governing any Obligations
relating thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may
be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any
agreement
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extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by
Section 4.03 of the Indenture) or adding Subsidiaries as additional
borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group
of lenders. Notwithstanding the foregoing, the Notes and the Indenture
shall not constitute a Credit Agreement.
"Credit Facilities" means one or more debt facilities
(including the Credit Agreement) or commercial paper facilities
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to lenders or to special
purpose entities formed to borrow from lenders against such
receivables) or letters of credit, or any debt securities or other form
of debt financing (including convertible or exchangeable debt
instruments), in each case, as amended, supplemented, modified,
extended, renewed, restated or refunded in whole or in part from time
to time.
"Designated Second Priority Agent" means at any time the
Trustee or such other Second Priority Agent as shall be designated by
all Second Priority Agents to act as Designated Second Priority Agent,
as such other Second Priority Agent shall be identified in a
certificate executed by all Second Priority Agents and delivered to the
Administrative Agent.
"Discharge of First Priority Claims" means, except to the
extent otherwise provided in Section 5.6, payment in full in cash of
(a) the principal of and interest and premium, if any, on all
Indebtedness outstanding under the First-Lien Credit Facilities or,
with respect to letters of credit outstanding thereunder, delivery of
cash collateral or backstop letters of credit in respect thereof in
compliance with such First-Lien Credit Facilities, as applicable, in
each case after or concurrently with termination of all commitments to
extend credit thereunder and (b) any other First Priority Claims that
are due and payable or otherwise accrued and owing at or prior to the
time such principal and interest are paid.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"First-Lien Credit Facilities" means (a) the Credit Facilities
provided pursuant to the Credit Agreement and (b) any other Credit
Facility, that, in the case of both clauses (a) and (b), is secured by
a Lien permitted by clause (B) of Section 4.15 of the Indenture.
"First Priority Cash Management Obligations" means any Cash
Management Obligations secured by any Common Collateral under the same
First Priority Collateral Documents that secure Obligations under the
Senior Credit Agreement.
"First Priority Claims" means (a) all Obligations under the
Credit Agreement, (b) all Obligations under one or more First-Lien
Credit Facilities (other than the Credit Facilities provided pursuant
to the Credit Agreement), the Indebtedness under each of which is
designated by the Company as "First Priority Claims" for purposes of
the Indenture, provided that the First Priority Lenders under each
First-Lien Credit Facility
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then in effect have consented to such designation pursuant to the
provisions of the First Priority Documents then in effect, (c) all
other Obligations of the Company or any other Grantor under the First
Priority Documents, including all First Priority Hedging Obligations
and First Priority Cash Management Obligations and (d) all Future Other
First-Lien Obligations. Except as provided in the last sentence of this
definition, any Obligations described in the preceding sentence shall
constitute First Priority Claims only to the extent such Obligations
are permitted pursuant to the Indenture. First Priority Claims shall
include all interest accrued or accruing (or which would, absent the
commencement of an Insolvency or Liquidation Proceeding, accrue) after
the commencement of an Insolvency or Liquidation Proceeding in
accordance with and at the rate specified in the relevant First
Priority Document whether or not the claim for such interest is allowed
as a claim in such Insolvency or Liquidation Proceeding. To the extent
any payment with respect to the First Priority Claims (whether by or on
behalf of any Grantor, as proceeds of security, enforcement of any
right of set-off or otherwise) is declared to be fraudulent or
preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the
obligation or part thereof originally intended to be satisfied shall be
deemed to be reinstated and outstanding as if such payment had not
occurred. Notwithstanding the foregoing the Notes and related
Obligations will not constitute First Priority Claims and Collateral
therefor will not constitute First Priority Collateral even if any
proceeds of the Notes are used to repay Obligations under the Credit
Agreement. Notwithstanding anything to the contrary contained in this
definition, any Obligation under a First Priority Document (including
any Cash Management Obligations or Hedging Obligations) shall
constitute a "First Priority Claim" if the Credit Agent or the relevant
First Priority Lender or First Priority Lenders under such First
Priority Document shall have received a written representation from the
Company in or in connection with such First Priority Document that such
Obligation constitutes a "First Priority Claim" under and as defined in
the Indenture (whether or not such Obligation is at any time determined
not to have been permitted to be incurred under the Indenture).
"First Priority Collateral" means all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien
is granted or held as security for any First Priority Claim.
"First Priority Collateral Documents" means any agreement,
document or instrument pursuant to which a Lien is granted securing any
First Priority Claims or under which rights or remedies with respect to
such Liens are governed.
"First Priority Documents" means the Credit Agreement, the
First Priority Collateral Documents, and each of the other agreements,
documents and instruments (including each agreement, document or
instrument providing for or evidencing a First Priority Hedging
Obligation or First Priority Cash Management Obligation) providing for
or evidencing any Obligation under the Credit Agreement or any other
First-Lien Credit Facility or any Future Other First-Lien Obligations,
and any other related document or instrument executed or delivered
pursuant to any First Priority Document at any time or otherwise
evidencing any First Priority Claims.
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"First Priority Hedging Obligations" means any Hedging
Obligations secured by any Common Collateral under the same First
Priority Collateral Documents that secure Obligations under the Senior
Credit Agreement.
"First Priority Lenders" means the Persons holding First
Priority Claims, including the Credit Agent.
"First Priority Liens"means all Liens that secure First
Priority Claims
"Future Other First-Lien Obligations" means all Obligations of
the Company or any other Grantor in respect of Cash Management
Obligations or Hedging Obligations that are designated by the Company
as "First Priority Claims" for purposes of the Indenture (other than
any First Priority Cash Management Obligations and First Priority
Hedging Obligations); provided that the required lenders (however
denominated) under any Senior Credit Agreement then in effect have
consented to such designation.
"Grantors" means each of the Company and the Subsidiaries that
has executed and delivered a First Priority Collateral Document or a
Second Priority Collateral Document.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person in respect of (a) interest rate or currency
swap agreements, interest rate or currency cap agreements, interest
rate or currency collar agreements, or (b) other agreements or
arrangements designed to protect such Person against fluctuations in
interest rates and/or currency exchange rates.
"Indebtedness" means and includes all Obligations that
constitute "Indebtedness" within the meaning of the Indenture or the
Senior Credit Agreement.
"Indenture" has the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" means (a) any voluntary
or involuntary case or proceeding under any Bankruptcy Law with respect
to any Grantor, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with
respect to any Grantor or with respect to any of their respective
assets, (c) any liquidation, dissolution, reorganization or winding up
of any Grantor whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities
of any Grantor.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor
or a lessor under any conditional sale agreement, capital lease or
title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
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"Noteholders" means the Persons holding Notes from time to
time.
"Notes" means (a) the 10 1/4% Senior Secured Notes due 2013 to
be issued by the Company, (b) the exchange notes issued in exchange
therefor as contemplated by the Registration Rights Agreement dated as
of June 19, 2003, among the Company and the Initial Purchasers (as
defined therein) and (c) any additional notes issued under the
Indenture by the Company, to the extent permitted by the Indenture and
the Senior Credit Agreement.
"Obligations" means any and all obligations with respect to
the payment of (a) any principal of or interest (including interest
accruing on or after the commencement of any Insolvency or Liquidation
Proceeding, whether or not a claim for post-filing interest is allowed
in such proceeding) or premium on any Indebtedness, including any
reimbursement obligation in respect of any letter of credit, (b) any
fees, indemnification obligations, damages, expense reimbursement
obligations or other liabilities payable under the documentation
governing any Indebtedness, (c) any obligation to post cash collateral
in respect of letters of credit and any other obligations or (d) any
Cash Management Obligations or Hedging Obligations.
"Other Second-Lien Obligations" has the meaning set forth in
the Indenture; provided that (a) no Obligations with respect to any
Indebtedness shall be an "Other Second-Lien Obligation" unless such
Obligation is permitted by the Senior Credit Agreement and is secured
by a Lien permitted by the Senior Credit Agreement and (b) such
Obligations (except for the Notes and related Obligations) are
designated by the Company as "Other Second-Lien Obligations" for
purposes of the Indenture.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, entity or other party, including any government and any
political subdivision, agency or instrumentality thereof.
"Pledged Collateral" means (a) the "Pledged Securities" under,
and as defined in, the Second Priority Security Agreement, and (b) any
other Common Collateral in the possession of the Credit Agent (or its
agents or bailees), to the extent that possession thereof is necessary
to perfect a Lien thereon under the Uniform Commercial Code.
"Recovery" has the meaning set forth in Section 6.5 hereof.
"Required Lenders" means, with respect to any amendment or
modification of the Senior Credit Agreement, or any termination or
waiver of any provision of the Senior Credit Agreement, or any consent
or departure by the Company or any of the Subsidiaries therefrom, those
First Priority Lenders the approval of which is required to approve
such amendment or modification, termination or waiver or consent or
departure.
"Second Priority Agent" means each of the Trustee and each
other Person which acts as trustee, lead agent, administrative agent or
collateral agent for any Second Priority Lenders and, if any Second
Priority Claims do not have a trustee, lead agent, administrative agent
or collateral agent, the representative appointed by the holders of at
least a majority of such Second Priority Claims.
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"Second Priority Claims" means all Obligations in respect of
the Notes or arising under the Second Priority Documents or any of
them. Second Priority Claims shall include all interest accrued (or
which would, absent the commencement of an Insolvency or Liquidation
Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in
the relevant Second Priority Document whether or not the claim for such
interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to the Second
Priority Claims (whether by or on behalf of any Grantor, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared
to be fraudulent or preferential in any respect, set aside or required
to be paid to a debtor in possession, trustee, receiver or similar
Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such
payment had not occurred.
"Second Priority Collateral" means all of the assets of any
Grantor, whether real, personal or mixed, with respect to which a Lien
is granted or held as security for any Second Priority Claim.
"Second Priority Collateral Documents" means the Second
Priority Security Agreement, the Second Priority Mortgages and any
other document or instrument pursuant to which a Lien is granted by any
Grantor to secure any Second Priority Claims or under which rights or
remedies with respect to any such Lien are governed.
"Second Priority Documents" means (a) the Indenture, the
Notes, the Second Priority Collateral Documents and each of the other
agreements, documents or instruments evidencing or governing any Other
Second-Lien Obligations and (b) any other related documents or
instruments executed and delivered pursuant to any Second Priority
Document described in clause (a) above evidencing or governing any
Obligations thereunder.
"Second Priority Lenders" means the Persons holding Second
Priority Claims, including the Noteholders, the Trustee, the other
Second Priority Agents, if any, and any other agent, representative or
Second Priority Agent for any of the foregoing.
"Second Priority Mortgages" means a collective reference to
each mortgage, deed of trust, deed to secure debt and any other
document or instrument under which any Lien on real property owned by
any Grantor is granted to secure any Second Priority Claims or under
which rights or remedies with respect to any such Liens are governed.
"Second Priority Security Agreement" means the Collateral
Agreement, dated as of June 19, 2003, among the Company, the other
Grantors and the Trustee.
"Senior Credit Agreement" means the Existing Credit Agreement;
provided that if at any time a Discharge of First Priority Claims
occurs with respect to the Existing Credit Agreement (without giving
effect to Section 5.6), then, to the extent provided in Section 5.6,
the term "Senior Credit Agreement" means the First-Lien Credit Facility
designated
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by the Company as the "Senior Credit Agreement" in accordance with such
Section (it being understood that only one Senior Credit Agreement may
be in effect at any time).
"Subsidiary" means any "Subsidiary" of the Company, as defined
in the Indenture or the Senior Credit Agreement.
"Trustee" means Wachovia Bank, National Association, in its
capacity as trustee under the Indenture and collateral agent under the
Second Priority Collateral Documents, and also includes its successors
hereunder as collateral agent or trustee for the Noteholders.
"Uniform Commercial Code" or "UCC" means the Uniform
Commercial Code as from time to time in effect in the State of New
York.
(b) Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified, (ii) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (iii) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Sections shall be construed to
refer to Sections of this Agreement and (v) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. When used in reference to a Second Priority Agent,
the phrase "applicable Second Priority Lenders" shall mean the Second Priority
Lenders for whom such Second Priority Agent acts as agent, trustee or
representative; the phrase "applicable Second Priority Document" means the
Second Priority Documents under which such Second Priority Agent acts as agent,
trustee or representative; and the phrase "applicable Second Priority Claims"
means the Second Priority Claims of such Second Priority Agent and the Second
Priority Lenders for whom it acts as agent, trustee or representative.
SECTION 2. Lien Priorities
2.1 Subordination. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Second Priority
Agents or the Second Priority Lenders on the Common Collateral or of any Liens
granted to the Credit Agent or the First Priority Lenders on the Common
Collateral and notwithstanding any provision of the UCC or any other applicable
law or the Second Priority Documents or the First Priority Documents or any
other circumstance whatsoever, each Second Priority Agent, on behalf of itself
and the applicable Second Priority Lenders, hereby agrees that: (a) any Lien on
the Common Collateral securing any First Priority Claims now or hereafter held
by or on behalf of the Credit Agent or any First Priority Lenders or any agent
or trustee therefor shall be senior in all respects and prior
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to any Lien on the Common Collateral securing any of the Second Priority Claims;
and (b) any Lien on the Common Collateral now or hereafter held by or on behalf
of any Second Priority Agent or any Second Priority Lenders or any agent or
trustee therefor regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Common Collateral securing any First Priority
Claims. All Liens on the Common Collateral securing any First Priority Claims
shall be and remain senior in all respects and prior to all Liens on the Common
Collateral securing any Second Priority Claims for all purposes, whether or not
such Liens securing any First Priority Claims are subordinated to any Lien
securing any other obligation of the Company, any other Grantor or any other
Person.
2.2 Prohibition on Contesting Liens. Each of the Second
Priority Agents, for itself and on behalf of each applicable Second Priority
Lender, and the Credit Agent, for itself and on behalf of each First Priority
Lender it represents, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including
any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of a Lien held by or on behalf of any of the First Priority
Lenders in the First Priority Collateral or by or on behalf of any of the Second
Priority Lenders in the Common Collateral, as the case may be; provided that
nothing in this Agreement shall be construed to prevent or impair the rights of
the Credit Agent or any First Priority Lender to enforce this Agreement,
including the priority of the Liens securing the First Priority Claims as
provided in Section 2.1.
2.3 No New Liens. So long as the Discharge of First Priority
Claims has not occurred, (a) the parties hereto agree that, after the date
hereof, if any Second Priority Agent shall hold any Lien on any assets of the
Company or any other Grantor securing any Second Priority Obligations that are
not also subject to the first-priority Lien of the Credit Agent under the First
Priority Documents, such Second Priority Agent, upon demand by the Credit Agent
or the Company, will either release such Lien or assign it to the Credit Agent
as security for the First Priority Claims (and such Second Priority Agent may
retain a subordinated Lien securing Second Priority Claims in accordance with
this Agreement if so assigned), and (b) the Company agrees that it will not, and
will not permit any Subsidiary to, grant or permit to exist any Lien on any
assets of the Company or any of its Subsidiaries to secure any Second Priority
Claim unless a perfected prior Lien on the same assets has been granted to
secure the First Priority Claims.
2.4 Effectiveness. No First Lien Lender or Second Lien Lender
shall have any rights or obligations under this Agreement unless it (or its
trustee, administrative agent or collateral agent on its behalf) shall have, at
the request of the then Credit Agent under the Senior Credit Agreement, executed
and delivered to such Credit Agent an agreement to be bound by the provisions of
this Agreement in form and at such time reasonably satisfactory to such Credit
Agent, and no Obligations (other than Obligations in respect of the Existing
Credit Agreement and related First Priority Documents and Obligations in respect
of the Notes and related Second Priority Documents) shall be deemed First
Priority Claims or Second Priority Claims unless such joinder is executed and
delivered in the form requested by such Credit Agent.
SECTION 3. Enforcement
3.1 Exercise of Remedies
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(a) So long as the Discharge of First Priority Claims has not
occurred, whether or not any Insolvency or Liquidation Proceeding has
been commenced by or against the Company or any other Grantor, (i) the
Second Priority Agents and the Second Priority Lenders will not
exercise or seek to exercise any rights or remedies (including set-off)
with respect to any Common Collateral, institute any action or
proceeding with respect to such rights or remedies (including any
action of foreclosure), contest, protest or object to any foreclosure
proceeding or action brought by the Credit Agent or any First Priority
Lender, the exercise of any right under any lockbox agreement, control
agreement, blocked account agreement, landlord waiver or bailee's
letter or similar agreement or arrangement to which any Second Priority
Agent or any Second Priority Lender is a party, or any other exercise
by any such Person, of any rights and remedies relating to the Common
Collateral under the First Priority Documents or otherwise, or object
to the forbearance by the First Priority Lenders from bringing or
pursuing any foreclosure proceeding or action or any other exercise of
any rights or remedies relating to the Common Collateral and (ii) the
Credit Agent and the First Priority Lenders shall have the exclusive
right to enforce rights, exercise remedies (including set-off and the
right to credit bid their debt) and make determinations regarding the
release, disposition, or restrictions with respect to the Common
Collateral without any consultation with or the consent of any Second
Priority Agent or any Second Priority Lender; provided, that (A) in any
Insolvency or Liquidation Proceeding commenced by or against the
Company or any Grantor, a Second Priority Agent may file a claim or
statement of interest with respect to the Second Priority Claims, and
(B) a Second Priority Agent may take any action (not adverse to the
prior Liens on the Common Collateral securing the First Priority
Claims, or the rights of the Credit Agent or the First Priority Lenders
to exercise remedies in respect thereof) in order to preserve or
protect its Lien on the Common Collateral. In exercising rights and
remedies with respect to the Common Collateral, the Credit Agent and
the First Priority Lenders may enforce the provisions of the First
Priority Documents and exercise remedies thereunder, all in such order
and in such manner as they may determine in the exercise of their sole
discretion. Such exercise and enforcement shall include the rights of
an agent appointed by them to sell or otherwise dispose of Common
Collateral upon foreclosure, to incur expenses in connection with such
sale or disposition, and to exercise all the rights and remedies of a
secured lender under the Uniform Commercial Code and under the
comparable law of any applicable jurisdiction and of a secured creditor
under Bankruptcy Laws of any applicable jurisdiction.
(b) Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees that it will not take or
receive, directly or indirectly, in cash or other property or by
setoff, counterclaim or in any other manner (whether pursuant to any
enforcement, collection, execution, levy or foreclosure proceeding or
otherwise), any Common Collateral or any proceeds of Common Collateral,
in each case in connection with the exercise of any right or remedy
(including set-off) with respect to any Common Collateral (or in
respect of any Common Collateral in the event of the occurrence of an
Insolvency or Liquidation Proceeding with respect to a Grantor), unless
and until the Discharge of First Priority Claims has occurred. Without
limiting the generality of the foregoing, unless and until the
Discharge of First Priority Claims has occurred, except as expressly
provided in the proviso in clause (ii) of Section 3.1(a)
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above, the sole right of the Second Priority Agents and the Second
Priority Lenders with respect to the Common Collateral is to hold a
Lien on the Common Collateral pursuant to the Second Priority Documents
for the period and to the extent granted therein and to receive a share
of the proceeds thereof, if any, after the Discharge of the First
Priority Claims has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a)
above and without limiting the effect of other provisions of this
Agreement, (i) each Second Priority Agent, for itself and on behalf of
the applicable Second Priority Lenders, agrees that such Second
Priority Agent and the applicable Second Priority Lenders will not take
any action that would hinder any exercise of remedies undertaken by the
Credit Agent under the First Priority Documents, including any sale,
lease, exchange, transfer or other disposition of the Common
Collateral, whether by foreclosure or otherwise, and (ii) each Second
Priority Agent, for itself and on behalf of the applicable Second
Priority Lenders, hereby waives any and all rights it or the applicable
Second Priority Lenders may have as a junior lien creditor to object to
the manner in which the Credit Agent or the First Priority Lenders seek
to enforce or collect the First Priority Claims or the Liens granted in
any of the First Priority Collateral, regardless of whether any action
or failure to act by or on behalf of the Credit Agent or First Priority
Lenders is adverse to the interest of the Second Priority Lenders.
(d) Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, hereby acknowledges and agrees that
no covenant, agreement or restriction contained in any Second Priority
Document shall be deemed to restrict in any way the rights and remedies
of the Credit Agent or the First Priority Lenders with respect to the
Common Collateral as set forth in this Agreement and the First Priority
Documents.
3.2 Cooperation. Subject to the proviso in clause (ii) of
Section 3.1(a) above, each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees that, unless and until the Discharge
of First Priority Claims has occurred, it will not commence, or join with any
Person (other than the First Priority Lenders and the Credit Agent upon the
request thereof) in commencing, any enforcement, collection, execution, levy or
foreclosure action or proceeding with respect to any Lien held by it under any
of the Second Priority Documents or otherwise.
SECTION 4. Payments
4.1 Application of Proceeds. As long as the Discharge of First
Priority Claims has not occurred, the Common Collateral or proceeds thereof
received in connection with the sale or other disposition of, or collection on,
such Common Collateral upon the exercise of remedies (or in respect of any
Common Collateral in the event of the occurrence of an Insolvency or Liquidation
Proceeding with respect to a Grantor), shall be applied by the Credit Agent to
the First Priority Claims in such order as specified in the relevant First
Priority Documents (or, if an order is not specified in the First Priority
Documents, in such order determined by the Credit Agent in its sole discretion)
until the Discharge of First Priority Claims has occurred. Upon the Discharge of
the First Priority Claims, the Credit Agent shall deliver to
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the Designated Second Priority Agent (or to the Company if there is no
Designated Second Priority Agent at the time) or as a court of competent
jurisdiction may otherwise direct any proceeds of Common Collateral held by it
in the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct to be applied, if applicable, by the
Designated Second Priority Agent to the Second Priority Claims in accordance
with the respective rights of the respective Second Priority Agents therefor.
4.2 Payments Over. Any Common Collateral or proceeds thereof
(or amounts in respect thereof) received by any Second Priority Agent or any
Second Priority Lender in connection with the exercise of any right or remedy
(including set-off) relating to the Common Collateral in contravention of this
Agreement shall be segregated and held in trust and forthwith paid over to the
Credit Agent for the benefit of the First Priority Lenders in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The Credit Agent is hereby authorized to make
any such endorsements as agent for any such Second Priority Agent or any such
Second Priority Lender. This authorization is coupled with an interest and is
irrevocable.
SECTION 5. Other Agreements
5.1 Releases
(a) If in connection with:
(i) the exercise of the Credit Agent's remedies in
respect of the Common Collateral provided for in Section 3.1,
including any sale, lease, exchange, transfer or other
disposition of any such Common Collateral;
(ii) any sale, lease, exchange, transfer or other
disposition of any Common Collateral permitted under the terms
of the Senior Credit Agreement (whether or not an event of
default thereunder, and as defined therein, has occurred and
is continuing) and permitted or not prohibited under Section
4.12 of the Indenture (Limitation on Asset Sales); or
(iii) any agreement between the Credit Agent and the
Company or any other Grantor which expressly releases the
Credit Agent's Lien on any portion of the Common Collateral or
to release any Grantor from its obligations under its guaranty
of the First Priority Claims; provided that (A) after giving
effect to the release, Obligations secured by first priority
Liens on the remaining Common Collateral remain outstanding
(unless such Obligations are deemed paid in full by the Credit
Agent and the Company) and (B) no such release shall be
effective against the Second Priority Lenders under the
Indenture and the Notes if an Event of Default has occurred
and is continuing under the Indenture as of the time of such
proposed release and written notice of the occurrence and
continuation of such Event of Default is received by the
Credit Agent at least one business day prior to such release
until such time as such Event of Default is cured or waived
unless such release is consented to by the holders of at least
a majority in aggregate principal amount of the Notes at the
time outstanding;
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the Credit Agent, for itself or on behalf of any of the First Priority Lenders,
releases any of its Liens on any part of the Common Collateral, the Liens, if
any, of each Second Priority Agent, for itself or for the benefit of the
applicable Second Priority Lenders, on such Common Collateral shall be
automatically, unconditionally and simultaneously released and each Second
Priority Agent, for itself or on behalf of any such applicable Second Priority
Lender, promptly shall execute and deliver to the Credit Agent or such Grantor
such termination statements, releases and other documents as the Credit Agent or
such Grantor may request to effectively confirm such release. The Company shall
promptly advise (i) each Second Priority Agent and the Credit Agent of the
occurrence of an Event of Default and (ii) each Second Priority Agent of any
proposed release of Common Collateral cognizable under Section 5.1(a)(iii).
(b) Each Second Priority Agent, for itself and on behalf of
the applicable Second Priority Lenders, hereby irrevocably constitutes and
appoints the Credit Agent and any officer or agent of the Credit Agent, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Second Priority
Agent or such holder or in the Credit Agent's own name, from time to time in the
Credit Agent's discretion, for the purpose of carrying out the terms of this
Section 5.1, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Section 5.1, including any termination statements, endorsements
or other instruments of transfer or release.
5.2 Insurance. Unless and until the Discharge of First
Priority Claims has occurred, the Credit Agent and the First Priority Lenders
shall have the sole and exclusive right under the First Priority Documents, to
the extent such a right is granted in the First Priority Documents, to adjust
settlement for any insurance policy covering the Common Collateral in the event
of any loss thereunder and to approve any award granted in any condemnation or
similar proceeding affecting the Common Collateral. Unless and until the
Discharge of First Priority Claims has occurred, all proceeds of any such policy
and any such award if in respect to the Common Collateral shall be paid to the
Credit Agent for the benefit of the First Priority Lenders to the extent
required under the First Priority Documents and thereafter to the Designated
Second Priority Agent (or to the Company is there is no Designated Second
Priority Agent at the time) for the benefit of the Second Priority Lenders to
the extent required under the applicable Second Priority Documents and then to
the owner of the subject property or as a court of competent jurisdiction may
otherwise direct. If any Second Priority Agent or any Second Priority Lender
shall, at any time, receive any proceeds of any such insurance policy or any
such award in contravention of this Agreement, it shall pay such proceeds over
to the Credit Agent in accordance with the terms of Section 4.2.
5.3 Amendments to Second Priority Documents
(a) Without the prior written consent of the Credit Agent and
the Required Lenders, no Second Priority Collateral Document may be
amended, supplemented or otherwise modified or entered into to the
extent such amendment, supplement or modification, or the terms of any
new Second Priority Collateral Document, would be prohibited by any of
the terms of the First Priority Documents. Each Second Priority Agent
agrees that each Second Priority Collateral Document shall
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include the following language (or language to similar effect approved
by the Credit Agent):
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the [Insert title of Second
Priority Agent] pursuant to this Agreement and the exercise of
any right or remedy by the [Insert title of Second Priority
Agent] hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of June 19, 2003 (as
amended, supplemented or otherwise modified from time to time,
the "Intercreditor Agreement"), among Tenneco Automotive Inc.,
JPMorgan Chase Bank, as Credit Agent, and Wachovia Bank,
National Association, as Trustee. In the event of any conflict
between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall
govern."
In addition, each Second Priority Agent agrees that each Second Priority
Mortgage covering any Common Collateral shall contain such other language as the
Credit Agent may reasonably request to reflect the subordination of such Second
Priority Mortgage to the First Priority Collateral Document covering such Common
Collateral.
(b) In the event the Credit Agent or the First Priority
Lenders enter into any amendment, waiver or consent in respect of any
of the First Priority Collateral Documents for the purpose of adding
to, or deleting from, or waiving or consenting to any departures from
any provisions of, any First Priority Collateral Document or changing
in any manner the rights of the Credit Agent, the First Priority
Lenders, the Company or any other Grantor thereunder, then such
amendment, waiver or consent shall apply automatically to any
comparable provision of the Comparable Second Priority Collateral
Document without the consent of any Second Priority Agent or any Second
Priority Lenders and without any action by any Second Priority Agent,
the Company or any other Grantor, provided, that (A) no such amendment,
waiver or consent shall have the effect of removing assets subject to
the Lien of the Second Priority Collateral Documents, except to the
extent that a release of such Lien is permitted by Section 5.1, (B)
notice of such amendment, waiver or consent shall have been given to
the applicable Second Priority Agent and (C) no such amendment, waiver,
or consent shall be effective to amend or waive a Comparable Second
Priority Collateral Document if it shall materially adversely affect
the rights of the Second Priority Lenders unless such change, waiver or
modification materially adversely affects the rights of the First
Priority Lenders in a like or similar manner (it being understood that
amendments, waivers and consents which have the effect of adding
collateral, adding remedies or enhancing the ability of the First
Priority Lenders to exercise remedies or perfect security interests in
collateral shall be deemed not to be materially adverse to the Second
Priority).
5.4 Rights As Unsecured Creditors. Notwithstanding anything to
the contrary in this Agreement, each of the Second Priority Agents and the
Second Priority Lenders may exercise rights and remedies as an unsecured
creditor against the Company or any Subsidiary that has guaranteed the Second
Priority Obligations in accordance with the terms of the Second Priority
Documents and applicable law. Nothing in this Agreement shall prohibit the
receipt by any Second Priority Agent or any Second Priority Lenders of the
required payments of interest,
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premium, if any, and principal on the Second Priority Claims and related fees
and expenses so long as such receipt is not the direct or indirect result of the
exercise by any Second Priority Agent or any Second Priority Lender of rights or
remedies as a secured creditor or enforcement in contravention of this Agreement
of any Lien held by any of them (or received or paid in respect of any Common
Collateral in the event of the occurrence of an Insolvency or Liquidation
Proceeding with respect to a Grantor). In the event any Second Priority Agent or
any Second Priority Lender becomes a judgment lien creditor in respect of Common
Collateral as a result of its enforcement of its rights as an unsecured
creditor, such judgment lien shall be subordinated to the Liens securing First
Priority Claims on the same basis as the other Liens securing the Second
Priority Claims are so subordinated to such First Priority Claims under this
Agreement. Nothing in this Agreement impairs or otherwise adversely affects any
rights or remedies the Credit Agent or the First Priority Lenders may have with
respect to the First Priority Collateral.
5.5 Bailee for Perfection
(a) The Credit Agent agrees to hold the Pledged Collateral
that is part of the Common Collateral in its possession or control (or
in the possession or control of its agents or bailees) as bailee for
the applicable Second Priority Agents and any assignee solely for the
purpose of perfecting the security interest granted in such Pledged
Collateral pursuant to the Second Priority Security Documents, subject
to the terms and conditions of this Section 5.5.
(b) Until the Discharge of First Priority Claims has occurred,
the Credit Agent shall be entitled to deal with the Pledged Collateral
in accordance with the terms of the First Priority Documents as if the
Liens of the Second Priority Agents under the Second Priority
Collateral Documents did not exist. The rights of the Second Priority
Agents shall at all times be subject to the terms of this Agreement and
to the Credit Agent's rights under the First Priority Documents.
(c) The Credit Agent shall have no obligation whatsoever to
the Second Priority Agents or any Second Priority Lender to assure that
the Pledged Collateral is genuine or owned by any of the Grantors or to
preserve rights or benefits of any Person except as expressly set forth
in this Section 5.5. The duties or responsibilities of the Credit Agent
under this Section 5.5 shall be limited solely to holding the Pledged
Collateral as bailee for the applicable Second Priority Agents for
purposes of perfecting the Lien held by such Second Priority Agents.
(d) The Credit Agent shall not have by reason of the Second
Priority Collateral Documents or this Agreement or any other document a
fiduciary relationship in respect of any Second Priority Agent or any
Second Priority Lender.
(e) Upon the Discharge of First Priority Claims, the Credit
Agent shall deliver to the Designated Second Priority Agent (or to the
Company if there is no Designated Second Priority Agent at the time)
the remaining Pledged Collateral (if any) together with any necessary
endorsements (or otherwise allow the Designated Second Priority Agent,
if applicable, to obtain control of such Pledged Collateral) or as a
court of competent jurisdiction may otherwise direct.
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5.6 When Discharge of First Priority Claims Deemed to Not Have
Occurred. If at any time after the Discharge of First Priority Claims has
occurred the Company designates any other First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder, then such Discharge of First Priority
Claims shall automatically be deemed not to have occurred for all purposes of
this Agreement (other than with respect to any actions taken prior to the date
of such designation as a result of the occurrence of such first Discharge of
First Priority Claims), and such other First-Lien Credit Facility shall
automatically be treated as the Senior Credit Agreement for all purposes of this
Agreement, including for purposes of the Lien priorities and rights in respect
of Common Collateral set forth herein. Upon receipt of notice of such
designation (including the identity of the new Credit Agent), the Second
Priority Agent shall promptly (i) enter into such documents and agreements
(including amendments or supplements to this Agreement) as the Company or such
new Credit Agent shall request in order to provide to the new Credit Agent the
rights of the Credit Agent contemplated hereby and (ii) deliver to the Credit
Agent the Pledged Collateral together with any necessary endorsements (or
otherwise allow such Credit Agent to obtain control of such Pledged Collateral).
5.7 Cooperation. Upon request of the Credit Agent from time to
time, each Second Priority Agent shall promptly disclose to the Collateral Agent
all information in its possession reasonably requested by the Credit Agent with
respect to the Second Priority Collateral, including the identity of the
Grantors and guarantors of any Second Priority Obligations and the description,
location and timing of perfection of Liens purported to be created on the Second
Priority Collateral to secure Second Priority Claims and shall promptly deliver
to the Credit Agent copies of the Second Priority Documents and other documents
relating to the Second Priority Collateral, such as Uniform Commercial Code
Financing Statements and record copies of Second Priority Collateral Documents.
SECTION 6. Insolvency or Liquidation Proceedings
6.1 Financing Issues. If the Company or any other Grantor
shall be subject to any Insolvency or Liquidation Proceeding and the Credit
Agent shall desire to permit the use of cash collateral or to permit the Company
or any other Grantor to obtain financing under Section 363 or Section 364 of
Title 11 of the United States Code or any similar Bankruptcy Law ("DIP
Financing"), then each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees that it will raise no objection to
such use of cash collateral or DIP Financing and will not request adequate
protection or any other relief in connection therewith (except to the extent
permitted by Section 6.3) and, to the extent the Liens securing the First
Priority Claims are subordinated or pari passu with such DIP Financing, will
subordinate its Liens in the Common Collateral to such DIP Financing (and all
Obligations relating thereto) on the same basis as the Liens securing the Second
Priority Claims are subordinated to First Priority Claims under this Agreement.
6.2 Relief from the Automatic Stay. Until the Discharge of
First Priority Claims has occurred, each Second Priority Agent, on behalf of
itself and the applicable Second Priority Lenders, agrees that none of them
shall seek relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding in respect of the Common Collateral, without the prior
written consent of the Credit Agent and the Required Lenders.
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6.3 Adequate Protection. Each Second Priority Agent, on behalf
of itself and the applicable Second Priority Lenders, agrees that none of them
shall contest (or support any other Person contesting) (a) any request by the
Credit Agent or the First Priority Lenders for adequate protection or (b) any
objection by the Credit Agent or the First Priority Lenders to any motion,
relief, action or proceeding based on the Credit Agent or the First Priority
Lenders claiming a lack of adequate protection. Notwithstanding the foregoing
contained in this Section 6.3, in any Insolvency or Liquidation Proceeding, (i)
if the First Priority Lenders (or any subset thereof) are 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 Bankruptcy Law, then each Second
Priority Agent, on behalf of itself or any of the applicable Second Priority
Lenders, may seek or request adequate protection in the form of a replacement
Lien on such additional collateral, which Lien, if any, shall be subordinated to
the Liens securing the First Priority Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Second Priority Claims are so subordinated to the First Priority Claims under
this Agreement, and (ii) in the event a Second Priority Agent, on behalf of
itself and the Second Priority Lenders, seeks or requests adequate protection
and such adequate protection is granted in the form of additional collateral,
then such Second Priority Agent, on behalf of itself or any of the applicable
Second Priority Lenders, agrees that the Credit Agent shall also be granted a
senior Lien on such additional collateral as security for the First Priority
Claims and any such DIP Financing and that any Lien on such additional
collateral securing the Second Priority Claims shall be subordinated to the
Liens on such collateral securing the First Priority Claims and any such DIP
Financing (and all Obligations relating thereto) and any other Liens granted to
the First Priority Lenders as adequate protection on the same basis as the other
Liens securing the Second Priority Claims are so subordinated to such First
Priority Claims under this Agreement.
6.4 No Waiver. Nothing contained herein shall prohibit or in
any way limit the Credit Agent or any First Priority Lender from objecting in
any Insolvency or Liquidation Proceeding or otherwise to any action taken by any
Second Priority Agent or any of the Second Priority Lenders, including the
seeking by any Second Priority Agent or any Second Priority Lender of adequate
protection (other than as allowed pursuant to Section 6.3 of this Agreement) or
the asserting by any Second Priority Agent or any Second Priority Lender of any
of its rights and remedies under the Second Priority Documents or otherwise.
6.5 Preference Issues. If any First Priority Lender is
required in any Insolvency or Liquidation Proceeding or otherwise to turn over
or otherwise pay to the estate of the Company or any other Grantor any amount (a
"Recovery"), then the First Priority Claims shall be reinstated to the extent of
such Recovery and the First Priority Lenders shall be entitled to receive
payment in full in cash (including, in the case of any letter of credit, cash
collateral therefor) with respect to all such recovered amounts. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto.
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SECTION 7. Reliance; Waivers; Etc.
7.1 Reliance. The consent by the First Priority Lenders to the
execution and delivery of the Second Priority Documents and the grant to any
Second Priority Agent on behalf of the applicable Second Priority Lenders of a
Lien on the Common Collateral and all loans and other extensions of credit made
or deemed made on and after the date hereof by the First Priority Lenders to the
Company or any Grantor shall be deemed to have been given and made in reliance
upon this Agreement. Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, acknowledges that it and such Second
Priority Lenders have, independently and without reliance on the Credit Agent or
any First Priority Lender, and based on documents and information deemed by them
appropriate, made their own credit analysis and decision to enter into the
Indenture, this Agreement and the transactions contemplated hereby and thereby
and they will continue to make their own credit decision in taking or not taking
any action under the Indenture or this Agreement.
7.2 No Warranties or Liability. Each Second Priority Agent, on
behalf of itself and the applicable Second Priority Lenders, acknowledges and
agrees that each of the Credit Agent and the First Priority Lenders have made no
express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability of
any of the First Priority Documents, the ownership of any Common Collateral or
the perfection or priority of any Liens thereon. The First Priority Lenders will
be entitled to manage and supervise their respective loans and extensions of
credit under the First Priority Documents as they may, in their sole discretion,
deem appropriate, and the First Priority Lenders may manage their loans and
extensions of credit without regard to any rights or interests that any Second
Priority Agent or any of the Second Priority Lenders have in the Common
Collateral or otherwise, except as otherwise provided in this Agreement. Neither
the Credit Agent nor any First Priority Lender shall have any duty to any Second
Priority Agent or any of the Second Priority Lenders to act or refrain from
acting in a manner which allows, or results in, the occurrence or continuance of
an event of default or default under any agreements with the Company or any
Subsidiary thereof (including the Second Priority Documents), regardless of any
knowledge thereof which they may have or be charged with.
7.3 No Waiver of Lien Priorities
(a) No right of the First Priority Lenders, the Credit Agent
or any of them to enforce any provision of this Agreement or any First
Priority Document shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or any
other Grantor or by any act or failure to act by any First Priority
Lender or the Credit Agent, or by any noncompliance by any Person with
the terms, provisions and covenants of this Agreement, any of the First
Priority Documents or any of the Second Priority Documents, regardless
of any knowledge thereof which the Credit Agent or the First Priority
Lenders, or any of them, may have or be otherwise charged with;
(b) Without in any way limiting the generality of the
foregoing paragraph, the First Priority Lenders, the Credit Agent and
any of them, may, at any time and from time to time, without the
consent of, or notice to, any Second Priority Agent or
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any Second Lien Lender, without incurring any liabilities to any Second
Priority Agent or any Second Lien Lender and without impairing or
releasing the Lien priorities and other benefits provided in this
Agreement (even if any right of subrogation or other right or remedy of
any Second Priority Agent or any Second Lien Lender is affected,
impaired or extinguished thereby) do any one or more of the following:
(i) change the manner, place or terms of payment or
change or extend the time of payment of, or amend, renew,
exchange, increase or alter, the terms of any of the First
Priority Claims or any Lien on any First Priority Collateral
or guaranty thereof or any liability of the Company or any
other Grantor, or any liability incurred directly or
indirectly in respect thereof (including any increase in or
extension of the First Priority Claims, without any
restriction as to the amount, tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange,
extend, modify or supplement in any manner any Liens held by
the Credit Agent or any of the First Priority Lenders, the
First Priority Claims or any of the First Priority Documents;
(ii) sell, exchange, release, surrender, realize
upon, enforce or otherwise deal with in any manner and in any
order any part of the First Priority Collateral or any
liability of the Company or any other Grantor to the First
Priority Lenders or the Credit Agent, or any liability
incurred directly or indirectly in respect thereof;
(iii) settle or compromise any First Priority Claim
or any other liability of the Company or any other Grantor or
any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including the
First Priority Claims) in any manner or order;
(iv) subordinate the priority of the First Priority
Lien held by any First Priority Lender to the priority of the
First Priority Lien held by any other Lender;
(v) enter into or amend any First Priority Document
in order to create or acquire additional collateral for the
First Priority Claims, to create and perfect security
interests in and Liens on collateral and to increase and
enhance the exercise of remedies thereunder and take actions
in furtherance of the foregoing; and
(vi) exercise or delay in or refrain from exercising
any right or remedy against the Company or any security or any
other Grantor or any other Person, elect any remedy and
otherwise deal freely with the Company, any other Grantor or
any First Priority Collateral and any security and any
guarantor or any liability of the Company or any other Grantor
to the First Priority Lenders or any liability incurred
directly or indirectly in respect thereof.
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(c) Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, also agrees that the First Priority
Lenders and the Credit Agent shall have no liability to any Second
Priority Agent or any Second Priority Lender, and each Second Priority
Agent, on behalf of itself and the applicable Second Priority Lenders,
hereby waives any claim against any First Priority Lender or the Credit
Agent, arising out of any and all actions which the First Priority
Lenders or the Credit Agent may take or permit or omit to take with
respect to: (i) the First Priority Documents, (ii) the collection of
the First Priority Claims or (iii) the foreclosure upon, or sale,
liquidation or other disposition of, any First Priority Collateral.
Each Second Priority Agent, on behalf of itself and the applicable
Second Priority Lenders, agrees that the First Priority Lenders and the
Credit Agent have no duty to them in respect of the maintenance or
preservation of the First Priority Collateral, the First Priority
Claims or otherwise; and
(d) Each Second Priority Agent, on behalf of itself and the
applicable Second Priority Lenders, agrees not to assert and hereby
waives, to the fullest extent permitted by law, any right to demand,
request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may
otherwise be available under applicable law or any other similar rights
a junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests,
agreements and obligations of the Credit Agent and the First Priority Lenders
and the Second Priority Agents and the Second Priority Lenders, respectively,
hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First
Priority Documents or any Second Priority Documents;
(b) any change in the time, manner or place of payment of, or
in any other terms of, all or any of the First Priority Claims or
Second Priority Claims, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by
course of conduct or otherwise, of the terms of the Senior Credit
Agreement or any other First Priority Document or of the terms of the
Indenture or any other Second Priority Document;
(c) any exchange of any security interest in any Common
Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise,
of all or any of the First Priority Claims or Second Priority Claims or
any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of the Company or any other Grantor; or
(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, the Company or any other
Grantor in respect of the First Priority Claims, or of any Second
Priority Agent or any Second Priority Lender in respect of this
Agreement.
