EXHIBIT 10.6
EXECUTION COPY
SUBORDINATION AND SECURITY AGREEMENT
SUBORDINATION AND SECURITY AGREEMENT dated as of June 28, 2006, among
Centerbrook Financial LLC, a limited liability company duly organized and
validly existing under the laws of the State of Delaware (the "BORROWER"),
Deutsche Bank Trust Company Americas, as Collateral Agent (in such capacity, the
"COLLATERAL AGENT") for the Secured Parties (as defined below), Citibank, N.A.,
as administrative agent (in such capacity, the "SENIOR AGENT") for the lenders
or other financial institutions or entities (the "SENIOR LENDERS") from time to
time parties, as lenders, to the Senior Loan Agreement referred to below and
Citibank, N.A., as administrative agent (in such capacity, the "MEZZANINE
AGENT") for the lenders or other financial institutions or entities (the
"MEZZANINE LENDERS") from time to time parties, as lenders, to the Mezzanine
Loan Agreement referred to below.
WHEREAS, the Borrower, the Senior Lenders and the Senior Agent are
parties to a Senior Loan Agreement dated as of June 28, 2006 (the "SENIOR LOAN
AGREEMENT"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Senior Lenders to the Borrower.
WHEREAS, the Borrower, the Mezzanine Lenders and the Mezzanine Agent
are parties to a Mezzanine Loan Agreement dated as of June 28, 2006 (the
"MEZZANINE LOAN AGREEMENT" and, together with the Senior Loan Agreement, the
"LOAN DOCUMENTS"), providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Mezzanine Lenders to the Borrower.
WHEREAS, each of the Mezzanine Agent and the Mezzanine Lenders has
agreed to subordinate the Mezzanine Obligations (as defined below) to the Senior
Obligations (as defined below) in the manner and to the extent hereinafter
provided.
NOW, THEREFORE, to induce (i) the Lenders to enter into the Loan
Documents and to extend credit thereunder, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower has agreed to pledge and grant to the Collateral Agent, for the benefit
of the Secured Parties, a security interest in the Collateral (as defined below)
as security for the Secured Obligations (as so defined) and (ii) the Senior
Lenders to enter into the Senior Loan Agreement and to extend credit thereunder,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Mezzanine Agent has agreed (on its behalf and
on behalf of the Mezzanine Lenders) to enter into this Agreement. Accordingly,
the parties hereto agree as follows:
Section 1. DEFINITIONS, ETC.
1.01 TERMS GENERALLY. Terms used herein and not otherwise defined
herein are used herein as defined in the Senior Loan Agreement or, at any time
after the Senior Obligations Payment Date, the Mezzanine Loan Agreement.
1.02 CERTAIN UCC TERMS. As used herein, the terms "ACCOUNT",
"ACCESSION", "AS-EXTRACTED COLLATERAL", "CHATTEL PAPER", "COMMERCIAL TORT
CLAIMS", "COMMODITY ACCOUNT", "COMMODITY CONTRACT", "DEPOSIT ACCOUNT",
"DOCUMENT", "ELECTRONIC CHATTEL PAPER", "EQUIPMENT", "FIXTURE", "GENERAL
INTANGIBLE", "GOODS", "INSTRUMENT", "INVENTORY", "INVESTMENT PROPERTY",
"LETTER-OF-CREDIT RIGHT", "PROCEEDS" and "PROMISSORY NOTE" have the respective
meanings set forth in Article 9 of the NYUCC, and the terms "CERTIFICATED
SECURITY", "FINANCIAL ASSET", "INDORSED", "SECURITIES ACCOUNT", "SECURITY",
"SECURITY ENTITLEMENT" and "UNCERTIFICATED SECURITY" have the respective
meanings set forth in Article 8 of the NYUCC.
1.03 ADDITIONAL DEFINITIONS. In addition, as used herein:
"AGENTS" means, collectively, the Senior Agent and the Mezzanine
Agent.
"BORROWER" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
"COLLATERAL" has the meaning ascribed thereto in Section 3.
"COLLATERAL AGENT" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
"CONTROLLING PARTY" means the Senior Agent or, at any time after the
Senior Obligations Payment Date, the Mezzanine Agent.
"COPYRIGHT COLLATERAL" means all Copyrights, whether now owned or
hereafter acquired by the Borrower, and including the right to recover for
all past, present and future infringements thereof, and all other rights of
any kind whatsoever accruing thereunder or pertaining thereto.
"COPYRIGHTS" means all copyrights, copyright registrations and
applications for copyright registrations, including all renewals and
extensions thereof.
"ENFORCEMENT ACTION" shall mean (a) to take from or for the account of
the Borrower or any Affiliate of the Borrower, by set-off or in any other
manner, the whole or any part of any moneys which may now or hereafter be
owing by the Borrower with respect to the Mezzanine Obligations, (b) to xxx
for payment of, or to initiate or participate with others in any suit,
action or proceeding against the Borrower or any Affiliate thereof to (i)
enforce payment of or to collect the whole or any part of the Mezzanine
Obligations or (ii) commence judicial enforcement of any of the rights and
remedies under the Mezzanine Loan Agreement or this Agreement or applicable
law with respect to the Mezzanine Obligations, (c) to accelerate the
Mezzanine Obligations, (d) to initiate or commence an Insolvency Proceeding
with respect to the Borrower, (e) to exercise any put option or to cause
the Borrower or any Affiliate thereof to honor any redemption or make any
prepayment under the Mezzanine Loan Agreement or this Agreement or (f) take
any action under the provisions of any state or Federal law, including the
Uniform Commercial Code, or under any contract or agreement, to enforce,
foreclose upon, take possession of or sell any property or assets of the
Borrower or any Affiliate thereof.
"EQUITY COLLATERAL" means, collectively, (i) the Pledged Equity and
(ii) all shares, securities, moneys or property representing a dividend on
any of the Pledged Equity, or representing a distribution or return of
capital upon or in respect of the Pledged Equity, or resulting from a
split-up, revision, reclassification or other like change of the Pledged
Equity or otherwise received in exchange therefor, and any subscription
warrants, rights or options issued to the holders of, or otherwise in
respect of, the Pledged Equity.
"EVENT OF DEFAULT" means an "Event of Default" as defined in the
Senior Loan Agreement or, at any time after the Senior Obligations Payment
Date, an "Event of Default" as defined in the Mezzanine Loan Agreement.
"INSOLVENCY PROCEEDING" means, as to any Person, any of the following:
(i) any case or proceeding with respect to such Person under the United
States Bankruptcy Code or any other Federal, State or foreign bankruptcy,
insolvency, reorganization or other law affecting creditors' rights or any
other or similar proceedings seeking any stay, reorganization, arrangement,
composition or readjustment of the obligations and indebtedness of such
Person or (ii) any proceeding seeking the appointment of any trustee,
receiver, liquidator, custodian or other insolvency official with similar
powers with respect to such Person or any of its assets or (iii) any
proceeding for liquidation, dissolution or other winding up of the business
of such Person or (iv) any assignment for the benefit of creditors or any
marshalling of assets of such Person.
"INTELLECTUAL PROPERTY" means, collectively, all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a) all
inventions, processes, production methods, proprietary information,
know-how and trade secrets, (b) all licenses or user or other agreements
granted to the Borrower with respect to any of the foregoing, in each case
whether now or hereafter owned or used, (c) all information, customer
lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery software
and programs, (d) all field repair data, sales data and other information
relating to sales or service of products now or hereafter manufactured, (e)
all accounting information and all media in which or on which any
information or knowledge or data or records may be recorded or stored and
all computer programs used for the compilation or printout of such
information, knowledge, records or data, (f) all licenses, consents,
permits, variances, certifications and approvals of governmental agencies
now or hereafter held by the Borrower, and (g) all causes of action, claims
and warranties now or hereafter owned or acquired by the Borrower in
respect of any of the items listed above.
"LENDERS" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
"LOAN DOCUMENTS" has the meaning ascribed thereto in the second
"Whereas" paragraph of this Agreement.
"MEZZANINE AGENT" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
2
"MEZZANINE LENDERS" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
"MEZZANINE LOAN AGREEMENT" has the meaning ascribed thereto in the
second "Whereas" paragraph of this Agreement.
"MEZZANINE LOANS" means the loans made by the Mezzanine Lenders to the
Borrower under the Mezzanine Loan Agreement.
"MEZZANINE OBLIGATIONS" means, collectively, the principal of and
interest on the Mezzanine Loans and all other amounts from time to time
owing to the Mezzanine Lenders or the Mezzanine Agent by the Borrower under
the Mezzanine Loan Agreement and this Agreement, including any such amounts
arising after the commencement of any Insolvency Proceeding with respect to
the Borrower (and including the payment of interest, fees and expenses
which would accrue and become due but for the commencement of such
Insolvency Proceeding whether or not such interest, fees or expenses are
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding).
"NYUCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
"PATENT COLLATERAL" means all Patents, whether now owned or hereafter
acquired by the Borrower, and all income, royalties, damages and payments
now or hereafter due and/or payable under and with respect thereto,
including damages and payments for past or future infringements thereof,
the right to xxx for past, present and future infringements thereof, and
all rights corresponding thereto throughout the world.
"PATENTS" means all patents and patent applications, including the
inventions and improvements described and claimed therein together with the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof.
"PLEDGED EQUITY" means all shares of capital stock, or partnership and
other ownership interest, of whatever class or character of any Person, now
or hereafter owned by the Borrower, and all certificates evidencing the
same.
"SECURED OBLIGATIONS" means, collectively, the Senior Obligations and
the Mezzanine Obligations.
"SECURED PARTIES" means, collectively, the Collateral Agent, the
Senior Agent, the Senior Lenders, the Mezzanine Agent and the Mezzanine
Lenders.
"SENIOR AGENT" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
"SENIOR LENDERS" has the meaning ascribed thereto in the introductory
paragraph of this Agreement.
"SENIOR LOAN AGREEMENT" has the meaning ascribed thereto in the first
"Whereas" paragraph of this Agreement.
"SENIOR LOANS" means the loans made by the Senior Lenders to the
Borrower under the Senior Loan Agreement.
"SENIOR OBLIGATIONS" means, collectively, the principal of and
interest on the Senior Loans and all other amounts from time to time owing
to the Senior Lenders or the Senior Agent by the Borrower under the Senior
Loan Agreement and the other Credit Documents, including any such amounts
arising after the commencement of any Insolvency Proceeding with respect to
the Borrower (and including the payment of interest, fees and expenses
which would accrue and become due but for the commencement of such
Insolvency Proceeding whether or not such interest, fees or expenses are
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding).
"SENIOR OBLIGATIONS PAYMENT DATE" means the date on which all of the
Senior Obligations shall have been paid in full and all of the Commitments
of the Senior Lenders under the Senior Loan Agreement shall have been
terminated, PROVIDED that, if, after the payment in full of the Senior
Obligations, the Senior Agent or any Senior Lender is for any reason
required to disgorge and surrender all or any part of such payments to any
Person for any reason, then the Senior Obligations shall be reinstated to
the extent of such disgorgement or surrender and the Senior Obligations
Payment Date shall be deemed not to have occurred.
3
"TRADEMARK COLLATERAL" means all Trademarks, whether now owned or
hereafter acquired by the Borrower, together, in each case, with the
product lines and goodwill of the business connected with the use of, and
symbolized by, each such trade name, trademark and service xxxx.
"TRADEMARKS" means all trade names, trademarks and service marks,
logos, trademark and service xxxx registrations, and applications for
trademark and service xxxx registrations, including all renewals of
trademark and service xxxx registrations.
1.04 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 (a) 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 (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
permitted assigns, (c) 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, (d) all references herein to Annexes
and Sections shall be construed to refer to Annexes to and Sections of this
Agreement and (e) references to any law, constitution, statute, treaty,
regulation, rule or ordinance, including any section or other part thereof
(each, for purposes of this Section 1.04, a "law"), shall refer to that law as
amended, supplemented or otherwise modified from time to time and shall include
any successor law.
Section 2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Secured Parties and the Collateral Agent that:
(a) This Agreement creates a valid and continuing security interest in
the Collateral in favor of the Collateral Agent for the benefit of the
Secured Parties, which security interest is perfected and prior to all
other Liens (except for Liens expressly permitted by Section 6.02 of the
Senior Loan Agreement or, at any time after the Senior Obligations Payment
Date, Section 6.02 of the Mezzanine Loan Agreement), and is enforceable as
such as against creditors of and purchasers from the Borrower.
(b) The Borrower has good and marketable title and is the owner of
each item of Collateral free and clear of any Liens except for Liens
expressly permitted by Section 6.02 of the Senior Loan Agreement or, at any
time after the Senior Obligations Payment Date, Section 6.02 of the
Mezzanine Loan Agreement.
(c) The Borrower has full right, and has received all consents and
approvals required by the terms of each item of Collateral, to grant a
security interest in and assign and pledge its rights in such item of
Collateral to the Collateral Agent.
(d) The Borrower has caused the filing of appropriate financing
statements in the proper filing offices in the appropriate jurisdictions
under applicable law in order to perfect the security interest in the
portion of the Collateral pledged to the Collateral Agent hereunder that
may be perfected by the filing of Uniform Commercial Code financing
statements.
(e) The Borrower has not authorized the filing of and is not aware of
any financing statements against the Borrower other than any financing
statement (a) relating to the security interest granted to the Collateral
Agent hereunder, (b) that has been terminated, (c) relating to the security
interest granted under the CDS Security Agreement or (d) that names the
Collateral Agent as the secured party. On the date of this Agreement, the
Borrower is not aware of any judgment, Pension Benefit Guaranty Corporation
(or any successor trustee) or tax Lien filings against the Borrower.
(f) Each of the Collection Account, the Reserve Account and the
Expense Account is a Securities Account and the Borrower has delivered to
the Collateral Agent a fully executed agreement pursuant to which the
securities intermediary for each such account has agreed to comply with all
instructions originated by the Collateral Agent directing disposition of
the funds in such account without further consent by the Borrower. The
Accounts (as defined in the Operating Agreement) are not in the name of any
Person other than the Borrower or the Collateral Agent. The Borrower has
not consented to the securities intermediary of any such Account to comply
with instructions of any Person other than the Collateral Agent.
4
(g) All original executed copies of each Instrument that constitutes
or evidences the Collateral have been delivered to the Collateral Agent, to
the extent received by the Borrower. None of such Instruments that
constitute or evidence the Collateral has any marks or notations indicating
that they are then pledged to any Person other than the Collateral Agent.
(h) All Certificated Securities that constitute or evidence the
Collateral have been delivered to the Collateral Agent, to the extent
received by the Borrower, registered in the name of the Collateral Agent or
indorsed to the Collateral Agent.
(i) The Borrower has caused all Uncertificated Securities that
constitute or evidence the Collateral to be either registered in the name
of the Collateral Agent or credited to one of the Accounts.
(j) All Pledged Equity in which the Borrower shall grant a security
interest pursuant to Section 3 will (i) be duly authorized, validly
existing, fully paid and non-assessable (in the case of any equity interest
in a corporation), (ii) constitute legal, valid and binding obligations of
the Borrower (in the case of any equity interest in a partnership) and
(iii) be duly issued and outstanding (in the case of any equity interest in
any other entity), and none of such Pledged Equity is or will be subject to
any contractual restriction, or any restriction under the charter, by-laws,
partnership agreement or other organizational instrument of the respective
issuer of such Pledged Equity, upon the transfer of such Pledged Equity
(except for any such restriction contained herein or in the Loan Documents,
or under such organizational instruments).
(k) Annex 1 sets forth a complete and correct list of all copyright
registrations, patents, patent applications, trademark registrations and
applications owned by the Borrower on the date hereof. To the Borrower's
knowledge, (i) there is no material violation by others of any right of the
Borrower with respect to any of its Copyrights, Patents or Trademarks and
(ii) the Borrower is not infringing in any material respect upon any
Copyright, Patent or Trademark of any other Person and no material
proceedings alleging such infringement have been instituted or are pending
against the Borrower.
Section 3. COLLATERAL. As collateral security for the payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
Secured Obligations, the Borrower hereby pledges and grants to the Collateral
Agent, for the benefit of the Secured Parties as hereinafter provided, a
security interest in all of the Borrower's right, title and interest in, to and
under the following property, in each case whether tangible or intangible,
wherever located, and whether now owned by the Borrower or hereafter acquired
and whether now existing or hereafter coming into existence (all of the property
described in this Section 3 being collectively referred to herein as
"COLLATERAL"):
(a) all Accounts:
(b) all As-Extracted Collateral;
(c) all Chattel Paper;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles;
(i) all Goods;
(j) the Equity Collateral;
(k) all Instruments, including all Promissory Notes;
(l) all Intellectual Property;
(m) all Inventory;
5
(n) all Investment Property, including all Securities, all Securities
Accounts and all Security Entitlements with respect thereto and Financial
Assets carried therein, and all Commodity Accounts and Commodity Contracts;
(o) all Letter-of-Credit Rights;
(p) all Commercial Tort Claims;
(q) all other tangible and intangible personal property whatsoever of
the Borrower; and
(r) all Proceeds of any of the Collateral, all Accessions to and
substitutions and replacements for, any of the Collateral, and all
offspring, rents, profits and products of any of the Collateral, and, to
the extent related to any Collateral, all books, correspondence, credit
files, records, invoices and other papers (including all tapes, cards,
computer runs and other papers and documents in the possession or under the
control of the Borrower or any computer bureau or service company from time
to time acting for the Borrower);
IT BEING UNDERSTOOD, HOWEVER, that in no event shall the security interest
granted under this Section 3 attach to any lease, license, contract, property
rights or agreement to which the Borrower is a party (or to any of its rights or
interests thereunder) if the grant of such security interest would constitute or
result in either (i) the abandonment, invalidation or unenforceability of any
right, title or interest of the Borrower therein or (ii) in a breach or
termination pursuant to the terms of, or a default under, any such lease,
license, contract, property rights or agreement (other than to the extent that
any such term would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the NYUCC).
Section 4. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant
of the pledge and security interest pursuant to Section 3, the Borrower hereby
agrees with each Secured Party and the Collateral Agent as follows:
4.01 DELIVERY AND OTHER PERFECTION. The Borrower shall:
(a) if any of the Equity Collateral, Investment Property or Financial
Assets pledged by the Borrower under Section 3 are received by the
Borrower, forthwith either (x) deliver to the Collateral Agent such Equity
Collateral, Investment Property and Financial Asset (together with the
certificates or instruments for any such Equity Collateral, Investment
Property or Financial Assets duly Indorsed in blank or accompanied by such
instruments of assignment and transfer in such form and substance as the
Collateral Agent may request), all of which thereafter shall be held by the
Collateral Agent, pursuant to the terms of this Agreement, as part of the
Collateral or (y) take such other action as the Collateral Agent shall
reasonably deem necessary or appropriate to duly record or otherwise
perfect the Lien created hereunder in such Equity Collateral, Investment
Property and Financial Assets pursuant to Section 3;
(b) deliver and pledge to the Collateral Agent any and all
Instruments, Indorsed and/or accompanied by such instruments of assignment
and transfer in such form and substance as the Collateral Agent may
request;
(c) give, execute, deliver, file, record, authorize or obtain all such
financing statements, notices, instruments, documents, agreements or
consents or other papers, and take such other actions, as may be necessary
or desirable (in the judgment of the Collateral Agent) to create, preserve,
perfect or validate the security interest granted pursuant hereto or to
enable the Collateral Agent to exercise and enforce its rights hereunder
with respect to such pledge and security interest, including, following the
occurrence and during the continuance of an Event of Default, causing any
or all of the Equity Collateral to be transferred of record into the name
of the Collateral Agent or its nominee (and the Collateral Agent agrees
that if any Equity Collateral is transferred into its name or the name of
its nominee, the Collateral Agent will thereafter promptly give to the
Borrower copies of any notices and communications received by it with
respect to the Equity Collateral pledged by the Borrower hereunder);
(d) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Collateral Agent may reasonably require in order to reflect
the security interests granted by this Agreement;
(e) permit representatives of the Collateral Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Collateral Agent to be present at the
Borrower's place of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies of any notices
or communications received by the Borrower with respect to the Collateral,
all in such manner as the Collateral Agent may require; and
6
(f) execute and deliver and cause to be filed such continuation
statements, and do such other acts and things, as may be necessary to
maintain the perfection of the security interest granted pursuant hereto.
4.02 OTHER FINANCING STATEMENTS AND LIENS. Except as otherwise
permitted under Section 6.02 of the Senior Loan Agreement or, at any time after
the Senior Obligations Payment Date, Section 6.02 of the Mezzanine Loan
Agreement, without the prior written consent of the Collateral Agent (granted at
the direction of the Controlling Party), the Borrower shall not (a) file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Collateral Agent is not named as the sole secured party
for the benefit of the Secured Parties, or (b) cause or permit any other Person
other than the Collateral Agent to have "control" (as defined in Section 9-104,
9-105, 9-106 or 9-107 of the NYUCC) of any Deposit Account, Electronic Chattel
Paper, Investment Property or Letter-of-Credit Right constituting part of the
Collateral.
4.03 PRESERVATION OF RIGHTS. The Collateral Agent shall not be
required to take steps necessary to preserve any rights against prior parties to
any of the Collateral.
4.04 SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.
(a) SPECIAL PROVISIONS RELATING TO EQUITY COLLATERAL.
(i) So long as no Event of Default shall have occurred and be
continuing, the Borrower shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Equity
Collateral for all purposes not inconsistent with the terms of this
Agreement, the Loan Documents or any other instrument or agreement referred
to herein or therein, PROVIDED that the Borrower agrees that it will not
vote the Equity Collateral in any manner that is inconsistent with the
terms of this Agreement, the Loan Documents or any such other instrument or
agreement, and the Collateral Agent shall execute and deliver to the
Borrower or cause to be executed and delivered to the Borrower all such
proxies, powers of attorney and other orders, and all such instruments,
without recourse, as the Borrower may reasonably request for the purpose of
enabling the Borrower to exercise the rights and powers which they are
entitled to exercise pursuant to this Section 4.04(a)(i).
(ii) Unless and until an Event of Default shall have occurred and
be continuing, the Borrower shall be entitled to receive and retain any
dividends, distributions or proceeds on the Equity Collateral paid in cash
out of earned surplus.
(b) INTELLECTUAL PROPERTY.
(i) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under Section 4.05 at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, the Borrower hereby grants to the Collateral Agent, to the
extent assignable, an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to the Borrower) to use,
assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by the Borrower, wherever the same may be located,
including in such license reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.
(ii) Notwithstanding anything contained herein to the contrary,
but subject to the provisions of Section 6.03 of the Senior Loan Agreement
(or, at any time after the Senior Obligations Payment Date, Section 6.03 of
the Mezzanine Loan Agreement) that limit the rights of the Borrower to
dispose of its property, so long as no Event of Default shall have occurred
and be continuing, the Borrower will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of
the business of the Borrower. In furtherance of the foregoing, unless an
Event of Default shall have occurred and be continuing, the Collateral
Agent shall from time to time, upon the request of the Borrower, execute
and deliver any instruments, certificates or other documents, in the form
so requested, that the Borrower shall have certified are appropriate (in
its judgment) to allow it to take any action permitted above (including
relinquishment of the license provided pursuant to clause (i) immediately
above as to any specific Intellectual Property). Further, upon the payment
in full of all of the Secured Obligations and cancellation or termination
of the commitments under the Loan Documents or earlier expiration of this
Agreement or release of the Collateral, the Collateral Agent shall grant
back to the Borrower the license granted pursuant to clause (i) immediately
above. The exercise of rights and remedies under Section 4.05 by the
Collateral Agent shall not terminate the rights of the holders of any
licenses or sublicenses theretofore granted by the Collateral Agent in
accordance with the first sentence of this clause (ii).
7
4.05 EVENTS OF DEFAULT, ETC. During the period during which an Event
of Default shall have occurred and be continuing, and subject to the terms and
conditions set forth in Articles XII and XIII of the Operating Agreement:
(a) the Collateral Agent (acting at the direction of the
Controlling Party) may appoint a special manager to manage the Collateral;
(b) the Borrower shall, at the request of the Collateral Agent
(acting at the direction of the Controlling Party), assemble the Collateral
owned by it at such place or places, reasonably convenient to the
Collateral Agent and the Borrower, designated in such request;
(c) the Collateral Agent (acting at the direction of the
Controlling Party) may make any reasonable compromise or settlement deemed
desirable with respect to any of the Collateral and may extend the time of
payment, arrange for payment in installments, or otherwise modify the terms
of, any of the Collateral;
(d) the Collateral Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the NYUCC
(whether or not the Uniform Commercial Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including the right, to the maximum extent
permitted by law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Collateral Agent were the
sole and absolute owner thereof (and the Borrower agrees to take all such
action as may be appropriate to give effect to such right);
(e) the Collateral Agent (acting at the direction of the
Controlling Party) may, in its name or in the name of the Borrower or
otherwise, demand, xxx for, collect or receive any money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so; and
(f) the Collateral Agent (acting at the direction of the
Controlling Party) may, upon ten Business Days' prior written notice to the
Borrower of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the possession,
custody or control of the Collateral Agent, the holders of the Secured
Obligations or any of their respective agents, sell, lease, assign or
otherwise dispose of all or any part of such Collateral, at such place or
places as the Collateral Agent (acting at the direction of the Controlling
Party) deems best, and for cash or for credit or for future delivery
(without thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the
Collateral Agent or any holder of any Secured Obligation or anyone else may
be the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted
by law, at any private sale) and thereafter hold the same absolutely, free
from any claim or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of the Borrower, any such demand,
notice and right or equity being hereby expressly waived and released. In
the event of any sale, assignment, or other disposition of any of the
Trademark Collateral, the goodwill connected with and symbolized by the
Trademark Collateral subject to such disposition shall be included. The
Collateral Agent (acting at the direction of the Controlling Party) may,
without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.05, including by virtue of the exercise of the license granted to the
Collateral Agent in Section 4.04(b), shall be applied in accordance with Section
4.09.
The Borrower recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Borrower acknowledges that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agree
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the respective issuer thereof to register
it for public sale.
The Borrower agrees that to the extent the Collateral Agent is
required by applicable law to give reasonable prior notice of any sale or other
disposition of any Collateral, ten Business Days' notice shall be deemed to
constitute reasonable prior notice.
Notwithstanding anything contained herein to the contrary, at no
time prior to the Senior Obligations Payment Date shall the Collateral Agent
sell all or any part of the Collateral without the consent of the Mezzanine
8
Agent unless the aggregate amount of the proceeds received from any such sale
shall be sufficient to pay in full all of the Senior Obligations and the
Mezzanine Obligations.
4.06 DEFICIENCY. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 4.05 are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Secured Obligations, the Borrower shall remain liable for any deficiency.
4.07 LOCATIONS; NAMES. Without at least 30 days' prior written notice
to the Collateral Agent, the Borrower shall not (i) change its location (as
defined in Section 9-307 of the Uniform Commercial Code), (ii) change its name
or (iii) agree to or authorize any modification of the terms of any item of
Collateral that would result in a change thereof from one Uniform Commercial
Code category to another such category (such as from a General Intangible to
Investment Property), if the effect thereof would be to result in a loss of
perfection of, or diminution of priority for, the security interests created
hereunder in such item of Collateral, or the loss of control (within the meaning
of Section 9-104, 9-105, 9-106 or 9-107 of the NYUCC) over such item of
Collateral.
4.08 PRIVATE SALE. The Collateral Agent and the Secured Parties shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 4.05 conducted in a
commercially reasonable manner. The Borrower hereby waives any claims against
the Collateral Agent or any Secured Party arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or was less than
the aggregate amount of the Secured Obligations, even if the Collateral Agent
accepts the first offer received and does not offer the Collateral to more than
one offeree.
4.09 APPLICATION OF PROCEEDS. The Proceeds of any collection, sale or
other realization of all or any part of the Collateral pursuant hereto, and any
other cash at the time held by the Collateral Agent under Section 3 or this
Section 4, shall be deposited in the Collection Account or the Reserve Account,
as applicable, and applied by the Collateral Agent in accordance with Sections
13.1 and 13.3 of the Operating Agreement.
4.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this Agreement to the Collateral Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Collateral Agent is hereby appointed the attorney-in-fact of the
Borrower for the purpose of carrying out the provisions of this Section 4 and
taking any action and executing any instruments that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
as attorney-in-fact is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, so long as the Collateral Agent shall
be entitled under this Section 4 to make collections in respect of the
Collateral, the Collateral Agent shall have the right and power to receive,
Indorse and collect all checks made payable to the order of the Borrower
representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
4.11 PERFECTION AND RECORDATION. Except as otherwise provided below,
prior to or concurrently with the execution and delivery of this Agreement, the
Borrower shall
(a) file such financing statements and other documents in such offices
as the Collateral Agent may request to perfect the security interests
granted by Section 3 of this Agreement,
(b) execute, deliver and record such short form security agreements
relating to Collateral consisting of the Trademarks as the Collateral Agent
may reasonably request, and
(c) enter into such account control agreements (and obtain the written
agreement with respect thereto from the applicable financial institution
where each Deposit Account or Securities Account is located) as may be
necessary to perfect the security interests granted by Section 3 of this
Agreement with respect to all Deposit Accounts and Securities Accounts.
Without limiting the foregoing, the Borrower consents that Uniform Commercial
Code financing statements may be filed describing the Collateral as "all assets"
of the Borrower, PROVIDED that no such description shall be deemed to modify the
description of Collateral set forth in Section 3.
4.12 TERMINATION. When all Secured Obligations shall have been paid in
full and the commitments of the Lenders under the Loan Documents shall have
expired or been terminated, this Agreement shall terminate, and the Collateral
Agent shall forthwith cause to be assigned, transferred and delivered, against
receipt but without any recourse, warranty or representation whatsoever, any
9
remaining Collateral and money received in respect thereof, to or on the order
of the Borrower and to be released and canceled all licenses and rights referred
to in Section 4.04(b). The Collateral Agent shall also, at the expense of the
Borrower, execute and deliver to the Borrower upon such termination such Uniform
Commercial Code termination statements and such other documentation as shall be
reasonably requested by the Borrower to effect the termination and release of
the Liens on the Collateral.
4.13 FURTHER ASSURANCES. The Borrower agrees that, from time to time
upon the written request of the Collateral Agent, the Borrower will execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order fully to effect the purposes of
this Agreement. The Collateral Agent shall release any Lien covering any asset
that has been disposed of pursuant to Section 6.03 of the Senior Loan Agreement
or, at any time after the Senior Obligations Payment Date, Section 6.03 of the
Mezzanine Loan Agreement.
Section 5. THE COLLATERAL AGENT.
Each of the Agents hereby irrevocably appoints the Collateral Agent as
its agent and authorizes the Collateral Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Collateral Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.
The Collateral Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a "Default" under any Loan Document
has occurred and is continuing, (b) the Collateral Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Collateral Agent is required to exercise in writing as directed by the
Controlling Party, and (c) except as expressly set forth herein, the Collateral
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower that is
communicated to or obtained by the bank serving as Collateral Agent or any of
its Affiliates in any capacity. The Collateral Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Controlling Party or in the absence of its own gross negligence or wilful
misconduct. The Collateral Agent shall be deemed not to have knowledge of any
Event of Default unless and until written notice thereof is given to the
Collateral Agent by the Borrower or a Secured Party, and the Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement or any other agreement, instrument or document.
If, with respect to a proposed action to be taken by it, the
Collateral Agent shall reasonably conclude in good faith that the provisions of
this Agreement relating to the functions or responsibilities or discretionary
powers of the Collateral Agent are or may be ambiguous or inconsistent, the
Collateral Agent shall notify the Secured Parties, identifying the proposed
action and the provisions that it considers are or may be ambiguous or
inconsistent, and may decline either to perform such function or responsibility
or to exercise such discretionary power unless it has received the written
confirmation of the Controlling Party that the Controlling Party concurs in the
circumstances that the action proposed to be taken by the Collateral Agent is
consistent with the terms of this Agreement or is otherwise appropriate. The
Collateral Agent shall be fully protected in acting, or refraining from acting,
under this Agreement in accordance with such confirmation of the Controlling
Party in this respect, and such confirmation shall be binding upon the
Collateral Agent and upon the Secured Parties.
The Collateral Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Collateral Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying
thereon. The Collateral Agent may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Collateral Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Collateral Agent. The Collateral Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their respective
Related Parties. The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of the Collateral Agent
and any such sub-agent.
The Collateral Agent's sole duties with respect to the custody,
safekeeping and the preservation of the Collateral in its possession shall be to
deal with such Collateral in accordance with the provisions of this Agreement
and in the same manner as it deals with similar property for its own account.
Except to the extent otherwise instructed in accordance with the terms of this
Agreement and as otherwise provided hereunder, the Collateral Agent shall not be
liable for failure to demand, collect or realize upon any of the Collateral, and
the Collateral Agent shall not be under any obligation to sell or otherwise
10
dispose of any of the Collateral or to take any other action whatsoever with
respect to the Collateral upon the request of the Borrower. The rights of the
Collateral Agent and the Secured Parties hereunder as against the Borrower shall
not be conditioned or contingent upon the pursuit by the Collateral Agent or the
Secured Parties of any right, power or remedy against the Borrower or against
any other Person which may be or become liable in respect of all or any part of
the Collateral.
Subject to the appointment and acceptance of a successor Collateral
Agent as provided in this paragraph, the Collateral Agent may resign at any time
by notifying the Agents and the Borrower. Upon any such resignation, the
Controlling Party shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Controlling Party and shall have accepted such appointment within 30 days after
the retiring Collateral Agent gives notice of its resignation, then the retiring
Collateral Agent may, on behalf of the Secured Parties, appoint a successor
Collateral Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank. Upon the acceptance of its appointment as
Collateral Agent hereunder by a successor, such successor shall succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a
successor Collateral Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Collateral Agent's resignation hereunder, the provisions of this Section shall
continue in effect for the benefit of such retiring Collateral Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Collateral Agent.
Section 6. SUBORDINATION.
6.01 SUBORDINATION OF MEZZANINE OBLIGATIONS. The Borrower, for itself
and its successors and assigns, covenants and agrees, and the Mezzanine Agent,
on behalf of each Mezzanine Lender (including each subsequent Mezzanine Lender),
likewise covenants and agrees, that the Mezzanine Obligations, and the payment
from whatever source of the principal of, and interest on, the Mezzanine Loans,
are hereby expressly made subordinate and junior and subject in right of payment
to the prior payment in full in cash of all Senior Obligations to the extent and
in the manner set forth in Section 13.3 of the Operating Agreement. At no time
prior to the Senior Obligations Payment Date shall the Mezzanine Agent or any
Mezzanine Lender give instructions or directions to the Collateral Agent and, in
any event, the Collateral Agent shall not comply with any instructions or
directions given to it by the Mezzanine Agent or any Mezzanine Lender until the
Senior Obligations Payment Date shall have occurred. Each holder of the Senior
Obligations, whether now outstanding or hereafter created, incurred, assumed or
guaranteed, shall be deemed to have acquired its Senior Obligations in reliance
upon the provisions contained in this Agreement.
If (a) the maturity of the Senior Loans shall have been accelerated
pursuant to the provisions of Article VII of the Senior Loan Agreement, (b) the
maturity of the Mezzanine Loans shall have been accelerated pursuant to the
provisions of Article VII of the Mezzanine Loan Agreement, (c) no Event of
Default (as defined in the Mezzanine Loan Agreement) shall have occurred and be
continuing on the date of such acceleration other than by reason of an Event of
Default (as defined in the Mezzanine Loan Agreement) based upon the acceleration
of the maturity of the Senior Loans, (d) after the date of such acceleration the
Senior Lenders shall duly rescind and annul such acceleration of the maturity of
the Senior Loans previously effected by them in accordance with the terms of the
Senior Loan Agreement, and (e) on the date of such rescission and annulment, no
Event of Default (as defined in the Mezzanine Loan Agreement) shall have
occurred and be continuing other than by reason of an Event of Default (as
defined in the Mezzanine Loan Agreement) based upon the acceleration of the
maturity of the Senior Loans (including the failure to pay principal of and
interest on the Mezzanine Loans that becomes due solely as a result of such
acceleration of the maturity of the Mezzanine Loans), then such acceleration of
the maturity of the Mezzanine Loans shall thereupon be deemed rescinded and
annulled without action on the part of the Mezzanine Agent or any Mezzanine
Lender, but such rescission and annulment shall not affect the rights of any
Mezzanine Lender with respect to any subsequent or other default or Event of
Default that may occur.
In the event that, notwithstanding the foregoing provisions of this
Section 6, any Mezzanine Lender shall have received any payment prohibited by
the foregoing provisions of this Section 6, including any such payment arising
out of the exercise by any Mezzanine Lender of a right of set-off or
counterclaim, any such payment received by reason of other indebtedness of the
Borrower being subordinated to the Mezzanine Loans and any such payment received
by reason of any Mezzanine Lender exercising any of their rights with respect to
the Collateral, then, and in any such event, such payment shall be held in trust
for the benefit of, and shall be immediately paid over or delivered to, the
Collateral Agent, to be deposited into the Collection Account or Reserve
Account, as applicable, and paid in accordance with Sections 13.1 and 13.3 of
the Operating Agreement.
The Mezzanine Lenders agree not to initiate, prosecute or participate
in any claim, action or other proceeding challenging the enforceability,
validity, perfection or priority of the Senior Obligations or any liens and
security interests securing the Senior Obligations or any actions of the Senior
Agent, the Senior Lenders or the Collateral Agent (acting on behalf of the
Senior Agent and the Senior Lenders) in respect of their performance, exercise
or enforcement of their rights hereunder and in the Collateral, so long as such
performance, exercise or enforcement is consistent with the provisions of this
Agreement.
11
6.02 PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this
Agreement shall affect the obligation of the Borrower to make (or prevent the
Borrower from making) optional or required prepayments of principal of, or
interest and fees (if any) on, the Mezzanine Loans or any other amount payable
by the Borrower in respect of the Mezzanine Loans, PROVIDED that all such
payments shall be subject to and paid in accordance with Sections 13.1 and 13.3
of the Operating Agreement.
6.03 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of
this Section 6 are and are intended solely for the purpose of defining the
relative rights of the Mezzanine Lenders on the one hand and the Senior Lenders
on the other hand. Nothing contained in this Section 6 or elsewhere in this
Agreement is intended to or shall:
(a) impair, as among the Borrower and its creditors (other than the
Senior Lenders and the Mezzanine Lenders), the obligation of the Borrower,
which is absolute and unconditional, to pay to the Mezzanine Lenders the
principal of and interest on the Mezzanine Loan as and when the same shall
become due and payable in accordance with their terms; and
(b) affect the relative rights against the Borrower of the Mezzanine
Lenders and creditors of the Borrower (other than the Senior Lenders).
6.04 NO WAIVER OF SUBORDINATION PROVISIONS. No right of the Senior
Agent or any Senior Lender to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Borrower or by any act or failure to act, in good faith, by the
Senior Agent or any Senior Lender, or by any non-compliance by the Borrower with
the terms, provisions and covenants of this Section 6, regardless of any
knowledge thereof the Senior Agent or any Senior Lender may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph,
the Senior Lenders may, subject to the terms of the Senior Loan Agreement, at
any time and from time to time, without the consent of or notice to any
Mezzanine Lender, without incurring responsibility to any Mezzanine Lender and
without impairing or releasing the subordination provided in this Section 6 or
the obligations hereunder of any Mezzanine Lender to the Senior Lenders, do any
one or more of the following: (a) change the time, manner or place of payment of
Senior Loans, or otherwise modify or supplement in any respect any of the
provisions of the Senior Loan Agreement or any other instrument evidencing or
relating to any of the Senior Loans; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Loans;
(c) release any Person liable in any manner for the collection of Senior Loans;
and (d) exercise or refrain from exercising any rights against the Borrower and
any other Person.
6.05 LIQUIDATION, DISSOLUTION, BANKRUPTCY. In the event of any
Insolvency Proceeding involving the Borrower or any of its properties:
(a) each Mezzanine Lender hereby irrevocably appoints the Collateral
Agent its agent and attorney-in-fact to make, file and present (acting at
the direction of the Controlling Party) for and on behalf of such Mezzanine
Lender a proof or proofs of claims against any obligor on account of the
Mezzanine Obligations if, within thirty days prior to the deadline for
filing thereof, such Mezzanine Lender has failed to file such proof or
proofs of claim; and
(b) the Senior Obligations shall continue to be treated as Senior
Obligations and the provisions of this Agreement shall continue to govern
the relative rights and priorities of the Senior Lenders and the Mezzanine
Lenders even if all or part of the Senior Obligations or the security
interests securing the Senior Obligations are subordinated, set aside,
avoided, invalidated or disallowed in connection with any such Insolvency
Proceeding, and this Agreement shall be reinstated if at any time any
payment of any of the Senior Obligations is rescinded or must otherwise be
returned by any holder of Senior Obligations or any representative of such
holder.
12
6.06 STANDSTILL. Unless the Senior Obligations Payment Date shall have
occurred, the Mezzanine Lenders shall not, without the prior written consent of
the Senior Agent, take any Enforcement Action with respect to the Mezzanine
Obligations, PROVIDED that the Mezzanine Lenders may file proofs of claim
against the Borrower in any Insolvency Proceeding involving the Borrower.
6.07 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATION AGENT.
Upon any payment or distribution of assets of the Borrower referred to in this
Section 6, the Mezzanine Agent and the Mezzanine Lenders shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Mezzanine Agent and the Mezzanine
Lenders, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the Senior Lenders and other indebtedness of the
Borrower, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Section 6.
6.08 SUBORDINATION TO CDS HOLDERS. Each of the Senior Agent and the
Mezzanine Agent, on behalf of the respective holders of the Mezzanine
Obligations and the Senior Obligations, agrees that all Liens in favor of said
holders now or hereafter existing with respect to the Collateral shall be
subject, subordinate and junior in all respects to the Liens in favor of the CDS
Holders (as defined in the CDS Security Agreement) now or hereafter existing
with respect to the "Collateral" as defined in the CDS Security Agreement. The
CDS Holders shall be express third party beneficiaries of the foregoing
agreements.
Section 7. MISCELLANEOUS.
7.01 NOTICES. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
"Address for Notices" specified pursuant to Section 9.01 of the Senior Loan
Agreement and Section 9.01 of the Mezzanine Loan Agreement, as applicable, and
shall be deemed to have been given at the times specified in said Section 9.01
or Section 9.01, as applicable.
7.02 NO WAIVER. No failure on the part of the Collateral Agent or any
Secured Party to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
or any Secured Party of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
7.03 AMENDMENTS, ETC. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Borrower, the Collateral Agent and each Agent (with any consent required under
Section 9.02 of each Loan Document). Any such amendment or waiver shall be
binding upon the Collateral Agent and each Agent, each holder of any of the
Secured Obligations and the Borrower.
7.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) COSTS AND EXPENSES. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Collateral Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Collateral Agent, in connection with the preparation and administration of
this Agreement or any amendments, modifications or waivers of the
provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), and (ii) all out-of-pocket expenses incurred
by the Collateral Agent, including the fees, charges and disbursements of
any counsel for the Collateral Agent, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its
rights under this Section, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations.
(b) INDEMNIFICATION BY BORROWER. The Borrower shall indemnify the
Collateral Agent and its Related Parties (each such Person being called an
"INDEMNITEE") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred
by or asserted against any Indemnitee arising out of, in connection with,
or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
transactions contemplated hereby, or (ii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
13
whether based on contract, tort or any other theory and regardless of
whether any Indemnitee is a party thereto; PROVIDED that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) INDEMNIFICATION BY LENDERS. To the extent that the Borrower fails
to pay any amount required to be paid by it to the Collateral Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Collateral Agent such Lender's pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is
sought and based on such Lender's portion of the Secured Obligations) of
such unpaid amount; PROVIDED that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Collateral Agent in its capacity as
such.
(d) WAIVER OF CONSEQUENTIAL DAMAGES, ETC. To the extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or
any agreement or instrument contemplated hereby or the transactions
contemplated hereby.
(e) PAYMENTS. All amounts due under this Section shall be subject to
and paid in accordance with Sections 13.1 and 13.3 of the Operating
Agreement.
7.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Borrower,
the Collateral Agent, each Agent and each holder of any of the Secured
Obligations, PROVIDED that the Borrower shall not assign or transfer its rights
or obligations hereunder without the prior written consent of the Collateral
Agent (granted at the direction of the Controlling Party).
7.06 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
7.07 GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
7.08 SUBMISSION TO JURISDICTION. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
7.09 WAIVER OF VENUE. The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in Section 7.08. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
7.10 SERVICE OF PROCESS. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
7.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
14
7.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
7.12 CAPTIONS. The captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
7.13 AGENTS AND ATTORNEYS-IN-FACT. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
7.14 SEVERABILITY. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral Agent
and the Secured Parties in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
7.15 NO PETITION; LIMITED RECOURSE. Each of the Collateral Agent, the
Senior Agent and the Mezzanine Agent (collectively, the "CREDITORS") agrees
(which agreement shall, pursuant to the terms of this Agreement, be binding upon
its successors, assigns, and participants) that it shall not institute against,
or join any other Person in instituting against, the Borrower any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day (or, if longer, the then applicable preference period) after the
payment in full of all amounts due under the Senior Facility and the Mezzanine
Facility. Notwithstanding anything herein or any other Program Document to the
contrary, the obligations of the Borrower owing to the Creditors hereunder or
thereunder are limited recourse and are payable only from the property and
assets of the Borrower, only to the extent funds are available for payment of
such obligations in accordance with Sections 13.1 and 13.3 of the Operating
Agreement. No recourse shall be had and no claim shall be made, whether by levy
or execution or otherwise, for the payment or satisfaction of any obligations of
the Borrower hereunder or under any other Program Document against any member of
the Borrower or any of its assets, other than the property and assets of the
Borrower, and no member of the Borrower shall be liable for any deficiency
judgment based thereon, it being expressly understood and agreed that the sole
remedies of each of the Creditors with respect to such amounts shall be against
the property and assets of the Borrower in accordance with this Agreement and
the other Program Documents. The provisions in this Section 7.15 shall survive
the termination of this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
CENTERBROOK FINANCIAL LLC
By: CENTERBROOK HOLDINGS LLC, its
Managing Member
By: /S/ XXXXXX XXXX
---------------
Name: Xxxxxx Xxxx
Title: Chief Execurtive Officer
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent
By: /S/ XXXXXX X. XXXXXXXXX
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
CITIBANK, N.A., as Senior Agent
By: /S/ XXXXX XXXXXX
----------------
Name: Xxxxx XxXxxx
Title: Vice President
CITIBANK, N.A., as Mezzanine Agent
By: /S/ XXXXX XXXXXX
----------------
Name: Xxxxx XxXxxx
Title: Vice President
16
ANNEX 1
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS; PATENTS AND PATENT APPLICATIONS;
AND TRADE NAMES, SERVICE MARKS, TRADEMARK AND SERVICE XXXX REGISTRATIONS
AND APPLICATIONS FOR TRADEMARK AND SERVICE XXXX REGISTRATIONS
NONE
