Exhibit 4.20
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of March 27, 2003 by and
among (i) the lenders identified on the signature pages hereof as revolving
credit lenders (such revolving credit lenders, together with successor revolving
credit lenders under the Revolving Credit (as defined below), are referred to
hereinafter each individually as a "Revolver Lender" and collectively as the
"Revolver Lenders"), and BANK ONE, NA, a national banking association having its
principal office in Chicago, Illinois ("Bank One"), as administrative agent and
collateral agent for the Revolver Lenders (Bank One, NA, in such capacity, and
any successor agent in such capacity, the "Revolver Agent"), (ii) the lenders
identified on the signature pages hereof as bank term lenders (such bank term
lenders, together with successor lenders of the Bank Term Loans (as defined
below), are referred to hereinafter each individually as a "Bank Term Lender"
and collectively as the "Bank Term Lenders"), and BANK ONE, NA, a national
banking association having its principal office in Chicago, Illinois, as
administrative agent and collateral agent for the Bank Term Lenders (Bank One,
NA, in such capacity, and any successor agent in such capacity, the "Bank Term
Agent"), (iii) the institutional investors identified on the signature pages
hereof as institutional investors (such institutional investors, together with
successor holders of the Institutional Investor Notes (as defined below), are
referred to hereinafter each individually as an "Institutional Investor" and
collectively as the "Institutional Investors"), and U.S. Bank National
Association, as collateral agent for the Institutional Investors (US Bank, in
such capacity, and any successor agent in such capacity, the "Collateral
Agent"). The Revolving Lenders, the Bank Term Lenders and the Institutional
Investors are referred to collectively as the "Secured Parties" and individually
as a "Secured Party". The Revolver Agent, the Bank Term Agent and the Collateral
Agent are referred to collectively as the "Agents" and each individually as an
"Agent".
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. RECITALS
Section 1.1. Bank Loan Agreement; Revolving Credit. Pursuant to that
certain Loan and Security Agreement of even date among the Obligors, the
Revolver Lenders, the Bank Term Lenders and Bank One, in its capacity as the
Revolver Agent and the Bank Term Agent (such agreement as hereafter amended,
supplemented, restated or modified from time to time in compliance with Section
6.2 hereof, the "Bank Loan Agreement"), the Revolver Lenders have agreed,
severally and not jointly, subject to the terms and conditions set forth
therein, to establish in favor of the Borrowers a revolving line of credit to
fund ongoing working capital needs of the Obligors (the "Revolving Credit"), and
to make loans to the Borrowers under the Revolving Credit and to issue letters
of credit (collectively, the "Revolver Loans"), all as set forth in the Bank
Loan Agreement, such Revolving Loans to be evidenced by the promissory notes of
the Borrowers (such notes, as hereafter amended, supplemented, restated or
modified from time to time in compliance with Section 6.2 hereof, the "Revolver
Notes" and each individually a "Revolver Note").
Section 1.2. Bank Loan Agreement; Bank Term Loans. Pursuant to the Bank
Loan Agreement, the Bank Term Lenders have agreed, severally and not jointly,
subject to the terms and conditions set forth therein, to make on the date
hereof $61,084,905.66 aggregate principal amount of floating rate Term Loans A
and $26,415,094.33 aggregate principal amount of fixed rate Term Loans B to the
Borrowers (collectively, the "Bank Term Loans"), such Bank Term Loans to be
evidenced by the promissory notes of the Borrowers (such notes, as hereafter
amended, supplemented, restated or modified from time to time in compliance with
Section 6.2 hereof, the "Bank Term Notes" and each individually a "Bank Term
Note").
Section 1.3. Note Agreement; Institutional Investor Notes. Pursuant to
a Note, Guaranty and Security Agreement of even date among the Obligors, the
Institutional Investors and the Collateral Agent (such agreement, as hereafter
amended, supplemented, restated or modified from time to time in compliance with
Section 6.2 hereof, the "Note Agreement"), the Borrowers have agreed to issue
and sell to the respective Institutional Investors $31,415,094 aggregate
principal amount of fixed rate Term Notes A and $13,584,906 aggregate amount of
fixed rate Term Notes B (such notes, as hereafter amended, supplemented,
restated or modified from time to time in compliance with Section 6.2 hereof,
collectively, the "Institutional Investor Notes" and each individually an
"Institutional Investor Note").
Section 1.4. Security Documents. Pursuant to the Bank Loan Agreement
and the other Loan Documents (as defined in the Bank Loan Agreement), as
security for the Revolver Obligations, the Obligors are granting the Revolver
Agent on behalf of the Revolver Lenders senior security interests, mortgages,
pledges and liens on and in the Shared Collateral (the Bank Loan Agreement and
the other Loan Documents, to the extent they relate to the grant of security for
the Revolver Obligations, as amended, supplemented, restated or modified from
time to time in compliance with Section 6.2 hereof, the "Revolver Security
Documents"). Pursuant to the Bank Loan Agreement and the other Loan Documents
(as defined in the Bank Loan Agreement), as security for the Bank Term
Obligations, the Obligors are granting the Bank Term Agent on behalf of the Bank
Term Lenders junior security interests, mortgages, pledges and liens on and in
the Shared Collateral (the Bank Loan Agreement and the other Loan Documents, to
the extent they relate to the grant of security for the Bank Term Obligations,
as amended, supplemented, restated or modified from time to time in compliance
with Section 6.2 hereof, the "Bank Term Security Documents"). Pursuant to the
Note Agreement and the other Note Documents (as defined in the Note Agreement),
as security for the Institutional Investor Obligations, the Obligors are
granting the Collateral Agent on behalf of the Institutional Investors junior
security interests, mortgages, pledges and liens on and in the Shared Collateral
(the Note Agreement and the other Note Documents, to the extent they relate to
the grant of security for the Institutional Investor Obligations, as amended,
supplemented, restated or modified from time to time in compliance with Section
6.2 hereof, the "Institutional Investor Security Documents") The Bank Term
Security Documents, the Institutional Investor Security Documents and the
Revolver Security Documents are referred to collectively as the "Security
Documents").
Section 1.5. No Other Security Documents. Each of the parties hereto
represents and warrants to one another that it has not entered into any
agreement or arrangement other than as set forth in Section 1.4 pursuant to
which any of the Obligors or any other Person has granted to such party any
additional security or guaranties of any kind with respect to any of the Secured
Obligations.
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SECTION 2. DEFINITIONS
For purposes of this Agreement, the following terms have the following
respective meanings:
"Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls or is controlled by or is under common control
with such first-mentioned Person, or any individual, in the case of a Person who
is an individual, who has a relationship by blood, marriage or adoption to such
first-mentioned Person not more remote than first cousin, and, without limiting
the generality of the foregoing, shall include (i) any Person beneficially
owning or holding 10% or more of any class of voting equity interests of such
first-mentioned Person or (ii) any Person of which such first-mentioned Person
owns or holds 10% or more of any class of voting equity interests. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person.
"Bankruptcy Code" means, as applicable, (i) the United States
Bankruptcy Code, (ii) the Bankruptcy and Insolvency Act (Canada) or (iii) the
Companies' Creditors Arrangement Act (Canada), or any similar legislation in a
relevant jurisdiction, in each case as in effect from time to time.
"Bank Term Documents" shall mean the Bank Loan Agreement, the
Bank Term Notes, the Bank Term Security Documents and any other Loan Document
(as defined in the Bank Loan Agreement), in each case only to the extent the
Bank Loan Agreement and such other Loan Document relates to the Bank Term Loans.
"Bank Term Obligations" shall mean (without duplication) the
principal of and interest (including Post Petition Interest) on the Bank Term
Loans, and all fees and other amounts (other than principal and interest) due to
the Bank Term Lenders or the Bank Term Agent (but only in their respective
capacities as Bank Term Lenders or Bank Term Agent, and not in their respective
capacities as Revolver Lenders or the Revolver Agent) under the Bank Loan
Agreement, the Bank Term Notes and the Bank Term Security Documents.
"Borrower" shall mean each of the entities identified as a
Borrower on the signature pages of the form of acknowledgement attached hereto
as Schedule II.
"Borrowing Base Collateral" shall mean Accounts, Inventory and
Cash Collateral, as such terms are defined in the Bank Loan Agreement, and the
products and proceeds thereof, all books and records (written or electronic)
related exclusively thereto, and all cash and Cash Equivalents subject to the
Senior Liens; provided that "Borrowing Base Collateral" shall not include any
Account or portion thereof that is generated or arising solely from the sale or
disposition of any Real Property Collateral, Equipment or General Intangibles,
as such terms are defined in the Bank Loan Agreement.
"Collection Expenses" shall mean, with respect to any
Recovery, the reasonable costs, fees and expenses directly related to effecting
such Recovery, including all reasonable costs, fees and expenses of agents,
appraisers, attorneys, and the Agents.
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Event of Default" shall mean any Event of Default under the
Bank Loan Agreement or the Note Agreement.
"Guarantees" shall mean any guarantees issued by any Person in
respect of all or any portion of the Secured Obligations, all as such guaranties
may be amended, supplemented, restated or modified from time to time in
compliance with Section 6.2 hereof.
"Guarantor" shall mean each of the entities identified as a
guarantor on the signature pages of the form of acknowledgement attached hereto
as Schedule II.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Institutional Investor Documents" shall mean the Note
Agreement, the Institutional Investor Notes, the Institutional Investor Security
Documents and any other Note Document (as defined in the Note Agreement).
"Institutional Investor Obligations" shall mean (without
duplication) the principal of and interest (including Post Petition Interest) on
the Institutional Investor Notes, and all fees and other amounts (other than
principal and interest) due to the Institutional Investors or the Collateral
Agent under the Note Agreement, the Institutional Investor Notes and the
Institutional Investor Security Documents.
"Inventory Location" means any Real Property Collateral (other
than (a) locations leased by an Obligor, (b) unused locations and (c) facilities
leased by the Obligors to franchisees) at which Inventory comprising a part of
the Shared Collateral is located.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, lien (statutory or otherwise), preference,
priority, security interest, chattel mortgage or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property and any
lease having substantially the same effect as any of the foregoing.
"Lien Enforcement Action" means (i) any action to foreclose on
any Lien in any Shared Collateral, (ii) any action to take possession of, sell
or otherwise realize (judicially or non-judicially) upon any Shared Collateral
(including, without limitation, by setoff or notification of account debtors),
and/or (iii) the commencement of any legal proceedings to facilitate any of the
actions described in (i) and (ii) above.
"Material Obligor" means any Obligor or subsidiary thereof
having assets, individually or on a consolidated basis with such Obligor and
subsidiaries, with a book or market value in excess of $1,000,000 in the
aggregate.
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"Notice Institutional Investor" means Connecticut General Life
Insurance Company or such other Person designated by the Required Institutional
Investors from time to time.
"Obligor" means any of the Borrowers or Guarantors.
"Post Petition Interest" shall mean, with respect to an
obligation of a Person, interest that accrues on such obligation after the
commencement of an Insolvency Proceeding with respect to such Person (or that
would accrue but for the commencement of such proceeding), whether or not
allowed as a claim in such Insolvency Proceeding.
"Priority Event" means any of the following: (i) an
acceleration or demand for payment of all of the Revolver Obligations by the
Revolver Agent during the continuance of an Event of Default, (ii) an
acceleration or demand for payment of all of the Bank Term Obligations by the
Bank Term Agent during the continuance of an Event of Default, (iii) an
acceleration or demand for payment of all of the Institutional Investor
Obligations by the Required Institutional Investors during the continuance of an
Event of Default, (iv) the occurrence of an Event of Default under Section 8.5
or 8.6 of the Bank Loan Agreement in respect of a Material Obligor, (v) the
delivery of any Remedies Notice in accordance with this Agreement and, if
delivered pursuant to Section 3.3(b)(ii) or (iii), the expiration of the related
Standstill Period, or (vi) the initiation of any Lien Enforcement Action by any
Agent or Secured Party.
"Priority Revolver Obligations" shall mean the Revolver
Obligations other than Unpermitted Advances.
"Prohibited Bank Term Loan Amendments" shall mean any
amendment, modification or waiver the effect of which would be to (i) increase
the outstanding principal balance of the Bank Term Obligations (other than
through the conversion of pay in kind interest to additional principal on the
terms provided in the Bank Loan Agreement and the Bank Term Notes as in effect
on the date hereof), (ii) increase the margin or rate of interest or change the
basis of calculation of interest on the Bank Term Obligations other than (x)
increases in rates pursuant to section 2.6(c) of the Bank Loan Agreement (as in
effect on the date hereof) during the continuance of an Event of Default, and
(y) increases or changes automatically occurring under the "most favored nation"
provisions of the Bank Loan Agreement (Section 2.17), (iii) increase any
existing fee or premium under the Bank Term Obligations or change the basis of
calculation of any such existing fee or premium or add any new fee or premium
under the Bank Term Obligations, in each case other than increases, changes or
additions automatically occurring under the "most favored nation" provisions of
the Bank Loan Agreement (Section 2.17), (iv) change the scheduled or required or
optional dates of payment of principal, interest, premium or fees under the Bank
Term Documents, (v) change the order of priority of payment and application of
payments to the Bank Term Obligations under the Bank Term Documents, (vi) amend
any existing representation, warranty, covenant or Event of Default under the
Bank Term Documents so as to make it more burdensome or add any new
representation, warranty, covenant or Event of Default under the Bank Term
Documents, (vii) change the required percentage or number of Bank Term Lenders
required under the Bank Term Documents to approve amendments or waivers under
the Bank Term Documents or add requirements for the consent of other Persons to
approve amendments or waivers under the Bank
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Term Documents or (viii) to the extent related to any of the above, amend or add
any defined term under the Bank Term Documents.
"Prohibited Institutional Investor Amendments" shall mean any
amendment, modification or waiver the effect of which would be to (i) increase
the outstanding principal balance of the Institutional Investor Obligations
(other than through the conversion of pay in kind interest to additional
principal on the terms provided in the Note Agreement and the Institutional
Investor Notes as in effect on the date hereof), (ii) increase the rate of
interest or change the basis of calculation of interest on the Institutional
Investor Obligations other than (x) increases in rates pursuant to section 2.6
of the Note Agreement (as in effect on the date hereof) during the continuance
of an Event of Default, and (y) increases or changes automatically occurring
under the "most favored nation" provisions of the Note Agreement (Section 2.2),
(iii) increase any existing fee or premium under the Institutional Investor
Obligations or change the basis of calculation of any such existing fee or
premium or add any new fee or premium under the Institutional Investor
Obligations, in each case other than increases, changes or additions
automatically occurring under the "most favored nation" provisions of the Note
Agreement (Section 2.2), (iv) change the scheduled or required or optional dates
of payment of principal, interest, premium or fees under the Institutional
Investor Documents, (v) change the order of priority of payment and application
of payments to the Institutional Investor Obligations under the Institutional
Investor Documents, (vi) amend any existing representation, warranty, covenant
or Event of Default under the Institutional Investor Documents so as to make it
more burdensome or add any new representation, warranty, covenant or Event of
Default under the Institutional Investor Documents, (vii) change the required
percentage or number of Institutional Investors required under the Institutional
Investor Documents to approve amendments or waivers under the Institutional
Investor Documents or add requirements for the consent of other Persons to
approve amendments or waivers under the Institutional Investor Documents, or
(viii) to the extent related to any of the above, amend or add any defined term
under the Institutional Investor Documents.
"Prohibited Revolver Amendments" shall mean any amendment,
modification or waiver the effect of which would be to (i) add any class of
assets to the Borrowing Base calculation set forth in Section 2.1(a) (or any
successor section) of the Loan Agreement or increase any of the advance rates
set forth in clauses (x)(i), (x)(ii)(A) or (B) or (x)(iii) of Section 2.1(a) (or
any successor section) of the Bank Loan Agreement to more than 90%, 55%, 90% or
100%, respectively, (ii) increase the Maximum Revolver Amount to more than
$40,000,000 or the Minimum Liquidity to more than the then applicable amount
specified in the definition of "Required Liquidity" in the Bank Loan Agreement,
(iii) alter the terms of Section 2.2(c) or 2.4 (or any successor sections) of
the Bank Loan Agreement, (iv) alter Section 2.3(c) (or any successor section) of
the Bank Loan Agreement to increase the maximum amount of Agent Advances or
Section 2.3(g) (or any successor section) of the Bank Loan Agreement to increase
the maximum amount of Optional Overadvances, (v) change the scheduled or
required or optional dates of payment of principal, interest, premium or fees
under the Revolver Documents, (vi) change the order of priority of payment and
application of payments to the Revolver Obligations under the Revolver
Documents, (vii) amend any existing representation, warranty, covenant or Event
of Default under the Revolver Documents so as to make it more burdensome or add
any new representation, warranty, covenant or Event of Default under the
Revolver Documents, (viii) change the required percentage or number of Revolver
Lenders required under
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the Revolver Documents to approve amendments or waivers under the Revolver
Documents or add requirements for the consent of other Persons to approve
amendments or waivers under the Revolver Documents, or (ix) to the extent
related to any of the above, amend or add any defined term under the Revolver
Documents.
"Real Property Collateral" shall have the meaning specified in
the Bank Loan Agreement.
"Recent Appraised Value" means, with respect to any parcel of
Real Estate Collateral, the fair market value of such parcel that would be
obtainable upon a sale of such parcel in an arm's length transaction to a third
party under usual and normal circumstances, with neither the buyer nor the
seller under any compulsion to act, as determined and set forth in (a) the
appraisals prepared by Xxxxxxx & Xxxxxxxxx for the initial closing under the
Bank Loan Agreement, or (b) a written appraisal performed by Xxxxxxx & Wakefield
or another qualified independent appraiser reasonably acceptable to the Secured
Parties within two (2) years prior to the relevant date of determination.
"Recovery" shall mean any amount received (other than
distributions made (x) pursuant to Section 4.2 or (y) from the Noteholder Group
Expense Fund (as defined in the Note Agreement)) by any Secured Party or any
Agent at any time after the occurrence of a Priority Event (after payment of or
deducting amounts to pay Collection Expenses) by way of (i) proceeds realized in
connection with any sale or other disposition of any of the Shared Collateral
(including any amount realized through the exercise of right of offset and any
proceeds of insurance or title insurance or eminent domain, taking or similar
proceedings), or (ii) any payment by any Obligor in respect of the Revolver
Obligations, the Bank Term Obligations or the Senior Note Obligations.
"Remedies Notice" means a written notice that the parties
described therein intend to commence the pursuit of remedies against some or all
of the Shared Collateral.
"Required Bank Term Lenders" shall mean, at any time, Bank
Term Lenders holding in the aggregate 51% or more of the outstanding principal
amount of the Bank Term Notes.
"Required Institutional Investors" shall mean Institutional
Investors holding in the aggregate 51% or more of the outstanding principal
amount of the Institutional Investor Notes.
"Required Revolver Lenders" shall mean, at any time, Revolver
Lenders holding in the aggregate 66 2/3% or more of the Revolving Commitment (as
defined in the Bank Loan Agreement) or, if the Revolver Commitment has been
terminated, 66-2/3% of the aggregate unpaid principal amount of all Revolver
Usage (as defined in the Bank Loan Agreement); provided, that if there are only
two (2) Revolving Lenders, then the reference to 66 2/3% shall be deemed to be a
reference to 100%.
"Required Secured Parties" shall mean collectively the
Required Revolver Lenders, the Required Bank Term Lenders and the Required
Institutional Investors.
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"Revolver Documents" shall mean the Bank Loan Agreement, the
Revolver Notes, the Revolver Security Documents and any other Loan Document (as
defined in the Bank Loan Agreement), in each case only to the extent the Bank
Loan Agreement and such other Loan Document relates to the Revolving Credit.
"Revolver Obligations" shall mean (without duplication) the
principal of and interest (including Post Petition Interest) on the Advances (as
defined in the Bank Loan Agreement) outstanding under the Revolving Credit, the
undrawn amount of any outstanding Letters of Credit issued under the Revolving
Credit (expressly excluding any portion thereof which is secured by cash
collateral at 105%), Bank Product Obligations (as defined in the Bank Loan
Agreement) and all fees and other amounts (other than principal and interest)
due to the Revolver Lenders or the Revolver Agent (but only in their respective
capacities as Revolving Lenders or Revolver Agent, and not in their respective
capacities as Bank Term Lenders or the Bank Term Agent) under the Bank Loan
Agreement, the Revolver Notes and the Revolver Security Documents.
"Revolver Termination Date" means the date on which all of the
obligations specified in the last sentence of Section 3.5 of the Bank Loan
Agreement have been satisfied in respect of the Priority Revolver Obligations.
"Secured Obligations" shall mean the Revolver Obligations, the
Bank Term Obligations and the Institutional Investor Obligations.
"Shared Collateral" shall mean all of the tangible and
intangible property and assets of the Obligors which are covered by the
mortgages, security interests, pledges and other Liens granted to or for the
benefit of any of the Secured Parties pursuant to the Security Documents or
otherwise as security for any or all of the Secured Obligations, including any
additional properties or assets which may from time to time secure any or all of
the Secured Obligations and including any bank deposits or similar obligations
which are subject to set-off by any of the Secured Parties, but expressly
excluding the Noteholder Group Expense Fund.
"Standstill Period" shall mean with respect to a Remedies
Notice delivered by or on behalf of the Required Bank Term Lenders or the
Required Institutional Investors, the period commencing on the date of delivery
of such Remedies Notice and expiring on (x) if such Remedies Notice is based on
an Event of Default resulting from the failure to make a required scheduled (but
not accelerated) payment of principal in respect of the Bank Term Obligations or
the Institutional Investor Obligations, the fifteenth day after delivery of such
Remedies Notice, (y) if such Remedies Notice is based on an Event of Default
resulting from the failure to make any other required scheduled (but not
accelerated) payment in respect of the Bank Term Obligations or the
Institutional Investor Obligations, the thirtieth day after delivery of such
Remedies Notice and (z) if such Remedies Notice is based on any other Event of
Default, the forty-fifth day after delivery of such Remedies Notice, provided
that all Standstill Periods will expire on the commencement of an Insolvency
Proceeding. For the avoidance of doubt, there shall be no Standstill Period with
respect to a Remedies Notice delivered by the Revolver Agent.
"Unpermitted Overadvances" shall mean the amount of any
Advances or other loans or extensions of credit (and interest with respect
thereto) made under the Revolving Credit
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and the aggregate undrawn amount of any outstanding Letters of Credit issued,
extended or renewed under the Revolving Credit that when made or issued extended
or renewed, as applicable, based on the most recent borrowing base certificate
delivered to the Agent, exceeded the lesser of: (i) $40,000,000 or (ii) the sum
of the Borrowing Base and the Agent Advances and the Optional Overadvances
permitted under Section 2.3 of the Bank Loan Agreement as in effect on the date
hereof.
"Unreimbursed Expenses" shall mean at any date the aggregate
amount of the out of pocket costs, fees and expenses (including, without
limitation, reasonable fees and expenses of counsel, consultants, financial
advisors, appraisers and the like) incurred through such date by the Bank Term
Agent, the Bank Term Lenders, the Collateral Agent or the Institutional
Investors, but only to the extent not theretofore paid or reimbursed by the
Obligors or out of a Recovery.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Bank Loan Agreement.
SECTION 3. COLLATERAL; PRIORITY OF LIENS; EXERCISE OF REMEDIES
Section 3.1. Priority of Liens; Shared Collateral. Notwithstanding
anything to the contrary contained in the Revolver Documents, the Bank Term
Documents or the Institutional Investor Documents, or the ordinary rules for
determining priority as among the Secured Parties and the Agents under the Code
or any other law governing priority of secured parties, pledgees or mortgagees,
and regardless of the relative times or order of attachment or perfection or the
time or order of filing or recording of financing statements, mortgages or other
documents, or the giving or failure to give any notice of the acquisition or
expected acquisition of purchase money security interests:
(a) From and after the date hereof, all Shared Collateral shall be held
to secure the Revolver Obligations on a first and senior basis (the "Senior
Liens"). No Secured Party or Agent will in any proceeding, whether in connection
with a Reorganization or otherwise, contest the superiority, priority, validity
or enforceability of any Senior Lien.
(b) From and after the date hereof, all Shared Collateral shall be held
to secure the Bank Term Obligations (the "Junior Bank Liens") and the
Institutional Investor Obligations (the "Junior Institutional Investor Liens")
on a basis junior and subordinate to the Senior Liens (collectively, the "Junior
Liens") but pari passu among such Junior Liens. Subject to section 3.1(a), no
Secured Party or Agent will in any proceeding, whether in connection with a
Reorganization or otherwise, contest the superiority, priority, validity or
enforceability of any Junior Lien.
Each Secured Party and each Agent acknowledges for all purposes of the
Code (as defined in the Bank Loan Agreement) that any Shared Collateral
(including, without limitation, any shares of capital stock or other equity
interests pledged to any of the Agents or Secured Parties as security for any or
all of the Secured Obligations) in which such Secured Party or Agent may from
time to time hold a possessory security interest (collectively, the "Pledged
Collateral") shall also be held on behalf of and as bailee for the other Agents
and Secured Parties, and each Secured Party and Agent agrees, and the Obligors
consent, that at such time as
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any of such Pledged Collateral is released from the Lien of such Secured Party
or Agent thereon (other than in connection with the exercise of remedies during
the continuance of an Event of Default), it shall be delivered to the other
Secured Parties or Agents, or such Person as shall be designated by such other
Secured Parties, to be held as security for the Secured Obligations. The Secured
Parties agree that the original certificates or other documents or instruments
evidencing the Pledged Collateral shall be delivered to the Revolver Agent and
held by the Revolver Agent, on its own behalf and as bailee for the other Agents
and the Secured Parties pursuant to this Agreement, provided that on the
Revolver Termination Date, the Revolver Agent shall deliver the original
certificates or other documents or instruments evidencing the Pledged Collateral
to the Bank Term Agent to hold the same on its own behalf and as bailee for the
Collateral Agent pursuant to this Agreement.
Notwithstanding the foregoing Lien priorities, (i) each Recovery shall
be distributed in accordance with Section 4.2 hereof and (ii) each of the
parties hereto expressly reserves the right to assert that a Recovery has not
been applied in accordance with Section 4.2 notwithstanding the prior provisions
of this Section 3.1.
Section 3.2. No Additional Collateral or Indebtedness. No Obligor shall
grant, and no Secured Party or Agent shall demand, accept or receive from any
Obligor or any other Person, any security, direct or indirect, for any Secured
Obligations except pursuant to the Security Documents. If notwithstanding the
foregoing, any Secured Party shall receive any such security, direct or
indirect, such security shall be deemed Shared Collateral.
Section 3.3. Exercise of Remedies. Notwithstanding any provision to the
contrary in the Revolver Documents, the Bank Term Documents or the Institutional
Investor Documents, the Secured Parties and the Agents agree with one another
(but not with the Obligors) as follows:
(a) Exercise of Remedies by Required Secured Parties. The Required
Secured Parties shall have the right, at any time and from time to time during
the continuance of an Event of Default, to proceed in concert to collect,
realize upon or foreclose on, or pursue any other remedies available at law or
under the Security Documents with respect to, the Shared Collateral or to direct
their respective Agents to proceed to collect, realize upon or foreclose on, or
pursue any other remedies available at law or under the Security Documents with
respect to, the Shared Collateral. The Required Secured Parties shall have the
right, subject to requirements of applicable law, to direct in concert the time,
method and place of conducting any proceeding for the foreclosure, sale or other
disposition of any of the Shared Collateral or for the appointment of a receiver
for the owner of such Shared Collateral or all or any of its assets, and to
determine the price and other terms and conditions of any such foreclosure, sale
or other disposition of the Shared Collateral and to direct their respective
Agents with respect to such matters. The rights set forth above shall not limit,
in any way, the rights and obligations set forth in the remainder of this
section 3.3 if the parties elect not to act in concert pursuant to this Section
3.3(a).
(b) Delivery of Remedies Notice.
(i) The Revolver Agent, acting alone or at the direction of the
Required Revolver Lenders, shall have the right to deliver a Remedies Notice at
any time that an Event of Default has occurred under the Bank Loan Agreement and
continues under the Bank Loan Agreement.
10
A Remedies Notice delivered by the Required Revolver Lenders or the Revolver
Agent shall be delivered by the Required Revolver Lenders or the Revolver Agent,
as the case may be, to the Bank Term Agent, the Collateral Agent, the Notice
Institutional Investor and the Administrative Borrower.
(ii) The Required Bank Term Lenders shall have the right to deliver, or
to direct the Bank Term Agent to deliver, a Remedies Notice at any time that
that an Event of Default has occurred under the Bank Loan Agreement and
continues under the Bank Loan Agreement. A Remedies Notice delivered by the
Required Bank Term Lenders or the Bank Term Agent shall be delivered by the
Required Bank Term Lenders or the Bank Term Agent, as the case may be, to the
Revolver Agent, the Collateral Agent, the Notice Institutional Investor and the
Administrative Borrower.
(iii) The Required Institutional Investors shall have the right to
deliver, or to direct the Collateral Agent to deliver, a Remedies Notice at any
time that an Event of Default has occurred under the Note Agreement and
continues under the Note Agreement. A Remedies Notice delivered by the Required
Institutional Investors or the Collateral Agent shall be delivered by the
Required Institutional Investors or the Collateral Agent, as the case may be, to
the Revolver Agent, the Bank Term Agent and the Administrative Borrower.
(iv) Any failure to provide any notice to the Administrative Borrower
pursuant to this Section 3.3(b) shall not affect the validity or effectiveness
of any Remedies Notice.
(c) Exercise of Remedies after Delivery of Remedies Notice. From and
after the date of delivery of a Remedies Notice in accordance with Section
3.3(b) and, with respect to clauses (c)(ii) and (c)(iii) below, the expiration
of any Standstill Period with respect thereto:
(i) the Required Revolver Lenders and/or the Revolver Agent shall have
the right, subject to applicable law, (w) to proceed to collect, realize upon or
foreclose any of the Revolver Liens on any of the Shared Collateral, (x) to
pursue any other remedies with respect to the Revolver Liens or the Shared
Collateral available at law or under the Revolver Security Documents, (y) to
direct the time, method and place of conducting any proceeding by or at the
direction of the Required Revolver Lenders and/or the Revolver Agent for the
enforcement or foreclosure of, sale or other disposition of any of the Shared
Collateral or for the appointment of a receiver for the owner of such Shared
Collateral or all or any of its assets, and (z) to determine the price and other
terms and conditions of any such foreclosure, sale or other disposition of the
Shared Collateral by or at the direction of the Required Revolver Lenders and/or
the Revolver Agent;
(ii) subject to clause (d) below, the Required Bank Term Lenders and/or
the Bank Term Agent (acting at the direction of the Required Bank Term Lenders)
shall have the right, subject to applicable law, (w) to proceed to collect,
realize upon or foreclose any of the Junior Bank Liens on any of the Shared
Collateral, (x) to pursue any other remedies with respect to the Junior Bank
Liens or the Shared Collateral available at law or under the Bank Term Security
Documents, (y) to direct the time, method and place of conducting any proceeding
by or at the direction of the Required Bank Term Lenders and/or the Bank Term
Agent (acting at the direction of the Required Bank Term Lenders) for the
enforcement or foreclosure of, sale or
11
other disposition of any of the Shared Collateral or for the appointment of a
receiver for the owner of such Shared Collateral or all or any of its assets,
and (z) to determine the price and other terms and conditions of any such
foreclosure, sale or other disposition of the Shared Collateral by or at the
direction of the Required Bank Term Lenders and/or the Bank Term Agent (acting
at the direction of the Required Bank Term Lenders); and
(iii) subject to clause (d) below, the Required Institutional Investors
and/or the Collateral Agent (acting at the direction of the Required
Institutional Investors) shall have the right, subject to applicable law, (w) to
proceed to collect, realize upon or foreclose any of the Junior Institutional
Investor Liens on any of the Shared Collateral, (x) to pursue any other remedies
with respect to the Junior Institutional Investor Liens or the Shared Collateral
available at law or under the Institutional Investor Security Documents, (y) to
direct the time, method and place of conducting any proceeding by or at the
direction of the Required Institutional Investors and/or the Collateral Agent
(acting at the direction of the Required Institutional Investors) for the
enforcement or foreclosure of, sale or other disposition of any of the Shared
Collateral or for the appointment of a receiver for the owner of such Shared
Collateral or all or any of its assets, and (z) to determine the price and other
terms and conditions of any such foreclosure, sale or other disposition of the
Shared Collateral by or at the direction of the Required Institutional Investors
and/or the Collateral Agent (acting at the direction of the Required
Institutional Investors).
(d) Exclusive Rights of Revolver Lenders to Dispose of Borrowing Base
Collateral. During any period that an Event of Default has occurred and is
continuing but only until the Revolver Termination Date (the "Revolver Control
Period"), the Revolver Agent shall, subject to applicable law, have the
exclusive right (w) to proceed to collect, realize upon or foreclose on any of
the Borrowing Base Collateral, (x) to pursue any other remedies with respect to
the Borrowing Base Collateral available at law or under the Revolver Security
Documents, (y) to direct the time, method and place of conducting any proceeding
for the enforcement or foreclosure of, sale or other disposition of any of the
Borrowing Base Collateral, and (z) to determine the price and other terms and
conditions of any such foreclosure, sale or other disposition of the Borrowing
Base Collateral by or at the direction of the Revolver Agent. The Revolver Agent
agrees that promptly following the delivery of a Remedies Notice, the Revolver
Agent shall, to the extent permitted by applicable law, apply all cash and Cash
Equivalents included in the Borrowing Base Collateral to cash collateralize at
105% any Letter of Credit Usage and Bank Products Obligations not already so
cash collateralized and shall, to the extent permitted by applicable law, apply
the balance of such cash and Cash Equivalents to pay the outstanding Priority
Revolver Obligations (other than Letter of Credit Usage and Bank Products
Obligations which have been cash collateralized). The Revolver Agent agrees that
from and after the delivery of a Remedies Notice, the Revolver Agent shall
commence and diligently and in good faith pursue Lien Enforcement Actions
against the Borrowing Base Collateral (other than Cash Collateral) in a
commercially reasonable manner designed to maximize the value to be obtained by
realization upon the Borrowing Base Collateral.
(e) Release of Liens in Borrowing Base Collateral. If during the
Revolver Control Period the Revolver Agent releases or forecloses upon any Lien
in any part of the Borrowing Base Collateral in connection with the sale,
transfer or other disposition thereof or for application of the proceeds thereof
to the Priority Revolver Obligations, the Junior Liens in such part of the
Borrowing Base Collateral shall be simultaneously released, and the Bank Term
Agent and the
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Collateral Agent shall execute and deliver to the Revolver Agent such
termination statements, releases and other documents as the Revolver Agent or
the Obligors may request to confirm such release; provided that the Junior Liens
shall, subject to all the provisions of this Agreement, continue in the proceeds
of any such sale, transfer or other disposition of the Borrowing Base Collateral
to the extent that such proceeds are not applied to the Priority Revolver
Obligations in accordance with this Agreement.
(f) Release of Liens in Real Property Collateral. If, during any period
that an Event of Default has occurred and is continuing, but only until an
Insolvency Proceeding involving an Obligor has commenced, any of the Revolver
Agent, the Bank Term Agent or the Collateral Agent shall release or foreclose
upon its Junior Liens or Senior Liens in any part of the Real Property
Collateral in connection with the sale, transfer or other disposition thereof or
for application of the proceeds thereof to the Secured Obligations in accordance
with this Agreement, the Liens of the other Agents and Secured Parties, whether
Junior Liens or Senior Liens, in such part of the Real Property Collateral shall
be simultaneously released, and the other Agents shall execute and deliver to
the releasing Agent such termination statements, releases and other documents as
the releasing Agent or the Borrowers may request to confirm such release;
provided, however, that the other Agents and Secured Parties shall only be
required to release their Liens in such part of the Real Property Collateral if
such sale, transfer or other disposition will result in cash proceeds of at
least 80% of the Recent Appraised Value of such part of the Real Property
Collateral; provided further that during the Revolving Control Period, no such
release shall be permitted in any Inventory Location without the consent of the
Revolver Agent, which consent shall not be unreasonably withheld if the Revolver
Agent's full access to the inventory stored thereon is preserved pursuant to
terms and conditions reasonably acceptable to it, which terms shall include,
without limitation, the right to conduct a commercially reasonable public or
private sale at the premises; and provided further that all such Liens shall,
subject to all the provisions of this Agreement, continue in the proceeds of any
such sale, transfer or other disposition of such part of the Real Property
Collateral, which proceeds shall be applied in accordance with the priorities
established under this Agreement.
(g) No Other Required Releases. Other than as expressly provided in the
preceding clauses (e) and (f) or as required under the Revolver Documents, the
Bank Term Documents or the Institutional Investor Documents, as the case may be,
no Secured Party and no Agent shall be required to release any Senior Lien or
any Junior Lien.
(h) Trademark and Tradename. Notwithstanding any other term or
provision to the contrary herein, no sale of any Obligor's trademark or
tradename shall be permitted by this Agreement unless the Revolver Agent has
been provided a license agreement that permits it to sell all inventory branded
with such trademark or tradename and comprising part of the Shared Collateral on
terms and subject to conditions reasonably satisfactory to it.
Section 3.4. Right to Accelerate and Demand Payment. Nothing contained
in this Agreement shall be deemed to affect or impair (i) the right of any of
the Revolver Lenders under the Bank Loan Agreement to accelerate the Revolver
Obligations or demand payment of any of the Revolver Obligations when due, in
each case without any requirement for consent under this Agreement, (ii) the
right of any of the Bank Term Lenders under the Bank Loan Agreement to
accelerate the Bank Term Obligations or demand payment of any of the Bank Term
Obligations
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when due, in each case without any requirement for consent under this Agreement,
or (iii) the right of any of the Institutional Investors under the Note
Agreement to accelerate the Institutional Investor Obligations or demand payment
of any of the Institutional Investor Obligations when due, in each case without
any requirement for consent under this Agreement, provided that notice thereof
shall be given to the Revolver Agent, the Bank Term Agent, the Collateral Agent,
the Notice Institutional Investor and the Administrative Borrower, and no
Secured Party or Agent will sell or otherwise liquidate or dispose of any Shared
Collateral pursuant to any of the Security Documents or exercise any of the
other rights of the Secured Parties or Agents as secured parties thereunder,
including without limitation any statutory or other right of set-off against
bank deposits or other Shared Collateral, except in accordance with Section 3.3
and the Security Documents.
Section 3.5. Bankruptcy Waivers. Each Secured Party and Agent agrees
that this Agreement shall be enforceable in any Insolvency Proceeding with
respect to an Obligor or other proceeding with respect to an Obligor, and that
in connection therewith it will not: (A) challenge the validity or priority of
any Lien securing any of the Secured Obligations, provided such Lien is held in
accordance with this Agreement and the payment and lien priorities set forth
herein, (B) seek to avoid any Secured Obligation, any payment on any Secured
Obligation, any Lien in the Shared Collateral securing any of the Secured
Obligations, or any other transfer on account of any Secured Obligation, as a
preference, fraudulent transfer or conveyance, or other similar action, (C) seek
or obtain adequate protection pursuant to Sections 362, 363 or 364 of the
Bankruptcy Code or otherwise (whether by way of replacement liens,
administrative priority claims, or otherwise) in respect of any Shared
Collateral that is in conflict with the payment or lien priorities set forth in
this Agreement, such adequate protection to be deemed proceeds of the Shared
Collateral and to be held and applied in accordance with the payment and lien
priorities set forth herein, (D) without the consent of the Required Revolver
Lenders, provide any debtor-in-possession or other post-petition financing
pursuant to Section 364 of the Bankruptcy Code or otherwise, that purports to
prime or be pari passu with the Priority Revolver Obligations or the Senior
Liens securing the Priority Revolver Obligations, (E) object to any sale of any
of the Borrowing Base Collateral to the extent such sale is otherwise expressly
permitted by the terms of this Agreement, (F) seek equitable subordination of
any of the Secured Obligations or the Liens securing any of the Secured
Obligations, or (G) challenge the validity or enforceability of any term or
provision of this Agreement.
Section 3.6. Collateral Access Agreements. If the Revolver Agent shall
exercise its rights under any Collateral Access Agreement during the Revolver
Control Period, the Revolver Agent, at the request of the Bank Term Agent or the
Collateral Agent, shall remove items of Collateral in addition to the Borrowing
Base Collateral and any expense in so doing shall constitute a Collection
Expense of the Revolver Agent. Following the end of the Revolving Control
Period, the Bank Term Agent shall assume such obligations at the request of the
Collateral Agent and any expenses thereof shall constitute a Collection Expense
of the Bank Term Agent.
SECTION 4. APPLICATION OF PROCEEDS
Section 4.1. Application of Payments before Priority Event.
Notwithstanding any provision to the contrary in the Revolver
Documents, the Bank Term Documents or the
14
Institutional Investor Documents, but without limitation upon the application of
the payment provisions relating to the Revolver Obligations under the Bank Loan
Agreement, the Secured Parties and the Agents hereby agree that all payments
made before the occurrence of a Priority Event by the Obligors or out of the
assets of the Obligors in respect of principal or interest in respect of the
Bank Term Loans or the Institutional Investor Notes shall be applied pro rata
between the Bank Term Loans and the Institutional Investor Notes, in proportion
(i) first to the accrued and unpaid interest then due in respect of the Bank
Term Loans or the Institutional Investor Notes, until all such accrued and
unpaid interest has been paid in full, and (ii) second to the respective
outstanding principal balances of the Bank Term Loans and the Institutional
Investor Notes, until the respective outstanding principal balances of the Bank
Term Loans and the Institutional Investor Notes have been paid in full. In the
event the Bank Term Agent, the Collateral Agent, any Bank Term Lender or any
Institutional Investor shall receive, prior to the occurrence of a Priority
Event, any payment in respect of the Bank Term Obligations or the Institutional
Investor Obligations in excess of the amount to which such Person is entitled
pursuant to this section 4.1, it shall, promptly after it acquires actual
knowledge of such excess payment, pay over such excess to its Agent and its
Agent shall promptly pay over such excess to the respective parties entitled
thereto under this section.
Section 4.2. Application of Recovery after Priority Event.
Notwithstanding any provision to the contrary in the Revolver Documents, the
Bank Term Documents or the Institutional Investor Documents, the Secured Parties
and the Agents hereby agree as follows with respect to each Recovery received
after the occurrence of a Priority Event:
(a) Until the Revolver Termination Date, 100% of any Recovery (or such
lesser amount as shall equal the amount of Priority Revolver Obligations then
outstanding) shall be paid over by such Person as may receive or direct the
application of such Recovery (including, without limitation, any Agent) to the
Revolver Agent and applied by the Revolver Agent to the Priority Revolver
Obligations then outstanding in the order of priority specified in the Bank Loan
Agreement, including to cash collateralize all outstanding Letter of Credit
Usage and Bank Products Obligations constituting Priority Revolver Obligations.
(b) If there are no Priority Revolver Obligations then outstanding, or
if the portion of the Recovery required to be paid over to the Revolver Agent
pursuant to clause (a) has been paid over to the Revolver Agent, then 100% of
any Recovery (less the portion, if any, required to have been paid over to the
Revolver Agent) shall be paid over by such Person as may receive or direct the
application of such Recovery (including, without limitation, any Agent) as
follows:
(i) first to the payment of the Unreimbursed Expenses, pro
rata between (x) the Unreimbursed Expenses of the Bank Term Agent and the Bank
Term Lenders, on the one hand, and (y) the Unreimbursed Expenses of the
Collateral Agent and the Institutional Investors, on the other hand, until the
Unreimbursed Expenses have been paid in full in cash;
(ii) second, to the payment of the aggregate accrued and
unpaid interest on the Bank Term Loans and the Institutional Investor Notes,
such payment to be made pro rata between (i) the Bank Term Lenders, on the one
hand, and (y) the Institutional Investors, on the other hand, in proportion to
the amount of accrued and unpaid interest on the Bank Term Loans
15
and the Institutional Investor Notes, until all accrued and unpaid interest on
the Bank Term Loans and the Institutional Investor Notes has been paid in full
in cash;
(iii) third, to the payment of the then outstanding aggregate
principal balance of the Bank Term Loans and the Institutional Investor Notes
(including any pay-in-kind portion of such principal balance), such payment to
be made pro rata between (i) the Bank Term Lenders, on the one hand, and (y) the
Institutional Investors, on the other hand, in proportion to the then
outstanding principal balances of the Bank Term Loans and the Institutional
Investor Notes, until the then outstanding principal balances of the Bank Term
Loans and the Institutional Investor Notes have been paid in full in cash; and
(iv) fourth, to the payment of any other Bank Term Obligations
and other Institutional Investor Obligations, such payment to be made pro rata
between (i) the Bank Term Lenders, on the one hand, and (y) the Institutional
Investors, on the other hand, in proportion to the respective amounts of other
Bank Term Obligations and other Institutional Investor Obligations, until all
Bank Term Obligations and Institutional Investor Obligations have been paid in
full in cash.
(v) fifth, to the payment of all Advances, and cash
collateralization of all Letters of Credit in the amount of 105% thereof,
comprising the Unpermitted Overadvances.
(c) In the event any Agent or Secured Party shall receive, after the
occurrence of a Priority Event, any payment in respect of the Secured
Obligations in excess of the amount to which such Secured Party is entitled
pursuant to this section 4.2 or in the case of an Agent, to which such Agent and
the Secured Parties represented by such Agent are entitled pursuant to this
section 4.2, it shall, promptly after it acquires actual knowledge of such
excess payment, pay over such excess to its Agent and such Agent shall promptly
pay over such excess to the respective parties entitled thereto under this
section.
(d) After the Revolver Obligations, Bank Term Obligations,
Institutional Investor Obligations and Unpermitted Overadvances have been paid
in full in cash, the balance, if any, of any Recovery shall be paid over to the
Obligors or as a court of competent jurisdiction shall otherwise direct.
(e) Except as otherwise provided in this Agreement, all payments
received by a Secured Party in respect of the Secured Obligations shall belong
to such Secured Party as its own property, and except as provided in this
Agreement, no Secured Party shall have any obligations to hold or remit any part
of any such payment for the account or benefit of any other Secured Party.
(f) Nothing contained herein shall prevent any Secured Party from
reflecting the application of the proceeds of any Shared Collateral on its books
and records in such manner as it shall determine in its sole discretion.
(g) Notwithstanding anything to the contrary herein, the foregoing
provisions of Section 4.2 shall not apply to payments from the Noteholder Group
Expense Fund, which shall be used solely for payment of Noteholder Group
Expenses (as defined in the Note Agreement).
16
SECTION 5. AGREEMENT BINDING
Section 5.1. Agreement Binding. The Obligors and each of the Secured
Parties and Agents represents and warrants to each of the other parties hereto
that this Agreement has been duly authorized, executed and delivered by such
representing and warranting party and is the legal, valid, binding and
enforceable obligation of such party, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and subject to general equitable principles,
including without limitation the principle that equitable remedies, such as the
remedy of specific performance, are subject to the discretion of the court.
Section 5.2. Guaranty. No Secured Party or Agent as a result of the
provisions of this Agreement shall be deemed to have, directly or indirectly,
guarantied any debts, obligations or liabilities of any Obligor or any of their
respective Affiliates.
Section 5.3. No Partnership Created. Neither the execution of this
Agreement, nor any action taken by any of the Secured Parties or Agents pursuant
hereto is intended to be, nor shall it be construed to be, the formation of a
partnership or joint venture among the Secured Parties and the Agents.
Section 5.4 Limited Purpose of Agreement. The provisions of this
Agreement shall have no effect upon the rights of any Secured Party or Agent
against any Obligor. None of the Obligors or any of their respective Affiliates
shall be entitled for any purpose or under any circumstances to rely upon the
failure of the Secured Parties or the Agents, or any of them, to comply with the
terms hereof. Nothing herein contained shall be deemed to authorize any Obligor
or any of their respective Affiliates to take any action not permitted under any
other documents to which any of them is a party.
SECTION 6. AMENDMENTS
Section 6.1. Amendments and Waivers of this Agreement . This Agreement
may be amended, supplemented, restated or modified only with the written consent
of the Required Secured Parties and each of the Agents, provided that no
amendment of any provision of Section 4 (or of any of the defined terms used
therein) shall be effective without the written consent of each of the Secured
Parties and each of the Agents. No waiver of any provision of this Agreement
shall be effective unless consented to in writing by the party against which
such waiver is to be effective.
Section 6.2. Amendment and Waivers of Other Agreements. The Secured
Parties, the Agents and the Lenders agree that:
(a) the respective parties to the Revolver Documents (other than this
Agreement) shall not effect, enter into or agree to any Prohibited Revolver
Amendment, except with the prior written consent of the Required Institutional
Investors and the Required Bank Term Lenders (as well as such other approvals
and consents as may be required under the Bank Loan Agreement);
(b) the respective parties to the Bank Term Documents (other than this
Agreement, the Warrant Agreement and Warrants (each as defined in the Bank Loan
Agreement)) shall not
17
effect, enter into or agree to any Prohibited Bank Term Loan Amendment, except
with the prior written consent of the Required Institutional Investors and the
Required Revolver Lenders (as well as such other approvals and consents as may
be required under the Bank Loan Agreement); and
(c) the respective parties to the Institutional Investor Documents
(other than this Agreement, the Warrant Agreement and Warrants) shall not
effect, enter into or agree to any Prohibited Institutional Investor Amendment,
except with the prior written consent of the Required Revolver Lenders and the
Required Bank Term Lenders (as well as such other approvals and consents as may
be required under the Note Agreement).
Any purported amendment, modification or waiver of any of the Revolver
Documents, the Bank Term Documents or the Institutional Investor Documents that
would be in conflict with this Section 6.2 shall be invalid, of no force and
effect, and shall be deemed a breach of this Agreement by the parties purporting
to effect such amendment, modification or waiver.
Nothing contained herein shall be deemed to preclude any Secured Party
or Agent from exercising its right to grant waivers of Defaults or Events of
Default under the Revolver Documents, the Bank Term Documents or the
Institutional Investor Documents, as applicable, so long as the conditions or
other terms of such waiver do not constitute a Prohibited Revolver Amendment,
Prohibited Bank Term Loan Amendment or Prohibited Institutional Investor
Amendment.
SECTION 7. MISCELLANEOUS
Section 7.1. Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of any of the Revolver
Documents, the Bank Term Documents or the Institutional Investor Documents, the
provisions of this Agreement shall prevail.
Section 7.2. Notices and Information. All notices and other
communications hereunder shall be in writing and shall be personally delivered,
delivered by overnight courier or sent by telecopier, to the respective parties
hereto at their respective addresses set forth in Schedule I attached hereto, or
to such other address for a party as such party shall specify in writing to the
other parties to this Agreement. Notices and other communications shall be
deemed delivered to a party when delivered by one of the above specified methods
to the indicated location(s) of such party and receipt of a counter signature
acknowledging receipt by an individual at such location.
Section 7.3. Transfer of Obligations; Parties in Interest. In the event
of any transfer by a Secured Party or Agent of any of the Secured Obligations,
such transfer shall be made expressly subject to the terms of this Agreement
which shall be binding on the transferee to the same extent as its transferor.
All of the terms and provisions of this Agreement shall inure to the benefit of
and be binding upon and enforceable by the respective successors and assigns of
the parties hereto, whether so expressed or not and, in particular, shall inure
to the benefit of and be enforceable by any future holder or holders of any
Secured Obligations.
Section 7.4. Governing Law; Jurisdiction; Waiver of Jury Trial.
THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH
18
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS (WITHOUT GIVING EFFECT TO CONFLICT OR CHOICE OF LAW
PRINCIPLES).
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF XXXX, STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT ANY
ACTION OR PROCEEDING SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE OPTION OF THE AGENT OR SECURED PARTY BRINGING
SUCH ACTION OR COMMENCING SUCH PROCEEDING, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH PARTY ELECTS TO BRING SUCH ACTION OR COMMENCE SUCH PROCEEDING WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY WAIVES, TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 7.4.
EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT
SUCH PARTY HAS REVIEWED THIS WAIVER AND SUCH PARTY KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
Section 7.5. Miscellaneous. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement (together with the Revolver Documents, the Bank Term
Documents and the Institutional Investor Documents) embodies the entire
agreement and understanding among the Secured Parties, the Agent and the
Obligors relating to the subject matter hereof, and supersedes all prior
agreements and understandings relating to the subject matter hereof. If any
provision in this Agreement refers to any action taken or to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable, whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision. In case any provision in
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. This Agreement may be executed in any number of
counterparts and by the parties hereto or thereto, as the case may be, on
separate counterparts but all such counterparts shall together constitute but
one and the same instrument.
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Section 7.6. No Third Parties Benefited. This Agreement is solely for
the benefit of the Secured Parties and the Agents and their respective
successors and permitted assigns, and no Person, including any Obligor shall
have any right, benefit, priority or interest under, or because of the existence
of this Agreement.
Section 7.7. Revival and Reinstatement of Obligations. If the
incurrence or payment of any of the Secured Obligations by any Obligor or the
transfer to any Agent or Secured Party of any property should for any reason
subsequently be declared to be void or voidable under any state or federal law
relating to creditors' rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property (collectively, a
"Voidable Transfer"), and if any of the Secured Parties or Agents is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that such Secured Party or Agent is required or
elects to repay or restore, the rights and obligations of each Obligor, Secured
Party and Agent automatically shall be revived, reinstated, and restored and
shall exist as though such Voidable Transfer had never been made, and the
parties shall reallocate among them pursuant to Section 4.2(c) funds previously
received from and after the date of receipt of the Voidable Transfer.
[SIGNATURE PAGES BEGIN ON FOLLOWING PAGE]
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
AGENTS:
BANK ONE, NA, as Revolver Agent
By:________________________________________
Name:
Title:
BANK ONE, NA, as Bank Term Agent
By:________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
By:________________________________________
Name:
Title:
REVOLVER LENDERS:
BANK ONE, NA, as Revolver Lender
By:________________________________________
Name:
Title:
BANK TERM LENDERS:
CREDIT SUISSE FIRST BOSTON, as
Bank Term Lender
By:________________________________________
Name:
Title:
ABN AMRO BANK N.V., as Bank Term
Lender
By:________________________________________
Name:
Title:
BNP PARIBAS, as Bank Term Lender
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
MIZUHO CORPORATE BANK, LTD., as
Bank Term Lender
By:________________________________________
Name:
Title:
THE NORTHERN TRUST COMPANY, as
Bank Term Lender
By:________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Bank Term Lender
By:________________________________________
Name:
Title:
INSTITUTIONAL INVESTORS:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By CIGNA Investments, Inc.
By:________________________________________
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY ON
BEHALF OF ONE OR MORE
SEPARATE ACCOUNTS
By CIGNA Investments, Inc.
By:________________________________________
Name:
Title:
CANADA LIFE INSURANCE COMPANY
OF AMERICA
By:________________________________________
Name:
Title:
CANADA LIFE INSURANCE COMPANY
OF NEW YORK
By:________________________________________
Name:
Title:
SOUTHERN FARM BUREAU LIFE
INSURANCE COMPANY
By:________________________________________
Name:
Title:
AMERICAN GENERAL LIFE
INSURANCE COMPANY
THE UNITED STATES LIFE
INSURANCE COMPANY IN THE
CITY OF NEW YORK
By AIG Global Investment Corp.,
investment adviser
By:________________________________________
Name:
Title:
THE TRAVELERS INSURANCE
COMPANY
By:________________________________________
Name:
Title:
FIRST TRENTON INDEMNITY
COMPANY
By:________________________________________
Name:
Title:
Schedule I
Address for Notices
Schedule II
Acknowledgement and Consent
Each of the undersigned hereby acknowledges receipt of a copy of the foregoing
Intercreditor Agreement consents to and agrees to be bound by the terms and
provisions thereof (as in effect on the date hereof and as amended, supplemented
or modified (with the consent of the Administrative Borrower prior to the
occurrence of an Event of Default)), and agrees not to take any action contrary
thereto. Each of the undersigned further acknowledges and agrees that the
Intercreditor Agreement is solely for the benefit of the Secured Parties and the
Agents, and their respective successors assigns, and none of the undersigned
shall have any right, benefit, priority or interest under, or because of the
existence of, the Intercreditor Agreement.
BORROWERS:
MIDAS INTERNATIONAL
CORPORATION,
a Delaware corporation
By:________________________________________
Name:
Title:
PARTS WAREHOUSE, INC.,
a Delaware corporation
By:________________________________________
Name:
Title:
DEALERS WHOLESALE, INC.,
a Delaware corporation
By:________________________________________
Name:
Title:
INTERNATIONAL PARTS
CORPORATION,
a Delaware corporation
By:________________________________________
Name:
Title:
MUFFLER CORPORATION OF
AMERICA,
a Illinois corporation
By:________________________________________
Name:
Title:
XXXX, INC.,
a Delaware corporation
By:________________________________________
Name:
Title:
MIDAS PROPERTIES, INC.,
a New York corporation
By:________________________________________
Name:
Title:
MIDAS REALTY CORPORATION,
a Delaware corporation
By:________________________________________
Name:
Title:
COSMIC HOLDINGS LLC,
a Delaware limited liability company
By:________________________________________
Name:
Title:
COSMIC HOLDINGS CORPORATION,
a Delaware corporation
By:________________________________________
Name:
Title:
GUARANTORS:
MIDAS, INC.,
a Delaware corporation
By:________________________________________
Name:
Title:
PROGRESSIVE AUTOMOTIVE
SYSTEMS, INC.,
a Delaware corporation
By:________________________________________
Name:
Title:
MIDAS ILLINOIS INC.,
a Illinois corporation
By:________________________________________
Name:
Title:
MIDAS INTERNATIONAL
CORPORATION,
a Wyoming corporation
By:________________________________________
Name:
Title:
MIDAS CANADA HOLDINGS LIMITED,
an Ontario corporation
By:________________________________________
Name:
Title:
MIDAS CANADA INC.,
an Ontario corporation
By:________________________________________
Name:
Title:
MIDAS REALTY CORPORATION OF
CANADA INC.,
an Ontario corporation
By:________________________________________
Name:
Title:
APWI CANADA, INC.,
a Canada corporation
By:________________________________________
Name:
Title:
MIDAS AUTOMOTIVE HOLDINGS, B.V.,
a Netherlands corporation
By:________________________________________
Name:
Title:
MIDAS AUTOMOTIVE INTERNATIONAL,
B.V.,
a Netherlands corporation
By:________________________________________
Name:
Title:
