INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of April 23, 2004, is
entered into among SILVER POINT FINANCE, LLC, as Senior Collateral Agent (as
defined below), WACHOVIA BANK, NATIONAL ASSOCIATION, as Noteholder Collateral
Agent (as defined below), and AAIPHARMA INC., a Delaware corporation (the
"Borrower").
W I T N E S S E T H :
WHEREAS, the Borrower, one or more of its affiliates, the
financial institutions party to the Senior Credit Agreement referred to below as
lenders and issuing banks, Silver Point Finance, LLC, as collateral agent for
such lenders and issuing banks (in such capacity, the "Senior Collateral Agent")
and Bank of America, N.A., as administrative agent for such lenders and issuing
banks, propose to enter into a Financing Agreement, dated as of April 23, 2004
(as such agreement may be amended, amended and restated, supplemented or
otherwise modified, from time to time at the option of the parties thereto and
any other agreements pursuant to which any of the indebtedness, commitments,
obligations, costs, expenses, fees, reimbursements, indemnities or other
obligations payable or owing thereunder may be refinanced, restructured,
renewed, extended, increased, refunded or replaced as any such other agreements
may from time to time at the option of the parties thereto be amended, amended
and restated, supplemented, renewed or otherwise modified, being collectively
referred to herein the "Senior Credit Agreement"); and
WHEREAS, the Borrower, one or more of its affiliates, and
Wachovia Bank, National Association (formerly known as First Union National
Bank), as the trustee under the Indenture referred to below (in such capacity,
the "Trustee"), entered into an Indenture, dated as of March 28, 2002, as
amended by the First Supplemental Indenture dated as of April 20, 2004 (as so
amended and as such Indenture may be further amended, amended and restated,
supplemented or otherwise modified, from time to time at the option of the
parties thereto, the "Indenture") governing the rights and duties of the
Borrower and certain of its affiliates under the 11% Senior Subordinated Notes
due 2010 (the "Notes");
WHEREAS, it is a condition precedent to the effectiveness of
the Senior Credit Agreement that the Senior Collateral Agent, for itself and for
the benefit of the Senior Lenders, Wachovia Bank, National Association, as
collateral agent under the Noteholder Documents referred to below (in such
capacity, the "Noteholder Collateral Agent"), for itself and for the benefit of
the Trustee and the Noteholders, and the Borrower enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and for other good and valuable
consideration, the adequacy and receipt of which are hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and the plural form of the terms indicated) and
capitalized terms defined in the Senior Credit
Agreement used (but not otherwise defined) herein shall have the meanings
ascribed to them in the Senior Credit Agreement:
"Agreement" shall mean this Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Bankruptcy Code" shall mean title 11 of the United States
Code (11 U.S.C. 101 et seq.), as amended from time to time and any successor
statute.
"Borrower" shall have the meaning set forth in the first
paragraph hereof.
"Business Day" shall mean any day other than Saturday, Sunday
and a day that is a legal holiday under the laws of the State of New York or on
which banking institutions in the State of New York are required or authorized
by law or other governmental action to remain closed.
"Collateral" shall mean all of the assets of the Borrower or
any of its Subsidiaries whether real, personal or mixed.
"Comparable Noteholder Collateral Document" shall mean, in
relation to any Collateral subject to any Senior Lender Collateral Document,
that Noteholder Collateral Document which creates a security interest in the
same Collateral, granted by the Borrower or same Guarantor, as applicable.
"Discharge of Senior Lender Claims" shall mean, except to the
extent otherwise provided in Section 5.6, payment in full of the principal of,
interest and premium, if any, on all indebtedness outstanding under the Senior
Credit Agreement and any Future First-Lien Credit Facility or, with respect to
Hedging Obligations or letters of credit outstanding under or in connection with
any of the foregoing, delivery of cash collateral or backstop letters of credit
in respect thereof in compliance with the Senior Credit Agreement or such
First-Lien Credit Facility, as applicable, in each case after or concurrently
with termination of all commitments to extend credit thereunder, and payment in
full of any other Senior Lender Claims that are due and payable at or prior to
the time such principal and interest are paid.
"Future First-Lien Credit Facility" shall mean any Credit
Facility (as defined in the Indenture) that is designated by the Borrower as a
"Credit Facility" for purposes of the Indenture (other than the Senior Credit
Agreement referenced in the recitals hereto), provided that the Required Lenders
under the Senior Credit Agreement then in effect have consented to such
designation.
"Guarantor" shall mean each Subsidiary of the Borrower that is
a guarantor of any of the Noteholder Claims, whether now or at any time in the
future.
"Hedging Obligations" shall mean, with respect to any Person,
the obligations of such Person under (a) interest rate or currency swap
agreements, interest rate or currency cap agreements, interest rate or currency
collar agreements and (b) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates and/or currency exchange
rates.
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"Indebtedness" shall mean, with respect to any specified
Person without duplication, any indebtedness of such Person, whether or not
contingent (a) in respect of borrowed money; (b) evidenced by bonds, notes,
debentures or other similar instruments or letters of credit (or reimbursement
agreements in respect thereof); (c) in respect of banker's acceptances; (d)
representing obligations in connection with Capital Leases; (e) representing the
balance deferred and unpaid of the purchase price of any property, except any
such balance that constitutes an accrued expense or trade payable, if and to the
extent any of the preceding items (other than letters of credit and
reimbursement obligations in respect thereof) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of another Person
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) to the extent of the fair
market value of such asset where the Indebtedness so secured is not the
Indebtedness of the specified Person and, to the extent not otherwise included,
the guaranty by the specified Person of the Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be (i) the
accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount; and (ii) the principal amount of the Indebtedness,
together with any interest on the Indebtedness that is more than 30 days past
due, in the case of any other Indebtedness. Hedging Obligations shall not
constitute Indebtedness, except to the extent they appear on the balance sheet
of the Borrower. Indebtedness of the Borrower and its Restricted Subsidiaries
(as defined in the Indenture) shall not include any Indebtedness of the Borrower
or any of its Restricted Subsidiaries that has been either satisfied and
discharged or defeased through covenant defeasance or legal defeasance.
"Indenture" shall have the meaning set forth in the recitals
hereto.
"Insolvency or Liquidation Proceeding" shall mean (a) any
voluntary or involuntary case or proceeding under the Bankruptcy Code with
respect to the Borrower or any Guarantor, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to the Borrower or any Guarantor or with respect to any of their
respective assets, (c) any liquidation, dissolution, reorganization or winding
up of the Borrower or any Guarantor whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy or (d) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of the Borrower
or any Guarantor.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, deposit arrangement, encumbrance,
lien or preference priority or other security agreement or other preferential
arrangement whatsoever, including, without limitation, any right of setoff, any
conditional sale or other title retention agreement, the interest of a lessor
under a lease or any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing statement naming
the owner of the asset to which such Lien relates as debtor.
"Noteholder" shall mean a Person in whose name a Note is
registered.
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"Noteholder Claims" shall mean all indebtedness, obligations
and other liabilities of any nature (contingent or otherwise) arising under or
with respect to the Noteholder Documents or any of them.
"Noteholder Collateral Agent" shall include, in addition to
the Noteholder Collateral Agent referred to in the recitals hereto, the then
acting collateral agent for the Noteholders under the Noteholder Collateral
Documents and any successor thereto exercising substantially the same rights and
powers, or if there is no acting collateral agent under the Noteholder
Collateral Documents, the Noteholders holding a majority in principal amount of
Noteholder Claims then outstanding.
"Noteholder Collateral Documents" shall mean the Noteholder
Security Agreement, the Noteholder Pledge Agreement, the Noteholder Mortgages,
and any document or instrument executed and delivered pursuant to any Noteholder
Document at any time or otherwise pursuant to which a Lien with respect to the
Collateral is granted by the Borrower or a Guarantor to secure any Noteholder
Claims or under which rights or remedies with respect to any such Lien are
governed, as the same may be amended, renewed, extended, supplemented or
modified from time to time.
"Noteholder Documents" shall mean the Indenture, the Notes,
the Noteholder Collateral Documents and any other related document or instrument
executed and delivered pursuant to any Noteholder Document at any time or
otherwise evidencing any Noteholder Claims, as the same may be amended, renewed,
extended, supplemented or modified from time to time.
"Noteholder Mortgages" shall mean a collective reference to
each mortgage, deed of trust and any other document or instrument under which
any Lien with respect to the Collateral consisting of real property owned by the
Borrower or any Subsidiary is granted to secure any Noteholder Claims or under
which rights or remedies with respect to any such Liens are governed, as the
same may be amended, renewed, extended, supplemented or modified.
"Noteholder Pledge Agreement" shall mean the Pledge and
Security Agreement, dated as of April 23, 2004, between the Borrower, the
Guarantors and the Noteholder Collateral Agent, as the same may be amended,
renewed, extended, supplemented or modified.
"Noteholder Security Agreement" shall mean the Security
Agreement, dated as of April 23, 2004, between the Borrower, the Guarantors and
the Noteholder Collateral Agent, as the same may be amended, renewed, extended,
supplemented or modified.
"Notes" shall have the meaning set forth in the recitals
hereto.
"Obligations" shall mean any principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness (including any obligation to
post cash collateral in respect of letters of credit and any other obligations),
or any obligation for cash management services or Hedging Obligations.
"Person" shall mean any person, individual, sole
proprietorship, partnership, joint venture, corporation, unincorporated
organization, association, institution, entity or other party,
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including, without limitation, any government and any political subdivision,
agency or instrumentality thereof.
"Pledged Collateral" shall mean the "Pledged Notes" and the
"Pledged Stock" under, and as defined in, the Pledge Agreement, cash and other
items in domestic deposit and securities accounts with respect to which an
account control agreement with the Senior Collateral Agent has been executed,
and any other property in the possession of the Senior Collateral Agent (or its
agents or bailees).
"Recovery" shall have the meaning set forth in Section 6.5
hereof.
"Required Lenders" shall mean, with respect to any amendment
or modification of the Senior Credit Agreement, or any termination or waiver of
any provision of the Senior Credit Agreement, or any consent or departure by the
Borrower or any Guarantor therefrom, those Senior Lenders, the approval of which
is required to approve such amendment or modification, termination or waiver or
consent or departure.
"Senior Collateral Agent" shall include, in addition to the
Senior Collateral Agent referred to in the recitals hereto, the then acting
collateral agent for the Senior Lenders (or if there is more than one agent, a
majority of them) under the Senior Lender Documents and any successor thereto
exercising substantially the same rights and powers, or if there is no acting
Senior Collateral Agent under the Senior Credit Agreement, the Required Lenders.
"Senior Credit Agreement" shall have the meaning set forth in
the recitals hereto; provided that if at any time a Discharge of Senior Lender
Claims occurs with respect to the Senior Credit Agreement referenced in the
recitals hereto (without giving effect to Section 5.6), then, to the extent
provided in Section 5.6, the term "Senior Credit Agreement" shall mean the
Future First-Lien Credit Facility designated by the Borrower in accordance with
the terms of such section.
"Senior Lender Cash Management Obligations" shall mean all
Obligations (as defined in the Senior Credit Agreement or any Future First-Lien
Credit Facility), now or hereafter outstanding, of the Borrower or any of its
Subsidiaries in respect of cash management services.
"Senior Lender Claims" shall mean (a) all Indebtedness, now or
hereafter outstanding, under one or more of the Senior Lender Documents,
including any Future First-Lien Credit Facilities, the Indebtedness under each
of which constitutes Permitted Debt (as defined in the Indenture) or is
otherwise permitted by the Indenture and (b) all other Obligations, now or
hereafter outstanding, not constituting Indebtedness of the Borrower or a
Guarantor, under the Senior Lender Documents or any such Future First-Lien
Credit Facility, including, without limitation, all Senior Lender Hedging
Obligations and Senior Lender Cash Management Obligations. Senior Lender Claims
shall include all interest accrued or accruing (or which would, absent the
commencement of an Insolvency or Liquidation Proceeding, accrue) after the
commencement of an Insolvency or Liquidation Proceeding in accordance with and
at the rate specified in the Senior Credit Agreement whether or not the claim
for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to
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any of the Senior Lender Claims (whether by or on behalf of the Borrower or any
Guarantor, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"Senior Lender Collateral Documents" shall mean the Security
Agreement, the Pledge Agreement, the Mortgages and any Loan Document or other
document or instrument pursuant to which a Lien is granted securing any Senior
Lender Claims, as the same may be amended, renewed, extended, supplemented or
modified from time to time.
"Senior Lender Documents" shall mean the Senior Credit
Agreement and each of the other Loan Documents (as defined in the Senior Credit
Agreement or any Future First-Lien Credit Facility) (including, without
limitation, each document or instrument evidencing a Senior Lender Hedging
Obligation or Senior Lender Cash Management Obligation), all documents and
instruments evidencing any other obligation under the Senior Credit Agreement or
any Future First-Lien Credit Facility, and any other related document or
instrument executed or delivered pursuant to any Senior Lender Document at any
time or otherwise evidencing, governing or relating to any Senior Lender Claims,
as any such document or instrument may from time to time be amended, renewed,
restated, supplemented or otherwise modified.
"Senior Lender Hedging Obligations" shall mean Obligations (as
defined in the Senior Credit Agreement or any Future First-Lien Credit
Facility), now or hereafter outstanding, constituting Hedging Obligations of the
Borrower or any of its Subsidiaries.
"Senior Lenders" shall mean the Persons holding Senior Lender
Claims, including, without limitation, the Senior Collateral Agent.
"Trustee" shall have the meaning set forth in the recitals
hereto.
"Uniform Commercial Code" or "UCC" shall mean the Uniform
Commercial Code of the State of New York, as amended.
SECTION 2. LIEN PRIORITIES.
2.1 Subordination. Notwithstanding the date, manner or
order of grant, attachment or perfection of any Liens granted to the Noteholder
Collateral Agent or any of the Noteholders on the Collateral or of any Liens
granted to the Senior Collateral Agent or any of the Senior Lenders on the
Collateral and notwithstanding any provision of the UCC, or any applicable law
or the Noteholder Documents or the Senior Lender Documents or any other
circumstance whatsoever, the Noteholder Collateral Agent, on behalf of itself
and the Noteholders, hereby agrees that: (a) any Lien on the Collateral securing
any or all of the Senior Lender Claims now or hereafter held by the Senior
Collateral Agent or any of the Senior Lenders shall be senior and prior to any
Lien on the Collateral securing any or all of the Noteholder Claims; and (b) any
Lien on the Collateral now or hereafter held by the Noteholder Collateral Agent
or any of the Noteholders regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Collateral securing any or all of the Senior
Lender Claims. All Liens on the Collateral
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securing any or all of the Senior Lender Claims shall be and remain senior to
all Liens on the Collateral securing any or all of the Noteholder Claims for all
purposes, whether or not any such Liens securing any of the Senior Lender Claims
are subordinated to any Lien securing any other obligation of the Borrower or
any Guarantor.
2.2 Prohibition on Contesting Liens. Each of the
Noteholder Collateral Agent, for itself and on behalf of each Noteholder, and
the Senior Collateral Agent, for itself and on behalf of each Senior Lender,
agrees that it shall not (and hereby waives any right to) contest or support any
other Person in contesting, in any proceeding (including, without limitation,
any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of a Lien held by the Senior Collateral Agent or any of the
Senior Lenders in any of the Collateral or by the Noteholder Collateral Agent or
any of the Noteholders in any of the Collateral, as the case may be.
2.3 No New Liens. So long as the Discharge of Senior
Lender Claims has not occurred, (a) the parties hereto agree that, after the
date hereof, if the Noteholder Collateral Agent or any Noteholder shall hold any
Lien on any assets of the Borrower or any of its Subsidiaries securing any of
the Noteholder Claims that are not also subject to the first-priority (ahead of
the Noteholder Collateral Agent and the Noteholders) Lien of the Senior
Collateral Agent under the Senior Lender Documents, the Noteholder Collateral
Agent, upon demand by the Senior Collateral Agent, will either release (or cause
the release of) such Lien or assign it (or cause it to be assigned) to the
Senior Collateral Agent as security for the Senior Lender Claims, and (b) the
Borrower agrees not to grant any Lien on any of its assets, or permit any
Subsidiary of the Borrower to xxxxx x Xxxx on any of its assets, in favor of the
Noteholder Collateral Agent or any of the Noteholders unless it, or such
Subsidiary, has granted a similar Lien on such assets in favor of Senior
Collateral Agent or the Senior Lenders.
SECTION 3. ENFORCEMENT.
3.1 Exercise of Remedies.
(a) So long as the Discharge of Senior Lender Claims has
not occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against the Borrower or any Guarantor, (i) the Noteholder
Collateral Agent and the Noteholders will not exercise or seek to exercise any
rights or remedies (including setoff) with respect to any Collateral, institute
any action or proceeding with respect to such rights or remedies, including,
without limitation, any action of foreclosure, contest, protest or object to any
foreclosure proceeding or action brought by the Senior Collateral Agent or any
Senior Lender, the exercise of any right under any cash management agreement,
landlord waiver or bailee's letter or similar agreement or arrangement to which
the Noteholder Collateral Agent or any Noteholder is a party, or any other
exercise by any such party, of any rights and remedies relating to the
Collateral under the Senior Lender Documents or otherwise, or object to the
forbearance by the Senior Collateral Agent and the Senior Lenders or any of them
from bringing or pursuing any foreclosure proceeding or action or any other
exercise of any rights or remedies relating to the Collateral and (ii) the
Senior Collateral Agent and the Senior Lenders shall have the exclusive right to
enforce rights, exercise remedies (including, without limitation, setoff and the
right to credit bid their debt) and make determinations regarding release,
disposition, or restrictions with
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respect to the Collateral without any consultation with or the consent of the
Noteholder Collateral Agent or any Noteholder; provided, however, (A) that in
any Insolvency or Liquidation Proceeding commenced by or against the Borrower or
any Guarantor, the Noteholder Collateral Agent or the Trustee may file a claim
or statement of interest (including, without limitation, one or more proofs of
claim) with respect to the Noteholder Claims, and (B) the Noteholder Collateral
Agent may take any action not adverse to the Liens on the Collateral securing
any of the Senior Lender Claims in order to preserve or protect its rights in
the Collateral. In exercising rights and remedies with respect to the
Collateral, the Senior Collateral Agent and the Senior Lenders or any of them
may enforce the provisions of the Senior Lender Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in the
exercise of their sole discretion. Such exercise and enforcement shall include,
without limitation, the rights of an agent appointed by them to sell or
otherwise dispose of Collateral upon foreclosure, to incur expenses in
connection with such sale or disposition, and to exercise all the rights and
remedies of a secured lender under the Uniform Commercial Code of any applicable
jurisdiction and of a secured creditor under bankruptcy or similar laws of any
applicable jurisdiction.
(b) The Noteholder Collateral Agent, on behalf of itself
and the Noteholders, agrees that it will not take or receive any Collateral or
any proceeds of Collateral in connection with the exercise of any right or
remedy (including setoff) with respect to any Collateral, unless and until the
Discharge of Senior Lender Claims has occurred. Without limiting the generality
of the foregoing, unless and until the Discharge of Senior Lender Claims has
occurred, except as expressly provided in the proviso in Section 3.1(a)(ii)
above, the sole right of the Noteholder Collateral Agent and the Noteholders
with respect to the Collateral is to hold a Lien on the Collateral pursuant to
the Noteholder Documents for the period and to the extent granted therein and to
receive a share of the proceeds thereof, if any, after the Discharge of Senior
Lender Claims has occurred.
(c) Subject to the proviso in Section 3.1(a)(ii) above,
(a) the Noteholder Collateral Agent, for itself and on behalf of the
Noteholders, agrees that the Noteholder Collateral Agent and the Noteholders
will not take any action that would hinder any exercise of remedies undertaken
by the Senior Collateral Agent or any Senior Lender with respect to the
Collateral under any of the Senior Loan Documents, including any sale, lease,
exchange, transfer or other disposition of any Collateral, whether by
foreclosure or otherwise, and (b) the Noteholder Collateral Agent, for itself
and on behalf of the Noteholders, hereby waives any and all rights it or any of
the Noteholders may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Collateral Agent or any of the Senior Lenders seek to
enforce or collect any Senior Lender Claims or any Liens granted in any of the
Collateral.
3.2 Cooperation. Subject to the proviso in Section
3.1(a)(ii) above, the Noteholder Collateral Agent, on behalf of itself and the
Noteholders, agrees that, unless and until the Discharge of Senior Lender Claims
has occurred, it will not commence, or join with any Person (other than the
Senior Lenders and the Senior Collateral Agent upon the request thereof) in
commencing any enforcement, collection, execution, levy or foreclosure action or
proceeding with respect to any Lien held by it with respect to the Collateral
under any of the Noteholder Documents or otherwise.
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SECTION 4. PAYMENTS.
4.1 Application of Proceeds. As long as the Discharge of
Senior Lender Claims has not occurred, the cash proceeds of Collateral received
in connection with the sale of, or collection on, such Collateral upon the
exercise of remedies, shall be applied by the Senior Collateral Agent to the
Senior Lender Claims in such order as specified in the Senior Credit Agreement
until the Discharge of Senior Lender Claims has occurred. Upon the Discharge of
Senior Lender Claims, the Senior Collateral Agent shall deliver to the
Noteholder Collateral Agent any proceeds of Collateral held by it in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct.
4.2 Payments Over. Any Collateral or proceeds thereof
received by the Noteholder Collateral Agent or any Noteholder in connection with
the exercise of any right or remedy (including setoff) relating to any
Collateral in contravention of this Agreement shall be segregated and held in
trust and forthwith paid over to the Senior Collateral Agent for the benefit of
the Senior Lenders in the same form as received, with any necessary endorsements
or as a court of competent jurisdiction may otherwise direct. The Senior
Collateral Agent is hereby authorized to make any such endorsements as agent for
the Noteholder Collateral Agent or any such Noteholder. This authorization is
coupled with an interest and is irrevocable.
SECTION 5. OTHER AGREEMENTS.
5.1 Releases.
(a) If in connection with:
(i) the exercise of the Senior Collateral
Agent's remedies in respect of any of the Collateral provided for in
Section 3.1, including any sale, lease, exchange, transfer or other
disposition of such Collateral;
(ii) any sale, lease, exchange, transfer or other
disposition of Collateral permitted under the terms of the Senior
Credit Agreement (whether or not an event of default under, and as
defined therein, has occurred and is continuing) and permitted or not
prohibited under Section 4.10 of the Indenture (Asset Sales); or
(iii) any agreement between the Senior Collateral
Agent and the Borrower to release the Senior Collateral Agent's Lien on
any portion of the Collateral or to release any Guarantor from its
obligations under the Senior Credit Agreement or any of the other
Senior Lender Documents, which release is not otherwise prohibited by
the terms of the Noteholder Documents;
the Senior Collateral Agent, for itself or on behalf of the Senior Lenders,
releases any of its Liens on any part of the Collateral (or any Guarantor from
its obligations under the Senior Credit Agreement or any of the other Senior
Lender Documents), the Liens, if any, of the Noteholder Collateral Agent, for
itself or for the benefit of the Noteholders, on such Collateral (and the
obligations of such Guarantor under its guaranty of the Noteholder Claims) shall
be automatically, unconditionally and simultaneously released and the Noteholder
Collateral Agent, for itself or on behalf of any such Noteholder, promptly shall
execute and deliver to the Senior Collateral Agent or the Borrower such
termination statements, releases and other documents as the Senior
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Collateral Agent or the Borrower may request to effectively confirm such
release; provided, however, that if an Event of Default under the Indenture
exists as of the date of the Discharge of Senior Lender Claims, the Collateral
securing the Noteholder Claims shall not be released until such Event of Default
and all other Events of Default shall have been cured or otherwise waived except
to the extent such Collateral was disposed of in connection with the Discharge
of Senior Lender Claims; and provided, further, that if the Senior Lender Claims
(or any portion thereof) are, pursuant to Section 5.6 or otherwise, thereafter
secured by assets of the Borrower or any of its Subsidiaries that would
constitute Collateral for the Senior Lender Claims, the Noteholder Claims shall
then be secured by Liens on such Collateral that are subordinated to the Liens
on the Senior Lender Claims to the same extent provided pursuant to this
Agreement as then in effect immediately prior to the release by the Noteholder
Collateral Agent of its Liens on the Collateral.
(b) The Noteholder Collateral Agent, for itself and on
behalf of the Noteholders, hereby irrevocably constitutes and appoints the
Senior Collateral Agent and any officer or agent of the Senior Collateral Agent,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Noteholder
Collateral Agent or such holder or in the Senior Collateral Agent's own name,
from time to time in the Senior Collateral Agent's discretion, for the purpose
of carrying out the terms of this Section 5.1, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Section 5.1,
including, without limitation, any financing statements, endorsements or other
instruments of transfer or release.
5.2 Insurance. Unless and until the Discharge of Senior
Lender Claims has occurred, the Senior Collateral Agent and the Senior Lenders
shall have the sole and exclusive right, subject to the rights of the Borrower
under the relevant Senior Lender Documents, to adjust settlement for any
insurance policy covering any Collateral in the event of any loss thereunder and
to approve any award granted in any condemnation or similar proceeding affecting
any Collateral. Unless and until the Discharge of Senior Lender Claims has
occurred, all proceeds of any such policy and any such award if in respect to
Collateral shall be paid to the Senior Collateral Agent for the benefit of the
Senior Lenders to the extent required under the Senior Credit Agreement and the
other Senior Lender Documents and thereafter to the Noteholder Collateral Agent
for the benefit of the Noteholders to the extent required under the applicable
Noteholder Documents and then to the owner of the subject property or as a court
of competent jurisdiction may otherwise direct. If the Noteholder Collateral
Agent or any Noteholder shall, at any time, receive any proceeds of any such
insurance policy or any such award in contravention of this Agreement, it shall
pay such proceeds over to the Senior Collateral Agent in accordance with the
terms of Section 4.2.
5.3 Amendments to Noteholder Collateral Documents.
(a) Without the prior written consent of the Senior
Collateral Agent and the Required Lenders, no Noteholder Collateral Document may
be amended, supplemented or otherwise modified or entered into to the extent
such amendment, supplement or modification, or the terms of any new Noteholder
Collateral Document, would be inconsistent with any of the
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terms of any of the Senior Lender Documents or this Agreement. The Noteholder
Collateral Agent agrees that each Noteholder Collateral Document shall include
the following language:
"Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Noteholder Collateral Agent pursuant to this
Agreement and the exercise of any right or remedy by the Noteholder
Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of April 23, 2004 (as amended,
modified, supplemented or replaced from time to time, the
"Intercreditor Agreement"), among Silver Point Finance, LLC, as Senior
Collateral Agent, and Wachovia Bank, National Association, as
Noteholder Collateral Agent, and aaiPharma Inc. In the event of any
conflict between the terms of the Intercreditor Agreement and this
Agreement, the terms of the Intercreditor Agreement shall govern."
In addition, the Noteholder Collateral Agent agrees that (i) each Noteholder
Mortgage covering any Collateral shall contain such other language as the Senior
Collateral Agent may reasonably request to reflect the subordination of such
Noteholder Mortgage to the Mortgage covering such Collateral and (ii) each
Uniform Commercial Code financing statement naming the Noteholder Collateral
Agent as secured party covering any Collateral shall contain such other language
as the Senior Collateral Agent may reasonably request to reflect the lien
subordination agreed to in this Agreement.
(b) In the event the Senior Collateral Agent or the
Required Lenders enter into any amendment, waiver or consent in respect of any
of the Senior Lender Collateral Documents for the purpose of adding to, or
deleting from, or waiving or consenting to any departures from any provisions
of, any Senior Lender Collateral Document or changing in any manner the rights
of the Senior Collateral Agent, any of the Senior Lenders, the Borrower or any
of the Guarantors thereunder, then such amendment, waiver or consent shall apply
automatically to any comparable provision of the Comparable Noteholder
Collateral Document without the consent of the Noteholder Collateral Agent or
the Noteholders and without any action by the Noteholder Collateral Agent, the
Borrower or any Guarantor; provided, however, (A) that no such amendment, waiver
or consent shall have the effect of removing assets subject to the Lien of the
Noteholder Collateral Documents, except to the extent that a release of such
Lien is permitted by Section 5.1 and (B) notice of such amendment, waiver or
consent shall have been given to the Noteholder Collateral Agent.
5.4 Rights As Unsecured Creditors. Notwithstanding
anything to the contrary in this Agreement, the Noteholder Collateral Agent and
the Noteholders may exercise rights and remedies as an unsecured creditor
against the Borrower and its Subsidiaries in accordance with the terms of the
Noteholder Documents and applicable law. Nothing in this Agreement shall
prohibit the receipt by the Noteholder Collateral Agent, the Trustee or any
Noteholders of the required payments of interest and principal so long as such
receipt is not the direct or indirect result of the exercise by the Noteholder
Collateral Agent or any Noteholder of rights or remedies as a secured creditor
or enforcement of any Lien held by any of them with respect to the Collateral in
contravention of this Agreement. In the event the Noteholder Collateral Agent or
any Noteholder becomes a judgment lien creditor in respect of Collateral as a
result of its enforcement of its rights as an unsecured creditor, such judgment
lien shall be subordinated to the Liens securing Senior Lender Claims on the
same basis as the other Liens securing the
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Noteholder Claims are so subordinated to such Senior Lender Claims under this
Agreement. Nothing in this Agreement modifies any rights or remedies the Senior
Collateral Agent or any of the Senior Lenders may have with respect to the
Collateral.
5.5 Bailee for Perfection.
(a) The Senior Collateral Agent agrees to hold the
Pledged Collateral that is part of the Collateral in its possession or control
(or in the possession or control of its agents or bailees) as bailee for the
Noteholder Collateral Agent and any assignee solely for the purpose of
perfecting the security interest granted in such Pledged Collateral pursuant to
the Noteholder Security Agreement, the Noteholder Pledge Agreement or the other
Noteholder Collateral Documents, subject to the terms and conditions of this
Section 5.5.
(b) Until the Discharge of Senior Lender Claims has
occurred, the Senior Collateral Agent shall be entitled to deal with the Pledged
Collateral in accordance with the terms of the Senior Lender Documents as if the
Lien of the Noteholder Collateral Agent under the Noteholder Security Agreement
did not exist. The rights of the Noteholder Collateral Agent with respect to the
Pledged Collateral shall at all times be subject to the terms of this Agreement
and to the Senior Collateral Agent's rights under the Senior Lender Documents.
(c) The Senior Collateral Agent shall have no obligation
whatsoever to the Noteholder Collateral Agent or any Noteholder to assure that
the Pledged Collateral is genuine or owned by the Borrower or any of its
Subsidiaries or to preserve rights or benefits of any Person except as expressly
set forth in this Section 5.5. The duties or responsibilities of the Senior
Collateral Agent under this Section 5.5 shall be limited solely to holding the
Pledged Collateral as bailee for the Noteholder Collateral Agent for purposes of
perfecting the Lien held by the Noteholder Collateral Agent.
(d) The Senior Collateral Agent shall not have by reason
of the Noteholder Security Agreement or this Agreement or any other document a
fiduciary relationship in respect of the Noteholder Collateral Agent or any
Noteholder.
(e) Upon the Discharge of Senior Lender Claims, the
Senior Collateral Agent shall deliver to the Noteholder Collateral Agent the
Pledged Collateral in its possession or control (or in the possession or control
of its agents or bailees) together with any necessary endorsements (or otherwise
allow the Noteholder Collateral Agent to obtain control of such Pledged
Collateral) or as a court of competent jurisdiction may otherwise direct.
5.6 When Discharge of Senior Lender Claims Deemed to Not
Have Occurred. If at any time after the Discharge of Senior Lender Claims has
occurred the Borrower designates any Future First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder, then such Discharge of Senior Lender Claims
shall automatically be deemed not to have occurred for all purposes of this
Agreement (other than with respect to any actions taken prior to the date of
such designation as a result of the occurrence of such first Discharge of Senior
Lender Claims), and such Future First-Lien Credit Facility shall automatically
be treated as the Senior Credit Agreement for all purposes of this Agreement,
including without limitation for purposes of the Lien priorities and rights in
respect of Collateral set forth herein. Upon receipt of notice of such
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designation (including the identity of the new Senior Collateral Agent) from the
Borrower, the Noteholder Collateral Agent shall promptly, at the request of the
Borrower, deliver to the Senior Collateral Agent the Pledged Collateral together
with any necessary endorsements (or otherwise allow such Senior Collateral Agent
to obtain control of such Pledged Collateral).
SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.
6.1 Financing Issues. If the Borrower or any Guarantor
shall be subject to any Insolvency or Liquidation Proceeding and the Senior
Collateral Agent or any Senior Lender shall desire to permit the use of cash
collateral or to permit the Borrower or any Guarantor to obtain financing under
Section 363 or Section 364 of the Bankruptcy Code ("DIP Financing"), then the
Noteholder Collateral Agent, on behalf of itself and the Noteholders, agrees
that it will raise no objection to such use or DIP Financing and will not
request adequate protection or any other relief in connection therewith (except
to the extent permitted herein) and, to the extent any of the Liens securing any
Senior Lender Claims are subordinated or pari passu with such DIP Financing,
will subordinate its Liens in the same Collateral to such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to Senior Lender Claims under this
Agreement.
6.2 Relief from the Automatic Stay. Until the Discharge
of Senior Lender Claims has occurred, the Noteholder Collateral Agent, on behalf
of itself and the Noteholders, agrees that none of them shall seek relief from
the automatic stay or any other stay in any Insolvency or Liquidation Proceeding
in respect of the Collateral, without the prior written consent of the Senior
Collateral Agent and the Required Lenders.
6.3 Adequate Protection. The Noteholder Collateral Agent,
on behalf of itself and the Noteholders, agrees that none of them shall contest
(or support any other Person contesting) (a) any request by the Senior
Collateral Agent or any of the Senior Lenders for adequate protection or (b) any
objection by the Senior Collateral Agent or any of the Senior Lenders to any
motion, relief, action or proceeding based on the Senior Collateral Agent or any
of the Senior Lenders claiming a lack of adequate protection. Notwithstanding
the foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of its cash collateral under Section 363 or Section 364 of
the Bankruptcy Code, then the Noteholder Collateral Agent, on behalf of itself
or any of the Noteholders, may seek or request adequate protection in the form
of a replacement Lien on such additional collateral, which Lien is subordinated
to the Liens securing the Senior Lender Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to the Senior Lender Claims under this
Agreement, and (ii) in the event the Noteholder Collateral Agent, on behalf of
itself and the Noteholders, seeks or requests adequate protection and such
adequate protection is granted in the form of additional collateral, then the
Noteholder Collateral Agent, on behalf of itself and the Noteholders, agrees
that the Senior Collateral Agent shall also be granted a senior Lien on such
additional collateral as security for the relevant Senior Lender Claims and any
such DIP Financing and that any Lien on such additional collateral securing the
Noteholder Claims shall be subordinated to the Liens on such collateral securing
the Senior Lender Claims and any such DIP Financing (and all Obligations
relating thereto) and any other Liens granted to the
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Senior Collateral Agent or any of the Senior Lenders as adequate protection on
the same basis as the other Liens securing the Noteholder Claims are so
subordinated to the Senior Lender Claims under this Agreement.
6.4 No Waiver. Nothing contained herein shall prohibit or
in any way limit the Senior Collateral Agent or any Senior Lender from objecting
in any Insolvency or Liquidation Proceeding or otherwise to any action taken by
the Noteholder Collateral Agent or any of the Noteholders, including, without
limitation, the seeking by the Noteholder Collateral Agent or any Noteholder of
adequate protection or the asserting by the Noteholder Collateral Agent or any
Noteholder of any of its rights and remedies under the Noteholder Documents or
otherwise.
6.5 Preference Issues. If the Senior Collateral Agent or
any Senior Lender is required in any Insolvency or Liquidation Proceeding or
otherwise to turn over or otherwise pay to the estate of the Borrower or any
Guarantor any amount (a "Recovery"), then the relevant Senior Lender Claims
shall be reinstated to the extent of such Recovery and the Senior Collateral
Agent and/or Senior Lenders shall be entitled to a Discharge of Senior Lender
Claims with respect to all such recovered amounts. If this Agreement shall have
been terminated prior to such Recovery, this Agreement shall be reinstated in
full force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.
6.6 Reorganization Securities. If, in any Insolvency or
Liquidation Proceeding, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor are distributed, pursuant to a
plan of reorganization or similar dispositive restructuring plan, both on
account of Senior Lender Claims and Noteholder Claims, then, to the extent the
debt obligations distributed on account of Senior Lender Claims and Noteholder
Claims are secured by Liens on the same property, the provisions of this
Agreement will survive the distribution of such debt obligations pursuant to
such plan and will apply with like effect to the Liens securing such debt
obligations.
SECTION 7. RELIANCE; WAIVERS; ETC.
7.1 Reliance. The consent by the Senior Lenders to the
Lien on the Collateral granted to the Noteholder Collateral Agent on behalf of
the Noteholders and all loans and other extensions of credit made or deemed made
on and after the date hereof by the Senior Collateral Agent or any of the Senior
Lenders to the Borrower and the Guarantors shall be deemed to have been given
and made in reliance upon this Agreement. The Noteholder Collateral Agent, on
behalf of itself and the Noteholders, acknowledges that it and the Noteholders
have, independently and without reliance on the Senior Collateral Agent or any
Senior Lender, and based on documents and information deemed by them
appropriate, made their own decision to enter into the Indenture, this Agreement
and the transactions contemplated hereby and thereby and they will continue to
make their own decision in taking or not taking any action under the Indenture
or this Agreement.
7.2 No Warranties or Liability. The Noteholder Collateral
Agent, on behalf of itself and the Noteholders, acknowledges and agrees that
neither the Senior Collateral Agent nor
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any Senior Lender has made any express or implied representation or warranty,
including, without limitation, with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Senior
Lender Documents. The Senior Collateral Agent and the Senior Lenders will be
entitled to manage and supervise their respective loans and extensions of credit
to the Borrower and the Guarantors in accordance with law and as they may
otherwise, in their sole discretion, deem appropriate, and the Senior Collateral
Agent and the Senior Lenders may manage their loans and extensions of credit
without regard to any rights or interests that the Noteholder Collateral Agent
or any of the Noteholders have in the Collateral or otherwise, except as
otherwise provided in this Agreement. Neither the Senior Collateral Agent nor
any Senior Lender shall have any duty to the Noteholder Collateral Agent or any
of the Noteholders to act or refrain from acting in a manner which allows, or
results in, the occurrence or continuance of an event of default or default
under any agreements with the Borrower or any Guarantor (including, without
limitation, the Noteholder Documents), regardless of any knowledge thereof which
they may have or be charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the Senior Lenders, the Senior Collateral
Agent or any of them to enforce any provision of this Agreement 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 any of the Guarantors or by any act or failure to act by
any Senior Lender or the Senior Collateral Agent, or by any noncompliance by any
Person with the terms, provisions and covenants of this Agreement, any of the
Senior Lender Documents or any of the Noteholder Documents, regardless of any
knowledge thereof which the Senior Collateral Agent or the Senior Lenders, or
any of them, may have or be otherwise charged with.
(b) Without in any way limiting the generality of the
foregoing paragraph (but subject to the rights of the Borrower and the
Guarantors under the Senior Lender Documents), the Senior Lenders, the Senior
Collateral Agent and any of them may, at any time and from time to time, without
the consent of, or notice to, the Noteholder Collateral Agent or any Noteholder,
without incurring any liabilities to the Noteholder Collateral Agent or any
Noteholder and without impairing or releasing the lien priorities and other
benefits provided in this Agreement (even if any right of subrogation or other
right or remedy of the Noteholder Collateral Agent or any Noteholder is
affected, impaired or extinguished thereby) do any one or more of the following:
(i) change the manner, place or terms of payment
or change or extend the time of payment of, or renew, exchange, amend,
increase or alter, the terms of any of the Senior Lender Claims or any
Lien in any Collateral or guaranty thereof or any liability of the
Borrower or any Guarantor or any other Person, or any liability
incurred directly or indirectly in respect thereof (including, without
limitation, any increase in or extension of any of the Senior Lender
Claims, without any restriction as to the amount, tenor or terms of any
such increase or extension or otherwise amend, renew, exchange, extend,
modify or supplement in any manner any Liens held by any of the Senior
Lenders or the Senior Collateral Agent, any of the Senior Lender Claims
or any of the Senior Lender Documents);
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(ii) sell, exchange, release, surrender, realize
upon, enforce or otherwise deal with in any manner and in any order any
part of the Collateral or any liability of the Borrower, any Guarantor
or any other Person to any of the Senior Lenders or Senior Collateral
Agent, or any liability incurred directly or indirectly in respect
thereof;
(iii) settle or compromise any Senior Lender Claim
or any other liability of the Borrower, any Guarantor or any other
Person or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and
however realized to any liability (including, without limitation, any
of the Senior Lender Claims) in any manner or order; and
(iv) exercise or delay in or refrain from
exercising any right or remedy against the Borrower or any security or
any Guarantor or any other Person, elect any remedy and otherwise deal
freely with the Borrower, any Guarantor and any other Person and any
Collateral and any security and any guarantor or any liability of the
Borrower or any Guarantor to the Senior Collateral Agent or any of the
Senior Lenders or any liability incurred directly or indirectly in
respect thereof.
(c) The Noteholder Collateral Agent, on behalf of itself
and the Noteholders, also agrees that the Senior Lenders and the Senior
Collateral Agent shall have no liability to the Noteholder Collateral Agent or
any Noteholder, and the Noteholder Collateral Agent, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Senior
Collateral Agent, arising out of any and all actions which any of the Senior
Lenders or the Senior Collateral Agent may take or permit or omit to take with
respect to: (i) any of the Senior Lender Documents, (ii) the collection of any
of the Senior Lender Claims or (iii) the foreclosure upon, or sale, liquidation
or other disposition of, any of the Collateral. The Noteholder Collateral Agent,
on behalf of itself and the Noteholders, agrees that the Senior Lenders and the
Senior Collateral Agent have no duty to them in respect of the maintenance or
preservation of the Collateral, the Senior Lender Claims or otherwise.
(d) The Noteholder Collateral Agent, on behalf of itself
and the Noteholders, agrees not to assert and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert
or otherwise claim the benefit of, any marshalling, appraisal, valuation or
other similar right with respect to the Collateral that may otherwise be
available under applicable law or any other similar rights a junior secured
creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests,
agreements and obligations of the Senior Collateral Agent and the Senior Lenders
and the Noteholder Collateral Agent and the Noteholders, respectively, hereunder
shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Senior
Lender Documents or any Noteholder Documents;
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(b) any change in the time, manner or place of payment
of, or in any other terms of, all or any of the Senior Lender Claims or
Noteholder Claims, or any amendment or waiver or other modification, including,
without limitation, any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of the Senior Credit Agreement or any other
Senior Lender Document or of the terms of the Indenture or any other Noteholder
Document;
(c) any exchange of any security interest in any
Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation
Proceeding in respect of the Borrower or any Guarantor; or
(e) any other circumstances which otherwise might
constitute a defense available to, or a discharge of, the Borrower or any
Guarantor in respect of any of the Senior Lender Claims, or of the Noteholder
Collateral Agent or any Noteholder in respect of this Agreement.
SECTION 8. MISCELLANEOUS.
8.1 Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of any of the Senior Lender
Documents or the Noteholder Documents, the provisions of this Agreement shall
govern. In the event of any conflict between any instruction, request or
direction given by the Senior Collateral Agent to the Noteholder Collateral
Agent or any Noteholder hereunder and any instruction, request or direction
given by any Senior Lender to the Noteholder Collateral Agent or any Noteholder
hereunder, the instruction, request or direction given by the Senior Collateral
Agent shall govern.
8.2 Continuing Nature of this Agreement. This Agreement
shall continue to be effective until the Discharge of Senior Lender Claims shall
have occurred. This is a continuing agreement of lien subordination and the
Senior Collateral Agent and Senior Lenders may continue, at any time and without
notice to the Noteholder Collateral Agent or any Noteholder, to extend credit
and other financial accommodations and lend monies to or for the benefit of the
Borrower and the Guarantors constituting Senior Lender Claims on the faith
hereof. The Noteholder Collateral Agent, on behalf of itself and the
Noteholders, hereby waives any right it may have under applicable law to revoke
this Agreement or any of the provisions of this Agreement. The terms of this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding.
8.3 Amendments; Waivers. No amendment, modification or
waiver of any of the provisions of this Agreement shall be deemed to be made
unless the same shall be in writing signed by the Noteholder Collateral Agent
and the Senior Collateral Agent and each waiver, if any, shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of the parties making such waiver or the obligations of the other parties
to such party in any other respect or at any other time. The Borrower and
Guarantors shall not have any
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right to amend, modify or waive any provision of this Agreement without the
written consent of the Noteholder Collateral Agent and the Senior Collateral
Agent, nor shall any consent or signed writing be required of any of them to
effect any amendment, modification or waiver of any provision of this Agreement,
except that no amendment, modification or waiver affecting any obligation or
right of the Borrower or any Guarantor hereunder shall be made without the
consent of the Borrower.
8.4 Information Concerning Financial Condition of the
Borrower and its Subsidiaries. The Senior Collateral Agent and the Senior
Lenders shall have no duty to advise the Noteholder Collateral Agent and the
Noteholders of (a) the financial condition of the Borrower and its Subsidiaries
and all endorsers and/or guarantors of the Noteholder Claims or the Senior
Lender Claims and (b) all other circumstances bearing upon the risk of
nonpayment of the Noteholder Claims or the Senior Lender Claims. The Senior
Collateral Agent and the Senior Lenders shall have no duty to advise the
Noteholder Collateral Agent or any Noteholder of information known to it or them
regarding such condition or any such circumstances or otherwise. In the event
the Senior Collateral Agent or any of the Senior Lenders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Noteholder Collateral Agent or any Noteholder, it or they
shall be under no obligation (x) to provide any additional information or to
provide any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential.
8.5 Subrogation. The Noteholder Collateral Agent, on
behalf of itself and the Noteholders, hereby waives any rights of subrogation it
may acquire as a result of any payment hereunder until the Discharge of Senior
Lender Claims has occurred, at which time such waiver shall be of no further
force or effect.
8.6 Application of Payments. As between the Senior
Collateral Agent and the Senior Lenders, on the one hand, and the Noteholder
Collateral Agent and the Noteholders, on the other hand, all payments received
by the Senior Collateral Agent and/or the Senior Lenders may be applied,
reversed and reapplied, in whole or in part, to such part of the Senior Lender
Claims as the Senior Collateral Agent and/or the Senior Lenders, in their sole
discretion, deem appropriate. The Noteholder Collateral Agent, on behalf of
itself and the Noteholders, assents to any extension or postponement of the time
of payment of the Senior Lender Claims or any part thereof and to any other
indulgence with respect thereto, to any substitution, exchange or release of any
security which may at any time secure any part of the Senior Lender Claims and
to the addition or release of any other Person primarily or secondarily liable
therefor.
8.7 Consent to Jurisdiction; Waivers. The parties hereto
consent to the jurisdiction of any state or federal court located in New York,
New York, and consent that all service of process may be made by registered mail
directed to such party as provided in Section 8.8 below for such party. Service
so made shall be deemed to be completed three (3) days after the same shall be
posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this
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Agreement or any other Loan Document, or any course of conduct, course of
dealing, verbal or written statement or action of any party hereto.
8.8 Notices. All notices to the Noteholders and the
Senior Lenders permitted or required under this Agreement may be sent to the
Noteholder Collateral Agent and the Senior Collateral Agent, respectively.
Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telecopied or sent by courier service or U.S. mail and shall
be deemed to have been given when delivered in person or by courier service,
upon receipt of a telecopy or four Business Days after deposit in the U.S. mail
(registered or certified, with postage prepaid and properly addressed). For the
purposes hereof, the addresses of the parties hereto shall be as set forth below
each party's name on the signature pages hereto, or, as to each party, at such
other address as may be designated by such party in a written notice to all of
the other parties.
8.9 Further Assurances. The Noteholder Collateral Agent,
on behalf of itself and the Noteholders, agrees that each of them shall take
such further action and shall execute and deliver to the Senior Collateral Agent
and the Senior Lenders such additional documents and instruments (in recordable
form, if requested) as the Senior Collateral Agent or the Senior Lenders may
reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement. The Senior Collateral Agent, on behalf of the
Senior Lenders, agrees that each of them shall take such further action and
shall execute and deliver to the Noteholder Collateral Agent and the Noteholders
such additional documents and instruments (in recordable form, if requested) as
the Noteholder Collateral Agent or the Noteholders may reasonably request to
effectuate the terms of and the lien priorities contemplated by this Agreement.
8.10 Governing Law. This Agreement has been delivered and
accepted at and shall be deemed to have been made at New York, New York and
shall be interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
8.11 Binding on Successors and Assigns. This Agreement
shall be binding upon the Senior Collateral Agent, the Senior Lenders, the
Noteholder Collateral Agent, the Noteholders and their respective permitted
successors and assigns.
8.12 Specific Performance. Each of the Senior Collateral
Agent and the Noteholder Collateral Agent may demand specific performance of
this Agreement. The Noteholder Collateral Agent, on behalf of itself and the
Noteholders, hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Senior Collateral
Agent. The Senior Collateral Agent, on behalf of itself and the Senior Lenders,
hereby irrevocably waives any defense based on the adequacy of a remedy at law
and any other defense which might be asserted to bar the remedy of specific
performance in any action which may be brought by the Noteholder Collateral
Agent.
8.13 Section Titles; Time Periods; Capacities. The section
titles contained in this Agreement are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of this Agreement. In the
computation of time periods, unless otherwise
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specified, the word "from" means "from and including" and each of the words "to"
and "until" means "to but excluding" and the word "through" means "to and
including". All references to the Borrower or any Guarantor shall include the
Borrower or any Guarantor as an obligor under the Senior Lender Documents,
regardless of its capacity as a borrower or guarantor thereunder.
8.14 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be an original and all of which shall
together constitute one and the same document. Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall
deliver an original executed counterpart of this Agreement, but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
8.15 Authorization. By its signature, each Person
executing this Agreement on behalf of a party hereto represents and warrants to
the other parties hereto that it is duly authorized to execute this Agreement.
8.16 No Third Party Beneficiaries. This Agreement and the
rights and benefits hereof shall inure to the benefit of the Senior Collateral
Agent and the Senior Lenders and their respective successors and assigns and, to
the extent applicable, the Borrower, the Guarantors, the Noteholder Collateral
Agent and the Noteholders and their respective permitted successors and assigns.
No other Person shall have or be entitled to assert rights or benefits
hereunder. Notwithstanding anything to the contrary in this Agreement, the
Borrower shall cause the Guarantors to comply with the terms of this Agreement.
8.17 Effectiveness. This Agreement shall become effective
when executed and delivered by the parties hereto. This Agreement shall be
effective both before and after the commencement of any Insolvency or
Liquidation Proceeding. All references to the Borrower or Guarantors shall
include the Borrower or any Guarantor as debtor and debtor-in-possession and any
receiver or trustee for the Borrower or any Guarantor (as the case may be) in
any Insolvency or Liquidation Proceeding.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
SILVER POINT FINANCE, LLC,
as Senior Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
Address:
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxxx
Telecopy No.: (000) 000-0000
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Noteholder Collateral Agent
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
Address:
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Corporate Trust - Bond
Administration
Telecopy No.: (000) 000-0000
AAIPHARMA INC.,
as Borrower
By: /s/ Xxxxxxx X.Xxxxx, Jr.
------------------------------------
Xxxxxxx X. Xxxxx, Jr.
Executive Vice President and
Chief Financial Officer
Address:
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
