EXHIBIT 4.9
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of June 30, 2002 (as
may be amended, supplemented or otherwise modified from time to time, the
"Agreement"), is made by and among ABLECO FINANCE LLC, a Delaware limited
liability company, in its capacity as collateral agent for itself and the other
lenders that are parties to that certain Senior Loan Agreement described below
(together with its successors and assigns in such capacity, the "Collateral
Agent"), THE BANK OF NEW YORK, a New York banking corporation, in its capacity
as trustee for and on behalf of the holders of indebtedness issued under the
First Indenture described below (together with its successors and assigns in
such capacity, the "First Trustee"), BANK ONE TRUST COMPANY, N.A., a national
banking association, in its capacity as trustee for and on behalf of the holders
of indebtedness issued under the Second Indenture described below (together with
its successors and assigns in such capacity, the "Second Trustee"), and KOMAG,
INCORPORATED, a Delaware corporation (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Collateral Agent, the lenders that are
signatories thereto (the "Senior Lenders"), and the Borrower are
contemporaneously herewith executing and delivering that certain Loan and
Security Agreement, dated as of the date hereof (as amended, restated, modified,
renewed or extended from time to time, the "Senior Loan Agreement"), pursuant to
which (a) the Senior Lenders have agreed to make loans and other extensions of
credit to the Borrower, and (b) the Borrower has granted to the Collateral
Agent, for the benefit of the Senior Lenders, a first priority security interest
in and to the Collateral (as herein defined) in order to secure the Borrower's
obligations arising in connection with the Senior Loan Agreement;
WHEREAS, pursuant to the terms and conditions of that certain
Indenture, dated as of June 30, 2002, between the Borrower and the First Trustee
(as amended, restated, modified, renewed or extended from time to time, the
"First Indenture"), the Holders (as herein defined) have agreed to purchase the
Borrower's Senior Secured Notes (collectively, the "Subordinated Notes") in the
aggregate original principal amount of $128,832,000;
WHEREAS, pursuant to the terms and conditions of that certain
Indenture, dated as of June 30, 2002, between the Borrower and the Second
Trustee (as amended, restated, modified, renewed or extended from time to time,
the "Second Indenture"), the Junior Note Holders (as herein defined) will
receive Junior Secured Notes due 2007 (collectively, the "Junior Notes") in the
aggregate original principal amount of $7,000,000;
WHEREAS, pursuant to certain security, pledge, and mortgage
documents executed and delivered in connection with the First Indenture, the
Borrower has granted to the First Trustee, for the benefit of the Holders, a
second priority security interest in and to the Collateral in order to secure
its obligations arising in connection with the First Indenture and the
Subordinated Notes;
WHEREAS, pursuant to certain security, pledge, and mortgage
documents executed and delivered in connection with the Second Indenture, the
Borrower has granted to the Second Trustee, for the benefit of the Junior Note
Holders, a third priority security interest in and to the Collateral in order to
secure its obligations arising in connection with the Second Indenture and the
Junior Notes; and
WHEREAS, it is a condition to the effectiveness of the Senior
Loan Agreement that the parties hereto execute and deliver this Agreement to set
forth the terms of the subordination in favor of the Collateral Agent, for the
benefit of the Senior Lenders, of the Junior Liens in and to the Collateral to
the Senior Lien in and to the Collateral, the subordination of the Second
Priority Obligations to the First Priority Obligations, the subordination and
postponement of the rights of the Trustees in and to the Collateral to the
rights of the Collateral Agent in and to the Collateral, and certain other
matters.
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
1. Definitions.
(a) As used in this Agreement, (i) the terms defined in
the preamble and recitals shall have the meanings assigned thereto, (ii)
capitalized terms that are used herein without being defined shall have the
meanings assigned thereto in the Senior Loan Agreement, and (iii) the following
terms shall have the following meanings:
"Bankruptcy Code" means United States Bankruptcy Code, as in
effect from time to time.
"Blockage Period" means a Non-Payment Blockage Period or a
Payment Blockage Period, as the case may be.
"Borrower" shall have the meaning set forth in the preamble to
this Agreement.
"Cap Amount" means the amount equal to the lesser of (a) 110%
of the aggregate amount of the Commitments of the Senior Lenders in effect from
time to time, or if the Commitments have been terminated, the aggregate amount
of the Commitments of the Senior Lenders immediately prior to such termination,
and (b) $22,000,000.
"Collateral" means any assets or property of the Borrower, and
any proceeds thereof, at any time subject to (a) a Lien in favor of the
Collateral Agent, for the benefit of the Senior Lenders, under the Senior Loan
Documents to secure the First Priority Obligations, (b) a Lien in favor of the
First Trustee, for the benefit of the Holders, under the First Indenture, to
secure the First Indenture Subordinated Obligations, (c) a Lien in favor of the
Second Trustee, for the benefit of the Junior Note Holders, under the Second
Indenture, to secure the Second Indenture Subordinated Obligations, including
without limitation, all "Collateral" as defined in
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the Senior Loan Agreement and all "Collateral" as defined in the Subordinated
Security Documents.
"Collateral Agent" shall have the meaning set forth in the
preamble to this Agreement.
"First Indenture" shall have the meaning set forth in the
recitals to this Agreement.
"First Indenture Junior Liens" means the Liens in and to the
Collateral granted pursuant to the First Indenture Subordinated Documents to
secure the First Indenture Subordinated Obligations.
"First Indenture Scheduled Payment" has the meaning specified
in Section 5(a) hereof.
"First Indenture Scheduled Payment Date" has the meaning
specified in Section 5(a) hereof.
"First Indenture Subordinated Documents" means the First
Indenture, the Subordinated Notes, and any other agreements, instruments, and
certificates executed and delivered in connection with the First Indenture.
"First Indenture Subordinated Obligations" means all of the
obligations, liabilities, and indebtedness of the Borrower under the First
Indenture Subordinated Documents, irrespective of whether on account of
principal, premium, interest, fees, costs, or expenses and including any
premium, interest, fees, costs, or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued.
"First Indenture Subordinated Security Documents" means those
certain security agreements, pledge agreements, deeds of trust, mortgages, and
other agreements or documents executed and delivered by the Borrower in
connection with the First Indenture in order to provide Liens in and to all or
any portion of its assets or properties.
"First Priority Obligations" means all of the obligations,
liabilities, and indebtedness of the Borrower under any of the Senior Loan
Documents, irrespective of whether on account of principal, premium, interest,
fees, costs, or expenses and including any premium, interest, fees, costs, or
expenses which would accrue and become due but for the commencement of an
Insolvency Proceeding, whether or not such premium, interest, fees, costs, or
expenses are allowed or allowable in whole or in part in any such Insolvency
Proceeding; provided that to the extent any indebtedness on account of principal
of the Borrower owed to the Senior Lenders under the Senior Loan Documents
exceeds the Cap Amount, such obligations, to the extent of such excess, shall
not be "First Priority Obligations" under this Agreement.
"First Trustee" shall have the meaning set forth in the
preamble to this Agreement.
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"Holders" shall have the meaning set forth in the First
Indenture.
"Indentures" means the First Indenture and the Second
Indenture.
"Insolvency Proceeding" means (a) any case, action, or
proceeding before any court or other governmental authority having jurisdiction
over the applicable Person or its assets relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up, or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar arrangement in
respect of its creditors generally or any substantial portion of its creditors;
in each case whether undertaken under Federal (including the Bankruptcy Code),
State, or local law.
"Junior Intercreditor Agreement" means that certain
Intercreditor Agreement, dated as of June 30, 2002, among the First Trustee, the
Second Trustee, and the Borrower.
"Junior Liens" means the First Indenture Junior Liens and the
Second Indenture Junior Liens.
"Junior Note Holders" means the holders of the Junior Notes.
"Junior Notes" shall have the meaning specified in the
recitals to this Agreement.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale, or trust receipt.
"Non-Payment Blockage Period" means, with respect to any
Non-Payment Default, the period from and including the date of receipt by each
Trustee of a Non-Payment Default Notice relating thereto until the first to
occur of (a) the 180th day after receipt of such Non-Payment Default Notice;
provided, however, that if, on or before such 180th day (i) the First Priority
Obligations are accelerated or (ii) the Collateral Agent or Senior Lenders have
commenced and diligently and in good faith are pursuing judicial or non-judicial
remedies with respect to all or substantially all of the Collateral securing the
First Priority Obligations, then such period shall continue unless and until the
Collateral Agent or Senior Lenders rescind such acceleration in writing or fail
diligently to pursue such judicial or non-judicial remedies, (b) the date on
which the Collateral Agent shall have expressly waived such Non-Payment Default
in writing or such Non-Payment Default shall have been cured, or (c) the date on
which the Collateral Agent shall have expressly and irrevocably waived the
application of Sections 5(b) and 6(b) in writing.
"Non-Payment Default" shall have the meaning specified in
Section 5(b).
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"Non-Payment Default Notice" means a written notice from or on
behalf of the Collateral Agent or Senior Lenders to each Trustee of the
existence of a Non-Payment Default and specifically designating such notice as a
"Non-Payment Default Notice."
"Paying Agent" shall have the meaning set forth in the First
Indenture or the Second Indenture.
"Payment Blockage Period" means, with respect to any Payment
Default, the period from and including the date of receipt by each Trustee of a
Payment Default Notice relating thereto until the first to occur of (a) the date
on which the Collateral Agent shall have expressly waived such Payment Default
in writing or such Payment Default shall have been cured, or (b) the date on
which Collateral Agent shall expressly and irrevocably waive the application of
Sections 5(a) and 6(a) in writing.
"Payment Default" shall have the meaning specified in Section
5(a).
"Payment Default Notice" means a written notice from or on
behalf of the Collateral Agent or Senior Lenders of the existence of a Payment
Default and specifically designating such notice as a "Payment Default Notice."
"Second Indenture" shall have the meaning set forth in the
recitals to this Agreement.
"Second Indenture Junior Liens" means the Liens in and to the
Collateral granted pursuant to the Second Indenture Subordinated Documents to
secure the Second Indenture Subordinated Obligations.
"Second Indenture Scheduled Payment" has the meaning specified
in Section 6(a) hereof.
"Second Indenture Scheduled Payment Date" has the meaning
specified in Section 6(a) hereof.
"Second Indenture Subordinated Documents" means the Junior
Notes and any other agreements, instruments, and certificates executed and
delivered in connection with the Second Indenture.
"Second Indenture Subordinated Obligations" means all of the
obligations, liabilities, and indebtedness of the Borrower under the Second
Indenture Subordinated Documents, irrespective of whether on account of
principal, premium, interest, fees, costs, or expenses and including any
premium, interest, fees, costs, or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued.
"Second Indenture Subordinated Security Documents" means those
certain security agreements, pledge agreements, deeds of trust, mortgages, and
other agreements or
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documents executed and delivered by the Borrower in connection with the Second
Indenture in order to provide Liens in and to all or any portion of its assets
or properties.
"Second Priority Obligations" means the First Indenture
Subordinated Obligations and the Second Indenture Subordinated Obligations.
"Second Trustee" has the meaning set forth in the preamble to
this Agreement.
"Senior Lenders" means the lenders that are signatories to the
Senior Loan Agreement, and shall include any other Person made a party to the
Senior Loan Agreement in accordance with the provisions of Section 15.1 thereof.
"Senior Lien" means the Liens in and to the Collateral granted
pursuant to the Senior Loan Documents or otherwise to secure the First Priority
Obligations.
"Senior Loan Agreement" shall have the meaning set forth in
the recitals of this Agreement.
"Senior Loan Documents" means the Loan Documents under and as
defined in the Senior Loan Agreement.
"Standstill Period" means, with respect to any Payment Default
or Non-Payment Default, the period from and including the date of receipt by
each Trustee of a Payment Default Notice or Non-Payment Default Notice, as
applicable, until the first to occur of (a) the 180th day after receipt of such
Payment Default or Non-Payment Default Notice, (b) the date on which such
Payment Default or Non-Payment Default shall have been cured or the Collateral
Agent shall have expressly waived such Payment Default or Non-Payment Default,
as applicable, in writing, or (c) the date on which there is commenced, either
by or against the Borrower, any Insolvency Proceeding.
"Subordinated Documents" means the First Indenture
Subordinated Documents and the Second Indenture Subordinated Documents.
"Subordinated Holders" means the Holders and the Junior Note
Holders.
"Subordinated Notes" shall have the meaning set forth in the
recitals to this Agreement.
"Subordinated Security Documents" means the First Indenture
Subordinated Security Documents and the Second Indenture Subordinated Security
Documents.
"Trustees" means the First Trustee and the Second Trustee.
(b) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
paragraph references are to this Agreement unless otherwise
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specified. The phrases "prior payment in full," "payment in full," "paid in
full" and any other similar terms or phrases when used herein with respect to
any First Priority Obligations shall mean the final indefeasible payment in full
in cash of all such First Priority Obligations (other than contingent indemnity
obligations of the Borrower that shall survive payment in full) and that, at
such time, there shall no longer be any obligation to make loans or advances or
issue letters of credit (or guaranties in respect thereof) thereunder and there
shall no longer be any letter of credit (or guaranty in respect thereof)
outstanding thereunder or such letter of credit (or guaranty in respect thereof)
shall have been fully cash collateralized (in accordance with the provisions of
the Senior Loan Documents).
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Acknowledgments; Agreements.
(a) The Trustees hereby acknowledge that the Collateral
Agent, for the benefit of the Senior Lenders, has been granted Liens upon all or
substantially all of the assets of the Borrower pursuant to the Senior Loan
Documents and hereby consents thereto. The Collateral Agent hereby acknowledges
that the Trustees have been granted Liens upon all or substantially all of the
assets of the Borrower pursuant to the Subordinated Documents and hereby
consents thereto.
(b) The Trustees hereby acknowledge and agree that (i)
the Junior Liens in and to the Collateral shall under all circumstances be
junior in priority and subordinated to the Senior Lien in and to the Collateral
and that the Trustees shall not have any claim to or in respect of the
Collateral, or any proceeds of or realization in and to the Collateral, on a
parity with or prior to the claim of the Senior Lenders, (ii) any Lien at any
time granted to or otherwise obtained by Senior Lenders with respect to the
Collateral shall have priority over, and shall be senior to, any Lien therein at
any time granted to or otherwise obtained by any Trustee, (iii) until the First
Priority Obligations have been paid in full and the Collateral Agent has
provided prompt written notice thereof to the Trustees (which the Collateral
Agent agrees to provide), the exercise of rights and remedies in respect of the
Junior Liens by any Trustee under the Subordinated Documents and applicable law
shall be limited to the extent set forth in, and shall be governed by, this
Agreement, and (iv) the Senior Lenders would not have executed the Senior Loan
Agreement in the absence of the execution and delivery of this Agreement by the
parties hereto.
(c) The priority agreements set forth in subsection (b)
above shall be applicable irrespective of the order, time or method of the
creation, attachment, or perfection of any Lien of Collateral Agent or any
Trustee upon all or any portion of the Collateral, or the order or time of
filing or recordation of any document or instrument for perfecting a Lien in
favor of Collateral Agent or any Trustee in any such Collateral, and
notwithstanding any conflicting terms or conditions that may be contained in any
of the Senior Loan Documents or Subordinated Documents.
(d) The Trustees and the Collateral Agent acknowledge and
agree that until the First Priority Obligations have been paid in full and the
Collateral Agent has provided prompt written notice thereof to the Trustees
(which the Collateral Agent agrees to provide), the
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Collateral Agent shall (i) hold all of the Collateral for which the security
interest therein is perfected by obtaining possession or dominion and control,
as applicable, of such Collateral (the "Controlled Collateral") pledged to the
Collateral Agent pursuant to the Senior Loan Documents, and (ii) for so long as
the Controlled Collateral forms a part of the Collateral for the Second Priority
Obligations, hold in its capacity as bailee for the Trustees all of the
Controlled Collateral pledged to the Trustees pursuant to the Subordinated
Documents. To the extent permitted by law, the Collateral Agent shall deliver
such Controlled Collateral possessed by it or its rights to the control thereof
to the Trustees promptly after the First Priority Obligations have been paid in
full.
3. Rights in Collateral.
(a) So long as this Agreement has not been terminated
pursuant to the provisions hereof, and regardless of whether or not the First
Priority Obligations or the Second Priority Obligations have been accelerated or
any Insolvency Proceeding has been commenced by or against the Borrower:
(i) Except as otherwise provided in subsection
(b), until payment in full of the First Priority Obligations and the Collateral
Agent has provided prompt written notice thereof to the Trustees (which the
Collateral Agent agrees to provide), no Trustee shall exercise any rights or
remedies in respect of the Collateral or the Junior Liens, whether under the
Subordinated Documents, applicable law or otherwise, including without
limitation, any action to institute any judicial or nonjudicial or similar
action or proceeding in respect of the Junior Liens or to seek relief from the
automatic stay pursuant to Section 362 of the Bankruptcy Code, and no Trustee
shall have any right whatsoever to direct the Collateral Agent to exercise or
seek to exercise or refrain from exercising any rights or remedies in respect of
the Collateral;
(ii) Except as otherwise provided in subsection
(b), subject to the terms of the Senior Loan Documents, the Collateral Agent
shall have the exclusive right to exercise rights and remedies in respect of the
Collateral under the Senior Loan Documents, applicable law or otherwise and, in
exercising such rights and remedies with respect to the Collateral, the
Collateral Agent may enforce the provisions of the Senior Loan Documents and
exercise remedies thereunder and under applicable law (or refrain from enforcing
any such rights and exercising any such remedies), all in such order and in such
manner as it may determine in the exercise of its discretion. Such exercise and
enforcement shall include, without limitation, the rights of the Collateral
Agent to sell or otherwise dispose of the Collateral (such sale to be free and
clear of the Junior Liens and the Trustees agree to execute any and all Lien
releases requested by Collateral Agent in connection therewith), to incur
reasonable expenses in connection with such exercise and enforcement, 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; provided that the
proceeds of any such sale, disposition, or other exercise of rights and remedies
are applied to the reasonable expenses incurred in connection therewith and to
the payment of the First Priority Obligations until satisfied in full with any
excess being remitted to the First Trustee to be applied in accordance with the
Junior Intercreditor Agreement, the First Indenture and the documents related
thereto and, at such time as the First Indenture Subordinated Obligations shall
have been
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paid in full, remitted to the Second Trustee to be applied in accordance with
the Second Indenture and the documents related thereto;
(iii) Notwithstanding anything to the contrary
contained in the Subordinated Documents, prior to the date on which the First
Priority Obligations have been paid in full and the Collateral Agent has
provided prompt written notice thereof to the Trustees (which the Collateral
Agent agrees to provide), if an Event of Default has occurred and is continuing
under the Senior Loan Agreement and if and to the extent that the Collateral
Agent shall have permitted or approved the sale, transfer, or other disposition
of any Collateral, then the Trustees shall be bound by such permission or
approval and shall execute any and all Lien releases requested by the Collateral
Agent in connection therewith; provided that the Collateral Agent references
this Section 3(a)(iii) in connection with such request; and provided further
that the proceeds of any such sale, transfer, or other disposition are applied
to the reasonable expenses incurred in connection therewith and to the payment
of the First Priority Obligations until satisfied in full with any excess being
remitted to the First Trustee to be applied in accordance with the Junior
Intercreditor Agreement, the First Indenture and the documents related thereto
and, at such time as the First Indenture Subordinated Obligations shall have
been paid in full, remitted to the Second Trustee to be applied in accordance
with the Second Indenture and the documents related thereto.
(iv) The Trustees shall not (A) seek to enjoin
any exercise of rights or remedies by the Collateral Agent or Senior Lenders
under any Senior Loan Document or applicable law in respect of the Collateral or
the Senior Lien, including without limitation, any action of foreclosure, or (B)
contest the validity or enforceability of the First Priority Obligations or the
validity, perfection, priority or enforceability of the Senior Lien (it being
understood and agreed that the terms of this Agreement shall govern even if part
or all of the First Priority Obligations or the Senior Lien are avoided,
disallowed, set aside or otherwise invalidated in any judicial proceeding or
otherwise); and
(v) Except to the extent the Subordinated
Holders are permitted under the terms of this Agreement to receive payments from
the Borrower, unless and until the First Priority Obligations have been paid in
full and the Collateral Agent has provided prompt written notice thereof to the
Trustees (which the Collateral Agent agrees to provide), any money, property,
securities, or other direct or indirect distributions of any nature whatsoever
received by any Trustee or any Subordinated Holder in respect of the Second
Priority Obligations resulting from the sale, disposition, or other realization
upon or other exercise of remedies in respect of all or any part of the
Collateral, regardless of whether such money, property, securities, or other
distributions are received directly or indirectly during the pendency of or in
connection with any bankruptcy, insolvency or other like proceeding or
otherwise, shall be delivered to the Collateral Agent in the form received, duly
indorsed to such party, if required, and applied by the Collateral Agent as
provided in the Senior Loan Documents. Until so delivered, such payment or
distribution to the extent received by any Trustee or any Subordinated Holder
shall be held in trust by such party as the property of the Collateral Agent,
for the benefit of the Senior Lenders, segregated from other funds and property
held by the Trustees.
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(b) The limitations set forth in clauses (a)(i) and (a)
(ii) above notwithstanding, the First Trustee and the Holders shall be entitled
(A) to exercise the rights and remedies available to the First Trustee and the
Holders under the First Indenture Subordinated Documents except during any
Standstill Period and after the expiration of any Standstill Period if the
Collateral Agent or Senior Lenders have theretofore commenced and diligently and
in good faith are continuing to pursue judicial or non-judicial remedies with
respect to all or substantially all of the Collateral securing the First
Priority Obligations, and (B) to accelerate the First Indenture Subordinated
Obligations.
(c) The limitations set forth in clauses (a)(i) and (a)
(ii) above notwithstanding, the Second Trustee and the Junior Note Holders shall
be entitled (A) subject to the terms and conditions of the Junior Intercreditor
Agreement, to exercise the rights and remedies available to the Second Trustee
and the Junior Note Holders under the Second Indenture Subordinated Documents
except during any Standstill Period and after the expiration of any Standstill
Period if the Collateral Agent or Senior Lenders have theretofore commenced and
diligently and in good faith are continuing to pursue judicial or non-judicial
remedies with respect to all or substantially all of the Collateral securing the
First Priority Obligations, and (B) to accelerate the Second Indenture
Subordinated Obligations.
(d) The Trustees hereby waive any right to require
Collateral Agent to marshal any security or collateral or otherwise to compel
Collateral Agent to seek recourse against or satisfaction of the indebtedness
owing to Senior Lenders from one source before seeking recourse or satisfaction
from another source. To the extent that it is entitled to receive and apply the
same pursuant to the provisions of this Agreement, the Collateral Agent shall be
authorized to apply any and all payments, collections, and proceeds of
Collateral received by it to such portion of the First Priority Obligations as
the Collateral Agent lawfully may elect consistent with the provisions of the
Senior Loan Documents.
(e) The Collateral shall be deemed to include casualty
insurance proceeds and, therefore, the priorities set forth herein shall govern
the ultimate disposition of casualty insurance proceeds related to some or all
of the Collateral. The Collateral Agent shall have the sole and exclusive right,
as against any Trustee, to adjust settlement of insurance claims in the event of
any covered loss, theft, or destruction of the Collateral. All proceeds of such
insurance shall inure to the benefit of the Collateral Agent, and the Trustees
shall cooperate (if necessary) in a reasonable manner in effecting the payment
of insurance proceeds to Collateral Agent. If such proceeds are applied to the
First Priority Obligations, any proceeds remaining after payment of the First
Priority Obligations and all reasonable expenses of collection, including costs,
fees, and expenses, shall be remitted promptly to the First Trustee to be
applied in accordance with the Junior Intercreditor Agreement, the First
Indenture and the documents related thereto and, at such time as the First
Indenture Subordinated Obligations shall have been paid in full, remitted to the
Second Trustee to be applied in accordance with the Second Indenture and the
documents related thereto.
(f) The Collateral Agent shall provide prompt written
notice to the Trustees of the acceleration of the First Priority Obligations.
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4. Rights to Payment.
(a) Except as restricted by clause (c) below, and without
modifying or limiting the restrictions set forth in Section 3 hereof, prior to
the commencement of, and following the expiration of, any Blockage Period with
respect to the First Indenture Subordinated Documents, the First Trustee or any
Paying Agent shall be entitled to: (i) demand, receive, and retain scheduled
payments of interest on the First Indenture Subordinated Obligations as the same
shall come due and are payable in cash (as opposed to the scheduled payments of
interest thereon that are payable-in-kind, including by increases to principal
which shall in no event be restricted by this Agreement) in accordance with the
terms of the First Indenture Subordinated Documents; and (ii) demand, receive
and retain scheduled installments or other payments of principal on the First
Indenture Subordinated Obligations as the same shall come due in accordance with
the terms of the First Indenture Subordinated Documents.
(b) Except as restricted by clause (c) below, and without
modifying or limiting the restrictions set forth in Section 3 hereof, prior to
the commencement of, and following the expiration of, any Blockage Period with
respect to the Second Indenture Subordinated Documents, the Second Trustee shall
be entitled to: (i) demand, receive, and retain scheduled payments of interest
on the Second Indenture Subordinated Obligations as the same shall come due and
are payable in cash (as opposed to the scheduled payments of interest thereon
that are payable-in-kind, including by increases to principal which shall in no
event be restricted by this Agreement) in accordance with the terms of the
Second Indenture Subordinated Documents; and (ii) demand, receive and retain
scheduled installments or other payments of principal on the Second Indenture
Subordinated Obligations as the same shall come due in accordance with the terms
of the Second Indenture Subordinated Documents.
(c) Under no circumstances shall the Borrower be entitled
to make, or the Trustees or any Subordinated Holder be entitled to demand, take,
receive, accept or retain, any prepayments (including payments due as a result
of any mandatory prepayment provisions of the Subordinated Documents or the
acceleration of the Second Priority Obligations) of principal, interest, or
premium on account of any of the Second Priority Obligations prior to the
repayment in full in cash of the First Priority Obligations and termination of
all commitments of the Senior Lenders to extend further credit to the Borrower.
5. Subordination of the First Indenture Subordinated Obligations.
Anything in the First Indenture, the Subordinated Notes, or
the other First Indenture Subordinated Documents to the contrary
notwithstanding, the First Trustee and each Holder of a Subordinated Note by its
acceptance of such Subordinated Note agrees that the First Indenture
Subordinated Obligations are and shall be, to the extent set forth below,
subordinate and junior and subject in right of payment to the prior payment in
full of all First Priority Obligations.
(a) If (i) the Borrower shall default in the payment of any First
Priority Obligations in respect of principal, interest, or scheduled payments of
fees when the same becomes due and payable, whether at maturity or at a date
fixed for scheduled payment or by declaration or acceleration or otherwise (a
"Payment Default"), and (ii) the First Trustee shall have received a
11
Payment Default Notice, then the Borrower shall not make and neither the First
Trustee nor any Holder of a Subordinated Note shall accept or receive, except as
otherwise provided in the proviso set forth in Section 5(d), any direct or
indirect payment or distribution of any kind or character (whether in cash,
securities, assets, by set-off, or otherwise) on account of the First Indenture
Subordinated Obligations during the Payment Blockage Period applicable to such
Payment Default; provided, however, that in the case of any payment on or in
respect of any First Indenture Obligation that would (in the absence of any such
Payment Default Notice) have been due and payable on any date (a "First
Indenture Scheduled Payment Date") during such Payment Blockage Period, the
provisions of this subsection (a) shall not prevent (x) the making of such
payment (a "First Indenture Scheduled Payment") on or after the date immediately
following the termination of such Payment Blockage Period or (y) the making of
any payment in kind, including increases to the principal balance of any First
Indenture Obligations. If the First Trustee shall have received a Payment
Default Notice from or on behalf of the Collateral Agent or Senior Lenders, then
the First Trustee and each Holder of a Subordinated Note shall, during the
Standstill Period applicable thereto, be prohibited from enforcing any of their
default remedies (other than accelerating the indebtedness evidenced thereby or
the imposition of a default rate of interest, but including the right to
exercise set-off rights) with respect thereto (including any right to xxx the
Borrower or to file or participate in the filing of an involuntary bankruptcy
petition against the Borrower) until such Standstill Period shall cease to be in
effect; provided, however, that if the First Trustee or a Holder of a
Subordinated Note had initiated an enforcement action prior to the commencement
of such Standstill Period at a time when the First Trustee or such Holder was
entitled to do so, then the First Trustee or such Holder, as applicable, shall
not be prevented during such Standstill Period from taking those steps, but no
others, with respect to such pending enforcement action as are required by a
mandatory provision of law. The First Trustee and each Holder of a Subordinated
Note, upon the termination of any Standstill Period applicable thereto, may, at
its sole election, exercise any and all remedies available to it under the First
Indenture Subordinated Documents or applicable law.
In the event that, notwithstanding the foregoing, the Borrower shall
make any payment to the First Trustee or any Holder of a Subordinated Note
prohibited by the foregoing provisions of this subsection (a), then and in such
event such payment shall be segregated by the First Trustee or such Holder and
held in trust for the benefit of and immediately shall be paid over to the
Collateral Agent (in the same form received, with all necessary endorsements)
for application against the First Priority Obligations remaining unpaid until
the First Priority Obligations are paid in full.
(b) Except under circumstances when the terms of subsections (a)
or (d) are applicable, if (i) an event of default other than a Payment Default
shall have occurred and be continuing under the Senior Loan Documents (a
"Non-Payment Default"), and (ii) the First Trustee shall have received a
Non-Payment Default Notice, then the Borrower shall not make and neither the
First Trustee nor any Holder of a Subordinated Note shall accept or receive any
direct or indirect payment or distribution of any kind or character (whether in
cash, assets, securities, by set-off, or otherwise) on account of the First
Indenture Subordinated Obligations during the Non-Payment Blockage Period
applicable to such Non-Payment Default; provided, however, that in the case of
any First Indenture Scheduled Payment on or in respect of any First Indenture
Obligation that would (in the absence of any such Non-Payment Default Notice)
have been due and payable on any First Indenture Scheduled Payment Date during
such Non-Payment Blockage Period, the
12
provisions of this subsection (b) shall not prevent (x) the making of such First
Indenture Scheduled Payment on or after the date immediately following the
termination of such Non-Payment Blockage Period or (y) the making of any payment
in kind, including increases to the principal balance of any First Indenture
Obligations. If the First Trustee shall have received a Non-Payment Default
Notice from or on behalf of the Collateral Agent or the Senior Lenders, then the
First Trustee and each Holder of a Subordinated Note, during the Standstill
Period applicable thereto, shall be prohibited from enforcing any of their
default remedies (other than accelerating the indebtedness evidenced thereby or
the imposition of a default rate of interest, but including the right to
exercise set-off rights) with respect thereto (including any right to xxx the
Borrower or to file or participate in the filing of an involuntary bankruptcy
petition against the Borrower) until such Standstill Period shall cease to be in
effect; provided, however, that if the First Trustee or a Holder of a
Subordinated Note had initiated an enforcement action prior to the commencement
of such Standstill Period at a time when the First Trustee or such Holder was
entitled to do so, then the First Trustee or such Holder, as applicable, shall
not be prevented during such Standstill Period from taking those steps, but no
others, with respect to such pending enforcement action as are required by a
mandatory provision of law. The First Trustee and each Holder of a Subordinated
Note, upon the termination of any Standstill Period applicable thereto, may, at
its sole election, exercise any and all remedies available to it under the First
Indenture Subordinated Documents or applicable law.
In the event that, notwithstanding the foregoing, the Borrower shall
make any payment to the First Trustee or any Holder of a Subordinated Note
prohibited by the foregoing provisions of this subsection (b), then and in such
event such payment shall be segregated by the First Trustee or such Holder and
held in trust for the benefit of and immediately shall be paid over to the
Collateral Agent (in the same form received, with all necessary endorsements)
for application against the First Priority Obligations remaining unpaid until
the First Priority Obligations are paid in full.
(c) Anything contained in Section 5(a) or 5(b) to the contrary
notwithstanding: (i) no more than 8 Non-Payment Default Notices may be sent to
the First Trustee (and any Non-Payment Default Notices in excess of such number
that are sent to the First Trustee shall be ineffective to commence a
Non-Payment Blockage Period or a Standstill Period); (ii) the aggregate number
of days that the First Trustee and Holders of the Subordinated Notes shall be
subject to one or more Non-Payment Blockage Periods shall not exceed 180 days in
any 360 consecutive day period; provided, however, that, in the absence of an
Insolvency Proceeding, if the First Priority Obligations are accelerated, and
the Collateral Agent or Senior Lenders have commenced and diligently and in good
faith are pursuing judicial or non-judicial remedies with respect to all or
substantially all of the Collateral securing the First Priority Obligations, in
which case any applicable Blockage Period shall continue beyond the maximum
number of days set forth in this clause (ii) unless and until Collateral Agent
or the Senior Lenders, as applicable, rescind such acceleration in writing, or
abandon, terminate, or fail diligently to pursue such judicial or non-judicial
remedies; and (iii) the aggregate number of days that the First Trustee or
Holders of the Subordinated Notes shall be subject to one or more Standstill
Periods shall not exceed 180 days in any 360 consecutive day period. No
Non-Payment Default that existed on the date of delivery of any Non-Payment
Default Notice or during the first 150 days of the Non-Payment Blockage Period
commenced by such notice shall be made the basis for a subsequent Non-Payment
Blockage Period or Standstill Period. No Non-Payment Default or Payment
13
Default that existed on the date of delivery of any Payment Default Notice or
during the first 150 days of the Payment Blockage Period commenced by such
notice shall be made the basis for a subsequent Non-Payment Blockage Period,
Payment Blockage Period or Standstill Period.
(d) In the event of the institution of an Insolvency Proceeding
relative to the Borrower or its property, (Y) all First Priority Obligations
shall first be paid in full before any payment is made by or on behalf of the
Borrower on the First Indenture Subordinated Obligations; (Z) any payment or
distribution of any kind or character (whether in cash, securities, assets, by
set-off, or otherwise) to which the First Trustee or Holders of the Subordinated
Notes would be entitled but for the provisions of this subsection (d)
(including, without limitation, any payment or distribution which may be payable
or deliverable to the First Trustee or such Holders by reason of the payment of
any other indebtedness of the Borrower or its Subsidiaries being subordinated to
payment of the First Indenture Subordinated Obligations) shall be paid or
delivered by the Person making such payment or distribution, whether a trustee
in bankruptcy, a receiver, a liquidating trustee, or otherwise, directly to the
Collateral Agent, for the benefit of the Senior Lenders, to the extent necessary
to make payment in full of all First Priority Obligations remaining unpaid;
provided, however, that no such delivery of stock or obligations that are issued
pursuant to a plan of reorganization pursuant to applicable bankruptcy law shall
be required to be made to Collateral Agent, if such stock or obligations are
subordinate and junior at least to the extent provided in this Section 5 to the
payment of all First Priority Obligations then outstanding and to the payment of
any stock or obligations which are issued in exchange or substitution for any
First Priority Obligations then outstanding. In the event that, in the
circumstances contemplated by this subsection (d), and notwithstanding the
foregoing provisions of this subsection (d) (but after giving effect to the
proviso in this subsection), the First Trustee or Holders of the Subordinated
Notes shall have received any such payment or distribution of any kind or
character (whether in cash, securities, assets, by setoff, or otherwise) that
they are not entitled to receive by the foregoing provisions, before all First
Priority Obligations are paid in full, then and in such event such payment or
distribution shall be segregated and held in trust for the benefit of and
immediately shall be paid over to the Collateral Agent, for the benefit of the
Senior Lenders, for application against the payment of all First Priority
Obligations remaining unpaid until all such First Priority Obligations shall
have been paid in full.
(e) If the First Trustee or the Holders of the Subordinated Notes
do not file a proper claim or proof of debt or other document or amendment
thereof in the form required in any proceeding under the Bankruptcy Code prior
to 30 days before the expiration of time to file such claim or other document or
amendment thereof, then the Collateral Agent shall have the right (but not the
obligation) in such proceeding, and hereby irrevocably is appointed lawful
attorney of the First Trustee and the Holders of the Subordinated Notes for the
purpose of enabling the Collateral Agent to demand, xxx for, collect, receive
and give receipt for the payments and distributions in respect of the First
Indenture Subordinated Obligations that are made in such proceeding and that are
required to be paid or delivered to the Collateral Agent as provided in
subsection (d), and to file and prove all claims therefor and to execute and
deliver all documents in such proceeding in name of the First Trustee or the
Holders of the Subordinated Notes or otherwise in respect of such claims, as the
Collateral Agent reasonably may determine to be necessary or appropriate.
(f) No right of any present or future holder of the First Priority
Obligations to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any
14
act or failure to act on the part of the Borrower, or by any non-compliance by
the Borrower or by the First Trustee or any Holder of any Subordinated Note with
the terms, provisions, and covenants of this Agreement or the First Indenture
Subordinated Documents, regardless of any knowledge thereof any such holder of
the First Priority Obligations may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of the First Priority Obligations may, at any time and from time to
time, without the consent of or notice to the First Trustee or the Holders of
the Subordinated Notes, without incurring responsibility to the First Trustee or
the Holders of the Subordinated Notes, and without impairing or releasing the
subordination provided in this Section 5 or the obligations of the First Trustee
or the Holders of the Subordinated Notes to the holders of the First Priority
Obligations, do any one or more of the following: (i) change the manner, place,
or terms of payment (including any change in the rate of interest) or extend the
time of payment of, or renew, amend, modify, alter, or grant any waiver or
release with respect to, or consent to any departure from, any First Priority
Obligations or any instrument evidencing the same or any agreement evidencing,
governing, creating, guaranteeing or securing any First Priority Obligations;
(ii) sell, exchange, release, or otherwise deal with any property pledged,
mortgaged or otherwise securing the First Priority Obligations; provided that
the proceeds of any such sale, exchange or release are applied to the reasonable
expenses incurred in connection therewith and to the payment of the First
Priority Obligations until satisfied in full with any excess being remitted to
the First Trustee to be applied in accordance with the Junior Intercreditor
Agreement, the First Indenture and the documents related thereto and, at such
time as the First Indenture Subordinated Obligations shall have been paid in
full, remitted to the Second Trustee to be applied in accordance with the Second
Indenture and the documents related thereto; (iii) release any Person liable
under or in respect of the First Priority Obligations; (iv) fail or delay in the
perfection of Liens securing the First Priority Obligations; (v) exercise or
refrain from exercising any rights against the Borrower and any other Person; or
(vi) amend, or grant any waiver or release with respect to, or consent to any
departure from, any guarantee for all or any of the First Priority Obligations.
(g) The provisions of this Section 5 are for the purpose of
defining the relative rights of the holders of First Priority Obligations on the
one hand, and the First Trustee and the Holders of the Subordinated Notes on the
other hand, and nothing herein shall impair, as between the Borrower and the
First Trustee or the Holders of the Subordinated Notes, the obligation of the
Borrower, which is unconditional and absolute, to pay to the holders thereof the
principal thereof and premium, if any, and interest thereon in accordance with
their terms and the provisions hereof, nor shall anything herein (other than the
rights of the Collateral Agent herein) prevent the First Trustee or the Holders
of the Subordinated Notes from exercising all remedies against the Borrower or
its assets otherwise permitted by applicable law or under the First Indenture
Subordinated Documents upon default thereunder (including the right to demand
payment and xxx for performance under the First Indenture and of the
Subordinated Notes and to accelerate the maturity thereof). Upon payment in full
of the First Priority Obligations and the termination of all obligations of the
Lenders under the Senior Loan Documents, the First Trustee or the Holders of the
Subordinated Notes shall be subrogated (without any representation or warranty
on the part of Collateral Agent or any holder of First Priority Obligations) to
the rights of the holders of the First Priority Obligations to receive payments
or distributions of assets of the
15
Borrower made on account of the First Priority Obligations (and any security
therefor) until the First Indenture Subordinated Obligations shall be paid in
full, and, for the purposes of such subrogation, no payments to the holders of
First Priority Obligations of any cash, assets, stock, obligations, or other
property to which the First Trustee or the Holders of the Subordinated Notes
would be entitled except for the provisions of this Section 5 above shall, as
between the Borrower, its creditors (other than the holders of the First
Priority Obligations), and the First Trustee or the Holders of the Subordinated
Notes, be deemed to be a payment by the Borrower to the holders of or on account
of the First Priority Obligations.
(h) The agreements contained in this Section 5 shall continue to
be effective or shall be automatically reinstated, as the case may be, if at any
time any payment (or any part of any payment) on the First Priority Obligations
shall be returned by any holder of First Priority Obligations under any state or
federal law upon or following the insolvency, bankruptcy, or reorganization of
the Borrower or otherwise, as though such payment had not been made.
(i) The foregoing provisions of this Section 5 shall constitute a
continuing offer to all Persons who, in reliance upon such provisions, become
holders of First Priority Obligations, and such provisions are made for the
benefit of, and may be enforced directly by, holders of the First Priority
Obligations, who hereby are expressly stated to be intended beneficiaries of
this Section 5.
6. Subordination of the Second Indenture Subordinated
Obligations.
Anything in the Second Indenture, the Junior Notes, or the
other Second Indenture Subordinated Documents to the contrary notwithstanding,
the Second Trustee and each Junior Note Holder by its acceptance of a Junior
Note agrees that the Second Indenture Subordinated Obligations are and shall be,
to the extent set forth below, subordinate and junior and subject in right of
payment to the prior payment in full of all First Priority Obligations.
(a) If (i) a Payment Default occurs, and (ii) the Second Trustee
shall have received a Payment Default Notice, then the Borrower shall not make
and neither the Second Trustee nor any Junior Note Holder shall accept or
receive, except as otherwise provided in the proviso set forth in Section 5(d),
any direct or indirect payment or distribution of any kind or character (whether
in cash, securities, assets, by set-off, or otherwise) on account of the Second
Indenture Subordinated Obligations during the Payment Blockage Period applicable
to such Payment Default; provided, however, that in the case of any payment on
or in respect of any Second Indenture Obligation that would (in the absence of
any such Payment Default Notice) have been due and payable on any date (a
"Second Indenture Scheduled Payment Date") during such Payment Blockage Period,
the provisions of this subsection (a) shall not prevent (x) the making of such
payment (a "Second Indenture Scheduled Payment") on or after the date
immediately following the termination of such Payment Blockage Period or (y) the
making of any payment in kind, including increases to the principal balance of
any Second Indenture Obligations. If the Second Trustee shall have received a
Payment Default Notice from or on behalf of the Collateral Agent or Senior
Lenders, then the Second Trustee and each Junior Note Holder shall, during the
Standstill Period applicable thereto, be prohibited from enforcing any of their
default remedies (other than accelerating the indebtedness evidenced thereby or
the imposition of a default rate of interest, but including the right to
exercise set-off rights) with respect thereto (including any right
16
to xxx the Borrower or to file or participate in the filing of an involuntary
bankruptcy petition against the Borrower) until such Standstill Period shall
cease to be in effect; provided, however, that if the Second Trustee or a Junior
Note Holder had initiated an enforcement action prior to the commencement of
such Standstill Period at a time when the Second Trustee or such Junior Note
Holder was entitled to do so, then the Second Trustee or such Junior Note
Holder, as applicable, shall not be prevented during such Standstill Period from
taking those steps, but no others, with respect to such pending enforcement
action as are required by a mandatory provision of law. The Second Trustee and
each Junior Note Holder, upon the termination of any Standstill Period
applicable thereto, may, at its sole election, exercise any and all remedies
available to it under the Second Indenture Subordinated Documents or applicable
law.
In the event that, notwithstanding the foregoing, the Borrower shall
make any payment to the Second Trustee or any Junior Note Holder prohibited by
the foregoing provisions of this subsection (a), then and in such event such
payment shall be segregated by the Second Trustee or such Junior Note Holder and
held in trust for the benefit of and immediately shall be paid over to the
Collateral Agent (in the same form received, with all necessary endorsements)
for application against the First Priority Obligations remaining unpaid until
the First Priority Obligations are paid in full.
(b) Except under circumstances when the terms of subsections (a)
or (d) are applicable, if (i) a Non-Payment Default shall have occurred and be
continuing under the Senior Loan Documents, and (ii) the Second Trustee shall
have received a Non-Payment Default Notice, then the Borrower shall not make and
neither the Second Trustee nor any Junior Note Holder shall accept or receive
any direct or indirect payment or distribution of any kind or character (whether
in cash, assets, securities, by set-off, or otherwise) on account of the Second
Indenture Subordinated Obligations during the Non-Payment Blockage Period
applicable to such Non-Payment Default; provided, however, that in the case of
any Second Indenture Scheduled Payment on or in respect of any Second Indenture
Obligation that would (in the absence of any such Non-Payment Default Notice)
have been due and payable on any Second Indenture Scheduled Payment Date during
such Non-Payment Blockage Period, the provisions of this subsection (b) shall
not prevent (x) the making of such Second Indenture Scheduled Payment on or
after the date immediately following the termination of such Non-Payment
Blockage Period or (y) the making of any payment in kind, including increases to
the principal balance of any Second Indenture Obligations. If the Second Trustee
shall have received a Non-Payment Default Notice from or on behalf of the
Collateral Agent or the Senior Lenders, then the Second Trustee and each Junior
Note Holder, during the Standstill Period applicable thereto, shall be
prohibited from enforcing any of their default remedies (other than accelerating
the indebtedness evidenced thereby or the imposition of a default rate of
interest, but including the right to exercise set-off rights) with respect
thereto (including any right to xxx the Borrower or to file or participate in
the filing of an involuntary bankruptcy petition against the Borrower) until
such Standstill Period shall cease to be in effect; provided, however, that if
the Second Trustee or a Junior Note Holder had initiated an enforcement action
prior to the commencement of such Standstill Period at a time when the Second
Trustee or such Junior Note Holder was entitled to do so, then the Second
Trustee or such Junior Note Holder, as applicable, shall not be prevented during
such Standstill Period from taking those steps, but no others, with respect to
such pending enforcement action as are required by a mandatory provision of law.
The Second Trustee and each Junior Note Holder, upon the termination of any
Standstill Period applicable thereto, may, at its sole election,
17
exercise any and all remedies (including the acceleration of the maturity of the
Junior Notes) available to it under the Second Indenture Subordinated Documents
or applicable law.
In the event that, notwithstanding the foregoing, the Borrower shall
make any payment to the Second Trustee or any Junior Note Holder prohibited by
the foregoing provisions of this subsection (b), then and in such event such
payment shall be segregated by the Second Trustee or such Junior Note Holder and
held in trust for the benefit of and immediately shall be paid over to the
Collateral Agent (in the same form received, with all necessary endorsements)
for application against the First Priority Obligations remaining unpaid until
the First Priority Obligations are paid in full.
(c) Anything contained in Section 6(a) or 6(b) to the contrary
notwithstanding: (i) no more than 8 Non-Payment Default Notices may be sent to
the Second Trustee (and any Non-Payment Default Notices in excess of such number
that are sent to the Second Trustee shall be ineffective to commence a
Non-Payment Blockage Period or a Standstill Period); (ii) the aggregate number
of days that the Second Trustee and Junior Note Holders shall be subject to one
or more Non-Payment Blockage Periods shall not exceed 180 days in any 360
consecutive day period; provided, however, that, in the absence of an Insolvency
Proceeding, if the First Priority Obligations are accelerated, and the
Collateral Agent or Senior Lenders have commenced and diligently and in good
faith are pursuing judicial or non-judicial remedies with respect to all or
substantially all of the Collateral securing the First Priority Obligations, in
which case any applicable Blockage Period shall continue beyond the maximum
number of days set forth in this clause (ii) unless and until Collateral Agent
or the Senior Lenders, as applicable, rescind such acceleration in writing, or
abandon, terminate, or fail diligently to pursue such judicial or non-judicial
remedies; and (iii) the aggregate number of days that the Second Trustee or
Junior Note Holders shall be subject to one or more Standstill Periods shall not
exceed 180 days in any 360 consecutive day period. No Non-Payment Default that
existed on the date of delivery of any Non-Payment Default Notice or during the
first 150 days of the Non-Payment Blockage Period commenced by such notice shall
be made the basis for a subsequent Non-Payment Blockage Period or Standstill
Period. No Non-Payment Default or Payment Default that existed on the date of
delivery of any Payment Default Notice or during the first 150 days of the
Payment Blockage Period commenced by such notice shall be made the basis for a
subsequent Non-Payment Blockage Period, Payment Blockage Period or Standstill
Period.
(d) In the event of the institution of any Insolvency Proceeding
relative to the Borrower or its property, (Y) all First Priority Obligations
shall first be paid in full before any payment is made by or on behalf of the
Borrower on the Second Indenture Subordinated Obligations; (Z) any payment or
distribution of any kind or character (whether in cash, securities, assets, by
set-off, or otherwise) to which the Second Trustee or Junior Note Holders would
be entitled but for the provisions of this subsection (d) (including, without
limitation, any payment or distribution which may be payable or deliverable to
the Second Trustee or such Holders by reason of the payment of any other
indebtedness of the Borrower or its Subsidiaries being subordinated to payment
of the Second Indenture Subordinated Obligations) shall be paid or delivered by
the Person making such payment or distribution, whether a trustee in bankruptcy,
a receiver, a liquidating trustee, or otherwise, directly to the Collateral
Agent, for the benefit of the Senior Lenders, to the extent necessary to make
payment in full of all First Priority Obligations remaining unpaid; provided,
however, that no such delivery of stock or obligations that are
18
issued pursuant to a plan of reorganization pursuant to applicable bankruptcy
law shall be required to be made to Collateral Agent, if such stock or
obligations are subordinate and junior at least to the extent provided in this
Section 6 to the payment of all First Priority Obligations then outstanding and
to the payment of any stock or obligations which are issued in exchange or
substitution for any First Priority Obligations then outstanding. In the event
that, in the circumstances contemplated by this subsection (d), and
notwithstanding the foregoing provisions of this subsection (d) (but after
giving effect to the proviso in this subsection), the Second Trustee or Junior
Note Holders shall have received any such payment or distribution of any kind or
character (whether in cash, securities, assets, by setoff, or otherwise) that
they are not entitled to receive by the foregoing provisions, before all First
Priority Obligations are paid in full, then and in such event such payment or
distribution shall be segregated and held in trust for the benefit of and
immediately shall be paid over to the Collateral Agent, for the benefit of the
Senior Lenders, for application against the payment of all First Priority
Obligations remaining unpaid until all such First Priority Obligations shall
have been paid in full.
(e) If the Second Trustee or the Junior Note Holders do not file a
proper claim or proof of debt or other document or amendment thereof in the form
required in any proceeding under the Bankruptcy Code prior to 30 days before the
expiration of time to file such claim or other document or amendment thereof,
then the Collateral Agent shall have the right (but not the obligation) in such
proceeding, and hereby irrevocably is appointed lawful attorney of the Second
Trustee and the Junior Note Holders for the purpose of enabling the Collateral
Agent to demand, xxx for, collect, receive and give receipt for the payments and
distributions in respect of the Second Indenture Subordinated Obligations that
are made in such proceeding and that are required to be paid or delivered to the
Collateral Agent as provided in subsection (d), and to file and prove all claims
therefor and to execute and deliver all documents in such proceeding in name of
the Second Trustee or the Junior Note Holders or otherwise in respect of such
claims, as the Collateral Agent reasonably may determine to be necessary or
appropriate.
(f) No right of any present or future holder of the First Priority
Obligations to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Borrower, or by any non-compliance by the Borrower or by the Second Trustee or
any Junior Note Holder with the terms, provisions, and covenants of this
Agreement or the Second Indenture Subordinated Documents, regardless of any
knowledge thereof any such holder of the First Priority Obligations may have or
be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of the First Priority Obligations may, at any time and from time to
time, without the consent of or notice to the Second Trustee or the Junior Note
Holders, without incurring responsibility to the Second Trustee or the Junior
Note Holders, and without impairing or releasing the subordination provided in
this Section 6 or the obligations of the Second Trustee or the Junior Note
Holders to the holders of the First Priority Obligations, do any one or more of
the following: (i) change the manner, place, or terms of payment (including any
change in the rate of interest) or extend the time of payment of, or renew,
amend, modify, alter, or grant any waiver or release with respect to, or consent
to any departure from, any First Priority Obligations or any instrument
evidencing the same or any agreement evidencing, governing, creating,
guaranteeing or securing any First Priority Obligations; (ii) sell, exchange,
release, or otherwise deal with any property pledged, mortgaged or otherwise
securing the First Priority Obligations; provided that the proceeds of any
19
such sale, exchange or release are applied to the reasonable expenses incurred
in connection therewith and to the payment of the First Priority Obligations
until satisfied in full with any excess being remitted to the First Trustee to
be applied in accordance with the Junior Intercreditor Agreement, the First
Indenture and the documents related thereto and, at such time as the First
Indenture Subordinated Obligations shall have been paid in full, remitted to the
Second Trustee to be applied in accordance with the Second Indenture and the
documents related thereto; (iii) release any Person liable under or in respect
of the First Priority Obligations; (iv) fail or delay in the perfection of Liens
securing the First Priority Obligations; (v) exercise or refrain from exercising
any rights against the Borrower and any other Person; or (vi) amend, or grant
any waiver or release with respect to, or consent to any departure from, any
guarantee for all or any of the First Priority Obligations.
(g) The provisions of this Section 6 are for the purpose of
defining the relative rights of the holders of First Priority Obligations on the
one hand, and the Second Trustee and the Junior Note Holders on the other hand,
and nothing herein shall impair, as between the Borrower and the Second Trustee
or the Junior Note Holders, the obligation of the Borrower, which is
unconditional and absolute, to pay to the holders thereof the principal thereof
and premium, if any, and interest thereon in accordance with their terms and the
provisions hereof, nor shall anything herein (other than the rights of the
Collateral Agent herein) prevent the Second Trustee or the Junior Note Holders
from exercising all remedies against the Borrower or its assets otherwise
permitted by applicable law or under the Second Indenture Subordinated Documents
upon default thereunder (including the right to demand payment and xxx for
performance under the Second Indenture and of the Junior Notes and to accelerate
the maturity thereof). Upon payment in full of the First Priority Obligations
and the termination of all obligations of the Lenders under the Senior Loan
Documents, the Second Trustee or the Junior Note Holders shall be subrogated
(without any representation or warranty on the part of Collateral Agent or any
holder of First Priority Obligations) to the rights of the holders of the First
Priority Obligations to receive payments or distributions of assets of the
Borrower made on account of the First Priority Obligations (and any security
therefor) until the Second Indenture Subordinated Obligations shall be paid in
full, and, for the purposes of such subrogation, no payments to the holders of
First Priority Obligations of any cash, assets, stock, obligations, other
property to which the Second Trustee or the Junior Note Holders would be
entitled except for the provisions of this Section 6 above shall, as between the
Borrower, its creditors (other than the holders of the First Priority
Obligations), and the Second Trustee or the Junior Note Holders, be deemed to be
a payment by the Borrower to the holders of or on account of the First Priority
Obligations.
(h) The agreements contained in this Section 6 shall continue to
be effective or shall be automatically reinstated, as the case may be, if at any
time any payment (or any part of any payment) on the First Priority Obligations
shall be returned by any holder of First Priority Obligations under any state or
federal law upon or following the insolvency, bankruptcy, or reorganization of
the Borrower or otherwise, as though such payment had not been made.
(i) The foregoing provisions of this Section 6 shall constitute a
continuing offer to all Persons who, in reliance upon such provisions, become
holders of First Priority Obligations, and such provisions are made for the
benefit of, and may be enforced directly by, holders of the First Priority
Obligations, who hereby are expressly stated to be intended beneficiaries of
this Section 6.
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7. Obligations Unconditional; Waivers, Covenants and Agreements
of the Trustees.
(a) All rights and interests of the Collateral Agent
hereunder and all agreements and obligations of the Trustees hereunder shall
remain in full force and effect irrespective of:
(i) any lack of validity or enforceability of
the First Priority Obligations, the Senior Lien, any Senior Loan Document, or
any other document or agreement in respect of the First Priority Obligations or
the Senior Lien, including without limitation, any exchange, release, or
non-perfection of the Senior Lien;
(ii) any change in the time, manner, or place of
payment, or in any other term, of all or any of the First Priority Obligations
(including without limitation, any rescission, in whole or in part, by the
Collateral Agent of any demand for payment of any First Priority Obligations),
or any participation, sale, assignment, or other transfer of any of the First
Priority Obligations, or any amendment, waiver, deferral, extension, renewal,
refinancing, replacement, refunding, acceleration, compromise, release,
alteration, supplementation, termination, or other modification, in whole or in
part, including any increase in the amount thereof (subject to the limitations
in the definition of First Priority Obligations), whether by course of conduct
or otherwise, of the First Priority Obligations or of the terms of the Senior
Loan Agreement, any other Senior Loan Document or any other document or
agreement relating to the First Priority Obligations or the Senior Lien; or
(iii) any other circumstances which otherwise
might constitute a defense available to, or a discharge of, the Borrower in
respect of the First Priority Obligations or the Senior Lien, including without
limitation, the avoidance or disallowance in any bankruptcy, insolvency or other
like proceeding or otherwise, of the First Priority Obligations or the Senior
Lien.
(b) The Trustees hereby waive (i) reliance by the
Collateral Agent upon the subordination and other intercreditor arrangements set
forth in this Agreement, and (ii) any notice of the creation, renewal,
extension, or accrual of any of the First Priority Obligations and notice of, or
proof of reliance by, the Collateral Agent upon this Agreement. The First
Priority Obligations shall be deemed conclusively to have been created,
contracted, or incurred in reliance on this Agreement, and all dealings between
the Borrower, the Trustees, and the Collateral Agent shall be deemed to have
been consummated in reliance upon this Agreement.
(c) So long as the Collateral Agent and the Senior
Lenders and their respective directors, officers, employees, and agents act in
accordance with the terms of this Agreement, the Trustees hereby waive any claim
against the Collateral Agent or the Senior Lenders with respect to, or arising
out of, any action or inaction or any error of judgment, negligence, or mistake,
or oversight whatsoever on the part of the Collateral Agent or Senior Lenders or
their respective directors, officers, employees, or agents (i) with respect to
any exercise of (or any delay in exercising, failure to exercise or decision to
refrain from exercising) any rights or remedies in respect of the First Priority
Obligations and the Senior Lien under the Senior Loan Documents or applicable
law, or (ii) in connection with any transaction relating to the Collateral.
Neither the Collateral Agent nor the Senior Lenders nor any of their respective
directors, officers, employees, or agents shall be liable for failure to demand,
collect, or realize upon any of the
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Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Borrower or any
other person or entity or to take any other action whatsoever with regard to the
Collateral or any part thereof, except as specifically provided in this
Agreement.
(d) The Collateral Agent and the Senior Lenders have not
made, and do not hereby or otherwise make to the Trustees or the Subordinated
Holders, any representations or warranties, express or implied (other than
Collateral Agent's authority to enter into this Agreement and to bind the Senior
Lenders hereby), nor do the Collateral Agent or the Senior Lenders assume any
liability to the Trustees or the Subordinated Holders with respect to the
financial or other condition of the Borrower, the Borrower's title to, the value
of, or any other matter in respect of any Collateral or the enforceability,
validity, priority, value or collectability of the First Priority Obligations,
any Senior Loan Document, the Senior Lien, the Second Priority Obligations, the
Subordinated Documents, or the Junior Liens.
(e) The Trustees and the Subordinated Holders have not
made, and do not hereby or otherwise make to the Collateral Agent or the Senior
Lenders, any representations or warranties, express or implied (other than (i)
First Trustee's authority to enter into this Agreement and to bind the Holders
of the Subordinated Notes hereby, and (ii) Second Trustee's authority to enter
into this Agreement and to bind the Junior Note Holders hereby), nor do the
Trustees or the Subordinated Holders assume any liability to the Collateral
Agent or the Senior Lenders with respect to the financial or other condition of
the Borrower, the Borrower's title to, the value of, or any other matter in
respect of any Collateral or the enforceability, validity, priority, value or
collectability of the First Priority Obligations, any Senior Loan Document, the
Senior Lien, the Second Priority Obligations, the Subordinated Documents, or the
Junior Liens.
8. Provisions Applicable After Bankruptcy.
The intercreditor and subordination arrangements set forth in
this Agreement, including without limitation, the subordination of the Second
Priority Obligations to the First Priority Obligations and the subordination of
the Junior Liens to the Senior Lien, shall continue in full force and effect
notwithstanding the occurrence of any case under the Bankruptcy Code, and in
furtherance thereof:
(a) the Senior Lien shall be reinstated to the
extent the Collateral Agent or Senior Lenders are required to turn over or
otherwise pay to the bankruptcy estate of the Borrower any amount of the First
Priority Obligations (and as a result thereof any portion of the Senior Lien is
released), and the Senior Lien so reinstated shall have the same benefits
hereunder as if the First Priority Obligations had never been paid;
(b) to the extent that any Trustee has or
acquires any rights under Section 363 or Section 364 of the Bankruptcy Code with
respect to the Junior Liens, (i) such Trustee will only assert such rights in a
manner consistent with the provisions hereof, including without limitation, in a
manner consistent with the subordination, pursuant to this Agreement, of the
Junior Liens to the Senior Lien, and (ii) the benefit of the existence,
acquisition, or assertion of any such rights shall be subject to the
subordination and other terms of this Agreement;
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(c) in connection with any financing or use of
cash collateral or other Collateral of the Borrower subsequent to the
commencement of a case under the Bankruptcy Code (collectively, "DIP
Financing"), the Trustees and the Subordinated Holders shall be deemed to have
consented to any DIP Financing and shall have no further right to adequate
protection in connection therewith, provided that (i) the Trustees are granted
(x) replacement Liens on property that are subordinate and junior in all
respects (on the same terms as are provided herein) to the Liens of the
Collateral Agent granted in connection with such DIP Financing, and (y) status
as a holder of an administrative claim of the same type as provided to the
Senior Lenders, but subordinate and junior to any administrative claim granted
to the Senior Lenders, (ii) the First Trustee receives reimbursement for the
reasonable fees and expenses of a single counsel to the First Trustee, (iii) the
Holders receive reimbursement for the reasonable fees and expenses of a single
counsel to some or all of the Holders (but in no event more than a single
counsel), (iv) the Second Trustee receives reimbursement for the reasonable fees
and expenses of a single counsel to the Second Trustee, (v) the Junior Note
Holders receive reimbursement for the reasonable fees and expenses of a single
counsel to some or all of the Junior Note Holders (but in no event more than a
single counsel), and (vi) the principal amount of the First Priority
Obligations, inclusive of the DIP Financing, does not exceed the Cap Amount; and
(d) the Trustees are not entitled to seek
adequate protection except (i) as provided in subsection (c) above, and (ii)
with respect to DIP Financing (other than as described in subsection (c) above)
so long as such adequate protection is consistent with the subordination in this
Agreement.
9. Further Assurances. The Borrower and the Trustees, at the
Borrower's expense and at any time from time to time, upon the reasonable
request of the Collateral Agent, will promptly and duly execute and deliver such
further instruments and documents (including amendments to financing statements
filed against the Borrower stating that the rights of the Trustees are subject
to the terms hereof and together with such assignments or endorsements as the
Collateral Agent may reasonably deem necessary) and take such further actions as
the Collateral Agent may reasonably request for the purposes of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted.
10. Provisions Define Relative Rights. This Agreement is intended
solely for the purpose of defining the relative rights of the Senior Lenders and
the Trustees in respect of the subordination of the Second Priority Obligations
to the First Priority Obligations and the Collateral and no other Person or
entity shall have any right, benefit or other interest under this Agreement.
Nothing contained in this Agreement is intended to affect or limit, in any way
whatsoever, the security interests, Liens, and other rights that the Collateral
Agent, the Senior Lenders and the Trustees have under the Senior Loan Documents
and the Subordinated Documents, respectively, insofar as the rights of the
Borrower or any other Person or entity are involved. For avoidance of doubt,
rights as between the Holders, on the one hand, and the Junior Note Holders, on
the other hand, shall be governed by and in accordance with the Junior
Intercreditor Agreement.
11. Termination of Agreement. Upon payment in full of the First
Priority Obligations, this Agreement shall terminate, and the exercise of rights
and remedies by the
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Trustees in respect of the Collateral shall thereafter be governed by the
Subordinated Documents. If the Collateral Agent receives as part of any
enforcement or collection proceedings any amounts or property in excess of that
required to pay the First Priority Obligations in full, then the Collateral
Agent shall pay to the Trustees as promptly as is commercially reasonable all
such amounts, in the same form as received, with any necessary non-recourse
endorsement.
12. Powers Coupled With An Interest.
(a) All powers, authorizations, and agencies contained in
this Agreement are coupled with an interest and are irrevocable until the First
Priority Obligations are paid in full.
(b) The Collateral Agent and the Trustees are hereby
authorized to demand specific performance of the provisions of this Agreement
when any party hereto has failed to comply with any terms or provisions hereof,
and each party waives any defense based on the adequacy of a remedy at law that
might be asserted as a bar to such remedy of specific performance.
13. Notices.
(a) (i) All notices, requests and demands to or upon the
Collateral Agent, the Senior Lenders or the Borrower to be effective shall be
made in accordance with the provisions of the Senior Loan Agreement, (ii) all
notices, requests, and demands to or upon the First Trustee to be effective
shall be made in accordance with the provisions of the First Indenture, and
(iii) all notices, requests, and demands to or upon the Second Trustee to be
effective shall be made in accordance with the provisions of the Second
Indenture. Borrower shall give notice to the Trustees of any cure or waiver of
any Event of Default under the Senior Loan Agreement.
(b) The Borrower shall give prompt written notice to the
Collateral Agent and the Trustees of any default or event of default under the
Senior Loan Documents or Subordinated Documents or under any agreement pursuant
to which any Senior Loan Documents or Subordinated Documents may have been
issued, or as to any other fact known to the Borrower which would prohibit the
making of any payment to or by either of the Trustees in respect of the
Subordinated Notes or the Junior Notes. Anything herein to the contrary
notwithstanding, the Trustees shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustees in respect of the Subordinated Notes or the Junior Notes unless and
until the Trustees shall have received written notice thereof from the Borrower,
the Collateral Agent, or any Senior Lender (or from any representative thereof),
and prior to the receipt of any such written notice, the Trustees shall be
entitled in all respects conclusively to assume that no such facts exist.
14. Counterparts. This Agreement may be executed by one or
more of the parties on any number of separate counterparts (including by
facsimile transmission), each of which shall constitute an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
15. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
24
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
16. Integration. This Agreement constitutes the entire agreement
of the parties hereto concerning the subject matter hereof and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties hereto. The parties hereto agree that (subject to the
provisions of the Trust Indenture Act of 1939, as amended, which shall govern
and control in the event and to the extent of any inconsistency with the terms
of this Agreement) the terms of this Agreement shall govern and control in the
event, and to the extent, of any inconsistency between the terms of this
Agreement and either of the Senior Loan Documents or the Subordinated Documents.
17. Amendments in Writing; Cumulative Remedies.
(a) None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed and delivered by the Collateral Agent and the Trustees; it
being expressly understood and agreed that the execution and delivery of such
instrument by the Borrower shall not be required unless it creates additional
burdens or obligations on the Borrower. No such additional burdens or
obligations on the Borrower shall arise solely from any change in the relative
rights or obligations of the Senior Lenders, the Collateral Agent, the Trustees,
or the Subordinated Holders due to an amendment, waiver, supplement, or other
modification of this Agreement.
(b) The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law. No failure to exercise, nor any delay
in exercising, on the part of the Collateral Agent, any right, power or
privilege hereunder or under any Senior Loan Document shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
18. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and assigns
to the same extent as if any such successor or assign was an original party
hereto.
(b) In the event the First Priority Obligations are paid
in full as a result of a replacement, refinancing or refunding of the First
Priority Obligations that does not violate the terms of the Indentures, the
lenders under any such new credit facility or facilities shall be entitled
(without any action by any party hereto) to succeed to the benefits of the
subordination of the Second Priority Obligations and the first priority Lien in
and to the Collateral to the extent afforded to the Collateral Agent, on behalf
of the Senior Lenders, as set forth herein. In furtherance thereof, the Trustees
agree to execute and deliver an agreement containing terms substantially
identical to those contained herein in favor of any third person who causes the
First Priority Obligations to be paid in full, whether such successor financing,
refinancing, refunding or replacement occurs by transfer, assignment, "takeout",
or any other means or vehicle.
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19. Fees; Expenses.
(a) The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Collateral Agent and Senior Lenders and
each of the Trustees, including the reasonable fees, charges, and disbursements
of counsel for the Collateral Agent and Senior Lenders and each of the Trustees,
in connection with the preparation of this Agreement, (ii) all reasonable
out-of-pocket expenses incurred by the Collateral Agent, the Senior Lenders and
the Trustees, including the reasonable fees, charges, and disbursements of
counsel for the Collateral Agent and Senior Lenders and a single counsel for
each of the Trustees, in connection with the administration of this Agreement,
and (iii) all reasonable out-of-pocket expenses incurred by the Collateral
Agent, the Senior Lenders, the Trustees, and the Subordinated Holders, including
the reasonable fees, charges and disbursements of any counsel for the Collateral
Agent and Senior Lenders and a single counsel for each of the First Trustee, the
Second Trustee, some or all of the Holders (but in no event more than a single
counsel for Holders) and some or all of the Junior Note Holders (but in no event
more than a single counsel for Junior Note Holders), in connection with the
enforcement or protection of any rights under this Agreement.
(b) Without limiting the indemnity obligations of the
Borrower under the Senior Loan Agreement or the indemnity obligations of the
Borrower under the Indentures, the Borrower shall pay, indemnify, and hold the
Collateral Agent, the Senior Lenders and the Trustees (each such Person, an
"Indemnitee") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions (whether sounding in contract, tort, or on
any other ground), judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever (including without limitation fees, reasonable fees
and disbursements of any counsel for any Indemnitee) arising out of, in
connection with, or as a result of (i) the execution and delivery of this
Agreement by the Borrower, or (ii) any action taken or omitted to be taken by
the Borrower with respect to this Agreement, provided that such indemnity under
clauses (i) and (ii) above shall not be available to the extent such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee.
(c) Nothing in this Agreement shall apply to claims of,
or payments to, (i) the First Trustee under or pursuant to Section 7.7 of the
First Indenture or (ii) the Second Trustee under or pursuant to Section 7.7 of
the Second Indenture (without giving effect to any subsequent amendments of such
sections).
20. Governing Law; Jurisdiction. This Agreement shall be governed
by, and construed and interpreted in accordance with, the law of the State of
New York. Each party hereto agrees that all judicial proceedings brought against
it arising out of or relating to this Agreement or its obligations hereunder may
be brought in any state or federal court of competent jurisdiction in the State
of New York, County of New York, and accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts.
21. No Fiduciary Duties Created. The Trustees shall not be deemed
to owe any fiduciary duty to the Senior Lenders or to the Collateral Agent. The
Collateral Agent shall
26
not be deemed to owe any fiduciary duty to the Trustees or the Holders. With
respect to the Senior Lenders or the Collateral Agent, the Trustees undertake to
perform or to observe only such of their covenants or obligations as are
specifically set forth in this Agreement and no implied covenants or obligations
with respect to Senior Lenders or to the Collateral Agent shall be read into
this Agreement against the Trustees.
22. NO JURY TRIAL. EACH PARTY HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING UNDER THIS
AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT, WHETHER NOW EXISTING OR
HEREAFTER.
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
ABLECO FINANCE LLC,
a Delaware limited liability company,
as Collateral Agent
By: ________________________________
Title:
THE BANK OF NEW YORK,
a New York banking corporation,
as First Trustee
By: ________________________________
Title:
BANK ONE TRUST COMPANY, N.A.,
a national banking association,
as Second Trustee
By: ________________________________
Title:
KOMAG, INCORPORATED,
a Delaware corporation
By: ________________________________
Title:
28
