EXHIBIT 10.3
Execution Version
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is dated as of October 12, 2006, and
entered into by and between GUGGENHEIM CORPORATE FUNDING, LLC, in its capacity
as administrative agent for the holders of the First Lien Obligations (as
defined below) (including its successors and assigns from time to time, the
"FIRST LIEN AGENT"), and XXXXX FARGO BANK, N.A.("TRUSTEE"), in its capacity as
trustee and collateral agent for the holders of the Second Lien Obligations (as
defined below) (including its successors and assigns from time to time, the
"SECOND LIEN AGENT"), and acknowledged and agreed to by NATIONAL COAL
CORPORATION., a Tennessee corporation (the "COMPANY"), NATIONAL COAL CORP., a
Florida corporation ("HOLDINGS") and each of the other Guarantors (as defined
below). Capitalized terms used herein but not otherwise defined herein have the
meanings set forth in SECTION 1 below.
RECITALS
WHEREAS, the Company, as borrower (in such capacity, the "FIRST LIEN
DEBTOR"), and the subsidiaries of the Company party thereto from time to time as
guarantors (collectively, the "FIRST LIEN GUARANTORS"), the lender(s) party
thereto, and GUGGENHEIM CORPORATE FUNDING, LLC, as the First Lien Agent, have
entered into that certain Credit Agreement, dated as of October 12 2006,
providing for loans to the First Lien Debtor thereunder (as Modified or
Refinanced from time to time pursuant to a Permitted Modification or a Permitted
Refinancing, the "FIRST LIEN FINANCING AGREEMENT");
WHEREAS, as security for the First Lien Obligations, the First Lien
Debtor executed and delivered, among other instruments, those First Lien
Collateral Documents identified on Exhibit B attached hereto and made a part
hereof, which instruments were recorded in the recording offices as identified
on Exhibit B hereto;
WHEREAS, the Company, as issuer of the Notes (defined below) (in such
capacity, the "SECOND LIEN DEBTOR"; the First Lien Debtor and the Second Lien
Debtor, collectively, the "DEBTOR"), and the subsidiaries of the Company party
thereto from time to time as guarantors (collectively, the "SECOND LIEN
GUARANTORS"; the First Lien Guarantors and the Second Lien Guarantors,
collectively, the "Guarantors"), the purchasers party thereto, and XXXXX FARGO
BANK, N.A., as Trustee, have entered into that certain Indenture, dated as of
December 29, 2005 (the "INDENTURE"); pursuant to which the Second Lien Debtor
has issued its 10.5% Senior Secured Notes due 2010 (the "NOTES"), which Notes
are guaranteed by the Second Lien Guarantors (the "SECOND LIEN GUARANTEES");
WHEREAS, as security for the Second Lien Obligations, the Second Lien
Debtor executed and delivered, among other instruments, those Second Lien
Collateral Documents identified on Exhibit C attached hereto and made a part
hereof, which instruments were recorded in the recording offices as identified
on Exhibit C hereto;
WHEREAS, the parties hereto intend that the First Lien Obligations will
be secured on a first priority basis by Liens on the Common Collateral pursuant
to the terms of the First Lien Documents;
WHEREAS, the parties hereto intend that the Second Lien Obligations
will be secured on a second priority basis by Liens on the Common Collateral
pursuant to the terms of the Second Lien Collateral Documents; and
WHEREAS, the First Lien Documents and the Second Lien Documents
provide, among other things, that the parties thereto shall set forth in this
Agreement their respective rights and remedies with respect to the Common
Collateral;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
Section 1 DEFINITIONS.
1.1 DEFINED TERMS. As used in the Agreement, the following terms
shall have the following meanings:
"AGREEMENT" means this Intercreditor Agreement, as Modified from time
to time in accordance with the terms hereof.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" has the meaning set forth in
SECTION 5.7(J) hereof.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute.
"BANKRUPTCY LAW" means the Bankruptcy Code and any similar federal,
state or foreign bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are expressly authorized or required
by law to close.
"COMMON COLLATERAL" means, at any time of determination, collectively,
the First Lien Collateral, and all of the other property of Grantor, in each
case above in which each of the First Lien Agent, on behalf of itself and the
First Lien Claimholders, and the Second Lien Agent, on behalf of itself and the
Second Lien Claimholders, has a valid and perfected Lien (which Lien has not
been avoided, disallowed, set aside, invalidated or subordinated pursuant to
Chapter 5 of the Bankruptcy Code or otherwise) securing payment of First Lien
Obligations or Second Lien Obligations, respectively.
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"COMPANY" has the meaning set forth in the Preamble hereto.
"CREDITORS" means, collectively, the First Lien Agent, on behalf of
itself and the First Lien Claimholders, and the Second Lien Agent, on behalf of
itself and the Second Lien Claimholders, and their respective successors and
assigns.
"CUT-OFF DATE" has the meaning set forth in SECTION 5.7(B) hereof.
"DEBTOR" has the meaning set forth in the Recitals hereto.
"DIP FINANCING" means any financing provided by a lender under Section
364 of the Bankruptcy Code or consent to the use of cash collateral under
Section 363 of the Bankruptcy Code.
"DISCHARGE OF FIRST LIEN OBLIGATIONS" means the payment in full in cash
of the principal of and interest and premium, if any, in respect of the
indebtedness of the First Lien Debtor and of the First Lien Guarantors under the
First Lien Financing Agreement or, with respect to Hedging Obligations or
letters of credit outstanding thereunder, delivery of cash collateral or
backstop letters of credit in respect thereof in compliance with the First Lien
Financing Agreement, in each case after or concurrently with termination of all
commitments to extend credit thereunder, and payment in full in cash of any
other First Lien Obligations that are due and payable or otherwise accrued and
owing at or prior to the time such principal, interest and premium, if any, are
paid. If after receipt of any payment of, or of proceeds of Common Collateral
applied to the payment of, any First Lien Obligations, any First Lien
Claimholder is required to surrender or return such payment or proceeds to any
Person for any reason, then the First Lien Obligations intended to be satisfied
and discharged by such payment or proceeds shall be reinstated and continue as
if such payment or proceeds had not been received by such holder.
"DISPOSITION" has the meaning set forth in SECTION 5.1(A)(I).
"ENFORCEMENT ACTION" means any action under applicable law:
(1) to foreclose, execute or levy on, collect on, take possession of or
control of, or sell or otherwise realize upon (judicially or non-judicially) or
to lease, license or otherwise dispose of (whether publicly or privately), any
Common Collateral or otherwise to exercise or enforce remedial rights with
respect to Common Collateral under the First Lien Documents or the Second Lien
Documents, as applicable, or any other applicable agreement, document or
instrument pertaining thereto (including, without limitation, by way of setoff,
noticing of any public or private sale or other disposition pursuant to the UCC
or other applicable law, notification of account debtors, notification of
depositary banks under deposit account control agreements or exercise of rights
under landlord consents, if applicable),
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(2) to solicit bids from third parties to conduct the liquidation or
disposition of any Common Collateral or to engage or retain sales brokers,
marketing agents, investment bankers, accountants, appraisers, auctioneers or
other third parties for the purposes of valuing, marketing, promoting and
selling any Common Collateral,
(3) to receive a transfer of Common Collateral in satisfaction of any
indebtedness or other obligation secured thereby, or
(4) to otherwise enforce any security interest or other right or
remedy, as a secured creditor or otherwise, pertaining to the Common Collateral
at law, in equity or pursuant to the First Lien Documents or the Second Lien
Documents, as applicable, or any other applicable agreement, document or
instrument pertaining thereto (including, without limitation, the commencement
of any applicable legal proceedings or other actions against or with respect to
all or any portion of the Common Collateral to facilitate the actions described
in the immediately preceding clauses (1), (2) and (3), and exercising voting
rights in respect of any equity interests comprising Common Collateral);
PROVIDED that "Enforcement Action" shall not be deemed to include the
commencement of, or joinder in filing of a petition for commencement of, an
Insolvency Proceeding against the owner of Common Collateral.
"FIRST LIEN AGENT" has the meaning set forth in the preamble hereto.
"FIRST LIEN ANCILLARY OBLIGATIONS" has the meaning set forth in Section
5.7(a) hereof.
"FIRST LIEN CLAIMHOLDERS" means, at any relevant time, the holders of
First Lien Obligations at such time, including without limitation the First Lien
Lenders and the First Lien Agent under the First Lien Financing Agreement.
"FIRST LIEN COLLATERAL" means all of the real property, and interests
therein, and all of the personal property of Grantor, whether now owned or
hereafter acquired or existing, whether tangible or intangible, and wherever
located, with respect to which a Lien is granted in favor of First Lien Agent
for the benefit of itself and the other First Lien Claimholders to secure any
First Lien Obligations (which Lien has not been released by First Lien Agent).
"FIRST LIEN COLLATERAL DOCUMENTS" means the Security Documents (as
defined in the First Lien Financing Agreement) and any other agreement, document
or instrument (including any mortgage or deed of trust or fixture filing)
pursuant to which a Lien is granted securing any First Lien Obligations or under
which rights or remedies with respect to such Liens are governed.
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"FIRST LIEN DEBTOR" has the meaning set forth in the Recitals hereto.
"FIRST LIEN DOCUMENTS" means the First Lien Financing Agreement, the
First Lien Guaranty, the First Lien Collateral Documents and all other
agreements, documents and instruments at any time entered into by Grantor or any
other Person with or in favor of the First Lien Agent and/or the First Lien
Lenders in connection therewith or related thereto, including this Agreement, as
all of the foregoing now exist or may hereafter be Modified pursuant to a
Permitted Modification or be Refinanced pursuant to a Permitted Refinancing.
"FIRST LIEN FINANCING AGREEMENT" has the meaning set forth in the
Recitals hereto.
"FIRST LIEN GUARANTORS" has the meaning set forth in the Recitals
hereto.
"FIRST LIEN GUARANTY" means any guaranty of any First Lien Guarantor
pursuant to which such First Lien Guarantor shall guarantee the First Lien
Obligations of the First Lien Debtor.
"FIRST LIEN LENDERS" means the "LENDERS" under and as defined in the
First Lien Financing Agreement and any other lenders from time to time under the
First Lien Financing Agreement.
"FIRST LIEN OBLIGATIONS" means, at any time of determination, but
subject to the limitations set forth in Section 5.3(a), all Obligations (in an
aggregate amount not to exceed the Maximum First Lien Debt Amount) then secured
by a Lien on the Common Collateral, and owing by Grantor to the First Lien Agent
and/or the First Lien Lenders, under the First Lien Documents, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Grantor to the extent a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, and all other
amounts payable thereunder or in respect thereof, including Obligations of any
Grantor in respect of Hedging Obligations under the First Lien Documents in
respect of interest on First Lien Principal Obligations. To the extent any
payment with respect to the First Lien Obligations (whether by or on behalf of
Grantor, as proceeds of security, enforcement of any right of set-off or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"FIRST LIEN PLEDGED COLLATERAL" has the meaning set forth in SECTION
5.5 hereof.
"FIRST LIEN PRINCIPAL OBLIGATIONS" means, at any time of determination,
the aggregate unpaid amount of the First Lien Obligations constituting principal
of indebtedness (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the First Lien Debtor and First Lien
Guarantors thereunder or in respect thereof).
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"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"GRANTOR" means the collective reference to the Debtor and the
Guarantors, or any one or more of them, as the context may require.
"GUARANTORS" has the meaning set forth in the Recitals hereto.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate collar
agreements;
(2) other agreements or arrangements designed to manage interest rates
or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices,
in each case entered into in the ordinary course of business and not for
speculative purposes.
"INDENTURE" has the meaning set forth in the Recitals hereto.
"INSOLVENCY PROCEEDING" means (a) any voluntary or involuntary case or
proceeding under Bankruptcy Law with respect to Grantor, (b) any other voluntary
or involuntary insolvency, reorganization or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding with respect to Grantor or with respect to a material portion of its
assets, (c) any liquidation, dissolution, reorganization or winding up of
Grantor whether voluntary or involuntary and whether or not involving insolvency
or bankruptcy or (d) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of Grantor.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance (including easements,
rights-of-way and the like), lien (statutory or other), security interest or
preference, priority or other security agreement, transfer intended as security
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any indebtedness or other Obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a capital
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lease, or any financing lease having substantially the same economic effect as
any of the foregoing, in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction naming the owner of the asset to which such Lien relates as
debtor.
"MAJOR EVENT OF DEFAULT" means the occurrence or existence of any event
or condition described in the following Sections of the Indenture: 601(1),
601(2), 601(3), 601(4), 601(5) (solely in respect of the covenants and
agreements of the Company and any other Grantor contained in Articles 3, 4, 5,
9, 10 and 11 of the Indenture), and any comparable provisions of any Second Lien
Financing Agreements evidencing any Permitted Modification or Permitted
Refinancing thereof .
"MAXIMUM FIRST LIEN DEBT AMOUNT" means the sum of (i) the outstanding
amount of First Lien Principal Obligations not to exceed (x) $10,000,000 in the
aggregate (calculated, in the case of any such First Lien Principal Obligations
issued at a discount, at the aggregate amount due at maturity thereof) less (y)
the aggregate amount of all repayments of term indebtedness constituting First
Lien Principal Obligations and all repayments of revolving credit indebtedness
constituting First Lien Principal Obligations (effected with a corresponding
commitment reduction under the First Lien Financing Agreement) pursuant to
clause (i) of the second paragraph of Section 4.10 of the Indenture plus (ii)
accrued but unpaid interest and, if applicable, premiums on the amount of such
principal not in excess of the amount referred to in clause (i) above plus (iii)
all fees, expenses, reimbursement obligations, guarantees and all other amounts
of a type not referred to in clause (i) or (ii) above payable in respect
thereof) plus (iv) Hedging Obligations in respect of interest on First Lien
Principal Obligations referred to in clause (i) above, in each case above
payable pursuant to the First Lien Documents.
"MODIFICATION" means, with respect to any agreement or other document,
any amendment, supplement, extension, renewal, restatement, restructuring or
other modification thereof, and "MODIFY" and "MODIFIED" shall have correlative
meanings.
"NEW AGENT" has the meaning set forth in SECTION 5.6 hereof.
"OBLIGATIONS" means all obligations of every nature outstanding from
time to time, whether for principal, interest, fees, expenses, charges,
premiums, indemnification or otherwise.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"PERMITTED MODIFICATION" means a Modification that complies with
SECTION 5.3(A) or (B), as applicable, including each proviso thereto.
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"PERMITTED REFINANCING" means a Refinancing that complies with SECTION
5.3(A) or (B), as applicable, including each proviso thereto.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PURCHASE COMMITMENT" has the meaning set forth in SECTION 5.7(B)
hereof.
"PURCHASE DATE" has the meaning set forth in SECTION 5.7(B) hereof.
"PURCHASE OPTION EVENT" means any of (i) the First Lien Agent's or any
First Lien Claimholder's (A) commencement of any Enforcement Action against the
First Lien Collateral or (B) acceleration of the First Lien Obligations (other
than pursuant to commencement by any Person other than any First Lien
Claimholder of an Insolvency Proceeding relating to any Grantor) or (C)
commencement of, or joinder in filing a petition for the commencement of, an
Insolvency Proceeding against any Grantor, (ii) the occurrence of an Event of
Default under the Indenture and (iii) the occurrence of an Insolvency Proceeding
in respect of any Grantor.
"PURCHASE OPTION EVENT NOTICE" has the meaning set forth in SECTION
5.7(A) hereof.
"PURCHASE OPTION STANDSTILL PERIOD" has the meaning set forth in
SECTION 5.7(A) hereof.
"PURCHASE NOTICE" has the meaning set forth in SECTION 5.7(F) hereof.
"PURCHASE OPTION PERIOD" has the meaning set forth in SECTION 5.7(B)
hereof.
"PURCHASE PERCENTAGE" has the meaning set forth in SECTION 5.7(F)
hereof.
"PURCHASE SHORTFALL" has the meaning set forth in SECTION 5.7(D)
hereof.
"REFINANCE" means, in respect of any indebtedness, to refinance,
extend, renew, defease, amend, modify, supplement, restructure, replace, refund
or repay, or to issue other indebtedness, in exchange or replacement for, such
indebtedness in whole or in part, other than pursuant to a DIP Financing, and
"REFINANCED" and "REFINANCING" shall have correlative meanings.
"REPLACEMENT FIRST LIEN AGENT" has the meaning set forth in Section
5.7(j) hereof.
"SECOND LIEN AGENT" has the meaning set forth in the preamble hereto.
"SECOND LIEN CLAIMHOLDERS" means, at any relevant time, the holders of
Second Lien Obligations at such time, including without limitation the Second
Lien Noteholders and the Second Lien Agent under the Second Lien Financing
Agreements.
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"SECOND LIEN CLAIMHOLDER CONSENT" means the written consent of Holders
(as defined in the Indenture, or any comparable term contained in any successor
Second Lien Financing Agreement) of Notes (or other relevant Second Lien
Obligations) in the minimum aggregate principal amount required under Article 9
of the Indenture (or any comparable provision of any successor Second Lien
Financing Agreement).
"SECOND LIEN COLLATERAL" means all of the real property, and interest
therein, and all of the personal property of Grantor, whether now owned or
hereafter acquired or existing, whether tangible or intangible, and wherever
located, with respect to which a Lien is granted in favor of Second Lien Agent
for the benefit of itself and the other Second Lien Claimholders to secure any
Second Lien Obligations (which Lien has not been released by Second Lien Agent).
"SECOND LIEN COLLATERAL DOCUMENTS" means the Second Lien Financing
Agreements, the Second Lien Security Agreement and any other agreement, document
or instrument (including any mortgage, deed of trust or fixture filing) pursuant
to which a Lien is granted securing any Second Lien Obligations or under which
rights or remedies with respect to such Liens are governed.
"SECOND LIEN DEBTOR" has the meaning set forth in the Recitals hereto.
"SECOND LIEN DOCUMENTS" means the Second Lien Financing Agreements and
the Second Lien Collateral Documents.
"SECOND LIEN FINANCING AGREEMENTS" means the Indenture, the Notes, and
the Second Lien Guarantees, and all of the other agreements, documents and
instruments at any time entered into by Grantor or any other Person with or in
favor of the Second Lien Agent and/or the Second Lien Lenders in connection
therewith or related thereto, including this Agreement, as all of the foregoing
now exist or may hereafter be Modified pursuant to a Permitted Modification or
be Refinanced pursuant to a Permitted Refinancing.
"SECOND LIEN GUARANTORS" has the meaning set forth in the Recitals
hereto.
"SECOND LIEN GUARANTEES" has the meaning set forth in the Recitals
hereto.
"SECOND LIEN NOTEHOLDERS" means the "HOLDERS" under and as defined in
the Indenture and any other lenders from time to time under the Second Lien
Financing Agreements.
"SECOND LIEN OBLIGATIONS" means, at any time of determination, all
Obligations outstanding under the Second Lien Financing Agreements and the other
Second Lien Documents owing by the Company or any other Grantor to the Second
Lien Agent and/or the Second Lien Noteholders thereunder, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, whether arising
(i) during or after the initial or any renewal term of the Second Lien Documents
pursuant to a Permitted Modification or (ii) after the commencement of any case
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with respect to Grantor under Bankruptcy Law, including the payment of interest
and other amounts which would accrue and become due but for the commencement of
such case, to the extent such amounts are allowed or allowable in any such
case), whether direct or indirect, absolute or contingent, joint or several, due
or not due, primary or secondary, liquidated or unliquidated. To the extent any
payment with respect to the Second Lien Obligations (whether by or on behalf of
Grantor, as proceeds of security, enforcement of any right of set-off or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
"SECOND LIEN PLEDGED COLLATERAL" has the meaning set forth in SECTION
5.5 hereof.
"SECOND LIEN SECURITY AGREEMENT" means the Security Agreement, dated as
of December 29, 2005, among the Second Lien Debtor, the Second Lien Guarantors
and the Second Lien Agent.
"STANDSTILL PERIOD" has the meaning set forth in SECTION 3.1(A)(I)
hereof.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"UNIFORM COMMERCIAL CODE" or "UCC" means the Uniform Commercial Code
(or any similar or equivalent legislation) as in effect in any applicable
jurisdiction.
1.2 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires or provides otherwise (a) subject, where applicable,
to the limitations set forth in this Agreement, any definition of or reference
to any agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns, (c)
the words "herein", "hereof" and "hereunder", and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Exhibits or Sections
shall be construed to refer to Exhibits or Sections of this Agreement and (e)
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the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
Section 2 LIEN PRIORITIES.
2.1 RELATIVE PRIORITIES.
(a) Each Creditor hereby acknowledges its understanding
that the other Creditor has been granted a Lien upon the Common Collateral.
Notwithstanding the date, manner or order of grant, attachment or perfection of
any Liens securing the Second Lien Obligations granted on the Common Collateral
or of any Liens securing the First Lien Obligations granted on the Common
Collateral and notwithstanding any provision of the UCC or any other applicable
law or the provisions of the Second Lien Documents or any other circumstance
whatsoever, each of the Second Lien Agent, on behalf of itself and the Second
Lien Claimholders, and the First Lien Agent, on behalf of itself and the First
Lien Claimholders hereby agrees that:
(i) all Liens granted under or pursuant to the First Lien
Documents on the Common Collateral securing the First
Lien Obligations up to but not exceeding the Maximum
First Lien Debt Amount now or hereafter held by or on
behalf of the First Lien Agent or any First Lien
Claimholder, or any agent or trustee therefor, shall,
so long as such Liens are valid and perfected, be and
remain senior in all respects and prior to all Liens
granted to the Second Lien Agent or the Second Lien
Claimholders under or pursuant to the Second Lien
Collateral Documents on the Common Collateral
securing any Second Lien Obligations;
(ii) any Lien granted under or pursuant to the Second Lien
Collateral Documents on the Common Collateral now or
hereafter held by or on behalf of the Second Lien
Agent or any Second Lien Claimholders or any agent or
trustee therefor, shall be junior and subordinate in
all respects to the Liens granted under or pursuant
to the First Lien Documents on the Common Collateral
securing the First Lien Obligations up to the Maximum
First Lien Debt Amount, so long as such Liens under
or pursuant to the First Lien Documents are valid and
perfected; and
(iii) provided that Second Lien Claimholder Consent shall
have been obtained to (i) the incurrence of
Obligations pursuant to the First Lien Documents in
excess of the Maximum First Lien Debt Amount and (ii)
the Liens granted pursuant to the First Lien
Documents on any Common Collateral securing any such
excess amounts, and subject to Section 5.3(a), all
Liens of the Second Lien Agent and the Second Lien
Claimholders on the Common Collateral shall, so long
as such Liens are valid and perfected, have priority
over the Liens of the First Lien Agent or the First
Lien Claimholders on the Common Collateral to the
extent that the Liens of the First Lien Agent or the
First Lien Claimholders secure First Lien Obligations
in excess of the Maximum First Lien Debt Amount, and
to the extent that the Liens of the First Lien Agent
or the First Lien Claimholders on the Common
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Collateral secure First Lien Obligations in excess of
the Maximum First Lien Debt Amount, but only with
respect to such excess amounts, such Liens of the
First Lien Agent and the First Lien Claimholders
shall be junior and subordinate in all respects to
the Liens of the Second Lien Agent and the Second
Lien Claimholders granted under or pursuant to the
Second Lien Documents on the Common Collateral so
long as such Liens under or pursuant to the Second
Lien Documents are valid and perfected, and the First
Lien Agent and First Lien Claimholders shall have,
mutatis mutandis, with respect thereto, and to Common
Collateral held or received therefor (including
proceeds), analogous obligations (other than the
obligations in respect of the Standstill Period) to
the Second Lien Agent and Second Lien Claimholders
under this Agreement as the Second Lien Agent and
Second Lien Claimholders have under this Agreement in
favor of the First Lien Agent and First Lien
Claimholders with respect to the First Lien
Obligations not exceeding the Maximum First Lien Debt
Amount and the Common Collateral securing such First
Lien Obligations not exceeding the Maximum First Lien
Debt Amount, and the Second Lien Agent and Second
Lien Claimholders shall have, mutatis mutandis, the
same limitations on responsibilities, duties and
liability in respect of the foregoing as the First
Lien Agent and First Lien Claimholders have under
this Agreement with respect to the Second Lien Agent
and Second Lien Claimholders.
(b) The lien priorities provided in this SECTION 2.1 in
respect of the Common Collateral on or in which the Creditors have a valid and
perfected Lien shall not be altered or otherwise affected by any Permitted
Modification of the Second Lien Documents or Permitted Modification of the First
Lien Documents or any Permitted Refinancing of the Second Lien Obligations or
Permitted Refinancing of the First Lien Obligations, or by any action that any
Creditor may take or fail to take in respect of Grantor or the Common Collateral
(other than failure to maintain the validity or perfection of their respective
Liens).
2.2 PROHIBITION ON CONTESTING LIENS. Each of the Second Lien
Agent, for itself and on behalf of each Second Lien Claimholder, and the First
Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees that
it will not contest the validity, perfection, priority (as set forth in SECTION
2.1) or enforceability of the Liens of the other Creditor upon the assets of the
Debtor or the Guarantors that are Common Collateral and that as between First
Lien Claimholders and Second Lien Claimholders, the terms of this Agreement
shall govern the priority of their respective valid and perfected Liens on or in
the Common Collateral securing the First Lien Obligations or Second Lien
Obligations, respectively. For avoidance of doubt, the parties confirm that the
assertion in any proceeding or otherwise by one party (Party A) of invalidity or
nonperfection of the other party's (Party B's) security interest as a defense to
a claim or assertion by Party B against Party A for or alleging breach of this
Agreement arising out of Party A's exercise of rights or enforcement of remedies
12
under this Agreement or any First Lien Documents or Second Lien Documents, as
applicable, shall not be deemed to be a "contest" for purposes of this SECTION
2.2. In the event that Second Lien Agent or any Second Lien Claimholder
believes, in good faith, that the Lien in favor of First Lien Agent in any
assets of Grantor is invalid or unperfected, prior to the commencement by Second
Lien Agent or any Second Lien Claimholder of any such exercise of rights or
enforcement of remedies which would violate this Agreement but for such
invalidity or nonperfection of First Lien Agent's Lien, the Second Lien Agent or
Second Lien Claimholder will furnish to the First Lien Agent not less than five
Business Days' prior written notice of the contemplated commencement of such
exercise or enforcement, which notice shall identify the basis for the belief by
the Second Lien Agent or Second Lien Claimholder, as the case may be, that such
invalidity or nonperfection exists.
2.3 SIMILAR LIENS AND AGREEMENTS. The parties hereto agree that it
is their intention that the First Lien Collateral constituting Common Collateral
and the Second Lien Collateral constituting Common Collateral be identical. In
furtherance of the foregoing, the parties hereto agree, subject to the other
provisions of this Agreement, upon request by the First Lien Agent or the Second
Lien Agent, to cooperate in good faith (and to direct their counsel to cooperate
in good faith) from time to time in order to determine the specific items
included in the First Lien Collateral and the Second Lien Collateral and the
steps taken to perfect their respective Liens thereon and the identity of the
respective parties obligated under the First Lien Documents and the Second Lien
Documents.
2.4 LIMITATIONS ON DUTIES AND OBLIGATIONS. Each of the Second Lien
Agent, for itself and on behalf of each Second Lien Claimholder, and the First
Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees
that, except in the case of (i) the obligations of the First Lien Agent under
SECTION 5.5 as bailee and agent for perfection for the Second Lien Agent and
(ii) the obligations of the Second Lien Agent under SECTION 5.5 as bailee and
agent for perfection for the First Lien Agent, each of the First Lien Agent (on
behalf of the First Lien Claimholders) and the Second Lien Agent (on behalf of
the Second Lien Claimholders) shall be solely responsible for perfecting and
maintaining the perfection of its Lien in and to each item constituting the
Common Collateral in which the First Lien Agent (on behalf of the First Lien
Claimholders) or the Second Lien Agent (on behalf of the Second Lien
Claimholders) has been granted a Lien. The foregoing provisions of this
Agreement are intended solely to govern the respective Lien priorities as
between the Creditors and shall not impose on either the First Lien Agent (on
behalf of the First Lien Claimholders) or the Second Lien Agent (on behalf of
the Second Lien Claimholders) any obligations in respect of the disposition of
proceeds of foreclosure on any Common Collateral that would conflict with prior
perfected claims therein in favor of any other Person or any order or decree of
any court or other Governmental Authority or any applicable law.
Section 3 ENFORCEMENT.
3.1 EXERCISE OF REMEDIES.
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(a) So long as the Discharge of First Lien Obligations
has not occurred, whether or not any Insolvency Proceeding has been commenced by
or against Grantor:
(i) the Second Lien Agent and the Second Lien
Claimholders:
(x) will not take any Enforcement Action with
respect to any Common Collateral; PROVIDED,
HOWEVER, that the Second Lien Agent or the
other Second Lien Claimholders may take any
such Enforcement Action with respect to the
Common Collateral after the expiration of a
period of 180 days following the date on
which the Second Lien Agent shall have (1)
declared, and notified the First Lien Agent
of, the existence of any "Event of Default"
or event of default, under or as defined in
the Second Lien Financing Agreements, that
is a Major Event of Default, or (2)
accelerated any of the Second Lien
Obligations under the Second Lien Financing
Agreements (such 180 day period, the
"STANDSTILL PERIOD"); PROVIDED that, at the
time of such exercise, either any "Event of
Default" or event of default under or as
defined in the Second Lien Financing
Agreements that is a Major Event of Default
shall exist or any of the Second Lien
Obligations shall have been accelerated or
otherwise have become due and payable; and
PROVIDED, FURTHER, however, that
notwithstanding anything herein to the
contrary, in no event shall the Second Lien
Agent or any Second Lien Claimholder take
any Enforcement Action with respect to the
Common Collateral if, notwithstanding the
expiration of the Standstill Period, the
First Lien Agent or First Lien Claimholders
shall have commenced Enforcement Action with
respect to all or any material portion of
the Common Collateral (which Enforcement
Action of the First Lien Agent is other than
the exercise of set off or analogous
remedies in respect of cash and cash
equivalents or deposit or cash collateral
accounts) (prompt notice of any such
exercise to be given by the First Lien Agent
to the Second Lien Agent),
(y) will not contest or protest or object to any
foreclosure proceeding or action brought by
the First Lien Agent or any First Lien
Claimholder, or any other exercise by the
First Lien Agent or any First Lien
Claimholder of any rights and remedies, in
each case relating to the Common Collateral
(whether under the First Lien Documents or
otherwise) provided that such foreclosure or
exercise is in compliance with applicable
law and is not prohibited by SECTION 5.7, or
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(z) subject to their rights under clause (i)(x)
above, will not object to the forbearance by
the First Lien Agent or the First Lien
Claimholders from bringing or pursuing any
foreclosure proceeding or action or any
other exercise of any rights or remedies
relating to the Common Collateral,
in each case in clauses (x), (y) and (z)
above so long as the respective Liens of the
Second Lien Agent and the other Second Lien
Claimholders attach to the proceeds thereof
subject to the relative priorities described
in SECTION 2 hereof; and
(ii) notwithstanding anything to the contrary set forth in
the Second Lien Documents, but subject to SECTION
3.1(A)(I), SECTION 5.1(A), SECTION 5.7 and any other
express provision of this Agreement, and subject to
applicable law, the First Lien Agent and the First
Lien Claimholders shall have the exclusive right to
manage the Common Collateral and enforce rights,
exercise remedies (including set-off) and make
determinations regarding the sale, transfer or other
disposition of Common Collateral (whether by the
First Lien Agent, any agent of the First Lien Agent
or Grantor with the consent of the First Lien Agent)
or restrictions with respect to the Common
Collateral, without any consultation with or the
consent of the Second Lien Agent or any Second Lien
Claimholder; PROVIDED that (A) in any Insolvency
Proceeding commenced by or against Grantor, the
Second Lien Agent and each other Second Lien
Claimholder may file a claim or statement of interest
with respect to the Second Lien Obligations not
inconsistent with the terms and agreements set forth
in this Agreement, (B) the Second Lien Agent and each
other Second Lien Claimholder may take any action
(not adverse to the prior valid and perfected Liens
on the Common Collateral securing the First Lien
Obligations, or the rights of the First Lien Agent or
any First Lien Claimholders to exercise remedies in
respect thereof (except as otherwise provided in this
Agreement), and not inconsistent with the terms of
this Agreement) in order to preserve or protect its
Lien on the Common Collateral (including actions
permitted pursuant to SECTION 6.3), (C) the Second
Lien Agent and each other Second Lien Claimholder
shall be entitled to file any necessary responsive or
defensive pleadings in opposition to any motion,
claim, adversary proceeding or other pleading made by
any Person objecting to or otherwise seeking the
disallowance, avoidance, subordination or other
modification of the claims or Liens of the Second
Lien Agent or any other Second Lien Claimholders,
including without limitation any claims secured by
the Common Collateral, if any, in each case in a
manner not inconsistent with the other terms of this
Agreement, (D) the Second Lien Agent and each other
Second Lien Claimholder shall be entitled to file any
pleadings, objections, motions or agreements that
assert rights or interests available to unsecured
creditors of Grantor arising under either Bankruptcy
Law or applicable non-bankruptcy law, (E) the Second
Lien Agent and each other Second Lien Claimholder
shall be entitled to file any proof of claim and
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other filings and make any arguments and motions that
are, in each case, not inconsistent with the terms of
this Agreement, with respect to the Second Lien
Obligations and the Common Collateral and (F) the
Second Lien Agent or any Second Lien Claimholder may
exercise any of its rights or remedies with respect
to the Common Collateral after the termination of the
Standstill Period to the extent permitted by clause
(i)(x) above. In exercising rights and remedies with
respect to the Common Collateral, subject to the
provisions hereof, the First Lien Agent and the First
Lien Claimholders may enforce the provisions of the
First Lien Documents and exercise remedies
thereunder, all in such order and in such manner as
they may determine in the exercise of their sole
discretion. Such exercise and enforcement shall
include, subject to the provisions hereof, the rights
of an agent appointed by them to sell or otherwise
dispose of Common Collateral in accordance with
applicable law upon foreclosure, to incur expenses in
connection with such sale or disposition, and to
exercise all the rights and remedies of a secured
creditor under the Uniform Commercial Code of any
applicable jurisdiction and of a secured creditor
under Bankruptcy Laws of any applicable jurisdiction.
The First Lien Agent shall comply with the provisions
of SECTION 5.7 in connection with its exercise and
enforcement of its rights or remedies with respect to
the Common Collateral.
(b) The Second Lien Agent, on behalf of itself and the
Second Lien Claimholders, agrees that prior to the expiration of the Standstill
Period, it will not take or receive any Common Collateral or any proceeds of
Common Collateral in connection with the exercise by it of any Enforcement
Action with respect to any Common Collateral, unless and until the Discharge of
First Lien Obligations has occurred, except as otherwise expressly provided in
the proviso in clause (ii) of SECTION 3.1(A), subject in any event to SECTION
4.2. Without limiting the generality of the foregoing, prior to the expiration
of the Standstill Period, unless and until the Discharge of First Lien
Obligations has occurred, and except as otherwise expressly provided in SECTION
2.2 and in the proviso in clause (ii) of SECTION 3.1(A) and any other express
provision of this Agreement, the sole right of the Second Lien Agent and the
Second Lien Claimholders with respect to the Common Collateral is to hold and
maintain perfection of a Lien on the Common Collateral pursuant to the Second
Lien Collateral Documents for the period and to the extent granted therein and
to receive a share of the proceeds thereof, if any, after the Discharge of the
First Lien Obligations has occurred in accordance with the terms of the Second
Lien Documents and applicable law. The exercise of rights or enforcement of
remedies by the Second Lien Agent is subject, where applicable, to the last
sentence of SECTION 2.2.
(c) Subject to its and their rights after the expiration
of the Standstill Period and subject to SECTION 2.2 and the proviso in clause
(ii) of SECTION 3.1(A) and any other express provision of this Agreement, (i)
the Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,
agrees that the Second Lien Agent and the Second Lien Claimholders will not take
any action that would hinder any exercise of remedies by the First Lien Agent or
the First Lien
16
Claimholders in respect of the Common Collateral under the First Lien Documents
or that is otherwise prohibited hereunder, including any sale, lease, exchange,
transfer or other disposition of the Common Collateral prior to the expiration
of the Standstill Period, whether by foreclosure or otherwise, and (ii) the
Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,
hereby waives any and all rights it or the Second Lien Claimholders may have as
a junior lien creditor to object to the manner in which the First Lien Agent or
the First Lien Claimholders seek to enforce or collect the First Lien
Obligations or the Liens granted in any of the First Lien Collateral (PROVIDED
that such enforcement or collection complies with applicable law and this
Agreement), regardless of whether any action or failure to act by or on behalf
of the First Lien Agent or First Lien Claimholders is adverse to the interest of
the Second Lien Claimholders.
(d) The Second Lien Agent hereby acknowledges and agrees
that no covenant, agreement or restriction contained in the Second Lien
Collateral Documents or any other Second Lien Document (other than this
Agreement) shall be deemed to restrict in any way the rights and remedies of the
First Lien Agent or the First Lien Claimholders with respect to the Common
Collateral as set forth in this Agreement and the First Lien Documents, subject,
however, to the provisions hereof and of applicable law.
Section 4 PAYMENTS.
4.1 APPLICATION OF PROCEEDS AND PAYMENTS. So long as the Discharge
of First Lien Obligations has not occurred, any Common Collateral or proceeds
thereof received by the First Lien Agent in connection with the sale or other
disposition of, or collection on, such Common Collateral upon the exercise of
remedies, shall be applied by the First Lien Agent to the First Lien Obligations
in such order, if any, as is specified in the relevant First Lien Documents,
PROVIDED HOWEVER that notwithstanding the foregoing, amounts received by the
First Lien Agent or any other First Lien Claimholder in respect of Obligations
outstanding under any First Lien Document shall be deemed for all purposes of
this Agreement, including determination of Discharge of First Lien Obligations,
to be applied first to payment and satisfaction of all outstanding First Lien
Obligations and thereafter to payment of Obligations thereunder, if any, not
constituting First Lien Obligations. Upon the Discharge of the First Lien
Obligations, the First Lien Agent shall deliver to the Second Lien Agent (except
as may otherwise be required by applicable law or any court order) any proceeds
of Common Collateral held by it in the same form as received, with any necessary
endorsements, or as a court of competent jurisdiction may otherwise direct, to
be applied by the Second Lien Agent to the Second Lien Obligations in such
order, if any, as is specified in the relevant Second Lien Collateral Documents.
4.2 PAYMENTS OVER. So long as the Discharge of First Lien
Obligations has not occurred, any Common Collateral or proceeds of sale or other
disposition thereof received by the Second Lien Agent or any Second Lien
Claimholders in connection with the exercise of any right or remedy (including
set-off) relating to the Common Collateral not otherwise permitted by this
Agreement, and any Common Collateral or proceeds of the sale or other
disposition thereof received by the Second Lien Agent or any Second Lien
17
Claimholders solely as a result of an Enforcement Action taken by the Second
Lien Agent or any Second Lien Claimholders in respect of the Common Collateral,
shall be segregated and held in trust and forthwith paid over to the First Lien
Agent for the benefit of the First Lien Claimholders in the same form as
received, with any necessary endorsements, for immediate application to the
repayment of the First Lien Obligations, or as a court of competent jurisdiction
may otherwise direct. The First Lien Agent is hereby authorized to make any such
endorsements as agent for the Second Lien Agent or any such Second Lien
Claimholders. This authorization is coupled with an interest and is irrevocable
until such time as this Agreement is terminated in accordance with its terms.
Section 5 OTHER AGREEMENTS.
5.1 RELEASES.
(a) If, in connection with:
(i) any sale, exchange, transfer or other disposition of
ownership (collectively, a "DISPOSITION") of any
Common Collateral permitted under the terms of the
First Lien Documents as in effect on the date hereof
and not involving any exercise of remedies referred
to in clause (ii) below, or
(ii) the exercise of any of the First Lien Agent's
remedies in respect of the Common Collateral provided
for in SECTION 3.1 upon or following acceleration or
maturity of the First Lien Obligations and
non-payment thereof, including any Disposition of any
such Common Collateral pursuant to any such exercise
of remedies,
the First Lien Agent, for itself or on behalf of any of the First Lien
Claimholders, releases any of its Liens on any part of the Common Collateral,
and/or releases any Grantor from its obligations under its guaranty of the First
Lien Obligations the outstanding equity interests of which Grantor have been
disposed of in connection with a Disposition under clause (i) or (ii) above
(such Grantor, a "DISPOSED GRANTOR"), in each case above (x) other than in
connection with the Discharge of First Lien Obligations and (y) in the case of
clause (i) above, other than after the occurrence and during the continuance of
any Default, default, Event of Default or event of default under or as defined
in the Second Lien Financing Agreements, and upon the request of the Company
pursuant to an Officer's Certificate (as defined in the Indenture) certifying
that all conditions precedent under the Indenture have been met, then the Liens,
if any, of the Second Lien Agent, for itself or for the benefit of the Second
Lien Claimholders, on such Common Collateral, and, if applicable, the
obligations of such Disposed Grantor under its guaranty of the Second Lien
Obligations, shall be automatically, unconditionally and simultaneously released
and the Second Lien Agent, for itself or on behalf of any such Second Lien
Claimholders, promptly shall execute and deliver to the First Lien Agent or such
Grantor such termination statements, releases and other documents as the First
Lien Agent or such Grantor may request to effectively confirm such release;
PROVIDED that notwithstanding the foregoing, (x) in the case of a Disposition
under SECTION 5.1(A)(I), the Liens, if any, of the Second Lien Agent, for itself
18
or for the benefit of the Second Lien Claimholders, on any Common Collateral
and, if applicable, the obligations of any Disposed Grantor under its guaranty
of the Second Lien Obligations, shall not be automatically released, and such
Disposition shall result in an Event of Default or event of default under or as
defined in the Second Lien Financing Agreements, if such Disposition is not then
expressly permitted under the terms of the Second Lien Financing Agreements and
(y ) in the case of a Disposition under SECTION 5.1(A)(I) or (II), the Liens, if
any, of the Second Lien Agent, for itself or for the benefit of the Second Lien
Claimholders, on all proceeds of any Common Collateral (including all amounts
and other property received upon such Disposition or exercise of remedies) shall
continue (subject to the priorities set forth in SECTION 2.1) and shall not be
automatically released.
(b) Until the Discharge of First Lien Obligations occurs,
the Second Lien Agent, for itself and on behalf of the Second Lien Claimholders,
hereby irrevocably constitutes and appoints the First Lien Agent and any officer
or agent of the First Lien Agent, with full power of substitution, as its true
and lawful attorney-in-fact (which appointment is coupled with an interest) with
full irrevocable power and authority in the place and stead of the Second Lien
Agent or such Second Lien Claimholder or in the First Lien Agent's own name,
from time to time in the First Lien Agent's discretion, for the purpose of
carrying out the terms of this SECTION 5.1, but subject to the limitations
contained herein, to take any and all appropriate action and to execute any and
all documents and instruments that may be necessary to accomplish the purposes
of this SECTION 5.1 in accordance herewith, including any endorsements or other
instruments of transfer or release.
(c) Until the Discharge of First Lien Obligations occurs,
to the extent that the First Lien Claimholders (i) have released any Lien on
Common Collateral or Grantor from its obligation under its guaranty and any such
Lien or guaranty is later reinstated or (ii) obtain any new first priority Liens
or additional guarantees from any Grantor, then the Second Lien Claimholders
shall be granted a second priority Lien on any such Common Collateral and an
equivalent additional guaranty, as the case may be
5.2 INSURANCE. Unless and until the Discharge of First Lien
Obligations has occurred, the First Lien Agent and the First Lien Claimholders
shall have the sole and exclusive right, subject to the rights of Grantor under
the First Lien Documents, to adjust settlement for any insurance policy covering
the Common Collateral in the event of any loss thereunder and to approve any
award granted in any condemnation or similar proceeding (or any deed in lieu of
condemnation) affecting the Common Collateral. Unless and until the Discharge of
First Lien Obligations has occurred, and subject to the rights of the Grantor
under the First Lien Documents, all proceeds of any such policy and any such
award (or any payments with respect to a deed in lieu of condemnation), if in
respect of the Common Collateral, shall be paid to the First Lien Agent for the
benefit of the First Lien Claimholders pursuant to the terms of the First Lien
Documents, if, but only if, so required and thereafter, if the Discharge of
First Lien Obligations has occurred, or initially, if such proceeds are not so
required to be paid to the First Lien Agent for the benefit of the First Lien
Claimholders, and subject to the rights of the applicable Grantor under the
19
Second Lien Collateral Documents, to the Second Lien Agent for the benefit of
the Second Lien Claimholders to the extent required under the Second Lien
Collateral Documents and then, to the extent no mandatory prepayment or
repayment of the Second Lien Obligations is then required, to the owner of the
subject property, or such other Person as may be entitled thereto or as a court
of competent jurisdiction may otherwise direct, PROVIDED that if such owner or
other Person is a Grantor, such proceeds or award (or any payments with respect
thereto) shall constitute Common Collateral to the extent constituting First
Lien Collateral in which the security interest of the First Lien Agent for the
benefit of the First Lien Claimholders pursuant to the terms of the First Lien
Documents is perfected and be pledged to the Second Lien Agent (which pledge
shall be fully perfected) pursuant to the terms of the Second Lien Collateral
Documents for the benefit of the Second Lien Noteholders. Until the Discharge of
First Lien Obligations has occurred, and if such proceeds or award or payment
are required to have been paid to the First Lien Agent pursuant to the
provisions of the First Lien Documents, if the Second Lien Agent or any Second
Lien Claimholders shall, at any time, receive any proceeds of any such insurance
policy or any such award or payment in contravention of this Agreement, it shall
pay such proceeds over to the First Lien Agent in accordance with the terms of
SECTION 4.2.
5.3 CERTAIN PROVISIONS OF FIRST LIEN DOCUMENTS; AMENDMENTS TO
FIRST LIEN DOCUMENTS AND SECOND LIEN DOCUMENTS.
(a) The First Lien Documents shall not: (i) provide for
or permit the principal amount of loans and other extensions of credit
thereunder, including, without limitation, outstanding First Lien Principal
Obligations, to exceed $10,000,000 at any time or the outstanding Obligations
under the First Lien Documents exceed the Maximum First Lien Debt Amount, in
each case above without having previously obtained the Second Lien Claimholder
Consent) or (ii) provide for a scheduled final maturity date of the First Lien
Principal Obligations under the First Lien Financing Agreement or any
Refinancing thereof that is within one year before or after the scheduled final
maturity date of the Notes as in effect on the date hereof. The First Lien
Documents may be Modified in accordance with their terms, and the First Lien
Financing Agreement may be Refinanced, in each case, without the consent of the
Second Lien Agent or the Second Lien Claimholders, PROVIDED, HOWEVER, that in
the case of a Refinancing, such Refinancing is designated by the Company, by
notice to Second Lien Agent, as a Permitted Refinancing to which this Agreement
shall apply, and the holders of such Refinancing debt, if such Refinancing debt
is secured by a Lien on the Common Collateral, shall bind themselves in writing
to the terms of this Agreement, and PROVIDED FURTHER that the First Lien Credit
Documents and any such Modification or Refinancing shall not: (i) provide for or
permit the principal amount of loans and other extensions of credit thereunder,
including, without limitation, outstanding First Lien Principal Obligations, to
exceed $10,000,000 at any time or the outstanding Obligations under the First
Lien Documents exceed the Maximum First Lien Debt Amount without the Second Lien
Claimholder Consent) or (ii) extend the scheduled final maturity date of the
First Lien Principal Obligations under the First Lien Financing
20
Agreement or any Refinancing thereof to a date within one year before or after
the scheduled final maturity date of the Notes as in effect on the date hereof .
As a condition to having the benefits of this Agreement, the holders of any such
Refinancing debt, if such Refinancing debt is secured by a Lien on the Common
Collateral, shall bind themselves in writing to the terms of this Agreement.
(b) The Second Lien Documents may be Modified in
accordance with their terms, and the Second Lien Financing Agreements may be
Refinanced, in each case, without the consent of the First Lien Agent or the
First Lien Lenders; PROVIDED, HOWEVER, that in the case of a Refinancing, such
Refinancing is designated by the Company, by notice to First Lien Agent, as a
Permitted Refinancing to which this Agreement shall apply, and the holders of
such Refinancing debt, if such Refinancing debt is secured by a Lien on the
Common Collateral, shall bind themselves in writing to the terms of this
Agreement, PROVIDED FURTHER, that any such Modification or Refinancing of the
Second Lien Documents shall not, without the consent of the First Lien Agent or
the First Lien Lenders, (i) provide for or permit the principal amount of loans
and other extensions of credit thereunder to be incurred pursuant to such
Modification or Refinancing or thereafter to exceed the amount permitted to be
incurred pursuant to the provisions of the First Lien Documents as then in
effect, (ii) amend covenants or events of default, along with related
definitions, to make them more restrictive than those contained from time to
time in the First Lien Financing Agreement, or (iii) shorten the scheduled final
maturity date of the Notes or any debt Refinancing the Notes to a date prior to
the stated maturity date of the Notes as in effect on the date hereof. As a
condition to having the benefits of this Agreement, the holders of any such
Refinancing debt, if such Refinancing debt is secured by a Lien on the Common
Collateral, shall bind themselves in writing to the terms of this Agreement.
5.4 RIGHTS AS UNSECURED CREDITORS, ETC.. The Second Lien
Obligations shall constitute senior indebtedness of each Grantor, PARI PASSU in
right of payment to all other senior indebtedness of such Grantor, including the
First Lien Obligations. Except as otherwise set forth in SECTION 3.1, the Second
Lien Agent and the Second Lien Claimholders may exercise rights and remedies as
creditors against Debtor or any other Grantor in accordance with the terms of
the Second Lien Documents and applicable law, PROVIDED that the Second Lien
Agent and the Second Lien Claimholders may not exercise any such rights or
remedies against the Common Collateral except as provided in SECTION 3.1, and
FURTHER PROVIDED that enforcement of any judgment lien by the Second Lien Agent
or the Second Lien Claimholders against the Common Collateral shall be subject
to the same limitations and restrictions as apply to an Enforcement Action under
SECTION 3.1(A) hereof. Except as otherwise set forth in SECTION 2.1 or SECTION
3.1, nothing in this Agreement shall prohibit or subordinate the receipt by the
Second Lien Agent or any Second Lien Claimholders of (or its right to receive)
the required payments of all Second Lien Obligations or subordinate the claims
of the Second Lien Agent and the Second Lien Claimholders in respect of property
of Grantor that is not Common Collateral.
5.5 BAILEE FOR PERFECTION, ETC.
21
(a) First Lien Agent hereby agrees and acknowledges that,
to the extent that it holds, or a third party (as bailee, agent or otherwise)
holds on its behalf, physical possession of or "control" (as defined in the UCC)
over Common Collateral (including proceeds thereof) pursuant to any of the First
Lien Documents (the "FIRST LIEN PLEDGED COLLATERAL"), First Lien Agent (and
others holding on its behalf) holds such First Lien Pledged Collateral as bailee
and agent for perfection for the benefit of the Second Lien Agent and Second
Lien Claimholders and their successors and assigns (such holding for the benefit
of the Second Lien Agent and Second Lien Claimholders being intended, among
other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c)
of the UCC) and in each case solely to the extent required to perfect and
enforce the security interests of Second Lien Agent in such First Lien Pledged
Collateral.
(b) Second Lien Agent hereby agrees and acknowledges
that, to the extent that it holds, or a third party (as bailee, agent or
otherwise) holds on its behalf, physical possession of or "control" (as defined
in the UCC) over Common Collateral (including proceeds thereof) pursuant to any
of the Second Lien Documents (the "SECOND LIEN PLEDGED COLLATERAL") prior to the
Discharge of First Lien Obligations, Second Lien Agent (and others holding on
its behalf) holds such Second Lien Pledged Collateral as bailee and agent for
perfection for the benefit of the First Lien Agent and First Lien Claimholders
and their successors and assigns (such holding for the benefit of the First Lien
Agent and First Lien Claimholders being intended, among other things, to satisfy
the requirements of Sections 8-301(a)(2) and 9-313(c) of the UCC) and in each
case solely to the extent required to perfect and enforce the security interests
of First Lien Agent in such Second Lien Pledged Collateral.
(c) Subject to the terms of this Agreement and applicable
law, until the Discharge of First Lien Obligations has occurred, the First Lien
Agent shall be entitled to deal with the First Lien Pledged Collateral in
accordance with the terms of the First Lien Documents as if the Liens of the
Second Lien Agent under the Second Lien Collateral Documents did not exist. The
rights of the Second Lien Agent in the Common Collateral shall at all times
prior to the Discharge of First Lien Obligations be subject to the terms of this
Agreement.
(d) The First Lien Agent shall have no obligation
whatsoever to the Second Lien Agent or any Second Lien Claimholder to ensure
that the First Lien Pledged Collateral is genuine or owned by Grantor. The
duties or responsibilities of the First Lien Agent under this SECTION 5.5 shall
be limited solely to holding the First Lien Pledged Collateral as bailee and
agent for perfection for the benefit of the Second Lien Agent and Second Lien
Claimholders and their successors and assigns, which duty and responsibility the
First Lien Agent shall fulfill using the same degree of care with respect
thereto as it uses for similar property pledged to it as collateral for
indebtedness of others to the First Lien Agent, and the First Lien Agent shall
have no liability in connection therewith except for its negligence or willful
misconduct as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.
22
(e) The Second Lien Agent shall have no obligation
whatsoever to the First Lien Agent or any First Lien Claimholder to ensure that
the Second Lien Pledged Collateral is genuine or owned by Grantor. The duties or
responsibilities of the Second Lien Agent under this SECTION 5.5 shall be
limited solely to holding the Second Lien Pledged Collateral as bailee and agent
for perfection for the benefit of the First Lien Agent and First Lien
Claimholders and their successors and assigns, which duty and responsibility the
Second Lien Agent shall fulfill using the same degree of care with respect
thereto as it uses for similar property pledged to it as collateral for
indebtedness of others to the Second Lien Agent, and the Second Lien Agent shall
have no liability in connection therewith except for its negligence or willful
misconduct as determined pursuant to a final non-appealable order of a court of
competent jurisdiction.
(f) The First Lien Agent acting pursuant to this SECTION
5.5 shall not have by reason of the First Lien Documents, the Second Lien
Collateral Documents, this Agreement or any other related document a fiduciary
relationship in respect of the Second Lien Agent or any Second Lien Claimholder.
(g) The Second Lien Agent acting pursuant to this SECTION
5.5 shall not have by reason of the First Lien Documents, the Second Lien
Collateral Documents, this Agreement or any other related document a fiduciary
relationship in respect of the First Lien Agent or any First Lien Claimholder.
(h) First Lien Agent and the other First Lien
Claimholders (and any third Person acting on its or their behalf, as agent,
bailee or otherwise) shall not have any duty to the Second Lien Agent or the
other Second Lien Claimholders with respect to the First Lien Pledged Collateral
or to provide the Second Lien Claimholders with any rights with respect to such
First Lien Pledged Collateral EXCEPT (1) as specified in this Agreement and (2)
promptly upon the Discharge of First Lien Obligations, subject to SECTIONS 2.2
and 2.4 hereof, and at the expense of Grantor, First Lien Agent and each other
First Lien Claimholder shall (and shall cause each Person acting on behalf of
any of the foregoing, as agent, bailee or otherwise, to) deliver all First Lien
Pledged Collateral (if any), together with any necessary endorsements and other
documents (including any applicable stock powers or bond powers), then in its
possession or in the possession of its agent or bailee, or turn over control as
to any First Lien Pledged Collateral for which it or its agent or bailee then
has control, as the case may be, to Second Lien Agent, except to the extent that
(i) First Lien Agent or any other First Lien Claimholder has retained or
otherwise acquired such First Lien Pledged Collateral in satisfaction of all or
any part of the First Lien Obligations, (ii) such First Lien Pledged Collateral
has been sold or otherwise disposed of by First Lien Agent or First Lien
Claimholders in accordance with this Agreement or by Grantor in accordance with
this Agreement and the Second Lien Documents or (iii) it may otherwise be
required by applicable law or any order of any court or other Governmental
Authority. First Lien Agent and, where applicable, the First Lien Claimholders
shall cause each Person acting on behalf of any of the foregoing, as agent,
bailee or otherwise, to comply with the provisions of this Agreement in respect
of Common Collateral in its possession or control. Subject to and upon
compliance by the First Lien Agent and First Lien Claimholders (and each such
23
Person acting on behalf of any of the foregoing) with the duties and obligations
contemplated by this SECTION 5.5 and the other provisions of this Agreement,
effective upon such delivery of all such possession and control of such First
Lien Pledged Collateral, First Lien Agent and First Lien Claimholders shall be
automatically released from all claims and liabilities arising pursuant to the
role of First Lien Agent as bailee and agent for perfection with respect to the
First Lien Pledged Collateral. Each Grantor acknowledges and agrees to the
delivery by First Lien Agent and each other First Lien Claimholder (and each
such Person acting on behalf of any of the foregoing) to Second Lien Agent of
any such First Lien Pledged Collateral and waives and releases First Lien Agent
and the other First Lien Claimholders (and each such Person acting on behalf of
any of the foregoing) from any liability as a result of such action.
(i) Second Lien Agent and the other Second Lien
Claimholders (and any third Person acting on its or their behalf) shall not have
any duty to the First Lien Agent or the other First Lien Claimholders with
respect to the Second Lien Pledged Collateral or to provide the First Lien
Claimholders with any rights with respect to such Second Lien Pledged Collateral
except as specified in this Agreement. Second Lien Agent and, where applicable,
the Second Lien Claimholders shall cause each Person acting on behalf of any of
the foregoing, as agent, bailee or otherwise, to comply with the provisions of
this Agreement in respect of Common Collateral in its possession or control.
Subject to and upon compliance by the Second Lien Agent and Second Lien
Claimholders (and each such Person acting on behalf of any of the foregoing)
with the duties and obligations contemplated by this SECTION 5.5 and the other
provisions of this Agreement, effective upon the earlier of Discharge of First
Lien Obligations and delivery of possession and control of all Second Lien
Pledged Collateral, if any, then in its possession (or the possession of its
agent or bailee), together with any necessary endorsements and other documents
(including any applicable stock powers or bond powers), to First Lien Agent,
Second Lien Agent and Second Lien Claimholders shall be automatically released
from all claims and liabilities arising pursuant to the role of Second Lien
Agent as bailee and agent for perfection with respect to the Second Lien Pledged
Collateral. Each Grantor acknowledges and agrees to the delivery by Second Lien
Agent and each other Second Lien Claimholder (and each such Person acting on
behalf of any of the foregoing) to First Lien Agent of any such Second Lien
Pledged Collateral and waives and releases Second Lien Agent and the other
Second Lien Claimholders (and each such Person acting on behalf of any of the
foregoing) from any liability as a result of such action.
(j) In the case of any deposit or securities accounts
subject to deposit account control agreements, securities account control
agreements or analogous agreements in favor of First Lien Agent or any rights
with respect to Common Collateral obtained by the First Lien Agent pursuant to
collateral access agreements or analogous agreements in favor of First Lien
Agent, after Discharge of First Lien Obligations, and to the extent that the
Second Lien Obligations remain outstanding, First Lien Agent agrees, at the
request of Second Lien Agent and at the expense of Grantor, to (i) with respect
to deposit accounts or securities accounts, promptly deliver written notice to
each bank or other
24
institution at which deposit accounts or securities accounts are maintained that
(A) the First Lien Agent is no longer acting as the "agent" (or in any analogous
capacity) or otherwise entitled to act under such agreement and (B) from the
date of the notice and at all times thereafter until the Second Lien Obligations
are paid in full or the Second Lien Agent instructs the bank or other
institution at which deposit accounts or securities accounts are maintained
otherwise, that the Second Lien Agent is to be deemed the "agent" (or analogous
party) and otherwise be entitled to act for all purposes in connection with such
agreement and that the bank or other institution at which such deposit accounts
or securities accounts are maintained is to follow the directions of the Second
Lien Agent for all purposes in connection with such deposit accounts or
securities accounts, as applicable, and (ii) with respect to collateral access
agreements or analogous comments in favor of First Lien Agent, promptly deliver
written notice to the Person party to the applicable Collateral Access Agreement
that (A) the Common Collateral located at such location remains subject to a
Lien in favor of the Second Lien Agent and (B) from the date of the notice and
at all times thereafter until the Second Lien Agent instructs such party
otherwise, the Second Lien Agent is to be deemed the "agent" (or analogous
party) for all purposes in connection with such agreement.
5.6 WHEN DISCHARGE OF FIRST LIEN OBLIGATIONS DEEMED TO NOT HAVE
OCCURRED. If at the time the Discharge of First Lien Obligations occurs, and in
connection therewith, Grantor enters into any Permitted Refinancing of any First
Lien Document evidencing a First Lien Obligation and the holders of the
Obligations outstanding under such Permitted Refinancing, or an authorized agent
on their behalf, shall have become bound by this Agreement, then such Discharge
of First Lien Obligations shall automatically be deemed not to have occurred for
all purposes of this Agreement (other than with respect to any actions taken
prior to the date of designation of such Refinancing by the Company as a
Permitted Refinancing (as provided in SECTION 5.3(A)) as a result of the
occurrence of such Disc harge of First Lien Obligations), and the Obligations
under such Permitted Refinancing of such First Lien Document up to, but not in
excess of, the Maximum First Lien Debt Amount shall automatically be treated as
First Lien Obligations for all purposes of this Agreement, including for
purposes of the Lien priorities and rights in respect of Common Collateral set
forth herein, and the First Lien Agent under such First Lien Documents shall be
the First Lien Agent for all purposes of this Agreement. Upon receipt of a
notice stating that Debtor has entered into a new First Lien Document
constituting a Permitted Refinancing, which notice shall include the identity of
the new First Lien Agent (such agent, the "NEW AGENT"), the Second Lien Agent
shall promptly consent to such Permitted Refinancing and (a) enter into such
documents and agreements (including amendments or supplements to this Agreement)
as the Company or such New Agent shall reasonably request in order to provide to
the New Agent the rights contemplated hereby, in each case consistent in all
material respects with the terms of this Agreement and (b) deliver to the New
Agent any Pledged Collateral then held by it together with any necessary
endorsements (or otherwise allow the New Agent to obtain control of such Pledged
Collateral). As a condition to the foregoing, the New Agent shall agree, on
behalf of itself and the new First Lien Claimholders, to be bound by the terms
of this Agreement. If the new First Lien Obligations under the new First Lien
25
Documents are secured by assets of Grantor that do not also secure the Second
Lien Obligations, then the Second Lien Obligations shall be secured at such time
by a second priority Lien on such assets to the same extent provided in the new
First Lien Collateral Documents pursuant to documentation reasonably
satisfactory to the Second Lien Agent.
5.7 PURCHASE RIGHT. No later than the 30th day after the date of
execution and delivery of this Agreement by the parties hereto, the Company
shall furnish to the Trustee an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of such
counsel, the obligation of the Second Lien Agent to deliver the Purchase Option
Event Notice or any other notices under this SECTION 5.7 will not be a violation
of any securities laws (the "TRUSTEE PURCHASE OPTION OPINION"). Notwithstanding
the foregoing and without affecting the obligation of the Company set forth in
the preceding sentence any Second Lien Claimholder may furnish or cause to be
furnished to the Trustee the Trustee Purchase Option Opinion. The obligation of
the Second Lien Agent to deliver any Purchase Option Event Notice or any other
notices under this SECTION 5.7 shall be conditioned upon the prior receipt by
the Trustee of Trustee Purchase Option Opinion from the Company or any Second
Lien Claimholder.
(a) Notwithstanding anything herein to the contrary, (i)
no less than 15 Business Days prior to (unless, in the good faith judgment of
the First Lien Agent, the delay in taking such action for 15 Business Days will
have any substantially adverse effect upon the value of or ability to realize on
the First Lien Collateral or the ability of the First Lien Claimholders to
collect the First Lien Obligations, in which case the First Lien Agent shall
provide the Purchase Option Event Notice as promptly as practicable (to maximize
the length of the Purchase Option Standstill Period (defined below) and to
minimize any such substantially adverse effect) prior to) the First Lien Agent's
or any First Lien Claimholder's (A) commencement of any Enforcement Action
against the First Lien Collateral or (B) acceleration of the First Lien
Obligations (other than pursuant to commencement by any Person other than any
First Lien Claimholder of an Insolvency Proceeding relating to any Grantor) or
(C) commencement of, or joinder in filing a petition for the commencement of, an
Insolvency Proceeding against any Grantor (such 15 Business Day period (or
shorter period, if applicable), the "PURCHASE OPTION STANDSTILL Period"), (ii)
promptly (but in any event within five Business Days) following upon receipt by
the First Lien Agent of written notice of the occurrence of an Event of Default
under the Indenture, and (iii) promptly (but in any event within five Business
Days) following the occurrence of an Insolvency Proceeding in respect of any
Grantor, the First Lien Agent shall deliver to the Second Lien Agent written
notice, by same day or overnight courier, of such Purchase Option Event (a
"PURCHASE OPTION EVENT NOTICE") and afford all Second Lien Claimholders who (x)
hold Notes as of the date of the delivery of the Purchase Option Event Notice to
the Second Lien Agent and (y) timely (in accordance with this SECTION 5.7)
notify the Second Lien Agent of their irrevocable commitments to purchase First
Lien Obligations the collective opportunity to purchase (at par and without
premium) all of the First Lien Obligations (and all attendant rights under the
First Lien Documents) pursuant to this SECTION 5.7 at any time after receipt of
such Purchase Option Event Notice by the Second Lien Agent. The Purchase Option
Event
26
Notice will specify (A) the Purchase Option Event, (B) the estimated aggregate
amount of First Lien Obligations outstanding on the date of such notice, (C) the
aggregate unpaid amount of First Lien Principal Obligations outstanding on the
date of such notice, (D) the estimated aggregate accrued, unpaid amount of the
First Lien Obligations constituting interest, fees, out of pocket expenses
(including attorney's fees (determined based on standard hourly rates of, and
hours actually worked by, such attorneys and reimbursable by Grantor under the
terms of the First Lien Documents) and disbursements) and other amounts owing
not constituting First Lien Principal Obligations (the amounts referred to in
this clause (D), the "FIRST LIEN ANCILLARY OBLIGATIONS") outstanding on the date
of such notice, (E) the estimated aggregate accrued, unpaid amount of each
category of First Lien Ancillary Obligations outstanding on the date of such
notice, and attach the form of the Assignment and Acceptance Agreement (as
defined below) to be executed by the Second Lien Claimholders, as assignee, and
each First Lien Lender and the First Lien Agent relating to the purchase of
First Lien Obligations pursuant to this SECTION 5.7, which shall be
substantially in the form attached hereto as Exhibit A, (F) the Cut-Off Date as
defined below in (b)(ii), and (G) the Purchase Date as defined below in
(b)(iii). Notwithstanding the foregoing, and without prejudice to the
obligations of the First Lien Agent set forth above, the Second Lien Agent may,
and at the direction of the Holders of 25 % or more of the outstanding principal
amount of the Second Lien Obligations shall, at any time after the occurrence of
a Purchase Option Event and prior to the giving of a Purchase Option Event
Notice in respect thereof by the First Lien Agent, demand that the First Lien
Agent deliver to the Second Lien Agent a Purchase Option Event Notice specifying
the information set forth in the preceding sentence with respect to such
Purchase Option Event and outstanding First Lien Obligations, and the First Lien
Agent shall, no later than five Business Days after receipt of such demand,
deliver to the Second Lien Agent such Purchase Option Event Notice specifying
such information and attaching such form of agreement, in which event the
Purchase Option Standstill Period shall commence on the date of such demand by
the Second Lien Agent and shall continue for 15 Business Days after delivery to
the Second Lien Agent of such Purchase Option Event Notice. During the Purchase
Option Standstill Period, neither the First Lien Agent nor any First Lien
Claimholder shall commence or continue any Enforcement Action against the First
Lien Collateral or accelerate the First Lien Obligations (other than pursuant to
commencement by any Person other than any First Lien Claimholder of an
Insolvency Proceeding relating to a Grantor).
(b) The Second Lien Agent will promptly (but in any event
within two Business Days after its receipt thereof) send the Purchase Option
Event Notice to each Second Lien Claimholder together with notice of:
(i) the date of receipt by the Second Lien Agent thereof,
(ii) the date (the "CUT-OFF DATE"), which shall be 10
Business Days after the Purchase Option Event Notice
was received by the Second Lien Agent, by which the
Second Lien Agent must receive irrevocable purchase
commitments from the Second Lien Claimholders in
order for such commitments to be considered, and
27
(iii) the proposed date (the "PURCHASE DATE"), which shall
be five Business Days after the Cut-Off Date, on
which the purchase of First Lien Obligations will
take effect if sufficient Purchase Commitments
(defined below) are received and the conditions to
consummation of the closing of the purchase are
satisfied.
Upon receipt of such Purchase Option Event Notice by the Second Lien
Claimholders, each Second Lien Claimholder shall have from the date of its
receipt thereof to and including the Cut-Off Date (a "PURCHASE OPTION PERIOD")
to notify the Second Lien Agent of its commitment (its "PURCHASE COMMITMENT") to
purchase First Lien Obligations pursuant to this SECTION 5.7 (which commitment
shall be irrevocable if the conditions to consummation of the closing of the
purchase are satisfied) and the maximum amount of First Lien Principal
Obligations that it is willing to purchase (which may be more or less than its
pro rata share thereof) (it being further understood that in delivering its
Purchase Commitment, a Second Lien Claimholder is irrevocably committing to
purchase up to the maximum amount of First Lien Principal Obligations specified
therein, plus its pro rata share (based on the Purchase Percentage of the First
Lien Principal Obligations to be purchased by it) of the accrued, unpaid First
Lien Ancillary Obligations as at the Purchase Date, which may exceed the amount
of accrued, unpaid First Lien Ancillary Obligations as at the date of the
Purchase Option Event Notice). In delivering its Purchase Commitment each Second
Lien Claimholder shall certify the aggregate principal amount of Notes
beneficially owned by it. If no such notice is received from a Second Lien
Claimholder within such Purchase Option Period, the option granted pursuant to
this SECTION 5.7 to such Second Lien Claimholder to purchase First Lien
Obligations in respect of such Purchase Option Event Notice shall expire (but
without prejudice to such Second Lien Claimholder's rights in respect of such
Purchase Option Event under SECTION 5.7(G) if the Purchase Date shall not have
occurred).
(c) [Intentionally Omitted]
(d) Each Second Lien Claimholder will have the right,
pursuant to this SECTION 5.7, to purchase up to its pro rata share (based on the
amount of Second Lien Obligations held by each such Second Lien Claimholder) of
the First Lien Obligations; PROVIDED that if any Second Lien Claimholder elects
not to exercise in whole or in part its option to purchase First Lien
Obligations, that Second Lien Claimholder's pro rata share (or relevant portion
thereof as to which such option has not been exercised) shall be allocated by
the Second Lien Agent to the other Second Lien Claimholders, if any, exercising
their option to purchase more than their original pro rata shares of First Lien
Obligations under this SECTION 5.7 as contemplated herein. If one or more Second
Lien Claimholders do not exercise their purchase option hereunder or exercise
such purchase option for less than their respective original pro rata share of
the First Lien Obligations, then those Second Lien Claimholders that have
indicated a willingness to purchase more than
28
their original pro rata shares shall be entitled to purchase the remaining
aggregate amount of the First Lien Obligations each pro rata based on the
percentage that the amount by which its purchase offer exceeded its original pro
rata share of the First Lien Obligations is of the aggregate of the amounts, if
any, by which the purchase offers of all such Second Lien Claimholders exceeded
their original pro rata shares of the First Lien Obligations. The amount of
purchased First Lien Obligations to be allocated to each such Second Lien
Claimholder shall be determined by the Second Lien Agent on the basis set forth
above. In the event that the amount of First Lien Principal Obligations that
Second Lien Claimholders elect to purchase pursuant to this SECTION 5.7 is less
than all of the First Lien Principal Obligations (a "PURCHASE SHORTFALL"), then
the option set forth in this SECTION 5.7 (including with respect to options that
have been exercised) with respect to the Purchase Option Event Notice so
delivered shall expire (but without prejudice to such Second Lien Claimholder's
rights in respect of such Purchase Option Event under SECTION 5.7(G) if the
Purchase Date shall not have occurred). This SECTION 5.7 shall remain in effect
for any subsequent Purchase Option Event.
(e) No later than the fourth Business Day prior to the
proposed Purchase Date, the First Lien Agent shall deliver to the Second Lien
Agent a definitive statement (the "PAY-OFF STATEMENT") of the aggregate amount
of First Lien Obligations reasonably estimated to be outstanding and accrued and
unpaid as at the proposed Purchase Date, which Pay-Off Statement shall specify
the complete wire transfer instructions for payment to the First Lien Agent for
the account of the First Lien Claimholders by the purchasing Second Lien
Claimholders of the purchase price for the First Lien Obligations, and shall
specify the aggregate reasonably estimated amount thereof at such proposed
Purchase Date constituting (i) outstanding First Lien Principal Obligations,
(ii) accrued, unpaid First Lien Ancillary Obligations and (iii) the aggregate
accrued, unpaid amount of each category of First Lien Ancillary Obligations
(interest, fees, out of pocket expenses (including estimated attorney's fees
(determined based on standard hourly rates of, and hours actually worked by,
such attorneys and reimbursable by Grantor under the terms of the First Lien
Documents) and disbursements through the Purchase Date) and other amounts by
category).
(f) The Second Lien Agent shall promptly (but no later
than one Business Day after the later of (x) the Cut-Off Date and (y) date of
receipt of the Pay-Off Statement) notify, in writing, (i) the First Lien Agent
either (A) of the irrevocable Purchase Commitments of Second Lien Claimholders
to purchase, in the aggregate, all of the First Lien Obligations pursuant hereto
on the proposed Purchase Date and specifying the percentage of such outstanding
First Lien Obligations being purchased by each Second Lien Claimholder
delivering an effective Purchase Commitment (as to each such Second Lien
Claimholder, its "PURCHASE PERCENTAGE") (such notice, the "PURCHASE NOTICE"), or
(B) that a Purchase Shortfall has occurred and that the purchase option
hereunder with respect to the then-effective Purchase Option Event Notice has
expired, as applicable, and (ii) each such Second Lien Claimholder (A) of the
amount of First Lien Obligations it is required to purchase pursuant to its
irrevocable Purchase Commitment, together with a copy of the Pay-Off Statement
or (B) as provided in clause (i)(B) above, as applicable.
29
Any Purchase Notice sent by the Second Lien Agent on behalf of the Second Lien
Claimholders to the First Lien Agent shall be irrevocable. Upon the First Lien
Agent's receipt of the Purchase Notice, the First Lien Agent and the First Lien
Claimholders shall not thereafter effect any acceleration of the First Lien
Obligations or commence any Enforcement Action (or continue to pursue any
Enforcement Action) upon or with respect to the Common Collateral.
(g) Notwithstanding anything to the contrary contained
elsewhere herein, if a Purchase Option Event shall have occurred and a Purchase
Shortfall shall occur with respect to the Purchase Option Event Notice relating
to such Purchase Option Event:
(i) At the written request of one or more Second Lien
Claimholders to the Second Lien Agent following a
Purchase Shortfall with respect to any Purchase
Option Event Notice, the Second Lien Agent shall
request that the First Lien Agent deliver to the
Second Lien Agent, and within five Business Days of
such request the First Lien Agent shall deliver to
the Second Lien Agent, a statement specifying (i) the
estimated aggregate amount of First Lien Obligations
outstanding on the date of such request, (ii) the
aggregate unpaid amount of First Lien Principal
Obligations outstanding on the date of such request,
(iii) the estimated aggregate amount of First Lien
Ancillary Obligations outstanding on the date of such
request, and (iv) the estimated aggregate accrued,
unpaid amount of each category of First Lien
Ancillary Obligations outstanding on the date of such
request. No more than two requests for statements may
be made by the Second Lien Agent to the First Lien
Agent in respect of any Purchase Option Event
following a Purchase Shortfall in respect thereof.
Upon receipt by the Second Lien Agent from the First
Lien Agent of such statement, the Second Lien Agent
shall promptly forward to the all the Second Lien
Claimholders a copy of such statement.
(ii) One or more Second Lien Claimholders shall have the
right at any time after such Purchase Option
Shortfall to purchase all, but not less than all, of
the then outstanding First Lien Obligations in
accordance with the provisions set forth hereinbelow
by delivering to the Second Lien Agent Purchase
Commitment(s) providing in the aggregate for the
purchase of all, but not less than all, of such then
outstanding First Lien Obligations pursuant to this
SECTION 5.7 and specifying the Purchase Percentage of
such outstanding First Lien Obligations being
purchased by each such Second Lien Claimholder (which
commitments shall be irrevocable if the conditions to
consummation of the closing of the purchase are
satisfied) and specifying the proposed Purchase Date
for the consummation of such purchase (which Purchase
Date shall be not less than six Business Days, nor
more than 10 Business Days, after the date the Second
Lien Agent receives such Purchase Commitment(s)), and
the Second Lien Agent shall within one Business Day
after its receipt thereof deliver a Purchase Notice
in respect of such Purchase Commitment(s) and notice
of such proposed Purchase Date to the First Lien
Agent.
30
Upon the First Lien Agent's receipt of the Purchase Notice, the First Lien Agent
and the First Lien Claimholders shall not thereafter effect any acceleration of
the First Lien Obligations or commence any Enforcement Action (or continue to
pursue any Enforcement Action) upon or with respect to the Common Collateral. No
later than the fourth Business Day prior to the proposed Purchase Date, the
First Lien Agent shall deliver to the Second Lien Agent a definitive Pay-Off
Statement of the aggregate amount of First Lien Obligations reasonably estimated
to be outstanding and accrued and unpaid as at the proposed Purchase Date,
containing the information provided for in SECTION 5.7(E) and specifying the
wire transfer information for payment of the purchase price for the First Lien
Obligations. The Second Lien Agent shall within one Business Day forward a copy
of such Pay-Off Statement to each Second Lien Claimholder that shall have
delivered an effective Purchase Commitment.
(h) On the Purchase Date specified in any applicable
Purchase Notice, the First Lien Agent and First Lien Claimholders shall, subject
to any required approval of any court or other regulatory or Governmental
Authority then in effect, if any, sell to the Second Lien Claimholders who have
exercised their purchase option as provided above all of the First Lien
Obligations. On such Purchase Date, each of the Second Lien Claimholders
exercising the purchase option hereunder, severally, shall pay to the First Lien
Agent, for the benefit of the First Lien Agent and First Lien Claimholders, in
immediately available funds its Purchase Percentage of the full amount (at par
and without premium) of all First Lien Principal Obligations then outstanding
together with all accrued, unpaid Ancillary First Lien Obligations, all in the
amounts specified in the Pay-Off Statement (reduced, however, by the amount of
any payment or reimbursement in respect thereof not reflected in the Pay-Off
Statement). To the extent that the actual aggregate outstanding amount of First
Lien Obligations outstanding on the Purchase Date is less than the aggregate
amount specified in the Pay-Off Statement, the First Lien Agent and the First
Lien Claimholders shall promptly cause such excess amount to be refunded to the
purchasing Second Lien Claimholders (pro rata based on the respective Purchase
Percentages of the First Lien Obligations purchased by them).
Such purchase price shall be remitted by wire transfer in federal funds
to such bank account of the First Lien Agent as the First Lien Agent shall have
specified in writing to the Second Lien Agent in the Pay-Off Statement for such
purpose. Interest shall be calculated to but excluding the Business Day on which
such purchase and sale shall occur if the amounts so paid by the purchasing
Second Lien Claimholders to the bank account designated by the First Lien Agent
are received in such bank account prior to 2:00 p.m., New York City time and
interest shall be calculated to and including such Business Day if the amounts
so paid by such Persons to the bank account designated by the First Lien Agent
are received in such bank account later than 2:00 p.m., New York City time.
(i) Any purchase pursuant to the purchase option set
forth in this SECTION 5.7 shall be expressly made without representation or
warranty of any kind by the First Lien Agent or the First Lien Claimholders, as
to the First Lien Obligations, the Common Collateral or otherwise, and without
recourse to the First Lien Agent and the First Lien Claimholders, except that
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First Lien Agent and each First Lien Claimholder, as to itself only, shall
represent and warrant as set forth in Section 7 of the Assignment and Acceptance
Agreement to be entered into as provided herein in connection with such
purchase.
(j) Upon notice to the Company that the purchase of First
Lien Obligations pursuant to this SECTION 5.7 has been consummated by delivery
of the purchase price to the First Lien Agent, each Grantor shall treat the
applicable Second Lien Claimholders as holders of the First Lien Obligations,
and such Person as the Second Lien Claimholders acquiring a majority in amount
of the First Lien Principal Obligations shall have appointed to act in such
capacity as the "agent" or "administrative agent" (or analogous capacity) under
the First Lien Documents, for all purposes hereunder and under each First Lien
Document (it being agreed that the Second Lien Agent shall have no obligation to
act as Replacement First Lien Agent). In connection with any purchase of First
Lien Obligations pursuant to this SECTION 5.7, each First Lien Claimholder
agrees to enter into and deliver to the purchasing Second Lien Claimholders on
the Purchase Date, as a condition to closing, an Assignment and Acceptance
Agreement substantially in the form attached hereto as Exhibit A (the bracketed
provisions therein to be appropriately modified to reflect the terms of the
First Lien Documents and the then existing First Lien Obligations) (an
"ASSIGNMENT AND ACCEPTANCE AGREEMENT") and, at the expense of Grantor, First
Lien Agent and each other First Lien Claimholder shall (and shall cause each
Person acting on behalf of any of the foregoing, as agent, bailee or otherwise,
to) deliver all First Lien Pledged Collateral (if any), together with any
necessary endorsements and other documents (including any applicable stock
powers or bond powers), then in its possession or in the possession of its agent
or bailee, or turn over control as to any First Lien Pledged Collateral for
which it or its agent or bailee then has control, as the case may be, to the
Replacement First Lien Agent and otherwise take such actions as may be
appropriate to effect an orderly transition to the Replacement First Lien Agent.
Section 6 INSOLVENCY PROCEEDINGS.
6.1 FINANCE AND SALE ISSUES. If Grantor shall become subject to a
case under the Bankruptcy Code and if, as debtor-in-possession, Grantor moves
for approval of a DIP Financing (i) to be provided in good faith by the First
Lien Agent or any First Lien Claimholders and that provides for a DIP Financing
in equivalent amounts (but in no event in an aggregate principal amount that,
together with the aggregate amount of First Lien Principal Obligations
outstanding after giving effect to the application of proceeds of such DIP
Financing, would exceed $10,000,000), and at pricing levels (including fees,
interest rate and other costs) and on other terms and conditions (including
representations, warranties, covenants and events of default) no less favorable
to Grantor than that then reasonably obtainable from other Persons, the Second
Lien Agent and each Second Lien Claimholder agree that no objection will be
raised by the Second Lien Agent or such Second Lien Claimholder to such DIP
Financing, provided that the aggregate principal amount thereof, together with
the aggregate amount of First Lien Principal Obligations outstanding after
giving effect to the application of proceeds of such DIP Financing, shall not
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exceed $10,000,000 at any time outstanding or (ii) to be provided in good faith
by the Second Lien Agent or any Second Lien Claimholders, which DIP Financing
either (x) does not provide for or have the benefit of any priming Lien having
priority over the Liens in favor of the First Lien Agent or the First Lien
Claimholders in the Common Collateral, or (y) provides for a DIP Financing in
equivalent amounts, and at pricing levels (including fees, interest rate and
other costs) and on other terms and conditions (including representations,
warranties, covenants and events of default) no less favorable to Grantor than
that then reasonably obtainable from other Persons, the First Lien Agent and
each First Lien Claimholder agrees that no objection will be raised by the First
Lien Agent or such First Lien Claimholder to such DIP Financing.
6.2 RELIEF FROM THE AUTOMATIC STAY. Until the Discharge of First
Lien Obligations has occurred, the Second Lien Agent, on behalf of itself and
the Second Lien Claimholders, agrees that none of them shall seek relief from
the automatic stay or any other stay in respect of the Common Collateral in any
Insolvency Proceeding, if such request for relief would be effective prior to
the expiration of the Standstill Period, without the prior written consent of
the First Lien Agent.
6.3 ADEQUATE PROTECTION. Nothing in this Agreement shall affect
the rights of any party hereto to seek adequate protection or, except as
otherwise provided herein, the rights of any party hereto to object to any
motion of any other party hereto seeking adequate protection; provided, that the
seeking of such adequate protection does not violate, and is not otherwise
inconsistent with, the agreements set forth in SECTION 6.1 above or elsewhere in
this SECTION 6.3. The Second Lien Agent, on behalf of itself and the other
Second Lien Claimholders, agrees that none of them shall contest (or support any
other Person contesting) (a) any request by the First Lien Agent or the other
First Lien Claimholders for adequate protection in respect of their Liens on
Common Collateral or (b) any objection by the First Lien Agent or the other
First Lien Claimholders to any motion, relief, action or proceeding based on the
First Lien Agent or the other First Lien Claimholders claiming a lack of
adequate protection in respect of their Liens on Common Collateral.
Notwithstanding the foregoing, in any Insolvency Proceeding, (i) if First Lien
Claimholders (or any subset thereof) are granted adequate protection in respect
of their Liens on Common Collateral in the form of additional collateral in
connection with any DIP Financing or use of cash collateral under Section 363 or
Section 364 of Title 11 of the Bankruptcy Code or any similar Bankruptcy Law,
then the Second Lien Agent, on behalf of itself or any of the other Second Lien
Claimholders, may seek or request adequate protection in respect of their Liens
on Common Collateral in the form of a replacement Lien on such additional
collateral, which Lien hereby is and shall be deemed to be subordinated to the
Liens securing the First Lien Obligations on the same basis as the other Liens
on Common Collateral securing the Second Lien Obligations hereby are and shall
be deemed to be so subordinated to the Liens on Common Collateral securing the
First Lien Obligations under this Agreement, and (ii) in the event the Second
Lien Agent, on behalf of itself and the other Second Lien Claimholders, seeks or
requests adequate protection in respect of their Liens on Common Collateral and
such adequate protection is granted in the form of additional collateral, then
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the Second Lien Agent, on behalf of itself and each of the other Second Lien
Claimholders, agrees that (x) the Second Lien Agent shall have the right to
request that it be granted a senior Lien on such additional collateral as
security for the First Lien Obligations and (y) any Lien on such additional
collateral securing the Second Lien Obligations shall be subordinated to the
Liens granted on such collateral securing the First Lien Obligations on the same
basis as the other Liens on Common Collateral securing the Second Lien
Obligations are so subordinated to the Liens on Common Collateral securing such
First Lien Obligations under this Agreement.
6.4 NO WAIVER. Subject to SECTION 2.2 and SECTION 6.3, and subject
to, and except with respect to actions contemplated by, SECTION 6.3, SECTION 6.7
and SECTION 3.1(A)(I) and any other action by the Second Lien Agent or any of
the Second Lien Claimholders expressly permitted by this Agreement, and the
proviso in clause (ii) of SECTION 3.1(A), nothing contained herein shall
prohibit or in any way limit the First Lien Agent or any First Lien Claimholder
from objecting in any Insolvency Proceeding or otherwise to any action taken by
the Second Lien Agent or any of the Second Lien Claimholders.
6.5 AVOIDANCE ISSUES. If any First Lien Claimholder is required in
any Insolvency Proceeding or otherwise to turn over or otherwise pay to the
estate of Grantor any amount (a "RECOVERY"), then such First Lien Claimholders
shall be entitled to a reinstatement of the relevant First Lien Obligations with
respect to all such recovered amounts. If any Second Lien Claimholder is
required in any Insolvency Proceeding or otherwise to turn over or otherwise pay
to the estate of Grantor any amount, then such Second Lien Claimholders shall be
entitled to a reinstatement of the relevant Second Lien Obligations with respect
to all such recovered amounts. If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and
effect as at the time of such Recovery, and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the obligations of the
parties hereto from such date of reinstatement.
6.6 REORGANIZATION SECURITIES. If, in any Insolvency Proceeding,
debt obligations of the reorganized debtor secured by Liens upon any property of
the reorganized debtor of the type expressly included in the Common Collateral
(but not property not included in the Common Collateral) are distributed
pursuant to a plan of reorganization or similar dispositive restructuring plan,
both on account of First Lien Obligations and on account of Second Lien
Obligations, then, to the extent the debt obligations distributed on account of
the First Lien Obligations and on account of the Second Lien Obligations are
secured by Liens upon the same property of the type expressly included in the
Common Collateral (but not property not included in the Common Collateral), the
provisions of this Agreement will survive the distribution of such debt
obligations pursuant to such plan and will apply with like effect to the Liens
upon such same property of the type expressly included in the Common Collateral
(but not property not included in the Common Collateral) securing such debt
obligations.
6.7 POST-PETITION INTEREST.
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(a) Neither the Second Lien Agent nor any Second Lien
Claimholder shall oppose or seek to challenge any claim by the First Lien Agent
or any First Lien Claimholder for allowance in any Insolvency Proceeding of
First Lien Obligations consisting of post-petition interest, fees or expenses to
the extent of the value of the valid and perfected Liens of the First Lien Agent
on behalf of the First Lien Claimholders securing the First Lien Obligations (to
the extent the First Lien Claimholders are entitled to such interest, fees, and
expenses pursuant to the First Lien Documents), without regard to the existence
of the Lien of the Second Lien Agent on behalf of the Second Lien Claimholders
on the Common Collateral.
(b) Neither the First Lien Agent nor any other First Lien
Claimholder shall oppose or seek to challenge any claim by the Second Lien Agent
or any Second Lien Claimholder for allowance in any Insolvency Proceeding of
Second Lien Obligations consisting of post-petition interest, fees or expenses
to the extent of the value of the valid and perfected Liens of the Second Lien
Agent on behalf of the Second Lien Claimholders securing the Second Lien
Obligations (to the extent the Second Lien Claimholders are entitled to such
interest, fees, and expenses pursuant to the Second Lien Documents) after taking
into account the First Lien Obligations secured by a Lien on the Common
Collateral.
6.8 WAIVER. The Second Lien Agent, for itself and on behalf of the
Second Lien Claimholders, waives any claim it may hereafter have against any
First Lien Claimholder arising out of the election of any First Lien Claimholder
of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or out of
any cash collateral or financing arrangement or out of any grant of a security
interest in connection with the Common Collateral in any Insolvency Proceeding
(except as otherwise provided in this Agreement).
Section 7 RELIANCE; WAIVERS; ETC.
7.1 RELIANCE. Other than any reliance on the terms of this
Agreement, the First Lien Agent, on behalf of itself and the First Lien
Claimholders under its First Lien Documents, acknowledges that it and such First
Lien Claimholders have, independently and without reliance on the Second Lien
Agent or any Second Lien Claimholders, and based on documents and information
deemed by them appropriate, made their own credit analysis and decision to enter
into such First Lien Documents and be bound by the terms of this Agreement, and
they will continue to make their own credit decision in taking or not taking any
action under the First Lien Documents or this Agreement. The Second Lien Agent,
on behalf of itself and the Second Lien Claimholders, acknowledges that it and
the Second Lien Claimholders have, independently and without reliance on the
First Lien Agent or any First Lien Claimholder, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into each of the Second Lien Documents and be bound by the
terms of this Agreement, and they will continue to make their own credit
decision in taking or not taking any action under the Second Lien Documents or
this Agreement.
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7.2 NO WARRANTIES OR LIABILITY. The First Lien Agent, on behalf of
itself and the First Lien Claimholders under its First Lien Documents,
acknowledges and agrees that each of the Second Lien Agent and the Second Lien
Claimholders have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectability or enforceability of any of the First Lien Documents, the Second
Lien Documents, the ownership of any Common Collateral or the perfection or
priority of any Liens thereon. The Second Lien Claimholders will be entitled to
manage and supervise their respective loans and extensions of credit under the
Second Lien Documents in accordance with applicable law and as they may
otherwise, in their sole discretion, deem appropriate, consistent with the terms
of this Agreement. The Second Lien Agent, on behalf of itself and the Second
Lien Claimholders, acknowledges and agrees that the First Lien Agent and the
First Lien Claimholders have made no express or implied representation or
warranty, including with respect to the execution, validity, legality,
completeness, collectability or enforceability of any of the First Lien
Documents, the Second Lien Documents, the ownership of any Common Collateral or
the perfection or priority of any Liens thereon. The First Lien Claimholders
will be entitled to manage and supervise their respective loans and extensions
of credit under their respective First Lien Documents in accordance with
applicable law and as they may otherwise, in their sole discretion, deem
appropriate, consistent with the terms of this Agreement. The Second Lien Agent
and the Second Lien Claimholders shall have no duty to the First Lien Agent or
any of the First Lien Claimholders, and the First Lien Agent and the First Lien
Claimholders shall have no duty to the Second Lien Agent or any of the Second
Lien Claimholders, to act or refrain from acting in a manner which allows, or
results in, the occurrence or continuance of an event of default or default
under any agreements with any Grantor (including the First Lien Documents and
the Second Lien Documents), regardless of any knowledge thereof which they may
have or be charged with. If the First Lien Agent or any First Lien Claimholder
shall honor or fail to honor a request by any Grantor for a loan, advance or
other financial accommodation under the First Lien Documents, whether or not the
First Lien Agent or any First Lien Claimholder has knowledge that the honoring
or dishonoring of such request would result in an event of default, or act,
condition or event which with notice or passage of time or both would constitute
an event of default, under the Second Lien Documents, the First Lien Agent and
the other First Lien Claimholders shall not have any liability whatsoever to the
Second Lien Agent or the other Second Lien Claimholders as a result thereof and,
without limiting the generality of the foregoing, the Second Lien Agent and the
Second Lien Claimholders agree that the First Lien Agent and the First Lien
Claimholders shall not have any liability for tortious interference with
contractual relations or for inducement to breach any contract of the Second
Lien Agent and the other Second Lien Claimholders, but without prejudice to the
express rights of the Second Lien Agent and the Second Lien Claimholders under
this Agreement. If the Second Lien Agent shall honor or fail to honor a request
by any Debtor for a loan, advance or other financial accommodation under Second
Lien Documents, whether or not the Second Lien Agent has knowledge that the
honoring or dishonoring of such request would result in an event of default, or
act, condition or event which with notice or passage of time or both would
constitute an event of default, under the First Lien Documents, the Second Lien
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Agent and the other Second Lien Claimholders shall not have any liability
whatsoever to the First Lien Agent and the other First Lien Claimholders as a
result of thereof and, without limiting the generality of the foregoing, the
First Lien Agent and the First Lien Claimholders agree that the Second Lien
Agent and the Second Lien Claimholders shall not have any liability for tortious
interference with contractual relations or for inducement to breach any contract
of the First Lien Agent and the other First Lien Claimholders, but without
prejudice to the express rights of the First Lien Agent and the First Lien
Claimholders under this Agreement..
7.3 NO WAIVER OF LIEN PRIORITIES.
(a) The Second Lien Agent, on behalf of itself and the
Second Lien Claimholders, agrees that the First Lien Claimholders and the First
Lien Agent shall have no liability to the Second Lien Agent or any Second Lien
Claimholders, and the Second Lien Agent, on behalf of itself and the Second Lien
Claimholders, hereby waives any claim against any First Lien Claimholder or the
First Lien Agent, arising out of any and all actions which the First Lien
Claimholders or the First Lien Agent may take or permit or omit to take in
respect of the First Lien Obligations and the First Lien Collateral in a manner
not inconsistent with the provisions of this Agreement or applicable law with
respect to: (i) the First Lien Documents, (ii) the collection of the First Lien
Obligations or (iii) the foreclosure upon, or sale, liquidation or other
disposition of, any First Lien Collateral. The Second Lien Agent, on behalf of
itself and the Second Lien Claimholders, agrees that the First Lien Claimholders
and the First Lien Agent have no duty to them in respect of the maintenance or
preservation of the First Lien Collateral except to the extent expressly
provided in SECTION 5.5; and
(b) The Second Lien Agent, on behalf of itself and the
Second Lien Claimholders, agrees not to assert and hereby waives, to the fullest
extent permitted by law (and except for rights provided for in this Agreement,
and the assertion thereof), any right to demand, request, plead or otherwise
assert or otherwise claim the benefit of, any marshalling, appraisal, valuation
or other similar right that may otherwise be available under applicable law with
respect to the Common Collateral or any other similar rights a junior secured
creditor may have under applicable law.
(c) No right of the First Lien Claimholders, the First
Lien Agent, the Second Lien Claimholders or the Second Lien Agent, or any of
them to enforce any provision of this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or any other Grantor, or by the noncompliance by any Person with the terms,
provisions and covenants of this Agreement, any of the First Lien Documents or
any of the Second Lien Documents, regardless of any knowledge thereof which the
First Lien Claimholders, First Lien Agent, Second Lien Claimholders or Second
Lien Agent, or any of them, may have or otherwise be charged with.
7.4 OBLIGATIONS UNCONDITIONAL. All rights, interests, agreements
and obligations of the First Lien Agent and the First Lien Claimholders and the
Second Lien Agent and the Second Lien Claimholders, respectively, hereunder
shall remain in full force and effect irrespective of:
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(a) any lack of validity or enforceability of any
provision of any First Lien Document or any Second Lien Document;
(b) except as otherwise provided in this Agreement
(including SECTION 5.4), any change in the time, manner or place of payment of,
or in any other terms of, all or any of the First Lien Obligations or Second
Lien Obligations, or any amendment or waiver or other modification, including
any increase in the amount thereof, whether by course of conduct or otherwise,
of the terms of any First Lien Document or any Second Lien Document;
(c) except as otherwise provided in, and subject to, this
Agreement (including SECTION 5.4), any exchange of any security interest in any
Common Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the First Lien Obligations or Second Lien Obligations or any guarantee
thereof;
(d) the commencement of any Insolvency Proceeding in
respect of Grantor; or
(e) any other circumstances which otherwise might
constitute a defense available to, or a discharge of, Grantor in respect of the
First Lien Obligations, or of the Second Lien Agent or any Second Lien
Claimholder in respect of this Agreement.
Section 8 MISCELLANEOUS.
8.1 CONFLICTS. In the event of any conflict between the provisions
of this Agreement and the provisions of the First Lien Documents or the Second
Lien Documents, the provisions of this Agreement shall govern and control.
8.2 EFFECTIVENESS; CONTINUING NATURE OF THIS AGREEMENT;
SEVERABILITY. This Agreement shall become effective when executed and delivered
by the parties hereto. This is a continuing agreement of lien subordination and
the First Lien Claimholders may continue, at any time and without notice to the
Second Lien Agent or any Second Lien Claimholder, to extend credit and other
financial accommodations and lend monies to or for the benefit of Grantor
constituting First Lien Obligations in reliance hereon (except to the extent
otherwise limited or prohibited by this Agreement). The Second Lien Agent, on
behalf of itself and the Second Lien Claimholders, hereby waives any right it
may have under applicable law to revoke this Agreement or any of the provisions
of this Agreement. The terms of this Agreement shall survive, and shall continue
in full force and effect, in any Insolvency Proceeding. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall not
invalidate 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. All references to
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Grantor shall include each Grantor individually, and each such Grantor as debtor
and debtor-in-possession and any receiver or trustee for such Grantor (as the
case may be) in any Insolvency Proceeding. This Agreement shall terminate and be
of no further force and effect, (i) with respect to the Second Lien Agent, the
Second Lien Claimholders and the Second Lien Obligations, upon the later of (1)
the date upon which the First Lien Agent and the First Lien Claimholders shall
have complied with their agreements set forth in SECTION 5 hereof, and (2) the
first Business Day after the date of Discharge of First Lien Obligations,
subject to the rights of the First Lien Claimholders under SECTION 6.5.
8.3 AMENDMENTS; WAIVERS. No amendment, modification or waiver of
any of the provisions of this Agreement by the Second Lien Agent or the First
Lien Agent shall be deemed to be made unless the same shall be in writing signed
by the First Lien Agent and the Second Lien Agent or its authorized agent, and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the party making such
waiver or the obligations of the other parties to such party in any other
respect or at any other time. Notwithstanding the foregoing, neither any Grantor
nor any other Person (other than First Lien Agent, on behalf of itself and the
other First Lien Claimholders, and Second Lien Agent, on behalf of itself and
the other Second Lien Claimholders) shall have any right to consent to or
approve any amendment, modification or waiver of any provision of this
Agreement.
8.4 INFORMATION CONCERNING FINANCIAL CONDITION OF THE COMPANY AND
ITS SUBSIDIARIES. The First Lien Agent and the First Lien Claimholders, on the
one hand, and the Second Lien Agent and the Second Lien Claimholders, on the
other hand, shall each be responsible for keeping themselves informed of (a) the
financial condition of the Company and its Subsidiaries and all endorsers and/or
guarantors of the First Lien Obligations or the Second Lien Obligations and (b)
all other circumstances bearing upon the risk of nonpayment of the First Lien
Obligations or the Second Lien Obligations. The First Lien Agent and the First
Lien Claimholders shall have no duty to advise the Second Lien Agent or any
Second Lien Claimholder, and the Second Lien Agent and the Second Lien
Claimholders shall have no duty to advise the First Lien Agent or any First Lien
Claimholder, of information known to it or them regarding such condition or any
such circumstances or otherwise. In the event the First Lien Agent or any of the
First Lien Claimholders, in its or their sole discretion, undertakes at any time
or from time to time to provide any such information to the Second Lien Agent or
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any Second Lien Claimholder, it or they shall be under no obligation (w) to
make, and the First Lien Agent and the First Lien Claimholders shall not be
deemed to make, any express or implied representation or warranty, including
with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided, (x) to provide any additional information or to provide
any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which such party wishes to
maintain confidential or is otherwise required to maintain confidential. In the
event the Second Lien Agent or any of the Second Lien Claimholders, in its or
their sole discretion, undertakes at any time or from time to time to provide
any such information to the First Lien Agent or any First Lien Claimholder, it
or they shall be under no obligation (w) to make, and the Second Lien Agent and
the Second Lien Claimholders shall not make, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x)
to provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or (z) to disclose any
information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
8.5 SUBROGATION. The Second Lien Agent, on behalf of itself and
the Second Lien Claimholders, hereby agrees that it will not exercise any rights
of subrogation it may acquire as a result of any payment hereunder until the
Discharge of First Lien Obligations has occurred.
8.6 APPLICATION OF PAYMENTS; ETC. All payments received by the
First Lien Agent or the First Lien Claimholders may be applied, reversed and
reapplied, in whole or in part, to such part of the First Lien Obligations as is
provided for in the First Lien Documents, PROVIDED, however, that for purposes
of this Agreement, including any determination of whether the Discharge of First
Lien Obligations has occurred, the provisions of SECTION 4.1 shall govern.
Without prejudice to the rights of the Second Lien Agent and the Second Lien
Claimholders hereunder, including their rights and remedies upon expiration of
the Standstill Period as provided in SECTION 3.1(A)(I), and subject to and
except as other provided in SECTION 5.1(A), the Second Lien Agent, on behalf of
itself and the Second Lien Claimholders, assents to any substitution, exchange
or release of any collateral which may at any time secure any part of the First
Lien Obligations (without prejudice to the Liens and other rights therein of the
Second Lien Agent and the Second Lien Claimholders) and to the addition of any
other Person primarily or secondarily liable therefor.
8.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER FIRST LIEN DOCUMENT, ANY OTHER SECOND LIEN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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8.8 NOTICES. All notices to the Second Lien Claimholders and the
First Lien Claimholders permitted or required under this Agreement shall also be
sent to the Second Lien Agent and the First Lien Agent, respectively. Unless
otherwise specifically provided herein, any notice hereunder shall be in writing
and may be personally served or sent by facsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service and signed for against receipt thereof, upon receipt of
facsimile or telex or PDF (portable document format) email attachment, or three
Business Days after depositing it in the United States mail with postage
prepaid, and in each case properly addressed. For the purposes hereof, the
addresses of the parties hereto shall be as set forth in the First Lien
Financing Agreement or Second Lien Financing Agreements, as applicable, or, as
to each party, at such other address as may be designated by such party in a
written notice to all of the other parties.
8.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement shall be construed in accordance with
and governed by the law of the State of New York. Each party hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment relating thereto, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement, any other First
Lien Document or any other Second Lien Document shall affect any right that any
First Lien Claimholder or Second Lien Claimholder may otherwise have to bring
any action or proceeding relating to this Agreement, any other First Lien
Document or any other Second Lien Document against Grantor or any of their
respective properties in the courts of any jurisdiction.
(b) Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement, any
other First Lien Document or any other Second Lien Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in SECTION 8.8. Nothing in
this Agreement, any other First Lien Document or any Second Lien Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
41
8.10 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the First Lien Agent, the First Lien Claimholders, the Second Lien
Agent, the Second Lien Claimholders, Grantor and their respective successors and
assigns.
8.11 SPECIFIC PERFORMANCE.
(a) Subject to PARAGRAPH (B) below, neither the First
Lien Agent nor the Second Lien Agent may demand specific performance of this
Agreement.
(b) The Second Lien Agent may demand specific performance
of the First Lien Agent's duties, as bailee and agent for perfection under
SECTION 5.5 hereof, to hold items of Common Collateral for the benefit of the
Second Lien Agent and to turn them over to the Second Lien Agent upon the terms
and conditions described therein, and waives no defense relating to or in
furtherance of such demand for specific performance. The First Lien Agent may
demand specific performance of the Second Lien Agent's duties, as bailee and
agent for perfection under SECTION 5.5 hereof, to hold items of Common
Collateral for the benefit of the First Lien Agent and to turn them over to the
First Lien Agent upon the terms and conditions described therein, and waives no
defense relating to or in furtherance of such demand for specific performance.
8.12 HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
8.13 COUNTERPARTS. This Agreement may be executed in counterparts
(and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Agreement or any document or instrument delivered in connection herewith by
facsimile or by PDF (portable document format) email attachment shall be
effective as delivery of a manually executed counterpart of this Agreement or
such other document or instrument, as applicable.
8.14 AUTHORIZATION. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement, in the case
of the First Lien Agent, on behalf of the First Lien Lenders and, in the case of
the Second Lien Agent, on behalf of the Second Lien Lenders.
8.15 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS; NO THIRD PARTY
BENEFICIARIES. This Agreement and the rights and benefits hereunder shall inure
to the benefit of each of the First Lien Claimholders and the Second Lien
Claimholders and their respective successors and assigns. The provisions of this
Agreement are and are intended solely for the purpose of defining the relative
rights of the First Lien Agent and the other First Lien Claimholders on the one
hand and the Second Lien Agent and the other Second Lien Claimholders on the
other hand. Neither any Grantor nor any other Person other than the First Lien
Agent and the other First Lien Claimholders and the Second Lien Agent and the
42
other Second Lien Claimholders shall have or be entitled to assert rights or
benefits hereunder or rely on the provisions hereof, and neither any Grantor nor
any debtor in possession, trustee, receiver or similar Person in respect
thereof, shall have or be entitled to assert rights or benefits hereunder in any
capacity as a successor, transferee or assignee of a First Lien Claimholder or
Second Lien Claimholder. Nothing in this Agreement is intended to or shall
impair the obligations of Grantor, which are absolute and unconditional, to pay
the First Lien Obligations and the Second Lien Obligations as and when the same
shall become due and payable in accordance with their terms.
43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GUGGENHEIM CORPORATE FUNDING, LLC, as First
Lien Agent,
By: /S/ XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
ACKNOWLEDGMENT
STATE OF New York)
COUNTY OF New York)
Before me, XXXXX XXXXXX, a Notary Public of said County and State,
personally appeared XXXXXXX X. XXXXXX, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be MANGING DIRECTOR of Guggenheim Corporate Funding,
LLC, a DELAWARE limited liability company, the within named bargainor, and that
he as such MANAGING DIRECTOR, being duly authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the his name
as a MANAGING DIRECTOR.
Witness my hand and seal, at Office in NEW YORK, this 12 day of
OCTOBER, 2006.
/S/ XXXXX XXXXXX
----------------------------------------------
Notary Public
My Commission Expires: 6/26/10
-------------------------------
XXXXX FARGO BANK, N.A.,
as Trustee and Second Lien Agent
By: /S/ XXXX X. XXXXXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
ACKNOWLEDGMENT
STATE OF Minnesota)
COUNTY OF Dakota)
Before me, XXX XXXX XXXX XXXXXX, a Notary Public of said County and
State, personally appeared XXXX X. XXXXXXXXX, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself to be VICE PRESIDENT of Xxxxx Fargo Bank, N.A.,
a national banking association, the within named bargainor, and that he as such
VICE PRESIDENT being duly authorized so to do, executed the foregoing instrument
for the purposes therein contained, by signing the his name as a VICE PRESIDENT.
Witness my hand and seal, at Office in Minnesota, this 10TH day of
OCTOBER , 2006.
/S/ XXX XXXX XXXX XXXXXX
----------------------------------------------
Notary Public
My Commission Expires: 1/31/09
-------------------------------
Acknowledged and agreed:
NATIONAL COAL CORPORATION,
as Debtor
By: /S/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
NATIONAL COAL CORP.,
as Guarantor
By: /S/ XXXXXX X. XXXXXX
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
NC TRANSPORTATION, INC.,
as Guarantor
By: /S/ XXXXXXX X. XXXX
------------------------------
Name: Xxxxxxx X. Xxxx
Title: General Counsel
By: /S/ T. XXXXXXX XXXX
------------------------------
Name: T. Xxxxxxx Xxxx
Title: Secretary
NC RAILROAD, INC.,
as Guarantor
By: /S/ XXXXXXX X. XXXX
------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
ACKNOWLEDGMENTS
STATE OF Tennessee)
COUNTY OF Xxxx)
Before me, XXXXXXX X. XXXX, a Notary Public of said County and State,
personally appeared XXXXXX X. XXXXXX, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be CEO of National Coal Corporation, a Tennessee
corporation, the within named bargainor, and that he as such CEO, being duly
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing the his name as a CEO.
Witness my hand and seal, at Office in KNOXVILLE, TN, this 11TH day of
OCTOBER, 2006.
/S/ XXXXXXX X. XXXX
----------------------------------------------
Notary Public
My Commission Expires: 2/19/08
-------------------------------
STATE OF Tennessee)
COUNTY OF Xxxx)
Before me, XXXXXXX X. XXXX, a Notary Public of said County and State,
personally appeared XXXXXX X. XXXXXX, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be CEO of National Coal Corp., a Florida corporation,
the within named bargainor, and that he as such CEO, being duly authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the his name as a CEO.
Witness my hand and seal, at Office in KNOXVILLE, TN, this 11TH day of
OCTOBER, 2006.
/S/ XXXXXXX X. XXXX
----------------------------------------------
Notary Public
My Commission Expires: 2/19/08
-------------------------------
ACKNOWLEDGMENT
STATE OF Tennessee)
COUNTY OF Xxxx)
Before me, XXXXXX XXXXXX, a Notary Public of said County and State,
personally appeared T. XXXXXXX XXXX, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be SECRETARY of NC Transportation, Inc., a TENNESSEE
corporation, the within named bargainor, and that he as such SECRETARY, being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the his name as a SECRETARY.
Witness my hand and seal, at Office in ______________, this day of
_____________, 2006.
/S/ XXXXXX XXXXXX
----------------------------------------------
Notary Public
My Commission Expires: 7/6/09
-------------------------------
STATE OF Tennessee)
COUNTY OF Xxxx)
Before me, XXXXXX XXXXXX, a Notary Public of said County and State,
personally appeared XXXXXXX X. XXXX, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself to be PRESIDENT of NC Railroad, Inc., a TENNESSEE
corporation, the within named bargainor, and that he as such PRESIDENT , being
duly authorized so to do, executed the foregoing instrument for the purposes
therein contained, by signing the his name as a PRESIDENT.
Witness my hand and seal, at Office in ______________, this day of
_____________, 2004.
/S/ XXXXX XXXXXX
----------------------------------------------
Notary Public
My Commission Expires: 7/6/09
-------------------------------
EXHIBIT A
to
INTERCREDITOR AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of _____________, 200_ is made between
________________________ ("ASSIGNOR") and ____________________ (individually,
each an "ASSIGNEE PARTY" and collectively, "ASSIGNEE"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings set forth in
that certain Intercreditor Agreement, dated as of ____________, 200_ (as
amended, restated, supplemented or modified from time to time in accordance
therewith, the "INTERCREDITOR AGREEMENT"), by and between GUGGENHEIM CORPORATE
FUNDING, LLC, in its capacity as First Lien Agent, and XXXXX FARGO BANK, N.A.,
in its capacity as Second Lien Agent.
W I T N E S S E T H:
WHEREAS, as provided under the First Lien Financing Agreement, Assignor
(i) committed to extend credit to Borrower in an aggregate amount not to exceed
$10,000,000 , and (ii) made a loan to Borrower constituting First Lien Principal
Obligations;
WHEREAS, pursuant to the provisions of the Intercreditor Agreement
Assignor is required to assign to Assignee all rights and obligations of
Assignor under the First Lien Financing Agreement in respect of [(i)] its share
of the First Lien Principal Obligations, constituting the percentage (the
"ASSIGNED PERCENTAGE") of the aggregate First Lien Principal Obligations set
forth in Part A of SCHEDULE 1 hereto, in the amount set forth in Part B[-1] of
SCHEDULE 1 hereto (the "ASSIGNED OBLIGATIONS AMOUNT"), and of the First Lien
Ancillary Obligations related thereto (such rights and obligations in respect of
such share assigned hereunder, the "ASSIGNED OBLIGATIONS") [and (ii) its Term
Loan Commitment under and as defined in the First Lien Financing Agreement,
constituting the Assigned Percentage of the aggregate Term Loan Commitments, in
the amount set forth in Part B-2 of SCHEDULE 1 hereto (the "ASSIGNED COMMITMENT
AMOUNT") (such rights and obligations in respect of such Term Loan Commitment
assigned hereunder, the "ASSIGNED COMMITMENT")], on the terms and subject to the
conditions set forth herein and Assignee wishes to accept assignment of such
rights and to assume such obligations from Assignor on such terms and subject to
such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
2. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this
Assignment and Acceptance, Assignor hereby sells,
transfers and assigns to Assignee, and Assignee
hereby purchases, assumes and undertakes from
Assignor, without recourse and without representation
or warranty (except as provided in this Assignment
and Acceptance) (i) the Assigned Obligations [and the
Assigned Commitment] and (ii) all related rights,
benefits, obligations, liabilities and indemnities of
the Assignor under and in connection with the First
Lien Financing Agreement and the other First Lien
Documents, so that after giving effect thereto, the
amount[s] of Assigned Obligations [and Assigned
Commitment] of each Assignee Party shall be the
product[s] of (x) the percentage set forth opposite
such Assignee Party's name on Part C of SCHEDULE 1
hereto (such percentage, such Assignee Party's "PRO
RATA SHARE") and (y) the Assigned Obligations Amount
[or Assigned Commitment Amount, respectively].
(b) With effect on and after the Effective Date (as
defined in SECTION 5 hereof), each Assignee Party
shall be a party to the First Lien Financing
Agreement and succeed to all of the rights and be
obligated to perform all of the obligations of a
Lender under the First Lien Financing Agreement,
including the requirements concerning confidentiality
and the payment of indemnification [, and its Term
Loan Commitment under and as defined in the First
Lien Financing Agreement prior to the Effective Date,
if any, shall be increased in an amount equal to the
product of (x) its respective Pro Rata Share and (y)
the Assigned Commitment]. Each Assignee Party agrees
that it will perform in accordance with their terms
all of the obligations which by the terms of the
First Lien Financing Agreement are required to be
performed by it as a Lender. It is the intent of the
parties hereto that the Term Loan Commitment of
Assignor under and as defined in the First Lien
Financing Agreement shall, as of the Effective Date,
be reduced to zero and Assignor shall relinquish all
its rights and be released from all its obligations
under the First Lien Financing Agreement; PROVIDED
that Assignor shall not relinquish its rights under
the First Lien Financing Agreement, as provided
therein, to the extent such rights relate to the time
prior to the Effective Date.
3. PAYMENTS. As consideration for the sale, assignment and
transfer contemplated in SECTION 1 hereof, each Assignee Party
shall pay to Assignor on the Effective Date in immediately
available funds an amount equal to the product of (x) the
amount set forth in Part D of SCHEDULE 1 hereto, representing
the principal amount of all Assigned Obligations, purchased at
par, including all documented principal, interest, fees,
costs, charges and expenses, including reasonable attorneys'
fees and legal expenses, and (y) a fraction equal to such
Assignee Party's Pro Rata Share.
4. REALLOCATION OF PAYMENTS. Any interest, fees and other
payments accrued to the Effective Date with respect to the
Assigned Obligations [and Assigned Commitment] shall be for
the account of Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the
Assigned Obligations [and Assigned Commitment] shall be for
the account of Assignee. Each of Assignor and Assignee agrees
that it will hold in trust for the other party any interest,
A-2
fees and other amounts which it may receive to which the other
party is entitled pursuant to the preceding sentence and pay
to the other party any such amounts which it may receive
promptly upon receipt.
5. INDEPENDENT CREDIT DECISION. Each Assignee Party acknowledges
that it has received a copy of the First Lien Financing
Agreement and the Schedules and Exhibits thereto, together
with copies of the most recent financial statements of the
Company and its Subsidiaries, and such other documents and
information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this
Assignment and Acceptance and agrees that it will,
independently and without reliance upon Assignor, First Lien
Agent or any First Lien Lender and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own credit and legal decisions in taking or not
taking action under the First Lien Financing Agreement.
6. EFFECTIVE DATE; NOTICES.
(a) As between Assignor and Assignee, the effective date
for this Assignment and Acceptance shall be
_______________, 200_ (the "EFFECTIVE DATE");
PROVIDED that the following conditions precedent have
been satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be
executed and delivered by Assignor and each
Assignee Party and shall be recorded in the
Register maintained by First Lien Agent;
(ii) the consent of First Lien Agent (and so long
as no Event of Default or event of default
shall have occurred and be continuing, the
consent of [Administrative Borrower (as
defined in the First Lien Financing
Agreement)]) as required for an effective
assignment of the Assigned Obligations [and
Assigned Commitment] by Assignor to Assignee
shall have been duly obtained and shall be
in full force and effect as of the Effective
Date;
(iii) written notice of such assignment, together
with payment instructions, addresses and
related information with respect to each
Assignee Party, shall have been given to
Borrower and First Lien Agent;
(iv) each Assignee Party shall pay to Assignor
all amounts due to Assignor from such
Assignee Party under this Assignment and
Acceptance; and
(v) each Assignee Party shall furnish cash
collateral to First Lien Agent in an amount
equal to the product of (x) such Assignee
Party's Pro Rata Share and (y) such amount
as First Lien Agent determines is reasonably
necessary to secure First Lien Agent and
Assignor in connection with any issued and
outstanding Letter of Credit Accommodations
(as defined in the First Lien Financing
Agreement) but not in any event in an amount
greater than 105% of the aggregate undrawn
face amount of such Letter of Credit
A-3
Accommodations (any excess cash collateral
for a Letter of Credit Accommodations
remaining after the expiration or
termination thereof to be promptly paid over
to Second Lien Agent).
(vi) Assignee shall reimburse First Lien Agent
and Assignor from time to time for any
documented expense (including reasonable
attorneys' fees and legal expenses) in
connection with any commissions, fees, costs
or expenses related to any checks or other
payments provisionally credited to the
Assigned Obligations [and Assigned
Commitment] assigned hereby as to which the
Assignor has not yet received final payment,
to the extent not previously paid by Debtor
and Guarantors.
(b) Promptly following the execution of this Assignment
and Acceptance, Assignor shall deliver to Borrower
and First Lien Agent, for acknowledgment by First
Lien Agent, a Notice of Assignment in the form
attached hereto as SCHEDULE 2.
7. REPRESENTATIONS AND WARRANTIES.
(a) Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is
free and clear of any security interest, lien,
encumbrance or other adverse claim, (ii) it is duly
organized and existing and it has the full power,
right and authority (A) to assign all of its right,
title and interest in and to the Assigned Obligations
[and all of its rights and obligations to and under
the Assigned Commitment], and (B) to take, and it has
taken, all action necessary to execute and deliver
this Assignment and Acceptance and any other
documents required or permitted to be executed or
delivered by it in connection with this Assignment
and Acceptance and to fulfill its obligations
hereunder, (iii) no notices to, or consents,
authorizations or approvals of, any Person are
required (other than any already given or obtained)
for its due execution, delivery and performance of
this Assignment and Acceptance, and apart from any
agreements or undertakings or filings required by the
First Lien Financing Agreement, no further action by,
or notice to, or filing with, any Person is required
of it for such execution, delivery or performance,
(iv) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the
legal, valid and binding obligation of Assignor,
enforceable against Assignor in accordance with the
terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization
and other laws of general application relating to or
affecting creditors' rights and to general equitable
principles.
(b) Assignor makes no representation or warranty and
assumes no responsibility with respect to any
statements, warranties or representations made in or
in connection with the First Lien Financing Agreement
or any of the other Financing Agreements or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of the First Lien
Financing Agreement or any other instrument or
document furnished pursuant thereto. Assignor makes
no representation or warranty in connection with, and
assumes no responsibility with respect to, the
solvency, financial condition or statements of
Debtor, Guarantors or any of their respective
A-4
Affiliates, or the performance or observance by
Debtor, Guarantors or any other Person, of any of its
respective obligations under the First Lien Financing
Agreement or any other instrument or document
furnished in connection therewith.
(c) First Lien Agent represents and warrants that the
amount of the Assigned Obligations hereby assigned is
as reflected in the books and records of the First
Lien Agent (but without representation or warranty as
to the collectability, validity or enforceability
thereof) and is the aggregate amount of unpaid,
outstanding First Lien Obligations owing by Debtor
under the First Lien Documents on the Effective Date.
(d) Each Assignee Party represents and warrants, as to
itself only, that (i) it is duly organized and
existing and it has full power and authority to take,
and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other
documents required or permitted to be executed or
delivered by it in connection with this Assignment
and Acceptance, and to fulfill its obligations
hereunder, (ii) no notices to, or consents,
authorizations or approvals of, any Person are
required (other than any already given or obtained)
for its due execution, delivery and performance of
this Assignment and Acceptance, and apart from any
agreements or undertakings or filings required by the
First Lien Financing Agreement, no further action by,
or notice to, or filing with, any Person is required
of it for such execution, delivery or performance;
and (iii) this Assignment and Acceptance has been
duly executed and delivered by it and constitutes the
legal, valid and binding obligation of such Assignee
Party, enforceable against such Assignee Party in
accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application
relating to or affecting creditors' rights to general
equitable principles.
8. FURTHER ASSURANCES. Assignor and Assignee each hereby agree to
execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to Debtor or First Lien Agent, which
may be required in connection with the assignment and assumption contemplated
hereby.
9. INDEMNIFICATION. Upon the Effective Date, each Assignee Party
agrees to indemnify and hold First Lien Agent and Assignor harmless from and
against all loss, cost, damage or expense (including reasonable attorneys' fees
and legal expenses) suffered or incurred by First Lien Agent and Assignor to the
extent arising from or attributable to acts or omissions of such Assignee Party,
in respect of the Assigned Obligations [and Assigned Commitment] and the First
Lien Financing Agreement and the other First Lien Documents, occurring after the
Effective Date.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and
signed by the parties hereto. No failure or delay by
either party hereto in exercising any right, power or
A-5
privilege hereunder shall operate as a waiver thereof
and any waiver of any breach of the provisions of
this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other for
further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) Assignor and each Assignee Party shall each pay its
own costs and expenses incurred in connection with
the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts
taken together shall be deemed to constitute one and
the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK. Assignor and each Assignee Party each
irrevocably submits to the non-exclusive jurisdiction
of any State or Federal court sitting in New York
County, New York over any suit, action or proceeding
arising out of or relating to this Assignment and
Acceptance and irrevocably agrees that all claims in
respect of such action or proceeding may be heard and
determined in such New York State or Federal court.
Each party to this Assignment and Acceptance hereby
irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient
forum to the maintenance of such action or
proceeding.
(f) ASSIGNOR AND EACH ASSIGNEE PARTY EACH HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND
ACCEPTANCE, THE FIRST LIEN FINANCING AGREEMENT, ANY
OF THE OTHER FIRST LIEN DOCUMENTS OR ANY RELATED
DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR
WRITTEN).
A-6
IN WITNESS WHEREOF, Assignor and each Assignee Party have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
Title:
[ASSIGNEE PARTIES]
By:
Title:
GUGGENHEIM CORPORATE FUNDING, LLC
By:
Title:
CONSENTED TO:
NATIONAL COAL CORPORATION
By:
Title:
SCHEDULE 1
PART A - ASSIGNED PERCENTAGE
[--]%
PART B[-1] - ASSIGNED OBLIGATIONS AMOUNT
$[__________________]
[PART B-2 - ASSIGNED COMMITMENT AMOUNT
$[__________________] ]
PART C - PRO RATA SHARES
ASSIGNEE PARTY PERCENTAGE
[Name] [__]%
[Name] [__]%
[Name] [__]%
PART D - AGGREGATE PAYMENT AMOUNT
$[__________________]
-1-
SCHEDULE 2
NOTICE OF ASSIGNMENT AND ACCEPTANCE
__, 20__
Attn:
Re:
Ladies and Gentlemen:
GUGGENHEIM CORPORATE FUNDING, LLC, in its capacity as agent pursuant to
the First Lien Financing Agreement (as hereinafter defined) acting for and on
behalf of the parties thereto as lenders (in such capacity, "AGENT"), and the
financial institutions and other entities parties to the First Lien Financing
Agreement as lenders (individually, each a "LENDER" and collectively, "LENDERS")
have entered into financing arrangements pursuant to which Agent and Lenders
will make loans and advances and provide other financial accommodations to
National Coal Corporation, a Tennessee corporation ("BORROWER") as set forth in
the First Lien Financing Agreement, dated October 12, 2006, by and among
Borrower, the entities parties thereto as Guarantors, Agent and Lenders (as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, the "FIRST LIEN FINANCING AGREEMENT"), and the
other agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto (all of the
foregoing, together with the First Lien Financing Agreement, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, being collectively referred to herein as the "FINANCING
AGREEMENTS"). Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed thereto in the First Lien Financing Agreement.
1. We hereby give you notice of, and request your acknowledgement of,
the assignment by __________________________ (the "Assignor") to
___________________________ (individually, each an "Assignee Party" and
collectively, "Assignee") such that after giving effect to the assignment
Assignee shall have its interest, if any, under the First Lien Financing
Agreement increased by an amount equal to ________ (__%)(1) percent of the total
Obligations [and Term Loan Commitments] pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). [We
understand that the Assignor's Commitment shall be reduced to zero.]
2. Each Assignee Party agrees that, upon receiving the acknowledgement
of Agent of such assignment, such Assignee Party will be bound by the terms of
the First Lien Financing Agreement as fully and to the same extent as if such
Assignee Party were the Lender originally holding such interest under the First
Lien Financing Agreement.
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(1) This should equal the "Assigned Percentage" from Part A of Schedule 1.
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3. The following administrative details apply to Assignee:
I (A) Notice address:
Assignee Party name:
Address:
Attention:
Telephone:
Telecopier:
(B) Payment instructions:
Account No.:
At:
Reference:
Attention:
II (A) Notice address:
Assignee Party name:
Address:
Attention:
Telephone:
Telecopier:
(B) Payment instructions:
Account No.:
At:
Reference:
Attention:
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You are entitled to rely upon the representations, warranties and covenants of
each of Assignor and Assignee contained in the Assignment and Acceptance.
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EXHIBIT B
RECORDED FIRST LIEN COLLATERAL DOCUMENTS
TENNESSEE:
1. Xxxxxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of _____________, 2006, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Guggenheim Corporate Funding,
Inc., as Collateral Agent, Beneficiary, of record in Book ____, page ____ in the
Xxxxxxxx County Register's Office;
b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Book ____, page ____ in the Xxxxxxxx County
Register's Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Book ____, page ____ in the Xxxxxxxx County Register's
Office.
2. Xxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of _____________, 2006, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Guggenheim Corporate Funding,
Inc., as Collateral Agent, Beneficiary, of record in Trust Book ____, page ____
in the Xxxxx County Register's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Trust Book ____, page ____ in the Xxxxx County Register's
Office; and
c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Trust Book ____, page ____ in the Xxxxx County
Register's Office.
3. Xxxxxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of _____________, 2006, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Guggenheim Corporate Funding,
Inc., as Collateral Agent, Beneficiary, of record in Book ____, page ____ in the
Xxxxxxxx County Register's Office;
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b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Book ____, page ____ in the Xxxxxxxx County
Register's Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Book ____, page ____ in the Xxxxxxxx County Register's
Office.
4. Xxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of _____________, 2006, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Guggenheim Corporate Funding,
Inc., as Collateral Agent, Beneficiary, recorded at instrument
__________________ in the Xxxx County Register's Office; and
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, recorded at instrument #___________________ in the Xxxx County Register's
Office.
KENTUCKY:
1. Xxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of _____________, 2006, by National Coal Corporation, Mortgagor, to Guggenheim
Corporate Funding, Inc., as Collateral Agent, Mortgagee, of record in Mortgage
Book ____, page ____ in the Xxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Fixture Filing Book ___, page ____ in the Xxxx County
Clerk's Office; and
c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Fixture Filing Book ___, page ____ in the Xxxx
County Clerk's Office.
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2. Xxxxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of ________________, 2006, by National Coal Corporation, Mortgagor, to
Guggenheim Corporate Funding, Inc., as Collateral Agent, Mortgagee, of record in
Mortgage Book ___, page ____ in the Xxxxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Fixture Filing Book ___, page ___ in the Xxxxxx County
Clerk's Office; and
c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Fixture Filing Book ___, page ____ in the
Xxxxxx County Clerk's Office.
3. Xxxxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of ________________, 2006, by National Coal Corporation, Mortgagor, to
Guggenheim Corporate Funding, Inc., as Collateral Agent, Mortgagee, of record in
Mortgage Book ___, page ____ in the Xxxxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Guggenheim Corporate Funding,
Inc., Secured Party, of record in Fixture Filing Book ___, page ____ in the
Xxxxxx County Clerk's Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Guggenheim Corporate Funding, Inc., Secured
Party, of record in Fixture Filing Book ___, page ____ in the Xxxxxx County
Clerk's Office.
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EXHIBIT C
RECORDED SECOND LIEN COLLATERAL DOCUMENTS
TENNESSEE:
1. Xxxxxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Xxxxx Fargo Bank National
Association, as Collateral Agent, Beneficiary, of record in Book T467, page 247
in the Xxxxxxxx County Register's Office;
b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Book T467, page 294 in the Xxxxxxxx County Register's
Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Book T467, page 298 in the Xxxxxxxx County Register's Office.
2. Xxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Xxxxx Fargo Bank National
Association, as Collateral Agent, Beneficiary, of record in Trust Book 220, page
835 in the Xxxxx County Register's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Trust Book 220, page 882 in the Xxxxx County Register's Office; and
c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Trust Book 220, page 886 in the Xxxxx County Register's
Office.
3. Xxxxxxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Xxxxx Fargo Bank National
Association, as Collateral Agent, Beneficiary, of record in Book 1412, page 1137
in the Xxxxxxxx County Register's Office;
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b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Book 1412, page 1184 in the Xxxxxxxx County Register's
Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Book 1412, page 1187 in the Xxxxxxxx County Register's Office.
4. Xxxx County
a. Fee and Leasehold Deed of Trust, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Grantor, to Xxxxxxx X.
Xxxxxxx, Esq., as Trustee, for the benefit of Xxxxx Fargo Bank National
Association, as Collateral Agent, Beneficiary, recorded at instrument
#200512290056145 in the Xxxx County Register's Office; and
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, recorded
at instrument #200512290056146 in the Xxxx County Register's Office.
5. Tennessee Secretary of State
a. UCC-1 Financing Statement (covering personal property), by National
Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party,
recorded at instrument #106-200503 in the UCC records of the Tennessee Secretary
of State's Office.
KENTUCKY:
1. Xxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Mortgagor, to Xxxxx Fargo
Bank National Association, as Collateral Agent, Mortgagee, of record in Mortgage
Book 247, page 868 in the Xxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Fixture Filing Book 5, page 815 in the Xxxx County Clerk's Office; and
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c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Fixture Filing Book 5, page 820 in the Xxxx County Clerk's
Office.
2. Xxxxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Mortgagor, to Xxxxx Fargo
Bank National Association, as Collateral Agent, Mortgagee, of record in Mortgage
Book 108, page 465 in the Xxxxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Fixture Filing Book 8, page 227 in the Xxxxxx County Clerk's Office;
and
c. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Fixture Filing Book 8, page 221 in the Xxxxxx County Clerk's
Office.
3. Xxxxxx County
a. Fee and Leasehold Mortgage, Assignment of Leases and Subleases,
Security Agreement, Fixture Filing and As-Extracted Collateral Filing dated as
of December 29, 2005, by National Coal Corporation, Mortgagor, to Xxxxx Fargo
Bank National Association, as Collateral Agent, Mortgagee, of record in Mortgage
Book 339, page 536 in the Xxxxxx County Clerk's Office;
b. UCC-1 Financing Statement (covering as-extracted collateral), by
National Coal Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured
Party, of record in Fixture Filing Book 7, page 456 in the Xxxxxx County Clerk's
Office; and
c. UCC-1 Financing Statement (covering fixtures), by National Coal
Corporation, Debtor, in favor of Xxxxx Fargo Bank, N.A., Secured Party, of
record in Fixture Filing Book 7, page 462 in the Xxxxxx County Clerk's Office.
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