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Exhibit 4.2
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this "COLLATERAL
AGENCY AND INTERCREDITOR AGREEMENT") dated as of March 30, 2001, among KeyBank
National Association, in its capacity as lender under the Bank Loan Agreement
(as defined below; together with its successors and assigns, the "BANK"),
Connecticut General Life Insurance Company, Life Insurance Company of North
America, Massachusetts Mutual Life Insurance Company, The Travelers Insurance
Company, The Guardian Life Insurance Company of America and Lincoln Life and
Annuity Company of New York, in their capacities as the holders of the notes
issued under the Note Purchase Agreements (as defined below; collectively,
together with their respective successors and assigns, including future holders
of Notes under the Note Purchase Agreements, the "NOTEHOLDERS"), and the Bank in
its capacity as Collateral Agent hereunder (in such capacity, together with its
successors and assigns in such capacity, the "COLLATERAL AGENT").
RECITALS
A. The Noteholders have purchased $35,000,000 of the Senior Notes of The
Xxxxx-X'Xxxx Company, formerly known as The O'Gara Company (together with its
successors and assigns, the "COMPANY") pursuant to the Noteholder Documents (as
defined below). Certain Subsidiaries of the Company listed on ANNEX 1 hereto
(the "NOTEHOLDER GUARANTORS"), have jointly and severally guaranteed the
obligations of the Company under the Noteholder Documents.
B. The Bank has made up to an aggregate of $40,000,000 of credit
available to the Company and certain of its Affiliates, namely X'Xxxx-Xxxx &
Xxxxxxxxxx Armoring Company, Xxxxx Holdings, Inc. and Kroll Associates, Inc.
(collectively, the "CO-BORROWERS"; the Co-Borrowers, together with the Company,
the "BORROWER"), pursuant to the Bank Documents (as defined below; together with
the Noteholder Documents, the "CREDIT DOCUMENTS"). Certain Subsidiaries of the
Borrower listed on ANNEX 2 hereto (the "BANK GUARANTORS", and together with the
Noteholder Guarantors (including, without limitation, the Co-Borrowers), the
"SUBSIDIARY OBLIGORS"), have jointly and severally guaranteed the obligations of
the Borrower under the Bank Documents.
C. The Company and the Subsidiary Obligors have granted to the Collateral
Agent, for the benefit of the Secured Parties (as defined below), mortgage liens
on and/or security interests in certain of their assets pursuant to the Security
Documents (as defined below) to secure their obligations to the Secured Parties.
The parties desire to enter into this Collateral Agency and Intercreditor
Agreement to, among other things, appoint the Collateral Agent as collateral
agent hereunder, to set forth the rights and duties of the Collateral Agent
hereunder and
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under the Security Documents and to set forth the Secured Parties' respective
rights with respect to the Collateral (as defined below).
Therefore, in consideration of the mutual promises set forth herein and
intending to be legally bound hereby, the parties agree as follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the following meanings:
"ACCELERATION" means the acceleration of the maturity of any the
obligations of the Company under the Note Purchase Agreements or of the Borrower
under the Bank Loan Agreement.
"ACCELERATION NOTICE" means a notice by a Secured Party of acceleration
of the maturity of any Obligations owed to such Secured Party given by such
Secured Party to the Collateral Agent and to the other Secured Parties.
"ACTION NOTICE" has the meaning assigned to that term in Section 4.2 of
this Collateral Agency and Intercreditor Agreement.
"AFFILIATE" means any person, partnership, joint venture, company or
business entity under common control or having similar equity holders owning at
least ten percent (10%) thereof, whether such common control is direct or
indirect. All of a Person's direct or indirect parent corporations, partners,
subsidiaries, and the officers, shareholders, members, directors and partners of
any of the foregoing and persons related by blood or marriage to any of the
foregoing will be deemed to be a Person's Affiliates for purposes of this
Agreement.
"ALTERNATE LETTER OF CREDIT" means that letter of credit issued by the
Bank for the account of the Company and certain Subsidiaries in substitution of
the letter of credit issued by PNC Bank, Ohio, National Association in
connection with the Borrower's $2,300,000 Variable Rate Demand Economic
Development Revenue Bonds, Series 1986 (O'Xxxx Xxxx & Xxxxxxxxxx Armoring
Company Limited Partnership Project) in the amount of $1,356,250.
"BANK" has the meaning set forth in the first paragraph of this
Collateral Agency and Intercreditor Agreement.
"BANK DOCUMENTS" means the Bank Loan Agreement, the Notes issued
thereunder, the Guaranties of even date herewith executed by each of the
Consolidated Subsidiaries in favor of the Bank, and any additional guaranty
agreements that may subsequently be executed by any Consolidated Subsidiary to
secure the obligations of the Company set forth in the Bank Loan Agreement, as
any of the same may be amended or modified from time to time.
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"BANK GUARANTORS" means those subsidiaries of the Borrower listed on
ANNEX 2 hereto, and each other subsidiary of the Borrower that may become a
guarantor of the Bank Obligations in connection with the transactions
contemplated by the Bank Loan Agreement.
"BANK GUARANTY AGREEMENT" means the Guaranty dated as of March 30, 2001
by the Bank Guarantors in favor of the Bank.
"BANK LOAN AGREEMENT" means that certain Second Amended and Restated Loan
Agreement of even date herewith, between the Borrower and the Bank, as the same
may be amended or modified from time to time.
"BANK OBLIGATIONS" means at any time, (i) all Obligations under the Bank
Documents (other than Indebtedness constituting the Alternate Letter of Credit
or in respect of any capital leases of property) and (ii) Permitted Swap
Obligations at such time, but no other Swap Obligations.
"BANKRUPTCY DEFAULT" means any Event of Default that consists of
bankruptcy, reorganization or similar proceedings instituted by or against any
Consolidated Entity, the appointment of a receiver, liquidator, trustee,
sequestrator or similar official for any Consolidated Entity or for any
substantial part of their respective assets, an assignment for the benefit of
creditors by any Consolidated Entity, any insolvency of any Consolidated Entity
or any dissolution, winding up or liquidation of any Consolidated Entity.
"BANKRUPTCY PROCEEDING" means any bankruptcy, reorganization, insolvency,
receivership, dissolution or similar proceeding and any assignment for the
benefit of creditors.
"BENEFITED SECURED PARTY" has the meaning set forth in Section 4.9 of
this Collateral Agency and Intercreditor Agreement.
"BUSINESS DAY" means any day on which banks are open for business in
Columbus, Ohio, and New York, New York.
"COLLATERAL" means any property of any Person with respect to which the
Collateral Agent or any of the Secured Parties has been granted a Collateral
Lien.
"COLLATERAL LIEN" means any security interest in, mortgage lien on,
pledge of or other grant of any right in or to any property of any Person
granted in favor of the Collateral Agent or any of the Secured Parties as
security for any of the Obligations.
"CONSOLIDATED ENTITY" means any of the Company or the Consolidated
Subsidiaries.
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"CONSOLIDATED SUBSIDIARY" means any corporation, association or other
business entity (i) a majority (by number of votes) of the voting securities of
which and a majority (in respect of rights to participate in dividends and in
the distribution of assets upon voluntary or involuntary liquidation,
dissolution or winding-up) of the equity securities of which is at any time
owned, directly or indirectly, by the Company and (ii) whose accounts are fully
consolidated with the accounts of the Company in accordance with the Company's
policy of consolidation as in effect from time to time and in accordance with
generally accepted accounting principles consistently applied and as reflected
in the Company's then most recent consolidated financial report to its
stockholders, and the successors and assigns of each such entity.
"CREDIT DOCUMENTS" means the Bank Documents and the Noteholder Documents.
"DEFAULT NOTICE" means a notice of the occurrence of an Event of Default
given by a Secured Party to the Collateral Agent and to the other Secured
Parties.
"DISTRIBUTION AGENT" has the meaning set forth in Section 5.3(a) of this
Collateral Agency and Intercreditor Agreement.
"ENFORCEMENT ACTION" means any action that may be deemed necessary or
desirable to take from time to time in order to enforce any right or pursue any
right or remedy of the Collateral Agent under any Security Document upon the
occurrence and during the continuation of an Event of Default or to effect any
realization upon any Collateral.
"EVENT OF DEFAULT" means any "Event of Default" or event of default under
and as defined in any Credit Document.
"INDEBTEDNESS" means: in respect of any Person (i) all obligations of
such Person for borrowed money or for the deferred purchase price of property
(including capitalized lease obligations) or services; (ii) all guarantees,
reimbursement, payment or similar obligations, absolute, contingent or otherwise
by such Person of Indebtedness of other Persons or under bankers acceptances,
letters of credit or similar facilities, and (iii) if such Person is a
Consolidated Entity, all Swap Obligations by such Person.
"LENDERS" means the Bank and the Noteholders.
"MAJORITY SECURED PARTIES" means, on any given date of determination, (a)
holders (other than the Company or any of its Affiliates) of at least a majority
in principal amount of the Bank Obligations on such date, PLUS (b) holders
(other than the Company or any or its Affiliates) of at least a majority in
principal amount of the Noteholder Obligations outstanding on such date.
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"MORTGAGES" means mortgages or deeds of trust by any Person in favor of
the Collateral Agent or any of the Secured Parties to secure any of the
Obligations, as the same may be amended or modified from time to time.
"MORTGAGED PROPERTY" means the real estate and related interests upon
which a mortgage lien or similar lien is granted pursuant to the Mortgages.
"NOTEHOLDER DOCUMENTS" means the Note Purchase Agreements and the Notes
issued thereunder executed in favor of the Noteholders, guaranties executed by
the Consolidated Subsidiaries, and any additional guaranty agreements that are
executed by any Person in accordance with the terms of any Note Purchase
Agreement, as any of the same may be amended or modified from time to time.
"NOTEHOLDER GUARANTORS" means those subsidiaries of the Company listed on
ANNEX 1 hereto, and each other subsidiary of the Company that may become a
guarantor of the Noteholder Obligations in connection with the transactions
contemplated by the Note Purchase Agreements.
"NOTEHOLDER GUARANTY AGREEMENT" means the Guaranty Agreement dated as of
March 30, 2001 by the Subsidiary Obligors in favor of the Noteholders.
"NOTEHOLDER OBLIGATIONS" means all Obligations under the Noteholder
Documents.
"NOTEHOLDERS" has the meaning set forth in the first paragraph of this
Collateral Agency and Intercreditor Agreement.
"NOTE PURCHASE AGREEMENTS" shall mean the Note Purchase Agreements dated
as of May 30, 1997 for the issuance of $35,000,000 Senior Notes Due May 31,
2003, between the Company and Connecticut General Life Insurance Company, Life
Insurance Company of North America, Massachusetts Mutual Life Insurance Company,
The Travelers Insurance Company and The Guardian Life Insurance Company of
America, as amended by the Amended and Restated Note Purchase Agreements dated
as of March 30, 2001, as the same may be amended or modified from time to time.
"NOTES" means any of the promissory notes issued (i) by the Borrower to
the Bank under the Bank Loan Agreement or (ii) by the Company to any Noteholder
under any of the Note Purchase Agreements, in each instance as any of the same
may be amended or modified from time to time.
"OBLIGATIONS" means all Indebtedness (other than Indebtedness (a)
constituting the Alternate Letter of Credit, (b) in respect of any capital
leases of property or (c) constituting Swap Obligations which are not Permitted
Swap Obligations) of the Company and all Consolidated
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Subsidiaries, whether for principal, interest, fees, expenses or otherwise;
PROVIDED, that with respect to the amount of Obligations owed to any Secured
Party, if (i) such party shall have obtained a final, non-appealable judgment
against any of the Consolidated Entities in respect of the Obligations owed to
it, the amount of obligations owed to it shall be the amount of such judgment,
and (ii) if any Bankruptcy Proceeding shall have been initiated against any
Consolidated Entity, the amount of Obligations owed to it shall be the amount of
such party's allowed claim in such proceedings (after the application of the
election under 11 U.S.C. ss.1111(b), if any).
"PERMITTED SWAP OBLIGATIONS" means at any time, the lesser of (a) the
aggregate amount of Swap Obligations determined at such time and (b) $2,335,000.
"PERSON" means any individual, partnership, corporation, trust, joint
venture or unincorporated organization and any government or department or
agency thereof.
"PRESERVATION ACTION" means any action that may be deemed necessary or
desirable to take from time to time in order to preserve or protect the
Collateral or the Collateral Liens and that may be taken by the Collateral Agent
under any Security Document.
"PROCEEDS" has the meaning assigned to that term in Section 3.7 of this
Collateral Agency and Intercreditor Agreement.
"RECEIVING LENDER" has the meaning set forth in Section 5.2 of this
Collateral Agency and Intercreditor Agreement.
"RESERVE ACCOUNT" has the meaning set forth in Section 5.2 of this
Collateral Agency and Intercreditor Agreement.
"SECURED PARTIES" means the Lenders and, solely for the purpose of
Secured Party Meetings at which the Secured Parties request its attendance, the
Collateral Agent.
"SECURED PARTY MEETING" means any meeting of the Secured Parties held in
accordance with Section 9.1 hereof.
"SECURED PARTY ENFORCEMENT NOTICE" means a notice by a Secured Party of
proceedings to enforce Obligations owed to such Secured Party under the Credit
Documents, given to the Collateral Agent and to the other Secured Parties.
"SECURITY AGREEMENTS" means (i) that certain Security Agreement of even
date herewith executed by the Borrower in favor of the Collateral Agent; (ii)
that certain Trademark Collateral Assignment and Security Agreement of even date
herewith executed by the Borrower in favor of
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the Collateral Agent, and (iii) any document or instrument pursuant to which any
Person grants a Collateral Lien, in each instance as amended or modified from
time to time.
"SECURITY DOCUMENTS" means the Mortgages, the Security Agreements and any
other agreements, documents or instruments that grants or creates a Collateral
Lien, as any of the same may be amended or modified from time to time.
"SET-OFF" means any debiting or setting off against (i) any balances,
credits, deposits, accounts or monies of any Consolidated Entity or (ii) any
indebtedness owed to any Consolidated Entity.
"SHARED PAYMENT" has the meaning set forth in Section 5.2 of this
Collateral Agency and Intercreditor Agreement.
"SHARED PAYMENT NOTICE" means a written notification given by or on
behalf of any Lender stating that such Lender has received a Shared Payment.
"SHARING AGREEMENT" means that certain Sharing Agreement, dated as of May
30, 1997, among the Bank and the Noteholders.
"SUBSIDIARY OBLIGORS" means the Bank Guarantors listed on ANNEX 1 hereto
and the Noteholder Guarantors listed on ANNEX 2 hereto, and each other
Consolidated Entity (other than the Company) which should be liable in respect
of the Bank Obligations or the Noteholder Obligations.
"SWAP OBLIGATION" means, any obligation of the Company or any
Consolidated Subsidiary to the Bank under any interest rate swap, cap, collar
floor, option, forward, or other type of interest rate protection, foreign
exchange or derivative transaction, including any other master agreement
covering any such transaction, entered into between the Company or any
Consolidated Subsidiary and the Bank from time to time, as the same may be
amended from time to time. For the purposes of this Collateral Agency and
Intercreditor Agreement, the amount of the obligation under any Swap Obligation
at any time shall be the amount determined in respect thereof at such time,
based on the assumption that such Swap Obligation had terminated at such time,
and in making such determination, if any agreement relating to such Swap
Obligation provides for the netting of amounts payable by and to the Company or
such Consolidated Subsidiary thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to the Company or such Subsidiary,
then in each such case, the amount of such obligation shall be the net amount so
determined.
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"TRANSACTIONAL LETTERS OF CREDIT" means certain transactional letters of
credit issued by the Bank to the Company pursuant to the terms of the Bank Loan
Agreement, the maximum stated amount outstanding of which shall not at any time
exceed $6,000,000.
Unless the context shall otherwise indicate, words importing the singular
number shall include the plural number and vice versa.
2. THE COLLATERAL AGENT.
2.1. APPOINTMENT AND GRANT OF AUTHORITY.
Each Secured Party hereby designates and appoints the Bank to act as
Collateral Agent for such Secured Party under this Collateral Agency and
Intercreditor Agreement and the Security Documents and authorizes the Collateral
Agent, acting on behalf of and for the benefit of the Secured Parties, to
execute and enter into the Security Documents and all other documents or
instruments related to the Security Documents. The Collateral Agent shall have
and may exercise such powers under this Collateral Agency and Intercreditor
Agreement as are specifically delegated to it by the terms hereof, together with
such other powers as are incidental thereto.
2.2. FINANCING STATEMENTS.
By execution of this Collateral Agency and Intercreditor Agreement, each
Secured Party (i) authorizes the Collateral Agent to file and to record all
financing statements necessary or desirable to perfect or to continue the
perfection of the liens and security interests granted pursuant to the Security
Documents and (ii) ratifies the Collateral Agent's prefiling of financing
statements prior to the date hereof.
2.3. NONRELIANCE ON COLLATERAL AGENT.
Each Secured Party expressly acknowledges that neither the Collateral
Agent nor any of its officers, directors, employees, agents, attorneys or
affiliates has made any representation or warranty to such Secured Party,
including, without limitation, any warranties with respect to the validity,
enforceability, genuineness, perfection, value or collectibility of the Security
Documents, the Collateral Liens or the Collateral, and that no act of the
Collateral Agent hereafter taken, including any review of the affairs of the
Consolidated Entities, shall be deemed to constitute a representation or
warranty to any Secured Party. Each Secured Party represents and warrants that
it has, independently and without reliance on the Collateral Agent, and based on
such documents and information as it has deemed appropriate, made its own
investigation into and analysis of the business, operations, property and
financial and other condition and creditworthiness of the Consolidated Entities,
including without limitation, an analysis of the value and condition of the
Collateral and the risks associated with being the beneficiaries of the
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Collateral Liens, and has made its own decision to extend and/or to continue to
extend credit to the Borrower and to enter into this Collateral Agency and
Intercreditor Agreement. Each Secured Party represents that it will,
independently and without reliance upon the Collateral Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking, or in directing the
Collateral Agent to take or not take, action under this Collateral Agency and
Intercreditor Agreement and the Security Documents and that it will make such
investigations as it deems necessary to inform itself as to the business,
operations, property and financial and other condition and creditworthiness of
the Consolidated Entities. The Collateral Agent has not made any credit analysis
and is not required to do so in the future. The Collateral Agent shall not be
required to keep informed as to the performance or observance by any
Consolidated Entity of any Credit Document or any Security Document, to inspect
the properties or books of any Consolidated Entity or to monitor the Collateral,
its existence, value, location, condition or authenticity. Except as otherwise
provided in Section 3.2 hereof, the Collateral Agent shall have no duty or
responsibility to provide any Secured Party with any information regarding any
Consolidated Entity, the Security Documents or the Collateral, including any
information that comes into the possession of the Collateral Agent or any of its
officers, directors, employees, agents, attorneys or affiliates. The Collateral
Agent shall have no implied duties to any Person or any obligation to take any
action under this Collateral Agency and Intercreditor Agreement or any Security
Document except for action specifically provided for in this Collateral Agency
and Intercreditor Agreement or any other Security Document to be taken by the
Collateral Agent. Before taking any action under this Collateral Agency and
Intercreditor Agreement or any Security Document under direction of the Majority
Secured Parties, the Collateral Agent may request an appropriate specific
indemnity satisfactory to it from each Lender so directing the Collateral Agent
in addition to the general indemnity provided for in Section 2.7 and until such
Collateral Agent has received such specific indemnity, the Collateral Agent
shall not be obligated to take any such action under this Collateral Agency and
Intercreditor Agreement or any Security Document.
In furtherance of the foregoing, the Secured Parties agree that, even
though the Collateral Agent has certain discretionary rights under the Security
Documents, it shall have no obligation to exercise those rights, but rather the
Secured Parties shall have the obligation to determine and direct the Collateral
Agent as to the exercise of those rights as provided herein, including but not
limited to:
(a) determining what actions are necessary or desirable to
maintain, protect and perfect the Collateral and any liens and/or
security interests therein;
(b) determining the adequacy of insurance policies, the amounts of
coverage, whether insurance carriers are responsible and satisfactory and
similar matters;
(c) determining what actions should be taken in connection with
property damage and the handling of insurance proceeds, what actions
should be taken in
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connection with condemnation proceedings and the handling of condemnation
awards and related actions in connection with reconstruction and
restoration;
(d) addressing any matters relating to title to the Collateral or
the Mortgaged Property or the adequacy of title insurance or provisions
thereof; and
(e) determining, in connection with Enforcement Actions, whether a
sale price is commercially reasonable and similar ancillary or incidental
decisions related to an Enforcement Action.
2.4. LIMITATION OF LIABILITY.
As between the Secured Parties and itself, neither the Collateral Agent
nor any of its directors, officers, employees, agents, attorneys or affiliates
shall be (i) liable for any actions lawfully taken or omitted to be taken by it
or such Person under or in connection with this Collateral Agency and
Intercreditor Agreement or any Security Documents or any document or instrument
in connection therewith or for any clerical errors, inadvertence or oversight
(except for its own or such Person's personal liability for its own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Secured Parties for any recitals, statements, representations or warranties
made by the any of the Consolidated Entities or any officer or employee of any
of them contained in any Security Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Collateral Agent pursuant to the terms of, this Collateral Agency and
Intercreditor Agreement or any Security Document.; (iii) responsible to any of
the Secured Parties for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any of the Credit Documents or the Security
Documents or any other document or instrument executed or delivered therewith or
herewith or for any failure of any of the Consolidated Entities to perform its
obligations thereunder. Without limiting the foregoing, neither the Collateral
Agent nor any of its directors, officers, employees, agents, attorneys or
affiliates shall be responsible for, or have any duty to examine (a) the
validity, effectiveness, enforceability, perfection or priority of any
Collateral Lien purported to have been created by any Security Document, (b) the
truthfulness of any recitals or statements or representations or warranties made
to the Collateral Agent or the Secured Parties in connection with the Security
Documents or (c) any failure of any party hereto to receive any communication
given in the manner set forth in Section 5.3 hereof.
2.5. RELIANCE BY COLLATERAL AGENT.
The Collateral Agent shall be entitled to act, and shall be fully
protected in acting upon, any telegram, telex, teletype, bank wire, cable or
radiogram, or any writing, application, notice, report, statement, certificate,
resolution, request, order, consent, letter or other instrument or paper or
communication, believed by the Collateral Agent in good faith to be genuine and
correct and to have been signed or sent or made by or on behalf of an authorized
officer of a
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Consolidated Entity or a Secured Party, as applicable. The Collateral Agent may
consult counsel and shall be entitled to act, and shall be fully protected in
any action taken in good faith, in accordance with advice given by counsel. The
Collateral Agent shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, provisions or conditions of this
Collateral Agency and Intercreditor Agreement or any Security Document on the
part of any party hereto or thereto. The Collateral Agent shall be fully
justified in failing or refusing to take action under this Collateral Agency and
Intercreditor Agreement unless it has received instructions from the Majority
Secured Parties as contemplated by this Collateral Agency and Intercreditor
Agreement and has been indemnified to its reasonable satisfaction by the Secured
Parties against any or all expense or liability that it might incur by reason of
taking, continuing to take or refraining from taking any such action. The
Collateral Agent in all cases shall be fully protected in acting, or in
refraining from acting, under this Collateral Agency and Intercreditor Agreement
and the Security Documents in accordance with Section 4.2 hereof and any action
taken or not taken pursuant thereto shall be binding on all of the Secured
Parties.
2.6. NOTICES FROM SECURED PARTIES.
The Collateral Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default, any acceleration of the maturities of
any of the Obligations, any action brought by any Secured Party to enforce any
of the Obligations or any requested action hereunder until it has received or is
otherwise in possession of a Default Notice, an Acceleration Notice, a Secured
Party Enforcement Notice or an Action Notice, as applicable.
2.7. INDEMNIFICATION.
The Secured Parties agree to indemnify and hold harmless the Collateral
Agent and its directors, officers, employees, agents, attorneys and affiliates
(to the extent not indemnified by any Consolidated Entity and without limiting
the obligations of any Consolidated Entity to do so), ratably according to their
respective shares of the Obligations outstanding from time to time, from and
against any and all claims, damages, losses, liabilities, costs and expenses
(including without limitation reasonable attorneys, fees and court costs) in any
way relating to or arising out of the actions or omissions of such Person
required or permitted in connection with (a) this Collateral Agency and
Intercreditor Agreement or any Security Document, (b) any Collateral, (c) any
Preservation Action, Enforcement Action, emergency action under Section 3.4 or
other action taken by (or inaction of) the Collateral Agent hereunder or under
any Security Document or (d) the involvement by such Person in any suit,
investigation, proceeding in equity or action as a consequence, direct or
indirect, of the Collateral Agent being a party to, or taking or failing to take
any action required or permitted by, this Collateral Agency and Intercreditor
Agreement or any Security Document; provided, that the Secured Parties shall not
be required to indemnify any such Person for any such claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, that any
of the same are caused by such Person's gross negligence or willful misconduct.
The obligations of the Secured Parties under this Section 2.7 shall survive the
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resignation or removal of the Collateral Agent and shall survive any termination
of this Collateral Agency and Intercreditor Agreement or the Obligations or any
Security Document. If any suit, investigation, proceeding, inquiry or action
(each a "PROCEEDING") is initiated against any Person entitled to
indemnification hereunder (an "INDEMNITEE"), and such Indemnitee intends to seek
indemnification hereunder on account of its involvement in such Proceeding, then
such Indemnitee shall notify the Secured Parties of such Proceeding and the
Secured Parties shall have the right to defend against such Proceeding on behalf
of such Indemnitee, so long as the Secured Parties employ counsel reasonably
satisfactory to such Indemnitee and diligently pursue such defense, and so long
as such Indemnitee has not been advised by counsel that such Indemnitee may have
defenses available to it that are different from or in addition to those
available to the Secured Parties; provided, that the failure by such Indemnitee
to so notify the Secured Parties shall not relieve the Secured Parties from
their obligation to indemnify such Indemnitee hereunder. If the Secured Parties
elect to defend against any such Proceeding, (x) they shall not enter into any
agreement to settle such Proceeding without the prior consent of the Indemnitee,
(y) the Indemnitee may participate in such defense and (z) the Secured Parties
and the Indemnitee will cooperate with each other in the conduct of such
defense.
2.8. THE BANK IN OTHER CAPACITIES.
The Bank and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Consolidated Entities
notwithstanding that the Bank serves as the Collateral Agent hereunder. With
respect to loans made or renewed by it under the Bank Loan Agreement, the Bank
in its capacity as a Bank shall have the same rights and powers under this
Collateral Agency and Intercreditor Agreement as any Secured Party and may
exercise the same, notwithstanding that the Bank is Collateral Agent hereunder.
2.9. SUCCESSOR COLLATERAL AGENT.
The Collateral Agent may resign as Collateral Agent hereunder upon 30
days notice to the Secured Parties and the Borrower and may be removed at any
time, with or without cause, upon the unanimous consent of the Secured Parties
upon 30 days notice to the Secured Parties, the Borrower and the Collateral
Agent. If at any time the Collateral Agent shall resign or be removed as the
Collateral Agent under this Collateral Agency and Intercreditor Agreement, then
the Secured Parties shall unanimously approve and appoint a successor collateral
agent for the Secured Parties, whereupon such successor collateral agent shall
succeed to the rights, powers and duties of the Collateral Agent; provided, that
any successor agent so appointed (a) shall be a bank or trust company having a
combined capital and surplus of at least $250,000,000 and subject to supervision
or examination by a federal or state banking authority and (b) shall be
authorized under the laws of the jurisdiction of its incorporation or
organization to assume the functions of an agent (any successor collateral agent
meeting each of the foregoing requirements being a "SUCCESSOR COLLATERAL
Agent"). If the appointment of such successor shall not have become effective
(as hereafter provided) within such 30-day period after the Collateral Agent's
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resignation or upon removal of the Collateral Agent, then (x) the Collateral
Agent may assign the Security Documents, the Collateral Liens and its duties
hereunder and under the Security Documents to the Secured Parties, as their
interests may appear, and in such case all references herein to the "Collateral
Agent" shall be deemed to refer to the "Secured Parties" and (y) the Secured
Parties may petition a court of competent jurisdiction for the appointment of a
successor Collateral Agent and such court shall, after such notice as it may
deem proper, appoint a Successor Collateral Agent meeting the qualifications
specified in this Section 2.9. The Secured Parties hereby consent to such
petition and appointment so long as such criteria are met. The term "Collateral
Agent" shall mean the Successor Collateral Agent effective upon its appointment
and upon its acceptance of such appointment, and concurrently therewith the
former Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Collateral Agency and
Intercreditor Agreement or the Security Documents and the Successor Collateral
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent. The resigning or removed Collateral
Agent agrees that it shall take all actions and execute all documents that may
be reasonably required by the Secured Parties and the Successor Collateral Agent
to give effect to its replacement as the Collateral Agent hereunder. After the
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this Collateral Agency and Intercreditor Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it while was
Collateral Agent under this Collateral Agency and Intercreditor Agreement.
2.10. COLLATERAL AGENT'S COMPENSATION.
As compensation for its services hereunder, the Collateral Agent shall be
paid by the Borrower as follows: $10,000 upon the execution and delivery
of this Collateral Agency and Intercreditor Agreement and $2,500 per
calendar month so long as it is serving as Collateral Agent hereunder.
The timing and the amounts of such compensation may not in any manner,
directly or indirectly, be amended modified or changed without the
written approval of the Majority Secured Parties. To the extent that the
Borrower does not do so, and without limiting the obligations of any
Consolidated Entity to do so, each of the Secured Parties agrees to
reimburse the Collateral Agent for all reasonable fees, out of pocket
costs and expenses (including attorneys' fees and expenses) suffered or
incurred by the Collateral Agent in performing its duties hereunder or
under the Security Documents or in the exercise of any right or power
imposed or conferred upon the Collateral Agent hereby or thereby,
including, without limitation, the fees owed by the Borrower as
compensation for its services. All such fees, costs and expenses shall be
borne by the Secured Parties ratably in accordance with their respective
shares of the Obligations outstanding from time to time.
2.11. VALIDITY, ETC.
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The Collateral Agent makes no representation or warranty (express or
implied) and shall not be responsible to any Lender or any future holder of any
interest in the Obligations (i) for the legality, validity, enforceability or
effectiveness of this Agreement or any Credit Document, (ii) for any recitals,
reports, representations, warranties or statements contained in or made in
connection with this Agreement or any Credit Document, (iii) for the existence
or value of any assets included in any security for the Bank Obligations or
Noteholder Obligations, (iv) for the perfection or effectiveness of any security
interest, mortgage or other lien purported to be included in such security, (v)
for the specification or failure to specify any particular assets to be included
in such security, or (vi) for the filing of any lien or mortgage on any of the
Collateral.
2.12. COMPLIANCE.
Unless specifically directed by the Majority Secured Parties or all
Secured Parties as provided herein, the Collateral Agent shall not be obligated
to ascertain or inquire as to the performance or observance of any of the terms
of this Collateral Agency and Intercreditor Agreement or any Credit Document.
3. POWERS AND DUTIES OF COLLATERAL AGENT.
3.1. DUTIES; DELEGATION.
The only duties and obligations of the Collateral Agent are those set
forth in this Collateral Agency and Intercreditor Agreement and in the Security
Documents. In the event of a conflict between this Collateral Agency and
Intercreditor Agreement and any provision of a Security Document, this
Collateral Agency and Intercreditor Agreement shall control. The Collateral
Agent may exercise its powers and perform any of its duties under this
Collateral Agency and Intercreditor Agreement and the Security Documents by or
through employees, agents or attorneys and shall be entitled to take and to rely
on an opinion of counsel or advice of counsel concerning all matters pertaining
to such powers and duties. The Collateral Agent shall not be responsible for the
negligence or misconduct of any of any agents or attorneys selected by it with
reasonable care. The Collateral Agent may use the services of such Persons as
the Collateral Agent in its sole discretion may determine, and all reasonable
fees and expenses of such persons shall be borne by the Borrower.
3.2. NOTICES TO THE CONSOLIDATED ENTITIES AND SECURED PARTIES.
Promptly upon its receipt of any notice or other communication from any
Consolidated Entity regarding any Security Document or the Collateral, the
Collateral Agent shall forward copies of the same to each Secured Party.
3.3. ACTIONS BY COLLATERAL AGENT.
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No Lender may enforce any security interest, mortgage lien or lien
against any Collateral, except by and through the Collateral Agent. All
Preservation Actions, Enforcement Actions and other actions under any Security
Document or with respect to any Collateral shall be taken only by the Collateral
Agent. Except as otherwise provided in Section 3.4 hereof, the Collateral Agent
shall not take any Preservation Action or Enforcement Action or other action
under any Security Document or with respect to any Collateral without first
receiving an Action Notice directing it to take such action; provided, however,
that the Collateral Agent may (but in the absence of an Action Notice has no
obligation to) execute, obtain the signature of one or more of the Consolidated
Entities on, and/or file any continuation statements, financing statements,
amendments to financing statements or amendments or supplements to Mortgages
that in the Collateral Agent's judgment are necessary or desirable to continue
or maintain the Collateral Liens. In furtherance of the foregoing, the
Collateral Agent agrees to make such demands and give such notices under the
Security Documents as may be requested by, and to take such action to enforce
the Security Documents and to foreclose upon, collect and dispose of the
Collateral or any portion thereof, as it may be directed to take pursuant to,
any Action Notice; provided, that the Collateral Agent shall not be required to
take any such action (a) that is, in its opinion, contrary to law or the terms
of this Collateral Agency and Intercreditor Agreement, any Credit Document or
any Security Document or (b) for which, in its opinion, it would not be
indemnified pursuant to Section 2.7 hereof unless each of the Secured Parties
shall provide the Collateral Agent with indemnification satisfactory to the
Collateral Agent.
3.4. EMERGENCY ACTIONS.
Notwithstanding Section 3.3 hereof, if the Collateral Agent shall
reasonably determine (even though it has no obligation to monitor or investigate
the same) that all or any substantial part of its rights or remedies under any
Security Document, the Collateral or the Collateral Liens will be lost or
materially impaired by the delay that would result in obtaining an Action
Notice, then the Collateral Agent may (but shall have no obligation to) take
such Preservation Actions or Enforcement Actions or other actions under any
Security Document or with respect to any Collateral as it reasonably determines
to be necessary in order to prevent such loss or impairment without first
receiving an Action Notice. Within one (1) Business Day after taking any such
action described in this Section 3.4, the Collateral Agent shall give a notice
to each of the other Secured Parties, which notice shall contain a description
of such action and state the reason for taking such action without first
receiving an Action Notice.
3.5. REQUESTS FOR INSTRUCTIONS.
The Collateral Agent may at any time request directions from the Secured
Parties as to any course of action to be taken, or any other matter relating to
the performance of its duties, under this Collateral Agency and Intercreditor
Agreement or any Security Document, and the Secured Parties shall respond
promptly to any such
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request. The Secured Parties shall give such directions pursuant to an Action
Notice, and the directions shall be binding on each of the Secured Parties.
3.6. DISPOSITIONS OF COLLATERAL.
Unless otherwise directed pursuant to an Action Notice, if the Collateral
Agent has been directed to foreclose upon or dispose of the Collateral or any
portion thereof pursuant to an Action Notice, the Collateral Agent shall use its
reasonable best efforts to sell such Collateral. If the Collateral Agent is
unable to sell any such Collateral within a reasonable time, it may dispose of
such Collateral in such manner as it deems appropriate, unless directed to do
otherwise pursuant to an Action Notice. The Collateral Agent will use reasonable
efforts to provide the Lenders with reasonable notice of its sale, lease, or
other disposition of Collateral; PROVIDED, HOWEVER, that the failure of a
Collateral Agent to give such notice shall not in any way negate or in any way
adversely affect or impair the sale, lease, or other disposition of such
Collateral.
3.7. APPLICATION OF PROCEEDS.
(a) Any cash held by the Collateral Agent as Collateral and all
cash received by the Collateral Agent upon the sale, exchange, collection
or other disposition of all or any part of the Collateral or any proceeds
therefrom (all such cash being referred to collectively as "PROCEEDS")
shall be applied as follows:
(1) first, to the payment or reimbursement of any expenses
and fees of, or any other amount payable to, the Collateral Agent
hereunder or under any Security Document, whether such amount is
payable to indemnify the Collateral Agent, to reimburse the
Collateral Agent, to pay the fees of the Collateral Agent, is for
reimbursement of expenses incurred in connection with the
maintenance, protection, enforcement, sale or realization of any
of the Collateral Liens or Collateral or otherwise;
(2) second, to the Secured Parties to the extent of the
amount of the outstanding principal balance and accrued interest
(and not any make whole or other premium or penalty) constituting
a part of the Obligations on the date of such distribution,
ratably according to the aggregate amounts of each Secured Party's
outstanding principal balance plus accrued interest on such date;
PROVIDED HOWEVER, that to the extent that any amounts available
for distribution pursuant to this Section 3.7(a)(2) are
attributable to the Bank Obligations that relate to undrawn
amounts under the Transactional Letters of Credit or contingent
unliquidated Permitted Swap Obligations, such amounts shall be
held in a reserve or other account unavailable to the Borrower or
any Subsidiary Obligor (the "RESERVE ACCOUNT") to be established
by the Collateral Agent. Amounts in the Reserve Account shall be
used from time to time to pay the applicable Bank Obligations in
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respect of the Transactional Letters of Credit or Permitted Swap
Obligations as they become due. Any amounts remaining in the
Reserve Account following the expiration or satisfaction in full
of the Bank Obligations for which such sums were held in reserve
shall be applied against any Obligations remaining unpaid in
accordance with this Section 3.7.
(3) third, to the Secured Parties on account of any other
obligations due to any Secured Party on the date when such
distribution is made, whether on account of fees, expenses or
otherwise, ratably according to the aggregate amounts thereof owed
to each Secured Party on the date of such distribution; and
(4) fourth, to the Borrower or to one or more of the
Consolidated Subsidiaries, as the case may be, unless otherwise
directed by a court.
In determining the amount of Obligations owed to each Secured Party and
the portions thereof that are due on account of principal, interest, fees,
expenses or otherwise, the Collateral Agent may request from each Secured Party,
and shall be entitled to rely upon, a statement from each Secured Party setting
forth the Obligations owed to it in such detail as shall permit the Collateral
Agent to make the foregoing distributions. In the event of any dispute between
any Secured Parties as to the Obligations owed to them or the amounts thereof,
the Collateral Agent may hold the portion of the Proceeds subject to the dispute
pending the resolution of the dispute by the parties or by a judicial
determination.
(b) If any amounts received by the Collateral Agent and
distributed to one or more of the Secured Parties pursuant to Section
3.7(a) subsequently are required to be repaid by one or more, but less
than all, of the Secured Parties which received such distribution to a
trustee, receiver or any other party under any bankruptcy law, state or
Federal law, common law or in equity, then each other Secured Party which
received a distribution but was not required to repay the same shall,
upon receipt of written notice from any Secured Party which was required
to repay such amount, pay to such Secured Party (or Parties) a share of
the distribution received by it and necessary to result in the aggregate
amount not repaid being distributed in the manner contemplated by Section
3.7(a).
3.8. RETENTION AND INVESTMENT OF PROCEEDS.
(a) Upon their receipt by the Collateral Agent and pending
disbursement pursuant to Section 3.7 hereof, all Proceeds shall be
deposited and held in a restricted account maintained by and under the
sole dominion and control of the Collateral Agent, for the benefit of the
Secured Parties, for the purpose of receiving and holding Proceeds.
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(b) Notwithstanding subparagraph (a) above, and except for
Proceeds which, in the aggregate total $10,000 or less, the Collateral
Agent shall, invest all Proceeds held by it in one or more of the
following (each a "PERMITTED INVESTMENT"):
(i) marketable direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by
any-agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of
America), in each case maturing not later than the earlier
of the anticipated distribution date of such amounts and
the date 180 days after the date of acquisition thereof;
(ii) investments in commercial paper maturing not later
than the earlier of the anticipated distribution date of
such amounts and the date 180 days after the date of
acquisition thereof and having, at such date of
acquisition, a rating of "A-1" or better from Standard &
Poor's Corporation or a rating of "P-1" or better from
Xxxxx'x Investors Service, Inc.;
(iii) investments in certificates of deposit, banker's
acceptances and time deposits maturing not later than the
earlier of the anticipated distribution date of such
amounts and the date 180 days after the date of acquisition
thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any office of
any commercial bank which has a combined capital and
surplus and undivided profits of not less than
$1,000,000,000 and which has a long-term bank deposit
rating of "A" or better from Standard Poor's Corporation or
"A-2" or better from Xxxxx'x Investors Service, Inc. or an
equivalent rating by any nationally-recognized rating
service; and
(iv) investments in repurchase agreements with any
commercial bank referred to in (iii) above, with respect to
obligations of the type referred to in (i) above.
The Collateral Agent shall be permitted to invest in Permitted
Investments issued by the Bank.
4. NOTICES; COOPERATION; COLLATERAL.
4.1. GIVING OF NOTICES.
This Collateral Agency and Intercreditor Agreement shall not limit or
impair the right of any Secured Party under any Credit Document to which it is a
party to take any action permitted
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thereunder. Each Secured Party may proceed to accelerate the maturity of the
Notes held by it; PROVIDED, HOWEVER, if a Secured Party accelerates the maturity
of any of the Notes held by it, such Secured Party shall give an Acceleration
Notice on the date of such acceleration to the other Secured Parties and to the
Collateral Agent.
4.2. ACTION NOTICES.
Whenever the Secured Parties desire to direct the Collateral Agent to
take any Preservation Action, Enforcement Action or other action under this
Collateral Agency and Intercreditor Agreement or any Security Document or with
respect to any Collateral or Collateral Lien, they shall give a notice (an
"ACTION NOTICE") to the Collateral Agent specifying such action and the manner
in which such action is to be taken. Each Action Notice shall state that it is
being given by the Majority Secured Parties or all of the Secured Parties, as
applicable, and the Collateral Agent shall be entitled to rely on such statement
without investigation or inquiry, unless the Collateral Agent has actual
knowledge that the statement is false. Action Notices may be given:
(a) upon the prior approval of all of the Secured Parties, if the
requested action (i) is the amendment of any provision of any Security
Document that directly or indirectly narrows the description of the
Collateral, modifies in any way the description of the Obligations
secured by such Security Document, (ii) changes the order of payments to
the Secured Parties or (iii) is the release of any Collateral Lien on any
Collateral; PROVIDED, HOWEVER, that the requirements of this Section
4.2(a)(iii) will not apply to, and no Action Notice will be required for,
release of any Collateral Lien on any Collateral so long as (A) the fair
market value of the Collateral which is the subject of such Collateral
Lien so released, together with the fair market value of all other
Collateral which was the subject of any such Collateral Lien so released
pursuant to this Section 4.2(a)(iii), does not exceed $10,000,000 and (B)
the proceeds received by the Company or any Consolidated Subsidiary in
connection with such release is paid to the Secured Parties in the manner
contemplated by Section 8(a) and Section 8(d); PROVIDED, HOWEVER, that
any amendment made to any of the Security Documents that changes the
responsibilities of the Collateral Agent shall require the prior approval
of the Collateral Agent; and
(b) upon the prior approval of the Majority Secured Parties, if
the requested action is (i) a Preservation Action, (ii) an Enforcement
Action, or (iii) any consent, waiver or other action under any Security
Document or with respect to any Collateral that pursuant to this
Collateral Agency and Intercreditor Agreement does not specifically
require the approval of all of the Secured Parties or which pursuant to
this Collateral Agency and Intercreditor Agreement may be taken with the
approval of the Majority Secured Parties.
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4.3. COOPERATION AMONG SECURED PARTIES.
The Secured Parties shall cooperate in good faith in an attempt to agree
upon a mutually satisfactory course of action to be taken (a) by the Secured
Parties with respect to any Event of Default, including without limitation the
taking or commencing of any actions to enforce their respective rights and
remedies under the Credit Documents, and (b) by the Collateral Agent whenever
such action is necessary or desirable in order to preserve or protect the
Collateral or the Collateral Liens, to enforce any right or pursue any remedy of
the Collateral Agent under any Security Document, to effect any realization upon
any of the Collateral or to put into effect any provision hereof. In connection
with the foregoing, the Secured Parties shall (x) hold such Secured Party
Meetings and such meetings with the Consolidated Entities as any of them shall
deem to be necessary or desirable and (y) share with each other all notices
received from the Consolidated Entities with respect to the Security Documents
or Collateral Liens.
4.4. COOPERATION WITH COLLATERAL AGENT; ACCOUNTINGS.
To the extent that the exercise of the rights, powers and remedies of the
Collateral Agent in accordance with this Collateral Agency and Intercreditor
Agreement requires that any action be taken by any Secured Party, such Secured
Party shall take such action and cooperate with the Collateral Agent to ensure
that the rights, powers and remedies of all Secured Parties are exercised in
full. Each of the Secured Parties, upon the reasonable request of the Collateral
Agent, from time to time will execute and deliver or cause to be executed and
delivered such further instruments and do and cause to be done such further acts
as may be necessary or proper to carry out more effectively the provisions of
this Collateral Agency and Intercreditor Agreement. Each Secured Party agrees,
upon the request of the Collateral Agent or any reasonable request of a Secured
Party, promptly to deliver to the Collateral Agent and each other Secured Party
an accounting of the Obligations owed to it, after giving effect, as
appropriate, to the application of any Proceeds.
4.5. MARSHALLING.
The Collateral Agent shall not be required to marshal any present or
future security (including the Collateral) for, or guaranties of, the
Obligations or any of them or to resort to such security or guaranties in any
particular order, and all rights in respect of such security and guaranties
shall be cumulative and in addition to any other rights, however existing or
arising. To the extent that they lawfully may, the Secured Parties agree that
they will not invoke, and irrevocably waive the benefit of, any law relating to
the marshalling of collateral that might cause delay or impede the enforcement
of the Collateral Agent's or Secured Parties' rights under any Security Document
or pursuant to any other document under which the Obligations are secured or
guaranteed.
4.6. PURCHASE/SALE OF COLLATERAL.
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Any Secured Party may purchase all or any part of the Collateral at any
public or private sale of such Collateral and may make payment on account
thereof by using any Obligations then due and payable to such Secured Party from
the Persons which granted a security interest in such Collateral as a credit
against the purchase price to the extent, but only to the extent, approved by
the Majority Secured Parties. Each of the Secured Parties shall cooperate with
each other Secured Party and the Collateral Agent in order to obtain the maximum
sale price reasonably possible upon any foreclosure or other sale of all or any
part of the Collateral. Notwithstanding the foregoing, all sales, transfers and
other dispositions of any Collateral shall be accomplished in a commercially
reasonable manner.
4.7. ASSIGNMENT OF RIGHTS TO AND DELIVERY OF COLLATERAL.
The Secured Parties agree that all of the provisions of this Collateral
Agency and Intercreditor Agreement apply to any and all properties, assets and
rights in which the Collateral Agent or any of the Secured Parties at any time
acquires a security interest or lien, pursuant to the Credit Documents, the
Security Documents or otherwise, to secure the Obligations. If any Secured Party
at any time shall obtain any rights to any property of any Person as collateral
for any Obligations owed to such Secured Party, it shall promptly notify the
Collateral Agent and the other Secured Parties of such event and shall execute
and deliver to the Collateral Agent all such documents and instruments as are
necessary or desirable, in the reasonable judgment of the Collateral Agent, to
assign all of such rights to the Collateral Agent, for the benefit of all
Secured Parties, whereupon such rights and assets shall become Collateral
hereunder. If any Collateral or Proceeds at any time shall come into the
possession of any Secured Party, such Secured Party shall promptly deliver such
Collateral or Proceeds to the Collateral Agent. If any Secured Party does not
comply with this Section 4.7 then any other Secured Party shall have the right
to enforce the provisions thereof.
4.8. PRIORITY OF RIGHTS.
Irrespective of the time, order or method of any attachment, perfection,
filing or recording of any Lien in any Collateral granted or to be granted to
the Collateral Agent or any of the Secured Parties for any of the Obligations,
and whether the Collateral Agent or any Secured Party has possession of all or
any part of the Collateral, (i) all security interests of each of the Secured
Parties in the Collateral (whensoever arising and howsoever documented), and all
other rights of the Secured Parties in and to the Collateral shall be of equal
priority, and (ii) the proceeds of any liquidation, sale, enforcement or other
distribution or realization upon any Collateral in respect of the Obligations
following any marshaling of the assets of any Consolidated Entity or following
confirmation of any plan or arrangement or plan of reorganization of any
Consolidated Entity, shall be distributed among the Secured Parties in the
manner set forth in Section 3.7 hereof.
4.9. CERTAIN ADJUSTMENTS WITH RESPECT TO SET-OFF.
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Except to the extent specifically provided for in Sections 5.1 through
5.5 below, if any Secured Party shall at any time exercise any right of set-off,
banker's lien or similar right with respect to any Obligation, and such Secured
Party (a "BENEFITED SECURED PARTY") shall obtain payment of any Obligation held
by it through the exercise of any such right or pursuant to a secured claim in
lieu of a set-off to which this Section 4.9 applies and, as a result of such
payment, such Benefited Secured Party shall have received a greater percentage
of the Obligations then due by the Consolidated Entities to such Benefited
Secured Party than the percentage of the Obligations then due and received by
any other Secured Parties to whom due, it shall promptly purchase from such
other Secured Parties participations in (or, if and to the extent specified by
held by such Secured Party, direct interests in) the Obligations held by such
other Secured Parties in such amounts, and make other such adjustments from time
to time as shall be equitable, to the end that all the Secured Parties shall
share the benefit of such excess payment (net of any expenses that may be
incurred by such Benefited Secured Party in obtaining or preserving such excess
payment) in accordance with the priority for payment of the Obligations set
forth in Section 3.7 hereof. To such end all the Secured Parties shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or otherwise is restored.
5. RESTATED SHARING PROVISIONS.
5.1. ACCELERATION; RECEIPT OF SHARED PAYMENT.
Each Noteholder shall give an Acceleration Notice or a Shared Payment
Notice, as applicable, to each other Noteholder and the Bank immediately upon
any Acceleration of any of the Noteholder Obligations owed to such Noteholder or
the receipt by such Noteholder of a Shared Payment. The Bank shall give an
Acceleration Notice or a Shared Payment Notice, as applicable, to each
Noteholder immediately upon any Acceleration of any of the Bank Obligations or
the receipt by the Bank of a Shared Payment.
5.2. SHARING OF PAYMENTS.
Each Lender (a "RECEIVING LENDER") agrees that any payment of any kind
(including, without limitation, any payment resulting from a set-off of a
deposit account or any payment or distribution made in the context of any
Bankruptcy Proceeding) received by it on account of the Obligations (such
payment, a "SHARED PAYMENT") from or on behalf of any Subsidiary Obligor, is to
be distributed among the Lenders equally and ratably in accordance with the
respective amounts of the Bank Obligations and Noteholder Obligations then held
by each of them, without discrimination or preference, with any balance
remaining after such distribution among the Lenders to be distributed to
whomever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct. Notwithstanding the foregoing, to the extent
that any amounts available for distribution pursuant to this Section 5.2 are
attributable to the Bank Obligations that relate to undrawn amounts under the
Transactional Letters of Credit or contingent
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unliquidated Permitted Swap Obligations, such amounts shall be held in a reserve
or other account unavailable to the Company or any Subsidiary Obligor (the
"RESERVE ACCOUNT") to be established by the Distribution Agent. Amounts in the
Reserve Account shall be used from time to time to pay the applicable Bank
Obligations in respect of the Transactional Letters of Credit or contingent
unliquidated Permitted Swap Obligations as they become due. Any amounts
remaining in the Reserve Account following the expiration or satisfaction in
full of the Bank Obligations for which such sums were held in reserve shall be
applied against any Obligations remaining unpaid in accordance with this Section
5.2.
5.3. DISTRIBUTION AGENT.
(a) APPOINTMENT. Each Lender hereby appoints the Collateral Agent
as agent (the "DISTRIBUTION AGENT") to distribute Shared Payments to the
Lenders.
(b) ACCEPTANCE OF APPOINTMENT. The Collateral Agent hereby accepts
such appointment.
(c) REMITTANCE AND DISTRIBUTION. Each Receiving Lender shall remit
any Shared Payment received by it to the Distribution Agent for
distribution in accordance with Section 5.2 hereof. Upon receipt of any
Shared Payment, the Distribution Agent shall calculate the amount of such
Shared Payment distributable to each Lender pursuant to Section 5.2
hereof as of the date the Receiving Lender received such Shared Payment
and remit such amount to each Lender, accompanied by computations in
reasonable detail showing the manner of calculation of the amounts
distributable to each Lender pursuant to Section 5.2 hereof.
5.4. INVALIDATED PAYMENTS.
If any amount distributed by the Distribution Agent to the Lenders in
accordance with the provisions of this Collateral Agency and Intercreditor
Agreement is subsequently required to be returned or repaid to any of the
Subsidiary Obligors or their representatives or successors in interest, whether
by court order, settlement or otherwise, each Lender shall, promptly upon its
receipt of notice thereof from the Distribution Agent, pay to the Distribution
Agent the pro rata portion received by it of such amount for payment to the
appropriate Subsidiary Obligors or their representatives or successors in
interest. If any such amounts are subsequently recovered by any Lender from any
of the Subsidiary Obligors or their representatives or successors in interest,
such Lender shall remit such amounts to the Distribution Agent and the
Distribution Agent shall redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed. The obligations of the
Lenders and the Distribution Agent under this Section 5.4 shall survive the
repayment of the Noteholder Obligations and the Bank Obligations and termination
of the Credit Documents.
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5.5. RECEIVING LENDER TO BE SUBROGATED TO RIGHTS OF OTHER LENDERS.
Any Receiving Lender that has remitted any portion of a Shared Payment
received by it to the Distribution Agent as provided in Section 5.3(c) shall, to
the extent of such remittance distributable to the other Lenders, be subrogated
to the rights of each of such other Lenders to receive payments from the
Subsidiary Obligors applicable to the Noteholder Obligations and the Bank
Obligations owed to such other Lenders, until all Noteholder Obligations and the
Bank Obligations owed to such Receiving Lender shall be paid in full, and for
purposes of such subrogation, no such payment received by such other Lenders
shall, as between the Subsidiary Obligors or any of them, their respective
creditors other than the holders of any Noteholder Obligations or Bank
Obligations, and the holders of any Noteholder Obligations or Bank Obligations,
be deemed to be a payment by any of the Subsidiary Obligors to such other
Lenders or on account of their Noteholder Obligations and the Bank Obligations,
it being understood that the provisions of this Section 5.5 are, and are
intended, solely for the purpose of defining the relative rights of the holders
of the Noteholder Obligations and the Bank Obligations.
6. DISTRIBUTION AGENT
6.1. DISTRIBUTIONS AND CONSENTS.
In making the distributions to the Lenders provided for in Section 5
hereof, the Distribution Agent may rely upon information available to it or
supplied by each Lender to it with respect to the amount of Noteholder
Obligations or Bank Obligations owing to each Lender, and the Distribution Agent
shall have no liability to any Lender for actions taken in reliance on such
information in the absence of its gross negligence or willful misconduct. Each
of the Lenders hereby agrees, on two (2) Business Days' telephonic, telegraphic,
telexed or similar notice from the Distribution Agent, to confirm to the
Distribution Agent in writing, including by telecopy of a signed confirmation or
by telex, the outstanding balance of the Noteholder Obligations or Bank
Obligations, if any (and, if requested by the Distribution Agent, itemized as to
principal, interest, fees, premiums and other amounts, if any), owing to such
Lender as of the date or dates specified in such notice.
6.2. APPOINTMENT, POWERS OF DISTRIBUTION AGENT.
Each of the Lenders and the other holders of any Noteholder Obligations
or Bank Obligations, by its acceptance thereof, hereby appoints and authorizes
the Distribution Agent to act as its agent hereunder with such powers as are
specifically delegated to the Distribution Agent by the terms of this Collateral
Agency and Intercreditor Agreement, together with such powers as are reasonably
incidental thereto. The Distribution Agent shall not have a fiduciary
relationship in respect of any Lender by reason of this Collateral Agency and
Intercreditor Agreement.
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6.3. LIABILITY.
The Distribution Agent shall have no duties to the Lenders under this
Collateral Agency and Intercreditor Agreement except those expressly set forth
herein. Neither the Distribution Agent nor any of its officers, directors,
employees or agents shall be liable to any Lender for any action taken or
omitted by it or them hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct.
6.4. RESIGNATION OR REMOVAL OF DISTRIBUTION AGENT.
The Distribution Agent may resign and be discharged of its duties
hereunder by giving written notice thereof to all holders of the Noteholder
Obligations and Bank Obligations then outstanding. Such resignation shall take
effect at such time as a successor distribution agent shall have been appointed.
The Distribution Agent may be removed at any time with or without cause by the
Majority Secured Parties. Upon any such resignation or removal, the Majority
Secured Parties shall have the right to appoint a successor distribution agent.
Upon the acceptance of any appointment as distribution agent hereunder by a
successor distribution agent, such successor distribution agent shall thereupon
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Distribution Agent. After any retiring Distribution
Agent's resignation or removal hereunder as Distribution Agent, the provisions
of this Section 6.4 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Distribution Agent.
6.5. EMPLOYMENT OF AGENTS AND COUNSEL.
The Distribution Agent may execute any of its duties as Distribution
Agent hereunder by or through employees, agents and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Distribution Agent
shall be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder.
6.6. RELIANCE ON DOCUMENTS; COUNSEL
The Distribution Agent shall be entitled to rely upon any notice,
consent, certificate, affidavit, letter, telegram, statement, paper or document
believed by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons, and, with respect to legal matters, upon the opinion
of counsel selected by the Distribution Agent, which counsel may be employees of
the Distribution Agent.
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6.7. DISTRIBUTION AGENT'S REIMBURSEMENT AND INDEMNIFICATION.
The Consolidated Entities shall, jointly and severally, reimburse and
indemnify the Distribution Agent as more specifically provided in its
Acknowledgement and Agreement hereto.
7. RIGHTS AS LENDER.
In the event the Distribution Agent, in its individual capacity, is a
Lender, the Distribution Agent shall have the same rights and powers hereunder
in such capacity as any Lender and may exercise the same as though it were not
the Distribution Agent, and the term "Lender" or "Lenders" shall, at any time
when the Distribution Agent is a Lender, unless the context otherwise indicates,
include the Distribution Agent in its individual capacity. The Distribution
Agent in its individual capacity may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Collateral Agency and Intercreditor
Agreement, with any of the Consolidated Entities (including, without limitation,
the Subsidiary Obligors) in which any of the Consolidated Entities is permitted
to participate with any other Person. The Distribution Agent, in its individual
capacity, is not obligated to be a Lender.
8. ACKNOWLEDGEMENT OF EXISTING RIGHTS UNDER THE CREDIT DOCUMENTS.
The Secured Parties hereto acknowledge and agree:
(a) that Section 3.1.1 of the Bank Loan Agreement provides that
(i) beginning on each Reduction Date (as defined in the Bank Loan
Agreement) and on the additional dates set forth therein, the amount of
the Total Facility (as defined in the Bank Loan Agreement), and the
amount permitted to be borrowed thereunder, will be reduced by certain
amounts as follows:
Reduction Date Required Reduction
-------------- ------------------
June 30, 2001 $1,135,800
September 30, 2001 $1,135,800
December 31, 2001 $1,703,700
March 31, 2002 $1,703,700
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and;
(ii) to the extent the aggregate amount outstanding under
the Revolving Credit Loan (as defined in the Bank Loan Agreement)
is in excess of the amount of the Total Facility on any Reduction
Date (after giving effect to such reduction), the Borrower will
make a principal payment to the Bank in the amount of such excess
as provided in Section 3.1.1 of the Bank Loan Agreement;
(b) that Section 7.13 of the Bank Loan Agreement provides that,
for any Sale (as such term is defined in the Bank Loan Agreement) of
assets which exceeds the amount of $1,000,000 per transaction or
$2,000,000 in the aggregate per fiscal year and to which the Bank
consents, within five (5) business days of any such Sale, the Borrower
shall make a mandatory prepayment of principal from the net proceeds of
such Sale (or the Fair Market Value (as such term is defined in the Bank
Loan Agreement) of the property subject to such Sale) to the Secured
Parties in the manner contemplated by Section 8(d) below and the Total
Facility (as defined above) will be reduced by the amount of the payment
made to the Bank;
(c) that Section 6.1 of the Note Purchase Agreements provides that
(i) the Company will prepay, and there shall become due and
payable on each of the dates set forth below an aggregate
principal amount of Notes next to such date on such table. Such
prepayment will be made together with interest on the principal
amount so prepaid accrued to the date of prepayment:
Date Amount
---- ------
June 30, 2001 $864,200
September 30, 2001 $864,200
December 31, 2001 $1,296,300
March 31, 2002 $1,296,300
and;
(ii) to the extent at any time after the Restatement Date
(as defined in the Note Purchase Agreements) there shall occur a
Bank Reduction Date (as defined in the Note Purchase Agreement)
(other than a Bank Reduction Date which shall have occurred by
operation of Section 3.1.1 of the Bank Loan Agreement (as in
effect on said Restatement Date)), the Company will prepay,
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and there shall be due and payable, on such Bank Reduction Date a
principal amount of Notes equal to the Pro Rata Amount (as defined
in the Note Purchase Agreements) in respect of such Bank Reduction
Date;
(d) that Section 8.20 of the Note Purchase Agreements provides
that, except for sales of inventory in the ordinary course of business,
neither the Company nor any Consolidated Subsidiary shall sell, lease or
otherwise dispose of any assets which are not Material (as such term is
defined in the Note Purchase Agreements) if the aggregate proceeds of, or
Fair Market Value (as such term is defined in the Note Purchase
Agreements) of the property subject to, such sale, lease or other
disposition exceeds One Million Dollars ($1,000,000) or if the aggregate
proceeds of all sales or other dispositions by the Company and its
Subsidiaries after the Restatement Date (as such term is defined in the
Note Purchase Agreements) plus the Fair Market Value of all the property
of the Company and its Subsidiaries leased to other Persons after the
Restatement Date exceeds Two Million Dollars ($2,000,000) in any calendar
year, UNLESS the Required Holders (as such term is defined in the Note
Purchase Agreements) shall have given their written consent to
such transaction and contemporaneously with such transaction, the Company
prepays, pursuant to the provisions of Section 6.2 of the Note Purchase
Agreements, an aggregate principal amount of Notes equal to the product
of (a) the Fair Market Value of the consideration received in such
transaction TIMES (b) a fraction, the numerator of which is the
then outstanding principal amount of the Notes and the denominator of
which is the sum of the numerator PLUS the then outstanding loans and
letters of credit (other than the Alternate Letter of Credit) under
the Working Capital Facility Agreement (as such term is defined in the
Note Purchase Agreements) (to the extent the proceeds of any such sale
lease or other disposition permitted under Section 8.20 of the Note
Purchase Agreements consisted of notes, chattel paper or other property,
it is understood that such items will be and become subject to the liens
and security interests of the Collateral Agent under the Security
Documents); and
(e) that neither the Bank nor the Noteholders, as applicable, will
amend, waive or otherwise modify the provisions listed above applicable
to them without the consent of all Secured Parties.
9. GENERAL PROVISIONS.
9.1. SECURED PARTY MEETINGS.
Meetings of the Secured Parties may be called by any Secured Party at any
time following an Acceleration Notice, Default Notice or during the continuance
of an Event of Default. Secured Party Meetings shall be held at a mutually
convenient time (not less than three (3) Business Days after notice is given
unless the Secured Parties agree otherwise) and place, and any Secured Party may
participate therein via telephone. Each Secured Party shall be entitled to
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have its counsel participate in any Secured Party Meeting. No Secured Party
Meeting shall be held unless each Secured Party has been given notice thereof.
9.2. VOTING.
Except as otherwise specifically set forth herein, any action or omission
to act shall require the vote of the Majority Secured Parties.
9.3. NOTICES.
All notices, consents, approvals and other communications required or
permitted to be given hereunder (a) shall be given by facsimile, in each case
confirmed by a writing sent via a reliable delivery service providing delivery
not later than the next Business Day, or shall be given by reliable overnight
delivery service for delivery not later than the next Business Day, in either
event to the addresses or numbers set forth on SCHEDULE 1 hereto, or to such
other address or number as any party has given the other parties 10 days' prior
notice and (b) shall be deemed received and effective (i) when received, as
evidenced by a writing constituting a receipt or other evidence of delivery;
(ii) when sent, in the case of facsimile communication verified by a
confirmation that such communication was sent to the proper number; or (iii)
when rejected by the addressee, as evidenced by a written notice from the Person
delivering the same that such communication was rejected.
9.4. AMENDMENTS, WAIVERS AND CONSENTS.
No amendment, waiver or consent shall affect the rights or duties of the
Collateral Agent under this Collateral Agency and Intercreditor Agreement unless
in writing and signed by the Collateral Agent and the Secured Parties required
for such amendment, waiver or consent pursuant to this Section 9.4. Amendment or
waiver of, or consent to, Sections 3.7, 4.2, 4.9, 5, 8, 9.2, 9.4, 9.15 and
amendment of the definitions of "Majority Secured Parties," or any definition or
provision affecting the definitions of "Bank Obligations," "Noteholder
Obligations" or "Obligations" set forth in Section 1 must be in writing and
signed by all of the Secured Parties. Amendment to or waiver of, or consent to
any action under, any other provision of this Collateral Agency and
Intercreditor Agreement must be in writing and signed by the Majority Secured
Parties and the Collateral Agent.
9.5. SUCCESSORS AND ASSIGNS.
This Collateral Agency and Intercreditor Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors, assigns and participants, and upon the holders of any Notes or other
Obligations under the Credit Documents, and all such Persons shall execute its
agreement joining this Collateral Agency and Intercreditor Agreement if
requested to do so by the Collateral Agent or any Secured Party. No Person shall
be entitled to
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enjoy the benefits provided by this Collateral Agency and Intercreditor
Agreement or the Security Documents until it shall have furnished a joinder
agreement to the Collateral Agent and to the other Secured Parties, however, the
failure of such Person to furnish such an agreement shall in no way diminish or
affect such Person's duties and obligations under this Collateral Agency and
Intercreditor Agreement. In the event that any of the Secured Parties shall
transfer or assign its interest in the Note then held by it to any Person such
Secured Party shall give written notice of the transfer or assignment to the
Collateral Agent.
9.6. INDEPENDENT ANALYSIS.
Each Lender acknowledges that it has independently and without reliance
on any Collateral Agent or other Lender made such Lender's own credit analysis
and decision to enter into and make loans and extend credit under the Bank Loan
Agreement and the Note Purchase Agreements based upon such information
concerning the Consolidated Entities as it has deemed appropriate.
9.7. CERTAIN ACTIONS AFTER DEFAULT AND IN REORGANIZATION.
This Collateral Agency and Intercreditor Agreement shall continue in full
force and effect after the filing of any petition by or against any Consolidated
Entity under the Bankruptcy Code and all converted or succeeding cases in
respect thereof.
9.8. NO THIRD PARTY BENEFICIARIES.
This Collateral Agency and Intercreditor Agreement and the terms and
provisions hereof are solely for the benefit of the Bank and Noteholders and
their respective successors and assigns (including, without limitation, future
holders of the Bank Obligations and Noteholder Obligations), and none of such
terms and provisions shall benefit in any way any Person not specifically a
party to this Collateral Agency and Intercreditor Agreement, including, but not
limited to, Borrower, or any of its Affiliates.
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9.9. RELATION OF PARTIES.
This Collateral Agency and Intercreditor Agreement is entered into solely
for the purposes set forth herein, and, except as is expressly provided
otherwise herein, neither any Lender nor the Collateral Agent assumes any
responsibility to any other Lender or the Collateral Agent to advise such other
parties of information known to such party regarding the financial condition of
any Consolidated Entity or regarding any Collateral or of any other
circumstances bearing upon the risk of non-payment of the obligations of any
Consolidated Entity to the Lenders. Each Lender shall be responsible for
managing its relation with the Consolidated Entities and, except as explicitly
provided herein, no Lender shall be deemed the agent of any other party for any
purpose. This Agreement shall not be construed to be, or to create any
partnership, joint venture or other joint enterprise between the Lenders or
between or among the Lenders and Collateral Agent. Subject to the terms hereof,
each of the Lenders may alter, amend, supplement, release, discharge or
otherwise modify any terms of the documents evidencing and embodying their
respective loans to and indebtedness of any Consolidated Entity without notice
to or consent of the others.
9.10. COPIES OF CREDIT DOCUMENTS.
Upon request of any Lender, each other Lender agrees to provide each
other with copies of the full-executed Credit Documents to which they are a
party and any future amendments thereto. Each of the Lenders consents to the
granting by each Consolidated Entity of the security interests and mortgage
liens which are the subject to this Collateral Agency and Intercreditor
Agreement. All rights of action and of asserting claims under this Collateral
Agency and Intercreditor Agreement and the Credit Documents may be enforced by
Collateral Agent without the possession of any original or executed instrument
evidencing or governing any Obligation and without the production thereof at any
trial or other proceeding relative to such claims, and any suit or proceeding
instituted by Collateral Agent shall be, subject to the provisions of this
Collateral Agency and Intercreditor Agreement, brought in its name as Collateral
Agent and any recovery of judgment shall be held by it and distributed in
accordance with the terms of this Collateral Agency and Intercreditor Agreement.
9.11. RESTATEMENT OF SHARING AGREEMENT.
This Collateral Agency and Intercreditor Agreement shall constitute an
amendment and restatement of the Sharing Agreement which after execution and
delivery hereof shall be no longer in effect.
9.12. GOVERNING LAW.
This Collateral Agency and Intercreditor Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the state of
Ohio.
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9.13. COUNTERPARTS.
This Collateral Agency and Intercreditor Agreement may be executed and
delivered in as many separate counterparts as shall be convenient, each of which
when executed and delivered by the parties shall be regarded as an original.
9.14. HEADINGS.
The headings of the sections and paragraphs of this Collateral Agency and
Intercreditor Agreement are inserted for convenience only and shall not be
deemed to constitute a part hereof.
9.15. TERMINATION.
Except as set forth in this Section 9.15, this Collateral Agency and
Intercreditor Agreement may be terminated or cancelled only by prior written
consent of all of the Secured Parties; PROVIDED, however, that the provisions of
Sections 2.4 and 2.7 shall survive the termination of this Collateral Agency and
Intercreditor Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Collateral Agency and
Intercreditor Agreement as of the date set forth above.
THE BANK:
KEY BANK NATIONAL ASSOCIATION,
in its capacity as the "Bank"
By:
--------------------------------------
Its:
-------------------------------------
THE NOTEHOLDERS:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
By: CIGNA Investments, Inc., its
authorized agent
By:
--------------------------------------
Its:
-------------------------------------
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc., its
authorized agent
By:
--------------------------------------
Its:
-------------------------------------
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MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: Xxxxx X. Xxxxxx & Company Inc.
Its Investment Adviser
By:
--------------------------------------
Its:
-------------------------------------
The Travelers Insurance Company
By:
--------------------------------------
Its:
-------------------------------------
THE GUARDIAN LIFE INSURANCE COMPANY
OF AMERICA
By:
--------------------------------------
Its:
-------------------------------------
LINCOLN LIFE AND ANNUITY COMPANY OF
NEW YORK
By:
--------------------------------------
Its:
-------------------------------------
COLLATERAL AGENT:
KEY BANK NATIONAL ASSOCIATION,
in its capacity as Collateral Agent
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By:
--------------------------------------
Its:
-------------------------------------
ACKNOWLEDGMENT OF AND AGREEMENT
TO COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
The undersigned, the Company, the Co-Borrowers and the Consolidated
Subsidiaries described in the Collateral Agency and Intercreditor Agreement set
forth above, acknowledge and, to the extent required, consent to the terms and
conditions of such Collateral Agency and Intercreditor Agreement. As used in
this Acknowledgement and Agreement the term "Collateral Agent" refers to the
Collateral Agent in its capacity as both collateral agent and Distribution
Agent. Further, the Borrower and each of the undersigned who is party to a
Security Document from time to time jointly and severally agree:
(a) to reimburse the Collateral Agent, on demand, for any out-of-pocket
expenses incurred by the Collateral Agent (including without limitation all
reasonable attorneys, fees and compensation of agents) that arise out of or are
in any way connected with (i) the preparation, negotiation, execution or
delivery of the Collateral Agency and Intercreditor Agreement, any Security
Document or any agreement, instrument or document executed in connection
herewith or therewith or (ii) the performance by the Collateral Agent of its
obligations hereunder and thereunder;
(b) to pay to the Collateral Agent any and all compensation as
contemplated by Section 2.10 of the Collateral Agency and Intercreditor
Agreement; and
(c) to indemnify and hold harmless the Collateral Agent, the Secured
Parties and their respective directors, officers, employees and agents, on
demand, from and against any and all claims, damages, losses, liabilities, costs
and expenses (including with limitation reasonable attorneys, fees and court
costs) that any such Person may incur by reason or in connection with (i) the
Collateral Agency and Intercreditor Agreement or any Security Document, (ii) any
Collateral, (iii) any Preservation Action, Enforcement Action, emergency action
pursuant to Section 3.4 of the Collateral Agency and Intercreditor Agreement or
any other action taken by (or inaction of) the Collateral Agent hereunder or
under any Security Document or (iv) the involvement by any such Person in any
suit, investigation, proceeding in equity or action as a consequence, direct or
indirect or such Person being a party to, or taking or failing to take any
action required or permitted by, the Collateral Agency and Intercreditor
Agreement or any Security Documents; provided, that the undersigned shall not be
required to indemnify any such Person for any such claims, damages, losses',
liabilities, costs or expenses to the extent, but only to the extent that any of
the same are caused by such Person's gross negligence or willful
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misconduct. If any suit, investigation, proceeding, inquiry or action (each a
"PROCEEDING") is initiated against any Person entitled to indemnification
hereunder (an "INDEMNITEE"), and such Indemnitee intends to seek indemnification
hereunder on account of its involvement in such Proceeding, then such Indemnitee
shall notify the Company of such Proceeding and the Consolidated Entities shall
have the right to defend against such Proceeding on behalf of such Indemnitee,
so long as the Consolidated Entities employ counsel reasonably satisfactory to
such Indemnitee and diligently pursue such defense, and so long as such
Indemnitee has not been advised by counsel that such Indemnitee may have
defenses available to it that are different from or in addition to those
available to the Consolidated Entities; provided, that the failure by such
Indemnitee to so notify the Company shall not relieve the Consolidated Entities
from their obligation to indemnify such Indemnitee hereunder unless the failure
to receive such notice materially and adversely affects the ability of the
Company and the Indemnitee to assert each of its rights and defenses in such
Proceeding. If the Consolidated Entities do so elect to defend against any such
Proceeding, (A) they shall not enter into any agreement to settle such
Proceeding without the prior consent of the Indemnitee, which consent shall not
be unreasonably withheld so long as such agreement provides a full and complete
release of any and all liability from the claims of the Indemnitee which were
the subject of such Proceeding, (B) the Indemnitee may participate in such
defense and (C) the Consolidated Entities and the Indemnitee will cooperate with
each other in the conduct of such defense.
Each of the undersigned shall execute and deliver such other documents
and instruments, in form and substance reasonably satisfactory to the Collateral
Agent, and shall take such other action, in each case as the Collateral Agent
may reasonably request, to effectuate and carry out the provisions of the
Collateral Agency and Intercreditor Agreement, including without limitation
recording or filing in such places as the Collateral Agent may deem desirable
such other documents or instruments as the Collateral Agent may specify.
This Acknowledgment of and Agreement to Collateral Agency and
Intercreditor Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which, when so
executed and delivered shall be an original, but all of which together shall
constitute but one and the same instrument. In proving this Acknowledgment of
and Agreement to Collateral Agency and Intercreditor Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
IN WITNESS WHEREOF, the parties below have caused this Acknowledgment and
Agreement to Collateral Agency and Intercreditor Agreement to be executed by
their respective duly authorized officers as of __, 2001.
THE XXXXX-X'XXXX COMPANY
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By:
--------------------------------------
Its:
-------------------------------------
X'XXXX-XXXX & XXXXXXXXXX ARMORING COMPANY
By:
--------------------------------------
Its:
-------------------------------------
KROLL HOLDINGS, INC.
By:
--------------------------------------
Its:
-------------------------------------
XXXXX ASSOCIATES, INC.
By:
--------------------------------------
Its:
-------------------------------------
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ANNEX 1
NOTEHOLDER GUARANTORS
---------------------
Corplex, Inc.
Inphoto Surveillance, Inc.
International Training, Incorporated
ITI Limited Partnership
Xxxxx Associates, Inc.
Kroll Associates International Holdings, Inc.
Kroll Background America, Inc.
Kroll Xxxxxxx Xxxxxxxx, Ltd.
Kroll Environmental Enterprises, Inc.
Kroll Holdings, Inc.
Kroll Information Services, Inc.
Kroll Laboratory Specialists, Inc.
Kroll Xxxxxxxxx Xxxx, Inc.
Kroll Schiff & Associates, Inc.
Xxxxx-X'Xxxx Crisis Management Group, Inc.
X'Xxxx-Xxxx & Xxxxxxxxxx Armoring Company
O'Gara Satellite Networks, Inc.
O'Gara Security International, Inc.
39
ANNEX 2
BANK GUARANTORS
---------------
Corplex, Inc.
Inphoto Surveillance, Inc.
International Training, Incorporated
ITI Limited Partnership
Xxxxx Associates International Holdings, Inc.
Kroll Background America, Inc.
Kroll Xxxxxxx Xxxxxxxx, Ltd.
Kroll Environmental Enterprises, Inc.
Kroll Information Services, Inc.
Kroll Laboratory Specialists, Inc.
Kroll Xxxxxxxxx Xxxx, Inc.
Kroll Schiff & Associates, Inc.
Xxxxx-X'Xxxx Crisis Management Group, Inc.
O'Gara Satellite Networks, Inc.
O'Gara Security International, Inc.
