EXHIBIT 10.4
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is dated as of November [ ], 2004, and
entered into by and among COINMACH LAUNDRY CORPORATION, a Delaware corporation
(the "Guarantor"), DEUTSCHE BANK TRUST COMPANY AMERICAS, in its capacity as the
Collateral Agent for the First Lien Creditors, (including its successors and
assigns from time to time), (the "First Lien Collateral Agent"), and THE BANK OF
NEW YORK, in its capacity as collateral agent for the Noteholders (the "Second
Lien Collateral Agent"). Capitalized terms used herein but not otherwise defined
herein have the meanings set forth in Section 1 below.
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantor, the Subsidiary Guarantors from time
to time party thereto, the various financial institutions from time to time
party thereto, the First Lien Collateral Agent, as Administrative Agent and
Collateral Agent, Deutsche Bank Securities Inc. (f/k/a Deutsche Banc Alex. ▇▇▇▇▇
Inc.), as Lead Arranger and Book Manager, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and
Wachovia Capital Markets, LLC (f/k/a First Union Securities, Inc.) as
Syndication Agents and Credit Lyonnais New York Branch, as Documentation Agent,
are parties to the Credit Agreement, dated as of January 25, 2002 (as further
amended, supplemented, amended and restated or otherwise modified from time to
time (including pursuant to the Limited Waiver and Amendment No. 1 and Agreement
dated as of November [ ], 2004 (the "First Amendment")) the "Credit Agreement");
WHEREAS, CSC, the Guarantor, the other guarantors from time to time party
thereto and the Second Lien Collateral Agent, as collateral agent and trustee,
entered into an Indenture, dated as of November [ ], 2004 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Indenture"), governing the rights and duties of CSC under its [ ]% Senior
Secured Notes due 2024 in an initial aggregate principal amount of
$[143,750,000] (the "Senior Secured Notes");
WHEREAS, the obligations of the Borrower under the Credit Agreement and
any Interest Rate Protection Agreements or Other Hedging Agreements with a
Secured Party (or affiliate thereof) at the time such Interest Rate Protection
Agreement or Other Hedging Agreement was entered into will be secured by, among
other things, the Common Collateral pursuant to the terms of the Holdings Pledge
Agreement;
WHEREAS, the obligations of the Guarantor under the Indenture will be
secured by, among other things, a security interest in the Common Collateral
pursuant to the terms of the Noteholder Collateral Documents;
WHEREAS, the Holdings Pledge Agreement, the Indenture and the Noteholder
Collateral Documents provide, among other things, that the parties thereto shall
set forth in this Agreement their respective rights and remedies with respect to
the Pledged Collateral (including the Common Collateral) owned by the Guarantor;
and
WHEREAS, it is a condition precedent to the effectiveness of the First
Amendment that the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, and in reliance upon
the representations, warranties and covenants herein contained, the parties
hereto, intending to be legally bound, hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and the plural form of the terms indicated) and capitalized
terms defined in the Credit Agreement used (but not otherwise defined) herein
shall have the meanings ascribed to them in the Credit Agreement:
"Agreement" means this Intercreditor Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time
in accordance with the terms hereof.
"Borrower" means Coinmach Corporation, a Delaware corporation.
"Common Collateral" means the Collateral, as such term is defined in
the Holdings Pledge Agreement.
"Comparable Noteholder Collateral Document" means, in relation to
any Common Collateral subject to any Security Document, that Noteholder
Collateral Document which creates a security interest in the same Common
Collateral, granted by the same Obligor, as applicable.
"Credit Agreement" is defined in the first recital; provided that
(i) the term Credit Agreement shall (x) also include any renewal,
extension, refunding, restructuring, replacement or refinancing thereof
(whether with the original collateral agent and lenders or another
collateral agent or agents or other lenders, whether provided under the
original Credit Agreement or any other credit or other agreement or
indenture and whether entered into concurrently with or subsequent to the
termination of the prior Credit Agreement); provided that any such
renewal, extension, refunding, restructuring, replacement or refinancing
does not increase the principal amount thereof beyond the limit set forth
in the Indenture and (y) exclude the Senior Secured Notes and other
Noteholder Documents and (ii) if at any time a Discharge of Lender Claims
occurs with respect to the Credit Agreement (without giving effect to
Section 5.5), then, to the extent provided in Section 5.5, the term
"Credit Agreement" shall mean the Future First-Lien Credit Facility
designated by the Borrower in accordance with the terms of such section.
"CSC" means Coinmach Service Corp., a Delaware corporation.
"Discharge of Lender Claims" means, except to the extent otherwise
provided in Sections 5.5 and 6.5, the payment in full in cash of all
Obligations, the expiration, termination or cash collateralization of all
Letters of Credit, pursuant (for purposes of cash col-
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lateralization) to the terms thereof and the Credit Agreement, the
termination of all commitments to extend credit under the Credit Agreement
and the payment in full in cash of all other Lender Claims.
"First Amendment" is defined in the first recital.
"First Lien Collateral Agent" means, in addition to the First Lien
Collateral Agent as defined in the preamble, the then acting agent for the
First Lien Creditors under the Credit Documents and any successor thereto
exercising substantially the same rights and powers.
"First Lien Creditors" shall mean the "Secured Creditors" (as
defined in the Credit Agreement) and any other Persons holding Lender
Claims, including the First Lien Collateral Agent.
"Future First-Lien Credit Facility" shall mean the Credit Agreement
and any [First-Lien Credit Facility] (as defined in the Indenture) that is
designated by the Borrower as a "First-Lien Credit Facility" for purposes
of the Indenture; provided that the First Lien Creditors under any Credit
Agreement then in effect have consented to such designation.
"Guarantor" is defined in the preamble.
"Indenture" is defined in the second recital.
"Insolvency or Liquidation Proceeding" means (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to
CSC or any of its subsidiaries as a debtor, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding with respect to CSC or any of its subsidiaries as a debtor or
with respect to any substantial part of their respective assets, (c) any
liquidation, dissolution, reorganization or winding up of CSC or any of
its subsidiaries whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy or (d) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of CSC or
any of its subsidiaries.
"Lender Claims" means all Obligations outstanding under one or more
of the Credit Documents. Lender Claims shall include all interest accrued
or accruing (or which would, absent the commencement of an Insolvency or
Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the
Credit Agreement whether or not the claim for such interest is allowed as
a claim in such Insolvency or Liquidation Proceeding. To the extent any
payment with respect to the Lender Claims (whether by or on behalf of any
Obligor, as proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential in any respect,
set aside or required to be paid to a debtor in possession, trustee,
receiver or similar Person, then the Obligations or part thereof
origi-
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▇▇▇▇▇ intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
"Lender Collateral" means any of the assets of the Obligors, whether
real, personal or mixed, on which the First Lien Creditors or any of them
now or hereafter holds a Lien as security for any Lender Claim (regardless
of the effect of the application of any laws relating to fraudulent
transfers or conveyances).
"Lender Liens" means Liens on Common Collateral or Lender Collateral
in favor of the First Lien Collateral Agent on behalf of the First Lien
Creditors created as collateral security for the Lender Claims.
"Noteholder Claims" means all indebtedness, obligations and other
liabilities (contingent or otherwise) arising under or with respect to the
Noteholder Documents or any of them.
"Noteholder Collateral Documents" means, collectively, the
Noteholder Security Agreements, and any document or instrument executed
and delivered pursuant to any Noteholder Document at any time or otherwise
pursuant to which a Lien is granted by an obligor under the Indenture to
secure the Noteholder Claims or under which rights or remedies with
respect to any such Lien are governed, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to
time.
"Noteholder Documents" means, collectively, the Indenture, the
Senior Secured Notes, the Noteholder Collateral Documents and any other
related document or instrument executed and delivered pursuant to any
Noteholder Document at any time or otherwise evidencing any Noteholder
Claims, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Noteholders" means the Persons holding Noteholder Claims.
"Noteholder Security Agreements" means (i) the Security Agreement,
dated as of November [ ], 2004 among CSC, the Guarantor and the Second
Lien Collateral Agent, as collateral agent and (ii) the Pledge Agreement
dated as of November [ ], 2004 among CSC, the Guarantor and the Second
Lien Collateral Agent, as collateral agent, in each case as the same may
be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Obligors" means the Borrower, the Guarantor and each of the
Subsidiary Guarantors as defined in the Credit Agreement.
"Pledged Collateral" means the certificated securities constituting
"Collateral" (as defined in the Credit Agreement), the "Intercompany
Notes" (as defined in the Credit Agreement), and any other tangible
property in the possession of the First Lien Collateral Agent (or its
agents or bailees) in which a security interest is perfected by such
possession.
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"Recovery" shall have the meaning set forth in Section 6.5 hereof.
"Required Lenders" shall mean, with respect to any amendment or
modification of the Credit Agreement or Future First-Lien Facility, or any
termination or waiver of any provision of the Credit Agreement or Future
First-Lien Facility, or any consent or departure by the Borrower
therefrom, those First Lien Creditors, the approval of which is required
to approve such amendment or modification, termination or waiver or
consent or departure.
"Second Lien Collateral Agent" shall include, in addition to the
Second Lien Collateral Agent defined in the preamble, the then acting
collateral agent under the Indenture and any successor thereto exercising
substantially the same rights and powers.
"Senior Secured Notes" is defined in the second recital.
Section 2. Lien Priorities.
2.1 Priority. Notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens granted to the Second Lien Collateral
Agent or to the Noteholders on the Common Collateral or of any Liens granted to
the First Lien Creditors on the Common Collateral and notwithstanding any
provision of the UCC, or any applicable law, the avoidance or setting aside of
any Lien granted to the First Lien Creditors on the Common Collateral, or the
Noteholder Documents or the Credit Documents or any other circumstance
whatsoever, the Second Lien Collateral Agent, on behalf of itself and the
Noteholders, hereby agrees that: (i) any Lien on the Common Collateral securing
the Lender Claims now or hereafter held by the First Lien Collateral Agent or
the First Lien Creditors shall be first in priority to any Lien on the Common
Collateral securing the Noteholder Claims and (ii) any Lien on the Common
Collateral now or hereafter held by the Second Lien Collateral Agent or the
Noteholders regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall be second in priority in all respects to
all Liens on the Common Collateral securing the Lender Claims. All Liens on the
Common Collateral securing the Lender Claims shall be and remain first in
priority to all Liens on the Common Collateral securing the Noteholder Claims
for all purposes, whether or not such Lender Liens are subordinated to any Lien
securing any other obligation of the Guarantor or any of its subsidiaries.
2.2 Prohibition on Contesting Liens. Each of the Second Lien Collateral
Agent, for itself and on behalf of each Noteholder, and the First Lien
Collateral Agent, for itself and on behalf of each other First Lien Creditor,
agrees that it shall not (and hereby waives any right to) contest or support any
other Person in contesting, in any proceeding (including any Insolvency or
Liquidation Proceeding), the priority, validity or enforceability of a Lien held
by the First Lien Creditors on the Lender Collateral or by the Noteholders on
the Common Collateral, as the case may be; provided that nothing in this
Agreement shall be construed to prevent or impair the rights of the First Lien
Collateral Agent or any of the First Lien Creditors to enforce this Agreement,
including the priority of the Liens securing the Lender Claims as provided in
Sections 2.1 and 3.1 of this Agreement.
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2.3 No New Liens. So long as the Discharge of Lender Claims has not
occurred, (a) the parties hereto agree that (i) neither the Second Lien
Collateral Agent nor any Noteholder shall acquire any security interest in or
shall have any interest in (including following avoidance of any Lender Liens)
any property, real or otherwise (other than the Common Collateral), of any
Obligor or any proceeds thereof and (ii) after the date hereof, if the Second
Lien Collateral Agent shall hold any Lien on any assets of any Obligor securing
the Noteholder Claims that are not also subject to the prior Lien of the First
Lien Creditors under the Credit Documents, the Second Lien Collateral Agent will
notify the First Lien Collateral Agent in writing and, upon demand by the First
Lien Collateral Agent, shall either release such Lien or assign it to the First
Lien Creditors as security for the Lender Claims (unless the applicable Obligor
shall promptly grant a similar Lien on such assets in favor of the First Lien
Creditors and such Lien shall be prior to the Lien of the Second Lien Collateral
Agent on such assets) and (b) each Obligor agrees it will not grant, and the
Guarantor agrees it will not permit its Subsidiaries to grant, any Lien on any
of its assets in favor of the Second Lien Collateral Agent or the Noteholders
unless such Obligor has granted a similar perfected prior Lien on such assets in
favor of the First Lien Creditors.
Section 3. Enforcement.
3.1 Exercise of Remedies.
(a) So long as the Discharge of Lender Claims has not occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by or against
CSC or any of its subsidiaries, (i) the Second Lien Collateral Agent and the
Noteholders will not exercise or seek to exercise any rights or remedies
(including by way of setoff) with respect to any Common Collateral, institute
any action or proceeding with respect to such rights or remedies, including any
action of foreclosure, or contest, protest or object to any foreclosure
proceeding or action brought by the First Lien Collateral Agent or any other
First Lien Creditor, or any other exercise by any such party of any rights and
remedies relating to the Common Collateral under the Credit Documents or
otherwise, or object to the forbearance by the First Lien Collateral Agent or
the First Lien Creditors from bringing or pursuing any foreclosure proceeding or
action or any other exercise of any rights or remedies relating to the Common
Collateral and (ii) the First Lien Collateral Agent and the other First Lien
Creditors shall have the exclusive right to enforce rights, exercise remedies
(including by way of setoff and the right to credit bid their debt), refrain
from enforcing or exercising remedies, and make determinations regarding
release, disposition, or restrictions with respect to the Common Collateral
without any consultation with or the consent of the Second Lien Collateral Agent
or any Noteholder, all as if the Lien of the Second Lien Collateral Agent for
the benefit of the Noteholders under the Noteholder Collateral Documents did not
exist; provided that (A) in any Insolvency or Liquidation Proceeding commenced
by or against the Guarantor, the Second Lien Collateral Agent or any Noteholder
may file a claim or statement of interest with respect to the Noteholder Claims,
(B) the Second Lien Collateral Agent or any Noteholder may take any action not
adverse to the Liens on the Common Collateral securing the Lender Claims in
order to establish, preserve, perfect or protect its rights in the Common
Collateral, (C) the Second Lien Collateral Agent or any Noteholder shall be
entitled to file any pleadings, objections, motions or agreements which assert
rights or interests available to unsecured Creditors of the Guarantor arising
under either the Bankruptcy Code or applicable non-bankruptcy law, in each case
not otherwise in contravention of the terms of this Agreement and
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(D) the Second Lien Collateral Agent or any Noteholder shall be entitled to file
any proof of claim and other filings and make any arguments and motions in order
to preserve or protect its Lien on the Common Collateral that are, in each case,
not otherwise in contravention of the terms of this Agreement, with respect to
the Indenture and the Common Collateral. In exercising rights and remedies with
respect to the Common Collateral, the First Lien Collateral Agent or any other
First Lien Creditors may enforce the provisions of the Credit Documents and
exercise remedies thereunder, all in such order and in such manner as it may
determine in the exercise of its sole discretion. Such exercise and enforcement
shall include the rights of an agent appointed by the First Lien Collateral
Agent and the other First Lien Creditors to sell or otherwise dispose of Common
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured party
under the UCC of any applicable jurisdiction and of a secured creditor under
bankruptcy or similar laws of any applicable jurisdiction.
(b) The Second Lien Collateral Agent, for itself and on behalf of the
Noteholders, agrees that the Second Lien Collateral Agent and the Noteholders
will not take any action that would hinder or cause to delay any exercise of
remedies undertaken by the First Lien Collateral Agent or any other First Lien
Creditor under the Credit Documents as secured parties in respect of any Common
Collateral, including any sale, lease, exchange, transfer or other disposition
of the Common Collateral, whether by foreclosure or otherwise, and the Second
Lien Collateral Agent, for itself and on behalf of the Noteholders, hereby
waives any and all rights it or the Noteholders may have as a junior lien
creditor or otherwise (whether arising under the UCC or any other law) to object
to the manner in which the First Lien Collateral Agent or the other First Lien
Creditors seek to enforce the Liens granted on any of the Lender Collateral.
(c) The Second Lien Collateral Agent hereby acknowledges and agrees that
no covenant, agreement or restriction contained in the Noteholder Documents
shall be deemed to restrict in any way the rights and remedies of the First Lien
Collateral Agent or the First Lien Creditors with respect to the Common
Collateral as set forth in this Agreement and the Credit Documents.
3.2 Cooperation. Subject to the proviso in clause (a)(ii) of Section 3.1,
the Second Lien Collateral Agent, on behalf of itself and the Noteholders,
agrees that, unless and until the Discharge of Lender Claims has occurred, it
will not commence, or join with any Person (other than the First Lien Creditors
upon the request thereof) in commencing, any enforcement, collection, execution,
levy or foreclosure action or proceeding with respect to any Lien held by it
under any of the Noteholder Documents with respect to the Common Collateral.
Section 4. Payments.
4.1 Application of Proceeds. So long as the Discharge of Lender Claims has
not occurred, the cash proceeds of Common Collateral received in connection with
the sale, transfer or other disposition of such Common Collateral upon the
exercise of remedies shall be applied by the First Lien Collateral Agent to the
Lender Claims in such order as specified in the Credit Agreement until the
Discharge of Lender Claims has occurred. Upon the Discharge of Lender Claims,
the First Lien Collateral Agent shall deliver to the Second Lien Collateral
Agent (for application in such order as specified in the Indenture and the other
applicable Noteholder Docu-
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ments) any proceeds of Common Collateral held by it in the same form as
received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct.
4.2 The Second Lien Collateral Agent, on behalf of itself and the
Noteholders, agrees that it will not, in connection with the exercise of any
right or remedy (including by way of setoff) with respect to any Common
Collateral, take or receive any Common Collateral or any proceeds of Common
Collateral unless and until the Discharge of Lender Claims has occurred. In the
event any Common Collateral or proceeds thereof are received by the Second Lien
Collateral Agent in violation of this Agreement, such Common Collateral and/or
proceeds shall be segregated and held in trust for the benefit of the First Lien
Creditors in the same form as received, and shall not be applied to the
satisfaction of any Noteholder Claims. Without limiting the generality of the
foregoing, unless and until the Discharge of Lender Claims has occurred, except
as expressly provided in the proviso in clause (a)(ii) of Section 3.1, the sole
right of the Second Lien Collateral Agent and the Noteholders as secured parties
with respect to the Common Collateral is to hold a perfected Lien on the Common
Collateral pursuant to the Noteholder Documents for the period and to the extent
granted therein and to receive a share of the proceeds thereof, if any, after
the Discharge of Lender Claims has occurred.
4.3 Each Obligor agrees that it will not, in connection with the exercise
of any right or remedy with respect to any Common Collateral by the Second Lien
Collateral Agent or the Noteholders, transfer, deliver or pay, as applicable, to
the Second Lien Collateral Agent or any Noteholder any Common Collateral or any
proceeds of Common Collateral unless and until the Discharge of Lender Claims
has occurred.
Section 5. Other Agreements.
5.1 Releases.
(a) If, in connection with:
(i) the exercise of any of the First Lien Collateral Agent's
remedies in respect of Common Collateral provided for in Section 3.1,
including any sale, lease, exchange, transfer or other disposition
(collectively, a "Disposition") of any such Common Collateral; or
(ii) a Disposition of any Common Collateral permitted under the
terms of the Credit Documents (whether or not an event of default
thereunder, and as defined therein, has occurred and is occurring),
the First Lien Collateral Agent, for itself and on behalf of any of the First
Lien Creditors, releases any of its Liens on any part of the Common Collateral,
in each case other than in connection with a Disposition under clause (ii) above
only, if such Disposition would result in an Event of Default under the
Noteholder Documents, then the Liens, if any, of the Second Lien Collateral
Agent, for itself or for the benefit of the Noteholders, on such Common
Collateral shall be automatically, unconditionally and simultaneously released
and the Second Lien Collateral Agent, for itself or on behalf of any such
Noteholder, promptly shall execute and deliver to the First
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Lien Collateral Agent such termination statements, releases and other documents
as the First Lien Collateral Agent may request to effectively confirm such
release.
(b) The Second Lien Collateral Agent, for itself and on behalf of the
Noteholders, hereby irrevocably constitutes and appoints the First Lien
Collateral Agent and any officer or agent of the First Lien Collateral Agent,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Second Lien
Collateral Agent or such Noteholder or in the First Lien Collateral Agent's own
name, from time to time in the First Lien Collateral Agent's discretion, for the
purpose of carrying out the terms of this Section 5.1, to take any and all
appropriate action and to execute any and all releases, documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Section 5.1, including any financing statements, mortgage releases,
intellectual property releases, endorsements or other instruments of transfer or
release.
5.2 Insurance. Unless and until the Discharge of Lender Claims has
occurred, the First Lien Collateral Agent and the other First Lien Creditors
shall have the sole and exclusive right, subject to the rights of the Obligors
under the Credit Documents, to adjust settlement for any insurance policy
covering the Common Collateral in the event of any loss thereunder. Unless and
until the Discharge of Lender Claims has occurred (and whether or not the
Revolving Loan Maturity Date has occurred), all proceeds of any such policy and
any such award if in respect of the Common Collateral shall be paid to the First
Lien Collateral Agent for the benefit of the First Lien Creditors to the extent
required under the Credit Agreement and thereafter to the Second Lien Collateral
Agent for the benefit of the Noteholders to the extent required under the
applicable Noteholder Documents and then to the owner of the subject property or
as a court of competent jurisdiction may otherwise direct.
5.3 Amendments to Noteholder Collateral Documents.
(a) Unless and until the Discharge of Lender Claims has occurred, without
the prior written consent of the First Lien Collateral Agent and the Required
Lenders, no Noteholder Collateral Document may be amended, supplemented or
otherwise modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Noteholder Collateral Document, would be
inconsistent with any of the terms of this Agreement or the Credit Documents.
The Second Lien Collateral Agent agrees that each Noteholder Collateral Document
shall include the following language:
"Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Second Lien Collateral Agent pursuant to this
Agreement and the exercise of any right or remedy by the Second Lien
Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreement, dated as of November [ ], 2004 (as amended,
supplemented, amended and restated or otherwise modified from time to
time, the "Intercreditor Agreement"), among Deutsche Bank Trust Company
Americas, as First Lien Collateral Agent, The Bank of New York as Second
Lien Collateral Agent, Coinmach Service Corp., Coinmach Corporation and
Coinmach Laundry Corporation, including any grantor of a security interest
pursuant to this Agreement, named therein. In the event of any conflict
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between the terms of the Intercreditor Agreement and this Agreement, the
terms of the Intercreditor Agreement shall govern."
(b) In the event the First Lien Collateral Agent enters into any
amendment, waiver or consent in respect of any of the Security Documents for the
purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any Security Document or changing in any
manner the rights of the First Lien Collateral Agent, the First Lien Creditors
or the Obligors thereunder, then such amendment, waiver or consent shall apply
automatically to any comparable provision of the Comparable Noteholder
Collateral Document without the consent of the Second Lien Collateral Agent or
the Noteholders and without any action by the Second Lien Collateral Agent, CSC
or any of its subsidiaries; provided that (A) no such amendment, waiver or
consent shall have the effect of removing assets subject to the Lien of the
Noteholder Collateral Documents, except to the extent that a release of such
Lien is permitted by Section 5.1, (B) any such amendment, waiver or consent that
materially and adversely affects the rights of the Second Lien Collateral Agent
and the Noteholders (and not the holders of the Lender Liens in a like or
similar manner) shall not apply to the Noteholder Collateral Documents without
the consent of the Second Lien Collateral Agent (acting at the direction of the
holders of a majority of the aggregate principal amount of the applicable
Noteholder Claims) and (C) notice of such amendment, waiver or consent shall
have been given to the Second Lien Collateral Agent; provided, further, that (x)
nothing contained in this clause (b) shall impair the rights of the First Lien
Collateral Agent and the holders of Lender Claims, or the obligations and
agreements of the Second Lien Collateral Agent and Noteholders, under Sections 3
and 5.1 hereof and (y) the Security Documents and Noteholder Security Documents
may, without the consent of the Second Lien Collateral Agent or the Noteholders,
be amended or modified pursuant to this Section 5.3(b) to secure additional
extensions of credit and add additional First Lien Creditors as long as such
amendments or modifications do not violate the express provisions of the
Indenture.
5.4 Bailee for Perfection.
(a) Solely for the purpose of perfecting the security interest granted in
the Pledged Collateral pursuant to the Noteholder Collateral Documents, and
subject to the terms and conditions of this Section 5.4, the First Lien
Collateral Agent agrees to hold the Pledged Collateral that is part of the
Common Collateral in its possession or control (or in the possession or control
of its agents or bailees) as bailee for the Second Lien Collateral Agent and any
assignee.
(b) The rights of the Second Lien Collateral Agent shall at all times be
subject to the terms of this Agreement and to the First Lien Collateral Agent's
rights under the Credit Documents.
(c) The First Lien Collateral Agent shall have no obligation whatsoever to
the Second Lien Collateral Agent or any Noteholder to assure that the Pledged
Collateral is genuine or owned by the Guarantor or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.4. The
duties or responsibilities of the First Lien Collateral Agent under this Section
5.4 shall be limited solely to holding the Pledged Collateral as bailee for the
Second Lien Collateral Agent for purposes of perfecting the Lien held by the
Second Lien Collateral Agent.
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(d) The First Lien Collateral Agent shall not have by reason of the
Noteholder Collateral Documents or this Agreement or any other document a
fiduciary relationship in respect of the Second Lien Collateral Agent or any
Noteholder.
(e) Upon the Discharge of Lender Claims, the First Lien Collateral Agent
shall deliver to the Second Lien Collateral Agent, at the sole cost and expense
of the Borrower, the Pledged Collateral in its possession together with any
necessary endorsements (or otherwise allow the Second Lien Collateral Agent to
obtain control of such Pledged Collateral) to the extent required by the
Noteholder Documents or as a court of competent jurisdiction may otherwise
direct.
5.5 When Discharge of Lender Claims Deemed to Not Have Occurred. If at any
time after the Discharge of Lender Claims has occurred the Borrower designates
any Future First-Lien Credit Facility to be the "Credit Agreement" hereunder,
then such Discharge of Lender Claims shall automatically be deemed not to have
occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such first Discharge of Lender Claims), and such Future First-Lien
Credit Facility shall automatically be treated as the Credit Agreement for all
purposes of this Agreement, including without limitation for purposes of the
Lien priorities and rights in respect of Collateral set forth herein. Upon
receipt of notice of such designation (including the identity of the new First
Lien Collateral Agent), the Second Lien Collateral Agent shall promptly deliver
to the First Lien Collateral Agent the Pledged Collateral together with any
necessary endorsements (or otherwise allow such First Lien Collateral Agent to
obtain control of such Pledged Collateral). If the Obligations under a Future
First-Lien Credit Facility are secured by assets of the Guarantor of the type
constituting Common Collateral that do not also secure the Noteholder Claims,
then the Senior Secured Notes shall be secured at such time by a second priority
Lien on such assets to the same extent provided in the Noteholder Collateral
Documents.
5.6 Rights as Unsecured Creditors. Except as otherwise set forth in
Section 2.1, the Second Lien Collateral Agent and the Noteholders may exercise
rights and remedies as unsecured creditors against CSC, the Guarantor or any
subsidiary of CSC that has guaranteed the Indenture in accordance with the terms
of the Noteholder Documents and applicable law. Except as otherwise set forth in
Section 2.1 of this Agreement, but subject to the terms of the Credit Documents,
nothing in this Agreement shall prohibit the receipt by the Second Lien
Collateral Agent or any Noteholder of the required payments of interest and
principal so long as such receipt is not the direct or indirect result of the
exercise by the Second Lien Collateral Agent or any Noteholder of rights or
remedies as a secured creditor (including setoff) or enforcement in
contravention of this Agreement of any Lien held by any of them and such receipt
is not proceeds of any Common Collateral. Nothing in this Agreement impairs or
otherwise adversely affects any rights or remedies the First Lien Collateral
Agent or the First Lien Creditors may have with respect to the Common
Collateral.
Section 6. Insolvency or Liquidation Proceedings.
6.1 Financing Issues. If CSC or any of its subsidiaries shall be subject
to any Insolvency or Liquidation Proceeding and the First Lien Collateral Agent
shall desire to permit the use of cash collateral or to permit the Borrower to
obtain financing under section 363 or sec-
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tion 364 of the Bankruptcy Code ("DIP Financing"), then the Second Lien
Collateral Agent, on behalf of itself and the Noteholders, agrees that it will
raise no objection to such use or DIP Financing and will not request adequate
protection or any other relief in connection therewith (except to the extent
permitted by Section 6.3) and, to the extent the Lender Liens are junior in
priority or pari passu with such DIP Financing, will maintain the priority of
its Liens in the Common Collateral as junior in priority to such Lender Liens on
the same basis as the other Liens securing the Noteholder Claims are second in
priority to Lender Claims under this Agreement.
6.2 Relief from the Automatic Stay. While any amounts are outstanding
under the Credit Documents or any commitment under any DIP Financing provided by
any First Lien Creditor is in effect, the Second Lien Collateral Agent, on
behalf of itself and the Noteholders, agrees that none of them shall seek relief
from the automatic stay or any other stay in any Insolvency or Liquidation
Proceeding in respect of the Common Collateral, without the prior written
consent of the First Lien Collateral Agent and the Required Lenders.
6.3 Adequate Protection. The Second Lien Collateral Agent, on behalf of
itself and the Noteholders, agrees that none of them shall contest (or support
any other Person contesting) (a) any request by the First Lien Collateral Agent
or the other First Lien Creditors for adequate protection or (b) any objection
by the First Lien Collateral Agent or the other First Lien Creditors to any
motion, relief, action or proceeding which objection is based on the First Lien
Collateral Agent or the other First Lien Creditors claiming a lack of adequate
protection. Notwithstanding the foregoing contained in this Section 6.3, in any
Insolvency or Liquidation Proceeding, in the event the Second Lien Collateral
Agent, on behalf of itself and the Noteholders, seeks or requests adequate
protection and such adequate protection is granted in the form of additional
collateral that would constitute collateral under the Credit Documents, then the
Second Lien Collateral Agent, on behalf of itself or any of the Noteholders,
agrees that the First Lien Creditors shall also be granted a Lien on such
additional collateral as security for the Lender Claims and any such DIP
Financing and that any Lien on such additional collateral securing the
Noteholder Claims shall be junior in priority to the Liens on such collateral
securing the Lender Claims and any such DIP Financing (and all Obligations
relating thereto) and any other Liens granted to the First Lien Creditors as
adequate protection on the same basis as the other Liens securing the Noteholder
Claims are junior in priority to such Lender Claims under this Agreement.
6.4 No Waiver; Voting Rights. Nothing contained herein shall prohibit or
in any way limit the First Lien Collateral Agent or any other First Lien
Creditor from objecting in any Insolvency or Liquidation Proceeding or otherwise
to any action taken by the Second Lien Collateral Agent or any of the
Noteholders, including the seeking by the Second Lien Collateral Agent or any
Noteholder of adequate protection or the asserting by the Second Lien Collateral
Agent or any Noteholder of any of its rights and remedies under the Noteholder
Documents or otherwise. In any Insolvency or Liquidation Proceeding, neither the
Second Lien Collateral Agent nor any Noteholder shall vote any Noteholder Claim
for any plan of reorganization of CSC or any of its subsidiaries unless (i) such
plan provides for the payment in full in cash of all Lender Claims on the
effective date of such plan of reorganization, (ii) such plan provides for
treatment of the Lender Claims in a manner that would result in such Lender
Claims having relative lien (or, if the obligations, property or assets to be
distributed in respect of the Lender Claims under such plan are unsecured,
other) priority over the Noteholder Claims to at least the same extent as if
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such obligations, property or assets were secured by Liens and subject to
Section 6.6, whether or not such obligations, property or assets are, in fact,
secured by any such Liens, or (iii) the plan otherwise provides treatment of the
Lender Claims in a manner approved by the First Lien Collateral Agent and the
Required Lenders.
6.5 Preference Issues. If any First Lien Creditor is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of any Obligor any amount as a preference (a "Recovery"), then
such First Lien Creditor shall be entitled to a reinstatement of Lender Claims
with respect to all such recovered amounts. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full
force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.
6.6 Reorganization Securities. If, in any Liquidation or Insolvency
Proceeding, debt obligations of the reorganized debtor secured by Liens upon any
property of the reorganized debtor are distributed, pursuant to a plan of
reorganization or similar dispositive restructuring plan, both on account of
Lender Claims and on account of Noteholder Claims, then, to the extent the debt
obligations distributed on account of the Lender Claims and on account of the
Noteholder Claims are secured by Liens upon the same property, the provisions of
this Agreement will survive the distribution of such debt obligations pursuant
to such plan and will apply with like effect to the Liens securing such debt
obligations.
6.7 Expense Claims. Neither the Second Lien Collateral Agent nor any
Noteholder will assert or enforce, at any time prior to the Discharge of Lender
Claims, any claim under Section 506(c) of the Bankruptcy Code senior to or on a
parity with the Lender Liens for costs or expenses of preserving or disposing of
any Common Collateral.
6.8 Post-Petition Claims.
(a) Neither the Second Lien Collateral Agent nor any Noteholder shall
oppose or seek to challenge any claim by the First Lien Collateral Agent or any
other First Lien Creditor for allowance in any Insolvency or Liquidation
Proceeding of Lender Claims consisting of post-petition interest, fees or
expenses to the extent of the value of the Lender Lien, without regard to the
existence of the Lien of the Second Lien Collateral Agent on behalf of the
Noteholders on the Common Collateral.
(b) Neither the First Lien Collateral Agent nor any other First Lien
Creditor shall oppose or seek to challenge any claim by the Second Lien
Collateral Agent or any Noteholder for allowance in any Insolvency or
Liquidation Proceeding of Noteholder Claims consisting of post-petition
interest, fees or expenses to the extent of the value of the Lien of the Second
Lien Collateral Agent on behalf of the Noteholders on the Common Collateral
(after taking into account the Lender Liens).
6.9 Waiver. The Second Lien Collateral Agent, for itself and on behalf of
the Noteholders, waives any claim it may hereafter have against the First Lien
Collateral Agent or any First Lien Creditor arising out of the election of any
First Lien Creditor of the application of section 1111(b)(2) of the Bankruptcy
Code, and/or out of any cash collateral or financing arrange-
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ment or out of any grant of a security interest in connection with the Common
Collateral in any Insolvency or Liquidation Proceeding.
6.10 Nature of Obligations; Post-Petition Interest. The Second Lien
Collateral Agent, on behalf of the Noteholders, and each of the Noteholders
hereby acknowledges and agrees that (i) the Noteholders' claims against the
Guarantor in respect of the Common Collateral constitute junior claims separate
and apart (and of a different class) from the senior claims of the First Lien
Creditors against the Guarantor in respect of the Common Collateral and (ii) the
Obligations include all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
receivership, reorganization or similar proceeding of any Obligor at the rate
provided for in the applicable Credit Documents governing the same, whether or
not a claim for post-petition interest is allowed or allowable in any such case,
proceeding or other action. To further effectuate the intent of the parties as
provided in the immediately preceding sentence, if it is held that the claims
against the Guarantor in respect of the Common Collateral constitute only one
secured claim (rather than separate classes of senior and junior claims), then
the Second Lien Collateral Agent, on behalf of the Noteholders, and each of the
Noteholders hereby acknowledge and agree that all distributions pursuant to
Section 4.1 or otherwise shall be made as if there were separate classes of
senior and junior secured claims against the Guarantor in respect of the Common
Collateral (with the effect being that, to the extent that the aggregate value
of the Common Collateral is sufficient (for this purpose ignoring all claims
held by the Second Lien Collateral Agent on behalf of the Noteholders), the
First Lien Creditors shall be entitled to receive, in addition to amounts
distributed to them in respect of principal, pre-petition interest and other
claims, all amounts owing in respect of post-petition interest at the relevant
contract rate (even though such claims may or may not be allowed in whole or in
part in the respective bankruptcy, insolvency, reorganization, receivership or
similar proceeding) before any distribution is made in respect of the claims
held by the Second Lien Collateral Agent, on behalf of the Noteholders, with the
Second Lien Collateral Agent and each of the Noteholders hereby acknowledging
and agreeing to turn over to the holders of the Lender Claims all amounts
otherwise received or receivable by them to the extent needed to effectuate the
intent of this sentence even if such turnover of amounts has the effect of
reducing the amount of the claim of the Noteholders).
6.11 Proofs of Claim. Subject to the limitations set forth in this
Agreement, the First Lien Collateral Agent may file proofs of claim and other
pleadings and motions with respect to any Lender Claims, the Indenture or the
Common Collateral in any Insolvency or Liquidation Proceeding. If a proper proof
of claim has not been filed in the form required in such Insolvency or
Liquidation Proceeding at least ten (10) days prior to the expiration of the
time for filing thereof, the First Lien Collateral Agent shall have the right
(but not the duty) to file an appropriate claim for and on behalf of the
Noteholders with respect to the Indenture or any of the Common Collateral;
provided that the First Lien Collateral Agent shall have provided written notice
of its intent to file a proof of claim on behalf of the Noteholders to the
Second Lien Collateral Agent at least the lesser of (x) three (3) days and (y)
the number of days remaining in the ten (10) day period described in this
sentence, in each case before so filing. In furtherance of the foregoing, the
Second Lien Collateral Agent hereby appoints the First Lien Collateral Agent as
its attorney-in-fact, with full authority in the place and stead of the Second
Lien Collateral Agent and full power of substitution and in the name of the
Noteholders or otherwise, to execute and deliver
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any document or instrument that the First Lien Collateral Agent is required or
permitted to deliver pursuant to this Section 6.11, such appointment being
coupled with an interest and irrevocable.
Section 7. Reliance; Waivers; etc.
7.1 Reliance. The consent by the First Lien Creditors to the execution and
delivery of the Noteholder Documents and the grant to the Second Lien Collateral
Agent, on behalf of the Noteholders, of a Lien on the Common Collateral and all
loans and other extensions of credit made or deemed made on and after the date
hereof by the First Lien Creditors to the Obligors shall be deemed to have been
given and made in reliance upon this Agreement. The Second Lien Collateral
Agent, on behalf of itself and the Noteholders, acknowledges that it and the
Noteholders have, independently and without reliance on the First Lien
Collateral Agent or any other First Lien Creditor, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into the Indenture, this Agreement and the transactions
contemplated hereby and thereby and they will continue to make their own credit
decision in taking or not taking any action under the Indenture or this
Agreement.
7.2 No Warranties or Liability. The Second Lien Collateral Agent, on
behalf of itself and Noteholders, acknowledges and agrees that each of the First
Lien Collateral Agent and the other First Lien Creditors has made no express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Credit Documents. The First Lien Creditors will be entitled to manage and
supervise their respective loans and extensions of credit to the Borrower in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and the First Lien Creditors may manage their loans and extensions
of credit without regard to any rights or interests that the Second Lien
Collateral Agent or any of the Noteholders have in the Common Collateral or
otherwise, except as otherwise provided in this Agreement. Neither the First
Lien Collateral Agent nor any First Lien Creditor shall have any duty to the
Second Lien Collateral Agent or any of the Noteholders to act or refrain from
acting in a manner which allows, or results in, the occurrence or continuance of
an event of default or default under any agreements with CSC or any of its
subsidiaries (including the Noteholder Documents), regardless of any knowledge
thereof which the First Lien Collateral Agent or any First Lien Creditor may
have or be charged with.
7.3 No Waiver of Lien Priorities.
(a) To the fullest extent permitted under applicable law, no right of the
First Lien Creditors, the First Lien Collateral Agent or any of them to enforce
any provision of this Agreement shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of CSC or any of its
subsidiaries or by any act or failure to act by any First Lien Creditor, or by
any noncompliance by any Person with the terms, provisions and covenants of this
Agreement, any of the Credit Documents or any of the Noteholder Documents,
regardless of any knowledge thereof which the First Lien Collateral Agent or the
other First Lien Creditors, or any of them, may have or be otherwise charged
with;
(b) Without in any way limiting the generality of the foregoing paragraph
(but subject to the rights of the Obligors under the Credit Documents), the
First Lien Creditors and any of
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them may, to the fullest extent permitted under applicable law, at any time and
from time to time, without the consent of, or notice to, the Second Lien
Collateral Agent or any Noteholder, without incurring any liabilities to the
Second Lien Collateral Agent or any Noteholder and without impairing or
releasing the lien priorities and other benefits provided in this Agreement
(even if any right of subrogation or other right or remedy of the Second Lien
Collateral Agent or any Noteholder is affected, impaired or extinguished
thereby) do any one or more of the following:
(i) make loans and advances to any Obligor or issue, guaranty or
obtain letters of credit for the account of any Obligor or otherwise
extend credit to any Obligor, in any amount (subject to the limits set
forth in the Indenture) and on any terms, whether pursuant to a commitment
or as a discretionary advance and whether or not any default or event of
default or failure of condition is then continuing;
(ii) change the manner, place or terms of payment or change or
extend the time of payment of, or renew, exchange, amend, increase
(subject to the limits set forth in the Indenture) or alter the terms of,
any of the Lender Claims or any Lien on any Lender Collateral (including,
without limitation, the Common Collateral) or guaranty thereof or any
liability of the Obligors, or any liability incurred directly or
indirectly in respect thereof (including any increase in (subject to the
limits set forth in the Indenture) or extension) of the Lender Claims,
without any restriction as to the amount, tenor or terms of any such
increase (subject to the limits set forth in the Indenture) or extension
or otherwise amend, renew, exchange, extend, modify or supplement in any
manner any Liens held by the First Lien Creditors, the Lender Claims or
any of the Credit Documents;
(iii) subject, in the case of Pledged Collateral, to Section 5.4,
sell, exchange, release, surrender, realize upon, enforce or otherwise
deal with in any manner and in any order any part of the Lender Collateral
or any liability of any Obligor to the First Lien Creditors, or any
liability incurred directly or indirectly in respect thereof;
(iv) settle or compromise any Lender Claim or any other liability of
any Obligor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and
however realized to any liability (including the Lender Claims) in any
manner or order;
(v) exercise or delay in or refrain from exercising any right or
remedy against any Obligor or any security or any other Person, elect any
remedy and otherwise deal freely with the Obligors and the Lender
Collateral and any security or any liability of any Obligor to the First
Lien Creditors or any liability incurred directly or indirectly in respect
thereof;
(vi) release or discharge any Lender Claims or any guaranty thereof
or any agreement or obligation of any Obligor or any other person or
entity with respect thereto;
(vii) take or fail to take any Lender Lien or any other collateral
security for any Lender Claims or take or fail to take any action which
may be necessary or appropriate to ensure that any Lender Lien or any
other Lien upon any property is duly enforceable or perfected or entitled
to priority as against any other Lien or to ensure that any proceeds of
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any property subject to any Lien are applied to the payment of any Lender
Claim or any other obligation secured thereby; or
(viii) release, discharge or permit the lapse of any or all Lender
Liens or any other Liens upon any property at any time securing any Lender
Claims;
(c) The Second Lien Collateral Agent, on behalf of itself and the
Noteholders, also agrees, to the fullest extent permitted under applicable law,
that no First Lien Creditor shall have any liability to the Second Lien
Collateral Agent or any Noteholder, and the Second Lien Collateral Agent, on
behalf of itself and the Noteholders, to the fullest extent permitted under
applicable law, hereby waives any claim against any First Lien Creditor, arising
out of any and all actions which such First Lien Creditor may take or permit or
omit to take with respect to: (i) the Credit Documents, (ii) the collection of
the Lender Claims or (iii) the foreclosure upon, or sale, liquidation or other
disposition of, the Lender Collateral. The Second Lien Collateral Agent, on
behalf of itself and the Noteholders, agrees that neither the First Lien
Collateral Agent nor any other First Lien Creditor shall have any duty to them,
express or implied, fiduciary or otherwise, in respect of the maintenance or
preservation of the Lender Collateral, the Lender Claims or otherwise; and
(d) The Second Lien Collateral Agent, on behalf of itself and the
Noteholders, agrees not to assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert, or
otherwise claim the benefit of, any marshalling, appraisal, valuation or other
similar right that may otherwise be available under applicable law or any other
similar rights a junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests, agreements and
obligations of the First Lien Collateral Agent and the other First Lien
Creditors and the Second Lien Collateral Agent and the Noteholders,
respectively, hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Credit Documents
or any Noteholder Documents or any setting aside or avoidance of any
Lender Lien;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Lender Claims or Noteholder Claims, or
any amendment or waiver or other modification, including any increase in
the amount thereof, whether by course of conduct or otherwise, of the
terms of the Credit Agreement or any other Credit Document or of the terms
of the Indenture or any other Noteholder Document;
(c) any exchange of any security interest in any Common Collateral
or any other collateral, or any amendment, waiver or other modification,
whether in writing or by course of conduct or otherwise, of all or any of
the Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of CSC or any of its subsidiaries; or
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(e) any other circumstances which otherwise might constitute a
defense available to, or a discharge of, any Obligor in respect of the
Lender Claims, or of the Second Lien Collateral Agent, any Noteholder, the
First Lien Collateral Agent or any other First Lien Creditor in respect of
this Agreement.
Section 8. Miscellaneous.
8.1 Conflicts. In the event of any conflict between the provisions of this
Agreement and the provisions of the Credit Documents or the Noteholder
Documents, the provisions of this Agreement shall govern.
8.2 Continuing Nature of This Agreement. This Agreement shall continue to
be effective until the Discharge of Lender Claims shall have occurred. This is a
continuing agreement of lien priority. The Second Lien Collateral Agent, on
behalf of itself and the Noteholders, hereby waives any right it may have under
applicable law to revoke this Agreement or any of the provisions of this
Agreement. The terms of this Agreement shall survive, and shall continue in full
force and effect, in any Insolvency or Liquidation Proceeding.
8.3 Amendments; Waivers. No amendment, modification or waiver of any of
the provisions of this Agreement shall be deemed to be made unless the same
shall be in writing signed by the Second Lien Collateral Agent, the First Lien
Collateral Agent and the Borrower and each waiver, if any, shall be a waiver
only with respect to the specific instance involved and shall in no way impair
the rights of the parties making such waiver or the obligations of the other
parties to such party in any other respect or at any other time.
8.4 Information Concerning Financial Condition of CSC and Its
Subsidiaries. The First Lien Collateral Agent and the other First Lien
Creditors, on the one hand, and the Second Lien Collateral Agent and the
Noteholders, on the other hand, shall each be responsible for keeping themselves
informed of (a) the financial condition of CSC and its subsidiaries, the
Guarantor, all Subsidiary Guarantors as defined in the Credit Agreement and all
endorsers and/or guarantors of the Noteholder Claims or the Lender Claims and
(b) all other circumstances bearing upon the risk of nonpayment of the
Noteholder Claims or the Lender Claims. Neither the First Lien Collateral Agent
nor any other First Lien Creditors shall have any duty to advise the Second Lien
Collateral Agent or any Noteholder of information known to it or them regarding
such condition or any such circumstances or otherwise. In the event the First
Lien Collateral Agent or any of the other First Lien Creditors, in its or their
sole discretion, undertakes at any time or from time to time to provide any such
information to the Second Lien Collateral Agent or any Noteholder, it or they
shall be under no obligation (x) to provide any additional information or to
provide any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential.
8.5 Successor Second Lien Collateral Agent. Each successor Second Lien
Collateral Agent under the Indenture shall execute and deliver a counterpart of
and become a party to this Agreement, and no replacement or resignation of the
Second Lien Collateral Agent shall be effective until its successor shall have
executed and delivered a counterpart of this Agreement.
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8.6 Application of Payments. All payments received by the First Lien
Creditors may be applied, reversed and reapplied, in whole or in part, to such
part of the Lender Claims as the First Lien Creditors, in their sole discretion,
deem appropriate. The Second Lien Collateral Agent, on behalf of itself and the
Noteholders, assents to any extension or postponement of the time of payment of
the Obligations or any part thereof and to any other indulgence with respect
thereto, to any substitution, exchange or release of any security which may at
any time secure any part of the Obligations and to the addition or release of
any other Person primarily or secondarily liable therefor.
8.7 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE
OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE BORROWER, THE GUARANTOR, THE COLLATERAL AGENT AND THE TRUSTEE, ON
BEHALF OF ITSELF AND THE NOTEHOLDERS, HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY OR INTERESTS IN PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE BORROWER,
GUARANTOR, THE COLLATERAL AGENT AND THE TRUSTEE, ON BEHALF OF ITSELF AND THE
NOTEHOLDERS, FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY PARTY TO
THIS AGREEMENT AT ITS ADDRESS SET FORTH BENEATH ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT OR ANY SECURED
CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF THE BORROWER, THE GUARANTOR, THE COLLATERAL AGENT AND THE
TRUSTEE, ON BEHALF OF ITSELF AND THE NOTEHOLDERS, HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
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8.8 Waiver of Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH PARTIES
RELATING THERETO. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
8.9 Notices. All notices to the Noteholders and the First Lien Creditors
permitted or required under this Agreement may be sent to the Second Lien
Collateral Agent and the First Lien Collateral Agent, respectively. Unless
otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, electronically mailed or sent by courier service or U.S.
mail and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of a telecopy or electronic mail or four (4)
Business Days after deposit in the U.S. mail (registered or certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto shall be as set forth below each party's name on the
signature pages hereto, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties.
8.10 Further Assurances. The Second Lien Collateral Agent agrees that it
shall take such further action and shall execute and deliver to the First Lien
Collateral Agent and the other First Lien Creditors such additional documents
and instruments (in recordable form, if requested) as the First Lien Collateral
Agent or the other First Lien Creditors may reasonably request to effectuate the
terms of and the lien priorities contemplated by this Agreement.
8.11 Subrogation. The Second Lien Collateral Agent, on behalf of itself
and the Noteholders, hereby waives any rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Lender Claims has
occurred.
8.12 Binding on Successors and Assigns; No Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the First Lien
Collateral Agent, the other First Lien Creditors, the Second Lien Collateral
Agent, the Noteholders and their respective successors and assigns. No other
Person shall have or be entitled to assert rights or benefits hereunder. This
Agreement shall be binding upon CSC, the Guarantor and the Borrower and their
successors and assigns; provided that none of CSC, the Guarantor and the
Borrower or any successor or assign thereof shall be entitled to enforce any
provision of this Agreement (other than any provision hereof expressly
preserving any right of CSC, the Guarantor and the Borrower under any Credit
Document or Noteholder Document).
8.13 Specific Performance. Each of the First Lien Collateral Agent and the
Second Lien Collateral Agent may demand specific performance of this Agreement;
provided that the
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Second Lien Collateral Agent may not demand specific performance from any
Obligor unless and until the Discharge of Lender Claims has occurred. The Second
Lien Collateral Agent, on behalf of itself and the Noteholders, hereby
irrevocably waives any defense based on the adequacy of a remedy at law and any
other defense which might be asserted to bar the remedy of specific performance
in any action which may be brought by the First Lien Collateral Agent.
8.14 Section Titles; Time Periods. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of this Agreement.
8.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement.
8.16 Authorization. By its signature, each Person executing this Agreement
on behalf of a party hereto represents and warrants to the other parties hereto
that it is duly authorized to execute this Agreement.
8.17 Effectiveness. This Agreement shall become effective when executed
and delivered by the parties listed below. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to CSC or any of its subsidiaries shall include CSC
or any of its subsidiaries as debtor and debtor-in-possession and any receiver
or trustee for such Obligor (as the case may be) in any Insolvency or
Liquidation Proceeding.
8.18 Provisions Solely to Define Relative Rights. The provisions of this
Agreement are and are intended solely for the purpose of defining the relative
rights of the First Lien Creditors on the one hand and the Noteholders on the
other hand. None of CSC or any of its subsidiaries or any other creditor thereof
shall have any rights hereunder. Nothing in this Agreement is intended to or
shall impair the obligations of CSC or any of its subsidiaries, which are
absolute and unconditional, to pay the Obligations and the Indentures as and
when the same shall become due and payable in accordance with their terms.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
Administrative Agent:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as First Lien Collateral Agent
By:
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Name:
Title:
Address:
Second Lien Collateral Agent:
THE BANK OF NEW YORK,
as Second Lien Collateral Agent
By:
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Name:
Title:
Address:
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CORPORATION
By:
------------------------------------
Name:
Title:
Address:
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ACKNOWLEDGED BY:
COINMACH CORPORATION
By:
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Name:
Title:
COINMACH SERVICE CORP.
By:
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Name:
Title:
